Enerpac Tool Group (EPAC) Q2 2026 earnings summary

Executive summary

• Q2 FY2026 net sales reached $155 million, up 6% year-over-year, with organic growth of 2%; IT&S product sales grew 6% organically, the highest in 10 quarters, while service revenue declined 13–17% due to EMEA weakness.

• Six new products were launched at CONEXPO, and a major five-year UK North Sea service contract was secured.

• Net earnings for Q2 FY2026 were $16.3 million ($0.31 per diluted share); adjusted net earnings were $20.3 million ($0.39 per diluted share), flat year-over-year.

• $51 million was returned to shareholders via share repurchases in Q2; $135 million remains authorized.

• Restructuring actions were taken in EMEA service business to align with market conditions, incurring $3.3 million in charges.

Financial highlights

• Gross margin declined 410 basis points year-over-year to 46.4%, mainly due to lower service volume and restructuring.

• Adjusted EBITDA margin was 21.3%, down from 23.2% a year ago; adjusted EBITDA was $33 million.

• Adjusted EPS was $0.39, flat year-over-year; reported EPS was $0.31, down from $0.38.

• Free cash flow for the first half rose to $23–$29 million from $5–$16 million year-over-year.

• Share repurchases totaled $51 million in Q2; $135 million remains under authorization.

Outlook and guidance

• FY2026 net sales guidance narrowed to $635–$650 million, reflecting 1–3% organic growth.

• Adjusted EBITDA guidance is $158–$163 million; adjusted EPS expected at $1.85–$1.92.

• Free cash flow guidance maintained at $100–$110 million.

• Sequential gross margin improvement expected in the second half; service business rebound anticipated in Q4.

• Continued focus on operational efficiency, margin expansion, and disciplined capital deployment.