second quarter 2026
Filed Aug 5, 2026NN Delivers Strong Second Quarter, Raises Outlook for 2026, Announces Refinancing
Net sales increased 19.3%, adjusted EBITDA increased 36.1%, adjusted EBITDA margin increased 170 basis points, GAAP operating results turned positive, and NN raised its 2026 outlook for net sales, adjusted EBITDA, and new business wins.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Net salesGAAP | $128.7 million | – | 19.3% |
| Gross marginGAAP | $21.9 million | – | 20.1% |
| Adjusted gross marginnon-GAAP | $26.1 million | – | 23.9% |
| Adjusted gross margin percentagenon-GAAP | 20.3% | – | up 80 basis points |
| Income from operationsGAAP | $1.0 million | – | up $2.5 million |
| Adjusted income from operationsnon-GAAP | $8.5 million | – | 73.9% |
| Net lossGAAP | $2.3 million | – | improving by $5.8 million or 72.0% |
| Adjusted net incomenon-GAAP | $5.5 million | – | up $4.7 million or 636.5% |
| Adjusted net income per diluted common sharenon-GAAP | $0.11 per diluted common share | – | up $0.09 per diluted common share |
| Adjusted EBITDAnon-GAAP | $17.9 million | – | 36.1% |
| Adjusted EBITDA margin percentagenon-GAAP | 13.9% | – | up 170 basis points |
| Power Solutions income from operationsGAAP | $9.0 million | – | 56.5% |
| Power Solutions adjusted income from operationsnon-GAAP | $11.7 million | – | 39.1% |
| Mobile Solutions loss from operationsGAAP | $1.9 million | – | increase of 75.4% |
| Mobile Solutions adjusted income from operationsnon-GAAP | $4.9 million | – | 11.2% |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Power SolutionsHigher precious metal pass-through pricing, higher volumes and favorable foreign exchange effects. | $62.3 million | – | 39.5% |
| Mobile SolutionsHigher volumes and favorable foreign exchange effects. | $66.6 million | – | 5.0% |
fiscal 2026 outlook
- Revenue$460 to $470 million
- NoteAdjusted EBITDA expected to range between $55 and $65 million, 22% growth over 2025 at midpoint
- NoteNew business wins are expected to increase to $80 to $100 million, 29% growth over 2025 at midpoint
- NoteNet sales expected to range between $460 to $470 million, 10% growth over 2025 at midpoint
What drove it
- Net-sales growth was primarily driven by contribution of new business launches, higher precious metals pass-through pricing, higher volumes and favorable foreign exchange effects.
- The improvement in income from operations was due to improved operating performance and improved sales mix, partially offset by an increase in depreciation and amortization costs.
- Adjusted EBITDA growth was primarily driven by improved sales mix and operating performance.
- Adjusted income from operations growth was driven primarily by stronger gross margin and partially offset by increased selling, general and administrative expenses.
- The 5 Pillar growth program delivered approximately $40 million in new wins in Data Center, Medical, and Defense.
- July year-to-date new business awards were over 100 programs valued at approximately $80 million per year.
- NN is on pace to install approximately 50 new machines during 2026 and has a $50+ million, growing pipeline.
Concerns
- Mobile Solutions reported loss from operations of $1.9 million, compared to loss from operations of $1.1 million for the same period in 2025, primarily due to higher costs associated with plant mix.
- The operating-income improvement was partially offset by an increase in depreciation and amortization costs.
- Adjusted income from operations was partially offset by increased selling, general and administrative expenses.
What to watch
- Execution against fiscal 2026 net-sales guidance of $460 to $470 million.
- Execution against fiscal 2026 adjusted EBITDA guidance of $55 to $65 million.
- Conversion of expected new business wins of $80 to $100 million and immediate-supply awards in Data Center liquid cooling, robotic surgery medical products, and defense products.
- Progress in the preferred-stock refinancing and the stated objective to reduce leverage and rates.
- Whether Mobile Solutions rationalization efforts continue to support adjusted income from operations while plant-mix costs affect GAAP operating results.
Balance sheet and cash flow
- NN completed a refinancing of the preferred stock.
- NN paid off approximately $89 million of the preferred stock.
Analysis
NN reported strong second-quarter growth, with net sales of $128.7 million, up 19.3% from $107.9 million. Management attributed the increase to new business launches, precious-metals pass-through pricing, higher volumes, and favorable foreign exchange effects. Power Solutions was the principal reported growth engine, with net sales of $62.3 million, up 39.5%, while Mobile Solutions net sales increased 5.0% to $66.6 million.
Profitability improved across the consolidated business. GAAP income from operations was $1.0 million versus a loss from operations of $1.5 million, while adjusted income from operations rose 73.9% to $8.5 million. Gross margin increased 20.1% to $21.9 million, adjusted gross margin increased 23.9% to $26.1 million, adjusted gross margin percentage increased 80 basis points to 20.3%, and adjusted EBITDA margin percentage increased 170 basis points to 13.9%. Management cited stronger gross margin, improved sales mix, and operating performance, while noting higher depreciation and amortization and higher selling, general and administrative expenses as offsets.
GAAP net loss narrowed to $2.3 million from $8.1 million, with the prior-year period affected by a loss on extinguishment of debt. Adjusted net income increased to $5.5 million, or $0.11 per diluted common share, from $0.7 million, or $0.02 per diluted common share. Power Solutions income from operations increased to $9.0 million, but Mobile Solutions recorded loss from operations of $1.9 million, with higher plant-mix costs cited as the cause. Mobile Solutions adjusted income from operations nevertheless increased to $4.9 million, driven by rationalization efforts.
NN raised its fiscal 2026 guidance to net sales of $460 to $470 million, adjusted EBITDA of $55 to $65 million, and new business wins of $80 to $100 million. The company highlighted approximately $40 million in second-quarter new wins in Data Center, Medical, and Defense, as well as July year-to-date awards of over 100 programs valued at approximately $80 million per year. The company also completed a preferred-stock refinancing and paid off approximately $89 million of preferred stock, which management described as part of an effort to reduce leverage and rates.
Management, verbatim
NN delivered strong financial performance in the second quarter with record results in many areas. Additionally, after the quarter ended, we implemented a game-changing improvement to our balance sheet.
Harold Bevis, President and Chief Executive Officer
Our gross margins and adjusted EBITDA margins continue to climb. We are achieving many multi-year goals and revising our outlooks based upon our actual results. We now believe that we can deliver higher margins than previously estimated.
Harold Bevis, President and Chief Executive Officer
For fiscal 2026, we are now guiding net sales in the range of $460 million to $470 million and adjusted EBITDA in the range of $55 million to $65 million, reflecting strong, profitable growth versus prior year.
Chris Bohnert, Senior Vice President and Chief Financial Officer
Not in the filing
stated, not guessed- GAAP net income or loss per diluted share
- GAAP gross margin percentage
- GAAP operating margin
- Adjusted operating margin
- Operating cash flow
- Free cash flow
- Cash balance
- Debt balance
- Capital expenditures
- Share repurchases
- Dividends
- Detailed refinancing terms, including debt amount, interest rate, maturity, and remaining preferred-stock balance
- Prior-quarter comparisons for reported financial metrics
- Prior guidance ranges were not provided
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.