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    RYZ
    Earnings call· Jun 2026(Q2 FY26)

    Ryerson Holding Q2 FY26 earnings call RYZ

    Jul 30, 2026 Source

    Executive summary

    Ryerson Q2 FY26 — Merger Synergies Drive Above-Guidance Performance Amidst Mixed Market

    Ryerson delivered strong Q2 FY26 results, exceeding revenue and adjusted EBITDA guidance, driven by merger synergies and robust transactional business. The company is effectively integrating Olympic Steel, realizing significant cost savings and commercial enhancements. While facing margin pressure from commodity price volatility and program pricing lags, management is focused on operational efficiencies and strategic capital allocation to reduce debt and capitalize on secular demand trends.

    Highlights

    5

    • Achieved revenue and adjusted EBITDA (ex-LIFO) above guidance ranges, with adjusted EBITDA reaching $101 million.

    • Realized $5 million in Q2 synergy attainment, on track to exceed first-year target of $40 million annual run rate synergies ahead of schedule.

    • North American same-store tons shipped increased by 5.8% year-to-date, outperforming industry growth of 2.9%.

    • Secular demand from data center and power generation projects represented ~7% of Q2 revenues, growing ~30% sequentially.

    • Leverage ratio decreased from 5.1x in Q1 to 4.0x in Q2, with a target of 3.0x by year-end.

    Concerns

    5

    • Net income impacted by a $15.7 million purchase accounting adjustment to COGS.

    • Transactional pricing and program pricing margin spreads widened to 700-800 basis points, the highest in three years.

    • Q3 outlook anticipates volumes 3-5% lower sequentially and margin compression due to rising material costs, program pricing lags, and inflationary labor/delivery pressures.

    • Non-ferrous commodity prices (stainless, aluminum) saw a 10-15% price reversion at the end of Q2 and into early Q3.

    • Agriculture market remains recessed, and consumer demand disciplined due to higher interest rates and inflation.

    Guidance & targets

    14
    CategoryTargetConfidence
    Q3 Volumes
    3% to 5% lower
    medium materiality
    High
    Q3 Average Selling Prices
    flat to up by 2%
    medium materiality
    High
    Q3 Revenues
    $1.87 billion to $1.95 billion
    high materiality
    High
    Q3 Inventory Purchase Accounting Adjustments
    $5 million to $7 million
    medium materiality
    High
    Q3 Net Income (excluding inventory purchase accounting)
    $19 million to $21 million
    high materiality
    High
    Q3 Diluted EPS (excluding inventory purchase accounting)
    37 cents to 40 cents per diluted share
    high materiality
    High
    Q3 LIFO Expense
    $16 million to $18 million
    medium materiality
    High
    Q3 Adjusted EBITDA excluding LIFO
    $88 million to $92 million
    high materiality
    High
    Q3 Olympic Steel Adjusted EBITDA excluding LIFO
    $21 million to $23 million
    medium materiality
    High
    Net Leverage Ratio
    closer to three times
    high materiality
    High
    Annual Run Rate Synergy Attainment
    $52 million to $56 million
    high materiality
    High
    Total Two-Year Annual Run Rate Synergies
    $120 million
    high materiality
    High
    Full-Year Capital Expenditures
    $75 million
    medium materiality
    High
    Full-Year Same-Store Capital Expenditures
    $50 million
    medium materiality
    High

    Segment performance

    3
    SegmentRevenueYoYQoQMargin
    Total Company
    Exceeded guidance expectations on both revenue and shipment basis due to stronger same-store and total company performance, improved pricing, and effective execution.
    Tons shipped: 800,000+Tons shipped growth QoQ: 22.6%Average selling prices growth QoQ: 4.5%
    		$2.01 billion—28.1%—
    Same-Store North America
    Reflects broad sequential volume growth, better market conditions, stronger customer activity, and commercial collaboration.
    Average selling prices growth QoQ: 7.2%Tons shipped growth QoQ: 4%
    		$1.44 billion—11.5%—
    Olympic Steel
    Contributed $23.5 million to adjusted EBITDA excluding LIFO in Q2, exceeding expectations. This compares to $12.5 million contributed in Q1 (six-week sub-period).
    		———$23.5 million adjusted EBITDA excluding LIFO

    Operational metrics

    44
    Net income
    $15.5 millionvs $4.5 million in Q1 FY26
    Q2 FY26

    GAAP net income, explicitly requested to be captured despite general skip rule for GAAP figures.

    Diluted EPS
    $0.30vs $0.10 in Q1 FY26
    Q2 FY26

    GAAP diluted EPS, explicitly requested to be captured despite general skip rule for GAAP figures.

    Adjusted net income
    $27.6 million
    Q2 FY26

    Excluding purchase accounting and other one-time items.

    Adjusted diluted EPS
    $0.52
    Q2 FY26

    Excluding purchase accounting and other one-time items. Transcript had a garble of '$50.6 million. cents per Duluth share' which was corrected to $0.52.

    Adjusted EBITDA excluding LIFO
    $101 millionvs $67.4 million in Q1 FY26
    Q2 FY26

    Exceeded guidance range of $88-$92 million.

    LIFO expense
    $17 million
    Q2 FY26

    Recorded in Q2.

    Gross margin
    17.7%contracted by 70 bps vs 18.4% in Q1 FY26
    Q2 FY26

    Impacted by $15.7 million purchase accounting adjustment.

    Adjusted gross margin excluding LIFO
    19.3%expanded by 20 bps vs 19.1% in Q1 FY26
    Q2 FY26

    Excluding LIFO expense and purchase accounting impact.

    WDSG&A
    $320.3 millionincreased 20.8% vs Q1 FY26
    Q2 FY26

    Warehousing, delivery, selling, general, and administrative expenses.

    WDSG&A (same-store)
    $218.7 millionup $1.1 million vs Q1 FY26
    Q2 FY26

    Relatively flat QoQ.

    WDSG&A as % of sales (same-store)
    15.2%down from 16.8% in Q1 FY26
    Q2 FY26
    WDSG&A per ton (total company)
    $398decreased from $404 in Q1 FY26
    Q2 FY26
    WDSG&A per ton (same-store)
    $402decreased from $416 in Q1 FY26
    Q2 FY26
    Days of supply (inventory)
    73 daysdecreased by 1 day
    Q2 FY26

    Within target range of 70-75 days.

    Cash conversion cycle
    71 daysincreased from 67 days in Q1 FY26
    Q2 FY26

    Due to early payment discounts decreasing payable cycle and slight increase in receivable cycle.

    Total debt
    $955 millionincreased $47 million vs Q1 FY26
    Q2 FY26

    Due to higher working capital requirements.

    Net debt
    $913 millionincreased $30 million vs Q1 FY26
    Q2 FY26

    Due to higher working capital requirements.

    Net leverage ratio
    4.0 timesdecreased from 5.1 times in Q1 FY26
    Q2 FY26

    Driven by higher trailing 12-month adjusted EBITDA excluding LIFO.

    Global liquidity
    $757 millionincreased from $618 million at Q1 FY26 end
    Q2 FY26

    Borrowing base expanded with working capital.

    Share repurchases
    $800,000
    Q2 FY26

    Opportunistic repurchases prior to new authorization.

    Remaining share repurchase authorization
    $100 million
    through April 2028

    Full authorization remains available.

    Quarterly dividend
    18.75 centsconsistent with prior quarter
    Q2 FY26

    To be paid September 17th to shareholders of record as of September 3rd.

    North American tons shipped growth
    49%vs H1 FY25
    YTD H1 FY26

    Total North American tons shipped.

    Same-store North American tons shipped growth
    5.8%vs industry growth of 2.9%
    YTD H1 FY26

    Reflects market share gains.

    Data center and power generation revenue contribution
    7%
    Q2 FY26

    Estimated contribution to Q2 revenues.

    Data center and power generation revenue growth
    30%sequentially
    Q2 FY26

    Sales tied to these applications.

    Commercial transportation volume growth
    solid single-digitquarter over quarter
    Q2 FY26

    Same-store North American volume growth, led by truck cab subsector.

    Climate volume growth
    double digitquarter-over-quarter
    Q2 FY26

    Same-store North American volume growth, supported by larger HVAC customers.

    Agriculture shipments
    modestly improved
    Q2 FY26

    Same-store North American shipments, suggesting larger customers slightly increased production.

    Fabrication and welding activity
    modestly improved
    Q2 FY26

    Same-store North American activity, supported by data center-related projects and broader manufacturing improvement.

    Consumer products volume
    flatquarter over quarter
    Q2 FY26

    Same-store North American volumes, with solid single-digit growth among top appliance customers.

    Transactional vs. Program business split
    40-60
    Q2 FY26

    Transactional to contract split, with a goal to reach 45-55.

    Transactional vs. Program margin differential
    700-800 bps
    Q2 FY26

    Widest in three years.

    Q2 Synergy attainment
    $5 million
    Q2 FY26

    Across four synergy pillars.

    One-time costs to achieve synergies
    $1.2 million
    through Q2 FY26
    Q3 Procurement synergies
    $6.5 million
    Q3 FY26

    From aligning purchasing programs and leveraging scale.

    Q3 Efficiency and public company cost savings
    $3 million
    Q3 FY26

    From eliminating duplicative costs, attrition, and efficiency actions.

    Q3 Commercial enhancement synergy benefits
    $2 million
    Q3 FY26

    From commercial strategies.

    Annualized incremental EBITDA from new business opportunities (commercial enhancement)
    $8 million
    annualized

    Enabled by scale, facilities, equipment, customer relationships, and geographic reach.

    Q3 Network optimization benefits
    $2 million
    Q3 FY26

    From actions like in-house processing, shared inventory, facility consolidation.

    Annualized network optimization benefits
    $8 million
    annualized
    Mexico consolidation annual run rate synergies
    $1.3 million
    annualized

    Project completed.

    Carbon commodity performance
    best performer
    Q2 FY26

    Followed by stainless and then aluminum.

    Non-ferrous price reversion
    15%
    end of Q2 into early Q3

    Before stabilizing in a lower trading range.

    Industry KPIs

    1
    MetricValueDetails
    Production sales volume by metal and by mine800,000+tons

    Capital programs

    2
    Mexico consolidation projectcompleted

    Benefit: $1.3 million annual run rate synergies

    Completed consolidation project generating annual run rate synergies.

    Connecticut project (Olympic Milford and Ryerson Specialty Alloys consolidation)advancing

    Benefit: stronger operating platform with improved workflow, expanded processing capabilities, better product availability, lower fixed costs, and enhanced logistics

    Consolidating Olympic Milford and Ryerson Specialty Alloys.

    Risks & headwinds

    5
    Purchase accounting adjustmentsQ2 FY26

    $15.7 million reduction to gross margin and net income in Q2 FY26

    Mitigation: Expect $5-7 million additional inventory purchase accounting adjustments through year-end as acquired inventory is sold through.

    Margin compressionQ3 FY26

    Expected in Q3 FY26

    Mitigation: Driven by rising material costs, ongoing program customer pricing lags, and continued inflationary pressures across labor and delivery.

    Non-ferrous commodity price reversionEnd of Q2 FY26 and into early Q3 FY26

    Approximately 15% price reversion

    Mitigation: Prices recently stabilizing within a lower trading range; expected to moderate working capital requirements in Q3.

    Lag in passing through inflationary costsQ2 FY26 and ongoing

    Impacts program pricing due to contract terms; fuel prices rose and truck capacity tightened

    Mitigation: Synergy realization and network optimization are helping to offset variable cost increases; more flexibility on transactional side.

    Weakness in cyclical end marketsNear term

    Agriculture market remains recessed; consumer demand disciplined due to higher for longer interest rates and inflation

    Mitigation: Well-positioned through network to take advantage of demand upside in other verticals (AI, aerospace, defense, etc.).

    What to watch in Q3 FY26

    5

    Net leverage ratio

    by the end of the year
    Current4.0x
    Targetcloser to 3.0x

    Why it matters

    Demonstrates progress on debt reduction, a key capital allocation priority and merger benefit.

    This working capital requirement moderation, coupled with higher trailing 12-month EBITDA generation, is expected to move us closer to a net leverage ratio of three times by the end of the year.

    Q&A highlights

    5

    Where are the market share wins coming from in the transactional business?

    Wins are broad-based, driven by service center fundamentals like 95% service levels for A1A items, inventory positioning, and improved quoting technology. Investments made over the last 2-3 years are now coming to fruition in a better market.

    “When that inventory is available, we do better. And it's really that simple.”

    asked by Samuel McKinney · answered by Edward Lehner

    2 min read6 chapters

    Detailed Narrative

    01

    Merger Integration & Synergies Exceed Expectations

    The first full quarter post-merger with Olympic Steel demonstrated significant integration progress, leading to $5 million in Q2 synergy realization. The company is on track to exceed its first-year target of $40 million in annual run rate synergies, expecting $52-56 million by Q3 FY26, and remains confident in achieving the $120 million two-year target. This includes $6.5 million from procurement, $3 million from efficiency/public company cost savings, $2 million from commercial strategies, and $2 million from network optimization in Q3.

    02

    Mixed Market Dynamics and End-Market Performance

    The market is characterized by improved but asymmetrical manufacturing demand, with a six-month streak of expanding ISM PMI readings. Strong demand is observed in AI, aerospace, defense, semiconductor, and electrification, while agriculture, consumer discretionary, and residential construction are still recovering. Commercial transportation saw solid single-digit volume growth QoQ, and climate-related demand (HVAC, data centers) delivered double-digit volume growth QoQ.

    03

    Pricing, Margin Spreads, and Commodity Volatility

    Average selling prices increased, but a significant margin differential of 700-800 basis points emerged between transactional and program pricing, the widest in three years. Carbon was the best-performing commodity, followed by stainless and aluminum. Non-ferrous commodities (stainless, aluminum) experienced an approximately 15% price reversion at the end of Q2 and into early Q3, before stabilizing.

    04

    Operational Execution and Enhanced Customer Experience

    Ryerson focused on enhancing customer experience through network optimization, shared inventory, increased in-house processing, and faster response times. Examples include moving Integrity Stainless product into Singer Steel facilities to reduce storage and logistics costs, and cross-company collaboration (e.g., Northeast market customer supported by Ryerson Los Angeles) for new business opportunities, leveraging the combined footprint.

    05

    Capital Allocation and Debt Reduction Progress

    The company maintains a disciplined capital allocation strategy, including supporting its quarterly dividend of 18.75 cents per share, prudent share repurchases ($0.8 million in Q2), and debt reduction. Net debt increased sequentially by $30 million to $913 million due to working capital, but the net leverage ratio decreased from 5.1x in Q1 to 4.0x in Q2, with a target of 3.0x by year-end, supported by higher TTM adjusted EBITDA.

    06

    Working Capital and Cash Flow Management

    Ryerson used $5.6 million in cash from operations in Q2, as net income generation was offset by higher working capital requirements supporting increased revenues. Inventory days of supply decreased by one day to 73 days, within the target range of 70-75 days. The cash conversion cycle increased to 71 days from 67 days. Moderation in working capital is anticipated in Q3 due to stabilizing non-ferrous prices, which is expected to support free cash flow generation and net debt reduction.

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