Northwest Pipe Co's Q2 2026 earnings show record revenue of $159.5M and EPS of $1.62, driven by strong performance in Water Transmission Systems.
Northwest Pipe Co reported Q2 2026 revenue of $159.5 million, a 19.7% increase year-over-year, surpassing analyst expectations. The company achieved record earnings per share of $1.62, driven by strong performance in its Water Transmission Systems segment and improved margins despite challenges in its precast segment.
Key Takeaways
- Record revenue reached $159.5 million, up 19.7% year-over-year, exceeding expectations.
- Earnings per share hit $1.62, a significant increase from $0.91 in Q2 2025, marking the highest in company history.
- Water Transmission Systems (WTS) revenue rose 33.8% to $113.2 million, with gross profit up 60.9% to $24.2 million.
- Precast segment revenue declined 4.8% to $46.3 million, impacted by weather-related shipping delays but showed signs of recovery in June.
- Free cash flow increased to $9.9 million, up from $1.9 million in the previous year, with a revised full-year outlook raised to $56 to $65 million.
Record Performance Driven by Water Transmission Systems
Northwest Pipe's second quarter was marked by robust growth, particularly in the Water Transmission Systems segment, which recorded revenue of $113.2 million, up 33.8% year-over-year. This performance was bolstered by a 26% increase in tons produced and a 6% rise in selling prices per ton, attributed to favorable project execution and product mix. Gross profit for this segment surged 60.9% to $24.2 million, resulting in a gross margin of 21.4%, a 360 basis point improvement from the previous year.
| Metric | Q2 2026 | YoY | QoQ |
|---|---|---|---|
| Revenue | $159.5M | +19.7% | - |
| Gross Profit | $34.4M | +35.5% | - |
| EPS | $1.62 | +78.0% | - |
The WTS segment also maintained a strong backlog, ending the quarter at $423 million, down slightly from $430 million in Q1 2026 but significantly up from $348 million year-over-year. Management noted healthy bidding activity, with an additional pipeline of projects worth over $125 million already bid on, suggesting sustained demand strength.
Challenges in Precast Segment
While the overall results were strong, the precast segment faced challenges, with revenue declining 4.8% to $46.3 million due to an 11% decrease in volume shipped caused by adverse weather conditions in Texas and project delays in Utah. However, selling prices improved by 7%, reflecting a favorable product mix. The precast order book increased to $61 million from $55 million at the end of Q1 2026, indicating a positive outlook moving into the second half of 2026 as demand in non-residential markets remains robust.
Strong Cash Flow and Revised Guidance
Northwest Pipe reported positive free cash flow of $9.9 million for the quarter, a significant increase from $1.9 million in the prior year. The company raised its full-year free cash flow outlook to between $56 and $65 million, up from $50 to $56 million, reflecting stronger earnings and an improved billing schedule in the water transmission segment. Management expressed confidence in maintaining strong performance for the remainder of the year, expecting Q3 results to be comparable to or stronger than Q2 2026.
“Demand across our end market remains healthy, bidding activity continues to be elevated, and our precast business is carrying positive momentum into the second half of the year,” said Scott Montross, President and CEO.
Analyst Q&A Highlights
During the analyst Q&A, Julio Romero from Sidoti and Company pressed management on the expected revenue performance for the WTS segment moving into Q3. Management clarified that while they anticipate Q3 revenue to be comparable to Q2, core WTS business growth is projected to be slightly stronger than in the previous quarter, despite some caution due to recent weather impacts in Texas. This indicates confidence in the operational execution and demand trends.
Additionally, management addressed concerns about margin sustainability within the WTS segment, emphasizing that improved project pricing and operational efficiency would likely support ongoing margin improvements as demand stabilizes.
Frequently Asked Questions
Did Northwest Pipe Co beat earnings estimates in Q2 2026?
Yes, Northwest Pipe Co reported earnings per share of $1.62, beating analyst estimates by $0.30.
What drove the revenue growth in the Water Transmission Systems segment?
Revenue in the Water Transmission Systems segment grew by 33.8% year-over-year to $113.2 million, driven by a 26% increase in production volume and improved selling prices per ton.
How did the precast segment perform in Q2 2026?
The precast segment revenue declined by 4.8% to $46.3 million due to shipping delays caused by heavy rainfall, despite a 7% increase in selling prices.
What is the company's outlook for the second half of 2026?
Management expects Q3 performance to be comparable to or stronger than Q2, with a positive momentum in both WTS and precast segments driven by healthy demand and improved bidding activity.
In conclusion, Northwest Pipe Co's strong second quarter results underscore the resilience of its diversified business model, particularly in the Water Transmission Systems segment. The company is well-positioned to navigate challenges in the precast segment while maintaining a focus on operational efficiency and strategic growth initiatives.
This analysis is based on public earnings call materials and is not investment advice.
