Power Solutions International (PSIX) Q1 2026 earnings summary

Executive summary

• Net sales for Q1 2026 were $128.6 million, down 5% year-over-year, mainly due to lower power systems sales and continued softness in oil and gas demand, partially offset by growth in industrial and transportation segments.

• Gross margin was 22.9%, down from 29.7% in Q1 2025, impacted by less favorable product mix and higher production costs from capacity ramp-up, but improved sequentially by 100 basis points from Q4 2025.

• Net income was $7.3 million ($0.32 per diluted share), down 62% year-over-year.

• Adjusted EBITDA was $13.9 million, reflecting operational challenges and lower profitability, down nearly 50% year-over-year.

• Completed MTL acquisition for $13.2 million in January 2026, expanding vertical integration and manufacturing capabilities.

Financial highlights

• Operating income was $11.4 million, down 54% year-over-year.

• Gross profit was $29.4 million, down 27% year-over-year.

• Cash and cash equivalents were $45.1 million as of March 31, 2026; total debt was $103.4 million.

• Adjusted net income was $8.0 million; adjusted net income per diluted share was $0.36.

• Operating expenses rose, with R&D and SG&A as a % of sales increasing year-over-year.

Outlook and guidance

• Q2 2026 revenue expected to be consistent with Q1; strong sales growth anticipated in the second half, driven by data center demand and larger power system orders.

• No formal full-year guidance provided due to order timing and market variability.

• Gross margin expected to remain flat or slightly improve, subject to product mix and cost structure improvements.

• Oil and gas market expected to remain soft throughout 2026, with no near-term improvement despite high oil prices.

• Capacity ramp-up costs in Wisconsin to persist, impacting production costs.