Executive Summary

Q2 2025 delivered resilient results in a volatile metals backdrop: sales $496.5M, GAAP diluted EPS $0.45, adjusted EPS $0.50, and adjusted EBITDA $20.3M; all three segments posted positive EBITDA .
Versus Wall Street consensus (S&P Global), ZEUS produced a revenue beat ($496.5M vs. $484.4M) and a Primary EPS beat ($0.50 vs. $0.46), while unadjusted EBITDA was modestly below ($19.6M vs. $19.8M); adjusted EBITDA rose 26% sequentially vs. Q1 *.
Management highlighted strengthening pricing in stainless and aluminum post-June tariff action, rising fabrication inquiries, and an active M&A pipeline, supported by >$300M borrowing availability (CFO noted ~$305M) .
Near-term setup: typical Q3 seasonality implies 5–6% sequential volume decline; FY25 tax rate guided to ~28–29%; 2025 capex ~$35M focused on automation and new processing lines—ramp largely from late 2025 into 2026 .

What Went Well and What Went Wrong

What Went Well

Sequential operating improvement: adjusted EBITDA increased 26% vs. Q1, aided by improved flat-roll margins and steady end products; “our team delivered a sequential increase in Adjusted EBITDA” (CEO) .
Fabrication momentum and specialty metals: management cited increased inquiries post-tariffs and sequential improvements in stainless/aluminum volume and profitability; specialty metals EBITDA +60% vs. Q1 (COO) .
Balance sheet and liquidity: debt reduced to ~$233M; revolver availability ~$305M; continued quarterly dividend of $0.16 per share approved .

What Went Wrong

Year-over-year softening: net sales down to $496.5M (from $526.3M), GAAP EPS down to $0.45 (from $0.66), adjusted EBITDA $20.3M (from $21.3M) amid industry demand headwinds .
Tubular & Pipe Products YOY decline: segment net sales fell to $79.2M (from $87.6M) and operating income to $3.9M (from $6.5M) as demand/pricing moderated .
Carbon segment YOY mixed: tons sold decreased and operating income modestly up, but average selling price per ton fell (ASP $1,315 vs. $1,343) reflecting pricing pressure .

Financial Results

Consolidated Results vs. Prior Periods

Metric	Q4 2024	Q1 2025	Q2 2025
Revenue ($USD Millions)	$418.8	$492.9	$496.5
GAAP Diluted EPS ($)	$0.33	$0.21	$0.45
Adjusted EPS ($)	$0.13	$0.21	$0.50
EBITDA ($USD Millions)	$17.3	$16.1	$19.6
Adjusted EBITDA ($USD Millions)	$14.5	$16.1	$20.3
Operating Income ($USD Millions)	$9.0	$7.8	$11.4
Operating Margin (%)	2.15%	1.58%	2.29%
Net Income ($USD Millions)	$3.9	$2.5	$5.2
Net Income Margin (%)	0.93%	0.51%	1.06%

Notes: Operating Margin = Operating Income / Revenue; Net Income Margin = Net Income / Revenue, computed from cited financial statements.

Q2 2025 vs. S&P Global Consensus

Metric	Consensus	Actual	Surprise
Revenue ($USD Millions)	$484.4	$496.5	+$12.1 (Beat)
Primary EPS ($)	$0.46	$0.50	+$0.04 (Beat)
EBITDA ($USD Millions)	$19.8	$19.6	-$0.2 (Miss)

Values retrieved from S&P Global.*

Segment Breakdown (YoY)

Segment	Net Sales Q2 2024 ($M)	Net Sales Q2 2025 ($M)	Operating Income Q2 2024 ($M)	Operating Income Q2 2025 ($M)	Avg Selling Price/Ton Q2 2024 ($)	Avg Selling Price/Ton Q2 2025 ($)
Carbon Flat Products	$307.8	$282.5	$5.4	$7.4	$1,343	$1,315
Specialty Metals Flat Products	$130.9	$134.7	$7.8	$4.9	$4,129	$4,190
Tubular & Pipe Products	$87.6	$79.2	$6.5	$3.9	N/A	N/A

KPIs and Operating Metrics

KPI	Q4 2024	Q1 2025	Q2 2025
Depreciation ($M)	$7.0	$6.5	$6.6
Amortization ($M)	$1.4	$1.8	$1.7
Interest Expense on Debt ($M)	$4.2	$4.2	$4.0
Effective Tax Rate (%)	18.9%	30.1%	29.1%
Credit Facility Revolver Balance ($M)	$272.5	$235.4	$233.2
Borrowing Availability ($M)	N/A	N/A	~$305
Net Cash from Ops (YTD) ($M)	N/A	$49.4	$64.9 (six months)
Dividend per Share ($)	$0.16 (declared for Mar 17, 2025)	$0.16 (paid Jun 16, 2025)	$0.16 (pay Sep 15, 2025)

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Effective Tax Rate	FY 2025	Not quantified	~28–29%	Set/maintained
CapEx	FY 2025	Not quantified	~$35M, focused on automation and processing lines	Set
Q3 Sequential Volume	Q3 2025	Not quantified	Typical seasonality: down ~5–6% vs. Q2	Maintained seasonal pattern
Debt Outlook	Q3 2025	Not quantified	“Flattish on debt” given pricing evaluation (stainless)	New qualitative view
Dividend	Q3 2025	$0.16 per quarter	$0.16 per quarter (Sep 15 payable)	Maintained

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4 2024 and Q1 2025)	Current Period (Q2 2025)	Trend
Diversification & positive EBITDA across segments	“All three segments delivered EBITDA-positive results every quarter of 2024” ; Q1: all segments posted positive EBITDA in a challenging macro	“All three segments continued to deliver positive EBITDA” (CEO); segment EBITDA commentary by COO (carbon $12.5M; pipe/tube $6.7M; specialty $5.9M)	Stable/positive
CapEx & automation	2024 automation investments; Metal Works acquisition	2025 capex ~$35M; new CTL lines (Minneapolis, Schaumburg), warehouse automation (Chambersburg), stainless slitter (Berlin Metals)	Accelerating execution
Tariffs/macro/pricing	Challenging demand/pricing in 2024	“Doubling of Section 232 tariffs to 50%” and domestic mill price increases; positive pricing trend in stainless/aluminum	Supportive pricing
Fabrication/onshoring demand	Q1: positioned to support U.S. manufacturing and OEM outsourcing	Increased inquiries for outsourced fabrication; strong data center-related demand expected in H2	Improving
M&A pipeline	Metal Works completed; accretive start	Opportunity flow picking up; active pipeline with >$300M liquidity; disciplined approach	Reaccelerating
Working capital & liquidity	Q1 debt reduced by $37M from year-end	Q2 debt reduced to $233M; availability ~$305M	Strengthening

Management Commentary

“Our strategic actions… have enabled us to build a stronger, more resilient Olympic Steel that can achieve profitable results in any environment. In the second quarter, our team delivered a sequential increase in Adjusted EBITDA, despite declining market demand for metals.” — CEO .
“We are well positioned to continue investing in our growth initiatives with a strong balance sheet and more than $300 million of borrowing availability.” — CEO .
“We are encouraged by the positive trend in stainless and aluminum pricing following the June tariff announcement… Inquiries for outsourced fabrication work have steadily increased as OEMs begin to navigate the new tariff environment.” — CEO .
“We expect improved second half 2025 demand for data center work related to pipe and tube.” — COO .
“2025 capital expenditures will be approximately $35 million… focused on supporting our automation and additional organic growth initiatives.” — CFO .

Q&A Highlights

Automation ROI and safety/productivity benefits: new high-speed lasers, CASTO system to reduce touches and improve safety; CTL lines in Minneapolis and Schaumburg (aluminum), stainless slitter at Berlin Metals expected operational by Q1 2026; benefits phase-in from early 2026 (CEO/COO) .
Data center demand as a growth vector: strong fabrication growth (carbon and stainless) with 19 high-speed tube lasers active; H2 demand tailwind expected (COO) .
Seasonality and outlook: typical Q3 sequential decline of 5–6% due to July holidays; pricing stability expected barring tariff changes/quota shifts (CFO/COO) .
Margin drivers: improved flat-roll margins from index pricing dynamics (inventory secured at lower costs sold into higher prices) and richer mix (more coated product, value-add work, end products) (CFO/CEO) .
Tax legislation: bonus depreciation most impactful to customers and future projects (post-Jan 2025); not a significant impact to 2025 tax rate for current projects (CFO) .
Liquidity/M&A: ~$305M revolver availability; opportunity flow improving after pause; disciplined approach continues (CEO/CFO) .

Estimates Context

Q2 2025: Revenue and Primary EPS beat consensus; EBITDA modestly below on an unadjusted basis. Expect models to reflect stronger adjusted EPS/EBITDA and improved mix, with segment commentary hinting at H2 demand stabilization and pricing support in specialty metals. Values retrieved from S&P Global.*
Forward estimates: Q3 2025 consensus Primary EPS ~$0.25 (actual reported later), revenue ~$476.2M; Q4 2025 consensus Primary EPS ~$0.17, revenue ~$444.8M. Values retrieved from S&P Global.*

Key Takeaways for Investors

Mix-led resilience continues: sequential adjusted EBITDA up 26% with improved flat-roll margins and stable end products; continued positive EBITDA across all segments .
Tariff-driven pricing tailwinds: stainless/aluminum pricing trends turned positive; fabrication inquiries rising—providing H2 support, especially in data centers .
CapEx and automation are near-term catalysts: ~$35M 2025 program with multiple lines and automation projects ramping late 2025 into 2026; expect productivity and safety gains and incremental sales capacity .
Liquidity supports optionality: debt down to ~$233M; ~$305M availability; active M&A pipeline may augment growth and diversification (disciplined execution) .
Near-term trading setup: typical Q3 seasonal dip in volumes (5–6% sequential); watch tariff changes/pricing in hot-rolled/stainless; H2 demand indicators improving (fabrication/data centers) .
Dividend stability: $0.16 per share quarterly cash dividend maintained—income support amid cyclical volatility .
Risk monitors: tariff/quotas, pricing volatility, stainless price base shifts, and macro demand; management’s tax rate guide ~28–29% and capex plan provide visibility .

*Values retrieved from S&P Global.

Citations for primary source data:

Q2 2025 press release and financials
Q2 2025 8-K 2.02 and exhibit
Q2 2025 earnings call transcript
Q1 2025 press release (trend analysis)
Q4 2024 press release (trend analysis)

OLYMPIC STEEL INC (ZEUS)·Q2 2025 Earnings Summary