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    ROG
    Earnings call· Jun 2026(Q2 FY26)

    ROGERS Q2 FY26 earnings call ROG

    Jul 28, 2026 Source

    Executive summary

    Rogers Corporation Q2 FY26 — Solid Progress with Accelerating Growth and Profitability

    Rogers Corporation delivered solid Q2 FY26 results, exceeding revenue expectations and achieving significant year-over-year profitability improvements, driven by commercial initiatives and market share gains. Despite short-term headwinds from supply chain issues and a facility event impacting Q2 EPS, the company projects continued momentum into Q3 with accelerating top-line growth and further margin expansion. Management is actively pursuing new product opportunities in AI/data centers and EV, with an upcoming Analyst Day to detail strategic plans and long-term financial targets.

    Highlights

    5

    • Sales of $216.8 million, up 6.9% year-over-year and above the midpoint of guidance.

    • Adjusted EBITDA increased to $38 million or 17.3% of sales, representing a 550 basis point improvement year-over-year.

    • Adjusted EPS of $0.92, a significant 171% increase from the second quarter of 2025.

    • Q3 sales guidance of $233 million to $243 million, with the midpoint reflecting a 10% year-over-year increase across all end markets.

    • Q3 Adjusted EBITDA margins projected to reach 20%, an increase of 250 basis points year-over-year.

    Concerns

    3

    • Adjusted EPS of $0.92 was below the midpoint of guidance due to supply chain headwinds, a onetime facility event, and higher operating expenses, with a cumulative impact of over $0.10 per share.

    • Gross margin improvement in Q3 guidance is modest (20 bps YoY) due to underutilization during the China factory ramp and increased commodity costs.

    • Defense sales were lower in Q2 due to normal variability in customer ordering patterns.

    Guidance & targets

    7
    CategoryTargetConfidence
    Q3 Revenue
    $233 million to $243 million
    high materiality
    High
    Q3 Gross Margin
    33.2% to 34.2%
    medium materiality
    High
    Q3 Adjusted EPS
    $1.10 to $1.30
    high materiality
    High
    Q3 Adjusted EBITDA
    $44 million to $50 million
    high materiality
    High
    Q3 Adjusted EBITDA Margin
    19.7%
    high materiality
    High
    Full-year 2026 Capital Expenditures
    $30 million to $35 million
    medium materiality
    High
    Non-GAAP Full-year Tax Rate
    approximately 32%
    medium materiality
    High

    Segment performance

    4
    SegmentRevenueYoYQoQMargin
    Industrial
    Performance driven by continued improvement in AMS general industrial demand in both the United States and Europe, led by Silicon Solutions experiencing healthy demand and gaining market share. Mass transit (rail applications in the United States) was also strong.
    % of year-to-date sales: 37%
    		—high single-digit——
    Automotive
    Revenue supported by higher sales of ADAS and ICE vehicle applications. Sales into the EV market were flat versus the prior year, with improved power substrate revenues offset by lower orders of materials for EV batteries. Sequential EV and HEV battery sales improved, with stronger second half EV sales expected due to new program ramps and recent design wins.
    % of sales: 25%
    		—low single-digit rate——
    Electronics and Communications
    Strongest performing end market during the quarter, with revenue increasing from higher sales into the wireless infrastructure and smartphone markets. Smartphone sales increased versus Q2 '25 from a favorable mix of higher-end devices and continued benefits from customer share gains.
    % of sales: 18%
    		—double-digit rate——
    Aerospace and Defense
    Defense sales were lower due to normal variability in customer ordering patterns and were partly offset by improved commercial aerospace sales in the AMS business. Defense sales are expected to improve significantly in the second half of the year, while commercial aerospace demand remains strong.
    % of sales: 15%
    		—decreased slightly——

    Operational metrics

    9
    Sales
    $216.8 millionup 6.9% from the prior year
    Q2 FY26

    Exceeded the midpoint of guidance range.

    Adjusted EBITDA
    $37.6 millionincreased from $23.9 million in the prior year quarter
    Q2 FY26

    Largest contributor to improvement from higher sales and improved product mix, also reductions in manufacturing costs and operating expenses. Had a $1 million headwind versus prior year from the ramp of new China factory.

    Adjusted EPS
    $0.92up 171% from the second quarter of 2025
    Q2 FY26

    Below the midpoint of guidance due to supply chain headwinds, a onetime facility event and higher operating expenses, with a cumulative impact of more than $0.10 of earnings per share.

    Gross Margin
    32.5%up 90 basis points year-over-year
    Q2 FY26

    Within guidance range.

    Cash and investments balance
    $211 millionincreased $15.6 million from the end of the first quarter
    Q2 FY26

    Provides strategic flexibility.

    Cash provided by operations
    $24.4 millioncompared to $5.8 million in Q1 '26
    Q2 FY26

    Improved cash flow primarily driven by higher sales and adjusted EBITDA. Working capital increased mainly as a result of higher sales, which drove an increase in accounts receivable and inventories.

    Capital expenditures
    $6.1 million
    Q2 FY26

    Part of the full year 2026 capital expenditure range of $30 million to $35 million.

    Shares repurchased
    $3 million
    Q2 FY26

    Partially offset the dilutive effect of annual share issuances. Company will continue to balance returning capital to shareholders with other priorities.

    Restructuring program savings
    $13 million
    FY26

    Program is on track to deliver the committed savings, with some already materializing in the P&L.

    Industry KPIs

    5
    MetricValueDetails
    Design wins product cycle ramps—
    Supply demand imbalance lead times—
    Capacity expansion internal sourcing—
    End market revenue mix organic growthIndustrial: 37%, Automotive: 25%, Electronics and Communications: 18%, Aerospace and Defense: 15%%
    Operating margin incremental leverage17.3%%

    Product announcements

    2
    ProductTypeDetails
    Microchannel cooler technologyupdate
    High-frequency circuit materialsupdate

    Capital programs

    1
    Ceramic China factory rampunderway

    Underutilization during the ramp of the Ceramic China factory is causing a $1 million headwind to EBITDA in Q2 and an 85 bps headwind to Q3 gross margin. The company is starting to build momentum but it will take time to ramp.

    Risks & headwinds

    6
    Supply chain headwinds (raw material shortages, logistics delays)ongoing issue

    more than $0.10 of earnings per share (cumulative impact with facility event and opex)

    Mitigation: Managing supply contracts, evaluating copper program, engineering initiatives to reduce consumption, and passing on incremental costs to customers (with a lag).

    Onetime facility event (small fire)resolved

    more than $0.10 of earnings per share (cumulative impact with supply chain and opex)

    Mitigation: The issue has been resolved, with no safety issues for employees.

    Underutilization during China factory rampwill take time to ramp there

    about 85 bps of a headwind in the third quarter (on gross margin)

    Mitigation: Starting to build a little bit of momentum.

    Increased commodity costscontinuing into the third quarter

    pressure of the commodity costs (on gross margins)

    Mitigation: Managing supply contracts, evaluating copper program, and passing on incremental costs to customers (with a lag).

    Higher operating expensesQ2 FY26

    more than $0.10 of earnings per share (cumulative impact with supply chain and facility event)

    Mitigation: Q3 adjusted operating expenses are forecasted to remain approximately flat sequentially.

    Tax challengesFY26

    Non-GAAP full year tax rate of approximately 32%

    Mitigation: Working towards an improvement in tax performance, addressing valuation allowances in some jurisdictions.

    What to watch in Q3 FY26

    5

    Resolution of supply chain issues

    next quarter
    CurrentRaw material shortages (silver, copper) and logistics delays (12+ weeks transit) ongoing.
    TargetImprovement in raw material availability and reduced transit times.

    Why it matters

    Supply chain issues impacted Q2 EPS by >$0.10/share and continue to pressure Q3 gross margins; resolution is key for profitability.

    On the supply side, we still have some raw material -- experiencing some raw material shortages as well as, I would say, logistics or from a freight perspective, it's just taking longer due to the situation in the Middle East... On the raw material side, there is still -- from a silver and copper perspective, we still see some tightness in the market. However, we see it light at the end of the tunnel.

    Q&A highlights

    7

    Asked for elaboration on the supply chain challenges and the one-time facility event that impacted Q2 EPS, and if these issues are resolved for Q3.

    Ali El-Haj explained supply chain issues include raw material shortages (silver, copper) and extended logistics (12+ weeks transit from 4-6 weeks) due to the Middle East situation, which are ongoing. The one-time facility event was a small fire that suspended manufacturing for a few days, now resolved with no safety issues.

    “On the supply side, we still have some raw material -- experiencing some raw material shortages as well as, I would say, logistics or from a freight perspective, it's just taking longer due to the situation in the Middle East. So typically, from transit time from 4 to 6 weeks in the past, now it's taken somewhere between over 12 weeks in some instances. That's one of the issues. On the onetime event, we experienced a small fire in one of our plants that actually ended up suspending manufacturing for a few days.”

    asked by Daniel Moore · answered by Ali El-Haj

    2 min read6 chapters

    Detailed Narrative

    01

    Q2 Performance Highlights

    Rogers Corporation reported Q2 FY26 sales of $216.8 million, a 6.9% increase year-over-year, surpassing the midpoint of guidance. Adjusted EBITDA reached $38 million (17.3% of sales), marking a 550 basis point improvement from the prior year. Adjusted EPS significantly increased by 171% to $0.92, although it fell below the midpoint of guidance due to supply chain issues and a one-time📎 facility event.

    02

    End Market Dynamics

    Industrial remained the largest end market at 37% of year-to-date sales, growing high single-digits YoY, driven by Silicon Solutions and mass transit. Automotive sales grew low single-digits YoY (25% of sales), with EV sales flat but expected to strengthen in H2 due to new program ramps and design wins. Electronics and Communications (18% of sales) saw double-digit growth from wireless infrastructure and smartphones. Aerospace and Defense (15% of sales) decreased slightly due to defense ordering variability but is expected to improve significantly in H2.

    03

    New Product Development & AI Opportunities

    The company is advancing microchannel cooler technology for high-power AI and data center applications, with multiple customer evaluations providing positive feedback on differentiated performance. Significant progress is also noted with high-frequency circuit materials for data centers, actively sampling with prospective customers and receiving positive initial feedback for next-generation AI server architectures.

    04

    Operational Headwinds and Mitigation

    Q2 adjusted EPS was impacted by supply chain headwinds🌐 (raw material shortages, extended logistics due to Middle East situation) and a one-time📎 small fire at a plant, totaling over $0.10 per share. While the facility issue is resolved, supply chain challenges🌐 persist. Management is working to mitigate commodity cost pressures through supply contracts, engineering initiatives to reduce consumption, and passing on incremental costs to customers where necessary, albeit with a lag.

    05

    Capital Allocation and M&A Strategy

    Rogers ended Q2 with over $211 million in cash and short-term investments, up $15.6 million sequentially, and generated $18.3 million in free cash flow. The company repurchased $3 million of shares in Q2 and maintains a strong balance sheet for strategic flexibility. Management is actively evaluating M&A opportunities, noting that current market conditions may present more favorable valuations and strategic fits compared to previous years.

    06

    Analyst and Investor Day

    Rogers Corporation will host an Analyst and Investor Day on September 30, 2026, in New York City. The event will provide a comprehensive update on strategy, growth opportunities, innovation initiatives, capital allocation priorities, long-term financial planning, and detailed insights into AI data centers and vehicle electrification opportunities.

    AI-generated summary of the company’s earnings call. Not investment advice.