NN’s second quarter was marked by strong year-over-year revenue growth and significant outperformance on adjusted profitability versus Wall Street expectations. Despite the negative market reaction, management attributed the quarter’s results to robust new business wins across its targeted verticals, including data center electric grid, defense electronics, and medical products. CEO Harold Bevis emphasized that the company’s diversification strategy is taking hold, with non-automotive end markets now representing roughly a third of total sales. The quarter also featured meaningful improvements in gross margins, driven by favorable product mix and efficiency gains from earlier cost initiatives.
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NN (NNBR) Q2 CY2026 Highlights:
- Revenue: $128.7 million vs analyst estimates of $116.1 million (19.3% year-on-year growth, 10.9% beat)
- Adjusted EPS: $0.05 vs analyst estimates of $0.01 (significant beat)
- Adjusted EBITDA: $17.94 million vs analyst estimates of $13.91 million (13.9% margin, 29% beat)
- The company lifted its revenue guidance for the full year to $465 million at the midpoint from $460 million, a 1.1% increase
- EBITDA guidance for the full year is $60 million at the midpoint, above analyst estimates of $56.5 million
- Operating Margin: 0.8%, up from -1.4% in the same quarter last year
- Market Capitalization: $192.6 million
While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From NN’s Q2 Earnings Call
- Robert Brown (Lake Street Capital Markets) asked about the data center pipeline scale and product focus. CEO Harold Bevis described a multiproduct approach, with a "large expanding pipeline" nearing $100 million in prospecting, and emphasized NN’s growing role in cold plates and transformer parts.
- Greg Palm (Craig-Hallum) questioned when new business wins would impact financials. Bevis clarified that "the announcements we made...are not impacting the first half at all," and production ramp-ups will begin contributing in the second half.
- George Proost (NOBLE Capital, for Joe Gomes) inquired about the timeline for capacity expansion in China. Bevis explained that NN is seeking space for 200 additional machines, aiming to secure facilities within 12 months to support growth.
- Barry Haimes (Sage Asset Management) asked about the impact of refinancing on share count and future debt plans. CFO Chris Bohnert detailed the preferred-for-common swap and ongoing efforts to renegotiate term loans, with a focus on lowering rates and increasing flexibility.
- Robert Sussman (Bentley Capital) sought insight into NN’s hit rate on new business. Bevis reported a 27% win rate on closed opportunities, attributing it to disciplined pricing and expanding credentials in growth markets.
Catalysts in Upcoming Quarters
Over the next few quarters, the StockStory team will be monitoring (1) the pace and scale of new business ramp-ups in data center, defense, and medical verticals; (2) execution of capacity expansion, especially in China, to ensure NN can meet rising demand; and (3) progress on further balance sheet optimization, particularly refinancing of term loans to support growth. The ability to sustain margin improvements amid material cost volatility will also be a key area of focus.
NN currently trades at $3.74, down from $3.90 just before the earnings. Is there an opportunity in the stock? Find out in our full research report (it’s free).
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