Stronger demand supports expansion as pricing diverges

Published
2026-09-28
Series
QBook

Companies reporting in QBook’s second quarter of 2026 described strengthening demand and targeted expansion, with uneven consumer spending and price movements limiting the common pattern.

Companies

Article body

Analog Devices reported strengthening demand across products and regions, AAON said it was scaling production to meet strong demand, and Apple posted double-digit revenue growth across iPhone, Mac and Services. Across the reporting companies and industries in QBook’s second quarter of 2026, stronger customer activity supported both sales growth and plans to expand capacity. The reach of that improvement varied: Advance Auto Parts described demand as volatile, with Pro comparable sales growing at a low single-digit rate, and Ameren attributed lower electric retail sales primarily to milder temperatures.

The reasons for revenue growth also differed, which matters when assessing the strength of customer spending. Apple’s growth extended to every geographic segment. ACV Auctions attributed its results to dealer wholesale market share gains and adoption of Marketplace Services, tying its performance to competitive gains and service uptake. Mission Produce sold more avocados following the Calavo integration and higher Mexican yields. Those company-specific drivers limit how far the results support a shared conclusion about end-market demand.

Prices added another dividing line. Alcoa benefited from favorable aluminum prices, and American Assets Trust reported record average rental rates across its office, retail and multifamily properties. Mission Produce’s lower per-unit prices partly offset the revenue increase from higher volume. Together, those results describe distinct pricing conditions across commodities, property and food. The supplied company statements provide less detail on input costs, hiring and inventories, leaving limited grounds to compare the operating pressures accompanying sales growth.

Financial companies reported additional customer activity through borrowing and investment allocations. ACNB said strong loan production helped loans grow at an 8.6% annualized rate during the quarter. Acadian Asset Management recorded $4.3 billion in net inflows, driven by its Enhanced and Extension strategies. These disclosures support growth in lending and client allocations; they provide little basis for a judgment about credit quality or lending standards.

Expansion plans gave the demand reports a tangible counterpart. American Electric Power signed agreements for six gigawatts of additional load during the quarter. Atlas Energy Solutions expected to expand oilfield power deployments by year-end, and AAON’s production increases linked capacity directly to current demand. Companies also described execution milestones beyond capacity: Asbury Automotive said its technology rollout remained on schedule for completion in the fall. Their outlooks turn on converting customer commitments into operating capacity and completing projects already under way.

## Semiconductors

Analog Devices (ADI) reported strengthening demand across products and regions, and Allegro Microsystems (ALGM) recorded its sixth consecutive quarter of sales growth, led by data centers, electrified vehicles and advanced driver-assistance systems. Allegro’s increasing bookings and expanding backlog reinforced its confidence in growth. Inventory conditions also improved at Diodes (DIOD), which said excess industrial inventory had cleared, and Microchip Technology (MCHP), which reduced inventory days from 185 on March 31 to 175 on June 30.

Companies were committing capacity to anticipated demand. Applied Materials (AMAT) announced additional manufacturing-capacity investments to support projected demand through the end of the decade. Stronger visibility from customers underpinned its expectation of another strong growth year in 2027. Ambiq Micro (AMBQ) said it was expanding capacity to support customers as rapid AI demand created semiconductor supply constraints.

Those constraints also carried costs for customers. Alpha & Omega Semiconductor (AOSL) cited elevated memory prices and supply limitations as pressures on the broader PC and smartphone markets. The company described improving pricing for its own products and expected a stronger product mix to support higher gross margins in the second half of calendar 2026. Consumer demand remained a limitation at Magnachip Semiconductor (MX), which reported lower-than-expected customer volumes in certain consumer applications.

## Software & Cloud

Demand for payment modernization and marketplace services brought new business to ACI Worldwide (ACIW) and supported quarterly results at ACV Auctions (ACVA). ACI cited two new ACI Connetic customers as evidence of growing demand among U.S. banks and continued investing in the platform. ACV credited dealer wholesale market-share gains and stronger adoption of Marketplace Services for its results, supporting further investment in its go-to-market team and new growth initiatives.

Those gains came with limits. ACI’s Biller revenue, excluding interchange fees, declined against a strong prior-year comparison. The company maintained its expectation for high-single-digit growth in that business for 2026, citing new business wins and transaction trends. ACV expected the dealer wholesale market to stabilize in the second half, distinguishing its own market-share gains from the broader conditions facing its customers.

Customers’ emphasis on measurable returns also raised the importance of execution and affordability. Advantage Solutions (ADV) said clients prioritized programs that delivered measurable returns and reported accelerating demand in Experiential Services. Higher costs to execute a merchandising project hurt its Retailer Services results, and the company was expanding capacity and strengthening labor readiness to meet demand. Autodesk (ADSK) described a similarly practical requirement for AI: customers need accuracy and speed at a price affordable enough for everyday use.

## Hardware & Devices

Apple Inc. (AAPL) and ADTRAN Holdings, Inc. (ADTN) reported firm demand across consumer devices and networking equipment. Apple posted double-digit revenue growth in iPhone and Mac, with double-digit growth in every geographic segment. ADTRAN said strong demand across its end markets was led by optical networking. Powerfleet, Inc. (AIOT) also reported faster-than-anticipated demand under its South African National Treasury contract, with near-term vehicle installations running at about seven times its original expectation.

Meeting that demand brought cost and resource pressures. Digi International Inc. (DGII) said component costs, particularly memory, were rising and described using pricing discipline, supply-chain flexibility and recurring revenue to manage them. Pricing had no material effect on its IoT Products & Services revenue growth. Powerfleet was reallocating resources to accelerate its contract rollout and forgoing portions of projected non-strategic South African revenue, making the larger installation opportunity a trade-off within its existing business.

Inventory also imposed a cash and margin burden. Diebold Nixdorf, Incorporated (DBD) said inventory needed to support increased demand contributed to negative quarterly free cash flow. Clearfield, Inc. (CLFD) recorded a $2.6 million inventory charge tied to an order it no longer expected to fulfill, reducing gross margin. For Diebold Nixdorf, serving higher demand required cash upfront; for Clearfield, an unfulfilled order left a direct earnings cost.

## Healthcare & Pharma

Agilent Technologies (A) reported stronger demand in key regions, and Acadia Pharmaceuticals (ACAD) said continued patient demand for DAYBUE and robust uptake of STIX drove another strong quarter. Agilent also cited improving end markets and customer response to new products as it raised its fiscal-year revenue-growth, margin-expansion and adjusted earnings guidance.

Competition constrained sales and pricing at other drugmakers. Amgen (AMGN) reported a 32% decline in Prolia sales, driven by 20% lower volume and 12% lower net selling price following multiple biosimilar launches globally. ADMA Biologics (ADMA) expected competitive pressure and pricing pressure in the U.S. immune globulin market to persist through the rest of 2026.

Manufacturing execution also limited the revenue companies could capture from treatment demand. Abeona Therapeutics (ABEO) treated five patients with ZEVASKYN during the quarter and reported higher revenue from the preceding quarter. It expected experience at activated treatment sites to support broader adoption. Revenue went unrecognized for two patients because of low manufacturing yield or failure to meet lot-release specifications.

## Industrials & Manufacturing

Industrial suppliers expanded production and services revenue as customer demand strengthened. AAON, Inc. (AAON) said demand remained strong across both brands and was scaling production to meet it, raising its 2026 outlook to net sales growth of 55%-60%. ABM Industries Incorporated (ABM) reported strong organic revenue growth in Aviation and Manufacturing & Distribution, supported by air travel, technology markets, client wins and contract ramp-ups. Those companies tied growth to both customer activity and their ability to deliver more work.

Expansion carried costs. AAON said the pace of growth and its capacity ramp were creating near-term margin pressure. American Airlines Group Inc. (AAL) reported revenue growth across all entities and cabins, with higher fares offsetting nearly 50% of its second-quarter fuel expense increase. American expected third-quarter fuel expense to rise another $1.7 billion year over year, leaving a substantial cost burden beyond the relief achieved through fares.

Customer weakness and project delays also constrained growth. ABM said a large client deferred some Technical Solutions projects, weighing on revenue; it expected many of those projects to ramp in the fourth quarter. A. O. Smith Corporation (AOS) reported a 28% decline in China sales in local currency, attributing it to continued weak consumer demand and a challenging market. AGCO Corporation (AGCO) was aligning production with retail demand and managing dealer inventories. Its operating priority remained matching output to purchases and controlling working capital.

## Retail & Consumer

Travel bookings and professional auto-parts sales provided pockets of demand growth for Airbnb (ABNB) and Advance Auto Parts (AAP) in the second quarter. Airbnb’s gross booking value rose 16% year over year to $27.2 billion, supported by strong demand and a moderate increase in average daily rates. Advance Auto Parts reported low-single-digit comparable-sales growth in its Pro channel, though it described overall demand as volatile.

Household purchases were less dependable. Advance Auto Parts said tighter budgets constrained do-it-yourself spending more than expected, particularly in the quarter’s final four weeks. Albertsons Companies (ACI) also reported pressure on core grocery demand from softer industry unit trends and more cautious consumers. Those comments limit how broadly the strength in travel and professional purchases can be read across consumer spending.

The companies’ responses put merchandising and customer value at the center of efforts to support sales and margins. Advance Auto Parts attributed product-margin expansion primarily to merchandising initiatives, excluding tariff refunds. Albertsons faced higher delivery and handling costs from digital-sales growth, along with higher fuel costs, and plans to accelerate investment in customer value and experience ahead of expected productivity benefits. For Albertsons, the spending to retain shoppers comes before the anticipated savings.

## Financial Services

Client inflows strengthened at Acadian Asset Management (AAMI) and AllianceBernstein Holding (AB), supporting growth in their asset-management businesses. Acadian attracted $4.3 billion in quarterly net inflows, driven by its Enhanced and Extension strategies. AllianceBernstein returned to organic growth with $0.8 billion in net inflows and its strongest sales quarter in five years. Its retail business reported record gross sales, with demand for tax-efficient income through separately managed accounts contributing to inflows. AllianceBernstein also attributed its record assets under management partly to the market recovery, giving asset prices a role alongside client additions.

Growth brought higher expenses. Acadian’s operating expenses rose 37.3% from a year earlier, primarily reflecting an increase in the value of its equity plan liability and higher variable compensation. Abacus Global Management (ABX) attributed lower GAAP net income to acquisition and growth-related expenses, including personnel costs across asset management, wealth management and technology. Abacus also reported higher operating cash flow as longevity fund assets scaled, illustrating how expansion affected cash generation and reported earnings differently.

Loan repayments created another limit on asset growth. Hercules Capital (HTGC) reported sharply higher early repayments; new originations and funding, combined with repayments and scheduled amortization, produced a $170.2 million decrease in its debt investment portfolio on a cost basis. For Hercules, new lending was insufficient to replace the loans leaving its portfolio.

## Banking

Loan balances and deposits expanded at Ameris Bancorp (ABCB) and Amalgamated Financial Corp. (AMAL) in the second quarter, supporting growth in their banking businesses. Ameris reported a $356.9 million increase in average portfolio loans, the main contributor to its increase in earning assets. Amalgamated added $280.3 million in deposits and raised its deposit-growth guidance. Customer spending also increased at Bank of America Corporation (BAC), where combined credit and debit card spending rose 9%.

Deposit losses and constraints on mortgage activity limited that expansion elsewhere. BayFirst Financial Corp. (BAFN) reported an 8.9% quarterly decline in deposits, extending a decline over the past year. Meridian Corporation (MRBK) said low housing inventory continued to constrain its mortgage business and refinancing had weakened as rates rose. Meridian described third-quarter originations as promising, leaving its mortgage outlook dependent on the type of borrowing customers pursued.

Larger balances brought modest changes in interest margins at Ameris and Amalgamated. Ameris held its net interest margin at 3.88%; Amalgamated increased its margin by 3 basis points. Banks also committed resources to expansion: Ameris entered Nashville, and Avidbank Holdings, Inc. (AVBH) added experienced bankers and launched an SBA lending division. BayFirst continued investing in community banking, including a planned South Tampa branch. Its expansion plans will require funding against the backdrop of a shrinking deposit base.

## Energy

Antero Midstream (AM) handled record gas volumes and ProFrac Holding (ACDC) reported growing demand for higher-specification equipment, with both companies investing to serve those needs. Antero gathered over 4.1 Bcf/d, up 19% year over year, and said a new regional pipeline would improve access to local markets with growing demand. ProFrac continued upgrading its fleet as equipment attrition tightened the market. It said hydraulic fracturing price increases were taking effect for the third quarter and expected those increases, alongside steady utilization, to improve stimulation results.

Atlas Energy Solutions (AESI) also described larger opportunities for oilfield power. The company said opportunities under its Caterpillar framework had grown in scale, duration and scope, with negotiations underway, and expected deployed power capacity to reach 180–200 MW by year-end. Those negotiations remained prospective business. Antero’s second-half outlook rested on expected increases in gathering and water volumes to drive EBITDA growth within its full-year guidance range.

Pricing delays and operating costs complicated the path to stronger earnings. Calumet (CLMT) implemented price increases after a normal lag. Archrock (AROC) tightened its full-year EBITDA guidance primarily because of near-term costs, including lube oil, and timing impacts. Delek US Holdings (DK) reported a -$157.3 million inventory adjustment affecting refining results, adding an earnings burden separate from the equipment demand and throughput gains reported by ProFrac and Antero.

## Utilities

Utilities are expanding infrastructure to serve new customers and replace aging systems. American Electric Power (AEP) signed agreements for six gigawatts of additional load during the quarter and outlined a $78 billion five-year capital plan. Artesian Resources (ARTNA) invested $25.9 million in water and wastewater infrastructure in the first half of 2026, targeting aging assets, system resilience and regulatory obligations. Artesian also reported growth in customers served, alongside temporary rate increases that helped lift water sales revenue.

Recovering investment through customer rates supported results at American Water Works Company (AWK) and Black Hills (BKH). American Water credited new rates with recovering capital and acquisition investments; Black Hills said new rates and rider recovery more than offset higher financing and depreciation costs. Current electricity sales remained sensitive to weather: Ameren (AEE) reported lower retail sales primarily because of milder temperatures. Ameren also incurred higher operations and maintenance expenses from reliability-focused tree trimming and energy center maintenance, illustrating the ongoing expense of maintaining service alongside expansion.

Customer affordability is also shaping utilities’ investment decisions. Avista (AVA), which reported increased employee salary and benefit costs, said it was balancing system investment with affordability. Pinnacle West Capital (PNW) expanded bill-management options and personalized assistance ahead of peak summer demand to help customers manage higher seasonal energy bills. The spending programs carry a practical obligation for utilities: helping customers manage the bills that accompany service.

## Communications & Media

Customer mix and upgraded offerings supported results at Accel Entertainment (ACEL) and Cinemark Holdings (CNK). Accel’s Illinois revenue, excluding Fairmount Park, rose 6% year over year, driven by improved hold per day and a higher-performing customer mix. Cinemark credited strong results partly to improvements in its consumer offering, expanded revenue opportunities and business optimization. Those explanations tie performance to company-specific operating gains and customer choices.

Customer acquisition also carried costs. DraftKings (DKNG) attributed lower revenue primarily to customer-friendly sports outcomes and increased promotional spending to acquire customers. Angi (ANGI) reported higher consumer marketing expense alongside declining revenue. Lower Pro acquisition costs and fixed expenses provided a partial offset, including reduced product development spending following workforce reductions. Angi’s revenue per lead increased 1%, primarily because its Pro mix shifted toward subscriptions, limiting how much that increase says about underlying pricing strength.

Array Digital Infrastructure (AD) paired sequential tower tenancy growth with a higher revenue outlook, citing increased interim site revenue. It kept capital expenditure guidance unchanged at $25 million–$35 million. Angi, meanwhile, said it was directing product and development investment toward an AI-native platform and its long-term growth priorities. The companies’ spending plans were specific: Array held its capital budget steady, and Angi focused development investment after cutting its workforce.

## Materials & Chemicals

Higher throughput and firmer pricing supported growth at American Battery Technology Company (ABAT), and Amrize Ltd (AMRZ) reported strong cement and aggregates pricing. American Battery Technology attributed its revenue increase to greater recycling throughput, increased byproduct production and improved product pricing; facility efficiencies also helped costs grow more slowly than revenue. Amrize’s Building Envelope pricing improved sequentially as increases took effect through the quarter. Those companies described gains from both operating execution and pricing.

Cost pressure and weaker end markets limited the improvement elsewhere. Alpha Metallurgical Resources, Inc. (AMR) raised its coal sales cost guidance to reflect fewer expected shipments and continued higher supply costs, combining a volume constraint with more expensive supplies. Minerals Technologies Inc. (MTX) reported a 3 percent decline in Household & Personal Care sales, attributing the decrease to lower sales of high-margin consumer specialty products. These businesses faced pressure on both sales volumes and the economics of what they sold.

Companies also calibrated investment to their operating opportunities. Albemarle Corporation (ALB) raised its full-year Specialties sales and EBITDA outlook after stronger-than-expected pricing and volumes, and reduced its capital expenditure forecast to approximately $500 million through capital-efficiency improvements. American Battery Technology advanced a second commercial-scale recycling facility designed to process approximately 100,000 tonnes of battery materials annually. Albemarle paired its stronger outlook with a smaller capital budget; American Battery Technology pursued additional capacity after improving throughput at its existing operation.

## Real Estate

Real estate lenders kept deploying capital in the second quarter. Arbor Realty Trust (ABR) increased agency loan originations from the prior quarter, and Ares Commercial Real Estate (ACRE) closed $130 million of new loan commitments. Arbor’s increased activity came with thinner transaction margins: its gain-on-sale margin fell to 1.33% from 1.86% in the first quarter, limiting the earnings benefit of higher originations.

Property owners reported stronger rents, with costs and occupancy creating additional pressure on operating results. American Assets Trust (AAT) achieved record average rental rates across its office, retail and multifamily properties, and AH Realty Trust (AHRT) reported positive cash spreads of 9.5% on new office leases. American Assets also reported lower occupancy at First & Main and 14Acres and higher rental expenses across all segments. AH Realty secured operating expense savings through successful real estate tax appeals.

Companies continued committing money to new investments with specific portfolio priorities. Adamas Trust (ADAM) acquired $1.5 billion of new single-family residential investments during the quarter. Ares continued investing in new loans and reducing its office loans and real estate owned properties. Its stated goal was to rebuild earnings to levels expected to meet or exceed its current dividend, leaving earnings recovery as work still to be completed.

## Food, Beverage & Tobacco

Beverage demand grew through wider consumer reach at Vita Coco Company (COCO) and Bellring Brands (BRBR). Vita Coco said coconut water growth came from both more households buying the category and higher consumption per household. Bellring attributed Premier Protein ready-to-drink volume gains to expanded distribution. Vita Coco also reported that strong shipments reduced inventories, and plans to increase second-half sales and marketing spending to sustain momentum into 2027.

Sales growth came with pressure on pricing at Bellring and Mission Produce (AVO). Bellring said additional promotions reduced price/mix. Mission’s avocado volume rose 38%, driven by the Calavo integration and higher Mexican yields; per-unit selling prices fell 9%. Mission attributed lower average prices to higher global avocado supply, which also reduced International Farming gross profit. B&G Foods (BGS) reported lower base-business sales, adding a separate sign of demand weakness in packaged food.

Companies also pursued savings to support profitability. Mission raised its estimated annualized Calavo synergy opportunity to more than $30 million, citing greater administrative savings and network efficiencies, and reaffirmed its second-half guidance. Brown Forman (BF-A) reported lower costs that supported gross-margin expansion. Its strong New Mix demand in Mexico sat alongside lower net pricing for tequila brands in Mexico and the United States. For these producers, selling more product and securing better prices remained distinct challenges.

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