NN (NASDAQ: NNBR) reported Q2 2026 net sales of $128.7 million, up 19.3% year over year, while GAAP diluted loss per share narrowed to $0.13 from $0.26 and adjusted diluted EPS rose to $0.11 from $0.02. Adjusted EBITDA increased 36.1% to $17.9 million, with its margin expanding 170 basis points to 13.9%. Power Solutions led the revenue increase, and NN raised its full-year sales, adjusted EBITDA, and new-business-win guidance.
Core Financial Results
Revenue growth was driven by new business launches, higher precious-metal pass-through pricing, increased volumes, and favorable foreign exchange effects. Better operating performance and sales mix moved GAAP operating income into positive territory, although higher depreciation and amortization provided a partial offset.
The narrower net loss reflected the operating improvement as well as the absence of the $3.0 million debt-extinguishment loss recorded in Q2 2025. On an adjusted basis, stronger gross margin more than offset higher selling, general, and administrative expenses.
| Metric | Q2 2026 | Q2 2025 | Year-over-year change |
|---|---|---|---|
| Net sales | $128.7 million | $107.9 million | +19.3% |
| GAAP gross margin, dollars | $21.9 million | $18.2 million | +20.1% |
| Adjusted gross margin | $26.1 million / 20.3% | $21.1 million / 19.5% | +23.9% / +80 bps |
| GAAP operating income (loss) | $1.0 million | $(1.5) million | Improved by $2.5 million |
| Adjusted operating income | $8.5 million | $4.9 million | +73.9% |
| GAAP net loss | $(2.3) million | $(8.1) million | Loss narrowed 72.0% |
| GAAP diluted loss per share | $(0.13) | $(0.26) | Loss narrowed by $0.13 |
| Adjusted diluted EPS | $0.11 | $0.02 | +$0.09 |
| Adjusted EBITDA and margin | $17.9 million / 13.9% | $13.2 million / 12.2% | +36.1% / +170 bps |
Business and Segment Performance
Power Solutions generated most of the quarter’s incremental revenue. Its sales increased 39.5%, supported by precious-metal pass-through pricing, higher volumes, and favorable currency effects. GAAP operating income rose faster than sales, but adjusted operating margin was nearly unchanged at 18.8%, indicating that part of the reported revenue increase came from pricing passed through to customers.
Mobile Solutions grew more slowly. Its GAAP operating loss widened because of product-mix costs, although adjusted operating income including joint-venture income improved as rationalization efforts provided support.
| Segment metric | Q2 2026 | Q2 2025 | Year-over-year change |
|---|---|---|---|
| Power Solutions sales | $62.3 million | $44.6 million | +39.5% |
| Power Solutions GAAP operating income | $9.0 million | $5.8 million | +56.5% |
| Power Solutions adjusted operating income and margin | $11.7 million / 18.8% | $8.4 million / 18.9% | +39.1% / -10 bps |
| Mobile Solutions sales | $66.6 million | $63.4 million | +5.0% |
| Mobile Solutions GAAP operating loss | $(1.9) million | $(1.1) million | Loss widened 75.4% |
| Mobile Solutions adjusted operating income including JV and margin | $4.9 million / 7.4% | $4.4 million / 7.0% | +11.2% / +40 bps |
New Program Wins Are Shifting Growth Toward Higher-Growth Markets
NN attributed approximately $40 million of Q2 new-business wins to data center, medical, and defense programs. The company described these awards as higher-margin business with mostly immediate 2026 start dates, making their conversion into production revenue an important driver for the second half.
The data center operation is on pace to install approximately 50 new machines during 2026 and has a pipeline exceeding $50 million. Through July, NN had secured more than 100 programs with an estimated annual value of approximately $80 million. These figures represent awards and pipeline opportunities rather than revenue already recognized in Q2.
Profitability, Cash Flow, and the Balance Sheet
Despite the improvement in adjusted earnings, NN remained loss-making under GAAP. Interest expense of $5.7 million exceeded the company’s $1.0 million of operating income, while $2.4 million of joint-venture income provided a partial offset. Depreciation and amortization totaled $9.3 million, and NN’s non-GAAP adjustments also included facility, personnel, and professional costs.
Cash-flow figures were provided for the first six months of 2026 rather than Q2 alone. Six-month operating cash flow improved to $11.8 million from an outflow of $4.0 million a year earlier. Capital expenditures were $8.5 million, meaning operating cash flow exceeded capital spending by approximately $3.3 million. Cash and equivalents increased to $16.5 million at June 30 from $11.4 million at the end of 2025.
At quarter-end, current and long-term debt totaled approximately $166.5 million, compared with approximately $159.5 million at the end of 2025. Series D preferred stock was $122.1 million, up from $112.4 million. These balances predate the post-quarter refinancing: management said NN subsequently paid off approximately $89 million of preferred stock, but the resulting post-transaction debt and preferred-stock balances were not provided.
2026 Guidance
NN raised its 2026 guidance after citing year-to-date performance and momentum in data center, defense, and medical programs. The previous guidance ranges were not included in the supplied results, so the size of each upward revision cannot be quantified.
| Metric | Latest 2026 guidance | Growth at midpoint versus 2025 |
|---|---|---|
| Net sales | $460 million to $470 million | 10% |
| Adjusted EBITDA | $55 million to $65 million | 22% |
| New business wins | $80 million to $100 million | 29% |
The guidance implies midpoints of $465 million for sales, $60 million for adjusted EBITDA, and $90 million for new-business awards. Management expects the second half to benefit from immediate-supply program launches and continued operational execution.
Recent Insider Transactions
The supplied Yahoo Finance summary classified 624,192 shares across 11 transactions as purchases and 3,292,614 shares across five transactions as sales over the latest six-month period. That resulted in a net reduction of 2,668,422 insider-held shares, or 45.30%, with total insider holdings reported at approximately 3.22 million shares.
The five reported sales are shown below. These transactions are presented as factual disclosures and do not by themselves establish insiders’ views on the company’s outlook.
| Date | Insider | Transaction | Ownership | Reported value and price |
|---|---|---|---|---|
| May 12, 2026 | Raymond T. White, director | Sale | Indirect | $45,298 at $2.41 per share |
| April 27, 2026 | Corre Partners Management, L.L.C., greater-than-10% owner | Sale | Indirect | $1,882,704 at $2.51–$2.69 per share |
| April 27, 2026 | John Frederick Barrett, greater-than-10% owner | Sale | Indirect | $3,929,988 at $2.04–$2.69 per share |
| April 22, 2026 | Corre Partners Management, L.L.C. | Sale | Indirect | $518,301 at $2.21–$2.30 per share |
| April 17, 2026 | Corre Partners Management, L.L.C. | Sale | Indirect | $1,528,983 at $2.04–$2.29 per share |
Risks Investors Should Watch
- Power Solutions growth includes pass-through pricing: Precious-metal pricing contributed to the segment’s 39.5% sales increase, while adjusted operating margin slipped 10 basis points. Reported sales growth therefore did not translate proportionally into margin expansion within the segment.
- Mobile Solutions remains loss-making under GAAP: Product-mix costs widened the segment’s operating loss to $1.9 million despite higher sales and improved adjusted results.
- Financing costs still weigh on GAAP earnings: Quarterly interest expense remained at $5.7 million. The preferred-stock refinancing reduced one balance-sheet obligation after quarter-end, but the complete effect on debt, interest rates, and future financing costs was not disclosed.
- New-program execution is becoming more important: The outlook depends partly on converting data center, medical, and defense awards into production. NN is also installing substantial new capacity, while personnel, facility, and program start-up costs remained part of its reported adjustments.
Summary
NN’s Q2 2026 results showed faster sales growth, broader adjusted margin expansion, and a return to positive GAAP operating income. Power Solutions and new programs in data center, medical, and defense were the principal growth drivers, while Mobile Solutions’ GAAP loss and ongoing financing costs remained constraints. The main items to monitor are the pace of new-program revenue conversion, Mobile Solutions’ product mix, and the balance-sheet impact of the post-quarter refinancing.
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