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    VPG
    Earnings call· Jun 2026(Q2 FY26)

    Vishay Precision Group Q2 FY26 earnings call VPG

    Aug 5, 2026 Source

    Executive summary

    Vishay Precision Group Q2 FY26 — Strong Orders and Humanoid Robotics Progress Offset FX and ERP Headwinds

    Vishay Precision Group reported strong order momentum in Q2 FY26, driven by AI-related markets and significant progress in humanoid robotics, including a key vendor nomination. Despite these tailwinds, revenue and operating profit faced headwinds from a temporary ERP-related shipment delay and unfavorable foreign exchange rates. The company is focused on operational improvements and capacity expansion to support future growth, particularly in its Sensors business, and expects full-year organic revenue growth to exceed its long-term target.

    Highlights

    5

    • Orders reached $95.5 million, marking the seventh consecutive quarter with a book-to-bill ratio at or above 1.0.

    • Sensors segment achieved a record $48.1 million in bookings, with a strong book-to-bill of 1.44.

    • Secured an official vendor nomination letter from an initial humanoid robotics customer, positioning for a production ramp in H2 2026.

    • Generated nearly $1 million in cost savings during Q2, on track for approximately $6 million in savings for FY26.

    • Net cash position improved to $60 million after paying down $5 million in debt.

    Concerns

    5

    • Q2 revenue was negatively impacted by a temporary $3 million shipment delay in the KELK business due to ERP implementation issues.

    • Operating profit was down $200,000 sequentially due to unfavorable product mix and foreign exchange.

    • FX remained a significant headwind, reducing operating profit by approximately $900,000 sequentially and $3.3 million year-over-year.

    • Adjusted free cash flow was a negative $1.4 million for the quarter.

    • Weighing Solutions and Measurement Systems segments experienced mixed demand and sequential order declines.

    Guidance & targets

    5
    CategoryTargetConfidence
    Full-year 2026 organic revenue growth
    exceed the 8% to 10% annual growth target
    high materiality
    High
    Q3 2026 Net Revenue
    $84 million to $89 million
    high materiality
    High
    Full-year 2026 Capital Expenditures
    $10 million to $12 million
    medium materiality
    High
    Full-year 2026 Operational Tax Rate
    approximately 30%
    low materiality
    High
    Full-year 2026 Cost Savings
    approximately $6 million
    medium materiality
    High

    Segment performance

    3
    SegmentRevenueYoYQoQMargin
    Sensors
    Revenue was approximately flat sequentially but grew significantly year-over-year. Bookings reached an all-time quarterly record, driven by AI-related infrastructure, semiconductor OEM equipment, fiber optics transmission, and aerospace and defense. Gross margin decreased due to unfavorable FX, higher material costs, and wage increases from hiring personnel.
    Bookings: $48.1 millionBook-to-bill ratio: 1.44
    		$33.4 million26%approximately flat31.5% gross margin
    Weighing Solutions
    Revenue was essentially flat sequentially and grew modestly year-over-year. Orders declined sequentially from a strong Q1. Demand was stable but mixed, with positive trends in consumer e-bike and construction equipment, offset by lower orders in transportation and industrial markets. Gross margin increased by 300 basis points sequentially due to cost reductions and favorable product mix.
    Orders: $28.6 millionBook-to-bill ratio: 0.94
    		$30.3 million3%essentially even37.3% gross margin
    Measurement Systems
    Revenue decreased sequentially but increased year-over-year. The sequential decrease was primarily due to lower sales in AMS and transportation, and was impacted by a $3 million shipment delay from ERP implementation. Orders declined sequentially due to timing of DSI customer projects and a challenging global steel market, though DTS saw continued order growth in aerospace and defense. Gross margin was essentially flat sequentially.
    Orders: approximately $19 million
    		—5%-3%52.5% gross margin

    Operational metrics

    22
    Business development bookings
    $11.6 million
    Q2 FY26

    Generated from business development initiatives in the second quarter.

    Business development bookings
    $21.6 million
    H1 FY26

    Total bookings from business development initiatives in the first half of the year.

    Operating profit impact from FX
    -$900,000sequential
    Q2 FY26

    Unfavorable foreign exchange rates reduced operating profit sequentially.

    Operating profit impact from FX
    -$3.3 millionYoY
    Q2 FY26

    Unfavorable foreign exchange rates reduced operating profit compared to the prior year period.

    Cost savings
    $1 million
    Q2 FY26

    Generated from operational improvement initiatives.

    Cost savings
    $1.6 million
    H1 FY26

    Total cost savings achieved in the first half of the year.

    Humanoid-related bookings
    $500,000
    Q2 FY26

    Bookings related to humanoid robotics.

    Humanoid-related sales
    $320,000
    Q2 FY26

    Sales related to humanoid robotics.

    Non-GAAP operating margin
    1.7%
    Q2 FY26

    Adjusted for restructuring costs, stock-based compensation, and severance costs.

    Selling, general and administrative expense as % of revenue
    38.1%similar to Q1
    Q2 FY26

    SG&A expense was $32 million.

    Adjusted Net Earnings
    $586,000
    Q2 FY26

    Adjusted for restructuring costs, stock-based compensation, severance costs, and $1.2 million effect of foreign currency exchange rates on the balance sheet.

    Non-GAAP EPS
    $0.04
    Q2 FY26

    Diluted earnings per share, adjusted for restructuring costs, stock-based compensation, severance costs, and $1.2 million effect of foreign currency exchange rates on the balance sheet.

    GAAP Tax Rate
    8%
    Q2 FY26

    The GAAP tax rate for the second quarter.

    Adjusted EBITDA
    $5.5 milliondown from $5.9 million in Q1
    Q2 FY26

    Adjusted EBITDA for the second quarter.

    Adjusted EBITDA margin
    6.5%down from 7% in Q1
    Q2 FY26

    Adjusted EBITDA as a percentage of revenue.

    Capital expenditure
    $2 million
    Q2 FY26

    Capital expenditures in the second quarter.

    Capital expenditure
    $5 million
    H1 FY26

    Capital expenditures for the first half of 2026.

    Cash and investments balance
    $75.7 million
    Q2 FY26

    Cash position at the end of the second quarter.

    Long-term debt
    $15.6 million
    Q2 FY26

    Long-term debt after paying down $5 million.

    Net cash position
    $60 million
    Q2 FY26

    Net cash position at the end of the second quarter.

    Annual interest cost reduction
    $300,000
    annual

    Expected reduction in net interest cost due to $5 million debt paydown.

    Tariff reimbursement
    $1.5 million
    YTD

    Amount received so far, expected to be profit neutral.

    Industry KPIs

    7
    MetricValueDetails
    Orders book to bill1.14
    Segment revenue growthSensors: $33.4M; Weighing Solutions: $30.3M; Measurement Systems: N/AUSD
    Design wins product cycle rampsOfficial vendor nomination letter
    Order visibility backlog policyElevated backlog
    Supply demand imbalance lead times—
    Capacity expansion internal sourcing—
    Operating margin incremental leverage1.7%%

    Orderbook & backlog

    2
    Consolidated Orders$95.5 millionQ2 FY26
    Consolidated Backlog$135.8 millionQ2 FY26

    increased by $10 million or $11 million from Q1

    Deals & partnerships

    1
    Initial Humanoid Robotics CustomerVendor nomination for humanoid robotics components

    Received an official vendor nomination letter, marking an important milestone after 2+ years of engineering collaboration, product development, qualification, and operational reviews. VPG is adding capacity based on customer's forecast demand.

    Capital programs

    1
    Humanoid Robotics Capacity Expansionunderway

    Benefit: thousands of bots per week

    VPG has made significant capital investments, hired personnel, and ordered raw materials to support the expected production ramp for its initial humanoid robotics customer, aiming to support thousands of bots per week.

    Risks & headwinds

    6
    Temporary shipment delay due to ERP implementationQ2 FY26, expected to be shipped by end of Q4 FY26

    $3 million in revenue

    Mitigation: ERP issues addressed, production increased to normalized level, delayed orders remain in backlog.

    Unfavorable product mixQ2 FY26

    Contributed to $200,000 sequential operating profit decrease

    Mitigation: Not explicitly stated, but management noted an 'unusual product volume mix based on higher contract pricing, which we don't expect to repeat itself'.

    Unfavorable foreign exchange ratesQ2 FY26

    -$900,000 sequential operating profit impact; -$3.3 million YoY operating profit impact

    Mitigation: Not explicitly stated, but the company assumes constant Q2 FY26 exchange rates for Q3 guidance.

    Higher material costs and wage increasesQ2 FY26

    Impacted Sensors gross margin

    Mitigation: Implemented selective price increases on new orders, expected to show benefits in H2 FY26.

    Softness in global steel marketQ2 FY26, ongoing

    Measurement Systems segment impacted

    Mitigation: Focus on solid demand in the U.S. from reshoring and growing opportunities in India.

    Softer demand in industrial markets and transportationQ2 FY26

    Impacted Weighing Solutions orders

    Mitigation: Anticipates improved business environment in H2, contingent on interest rates and inflation.

    What to watch in Q3 FY26

    5

    Humanoid robotics production ramp

    H2 FY26
    CurrentVendor nomination received, capacity added
    TargetInitial production ramp from tens to hundreds of bots per week

    Why it matters

    This is a key new growth vector for the Sensors segment and will demonstrate the commercialization of VPG's technology in emerging AI applications.

    At this point in time, the initial customer indicated the expectation of a production ramp-up in the second half of the year from tens of bots per week up to hundreds and even thousands per week by the end of the year.

    Q&A highlights

    5

    Could you provide more details on the humanoid pipeline, including the number of engagements and how it compares to the end of 2025? Also, is the current capacity expansion primarily for humanoid demand or broader sensor customers?

    VPG has received a vendor nomination from its initial humanoid customer, expecting a production ramp in H2 2026. A second customer is refining designs, and VPG is prototyping for third and fourth customers, while also identifying 150 potential suppliers. Current capacity expansion is mainly for AI infrastructure, data center, and defense, with humanoid-specific capacity designated for the initial customer's projected volume.

    “At this point in time, the initial customer indicated the expectation of a production ramp-up in the second half of the year from tens of bots per week up to hundreds and even thousands per week by the end of the year. The company is ready and have already hired personnel, which are in training. We made the capital investments for the capacity and we have ordered the raw material.”

    asked by Jaeson Schmidt · answered by Ziv Shoshani

    2 min read6 chapters

    Detailed Narrative

    01

    Humanoid Robotics Market Development

    VPG achieved a significant milestone by receiving an official vendor nomination letter from its initial humanoid robotics customer, signaling an expected production ramp in the second half⚖️ of 2026, from tens to potentially thousands of bots per week. The company has proactively invested in capacity, hired personnel, and ordered raw materials to support this anticipated volume. While a second humanoid customer is reevaluating designs, VPG continues to engage with third and fourth developers and has identified approximately 150 potential humanoid suppliers for future outreach, leveraging its foil-based strain gage technology and scalable manufacturing.

    02

    AI-Related Demand and Growth Drivers

    Strong order momentum, particularly in the Sensors segment, was driven by sustained demand from AI-related markets. This includes precision resistors for semiconductor OEM equipment makers and semi device makers, as well as products for long-haul high-speed fiber optics transmission equipment supporting data center infrastructure build-outs. Additionally, demand for avionics and defense applications remained robust, contributing to the company's positive outlook and confidence in exceeding its full-year organic growth target.

    03

    Operational Improvements and Cost Savings

    VPG's operational improvement initiatives are gaining traction, with nearly $1 million in cost savings realized during Q2 FY26, contributing to a total of $1.6 million in the first half of the year. The company remains on track to achieve approximately $6 million in savings for the full year. These efforts represent the first phase of a broader three-year plan targeting $20 million in cost reductions through manufacturing footprint optimization, increased automation, and procurement efficiencies across its global supply chain.

    04

    ERP System Impact and Resolution

    Second quarter revenue was negatively impacted by a temporary delay of approximately $3 million in shipments at the KELK business, a part of the Measurement Systems segment. This delay was attributed to supply chain challenges🌐 arising from the implementation of a new ERP system. Management confirmed that the ERP issues have been addressed, production has returned to normalized levels, and the delayed orders are expected to be shipped by the end of the fourth quarter of 2026, with customer demand remaining intact.

    05

    Foreign Exchange Headwinds

    Foreign exchange rates presented a significant headwind to VPG's financial performance. FX negatively impacted operating profit by approximately $900,000 sequentially compared to Q1 FY26 and by $3.3 million compared to the prior year period. This factor contributed to the sequential decline in adjusted operating margin and adjusted EBITDA, underscoring the ongoing challenge posed by currency fluctuations.

    06

    Segment Performance and Market Dynamics

    The Sensors segment demonstrated robust performance with record bookings, driven by AI infrastructure and defense. Weighing Solutions saw mixed demand, with strength in consumer e-bike and construction equipment offsetting softness in industrial weighing and transportation. Measurement Systems experienced a sequential revenue decrease due to the KELK shipment delay and project timing, though DTS showed continued order growth in aerospace and defense. Management anticipates an improved, though not significantly rapid, business environment in the second half for these segments, contingent on interest rate and inflation trends.

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