Freightcar America NASDAQ: RAIL reported second-quarter results marked by strong order intake and backlog growth, but lowered its 2026 delivery, revenue and adjusted EBITDA outlook after a planned production ramp began later than expected.
President and Chief Executive Officer Nicholas Randall said customer demand had been deferred rather than canceled, with some railcars previously expected to be delivered in 2026 now scheduled for early 2027. He said the company expects the second quarter to represent the low point of the year for adjusted EBITDA and margins as production rises in the second half and cost-saving measures begin to take effect.
“The lower 2026 delivery outlook does not reflect a weakening of our commercial position,” Randall said, pointing to approximately 3,000 units booked during the quarter, including about 2,600 new railcars.
Orders and Backlog Expand
FreightCar America said its new railcar orders represented roughly 45% of total industry new railcar orders during the quarter. Excluding tank cars, Chief Commercial Officer Matt Tonn said the company captured about 56% of the addressable market.
The quarter included a multiyear award for 1,900 railcars, with deliveries extending through 2028. Randall said orders came from repeat customers and first-time buyers across each of the company’s principal market segments.
The company ended the period with backlog of 3,972 units valued at approximately $344 million, compared with 2,058 units valued at $156 million at the end of the first quarter. Backlog units rose about 93% sequentially, while backlog value increased 121%.
Tonn said industry order activity remained subdued, with approximately 5,800 new railcar orders during the second quarter, compared with roughly 6,200 in the prior-year period. Still, he said 16 of 20 carload segments tracked by the Association of American Railroads posted year-over-year growth, while carload traffic excluding coal in the first half reached its highest level since 2008.
Management continued to characterize the railcar market as being in a cyclical trough. Tonn said total industry order activity and deliveries could be in the 20,000 to 23,000 range this year, while demand could approach 30,000 railcars in 2027 and rise above 40,000 in 2028 as aging railcars are retired. The company has cited normalized replacement demand of approximately 35,000 to 40,000 railcars annually.
Quarterly Profitability Declines on Timing and Restructuring Costs
Second-quarter revenue was $113.1 million, down from $118.6 million a year earlier. FreightCar America delivered 927 railcars during the quarter, compared with 939 in the prior-year period.
Gross profit fell to $6.2 million, or a 5.5% gross margin, from $17.8 million and a 15% margin in the second quarter of 2025. Chief Financial Officer Mike Riordan attributed the decline primarily to lower delivery volumes and reduced fixed-cost absorption, along with $2.2 million in costs tied to a workforce and operating realignment at the company’s Castaños manufacturing operation.
The company reported a net loss of $30.1 million, or $0.94 per diluted share. The result included a $24.9 million non-cash loss from remeasuring its warrant liability after the company’s share-price appreciation during the quarter. Adjusted net loss was $0.8 million, or $0.02 per diluted share, compared with adjusted net income of $3.8 million, or $0.11 per diluted share, a year earlier.
Adjusted EBITDA was $1.2 million, representing a 1% margin, compared with $9.3 million and a 7.8% margin in the prior-year period.
Cost Savings and Aftermarket Expansion
FreightCar America completed a structural optimization of its Castaños facility during the quarter. Randall said manufacturing productivity has increased by approximately 50% over the last two years through its TruTrack operating system, automation investments and vertical integration efforts.
The company expects the realignment to generate about $12 million in annualized structural savings, beginning in the third quarter and building toward a full run rate thereafter. Randall said the changes preserved installed production capacity, principal manufacturing lines and capabilities needed to increase output as demand recovers.
Aftermarket revenue increased 13% year over year, supported by organic growth in parts and components and the contribution from a previous acquisition. In July, FreightCar America completed its acquisition of Southern Parts & Equipment, its second aftermarket transaction in less than a year.
Riordan said the company views aftermarket operations as a meaningful growth platform, citing their more repeatable, less cyclical revenue profile. He said the business’s long-term gross margin rate is expected to be in the 32% to 33% range, though quarterly results may vary based on product mix.
Updated 2026 Outlook and Tank-Car Plans
For 2026, FreightCar America now expects:
- Railcar deliveries of 3,500 to 3,900 units;
- Revenue of $410 million to $460 million; and
- Adjusted EBITDA of $36 million to $44 million.
Riordan said the updated forecast reflects the later production ramp and customer delivery timing, while the company’s aftermarket business remains on plan. The second-half outlook is supported by orders already in backlog, he said.
The company generated $12.1 million in operating cash flow and $11.3 million in free cash flow during the quarter, up 43% year over year. It ended June with $63 million in cash and cash equivalents and had reduced total debt by approximately $7.3 million since year-end.
On tank cars, Randall said the company’s retrofit program remains on track for activity in the third and fourth quarters and into 2027. FreightCar America continues to evaluate a potential entry into new tank-car manufacturing in late 2027 or early 2028. Randall said the company is reviewing the implications of Section 232 tariffs on tank cars from Mexico, but does not expect the tariffs to affect the current retrofit program or alter its near-term planning.
About Freightcar America (NASDAQ:RAIL)
FreightCar America, Inc is a designer and manufacturer of specialized railroad freight cars, offering a diverse range of products that include tank cars, open and covered hoppers, gondolas, boxcars and centerbeam lumber cars. The company supports both new car construction and the rebuilding of existing fleets, providing custom engineering solutions to meet customer specifications and industry regulations. FreightCar America also supplies aftermarket parts, maintenance services and component remanufacturing for its own fleet and for third-party car owners.
Headquartered in Chicago, Illinois, FreightCar America traces its origins to early 20th-century railcar builders and began trading as an independent, publicly-listed company on the NASDAQ under the ticker RAIL following a spin-off in 2010.
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