NN 2025 Q2 Earnings Deeper Losses Amid Revenue Decline

NN (NNBR) reported its fiscal 2025 Q2 earnings on August 7, 2025. The results missed expectations, with a significant widening of losses and a notable drop in revenue. The company did not provide forward guidance but outlined strategic initiatives to shift toward a more fee-based and capital-efficient model.

Revenue
NN’s total revenue declined by 12.3% to $107.92 million in Q2 2025, compared to $122.99 million in the same period the prior year. The Mobile Solutions segment accounted for the largest portion of revenue at $63.39 million, while the Power Solutions segment generated $44.64 million. The Corporate and Eliminations segment reported a negative contribution of $111,000. The decline reflects broader market challenges and segment-specific performance dynamics.

Earnings/Net Income
NN’s net loss widened significantly in Q2 2025, reaching $8.10 million, or $0.26 per share, compared to a loss of $2.20 million, or $0.12 per share, in Q2 2024. The loss per share increased by 116.7%, underscoring the company’s financial pressure.

Price Action
Shares of NN edged up 2.33% on the latest trading day and rose 12.82% for the week, but declined 0.45% month-to-date.

Post-Earnings Price Action Review
A post-earnings strategy of buying NNBR after a supposed beat and holding for 30 days yielded a poor return of -66.67%, significantly underperforming the benchmark by 156.19%. The strategy displayed no downside protection, with a maximum drawdown of 0% and a Sharpe ratio of -0.29, indicating a high-risk profile.

CEO Commentary
Christopher Owsley Blunt, CEO, highlighted strong second-quarter performance, including record AUM before flow reinsurance and one of the best sales quarters in history, with $4.1 billion in gross sales. He noted the launch of a $1 billion reinsurance sidecar with Blackstone as a key strategic move toward a more fee-based, higher-margin model. Growth areas included fixed index annuities, index life, and pension risk transfer. Blunt emphasized pricing discipline, capital allocation to high-return opportunities, and long-term growth through scale and distribution strength.

Guidance
The company expects operating expenses to improve from 60 basis points at year-end 2024 to approximately 50 basis points by year-end 2025. The CEO reiterated confidence in achieving 2023 Investor Day targets, including expanding fee-based earnings power and growing ROE through capital-light strategies.

Additional News
Recent news unrelated to earnings includes the Punch Newspapers homepage highlighting breaking news and Nigerian current affairs as of August 8, 2025. The outlet covers business, politics, sports, and entertainment, but no specific corporate actions, mergers, or executive changes were detailed for NN during the three weeks following the earnings release.