Commercial Vehicle Group Q2 2026 Earnings Call: Complete Transcript

Commercial Vehicle Group (NASDAQ: CVGI ) held its second-quarter earnings conference call on Tuesday.

Below is the complete transcript from the call.

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View the webcast at Summary Commercial Vehicle Group reported year-over-year revenue growth across all segments, driven by geographical and end market diversification efforts.

Adjusted gross margin improved to 12.9%, with a focus on operational efficiency and increased volumes aiding profitability.

The Electrical Systems segment saw a 15.8% revenue increase, driven by program ramps in North America and EMEA.

Debt reduction efforts saw total debt decrease by $14.6 million, supported by an at-the-market equity program and a sale-leaseback transaction.

Future outlook is positive, with increased revenue and EBITDA guidance for 2026, supported by new business ramps and expected market improvements.

The company is adding labor and capital to support growth, particularly in the Zoox program, which is moving to commercial production.

SG&A expenses increased due to higher incentive compensation, impacting EBITDA margins.

Management highlighted continued efforts on cost control, cash flow generation, and further deleveraging.

Full Transcript Michelle, Investor Relations And welcome everyone to our second quarter 2026 conference call.

Joining me on the call today are James Ray, President and CEO, and Angie O'Leary, Interim Chief Financial Officer.

This morning we will provide a brief company update as well as commentary regarding our second quarter 2026 results, after which we will open the call for questions.

As a reminder, this conference call is being webcast and the Q2 2026 earnings call presentation, which we will refer to during this call, is available on our website.

Both may contain forward-looking statements including, but not limited to, expectations for future periods regarding market trends, cost savings initiatives and new product initiatives, among others.

Actual results may differ from anticipated results because of certain risks and uncertainties.

These risks and uncertainties may include, but are not limited to, economic conditions in the markets in which Commercial Vehicle Group operates, fluctuations in the production volumes of vehicles for which Commercial Vehicle Group is a supplier, financial covenant compliance and liquidity risks associated with conducting business in foreign countries and currencies, and other risks as detailed in our SEC filings.

I will now turn the call over to James to provide some highlights from our second quarter performance.

James Ray, President and CEO Thank you, Michelle.

Good morning and thanks to all those who joined the call.

Please turn your attention to the supplemental earnings presentation starting on slide three.

As we have highlighted on this slide, CVG delivered year-over-year revenue growth across all three segments.

This reflects our ongoing efforts to reduce our end market concentration in cyclical North American Class 8 truck exposure through geographic and end market diversification.

While there are still macroeconomic uncertainties to monitor, CVG is hitting its stride as our new business wins are ramping, coincidentally with a recovery in our key end markets.

During the quarter we delivered an adjusted gross margin of 12.9%, up 90 basis points compared to last year and 70 basis points sequentially from the first quarter of 2026.

The continued year-over-year and sequential improvement in profitability was again driven by our focus on improvements in operational efficiency and the operating leverage we are seeing from improved volumes.

We have recently highlighted the growth in our Electrical Systems segment and that accelerated again with a 15.8% growth in segment revenues in the quarter.

This growth has been driven by the ramp of previously mentioned programs across North American and international markets, particularly Zoox in North America and the ramp of our key wins in the EMEA region.

This growth is going a long way to increase capacity utilization at our Aldama, Mexico and Tangier, Morocco facilities.

While we are adding labor to handle the additional volumes, we continue to see margin expansion in this segment.

Another highlight in the last quarter was the continued debt and leverage reduction we delivered.

Angie will give you more detail shortly, but the at-the-market equity program we announced and executed a portion of during the quarter is not only accretive but provides us additional capacity to continue to invest for growth opportunities going forward.

The at-the-market transaction combined with the sale-leaseback transaction on our Venur facility provided us with cash that we used to pay down total debt by $14.6 million since the end of 2025, facilitating a net leverage ratio reduction from 4.1 times at the end of 2025 to 3.3 times at the end of the second quarter.

Our goal remains to bring leverage back down to the two times level over time.