Twin Disc (TWIN) Q2 2025 earnings summary

Executive summary

• Q2 sales rose 23.2% year-over-year to $89.9 million, driven by the Katsa Oy acquisition, strong Veth propulsion demand, and organic growth in Marine, Propulsion, and Industrial segments.

• Net income was $0.9 million ($0.07 per diluted share), flat compared to the prior year, reversing a previous net loss.

• EBITDA increased 13.5% to $6.3 million, reflecting improved operational performance.

• Backlog at quarter-end was $124.0 million, down sequentially due to high shipments and FX impact, but remains healthy.

• Integration of Katsa and Veth product lines expanded global reach and engineering capabilities, especially in Europe and North America.

Financial highlights

• Q2 sales reached $89.9 million, up 23.2% year-over-year; organic revenue increased 10.1%.

• Gross profit margin declined to 24.1% from 28.3% year-over-year, impacted by a $1.6 million inventory write-down and Katsa-related purchase accounting.

• EBITDA for Q2 was $6.3 million, up from $5.5 million a year ago.

• Net debt increased to $9.0 million from a net cash position a year ago, mainly due to the Katsa acquisition; cash balance ended at $15.9 million.

• Free cash flow in Q2 was $6.4 million; operating cash flow was $4.3 million.

Outlook and guidance

• Management expects continued growth from cross-selling, cost optimization, and strategic acquisitions, with a focus on operational efficiencies and cost management.

• CapEx for the year projected at $12–$15 million, with larger projects in the second half.

• End-market demand remains healthy, with strategic priorities aimed at expanding hybrid and electric solutions.

• Quoting activity in oil and gas is increasing across North America, Asia, and South America.

• Management expects available cash, credit facilities, and future operations to be adequate for foreseeable needs.