Hammond Power Solutions Stock Earnings Reports

Hammond Power Solutions reported Q3 2025 revenue of $218 million, a 14% increase year-over-year and the company’s second-best shipments quarter, driven primarily by strong U.S. demand across distribution, private label and OEM channels—notably large data-center orders. Backlog grew 28% year-to-date, with several large data-center orders received after quarter close (making up ~53% of the closing backlog) that are expected to ship mostly from the new Mexico facilities over the next 12–18 months. Management is adding equipment and reconfiguring operations to increase capacity—about $100 million of additional capacity to the new Monterrey facility—bringing total targeted manufacturing capacity to roughly $1.2 billion by 2027. Margins were pressured: Q3 gross margin was 30.1% (down from 33.8% YoY) due to ongoing material cost inflation, Section 232 tariff impacts on steel/aluminum, and unabsorbed overhead in new Mexico plants (cited as a 233-basis-point drag). Pricing actions implemented in September and expected higher absorption as backlog converts to shipments are anticipated to improve margins in Q4 and into 2026. Inventories rose due to project shipping delays, safety stock and tariffs; capex year-to-date was $27 million. Management remains focused on cost control, ramping Mexican capacity, and pursuing targeted acquisitions while capitalizing on growing large-project demand in data centers.