Earnings Recap — Q2 FY2026
CY Q3 2026 · Reported August 5, 2026 · Beat 4 of last 6 quarters
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NN, Inc. is a direct beneficiary of the AI infrastructure buildout, supplying precision metal components for data center liquid cooling and power distribution. The company's data center and electric grid business is already at $80M trailing twelve-month sales, with a near-term goal of $120M, and management noted they are receiving 'very large asks' from customers. The ramp-up of 50 new machines and expansion in China signal accelerating capacity to meet AI-driven demand.
NN, Inc. reported Q2 FY2026 net sales of $128.7M, up 19% YoY, and adjusted EBITDA of $17.9M, up 36% YoY, with both segments growing. Power Solutions grew 40% to $62.3M, while Mobile Solutions grew 5% to $66.6M. The company completed a $124M refinancing that retired $89M of preferred stock, reducing annual PIK interest by ~$13M. New business wins reached $80M through July, and management highlighted strong momentum in data center, defense, and medical markets.
Management raised full-year 2026 guidance: net sales of $460–480M, adjusted EBITDA of $55–65M, and new business wins of $80–100M. They emphasized that the second half will benefit from ramp-ups in data center, defense, and medical programs, with 50 new machines coming online for data center parts. Management noted the refinancing reduces annual PIK interest by ~$13M and they are now evaluating refinancing the term loan to lower rates and increase flexibility.
“Everyone knows that AI and data center is one of the biggest things happening in the world, and it's the biggest thing happening to our company.”
on Data center growth
“We are getting very large asks to us. We're a well-known precision metal part maker, and that finds itself in a lot of aspects of the data centers, especially with the liquid management regarding the cold plates as well as the pumps to make sure that system is good.”
on Data center demand
“We're running a 27% hit rate year-to-date on closed opportunities, 27%. That compares favorably. If you research and benchmark that number, that's above industry average for a manufacturing company.”
on New business win rate
Could you characterize the pipeline in the data center market? What areas are you most interested in and the scale?
Harold Bevis detailed products like transformer parts, busbar parts, test probes, liquid connector parts, cold plate plating, and couplings. He noted a large expanding pipeline approaching $100M in prospecting, with potential to reach $100M in connectors alone over time. He emphasized a multiproduct approach and the importance of choosing partners and assets.
How much of the new business wins are currently flowing through the P&L? It sounds like a big chunk is still to come.
Harold Bevis confirmed that the announced wins in medical, data center, and defense have not impacted the first half. He said the 50 machines for data center parts will hit stride in November, with sales exceeding $1M/month and building into Q1. He acknowledged the guidance is slightly conservative but noted Q4 is typically light, offset by new wins.
Could you tell us how the share count will change and progress on renegotiating the term loan?
Chris Bohnert said they swapped 5.5 million shares for roughly $19M of preferred reduction, increasing share count. He noted they are working on refinancing the term loan, with hopes to reduce rates and gain flexibility. Harold Bevis added that shares outstanding are now 82.6 million out of 90 million authorized, with the gap reserved for comp plans and warrants.