Littelfuse (LFUS) Q2 FY26 earnings call: guidance and Q&A

How Littelfuse plans to leverage the improved breadth of growth in electronics and industrial markets, including potential for share gains and pricing, and prioritizing actions for the rest of the year.

Management emphasized the broad-based momentum across all end markets, including strengthening in previously slower areas like HVAC and diversified industrials (medical, A&D). They highlighted strong design win traction (double-digit increase across all markets) as a key driver of future growth and share gains, focusing on capturing upside volume.

“I think it's broad growth across our reported segments and across our markets. And so our strategy and focus right now is being well positioned to capture the upside in the volume.”

asked by Luke Junk (Baird) · answered by Gregory Henderson

Inquiry about improving the data center business positioning in the near term, year-to-date progress, and how data center mix is evolving as a percentage of sales.

Data center remains a strong growth driver, expected to continue through H2 FY26. Current revenue is primarily from low-voltage architectures, with high-voltage architectures expected from 2027 onwards, supported by strong design wins (more than doubled YoY). While data center is the fastest-growing market, overall growth is now more broad-based across other industrial markets compared to last year.

“I think what's also important, though, is that to understand that the revenue growth that we have now in data center this year is all related to the low voltage architectures. And we've talked about the high-voltage architectures coming in the future, probably in 2017 and beyond. We have very low volume shipments now for kind of the proof of concept of those systems, but that comes in.”

asked by Luke Junk (Baird) · answered by Gregory Henderson

Request for unpacking the drivers behind incremental margin dynamics, especially with Q3 guidance implying a 40% incremental, considering factors like volume and pricing.

The strong incremental margins are driven by a combination of volume leverage from mid-to-high single or double-digit organic growth, operational execution, and favorable revenue mix. Growth in passive and protection products, which have high flow-through, also contributes significantly.

“So if you think about the margin drivers, so I'll bring it down to a couple of things. Number 1 is the volume leverage that you see unpack as we start to grow the company on a year-over-year basis; two, it's tied to operational execution. Three, it's take to mix.”

asked by Luke Junk (Baird) · answered by Abhishek Khandelwal

Seeking additional information on the Allen, Texas semi fab closure, when savings will impact the P&L, and the potential magnitude of those savings.

The Allen, Texas facility closure is part of a multi-year power semiconductor rationalization and footprint optimization process. Savings are expected in the back half of 2027. The decision aims to simplify the operational footprint, reduce lead times, and improve cost structure through a make-versus-buy strategy. More details will be shared as progress is made.

“The easiest way to think about the Allen closure is, this is a decision that we're making to simplify our operational footprint and a decision around make versus buy, which will help us reduce our lead times and improve our cost structure.”

asked by David Williams (Needham) · answered by Abhishek Khandelwal

Request to quantify the record bookings in Q2, relative to prior records and year-over-year, and whether demand is from replenishment or end consumption.

While exact booking numbers are not provided, Q2 bookings were a company-wide record and book-to-bill was "significantly north of 1.0." The bookings reflect broad-based momentum across all end markets and strong double-digit design win growth. Sequential organic growth improvement (9% in Q1, 14% in Q2, 21% guided for Q3) supports the strong booking comment. Channel inventory is generally healthy, and demand is largely real end consumption.

“And David, just to size it up a slightly different way, while we don't hand out an exact booking numbers, if you think about the year and think about our actuals in the guide and see the sequential improvement supports the strong booking comment that we made, which is, look, organically, Q1, we delivered 9%. Q2, we came in at 14% and at the midpoint of Q2 for Q3 guide, we're guiding a 21% organic.”

asked by David Williams (Needham) · answered by Abhishek Khandelwal

Inquiry about the faster-than-expected HVAC market recovery, given the prior easy comparison was Q3, and whether Littelfuse is gaining share or benefiting from OEM stocking.

Littelfuse has a strong market position in HVAC, but the recovery is primarily due to the market itself recovering faster than anticipated. This is the first quarter since H1 2025 that the company has seen year-over-year growth in HVAC, following four consecutive quarters of decline.

“I would say for us, there is a market recovery there that we're seeing a little faster than maybe we expected.”

asked by Christopher Glynn (Oppenheimer) · answered by Gregory Henderson