Alliance Laundry Holdings Inc.

Second-quarter net revenue grew 7% year over year. Gross profit grew 9%, with gross margin at 39.8%, up approximately 90 basis points. Adjusted EBITDA grew 12% to a margin of 28.1%, up 135 basis points; excluding tariff refunds and a business interruption insurance claim totaling approximately $3.8 million, adjusted EBITDA grew 9% and margin expanded 60 basis points. Adjusted net income was up 55% year over year and adjusted EPS was up 32% to $0.41. Operating cash flow was $66 million, and the company repaid $50 million of debt in the quarter. For 2026, Alliance maintained revenue growth guidance of 6% to 7% and raised adjusted EBITDA growth guidance to 8% to 10%; it now expects net leverage of 2.0x at year-end, 2026 interest expense of approximately $80 million, and a 23% effective tax rate. Management said revenue should be fairly consistent across the second half, with margin expansion weighted more toward Q4.

Mike Schoeb framed the quarter as evidence that Alliance’s replacement-driven, essential end markets and broad diversification can produce resilient growth across cycles. He said demand remains strong in North America, Asia Pacific and parts of Europe, while the Middle East and Africa issues are small in direct revenue impact because the region is less than 2% of global sales. He also emphasized digital innovation, local-for-local manufacturing, and a long runway in laundromats and vended laundry, especially in Southeast Asia, where he described structural demand and a growing installed base.

Dean Nolden highlighted that pricing contributed slightly more than half of the 7% revenue increase, with the rest mainly from volume. He pointed to gross margin of 39.8%, adjusted EBITDA margin of 28.1%, and adjusted EPS of $0.41, noting that lower interest expense helped earnings meaningfully. On cash and capital structure, he cited $66 million of operating cash flow, $50 million of debt paydown in the quarter, $115 million repaid year to date, and net leverage down to 2.4x from 4.6x a year ago; he also said Moody’s and S&P upgraded the debt ratings, cutting borrowing costs by 25 basis points going forward.

Analysts focused on the Middle East conflict, North American margin sustainability, pricing/steel inflation, international margin pressure, and what comes next for capital allocation as leverage falls toward 2x. Management said the Middle East and Africa impact is de minimis because it is less than 2% of revenue, though delayed vessels, higher energy costs, and knock-on effects are creating some lumpiness in international demand. On margins and pricing, management said steel is locked through the first quarter of 2027, inflation looks somewhat hotter, and the company will likely use pricing and other cost actions if needed; on capital allocation, Bob Calver said the priority remains deleveraging, with CapEx and M&A as the next uses of capital and dividends/buybacks a later, non-committed possibility.