Episode Details

DPC Holdings (DPC) Q2 2026 — Q2 2026 (quarter ended June 28). DPC Holdings, trading as Doncasters, listed on the NYSE on June 25 2026 - this is its first reported quarter as a public company. The 8-K cleared EDGAR at 7:05am ET on August 11, BEFORE the open, so August 11 IS the reaction session: it opened plus 1.11 pct, ran to plus 11.19 pct, traded BELOW the prior close intraday, and closed plus 4.45 pct on 1.74x volume. By August 14 it was USD50.09 - the entire gain handed back. Doncasters casts the superalloy blades that sit inside jet engines and industrial gas turbines, and it has been a public company for seven weeks. Its first print was a record: revenue up 34 pct to USD268.7M, adjusted EBITDA up 33 pct to USD48M, and the first full-year guidance the company has ever given. And in that same quarter the group adjusted EBITDA margin went DOWN ten basis points. THE CALL: HOLD (3/5, MEDIUM - THE GROWTH IS REAL, THE MARGIN THAT JUSTIFIES THE MULTIPLE IS NOT THERE YET) — base-case value ~$46.27 vs ~$50.09 today. KEY METRICS: - CALL: HOLD, 3/5. Fair value USD46.27 against the USD50.09 close, -7.6 pct. Bear USD32.92 / base USD46.27 / bull USD58.63. Three roads, weighted 45/30/25: 30x our 2027 adjusted EBITDA estimate of USD222M, the 32.5x peer median applied to the year DPC has actually guided, and a 36x growth premium. - THE PRINT: revenue USD268.7M against a USD246.0M bar - a 9.2 pct beat and a record, up 34 pct. But adjusted EPS was USD0.05 against USD0.07, a two-cent MISS on a genuinely comparable non-GAAP basis. The GAAP loss of USD1.14 a share contains USD158.5M of listing-triggered pay, not operations. - THE ANGLE: group adjusted EBITDA margin FELL 10 basis points, 17.9 pct to 17.8 pct, in the quarter revenue grew 34 pct to a record. Engine Products added 210bp to 23.5 pct - but Turbo Wheels, 17.9 pct of revenue, lost 430bp to 3.3 pct as its segment EBITDA fell 55.6 pct to USD1.6M. - THE GUIDE IS THE TELL: first guidance ever, USD1.00-1.04bn revenue and USD182-187M adjusted EBITDA. H1 revenue was USD505.3M, so the implied second half grows only 10.4 to 19.4 pct against 29.9 pct in H1 - while needing margin of 18.8 pct against 17.4 pct. A margin guide, in the half margin fell. - CASH: free cash flow was minus USD36.5M in the quarter and minus USD53.8M across the half, against POSITIVE USD11.0M a year earlier. Operating cash flow was minus USD27.0M on USD48M of adjusted EBITDA. Working capital of USD307.0M is about 30 pct of guided revenue, so growth consumes cash. - THE BALANCE SHEET, AND WE GIVE IT FULL CREDIT: from USD524.6M of net debt at 3.8x in December to USD118.2M of transaction-adjusted net CASH at 0.7x. The 14.0 pct shareholder PIK loan is extinguished, USD460M of a 10.2 pct term loan was repaid June 29, and Moody's upgraded to Ba2 positive. - WHAT THE TAPE REQUIRES: at USD50.09 on 149,393,016 shares the enterprise value is USD7.36bn - 45.9x trailing adjusted EBITDA and 39.9x the company's own guide. Howmet, which casts the same parts for the same engines, trades at 43.5x on a 30.2 pct margin. DPC is guiding to 18.1 pct. What to watch: UP: two consecutive quarters of positive free cash flow, evidence that Turbo Wheels has stopped diluting - a disposal or a genuine margin recovery toward the 7.6 pct it earned a year ago - or a November print that delivers the second-half margin the guidance promises. DOWN: metal-cost pass-through continuing to dilute reported margin, working capital absorbing the growth, a soft first guide revision, or the 180-day lock-up releasing around December 21 2026 into a float that is seven weeks old. Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision. Learn investing free in the Charged Alpha app: https://chargedalpha.com/app?source=youtube&ref=video Educational only. Not financial advice.