Earnings Recap — Q2 FY2026
CY Q3 2026 · Reported July 29, 2026 · Beat 1 of last 2 quarters
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Ryerson's results reinforce the AI infrastructure buildout as a tangible demand driver for metals service centers, with data center and power generation projects now representing ~7% of revenue and growing ~30% sequentially. The company's ability to capture this demand through its expanded post-merger footprint positions it as a key supplier to the physical buildout of AI infrastructure, including power, cooling, and fabrication. The acceleration in data center-related demand, coupled with management's expectation for continued growth, suggests sustained metal intensity in AI infrastructure construction.
Ryerson delivered record revenue of $2.01B and adjusted EBITDA (ex-LIFO) of $101M, both above guidance, in its first full quarter since the Olympic Steel merger. Shipments exceeded expectations, with same-store volumes growing 4% sequentially and 5.8% year-to-date, outpacing the industry's 2.9% growth. Net income was $15.5M, impacted by a $15.7M purchase accounting adjustment; adjusted net income was $27.6M. Data center and power generation demand represented ~7% of revenue, up ~30% sequentially. The company realized ~$5M of synergies in Q2 and expects $13–14M in Q3, with a $52–56M annualized run-rate.
Management expects Q3 volumes to decline 3–5% sequentially on normal seasonality, with average selling prices flat to up 2%, leading to revenue of $1.87–$1.95B. They guided adjusted EBITDA (ex-LIFO) of $88–$92M, with Olympic Steel contributing $21–$23M, and net income of $19–$21M (excluding ~$5–7M of inventory purchase accounting adjustments). Margins are expected to compress due to rising material costs, program pricing lags, and inflationary labor/delivery costs, but management expects working capital to moderate as stainless and aluminum prices revert, supporting free cash flow and deleveraging toward ~3.0x net leverage by year-end. Synergy realization is expected to accelerate to $13–14M in Q3, exceeding the first-year target ahead of schedule, and management reiterated confidence in the $120M two-year target. Demand is expected to remain supported by AI infrastructure, aerospace, defense, and electrification, with agriculture and consumer discretionary still recovering.
“We would be remiss if we didn't mention the omnipresent AI infrastructure and compute build-out and its outsized impact to PMI and GDP growth as well as our increasing participation in this secular super cycle as an AI infrastructure partner to our customers.”
on AI infrastructure demand
“We're looking to improve both sides of the ledger. I think where we can improve the program portfolio of business is through the program portfolio. We're doing that and we call it, you know, sweat the P and grow the T.”
on Commercial strategy
“We have a real opportunity. I think we all agree that the biggest opportunity that we have is within our commercial portfolio to drive margin accretion over time.”
on Margin outlook
The transactional business outperforming contract has been the trend at Ryerson for a while, but you also mentioned some transactional market share gains in the release. Just maybe an outline of where you're seeing those wins right now.
Eddie Lehner explained that the wins are broad-based and driven by service center fundamentals—when inventory is positioned locally and service levels are high (95% for A1A items), win rates improve. He credited investments in quoting technology and the company's brand for increased quoting opportunities, and noted that the improved market environment has allowed these investments to bear fruit.
If you could just level set us on the split between the transactional and the contract business today.
Eddie Lehner said the combined enterprise is roughly 40% transactional / 60% contract, and the goal is to move to 45/55 by 'sweating the P and growing the T'—lowering cost-to-serve on program business by moving it to optimal work centers, freeing capacity for higher-margin transactional work. He noted the margin differential between transactional and program is currently 700–800 basis points.
Maybe staying on the contractual and transactional business, Eddie, you just mentioned that the margin gap is between 700 to 800 basis points. How does that compare to typical historical gaps?
Eddie Lehner said the typical gap is around 600–700 basis points, so the current gap is wider than normal. He attributed the program margin lag to supply-side constraints and index-based contract pricing that resets with a lag. Andrew Greif added that running contract business on Olympic assets with fuller shifts improves asset utilization, and Rick Marabito noted that as carbon prices rise, contract pricing will catch up over time.