Dauch Q2 2026 Earnings: Revenue Nearly Doubles as GAAP Profit Falls

Dauch Corporation (NYSE: DCH; LSE: DCH) reported Q2 2026 revenue of $2.96 billion, up approximately 92.4% from $1.54 billion a year earlier, while diluted EPS fell to $0.00 from $0.32. The Dowlais acquisition drove most of the increase in scale, but acquisition-related expenses, higher interest costs and the absence of a prior-year derivative gain reduced GAAP profit; adjusted EBITDA margin remained unchanged at 13.2%.

Core earnings data

The February 3 consolidation of Dowlais was the primary driver of the year-over-year increases in revenue and adjusted EBITDA. However, gross margin declined by approximately 1.6 percentage points, and net income attributable to Dauch fell to $1.0 million.

Adjusted results were more stable than GAAP earnings. Adjusted EPS slipped to $0.32, while adjusted EBITDA nearly doubled without a change in its percentage of sales.

Adjusted EBITDA, adjusted EPS and adjusted free cash flow are non-GAAP measures and exclude specified acquisition, restructuring and other items.

Business and segment performance

Both operating segments expanded after Dowlais was consolidated into Dauch’s results. Driveline produced the larger absolute increases in sales and adjusted EBITDA, while Metal Forming recorded the faster adjusted EBITDA growth rate.

Dowlais has been included in both segments since February 3, 2026. Dauch also recast the prior-year segment figures after moving certain plants from Metal Forming to Driveline, so the reported comparisons reflect the revised organization.

Profitability, cash flow and balance sheet

Acquisition and financing costs constrained GAAP earnings

Restructuring and acquisition-related costs rose to $49.8 million from $16.5 million. Interest expense more than doubled to $89.8 million from $43.1 million, offsetting much of the increase in operating income. The prior-year quarter also included a $46.3 million gain on the business-combination derivative, while Q2 2026 had no comparable gain.

These items contributed to the gap between GAAP and adjusted results. Income before taxes was $17.6 million, but $16.1 million of income tax expense left consolidated net income at $1.5 million and net income attributable to Dauch at $1.0 million. The adjusted EPS reconciliation excluded $0.19 per share of restructuring and acquisition-related costs and $0.09 per share of acquisition-related intangible amortization, among other items.

Adjusted free cash flow was well above reported free cash flow

Operating cash flow increased to $107.5 million, but capital expenditures net of asset-sale proceeds totaled $91.7 million, leaving free cash flow of $15.8 million. Adjusted free cash flow reached $148.4 million after excluding $40.6 million of restructuring payments, $64.4 million of acquisition-related payments and $27.6 million of synergy integration payments.

At June 30, Dauch held $880.8 million of cash and cash equivalents and $5.03 billion of long-term debt, compared with $708.9 million and $4.04 billion, respectively, at December 31, 2025. The quarter included $132.0 million of net cash used for debt activity, but interest expense remained a significant constraint on reported earnings.

2026 guidance

Dauch raised the lower ends of several full-year ranges while leaving their upper ends unchanged. The outlook includes Dowlais results from the February 3 acquisition closing date rather than for the full year.

The company continues to target capital expenditures equal to 4.5% to 5% of sales. It also expects $115 million to $150 million of restructuring cash payments and $95 million to $110 million of synergy implementation payments. The outlook assumes no changes to USMCA and mitigation of most incremental tariff costs.

Risks investors should watch

• Integration and synergy execution: The outlook incorporates $60 million to $75 million of synergy benefits and a run rate above $100 million by the end of the first year. Delays could reduce adjusted EBITDA while the company continues to incur implementation costs.
• Large gap between adjusted and reported cash flow: Q2 adjusted free cash flow was $148.4 million, but reported free cash flow was only $15.8 million because restructuring, acquisition and integration payments were added back to the adjusted measure.
• Debt and interest burden: Long-term debt stood at $5.03 billion, and quarterly interest expense reached $89.8 million. These financing costs can limit how much operating improvement reaches GAAP net income and cash available for debt reduction.
• Tariff and production assumptions: The guidance depends on mitigating most incremental tariff costs, maintaining current trade arrangements and achieving assumed automotive production levels. Changes in these conditions could affect sales, margins and cash generation.

Summary

Dauch’s Q2 2026 results reflect a much larger company following the Dowlais acquisition: revenue and adjusted EBITDA nearly doubled, and the adjusted EBITDA margin held at 13.2%. The main counterweight was the decline in GAAP profitability as acquisition costs, interest expense and difficult prior-year comparisons absorbed the operating increase. Execution on integration savings, conversion of adjusted cash flow into reported free cash flow and management of the enlarged debt load are the principal areas to monitor.