NN NASDAQ: NNBR reported higher first-quarter 2026 sales and profitability and raised its full-year outlook, with executives pointing to an improving sales mix, strength in electrical grid and data center end markets, and benefits from multi-year cost-out actions.
First-quarter results show sales growth and margin expansion
Senior Vice President and Chief Financial Officer Chris Bohnert said first-quarter net sales were $118.5 million, up $12.8 million, or 12.1%, from the prior-year period. Bohnert attributed the growth to a “positive shift” in sales mix, higher precious metals pass-through, and favorable foreign exchange, partially offset by softness in China automotive. He added that outside China, global automotive sales were “up slightly.”
Profitability improved sharply. Bohnert said adjusted operating income was $5.8 million, up $3.8 million from $2.0 million a year earlier. Adjusted EBITDA increased to $14.1 million from $10.6 million, a gain of 33.7%, with adjusted EBITDA margin rising to 11.9% from 10.0%.
Chief Executive Officer Harold Bevis said the quarter reflected a “very good mix” and noted the company achieved its “highest trailing 12-month adjusted EBITDA” in five years. He also said NN’s adjusted gross margin and adjusted EBITDA were higher both year-over-year and sequentially, driven by mix and operating performance.
Segment performance: Power Solutions drives results
In Power Solutions, Bohnert reported net sales of $55.4 million, up $11.9 million, or 27%, from $43.5 million in the prior-year quarter. He said growth was driven by improved mix from higher volumes in targeted growth areas, higher precious metals pass-through pricing, and favorable FX, partially offset by softness in certain stamped product lines.
Power Solutions adjusted EBITDA was $10.4 million, up 65.1% from $6.3 million, and adjusted EBITDA margin improved to 18.7% from 14.5%. Bohnert cautioned that NN sees “a short lag” in passing through inflation impacts to precious metals pricing, tariffs, and other surcharges, which can temporarily pressure profitability.
In Mobile Solutions, Bohnert said net sales rose modestly to $63.1 million from $62.2 million, up 1.4%, with growth supported by new program launches and strength across North America, South America, Europe, and automotive markets, as well as favorable FX. China automotive softness partially offset those gains. Segment adjusted EBITDA was $8.2 million with an adjusted EBITDA margin of 13%, which Bohnert described as flat due to China-related headwinds.
Growth programs and portfolio shift toward higher-growth markets
Bevis said NN’s diversification strategy is centered on three markets: electric grid and data center, defense electronics, and medical. He said these growth markets were collectively up 28% versus the first quarter of 2025 and now represent 44% of the company’s mix, up from 35% in 2023, as automotive declined to 44% from 56%.
Bevis emphasized that growth is not concentrated in a single customer or program, noting sales were higher with 22 of the company’s top 30 customers and that NN is launching “over 100 small and medium-sized programs” while adding new customers, “specifically in the data center arena.” He described NN’s automotive approach as “disciplined,” focused on maintaining profitable volumes rather than chasing share.
On the data center and electric grid opportunity, Bevis said the business is already “over $70 million” on a trailing 12-month basis and the near-term goal is to reach $100 million. He said NN supplies components including transformer components, electrical disconnects, circuit breaker components, smart meter components, and liquid cooling components.
Bevis discussed liquid cooling connector components—also referred to as quick disconnect couplings or fluid connectors—and described them as stainless steel connectors that route coolant through data center rack cooling systems. He said market size estimates for the area NN participates in range from $1.5 billion to $6 billion and referenced growth rates “at 40% per annum” in some estimates, while also noting wide variability in published figures.
He also said NN has been expanding manufacturing capability for these products, including that the company already had “over 100 machines” capable of making similar components and added another 17, with “about half” received so far.
In defense electronics, Bevis said the business is already “over $50 million” on a trailing 12-month basis and that growth has been “faster and bigger” than expected, including work with a “marquee OEM” in the U.S. to expand as a tier 1 manufacturer of weapons components, requiring new specialized equipment.
In medical, Bevis said NN restarted the business in fall 2023 and has implemented a turnaround plan and growth plan. He said it has been slower than expected relative to the other diversification areas, in part due to needing more plant certifications, but added that momentum is increasing and that the company is already profitable in medical. He told analysts medical was “not a source of our sales increase” in the quarter, but the company expects to “report positively” in medical this year.
New business wins, investment, and operational capacity
NN reported a strong quarter for new business awards. In Power Solutions, Bohnert said wins totaled $29.3 million, concentrated in electrical grid, data center, defense, and electronics products. In Mobile Solutions, he said wins were $13.6 million, including liquid cooling connector components now in production.
Management also discussed investment to support growth. Bohnert said the company acquired additional plating equipment “to advance our growth in electrical grid and data center markets.” Bevis later said the plating equipment supports busbar-related opportunities, enabling NN to quote a fuller bill of materials. He characterized the equipment as “medium-sized,” with expensive installation requirements, and said it is included in the company’s plan and guidance for the year, with availability expected “towards the end of the year.”
On capacity, Chief Operating Officer Tim French said Power Solutions has “significant capacity available” and that facilities are not running 24/7, allowing the business to “adapt and assimilate new business fairly quickly,” with ramp-ups that “can be extremely quickly” on the power side once tooling is created.
French also said there are no plant closures scheduled at this time, and Bevis added that while some plants rank lower than others, closures do not currently meet the company’s return thresholds compared with other uses of capital.
Guidance raised; long-term timeline pulled forward
Management raised 2026 guidance following the first-quarter performance and visibility into the rest of the year. Bohnert said NN now expects full-year 2026:
- Net sales of $450 million to $470 million (about 9% growth at the midpoint versus the prior year)
- Adjusted EBITDA of $52 million to $62 million (about 16% growth at the midpoint)
Bevis said NN is revising guidance ranges higher for net sales, adjusted EBITDA, and new business wins compared with prior expectations communicated earlier in the year.
NN also pulled forward the timing of its long-term targets by one year. Bohnert said the company now expects to reach its long-term goals in 2029 rather than 2030, while keeping the targets themselves unchanged: approximately $600 million in net sales at a 20% adjusted gross margin, and about $80 million of adjusted EBITDA at a 13% margin. He said that compared with 2025, those targets imply more than 40% net sales growth and more than 60% adjusted EBITDA growth.
During Q&A, Bevis acknowledged analyst questions about whether the margin targets appear conservative given the portfolio shift, saying the company opted to pull forward the timing rather than raise margin commitments, but that revisiting those targets is “top of mind.”
Bevis also said the company’s longer-term goal is to reduce automotive exposure to “30% or less” over time, while emphasizing that maintaining a stable automotive base requires ongoing program work and disciplined quoting.
On raw material inflation and tariffs, Bevis said NN has pass-through rights but experiences some lag due to the need to document incurred costs. He said the company has been able to keep up and has not seen “any material compression” from metals escalation.
Finally, Bevis provided an update on liquidity, stating NN received “the CARES Act proceeds,” which he said helped liquidity and reduced pressure as the board evaluates financing and other strategic alternatives. He said there was “nothing material to report” on the broader process at this time.
About NN NASDAQ: NNBR
NN, Inc NASDAQ: NNBR is a diversified industrial manufacturing company specializing in engineered metal components, powder metal parts and friction materials. Through its subsidiaries, the company develops and produces precision-rolled products for powertrain and chassis applications, engineered friction products for brake and transmission systems, and various metal powders used in automotive, industrial and energy markets. Its offerings span a wide range of component sizes and complexity, from thin‐gauge strips for hybrid and electric vehicle applications to high‐volume sintered parts for commercial and consumer products.
The company's operations are organized into three business segments.
Read More
This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.
Before you consider NN, you'll want to hear this.
MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and NN wasn't on the list.
While NN currently has a Hold rating among analysts, top-rated analysts believe these five stocks are better buys.
View The Five Stocks Here
Discover the 10 Best High-Yield Dividend Stocks for 2026 and secure reliable income in uncertain markets. Download the report now to identify top dividend payers and avoid common yield traps.
Get This Free Report
