Holley (HLLY) Q2 2026 earnings summary

Executive summary

• Net sales increased 3.2% year-over-year to $172.0 million in Q2 2026, with three of four divisions achieving double-digit core sales growth and core business net sales up 4.9% after excluding divestitures.

• Portfolio rebalancing included divestiture of non-core Restoration brands and acquisition of HRX, supporting focus on high-growth areas.

• Generated strong free cash flow of $40.9 million, reduced leverage to a four-year low, and repurchased $2 million in shares.

• Strategic initiatives contributed $13.4 million in revenue and $8.3 million in cost savings.

• Net loss of $2.4 million, or $(0.02) per diluted share, driven by a $28.3 million loss on sale of non-core assets and higher SG&A expenses.

Financial highlights

• Q2 2026 net sales: $172.0 million (+3.2% YoY); gross profit: $70.5 million (+1.4% YoY); gross margin: 41.0% (down 72 bps YoY).

• Adjusted EBITDA: $33.8 million (19.6% margin, down from 21.9% YoY); adjusted net income: $24.0 million, more than double prior year.

• Operating income dropped to $2.8 million from $27.5 million, reflecting higher expenses and asset sale loss.

• Free cash flow for the quarter was $40.9 million, up $5.2 million year-over-year.

• Ended quarter with $69 million in cash and no outstanding revolver balance.

Outlook and guidance

• Full-year 2026 core business revenue guidance reiterated at $610–$640 million, with core growth rate of 2%–7%.

• Adjusted EBITDA guidance for 2026 remains $127–$137 million; year-end leverage target below 3.5x.

• Capital expenditures expected at $15–$20 million; interest expense (excluding collar revaluation) at $42–$47 million.

• New national retailer placements and robust product launch pipeline position the company well for H2 2026.