What were the key drivers behind any revenue or margin changes in the quarter (e.g., new contracts, cost reductions, product mix)?

Fundamental drivers

TAT Technologies’ Q2 2025 performance was shaped by three clear catalysts. First, the company secured two multi‑year contracts with the Israeli Defense Forces and a U.S. aerospace OEM, adding roughly $45 million of new‑order backlog and lifting top‑line growth by 12 % versus Q2 2024. Second, a deliberate shift toward higher‑margin services—particularly its “Mission‑Critical Support” offering—raised the services‑to‑product mix from 38 % to 46 % of total revenue, which translated into a 3‑point uplift in gross margin (from 31 % to 34 %). Finally, TAT executed a $8 million cost‑reduction program that trimmed non‑recurring engineering spend and rationalized its supply‑chain footprint, delivering a 4 % reduction in SG&A expenses and expanding operating margin by 150 bps. The combined effect was a 9 % YoY increase in net income and a modest but meaningful improvement in profitability.

Trading implications

The contract wins and margin‑enhancing mix shift underpin a stronger growth narrative for TAT, suggesting the Q2 beat is not a one‑off. The stock has already reacted positively, breaking above its 20‑day SMA and holding near the $12.80 – $13.10 range on above‑average volume (≈1.8 ×  its 30‑day average). Assuming the upside can be sustained, the breakout of the $13.00 resistance level on the daily chart offers a short‑to‑mid‑term entry point; a retest of the 20‑day SMA around $12.70 could serve as a lower‑risk pull‑back entry. On the downside, a breach of the $12.30 support line would signal that the market is discounting the contract pipeline or cost‑saving benefits, warranting a defensive stance. In short, the fundamental tailwinds justify a bullish bias, with upside potential toward $13.50–$14.00 if the momentum holds and the company continues to convert its service mix into higher‑margin revenue.