Earnings Recap — Q2 FY2026
CY Q3 2026 · Reported August 5, 2026 · Beat 6 of last 7 quarters
Allient Inc. reported Q2 FY2026 revenue of $154M, a beat of 5.6% against consensus, and EPS of $0.80, a beat of 30.5%.
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Allient's data center and infrastructure revenue grew 60% year-over-year to $16.3M, or 10.6% of total revenue, with trailing 12-month sales up 69%, showing that power quality equipment — active and passive harmonic filters, line reactors and communications gateways — is becoming a more meaningful part of the AI data center electrical stack. Management's disclosure of $2,000 to over $40,000 of content per megawatt, combined with capacity expansion coming online late this quarter or early next, gives investors a way to size the opportunity as compute-dense facilities increase electrical load and complexity. The record $201.3M of orders and $298M backlog suggest this demand is not a one-quarter event, though management cautioned that mix and margins can be lumpy.
Allient reported Q2 FY2026 revenue of $153.8M, up 10% year-over-year, with constant-currency organic growth of 9% and a $1.3M FX tailwind. Gross margin expanded 170 basis points to a record 34.9%, operating margin improved to 10.2% from 8.4% (the highest in roughly a decade), and adjusted EPS rose to $0.80 from a prior-year level as adjusted net income increased 42% to $13.5M. Industrial revenue rose 17% on industrial automation and data center power quality, Aerospace & Defense rose 16% despite the M10 Booker cancellation, Medical rose 9%, and Vehicle declined 7% on lower powersports demand. Orders reached a record $201.3M, up 49% year-over-year, producing a 1.31x book-to-bill and a $298M backlog. The company also disclosed data center and infrastructure sales of $16.3M, or 10.6% of revenue, up 60% year-over-year, and said it has submitted or expects to submit approximately $1.3M of IEEPA tariff refund claims with no receivable recorded.
Management framed the company as entering the back half of 2026 with solid momentum, citing record orders of $201.3M, a 1.31x book-to-bill and $298M of backlog that is mostly expected to convert to revenue within 3 to 9 months. Dick Warzala said order intake and shipments remained strong one month into Q3, and that data center order growth is tracking in line with the 60% revenue growth seen in the quarter. The company continues to expect full-year restructuring and realignment costs of approximately $2M to $3M tied to the Dothan transition, a full-year tax rate of 21% to 23%, and capital expenditures of roughly $12M to $15M, with investment directed at capacity and productivity for data center-related power quality and automation. STAN cost savings are targeted at $5M to $7M for 2026, similar to 2025, with management indicating a runway of 2 to 3 more years at that level. Management said it is expanding power quality capacity, ready to come online late this quarter or early next quarter, and expects data center and infrastructure to grow faster than the company average. Gross margin is expected to show some quarter-to-quarter variability even as structural gains build, and the drone and unmanned systems portfolio is expected to continue taking shape in the second half, with a full product launch planned around AUSA in October.
“In the second quarter, sales tied to data center and infrastructure applications were $16.3 million or 10.6% of total revenue, up 60% from the prior year period. On a trailing 12-month basis, sales were $57.1 million or 9.9% of total sales, up 69% year-over-year.”
on Data center disclosure
“Orders increased 49% year-over-year and 27% sequentially to a record $201.3 million, resulting in a book-to-bill ratio of 1.31x. Backlog ended the quarter at $298 million, and most of that backlog is expected to convert to revenue within 3 to 9 months, which is consistent with our historical conversion patterns.”
on Orders and backlog
“I would say to you that on the low end, if it's just simply a line reactor, we might be talking about a couple of thousand dollars per megawatt. When it gets into a more complete solution, which we offer, including communications gateways, filters and reactors and so forth and even getting into some equipment that we supply that does fiber alignment to -- we supply products to that market that does fiber alignment that that's even in the equation. Now we're over $40,000 per megawatt.”
on Data center content per megawatt
Is the 60% data center revenue growth in line with the order growth you're seeing, and has that continued into Q3?
Warzala said it is in line, and that one month into Q3 order intake and shipments remain strong and continuing.
Was there anything unusual in the record orders, and does the backlog imply a significant step-up in revenue versus normal seasonality?
Warzala said there was no single area that stands out, that lead times have expanded and some orders are coming in about three months earlier than before, and that larger blanket orders are only booked once released into production within a one-year window, which smooths lumpiness. He confirmed the demand is continuing at a strong pace into Q3.
What is driving the record Aerospace & Defense quarter, and what is the outlook for that business?
Warzala said the increased inquiries and quoting of prior quarters have converted to reality, that defense demand is continuing and will accelerate, and highlighted the upcoming launch of COTS propulsion motors and electronics plus the counter-drone opportunity, with a full product launch planned around AUSA in October.