Hammond Power Solutions (HPS) Q2 2026 earnings summary

Executive summary

• Achieved record Q2 2026 sales of CAD 324.8 million (USD 324.8 million), up 44.7% year-over-year, driven by strong U.S. and Mexico demand, especially in data centers and industrial electrification.

• Gross margin improved to 31.5% from 30.1% in Q1 2026 and 30.7% in Q2 2025, reflecting pricing actions, custom product shipments, and operational improvements.

• Backlog remains nearly double year-ago levels (up 96.9% year-over-year), though declined 6.9% sequentially as higher production enabled more order conversion.

• Completed the $365M acquisition of AEG Power Solutions post-quarter, expanding technology portfolio and recurring service exposure; integration is a key focus for H2 2026.

• Year-to-date sales reached $589.6M, up 38.5% over the prior year, reflecting capacity investments and strategic growth.

Financial highlights

• Q2 sales: CAD 324.8 million (USD 324.8 million), up from CAD 224.4 million in Q2 2025; YTD sales: $589.6M (2025: $425.8M).

• U.S. and Mexico Q2 sales rose 73% year-over-year; Canada declined 23.7% due to project timing and market softness; India Q2 sales: $7.4M, down 9.9%.

• Adjusted EBITDA was $53.2M (16.4% of sales), up from $33.4M (14.9%) last year; YTD adjusted EBITDA was $94M (16.0% of sales).

• Adjusted EPS increased to $2.76 from $1.72; basic EPS was $0.79, down from $1.12; reported net earnings were $9.4M, down from $13.4M due to acquisition and FX costs.

• Gross margin was 31.5% in Q2 2026, up 80 basis points year-over-year and 140 basis points sequentially.

Outlook and guidance

• Entering H2 2026 with expanded manufacturing capacity, broader product portfolio, and continued strong demand in key markets.

• Focus remains on integrating AEG, maintaining operational discipline, managing working capital, and executing growth strategies.

• Full-year capital expenditures are expected to be between $35 million and $40 million.

• No further significant pricing changes anticipated for the rest of the year.