Executive Summary
Worthington Steel Inc reported QQ1 2026 revenue of USD 872.9 million, with gross profit of USD 115.2 million and a gross margin of 13.2%. EBITDA stood at USD 75.2 million and net income USD 36.3 million, yielding an EPS of USD 0.73. On a sequential basis, the company delivered robust top-line momentum (revenue +26.99% QoQ) and meaningful improvements in gross profit QoQ (up 41.87%). However, year-over-year metrics remained pressured, with revenue down 4.18% and net income down 31.77% versus the year-ago quarter, highlighting the cyclicality of steel demand and ongoing pricing dynamics in the sector.
Profitability metrics show resilience but with stress on cash generation: operating income USD 48.3 million (operating margin ~5.5%), and net margin ~4.2%. EBITDA margin was approximately 8.6%. Despite solid earnings, cash flow was challenged: net cash from operating activities was negative USD 5.0 million, largely due to a significant working capital outflow of USD 63.6 million. Free cash flow was negative USD 34.4 million as capex and working capital requirements weighed on liquidity. The balance sheet remains solid, with total assets of USD 2.243 billion and a strong equity base of USD 1.105 billion, but the company carries a total debt load of USD 333.3 million and net debt of USD 255.0 million. Liquidity remains adequate with USD 78.3 million in cash, implying room to manage near-term maturities, though leverage and cash-flow dynamics warrant monitoring in a cyclical environment.
Key Performance Indicators
QoQ: 41.87% | YoY:-10.77%
QoQ: 163.93% | YoY:-26.15%
QoQ: 163.04% | YoY:-31.77%
QoQ: 160.71% | YoY:-32.41%
Key Insights
Revenue: USD 872.9m (YoY: -4.18%, QoQ: +26.99%).
Gross Profit: USD 115.2m (YoY: -10.77%, QoQ: +41.87%).
Operating Income: USD 48.3m (YoY: -26.15%, QoQ: +163.93%).
Net Income: USD 36.3m (YoY: -31.77%, QoQ: +163.04%).
EPS: USD 0.73 (YoY: -32.41%, QoQ: +160.71%).
EBITDA: USD 75.2m; EBITDA Margin: ~8.6%.
Net Debt: USD 255.0m; Total Debt: USD 333.3m; Cash: USD 78.3m.
Free Cash Flow: -USD 34.4m; Operating Cash Flow: -USD 5.0m; Capex: -USD 29.4m.
Current Assets: USD 1.1485b; Total Assets: USD 2.2433b. ...
Financial Highlights
Revenue: USD 872.9m (YoY: -4.18%, QoQ: +26.99%).
Gross Profit: USD 115.2m (YoY: -10.77%, QoQ: +41.87%).
Operating Income: USD 48.3m (YoY: -26.15%, QoQ: +163.93%).
Net Income: USD 36.3m (YoY: -31.77%, QoQ: +163.04%).
EPS: USD 0.73 (YoY: -32.41%, QoQ: +160.71%).
EBITDA: USD 75.2m; EBITDA Margin: ~8.6%.
Net Debt: USD 255.0m; Total Debt: USD 333.3m; Cash: USD 78.3m.
Free Cash Flow: -USD 34.4m; Operating Cash Flow: -USD 5.0m; Capex: -USD 29.4m.
Current Assets: USD 1.1485b; Total Assets: USD 2.2433b. Current Liabilities: USD 693.6m; Total Liabilities: USD 912.4m; Shareholders’ Equity: USD 1.1049b.
Key Ratios: EBITDARatio ~ 0.086; Operating Margin ~ 5.53%; Net Margin ~ 4.16%; ROE ~ 3.3% (approx.).
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
872.90M |
-4.18% |
26.99% |
| Gross Profit |
115.20M |
-10.77% |
41.87% |
| Operating Income |
48.30M |
-26.15% |
163.93% |
| Net Income |
36.30M |
-31.77% |
163.04% |
| EPS |
0.73 |
-32.41% |
160.71% |
Management Commentary
Earnings call transcript data not provided in the source document. No management quotes or thematic highlights were attached for extraction.
Forward Guidance
No formal forward-looking guidance is included in the provided data. Given the cyclicality of steel demand and the company’s capital structure, investors should monitor: (1) end-market demand (especially automotive, heavy machinery, construction, and energy) and its impact on realized pricing; (2) working capital efficiency and inventory/receivables cycles to improve operating cash flow; (3) sustaining capex versus free cash flow generation; (4) debt maturity profile and refinancing risk in a rising-rate environment. If management signals improved pricing power, better working capital management, or targeted efficiency initiatives, the near-term cash generation could improve, supporting a more favorable leverage trajectory.