Power Solutions International (PSIX) had a rough start to the week. The company reported first-quarter results on Tuesday that missed Wall Street's expectations on both earnings and revenue, and its stock took a beating — down about 33% in premarket trading.
The maker of power systems reported adjusted earnings of $0.36 per share, well below the $0.74 analysts were looking for. Revenue came in at $128.6 million, missing the consensus estimate of $160.8 million. Sales fell 5% year over year, dragged down by a $10.2 million drop in the power systems segment as oil and gas demand softened and data center-related orders arrived unevenly.
The margin story was even uglier. Gross profit dropped 27% to $29.4 million, and gross margin shrank to 22.9% from 29.7% a year ago. The company blamed a weaker mix of oil and gas sales, plus higher production costs tied to expanding its data center manufacturing capacity in Wisconsin.
On the bright side, Power Solutions said demand for its data center power solutions remains strong and expects higher sales in the second half of 2026. But there's a catch: shipment timing and order volumes still depend on customer schedules, manufacturing capacity, and supply-chain conditions. As of March 31, the company had $45.1 million in cash.
Looking ahead, the company didn't provide full-year 2026 guidance, citing variability in order timing and broader market conditions. Management expects second-quarter revenue to be roughly in line with the first quarter, with stronger growth later in the year as larger power systems orders move into production. But they also warned that continued weakness in the oil and gas market and the ongoing capacity ramp-up in Wisconsin will likely keep pressuring gross margins.
Shares were down 32.75% at $42.00 in premarket trading Tuesday.
