Executive Summary
Strattec Security Corporation delivered a solid QQ1 2026 performance with year-over-year and sequential topline momentum, supported by favorable product mix and disciplined cost management. Revenue reached $152.4 million, up 6.5% year over year and 5.8% quarter over quarter, while gross profit rose to $26.335 million for a gross margin of 17.28%. Operating income totaled $10.447 million, yielding an EBITDA of $10.447 million and an operating margin of 6.86%. Net income was $8.529 million (net margin 5.60%), with diluted earnings per share at $2.07. The company generated $11.327 million of cash from operations and $9.798 million in free cash flow, ending the period with $90.473 million in cash and cash equivalents and a net cash position of about $85.5 million after netting debt. These dynamics underscore not only current profitability and liquidity but also strategic flexibility to pursue selective investments or balance-sheet optimization.
From a balance-sheet perspective, Strattec remains conservatively funded, with minimal debt ($5.0 million) and a robust liquidity buffer. The current ratio stood near 2.49x, and the quick/liquidity metrics imply strong ability to fund near-term obligations and potential capex or technology investments without compromising financial stability. While the quarter benefited from favorable volumes and mix, net income declined modestly on a year-over-year basis (YoY net income down 11.34%), signaling ongoing profitability levers that management will need to sustain as OEM demand cycles evolve. The combination of positive free cash flow and a net-cash balance sheet provides a favorable platform for shareholder-friendly activity or strategic investments, should management choose to deploy excess liquidity.
Outlook and considerations for investors center on the durability of top-line growth and margin trajectory within the cyclicality of the auto OEM market. The QQ1 2026 results position Strattec to navigate a mid-single-digit revenue trajectory with continued cost discipline, while maintaining a strong balance sheet. Key risks to monitor include potential OEM volume fluctuations, pricing pressure, and any shifts in product mix that could impact margin. Absent explicit forward guidance in the materials provided, the resulting investment thesis rests on demonstrated cash generation, a conservative capital structure, and the ability to scale or optimize operations in a recovering/steady auto parts market.
Key Performance Indicators
QoQ: 58.06% | YoY:-11.34%
QoQ: 56.72% | YoY:-12.86%
Key Insights
Revenue: $152.399M, YoY +6.53%, QoQ +5.77%; Gross Profit: $26.335M, Gross Margin 17.28%, YoY +41.84%, QoQ +13.98%; Operating Income: $10.447M, Operating Margin 6.86%, YoY +7.80%, QoQ +47.45%; Net Income: $8.529M, Net Margin 5.60%, YoY -11.34%, QoQ +58.06%; EPS: $2.10 (GAAP basic), Diluted $2.07, YoY -12.86%, QoQ +56.72%; EBITDA: $10.447M, EBITDA Margin 6.86%; Cash from Operations: $11.327M; Capex: $-1.529M; Free Cash Flow: $9.798M; Cash and Equivalents: $90.473M; Net Debt: -$85.473M; Total Asset...
Financial Highlights
Revenue: $152.399M, YoY +6.53%, QoQ +5.77%; Gross Profit: $26.335M, Gross Margin 17.28%, YoY +41.84%, QoQ +13.98%; Operating Income: $10.447M, Operating Margin 6.86%, YoY +7.80%, QoQ +47.45%; Net Income: $8.529M, Net Margin 5.60%, YoY -11.34%, QoQ +58.06%; EPS: $2.10 (GAAP basic), Diluted $2.07, YoY -12.86%, QoQ +56.72%; EBITDA: $10.447M, EBITDA Margin 6.86%; Cash from Operations: $11.327M; Capex: $-1.529M; Free Cash Flow: $9.798M; Cash and Equivalents: $90.473M; Net Debt: -$85.473M; Total Assets: $390.057M; Total Liabilities: $134.278M; Total Equity: $230.547M; Current Assets: $290.125M; Current Liabilities: $116.509M; Current Ratio: ~2.49x; Quick Ratio (approx): ~1.66x; Weighted Avg Shares (GAAP): 4.054M; Weighted Avg Shares Diluted: 4.127M; EPS Diluted: $2.07.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
152.40M |
6.53% |
5.77% |
| Gross Profit |
26.34M |
41.84% |
13.98% |
| Operating Income |
10.45M |
7.80% |
47.45% |
| Net Income |
8.53M |
-11.34% |
58.06% |
| EPS |
2.10 |
-12.86% |
56.72% |
Management Commentary
Note: The earnings transcript content is not provided in the prompt. As a result, management commentary and thematic highlights from the QQ1 2026 call could not be extracted. The analysis therefore relies on disclosed financial results and known quarterly trends.
Transcript data not provided in the prompt.
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Forward Guidance
No formal forward guidance is disclosed within the provided material. Given the auto OEM cycle and Strattec’s cash-rich balance sheet, a base-case view supports mid-single-digit revenue growth with margin stability assuming continued cost discipline and favorable product mix. Investors should monitor: (1) OEM production volumes and North American demand signals, (2) the company’s ability to sustain operating margin amid input cost volatility, (3) any announced capital allocation decisions (capex, acquisitions, or potential share repurchases), and (4) technology adoption in electronic locking solutions as a driver of higher-margin mix. Management commentary, if provided in the QQ1 2026 call, would be essential to calibrate this outlook and to refine any target ranges for the remainder of 2026.