Twin Disc (TWIN) Q4 2026 earnings summary

Executive summary

• Achieved record Q4 2026 revenue of $114.4 million, up 18.3% year-over-year, capping a year of strong demand and operational execution in Marine, Propulsion, and Land-Based Transmissions.

• Net income for Q4 was $9.4 million, with full-year net income at $27.1 million, reversing a prior year loss.

• EBITDA for Q4 rose 35.1% to $11.1 million; full-year EBITDA increased 48.0% to $29.9 million.

• Defense and oil & gas segments were key growth drivers, with defense backlog up over 53% year-over-year and robust demand from U.S. and NATO.

• Board approved a 25% increase in quarterly dividend to $0.05 per share, reflecting confidence in future performance.

Financial highlights

• Q4 2026 sales reached $114.4 million, up 18.3% year-over-year; full-year sales were $381.3 million, with organic net sales at $356.5 million after adjusting for acquisitions and currency.

• Q4 operating income was $7.8 million; net income was $9.4 million ($0.64 per diluted share), aided by a $2.5 million tax benefit.

• Q4 EBITDA was $11.1 million, up 35.1% year-over-year; EBITDA margin increased 120 bps to 9.7%.

• Gross margin for Q4 was 26.3%, down 600 bps year-over-year due to product mix, tariff dilution, and absence of a prior-year one-time adjustment.

• Free cash flow in Q4 was $17.2 million; full-year free cash flow was $9.2 million; cash at quarter-end was $16.1 million, with net debt reduced to $13.8 million.

Outlook and guidance

• Strong backlog of $178.3 million at quarter-end, consistent with Q3, underpins confidence for fiscal 2027.

• Focus remains on operational execution, margin improvement, and disciplined capital allocation to achieve 2030 targets: $500 million revenue, 30% gross margin, and >60% free cash flow conversion.

• CapEx for fiscal 2027 expected to exceed $20 million, driven by facility expansion in Finland and equipment investments.