NN Raises 2026 Outlook as Q3 Sales Rise 26%

NN, Inc. (NASDAQ: NNBR) raised its 2026 financial guidance after third-quarter sales increased 26% and adjusted EBITDA rose 50%, supported by growth in both operating segments and higher margins. The precision-components manufacturer also reported $106 million of year-to-date new business awards, with data centers, electric-grid equipment, defense and medical applications central to its growth program.

For 2026, NN now expects net sales of $480 million to $500 million, compared with its prior range of $460 million to $480 million. The company raised its adjusted EBITDA forecast to $64 million to $68 million from $55 million to $65 million and increased its new-business-wins outlook to $110 million to $130 million from $80 million to $100 million.

At the new guidance midpoints, NN would generate $490 million in sales, $66 million in adjusted EBITDA and $120 million in new business wins. Those figures would represent increases of 16%, 35% and 71%, respectively, from 2025 results. The guidance, issued as of October 28, assumes current base-metal costs and foreign-exchange conditions.

Sales and margins strengthen

Third-quarter net sales reached $131.1 million, up $27.2 million from $103.9 million a year earlier. Adjusted gross margin increased to $25.3 million from $19.5 million, while the adjusted gross margin rate expanded 50 basis points to 19.3%.

Adjusted EBITDA rose to $18.5 million from $12.4 million. The corresponding margin increased 220 basis points to 14.1%, indicating that profit growth outpaced the increase in revenue.

For the first nine months of 2026, sales rose 19% to $378.3 million. Adjusted gross margin increased to $74.5 million from $58.5 million, with the margin rate reaching 19.7%, up 130 basis points. Adjusted EBITDA advanced 40% to $50.6 million, and its margin expanded 200 basis points to 13.4%.

The presentation focused on non-GAAP operating measures and did not provide GAAP earnings figures. NN said its non-GAAP measures should not be considered substitutes for comparable GAAP results.

Power Solutions leads segment growth

Power Solutions, which includes stamped and plated products, generated third-quarter sales of $63.2 million, up 41% year over year. Segment adjusted EBITDA was $13.4 million, equivalent to a 21% margin. Year-to-date sales increased 36% to $180.9 million, while adjusted EBITDA totaled $36.5 million at a 20% margin.

Mobile Solutions, NN’s machined-products segment, posted quarterly sales of $68.2 million, a 15% increase. Adjusted EBITDA was $8.8 million, representing a 13% margin. For the first nine months, segment sales rose 7% to $197.9 million, with adjusted EBITDA of $26.8 million and a 14% margin.

NN identified data centers and electric-grid products, defense and electronics, and medical equipment as its three leading growth markets. Together, those businesses produced approximately $162 million in trailing-12-month sales and had an estimated quoted pipeline of about $270 million as of October 9.

Data center and electric-grid applications accounted for roughly $87 million in trailing-12-month sales and $48 million of new awards. NN said multi-quarter production ramp-ups were underway through the first quarter of 2027. The company is adding more than 50 CNC machines in Wuxi, China, to produce liquid-cooling components for AI data-center racks and is evaluating additional capacity at another Chinese facility.

NN expects its data-center business to reach an annualized revenue run rate of about $35 million upon exiting the fourth quarter of 2026, up from approximately $2 million at the beginning of 2025. Its installed machine count for the business was about 19 in the third quarter, with an objective of approximately 55 by the first quarter of 2027 and roughly 180 over the longer term. Management also set a $100 million long-term data-center business objective, explicitly identifying it as an aspiration rather than a revenue estimate.

Defense and electronics generated about $62 million in trailing-12-month sales and had approximately $85 million of quoted opportunities. NN reported $10 million of new business wins in the market, including firearm assemblies and anti-drone military munitions. Sales from several defense-related ramp-ups began in the third quarter.

The medical business contributed $13 million in trailing-12-month sales and also had a quoted pipeline of about $85 million. NN said it had received initial purchase orders for robotic-surgery equipment parts and estimated potential sales of $25 million to $30 million with new medical-equipment customers.

Balance-sheet actions and longer-term targets

NN said it eliminated all preferred stock obligations during 2026 through five transactions. On a pro forma basis, preferred stock and net debt declined 47% to $139 million from $261 million at the end of 2025. The pro forma figure reflects $192 million as of September 30 less a $53 million final redemption of Series D preferred stock.

The company’s multi-year plan targets 2029 sales of $625 million, adjusted EBITDA of $87 million, an adjusted gross margin of 22% and an adjusted EBITDA margin of 14%. The plan assumes average annual sales growth of $50 million and average annual adjusted EBITDA growth of $7 million, influenced by market conditions, automotive-sales optimization, new-business onboarding, sales mix and cost reductions.

NN cautioned that the plan and its near-term guidance depend on factors including metals prices, foreign-exchange rates, the pace of customer onboarding and business mix. The company also noted that forward-looking expectations remain subject to the risks and uncertainties described in its regulatory filings.