LSI Industries shares surge 13.40% after-hours on strong Q2 results, robust free cash flow, and improved profitability.

LSI Industries (NASDAQ: LYTS) surged 13.40% in after-hours trading following the release of its fiscal 2026 second-quarter results, which highlighted strong profitability, robust free cash flow generation, and debt reduction. The company reported adjusted EBITDA of $13.4 million (9.1% of sales), $23.3 million in free cash flow, and a net debt-to-EBITDA ratio of 0.4x, driven by disciplined cost management and improved productivity. The Lighting segment delivered 15% sales growth and margin expansion, while Display Solutions normalized after prior-year volatility. Management emphasized sustained order growth, a $0.05 dividend declaration, and confidence in second-half fiscal 2026 performance, citing a $103.4 million cash runway. These results, coupled with improved leverage metrics and visibility into future demand, fueled the sharp after-hours rally.