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Perma-Pipe International Holdings, Inc. (PPIH)·Q2 2026 Earnings Summary

Executive Summary

  • Q2 2026 delivered strong top-line growth but materially weaker earnings due to one-time executive compensation and higher G&A; net sales rose 27.7% year over year to $47.9M, while diluted EPS fell to $0.10 versus $0.40 in the prior-year quarter .
  • Management announced a formal review of strategic alternatives (including divisional or whole-company sale), a clear stock-reaction catalyst; shares fell meaningfully on the print and strategic review headlines .
  • Backlog reached $157.8M (+109% YoY), underscoring demand strength across North America and MENA; company also invested to establish a Qatar facility backed by >$5M in new awards .
  • Effective tax rate spiked to 54% on jurisdictional mix and deduction limitations related to the one-time charge, amplifying the EPS compression despite higher revenue .
  • Consensus (S&P Global) appears limited/unavailable for Q2 2026, so we anchor comparisons to prior periods and company disclosures; where estimates are unavailable, we note explicitly in tables and commentary.

What Went Well and What Went Wrong

What Went Well

  • Net sales increased 27.7% YoY to $47.9M, driven by higher volumes in Middle East and North America .
  • Backlog rose to $157.8M (+14% vs Jan 31, 2025; +109% YoY), supporting forward revenue visibility; “growth across both North America and the MENA region” .
  • Strategic review launched to “close the gap between public market valuation and sum-of-the-parts value,” potentially unlocking shareholder value .

Quotes:

  • “We remain confident in our ability to drive profitable growth and strengthen our competitive position” – President & CEO Saleh Sagr .
  • “The Board has authorized a comprehensive review of strategic alternatives” – Chairman Jon Biro .

What Went Wrong

  • Diluted EPS fell to $0.10 vs $0.40 in the prior-year quarter; net income attributable to common stock dropped to $0.9M vs $3.3M due to a one-time $2.1M executive compensation acceleration and higher G&A .
  • Effective tax rate surged to 54% vs 23% prior year, reflecting jurisdictional mix and deduction limitation tied to the one-time compensation, further pressuring net income .
  • Cash from operations declined sequentially; capex increased, reflecting investment cycle and Qatar setup (quantitative CFO/capex figures in Financial Results tables; commentary on Qatar in press release) .

Financial Results

MetricQ4 2025Q1 2026Q2 2026
Revenue ($USD Millions)$45.0*$46.747 $47.902
Diluted EPS ($USD)$0.22 [MarketBeat link shows GAAP EPS for Q4 2025]$0.61 $0.10
Gross Profit ($USD Millions)$15.171*$16.724 $14.423
EBIT ($USD Millions)$5.438*$7.889 $3.187
EBITDA ($USD Millions)$6.380*$8.826*$4.144*
EBIT Margin (%)12.09%*16.88%*6.65%*
EBITDA Margin (%)14.18%*18.88%*8.65%*
Gross Margin (%)33.72%*35.78%*30.11%*
Cash from Operations ($USD Millions)$6.022*$0.733 -$2.041*
Capital Expenditure ($USD Millions)-$1.320*-$0.927*-$2.551*

Notes:

  • Values marked with an asterisk (*) retrieved from S&P Global.
  • Q4 2025 revenue derived from company’s press release narrative; detailed non-GAAP tables and balance sheet provided in the company’s release .
  • Q2 2026 statement of operations embedded in press release/8-K .

Prior-year comparison (selected line items):

  • Q2 2026 revenue $47.9M vs $37.5M in Q2 2025 .
  • Q2 2026 diluted EPS $0.10 vs $0.40 in Q2 2025 .
  • Q2 2026 net income attributable to common $0.851M vs $3.289M in Q2 2025 .

KPIs

KPIQ4 2025Q1 2026Q2 2026
Backlog ($USD Millions)$138.1 $131.1 $157.8
Effective Tax Rate (%)29.1% (FY context) 21% 54%
Adjusted Income Before Tax ($USD Millions)$19.020 (FY) N/A$4.857

Segment breakdown: Not disclosed by segment in the Q2 2026 press release; commentary attributes growth to Middle East and North America .

Guidance Changes

No formal quantitative revenue/EPS/margin guidance provided for Q3/Q4 FY2026. Company announced strategic alternatives review and filer status change to accelerated filer.

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueFY 2026N/AN/AMaintained (no guidance)
EBITDA/MarginsFY 2026N/AN/AMaintained (no guidance)
OpExFY 2026N/AHigher G&A including one-time charge notedN/A
Tax RateQ2 2026N/A54% actual; no forward rate issuedN/A
Strategic ActionsOngoingN/AStrategic alternatives review initiatedNew
Filer StatusFY ending Jan 31, 2026SRCAccelerated filerChanged

Earnings Call Themes & Trends

Note: A Q2 2026 earnings call transcript could not be located despite targeted searches across filings, investor site, and third-party aggregators. Searches performed for “earnings-call-transcript” and September 2025 items returned press releases and 8-K only [ListDocuments: none for transcript] [SearchDocuments results summarize 8-K and press release].

TopicPrevious Mentions (Q4 2025, Q1 2026)Current Period (Q2 2026)Trend
Regional demand (MENA, North America)Growth in Middle East/Canada; JV in Saudi; North America improving Higher sales volumes in Middle East and North America driving revenue Improving demand breadth
Backlog trajectory$138.1M (+102% YoY) entering FY2025 $131.1M at Apr 30, 2025; then $157.8M at Jul 31, 2025 (+109% YoY) Up strongly
Cost structure / G&AHigher comp/pro fees FY2024 G&A $10.0M (+$4.0M YoY); one-time $2.1M exec comp acceleration Elevated; transient one-time
Tax rate dynamicsFY2024 29.1% Q1 2026: 21%; Q2 2026: 54% (mix, deduction limits) Volatile; elevated in Q2
Strategic alternativesNot highlightedComprehensive review announced (divisions or whole-company sale) New catalyst
Capacity/footprintJV in Saudi; Vars, Ontario ramp Qatar facility setup; >$5M awards to deliver by year-end Expanding capacity

Management Commentary

  • “Our strong first-half results reflect both the continued momentum in our core markets and the benefits of improved operating leverage… We remain confident in our ability to drive profitable growth” – Saleh Sagr, President & CEO .
  • “As we seek to close the gap between Perma-Pipe’s public market valuation and the Company’s sum-of-the-parts value, the Board has authorized a comprehensive review of strategic alternatives” – Chairman Jon Biro .
  • Backlog: “$157.8 million at July 31, 2025… more than double the backlog reported at the end of last year’s second quarter, with growth across both North America and the MENA region” – Saleh Sagr .
  • Qatar: “Additional costs… for setting up a manufacturing facility in Qatar on the back of securing more than $5 million in new awards” – Saleh Sagr .

Q&A Highlights

Not available. A Q2 2026 earnings call transcript could not be located via filings list, investor site, or third-party aggregators; the company furnished an 8-K and press release but no transcript was accessible [ListDocuments: no earnings-call-transcript].

Estimates Context

  • S&P Global consensus coverage for Q2 2026 appears limited/unavailable; “Primary EPS Consensus Mean,” “Revenue Consensus Mean,” and “EBITDA Consensus Mean” did not return consensus estimates, only actuals. Where consensus is unavailable, the table shows “N/A.”
  • Post-earnings reaction: shares fell on the day; headlines highlighted top-line strength but EPS compression and strategic review .
MetricQ2 2026 ConsensusQ2 2026 Actual
EPS ($USD)N/A$0.10
Revenue ($USD Millions)N/A$47.902
EBITDA ($USD Millions)N/A$4.144

Notes:

  • Values retrieved from S&P Global.
  • Consensus cells show “N/A” due to limited analyst coverage/availability.

Key Takeaways for Investors

  • Revenue momentum intact with backlog at record levels; demand is diversified across regions and supported by capacity expansion (Qatar), which should underpin medium-term growth .
  • Earnings were depressed by a one-time $2.1M executive compensation acceleration and a 54% effective tax rate; absent transients, profitability would have been higher—watch normalization in coming quarters .
  • Strategic alternatives review is a material near-term catalyst, potentially unlocking value via divisional sale or full-company transaction; diligence and advisor engagement are in place .
  • Filer status change to accelerated filer tightens reporting timelines and ends scaled SRC disclosures; operational discipline and controls will be increasingly scrutinized .
  • Near term, monitor cash generation and capex cadence as the company invests (Qatar, footprint); sequential CFO softness in Q2 warrants attention against backlog conversion .
  • Estimate coverage appears sparse; buyside should build bottoms-up models anchored to backlog, execution pace, mix, and jurisdictional tax impacts, rather than relying on consensus .
  • Trading implications: stock’s negative reaction reflects transients (one-time comp, tax) and uncertainty around the review—event-driven strategies may benefit from monitoring review milestones, backlog wins, and margin normalization .

Citations:

  • Q2 2026 press release and embedded financials .
  • 8-K furnishing of press release and strategic alternatives details .
  • Q1 2026 press release for prior-quarter trend .
  • Q4 2025 press release for prior context .
  • Market reaction reference .

Notes: Values marked with an asterisk (*) are retrieved from S&P Global.