Perma-Pipe International Holdings (PPIH) Q2 2027 earnings summary

Executive summary

• Net sales for Q2 2026 rose 24% year-over-year to $59.6 million, driven by higher volumes in North America and MENA, with a backlog of $142.3 million at quarter-end and over $67 million in new orders.

• Net income attributable to common stock was $2.5 million ($0.31 per diluted share), up from $0.9 million ($0.10 per share) last year, despite a $3.9 million charge for an uncollectible receivable.

• Operational highlights include ramp-up of new facilities in Ohio and Qatar, a joint venture in Jordan, and inclusion in the Russell 2000 and 3000 Indexes.

• Strategic expansion continues in MENA, with a joint venture in Saudi Arabia and a new MOU in Jordan targeting major infrastructure projects.

• Growth is driven by strong demand in leak detection, oil & gas, district heating/cooling, water security, and digital infrastructure.

Financial highlights

• Gross profit for Q2 was $17.4 million (29% margin), up 21% year-over-year; gross margin remained stable.

• Operating expenses rose to $13.2 million, including a $3.9 million bad debt charge and $0.5 million in Ohio startup costs.

• Income from operations was $4.3 million, up from $3.2 million last year; net interest expense increased slightly to $0.5 million.

• Cash and equivalents rose to $31.8 million, with net debt reduced to $4.3 million.

• Total debt at quarter-end was $36.1 million, up from $32.5 million at January 31, 2026.

Outlook and guidance

• Management expects strong performance in the second half of 2026, supported by a robust backlog, expanding RFP pipeline, and business development initiatives.

• Ramp-up of Ohio and Qatar facilities expected to reach full utilization by early 2027, with data centers as a key growth driver.

• Anticipates margin expansion as volumes increase and fixed costs are absorbed; aims to return consolidated gross margins to above 30%.

• Expects 40%-50% of backlog to convert to revenue in Q3.

• Existing cash, cash flows, and credit facilities expected to meet all working capital and capital expenditure needs for the next twelve months.