Stoneridge Q2 2026 Earnings: Sales Rise as Gross Margin Contracts

Stoneridge (NYSE: SRI) reported Q2 2026 net sales from continuing operations of $181.4 million, up 15.1% year over year, while diluted loss per share from continuing operations narrowed to $0.19 from $0.40. Adjusted EBITDA improved to $5.5 million and the GAAP operating loss narrowed, but gross margin fell 277 basis points as material costs, currency effects, inventory actions and product mix outweighed volume leverage and expense controls.

Core earnings results

Reported sales increased by $23.9 million, but underlying growth was more moderate. Excluding $4.4 million of favorable currency translation and $7.1 million of Mexico Manufacturing Agreement revenue related to the Control Devices sale, core revenue increased 7.8%.

Gross profit rose by only about $0.5 million despite the higher sales base. Nevertheless, lower operating expenses helped narrow the operating loss, while adjusted EBITDA reached its highest quarterly level in 24 months.

Business and segment performance

Electronics remained the largest business, with revenue increasing 12.8% to $160.9 million. Constant-currency growth was 11.0%, while growth excluding favorable currency and Mexico Manufacturing Agreement revenue was 6.0%. The North American commercial vehicle market was the primary driver.

Electronics’ GAAP operating income rose to $4.9 million from $2.7 million, lifting its GAAP operating margin to 3.0% from 1.9%. On an adjusted basis, however, the margin increased by only 12 basis points to 3.0%, as unfavorable product mix, currency and inventory-related actions absorbed much of the benefit from higher revenue and cost initiatives.

Stoneridge Brazil recorded quarterly revenue of $20.5 million, up 37.6% as reported and 25.7% excluding favorable currency translation. Higher OEM sales drove the increase. GAAP operating income rose to $2.6 million from $1.0 million, with margin expanding to 12.6% from 6.5%. Adjusted operating income was $2.3 million, or 11.2% of sales, as higher volume more than offset increased SG&A expense.

MirrorEye also delivered record quarterly revenue of approximately $37 million, an increase of 39% year over year.

Expense control narrowed the operating loss despite lower gross margin

The main tension in the quarter was the divergence between revenue and gross profit. Sales rose 15.1%, but gross profit increased only 1.3% because higher material costs related to unfavorable currency, strategic inventory actions and adverse product mix following the completion of a European regulatory retrofit campaign compressed gross margin.

Below gross profit, expense control provided an offset. Design and development expense declined by about $2.9 million to $12.0 million, while SG&A increased by about $0.4 million to $26.1 million. The resulting reduction of approximately $2.5 million in combined operating expenses explains most of the improvement in the GAAP operating loss.

The income tax provision increased to $2.6 million from $1.5 million despite a pretax loss, limiting the improvement at the net-income level. Adjusted net loss was $5.2 million, or $0.18 per share.

Cash, debt and refinancing

At June 30, 2026, Stoneridge held $71.5 million of cash and cash equivalents and $151.1 million of total debt, producing reported net debt of $79.6 million. Management attributed the reduction in net debt to proceeds from the January sale of the Control Devices business and tighter working-capital management during the first half.

There is a discrepancy in the period comparison disclosed in the release. The company described net debt as declining $38.5 million from December 31, 2025, but the year-end balance-sheet figures—$180.9 million of revolving debt and $53.1 million of cash—imply net debt of approximately $127.9 million and a decline of about $48.3 million. Investors may want to reconcile this difference with the company’s regulatory filing.

The credit facility matures on July 1, 2027. Stoneridge expects to refinance it and said a global refinancing process is underway, making the timing and cost of new financing an important balance-sheet consideration.

2026 guidance

Stoneridge reaffirmed the full-year guidance most recently updated in May. The ranges cover revenue and adjusted profitability measures, with no new increase or reduction this quarter.

The full-year profitability targets are non-GAAP measures. Stoneridge did not provide GAAP reconciliations because it said certain future adjustments could not be forecast with sufficient precision.

Management commentary

Management said operational-efficiency and profitability initiatives were beginning to produce results. It also cited promising demand signals in the European and North American commercial vehicle markets, while maintaining a cautious view because of macroeconomic and geopolitical uncertainty.

In Brazil, the company continues to shift toward higher-value OEM programs. Across the broader business, management’s priorities include reducing material costs, improving quality and recovering inflation-related costs.

Recent insider transactions

The six-month insider summary showed 791,862 shares acquired across 15 transactions and 9,000 shares sold in one transaction, resulting in net acquisitions of 782,862 shares. The detailed list also included multiple zero-price director stock awards, so the aggregate acquisitions should not be treated as equivalent to cash purchases.

The latest transactions with clearly disclosed purchase or sale terms were as follows:

These transactions are presented as reported and do not, by themselves, establish insiders’ views on the company’s outlook.

Risks investors should monitor

• Gross-margin pressure: Higher material costs, unfavorable currency, inventory actions and product mix reduced gross margin by 277 basis points. Continued pressure could limit the conversion of sales growth into operating profit.
• Quality of reported growth: Reported revenue increased 15.1%, compared with 7.8% core growth after excluding favorable currency and Mexico Manufacturing Agreement revenue. These items contributed meaningfully to the headline increase.
• Commercial vehicle and macroeconomic exposure: North American commercial vehicles were a primary growth driver, but management continues to balance improving demand signals against macroeconomic and geopolitical uncertainty.
• Refinancing execution: The credit facility matures in July 2027. Refinancing terms and capital-market access could affect future interest expense, liquidity and financial flexibility.

Summary

Stoneridge’s Q2 2026 results combined double-digit reported sales growth and a narrower operating loss with continued gross-margin pressure. Electronics, Brazil and MirrorEye drove revenue, while lower development spending supported adjusted EBITDA and operating results. The next priorities are converting higher sales into better gross margins, delivering the reaffirmed full-year profitability ranges and completing the credit-facility refinancing process.