Enerpac Tool Group (EPAC) Q2 2026 earnings summary

Executive summary

• Net sales reached $155 million in Q2 FY2026, up 6% year-over-year, with organic sales growth of 2%; IT&S product sales grew 6% organically, the highest in 10 quarters, while service revenue declined 17% due to EMEA softness.

• Product order rates increased mid-single digits across all regions, and six new products were launched at CONEXPO, including advanced pumps and wireless control platforms.

• Secured a major five-year service contract with a leading UK oil and gas company, expected to generate several million dollars annually.

• Returned $51 million to shareholders via share repurchases in Q2; $135 million remains authorized.

• Restructuring actions were taken in EMEA to align service operations with market conditions.

Financial highlights

• Adjusted EBITDA was $33 million, with a margin of 21.3%, down from 23.2% a year ago, due to service business pressure and FX impact.

• Adjusted EPS was $0.39, flat year-over-year; reported EPS was $0.31, down from $0.38.

• Gross margin declined 410 basis points year-over-year to 46.4%, mainly from lower service volume.

• Free cash flow for the first half rose to $23 million from $5 million year-over-year; year-to-date operating cash flow increased to $29 million from $16 million.

• $51 million in share repurchases during the quarter; $135 million remains authorized.

Outlook and guidance

• Fiscal 2026 net sales guidance narrowed to $635–$650 million, reflecting 1–3% organic growth.

• Product sales expected to grow mid-single digits; service revenue projected to contract low to mid-teens.

• Adjusted EBITDA guidance set at $158–$163 million; adjusted EPS at $1.85–$1.92.

• Free cash flow guidance maintained at $100–$110 million; capex of $10–$15 million.

• Sequential gross margin improvement expected in the second half; service business rebound anticipated in Q4.