10-Q · June 5, 2026
Quanex Building Products reported Q2 2026 results showing total revenue of $462.4 million, a slight increase of 2% year-over-year, and an improvement in diluted EPS to $0.25 compared to $0.44 the previous year. However,…
Earnings analysis · 10-Q
NX earnings analysis
Filed September 4, 2026 · Our reading of the company's report
The latest report
Quanex delivered a solid third quarter, with revenue of $501.845 million beating consensus, gross margin rising to 28.2%, and adjusted EPS of $0.79 exceeding the $0.66 estimate. Free cash flow of $47.810 million…
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Quanex delivered a solid third quarter, with revenue of $501.845 million beating consensus, gross margin rising to 28.2%, and adjusted EPS of $0.79 exceeding the $0.66 estimate. Free cash flow of $47.810 million supported $42.25 million of debt repayment, while the company added an interest-rate swap covering $175.0 million of borrowings. Offsetting positives are the unremediated cash-flow control weakness, newly disclosed AI and customer/supplier risks, and the absence of explicit forward guidance.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $0.58
- Gross margin
- 28.2%
What stood out
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Revenue beat estimates and grew year over year
Third-quarter revenue was $501.845 million, up from $461.845 million in Q2 2026 and $494.7 million in Q3 2025, representing approximately 8.7% sequential growth and 1.4% year-over-year growth. Revenue also exceeded the $497.706 million consensus estimate.
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Gross margin expanded
Gross margin increased to 28.2% from 25.5% in Q2 2026 and 27.9% in Q3 2025, an improvement of 270 basis points sequentially and 30 basis points year over year.
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Adjusted EPS beat consensus
Adjusted diluted EPS was $0.79, versus the $0.66 consensus estimate and $0.07 in Q2 2026. GAAP diluted EPS was $0.58, compared with a GAAP loss of $6.04 in Q3 2025.
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Cash flow funded debt repayment
Free cash flow was $47.810 million in the quarter, compared with $8 million in Q2 2026 and $46 million in Q3 2025. The company used $42.25 million of this cash generation to repay debt.
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Debt-rate exposure partially hedged
The company entered into an interest-rate swap covering $175.0 million of variable-rate borrowings, reducing the cash-flow variability associated with interest payments.
What to watch
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Material weakness remains unremediated
As of July 31, 2026, management concluded that disclosure controls and procedures were not effective because the previously identified material weakness in statement-of-cash-flow controls remained under remediation. Management expects to conclude its evaluation by October 31, 2026.
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New AI and cybersecurity exposure
The 10-Q added an AI-related risk covering inaccurate outputs, data privacy, intellectual-property, cybersecurity and regulatory risks. The risk is current as of July 31, 2026 and could create competitive disadvantage or operational and reputational harm if AI is not appropriately managed.
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Customer and supplier credit risk
The filing added risks from customer, distributor or supplier consolidations, restructurings and bankruptcies, which could reduce demand, disrupt supply or impair collections. The company notes that pricing updates for certain raw materials can lag market changes by up to three months, adding to working-capital and margin exposure.
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Variable-rate debt remains sensitive
Interest-rate sensitivity remains material despite the swap: after hedging $175.0 million of borrowings, a hypothetical 1.0% rate increase or decrease could change annual pretax income by approximately $4.4 million.
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Unhedged foreign-exchange exposure
No forward foreign-exchange contracts were outstanding as of July 31, 2026 after earlier contracts matured and settled. The company recognized a $0.5 million loss on these contracts in the comparable prior-year quarter, highlighting continued currency exposure.
Management's outlook
No explicit numeric revenue or EPS guidance, or change to prior outlook, was provided in the 10-Q. The filing states the company expects to conclude its internal-control evaluation by October 31, 2026.
Earlier filings 4
10-Q · March 6, 2026
Quanex reported net sales of $409.089 million for the quarter ended January 31, 2026, up $9.045 million or 2% versus $400.044 million in the prior year. GAAP net loss narrowed to $4.071 million (improved $10.814…
10-K · December 12, 2025
Quanex presents a strategy of profitable growth via targeted acquisitions (notably the Tyman acquisition on August 1, 2024), product portfolio expansion and operational efficiencies. The 10-K shows a backlog of…
10-Q · June 6, 2025
Quanex reported strong period-over-period revenue growth to $452,478,000 (up $186,277,000 or 70% vs. prior year) driven largely by the acquired Tyman business. Operating income nearly doubled to $40,921,000 (up…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.