Executive Summary

Q1 FY2026 delivered a top-line beat with net sales up 13.5% year over year to $194.7M, while adjusted EPS reached $0.15; gross margin compressed 210 bps to 14.3% on higher unit labor/material costs and dealer incentives .
Consensus was exceeded: revenue $194.7M vs $182.2M*, and EPS $0.15 vs $0.095*; management called the quarter “modestly above expectations” and maintained full-year guidance .
Guidance: FY2026 sales flat to down mid-single digits and adjusted EBITDA margin 8–9%; Q2 FY2026 sales guided to $175–$185M and adjusted EBITDA margin 3–5%, reflecting boat show costs and deleverage as volumes step down .
Strategic catalysts: new product launches across brands at FLIBS (Pathfinder 2600 TRS, Cobalt R31 OB), continued innovation, and rollout of MBI Acceptance financing to support retail; the Malibu Wakesetter 23 LSV won Boat of the Year for the sixth consecutive season .

What Went Well and What Went Wrong

What Went Well

Revenue beat and volume growth: Net sales +13.5% YoY to $194.7M on unit volume +10.3% to 1,129; consolidated net sales per unit +2.9% to ~$172.5K .
Malibu segment momentum: Malibu net sales +40.4% to $78.6M on higher shipments; Malibu/Axis constituted ~47.7% of unit mix .
Strategic execution and innovation: “We delivered strong results… Prioritizing dealer health remains central to our strategy,” CEO Steve Menneto; new models drew strong dealer/customer feedback and financing partner called MBI Acceptance “one of the strongest programs” they have seen .

What Went Wrong

Margin compression: Gross margin fell 210 bps to 14.3% on higher per-unit labor/material costs and increased dealer incentives, particularly in Malibu .
QoQ step-down: Versus Q4 FY2025, sales (-6%), gross margin (-150 bps), and adjusted EBITDA margin (-340 bps) declined amid normal seasonal expense phasing and show costs .
Competitive promotions and soft retail: Management expects a “competitive promotional environment” to persist as retail remains soft; dealer incentives weighed on Malibu segment .

Financial Results

Summary financials (actuals)

Metric	Q3 FY2025	Q4 FY2025	Q1 FY2026
Net Sales ($USD Millions)	$228.662	$207.039	$194.733
Unit Volume (Units)	1,431	1,221	1,129
Gross Profit ($USD Millions)	$45.724	$32.740	$27.931
Gross Margin (%)	20.0%	15.8%	14.3%
GAAP Diluted EPS ($)	$0.66	$0.24	($0.04)
Adjusted EBITDA ($USD Millions)	$28.323	$19.657	$11.784
Adjusted EBITDA Margin (%)	12.4%	9.5%	6.1%
Non-GAAP EPS ($)	$0.72 (Adj. fully distributed)	$0.42 (Adj. net income per share)	$0.15 (Adj. net income per share)

Note: Q3 FY2025 non-GAAP EPS uses adjusted fully distributed net income per share; in FY2025/Q4 and FY2026/Q1 the company reports adjusted net income per share (different basis) .

Segment net sales

Segment Net Sales ($USD Millions)	Q3 FY2025	Q4 FY2025	Q1 FY2026
Malibu	$102.2	$80.3	$78.6
Saltwater Fishing	$71.9	$72.9	$64.3
Cobalt	$54.6	$53.8	$51.8

KPIs and unit economics

KPI	Q3 FY2025	Q4 FY2025	Q1 FY2026
Net Sales per Unit ($)	$159,792	$169,565	$172,483
Malibu Net Sales per Unit ($)	$137,417	$140,951	$146,184
Saltwater Net Sales per Unit ($)	$220,454	$225,582	$223,326
Cobalt Net Sales per Unit ($)	$151,125	$164,128	$170,851
Free Cash Flow ($USD Millions)	—	—	$2.5
Capital Expenditures ($USD Millions)	—	—	$4.3
Unit Mix (Malibu/Axis, Saltwater, Cobalt)	—	—	47.7% / 25.5% / 26.8%

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Net Sales Growth YoY	FY2026	Flat to down mid-single digits	Flat to down mid-single digits	Maintained
Adjusted EBITDA Margin	FY2026	8%–9%	8%–9%	Maintained
Sales ($USD Millions)	Q2 FY2026	—	$175–$185	New disclosure
Adjusted EBITDA Margin	Q2 FY2026	—	3%–5%	New disclosure
Tariffs Impact (as % of Cost of Sales)	FY2026	“Not materially impacting” FY2025 cost structure	1.5%–3% FY2026 costs	Raised risk

Company did not provide GAAP reconciliations for adjusted EBITDA margin, citing unreasonable efforts exception under Item 10(e)(1)(i)(B) of Regulation S‑K .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3 FY2025)	Previous Mentions (Q4 FY2025)	Current Period (Q1 FY2026)	Trend
Dealer health & inventory	Focus on aligning dealer inventory with retail demand	Continued efforts to reduce dealer inventory; margin improved with lower promotions	Inventory slightly elevated entering Q1; working down in H1; promotional environment competitive	Improving dealer inventories, promotions normalizing but still competitive
Tariffs	Not expected to materially impact FY2025	Tariff headwinds emerging	1.5%–3% of cost of sales headwind in FY2026; mitigation via sourcing/vertical integration	Headwind rising; mitigation in progress
Product innovation & awards	Mixed boat show season but encouraging momentum	Model Year 2026 lineup expanded	FLIBS launches (Pathfinder 2600 TRS, Cobalt R31 OB); Wakesetter 23 LSV Boat of the Year (sixth consecutive)	Strong brand/innovation narrative
Financing initiatives	—	—	MBI Acceptance rolled out; partner feedback highly positive; aims to support retail	New retail tool expanding
Macro/interest rates	—	—	Rate cuts improve sentiment; floorplan costs tied to SOFR fall sooner than consumer rates	Sentiment tailwind; consumer rates lag
Margin trajectory	Gross margin 20% on fixed cost leverage	Gross margin 15.8% with reduced promotions	Gross margin 14.3%; Q2 margin guide 3%–5% adjusted EBITDA; higher margins expected in H2	Near-term pressured; H2 improvement embedded

Management Commentary

“We delivered strong results in the first quarter in what continues to be a challenging market environment. Prioritizing dealer health remains central to our strategy…” — Steve Menneto, CEO .
“Our first-quarter results modestly exceeded our expectations, underscoring solid execution and operational discipline.” — Bruce Beckman, CFO .
“Model year 2026 is off to a great start… debuting this week at Fort Lauderdale, it is the all-new Pathfinder 2600…” .
“MBI Acceptance… one of the strongest programs they have seen… exceptional dealer engagement and early success in the rollout.” .
“We continue to expect sales [for Q2] between $175 to $185 million… adjusted EBITDA margins ranging from 3% to 5%.” — CFO .

Q&A Highlights

Interest rates: Rate cuts improve sentiment and lower dealer floorplan costs tied to SOFR; consumer finance rates will lag, tied more to longer-term treasuries .
Promotions/dealer incentives: Q1 Malibu incentives elevated vs light prior-year promo comp; competitive environment expected to persist but cooler than peak excess inventory phase .
Inventory management: Monitoring via floorplan providers; inventories expected to decline across segments through first half; production pacing aligned to down markets .
Margin phasing: Q2 margins reflect deleverage on lower revenue and boat show costs; higher H2 margins embedded in guidance .
MBI Acceptance rollout: Early dealer adoption and anecdotal sales uplift (e.g., 4.99% promos reactivating dormant customers); broader brand rollout planned .
ASPs/mix: Modest YoY price increases; continued (though slower) trend toward larger, feature-rich boats .

Estimates Context

Q1 FY2026: Consensus vs Reported

Metric	Consensus Mean	Company Reported Actual
Revenue ($USD Millions)	182.178*	194.733
EPS ($) (Primary/Adjusted)	0.095*	0.15 (Adjusted net income per share)
EPS ($) (GAAP Diluted)	—	(0.04)
# of Estimates (Revenue / EPS)	9 / 8*	—

Result: Revenue and adjusted EPS beats; GAAP EPS negative due to margin compression and expense phasing .

Forward: Q2 FY2026 Consensus and Company Outlook

Metric	Consensus Mean	Company Outlook
Revenue ($USD Millions)	182.415*	$175–$185
EPS ($) (Primary)	0.02*	Adjusted EBITDA margin 3%–5% (no EPS guidance)
# of Estimates (Revenue / EPS)	9 / 6*	—

Values with asterisks retrieved from S&P Global.

Key Takeaways for Investors

Beat on revenue and adjusted EPS, but quality mixed: gross margin down 210 bps and EBITDA margin down 340 bps vs Q4 as incentives and cost inflation weighed; seasonal show costs and deleverage likely to pressure Q2 .
Malibu segment strength offset softer Saltwater/Cobalt volumes; consolidated ASPs rose on favorable mix, especially in Cobalt and Saltwater .
Guidance maintained for FY2026 despite soft retail, signaling confidence in innovation, dealer health initiatives, and margin recovery in H2; monitor execution on tariff mitigation (1.5%–3% CoS headwind) .
Watch Q2 margins (3%–5% adjusted EBITDA) as the near-term inflection; any upside from boat show sell-through, MBI Acceptance financing penetration, and promo moderation could shift narrative positively .
Free cash flow generation resumed in a typically tough quarter; stronger FCF expected as capacity expansions are behind them and volumes normalize mid-cycle .
Product cycle is supportive: FLIBS launches and sixth consecutive Boat of the Year award reinforce brand equity; should aid retail as sentiment and financing improve .
Near-term trading lens: stock likely sensitive to Q2 deliverability on margins and signs of retail stabilization; medium-term thesis hinges on innovation-led share gains, dealer health discipline, and services/vertical integration absorbing tariff headwinds .

MALIBU BOATS, INC. (MBUU)·Q1 2026 Earnings Summary