Power Solutions International Announces First Quarter 2026 Financial Results
Rhea-AI Summary
Power Solutions International (Nasdaq: PSIX) reported first quarter 2026 net sales of $128.6 million (down 5% year over year), net income of $7.3 million, and diluted EPS of $0.32. Gross profit was $29.4 million, with gross margin declining to 22.9%.
Cash was $45.1 million and total debt $103.4 million at March 31, 2026. The company expects second-quarter 2026 revenue to be roughly in line with the first quarter and anticipates stronger sales in the second half of 2026, subject to order timing and market conditions.
AI-generated analysis. Not financial advice.
Positive
- Generated first quarter 2026 net income of $7.3 million
- Delivered diluted EPS of $0.32 in first quarter 2026
- Cash and cash equivalents increased to $45.1 million from $41.3 million
- Gross margin improved sequentially by about 100 bps versus Q4 2025
- Company expects second-half 2026 sales roughly in line with second-half 2025
- Ongoing strong demand for data center power solutions noted by the company
Negative
- First quarter 2026 net sales down 5% year over year to $128.6 million
- Gross profit declined 27% year over year to $29.4 million
- Net income decreased 62% year over year to $7.3 million
- First quarter 2026 gross margin fell to 22.9% from 29.7%
- Power systems end-market sales declined by $10.2 million year over year
- SG&A expenses rose 17% year over year to $13.0 million
News Market Reaction – PSIX
On the day this news was published, PSIX declined 39.15%, reflecting a significant negative market reaction. Argus tracked a peak move of +2.6% during that session. Argus tracked a trough of -56.9% from its starting point during tracking. Our momentum scanner triggered 133 alerts that day, indicating very high trading interest and price volatility. This price movement removed approximately $1.22B from the company's valuation, bringing the market cap to $1.90B at that time. Trading volume was exceptionally heavy at 5.5x the daily average, suggesting significant selling pressure.
Data tracked by StockTitan Argus on the day of publication.
Key Figures
Market Reality Check
Peers on Argus
Peers showed mixed moves, with EPAC (-0.04%), SXI (-2.65%), and KAI (-1.02%) down, while ATS (+3.06%) and AMSC (+1.51%) were up. With no peers in the momentum scanner and a different direction flag for the target, trading appears more stock-specific than sector-driven.
Previous Earnings Reports
| Date | Event | Sentiment | Move | Catalyst |
|---|---|---|---|---|
| Mar 02 | Full-year 2025 earnings | Positive | -29.0% | Record 2025 sales and earnings but margins compressed from Wisconsin ramp-up. |
| Nov 06 | Q3 2025 earnings | Positive | -19.1% | Record Q3 2025 results with strong growth but lower gross margin and higher SG&A. |
| Aug 07 | Q2 2025 earnings | Positive | +13.6% | Record Q2 2025 sales and earnings, debt reduction and new credit agreement. |
| May 08 | Q1 2025 earnings | Positive | +9.4% | Best-ever Q1 2025 with strong sales, higher gross margin and debt reduction. |
| Mar 24 | Q4 2024 earnings | Positive | +7.1% | Record Q4 and 2024 results with margin expansion, higher cash and lower debt. |
Earnings releases often brought strong fundamental results but mixed to negative next-day reactions, including two sharp selloffs in early 2026 despite record 2024–2025 performance.
Over the past year, PSI reported several record quarters and full-year results, with strong growth in power systems and data center demand, particularly in 2024 and 2025. Earnings updates on May 8, 2025, Aug 7, 2025, and Nov 6, 2025 all highlighted robust sales and net income gains, while recent releases on Mar 2, 2026 showed record 2025 results but margin pressure from Wisconsin ramp-up. Today’s weaker Q1 2026 earnings contrast with that run of record performance and extend the narrative of margin compression and more volatile post-earnings trading.
Historical Comparison
Earnings releases have averaged a -3.6% move over five prior events, with several record quarters still seeing selling pressure. Today’s Q1 2026 miss on prior-year strength fits into this pattern of volatile, often downside, reactions after earnings.
Earnings news progressed from record Q4 2024 and strong 2025 quarters to record full-year 2025 results, followed by Q1 2026 showing lower sales, earnings, and margins as Wisconsin ramp-up and mix pressures weighed on performance.
Market Pulse Summary
The stock dropped -39.1% in the session following this news. A negative reaction despite already-flagged margin headwinds would fit the pattern seen around prior earnings, where strong results sometimes preceded sharp declines. Q1 2026 net sales of $128.6M and EPS of $0.32 fell well below Q1 2025’s $135.4M and $0.83, and gross margin slipped to 22.9%. Continued Wisconsin ramp-up costs and softer oil and gas demand could reinforce concerns about sustainability of the record 2025 performance, making investors more cautious around guidance framed without formal full-year targets.
Key Terms
gross margin financial
basis points financial
research and development expenses financial
selling, general and administrative expenses financial
interest expense financial
income tax expense financial
AI-generated analysis. Not financial advice.
First Quarter Net Sales of
First Quarter Net Income of
Diluted EPS of
WOOD DALE, Ill., May 11, 2026 (GLOBE NEWSWIRE) -- Power Solutions International, Inc. (the “Company” or “PSI”) (Nasdaq: PSIX), a leader in the design, engineering and manufacture of emission-certified engines and power systems, today announced its financial results for the first quarter of 2026.
Financial Highlights
| ($ in millions, except per share amounts) | March 31, 2026 | March 31, 2025 | Change |
| Net Sales | (5)% | ||
| Gross Profit | (27)% | ||
| Net Income | (62)% | ||
| Diluted Earnings per Share | |||
Dino Xykis, Chief Executive Officer, said: “Our first quarter results were below the strong prior-year period, which had benefited from significant growth in our Power Systems business. The year-over-year declines in sales and profitability primarily reflected softer oil and gas demand, the timing of certain Power Systems shipments, and elevated production costs associated with the capacity ramp-up in our Wisconsin operations.
At the same time, demand related to data center applications remains solid. Gross margin improved sequentially from the fourth quarter of 2025, partially offset by unfavorable product mix.”
First Quarter 2026 Results
Net sales for the first quarter of 2026 were
Gross profit for the first quarter of 2026 was
Research and development expenses during the three months ended March 31, 2026 and 2025 were
Selling, general and administrative expenses were
Interest expense was
Income tax expense was
Balance Sheet Update
The Company’s cash and cash equivalents were approximately
Outlook for 2026
Given ongoing variability in order timing and market conditions, the Company is not providing formal full-year guidance at this time. Based on current visibility, the Company currently expects second-quarter 2026 revenue to be generally consistent with the first quarter on a sequential basis. The Company anticipates stronger sales growth in the second half of 2026, approximately in line with sales in the second half of 2025, as larger Power Systems orders move into production and are recognized as revenue. However, the timing and ultimate volume of those shipments remain subject to customer scheduling, manufacturing throughput, supply chain factors and other variables. There can be no assurance that those orders will translate to a uniformly stronger second half. Continued softness in the oil and gas end market is expected to weigh on quarterly revenue trends, and capacity ramp-up activities at the Company’s Wisconsin operations and their related cost effects on gross margin are expected to continue.
About Power Solutions International, Inc.
Power Solutions International, Inc. (PSI) is a leader in the design, engineering and manufacture of a broad range of advanced, emission-certified engines and power systems. PSI provides integrated turnkey solutions to leading global original equipment manufacturers and end-user customers within the power systems, industrial and transportation end markets. The Company’s in-house design, prototyping, engineering and testing capabilities allow PSI to customize high-performance engines using a fuel-agnostic strategy to run on a wide variety of fuels, including natural gas, propane, gasoline, diesel and biofuels.
PSI develops and delivers complete power systems that are used worldwide in stationary and mobile power generation applications supporting standby, prime, demand response, and microgrid solutions, as well as products and packages supporting the growing data center markets. PSI’s industrial end market provides engine and battery powertrain solutions to serve applications such as forklifts, agricultural and turf, arbor care, industrial sweepers, aerial lifts, irrigation pumps, ground support, and construction equipment. PSI’s transportation end market provides engine powertrain solutions to specialized applications such as terminal tractors, port equipment, military vehicles, and other non-road vocational vehicles. For more information on PSI, visit www.psiengines.com.
Cautionary Note Regarding Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements reflect the Company’s current expectations and assumptions regarding future events. Words such as “anticipate,” “believe,” “budget,” “contemplate,” “continue,” “estimate,” “expect,” “forecast,” “guidance,” “intend,” “may,” “outlook,” “plan,” “position,” “project,” “prospect,” “should,” “target,” “will,” “would” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. Forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties and assumptions that could cause actual results to differ materially from those expressed in or implied by such statements.
Important factors that could cause actual results to differ materially include, without limitation: the timing and ultimate conversion of Power Systems orders into revenue, including data-center-related orders, and the volume and timing of related shipments; quarterly variability in product mix and the corresponding effect on gross profit and gross margin; the cost, pace, throughput and operational outcomes of capacity ramp-up activities at the Company’s Wisconsin operations, including the duration and magnitude of related production costs; the level and persistence of customer demand in the power systems, industrial and transportation end markets; volatility in oil and gas prices and corresponding demand for related products; supply-chain disruptions, component availability and supplier performance; macroeconomic, regulatory and trade conditions, including U.S. tariffs and trade restrictions; integration of recent and future acquisitions, including the acquisition of MTL Manufacturing and Equipment; the outcome of pending or threatened litigation and regulatory inquiries, including the previously disclosed putative federal securities class action; changes in management or other personnel, including the timing of any related disclosures; the ability to recruit and retain key employees; the impact of changes in our effective tax rate or applicable tax legislation; and the other risks and uncertainties described in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025 and in the Company’s subsequent filings with the U.S. Securities and Exchange Commission, all of which are incorporated by reference into this press release.
The Company’s forward-looking statements speak only as of the date of this filing. Except as required by law, the Company expressly disclaims any intention or obligation to revise or update any forward-looking statement, whether as a result of new information, future events or otherwise. Investors are cautioned not to place undue reliance on any forward-looking statements.
Results of operations for the three months ended March 31, 2026 compared with the three months ended March 31, 2025 (UNAUDITED):
| (in thousands, except per share amounts) | For the Three Months Ended March 31, | |||||||||||||
| 2026 | 2025 | Change | % Change | |||||||||||
| Net sales (to related parties | $ | 128,592 | $ | 135,446 | $ | (6,854 | ) | (5 | )% | |||||
| Cost of sales (derived from related party net sales | 99,168 | 95,152 | 4,016 | 4 | % | |||||||||
| Gross profit | 29,424 | 40,294 | (10,870 | ) | (27 | )% | ||||||||
| Gross margin % | 22.9 | % | 29.7 | % | (6.8)% | |||||||||
| Operating expenses: | ||||||||||||||
| Research and development expenses | 4,805 | 4,244 | 561 | 13 | % | |||||||||
| Research and development expenses as a % of sales | 3.7 | % | 3.1 | % | 0.6 | % | ||||||||
| Selling, general and administrative expenses | 12,977 | 11,109 | 1,868 | 17 | % | |||||||||
| Selling, general and administrative expenses as a % of sales | 10.1 | % | 8.2 | % | 1.9 | % | ||||||||
| Amortization of intangible assets | 249 | 307 | (58 | ) | (19 | )% | ||||||||
| Total operating expenses | 18,031 | 15,660 | 2,371 | 15 | % | |||||||||
| Operating income | 11,393 | 24,634 | (13,241 | ) | (54 | )% | ||||||||
| Other expense (income), net: | ||||||||||||||
| Interest expense (from related parties | 1,745 | 1,766 | (21 | ) | (1 | )% | ||||||||
| Other expense (income) | (85 | ) | — | (85 | ) | NM | ||||||||
| Total other expense, net | 1,660 | 1,766 | (106 | ) | (6 | )% | ||||||||
| Income before income taxes | 9,733 | 22,868 | (13,135 | ) | (57 | )% | ||||||||
| Income tax expense | 2,433 | 3,786 | (1,353 | ) | (36 | )% | ||||||||
| Net income | $ | 7,300 | $ | 19,082 | $ | (11,782 | ) | (62 | )% | |||||
| Earnings per common share: | ||||||||||||||
| Basic | $ | 0.32 | $ | 0.83 | $ | (0.51 | ) | (61 | )% | |||||
| Diluted | $ | 0.32 | $ | 0.83 | $ | (0.51 | ) | (61 | )% | |||||
| Non-GAAP Financial Measures: | ||||||||||||||
| Adjusted net income * | $ | 8,005 | $ | 19,235 | $ | (11,230 | ) | (58 | )% | |||||
| Adjusted net income per share – diluted* | $ | 0.36 | $ | 0.83 | (0.47 | ) | (57 | )% | ||||||
| EBITDA * | $ | 13,170 | $ | 25,916 | $ | (12,746 | ) | (49 | )% | |||||
| Adjusted EBITDA * | $ | 13,875 | $ | 26,069 | $ | (12,194 | ) | (47 | )% | |||||
| NM | Not meaningful |
| * | See reconciliation of non-GAAP financial measures to GAAP results below |
| POWER SOLUTIONS INTERNATIONAL, INC. CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||
| (in thousands, except par values) | As of March 31, 2026 (unaudited) | As of December 31, 2025 | |||||
| ASSETS | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 45,089 | $ | 41,250 | |||
| Restricted cash | 4,448 | 3,698 | |||||
| Accounts receivable, net of allowances of | 73,690 | 90,446 | |||||
| Income tax receivable | 5,348 | 6,442 | |||||
| Inventories, net | 129,243 | 127,363 | |||||
| Prepaid expenses | 4,293 | 4,500 | |||||
| Contract assets | 11,567 | 15,965 | |||||
| Other current assets | 1,152 | 1,256 | |||||
| Total current assets | 274,830 | 290,920 | |||||
| Property, plant and equipment, net | 32,281 | 23,014 | |||||
| Operating lease right-of-use assets, net | 61,164 | 52,911 | |||||
| Intangible assets, net | 1,607 | 1,236 | |||||
| Goodwill | 34,921 | 29,835 | |||||
| Deferred tax assets | 12,188 | 13,322 | |||||
| Customs-related deposits | 13,148 | 12,893 | |||||
| Other noncurrent assets | 543 | 614 | |||||
| TOTAL ASSETS | $ | 430,682 | $ | 424,745 | |||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
| Current liabilities: | |||||||
| Accounts payable (to related parties | $ | 42,544 | $ | 48,196 | |||
| Current maturities of long-term debt | 1,804 | 28 | |||||
| Finance lease liability, current | 364 | 355 | |||||
| Operating lease liability, current | 7,351 | 6,346 | |||||
| Other accrued liabilities (to related parties | 28,310 | 37,353 | |||||
| Total current liabilities | 80,373 | 92,278 | |||||
| Long-term debt, net of current maturities | 5,050 | 10 | |||||
| Revolving line of credit, long-term | 95,000 | 95,000 | |||||
| Finance lease liability, long-term | 1,223 | 1,224 | |||||
| Operating lease liability, long-term | 55,628 | 49,397 | |||||
| Noncurrent contract liabilities | 1,666 | 1,699 | |||||
| Other noncurrent liabilities | 5,965 | 6,528 | |||||
| TOTAL LIABILITIES | $ | 244,905 | $ | 246,136 | |||
| STOCKHOLDERS’ EQUITY | |||||||
| Common stock – | 23 | 23 | |||||
| Additional paid-in capital | 157,878 | 157,602 | |||||
| Retained earnings | 29,776 | 22,476 | |||||
| Treasury stock, at cost, 66 and 76 shares at March 31, 2026 and December 31, 2025, respectively | (1,900 | ) | (1,492 | ) | |||
| TOTAL STOCKHOLDERS’ EQUITY | 185,777 | 178,609 | |||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 430,682 | $ | 424,745 | |||
| POWER SOLUTIONS INTERNATIONAL, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) | |||||||
| (in thousands) | For the Three Months Ended March 31, | ||||||
| 2026 | 2025 | ||||||
| Cash flows from operating activities | |||||||
| Net income | $ | 7,300 | $ | 19,082 | |||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
| Amortization of intangible assets | 249 | 307 | |||||
| Depreciation | 1,443 | 975 | |||||
| Noncash lease expense | 1,439 | 1,684 | |||||
| Stock-based compensation expense | 424 | 153 | |||||
| Amortization of financing fees | 151 | 165 | |||||
| Deferred income taxes | 1,134 | — | |||||
| Provision (credit) for losses in accounts receivable | 432 | (37 | ) | ||||
| Increase in allowance for inventory obsolescence, net | 405 | 206 | |||||
| Other adjustments, net | 111 | 33 | |||||
| Changes in operating assets and liabilities, net of effects of business combinations: | |||||||
| Accounts receivable | 17,137 | (12,619 | ) | ||||
| Inventories | 339 | (19,294 | ) | ||||
| Prepaid expenses | 207 | 33 | |||||
| Contract assets | 4,398 | 4,077 | |||||
| Other assets | (133 | ) | 1,571 | ||||
| Accounts payable | (4,316 | ) | 7,014 | ||||
| Income taxes receivable | 1,094 | 986 | |||||
| Accrued expenses | (10,434 | ) | 9,272 | ||||
| Other noncurrent liabilities | (2,250 | ) | (4,797 | ) | |||
| Net cash provided by operating activities | 19,130 | 8,811 | |||||
| Cash flows from investing activities | |||||||
| Capital expenditures | (1,890 | ) | (3,403 | ) | |||
| Business acquisition | (11,911 | ) | — | ||||
| Net cash used in investing activities | (13,801 | ) | (3,403 | ) | |||
| Cash from financing activities | |||||||
| Repayment of long-term debt and lease liabilities | (180 | ) | (98 | ) | |||
| Repayment of short-term financings | — | (10,000 | ) | ||||
| Repurchases to settle tax withholding obligations for stock-based compensation awards | (556 | ) | (142 | ) | |||
| Other financing activities, net | (4 | ) | — | ||||
| Net cash used in financing activities | (740 | ) | (10,240 | ) | |||
| Net increase (decrease) in cash, cash equivalents, and restricted cash | 4,589 | (4,832 | ) | ||||
| Cash, cash equivalents, and restricted cash at beginning of the period | 44,948 | 58,491 | |||||
| Cash, cash equivalents, and restricted cash at end of the period | $ | 49,537 | $ | 53,659 | |||
Non-GAAP Financial Measures
In addition to the results provided in accordance with U.S. GAAP above, this report also includes non-GAAP (adjusted) financial measures. Non-GAAP financial measures provide insight into selected financial information and should be evaluated in the context in which they are presented. These non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation from, or as a substitute for, financial information presented in compliance with U.S. GAAP, and non-GAAP financial measures as reported by the Company may not be comparable to similarly titled amounts reported by other companies. The non-GAAP financial measures should be considered in conjunction with the consolidated financial statements, including the related notes, and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in this report. Management does not use these non-GAAP financial measures for any purpose other than the reasons stated below.
| Non-GAAP Financial Measure | Comparable GAAP Financial Measure |
| Adjusted net income | Net income |
| Adjusted net income per share – diluted | Net income per share – diluted |
| EBITDA | Net income |
| Adjusted EBITDA | Net income |
The Company believes that Adjusted net income, Adjusted net income per share – diluted, EBITDA, and Adjusted EBITDA provide relevant and useful information, which is widely used by analysts, investors and competitors in its industry as well as by the Company’s management in assessing the performance of the Company. Adjusted net income is defined as net income as adjusted for certain items that the Company believes are not indicative of its ongoing operating performance. Adjusted net income per share – diluted is a measure of the Company’s diluted earnings per common share adjusted for the impact of special items. EBITDA provides the Company with an understanding of earnings before the impact of investing and financing charges and income taxes. Adjusted EBITDA further excludes the effects of other non-cash charges and certain other items that do not reflect the ordinary earnings of the Company’s operations.
Adjusted net income, Adjusted net income per share – diluted, EBITDA, and Adjusted EBITDA are used by management for various purposes, including as a measure of performance of the Company’s operations and as a basis for strategic planning and forecasting. Adjusted net income, Adjusted net income per share – diluted, and Adjusted EBITDA may be useful to an investor because these measures are widely used to evaluate companies’ operating performance without regard to items excluded from the calculation of such measures, which can vary substantially from company to company depending on the accounting methods, the book value of assets, the capital structure and the method by which the assets were acquired, among other factors. They are not, however, intended as alternative measures of operating results or cash flow from operations as determined in accordance with U.S. GAAP.
The following table presents a reconciliation from Net income to Adjusted net income for the three months ended March 31, 2026 and 2025:
| (in thousands) | For the Three Months Ended March 31, | ||||||
| 2026 | 2025 | ||||||
| Net income | $ | 7,300 | $ | 19,082 | |||
| Stock-based compensation 1 | 424 | 153 | |||||
| Severance 2 | 134 | — | |||||
| Other legal matters 3 | 147 | — | |||||
| Adjusted net income | $ | 8,005 | $ | 19,235 | |||
The following table presents a reconciliation from Net income per share – diluted to Adjusted net income per share – diluted for the three months ended March 31, 2026 and 2025:
| For the Three Months Ended March 31, | |||||||
| 2026 | 2025 | ||||||
| Net income per share – diluted | $ | 0.32 | $ | 0.83 | |||
| Stock-based compensation 1 | 0.02 | — | |||||
| Severance 2 | 0.01 | — | |||||
| Other legal matters 3 | 0.01 | — | |||||
| Adjusted net income per share – diluted | $ | 0.36 | $ | 0.83 | |||
| Diluted shares (in thousands) | 23,063 | 23,061 | |||||
The following table presents a reconciliation from Net income to EBITDA and Adjusted EBITDA for the three months ended March 31, 2026 and 2025:
| (in thousands) | For the Three Months Ended March 31, | ||||||
| 2026 | 2025 | ||||||
| Net income | $ | 7,300 | $ | 19,082 | |||
| Interest expense | 1,745 | 1,766 | |||||
| Income tax expense | 2,433 | 3,786 | |||||
| Depreciation | 1,443 | 975 | |||||
| Amortization of intangible assets | 249 | 307 | |||||
| EBITDA | 13,170 | 25,916 | |||||
| Stock-based compensation 1 | 424 | 153 | |||||
| Severance 2 | 134 | — | |||||
| Other legal matters 3 | 147 | — | |||||
| Adjusted EBITDA | $ | 13,875 | $ | 26,069 | |||
| 1. | Amounts reflect non-cash stock-based compensation expense for the three months ended March 31, 2026 and 2025. |
| 2. | Amounts include severance expense for the three months ended March 31, 2026. |
| 3. | Amounts include legal settlements for the three months ended March 31, 2026. |
Contact Power Solutions International, Inc. Kenneth Li Chief Financial Officer 630-284-9719 kli@psiengines.com