Hammond Power Solutions (HPS) Q1 2026 earnings summary

Executive summary

• Achieved record Q1 sales of CAD 264.8 million (USD 265 million), up 31.5% year-over-year, driven by strong U.S. and Mexico demand, especially for custom products and data center applications.

• Gross margin improved sequentially to 30.1% from 29.2% in Q4 2025, though down from 31.5% a year ago due to tariff and commodity cost pressures.

• Backlog increased significantly year-over-year and sequentially, providing strong visibility for the remainder of 2026.

• Announced agreement to acquire AEG Power Solutions, expected to close in Q2 2026, expanding technology and geographic reach.

• New factory in Mexico began shipping, supporting growth and expanding market reach.

Financial highlights

• Sales reached CAD 264.8 million, up from CAD 201.4 million in Q1 2025.

• U.S. and Mexico sales grew 41.8% year-over-year; Canada up 3.2%; India up 33.5%.

• Net earnings were CAD 19.6 million, down from CAD 26.2 million in the prior year, reflecting higher costs.

• Basic EPS was CAD 1.64; adjusted EPS was CAD 2.08, up from CAD 1.60 in Q1 2025.

• Adjusted EBITDA was CAD 41 million (15.5% of sales), up from CAD 30.9 million a year ago.

Outlook and guidance

• Strong backlog and healthy demand trends in electrification and data centers support a positive outlook for 2026.

• Confident in ability to execute through the year despite input cost variability and project timing risks.

• Acquisition of AEG Power Solutions expected to close in Q2 2026, enhancing product and service offerings.