Tennant Company (TNC) Q2 2026 earnings summary

Executive summary

• Net sales rose 1.7% year-over-year to $324 million in Q2 2026, driven by price realization, favorable currency, and acquisitions, but offset by lower volumes and operational constraints, especially in EMEA and APAC.

• Orders increased 6.6% year-over-year to $339.5 million, with backlog rising to $127 million as order entry outpaced shipments, indicating strong demand.

• Robotics segment delivered 37% year-over-year growth in Q2, reaching $31 million in revenue, with a robust pipeline and full-year revenue projected at $130–$145 million.

• Profitability lagged expectations due to gross margin pressures, higher operating expenses, and ERP inefficiencies, particularly in EMEA and North America.

• Full-year net sales outlook was raised, but adjusted EBITDA and EPS guidance were lowered due to ongoing cost pressures and delayed efficiency gains.

Financial highlights

• Q2 2026 net sales were $324 million (+1.7% YoY); organic sales declined 0.5% as pricing gains were offset by lower volumes.

• Net income dropped to $7.6 million from $20.2 million year-over-year, mainly due to cost inflation and ERP inefficiencies.

• Adjusted EBITDA was $35.3 million (10.9% margin), down from $51 million (16%) year-over-year.

• Adjusted diluted EPS was $0.83, down from $1.49 in the prior year; reported diluted EPS was $0.44.

• Gross margin was 39.5%, down 260 bps year-over-year but up 140 bps sequentially.

Outlook and guidance

• Full-year 2026 net sales guidance raised to $1.27–$1.31 billion (3.5%–7% organic growth).

• Adjusted EBITDA guidance lowered to $155–$170 million (12.2%–13% margin); adjusted diluted EPS now expected at $3.80–$4.45.

• Robotics revenue expected to reach $130–$145 million for the full year, with acceleration in H2 from new product launches and backlog conversion.

• Capital expenditures expected to be ~$25 million; adjusted effective tax rate projected at 24%–29%.

• ERP-related costs and EMEA/APAC volume pressures expected to persist into H2, with margin improvement anticipated in Q4.