Key Highlights

  • Order intake increased 16 percent year over year to $516 million, with order Backlog up nearly 20 percent to approximately $1.3 billion.
  • Revenue of $496.4 million beat the $474.7 million estimate by 4.57 percent, while adjusted EPS of $0.14 beat the $0.13 estimate by 7.69 percent.
  • Adjusted EBITDA grew 22 percent year over year to $42 million, with Margin improving approximately 90 basis points to 8.5 percent, outpacing 9.4 percent net sales growth.
  • The company secured a landmark $96 million seven-year walk-in and cargo van frame contract in North America and confirmed full-year 2026 guidance for net sales and adjusted EBITDA.

Profitability Grows Faster Than Sales One Year Into the Shyft Merger

Aebi Schmidt Group (NASDAQ:AEBI), a specialty vehicle manufacturer formed through last year's Merger with The Shyft Group, reported second-quarter net sales growth of 9.4 percent to $496.4 million, with adjusted EBITDA growing more than twice as fast at 22 percent to $42 million. Management said the outsized profitability gain reflected production ramp-ups, accelerated realization of Acquisition synergies, and strict cost control, with Net Income increasing $18 million year over year.

Comparing the 12 months before and after the Shyft acquisition, order intake has grown 26 percent and adjusted EBITDA margin has improved approximately 120 basis points, with the company raising its annual synergy target to more than $40 million from an original $25 million to $30 million range. Management said $37 million of that target is expected to be realized by year-end 2026, with the remaining roughly $5 million, primarily from revenue-related cross-selling synergies, following in 2027.

Landmark Walk-In Van Contract Signals Broadening North American Demand

North America delivered 11 percent Organic Sales growth and 22 percent adjusted EBITDA growth, highlighted by a seven-year, $96 million frame contract with a strategic customer of more than two decades that, for the first time, includes cargo vans in addition to the company's traditional walk-in van offering. Management characterized the expanded scope as validation of the broader combined product portfolio following the Shyft merger, noting the contract came from outside the large parcel delivery companies that have traditionally anchored the walk-in van business.

The company also achieved a record quarter at its Royal service body business, with production up more than 20 percent versus historical averages, and completed the ramp-up of its Joliet upfit facility. Management confirmed the $96 million contract is not yet reflected in backlog under the company's conservative accounting policy of only booking frame agreements once a purchase order is received, meaning the full value of the deal remains a future backlog contributor as orders convert.

Europe Delivers Strongest Regional Profitability Gain of the Quarter

Europe and Rest of World order intake grew approximately 20 percent, with net sales up 7 percent and adjusted EBITDA up 25 percent, the fastest profitability growth of any segment in the quarter. Key wins included selection as preferred supplier for winter maintenance and airfield sweeping equipment by a major U.K. airport group, an $11 million German motorway contract, and continued cross-selling of the company's LADOG vehicles into the airport segment, which management said demonstrates the ability to penetrate new customer segments beyond the company's traditional base.

Management said the quarter's gross margin benefited from disciplined cost management that helped offset temporary pressure from rising material costs, particularly steel and aluminum inputs affected indirectly by tariff-driven Supply chain disruptions and elevated iron ore and energy prices. The company noted that recently executed price increases are expected to flow through gross margins with a delay given its substantial order backlog, with the benefit expected to materialize mostly by year-end 2026 and into early 2027.

Guidance Confirmed as Company Balances Growth Investment With Deleveraging

Management confirmed full-year 2026 guidance for net sales and adjusted EBITDA, while slightly revising its year-end Leverage target from two times or slightly below to two times or slightly above, citing temporary investments in safety stock and bulk purchasing to mitigate material cost Inflation and supply chain risk through early 2027. Net Debt stood at $450 million with leverage of 2.7 times at quarter end, down more than half a turn from a year earlier, and the company reiterated its long-term 2030 ambition of exceeding $3 billion in annual sales with a mid-teens adjusted EBITDA margin above 13 percent. Whether the company can sustain its current pace of over-proportional profitability growth relative to sales will likely depend on how quickly executed price increases flow through the substantial existing order backlog, and whether continued M&A activity in areas such as European summer maintenance equipment and U.S. sweeper products can be layered on without disrupting the deleveraging trajectory management has committed to.