Earnings Recap — Q2 FY2026
CY Q3 2026 · Reported August 7, 2026 · Beat 7 of last 7 quarters
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Atmus's record quarter and raised guidance signal continued strength in the commercial vehicle filtration aftermarket and first-fit recovery, which supports the broader AI infrastructure buildout through the logistics and data center cooling demand. The Koch Filter acquisition expands exposure to high-growth industrial air filtration end markets, including data centers and healthcare, which are directly tied to AI infrastructure expansion. Management's focus on debt paydown and disciplined capital allocation positions Atmus to fund future industrial filtration bolt-ons, potentially benefiting the supply chain for AI-related cooling and filtration systems.
Atmus delivered record Q2 sales of $528M, up 16.4% YoY, with Power Solutions up 7% to $486M (price +3%, volume +2%, FX +2%) and Industrial Solutions contributing $42M from the Koch Filter acquisition. Adjusted EBITDA rose to $109M (20.7% margin) and adjusted EPS was $0.82, beating consensus. The company exited over 95% of the Koch Filter transition services agreement and expects completion in Q3. Management noted improving freight sentiment but flat aftermarket conditions, while first-fit markets began to show cyclical recovery. They also highlighted ongoing Middle East conflict impacts on commodity costs and India JV performance.
Management narrowed full-year adjusted EBITDA margin guidance to 19.75%–20.25% and expects adjusted EPS of $2.85–$3.00. Power Solutions revenue is expected at $1.82B–$1.865B, Industrial Solutions at $155M–$165M, and total revenue at $1.975B–$2.03B. They expect aftermarket to remain flat, first-fit to recover, and share gains of 1%–2%. They plan to allocate surplus cash to debt paydown and expect share repurchases of $20M–$14M in 2026 (as stated, likely a typo).
“We are starting to see signs of health in the overall freight market, including higher spot rates and increasing optimism for improved freight activity. However, we have yet to see a significant inflection and therefore, continue to expect the market to be relatively flat year-over-year.”
on Aftermarket outlook
“We continue to see value creation opportunities from Koch filter's deep industry experience, combined with our filtration capabilities and global footprint, which will provide ongoing benefits for all stakeholders.”
on Koch Filter integration
“We continue to expect the net impact on EBITDA from a tariff perspective to be substantially neutral.”
on Tariff impact
Could you discuss how aftermarket and first-fit revenues performed in the quarter and give an estimate for share gains contribution in Power Solutions?
Stephanie Disher noted aftermarket remained flattish globally, with stronger sentiment in the U.S. and Mexico but subdued conditions in Europe, Middle East, and Asia Pacific outside China. First-fit markets began to see cyclical recovery in Q2, ahead of vehicle OEMs by 4-6 weeks. Share gains remain in the 1%–2% range.
Did you catch up on any lost sales from the Middle East conflict in Q2, and what's embedded in the second-half guide?
Stephanie Disher said they did not fully catch up in Q2; the conflict is ongoing and impacting Middle East business and India JV income. They anticipate recovery in the second half, but it's a smaller portion of revenue (~2%).
Why did you lower the top end of the EBITDA margin guide by 25 bps?
Jack Kienzler explained the narrowing reflects moderating pricing and FX tailwinds in the second half, persistent Middle East conflict driving commodity inflation, and lower India JV income. He noted a slight mix headwind from stronger first-fit relative to aftermarket.