Power Solutions International (PSIX) Q2 2026 earnings summary

Executive summary

• Net sales for Q2 2026 were $152.5 million, down 21% year-over-year but up 18.6% sequentially, mainly due to lower power systems and oil and gas sales.

• Gross margin improved sequentially by 420 basis points to 27.1%, though down from 28.2% year-over-year, reflecting operational gains and higher production costs from capacity ramp-up.

• Net income for Q2 2026 was $16.9 million ($0.73 per diluted share), down 67% from Q2 2025, which included a non-recurring tax benefit.

• Strong operating cash flow enabled a $30.8 million reduction in total debt during the quarter, strengthening the balance sheet.

• Management expects sales to improve in the second half of 2026, driven by robust data center demand, but ongoing oil and gas softness and supply chain factors may impact results.

Financial highlights

• Q2 2026 net sales: $152.5 million, down 21% year-over-year but up 18.6% sequentially; six-month sales: $281.1 million (down 14% YoY).

• Gross profit: $41.4 million (Q2 2026), down 24% year-over-year; gross margin: 27.1%.

• Operating income: $23.9 million (Q2 2026), down 26% year-over-year.

• Adjusted EBITDA: $26.8 million (Q2 2026); EBITDA margin: 17.6%.

• Cash and cash equivalents at June 30, 2026: $70.1 million; total debt: $72.6 million.

Outlook and guidance

• Second-half 2026 sales are expected to exceed first-half, driven by larger Power Systems orders and data center demand.

• Sales in the second half of 2026 are projected to be in line with the second half of 2025.

• No formal full-year guidance for 2026 or 2027 due to order timing and market variability.

• Gross margin improvements expected to continue, with a long-term target around 25%.

• Oil and gas market softness and capacity ramp-up costs are expected to persist through 2026.