Hammond Power Solutions Reports Third Quarter 2025 Financial Results

Executive Summary

• Hammond Power Solutions reported Q3 2025 sales of $218 million, a 13.7% year‑over‑year increase and the second‑highest quarterly shipment level in company history.
• Adjusted EBITDA was $30.3 million (13.9% of sales) versus $34.4 million a year earlier, reflecting margin pressure from higher material costs and tariffs.
• Net earnings rose to $17.44 million; however, adjusted EPS fell to $1.56 (down from $1.80 YoY), while basic EPS increased modestly to $1.46.

Key Details

• Revenue: $218.3 M in Q3 2025 vs. $192.0 M in Q3 2024 (+13.7%).
• Geographic Mix:
• U.S. & Mexico: $158.0 M (up 21.5% YoY)
• Canada: $51.4 M (down 2.9% YoY)
• India: $8.9 M (down 0.4% YoY)
• Backlog: Up 22.4% YoY; 27.7% higher than beginning‑of‑year level; orders received after quarter close represent 53% of the closing backlog, primarily data‑center projects slated for 2026 shipments from new Mexican facilities.
• Gross Margin: 30.1% of sales ($66 M) vs. 33.8% YoY – a decline of 210 basis points driven by commodity volatility, inflation and tariffs.
• Operating Expenses:
• Selling & distribution: $24.2 M (up 60 bps YoY)
• General & administrative: $16.5 M (down 340 bps YoY)
• EBITDA: $28.7 M (up 5.6% YoY); Adjusted EBITDA $30.3 M (down 11.9% YoY after FX and share‑based compensation adjustments).
• Net Earnings: $17.44 M vs. $16.31 M a year earlier (+$1.13 M).
• Earnings per Share:
• Basic EPS: $1.46 (up $0.09 YoY)
• Adjusted EPS: $1.56 (down from $1.80 YoY)
• Capital Expenditures: $7.37 M in Q3 2025 (down $6.2 M YoY); total YTD capex $27.0 M vs. $30.9 M prior year.
• Dividend: Quarterly cash dividend declared at $0.275 per Class A and Class B share, paid September 25 2025; YTD dividend $0.825 per share.
• Forward‑Looking Statements: Management highlighted confidence in 2026 data‑center order pipeline, anticipated pricing actions to offset tariff impacts, and expected increased capital requirements over the next two quarters for equipment upgrades and production shifts.

Notable Quotes

“HPS delivered another strong quarter… generating $218 million in revenue, our second highest quarter for shipments ever.” – Adrian Thomas, CEO
“Implementation of additional tariffs in late August had a negative impact on margins but we expect pricing actions … to offset this impact moving forward.” – Richard Vollering, CFO