Earnings Recap — Q2 FY2026
CY Q3 2026 · Reported July 29, 2026 · Beat 6 of last 7 quarters
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NWPX's Precast segment continues to benefit from data center construction, with management citing data center projects as a key driver of nonresidential demand and record June revenue at Geneva. The Dodge Momentum Index up 22% in June signals sustained nonresidential construction activity into 2027, which could support continued demand for precast water infrastructure products. While the AI exposure is indirect, the data center buildout remains a meaningful tailwind for NWPX's Precast business.
NWPX delivered record Q2 results with consolidated net sales up 19.7% to $159.5M, gross profit up 35.5% to $34.4M (21.5% margin), and EPS of $1.62, beating consensus. WTS revenue rose 33.8% to a record $113.2M on 26% higher tons produced and 6% higher selling prices, with gross margin up 360 bps to 21.4%. Precast revenue declined 4.8% to $46.3M due to heavy Texas rainfall and Utah project delays, but gross margin improved 70 bps to 21.9% and the order book grew to $61M. The company generated $9.9M of free cash flow and ended the quarter with a net cash position of $9.3M.
Management expects Q3 2026 consolidated performance to be comparable to or stronger than Q2, with WTS revenue and margins similar to the prior quarter as the large unplanned NDA project continues through Q3. Full-year bidding levels are expected to be stronger than 2025, and the WTS backlog is expected to normalize to the low-to-mid $300M range after the NDA project winds down. Precast revenue is expected to be higher than both Q3 2025 and Q2 2026 with stable margins, supported by a stronger order book and nonresidential demand. Management raised full-year free cash flow guidance to $56M–$65M (from $50M–$56M) and reiterated SG&A of $54M–$56M, D&A of $21M–$23M, CapEx of $20M–$24M, and an effective tax rate of 24%–26%. The tone was confident, with management calling 2026 a 'historic year' and noting continued margin improvement in WTS and Precast.
“Second quarter marked another outstanding quarter for NWPX Infrastructure as we delivered record financial results across revenue, gross profit and EPS.”
on Quarterly performance
“We're seeing a bit stronger bidding year than we did last year. And ultimately, it's coming with improving, like we said in the script, economics and margins as we move forward.”
on Bidding environment
“We've seen a very favorable product mix with the jobs that have been coming through. ... So you can sit back a lot of times because the backlog is in the shape it is and kind of pick the ones that fit you with your best cost position and do some product mix improvement on the backlog.”
on Margin and mix
Can you reconcile the strong WTS sales with the Q3 outlook of similar revenue quarter-over-quarter? Does that imply core WTS sales step down sequentially?
Scott clarified that Q3 is typically the biggest quarter of the year and expected to be the biggest this year too. He noted the base business (ex-NDA) was ~$105M in Q2 and should be a bit stronger in Q3, with the NDA project on top. He cited cautious guidance due to Texas weather but expects Q3 to be larger on both segments with better profitability.
What is driving the WTS margin improvement and how sustainable are those gains?
Scott attributed the 360 bps margin expansion to higher volumes (tons up 26%), better project pricing, favorable product mix, and improved overhead absorption. He said demand has become stable to upward trending, and margins should continue to inch up through Q3, with Q4 typically slower but possibly less so this year.
How does steel factor into your pricing given steel costs are up significantly? Why was pricing only up 6%?
Scott explained that steel is a pass-through at ~34-35% of cost of sales. Revenue per ton was up 6%, which in dollar terms exceeded the 24% increase in steel cost per ton. He also noted that overhead absorption from 26% higher tons contributed more to margin than steel. He expects steel prices to continue inching up, potentially to $1,400/ton, but NWPX is comfortable as long as they can get steel.