MALIBU BOATS (MBUU)·Q2 2026 Earnings Summary

Malibu Boats Beats Revenue But Margin Pressure Intensifies in Q2

February 5, 2026 · by Fintool AI Agent

Malibu Boats (NASDAQ: MBUU) reported Q2 FY2026 results that beat revenue expectations but showed continued margin pressure from a challenging retail environment. Net sales of $188.6M exceeded consensus by approximately 3.5%, while adjusted EPS swung to a loss of $0.02 from a $0.32 profit in the year-ago quarter.

CEO Steve Menneto struck a cautiously optimistic tone: "We are pleased to report solid second quarter results as we enter the early boat show season. Net sales of $188.6 million came in ahead of our expectations despite what remains a continued challenging retail environment."

The company maintained full-year guidance and provided Q3 expectations of $198M-$202M in revenue with 8.5% adjusted EBITDA margin.

Did Malibu Boats Beat Earnings?

Revenue: Beat. Net sales of $188.6M came in ahead of the ~$182M consensus estimate, representing a 3.5% surprise. However, this was still down 5.8% year-over-year, with unit volume declining 9.5% to 1,106 units.

EPS: Miss vs Prior Year. Adjusted EPS of $(0.02) compared poorly to $0.32 in Q2 FY25 — a complete reversal from profit to loss. GAAP net loss was $2.5 million vs net income of $2.4 million in the prior year.

Margin Compression: Severe. Gross margin contracted 540 basis points to 13.3%, driven by fixed cost deleverage across all segments and higher per-unit labor and material costs. Adjusted EBITDA fell 52.5% to $8 million.

How Did the Stock React?

MBUU shares closed at $34.61 on the day prior to earnings (+1.6%), with aftermarket trading showing the stock at $34.49. The stock has rallied from its 52-week low of $24.07 but remains well below its 52-week high of $39.65.

The market appears to have anticipated a challenging quarter. MBUU has shown resilience in its beat/miss history, with revenue beats in 6 of the last 8 quarters:

What Did Management Guide?

FY2026 guidance maintained. Malibu reiterated its full-year outlook despite the challenging environment :

• Net Sales: Flat to down mid-single digits year-over-year
• Adj. EBITDA Margin: 8% to 9%

Q3 specific guidance:

• Net Sales: $198M to $202M
• Adj. EBITDA Margin: Approximately 8.5%

Tariff impact: Management estimates 1.5% to 3% of cost of sales impact from current tariff rates, which is incorporated into guidance. Centralized sourcing efforts are helping mitigate potential price increases passed on to consumers.

Management emphasized their focus on supporting dealer health, generating cash flow, and disciplined capital allocation. The company expanded its share repurchase program to $70 million and completed $20.8 million in repurchases (751,000 shares) during the quarter.

CFO David Black noted on his first earnings call in the role: "Our business model remains resilient, and we continue to generate positive Free Cash Flow despite a softer market. Our focus remains on disciplined execution, operational excellence, and the prudent deployment of capital to drive long-term value for our shareholders."

What Changed From Last Quarter?

Margin deterioration accelerated. Q2 gross margin of 13.3% showed continued pressure as volumes remain depressed. Higher boat show promotional costs added approximately 50 basis points of margin pressure year-over-year.

Free cash flow remained positive. The company generated $8.4 million of free cash flow during Q2, inclusive of $4.4 million of capital expenditures, demonstrating continued cash generation despite profitability headwinds.

Year-end sales event outperformed. The Malibu year-end sales event exceeded prior year performance, serving as an effective tool to drive December retail activity.

New initiatives gaining traction:

• MBI Acceptance: In-house financing partnership expanding across brands with rates as low as 3.99%. Management noted higher take rates at early boat shows.
• Marine Components: Early customer traction with soft-grip flooring and trailer offerings, now engaging with two new customers.
• Product Awards: Malibu 23 LSV won WakeWorld's Riders' Choice Award as Surfboat of the Year for the sixth consecutive year.
• New Models: Debuting Pursuit 286 and Pathfinder 2800 at Miami International Boat Show next week.

Segment Performance

All three segments faced headwinds from lower wholesale shipments driven by soft retail activity. From a mix perspective, Malibu/Axis represented 46.4% of unit sales, Saltwater Fishing 25.5%, and Cobalt 28.1%.

Bright spot: ASP increased. Net sales per unit rose 4.1% to $170,544, driven by favorable model mix in Cobalt and Saltwater Fishing segments, plus inflation-driven price increases. This partially offset unfavorable model mix in Malibu and unfavorable segment mix overall.

Capital Allocation

Management demonstrated commitment to shareholder returns despite the challenging environment:

• Share Repurchase Program: Expanded to $70 million
• Q2 Repurchases: $20.8 million (751,000 shares)
• Free Cash Flow: $8.4 million generated
• Capital Expenditures: $4.4 million

CFO David Black emphasized: "We expanded our share repurchase program to $70 million, reflecting our board's confidence in our long-term strategy, strong financial position, and commitment to disciplined capital allocation."

Key Risks and Concerns

1. Margin pressure persists. Fixed cost deleverage continues to weigh on profitability as volumes remain below capacity. Gross margin at 13.3% is significantly below historical levels, driven by lower sales and higher per-unit labor and material costs.

2. Retail environment remains mixed. Management characterized boat show performance as "meeting expectations" but still mixed across different shows. The ski/wake category has not yet bounced back.

3. Tariff impact. Management estimates tariffs will add 1.5%-3% to cost of sales at current rates. Centralized sourcing efforts aim to minimize price increases passed on to consumers.

4. Interest rates and financing. Higher borrowing costs impact both dealer floor-plan financing and consumer boat loans, though MBI Acceptance with rates as low as 3.99% aims to mitigate this.

Forward Catalysts

• Miami Boat Show: Debuting Pursuit 286 and Pathfinder 2800 next week
• MY26 product launches: New model-year boats generating encouraging customer response; Malibu 23 LSV won Surfboat of the Year for 6th consecutive year
• MBI Acceptance expansion: Financing partnership seeing higher take rates at boat shows, rolling out across all brands
• Centralized sourcing benefits: Material margin benefit expected in back half as higher-cost inventory works through
• Marine Components growth: Two new customers engaged for soft-grip flooring and trailer offerings
• Operational flexibility: Capacity to scale production if demand improves

Q&A Highlights

On margin improvement path: CFO David Black outlined three levers for back-half margin expansion: (1) sequential top-line growth driving fixed-cost leverage, (2) centralized sourcing benefits flowing through as higher-cost inventory is worked through, and (3) declining promotional dollars as inventory stabilizes.

On boat show performance: CEO Steve Menneto described early boat show results as "meeting expectations" with mixed retail across shows, but overall positive trends resulting in additional orders.

On dealer sentiment: Dealers remain encouraged by healthy inventory positions and early traction with MBI Acceptance financing. The company expects some destocking through fiscal year-end, but inventory should stabilize as the year progresses.

On ski/wake category: Management acknowledged the category has not yet bounced back, but emphasized collaborative industry efforts to return the segment to growth.

On M&A: Management confirmed active pipeline work and ongoing diligence on potential opportunities without providing specifics.

Bottom Line

Malibu Boats delivered a revenue beat in a difficult quarter, demonstrating the strength of its brands and dealer relationships. However, the severe margin compression — with gross margin down 540 bps and adjusted EBITDA dropping 52% — underscores the challenge of maintaining profitability at current volume levels.

The company's maintained FY26 guidance, Q3 outlook of $198M-$202M in revenue with 8.5% EBITDA margin, and continued cash generation provide some comfort. The expanded $70 million share repurchase program signals management's confidence in long-term value.

Key to the investment thesis is whether centralized sourcing benefits and boat show momentum can drive margin recovery in the back half, while the company navigates tariff headwinds of 1.5%-3% of COGS.

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Malibu Boats reports on a June fiscal year-end. Q2 FY2026 covers July-December 2025.