Holley (HLLY) Q2 2026 earnings summary

Executive summary

• Net sales increased 3.2% year-over-year to $172.0 million, 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, up $5.2 million year-over-year, and reduced leverage to a four-year low.

• 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); core business net sales grew 4.9%.

• Gross margin: 41.0%, down 72 bps year-over-year, mainly due to tariffs and higher cost of goods sold.

• Adjusted EBITDA: $33.8 million (19.6% margin), down from $36.4 million (21.9% margin) year-over-year.

• Adjusted net income rose to $24.0 million from $10.6 million; adjusted diluted EPS: $0.20, up $0.11 year-over-year.

• Free cash flow for the quarter was $40.9 million, up from $35.7 million year-over-year.

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 remains on track.

• Expect slight gross margin uptick in H2 2026 due to pricing actions and cost controls.

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