5N Plus (TSX:VNP) reported second-quarter financial results on Tuesday. The transcript from the company's second-quarter earnings call has been provided below.

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5N Plus reported a 28% increase in Q2 2026 revenue to $122.4 million, driven by higher volumes in renewable energy and bismuth-based products.

Adjusted gross margin increased in absolute terms but percentage declined due to higher metal and chemical costs, with adjusted EBITDA rising 10% to $26.6 million.

The company maintains a prudent outlook amid geopolitical risks and inflation, reaffirming full-year adjusted EBITDA guidance of $100-$105 million.

Operational highlights include ongoing capacity expansions, integration of new equipment and employees, and strong backlog in specialty semiconductors.

Management emphasized the resilience of the business, strategic investments in capacity expansion, and exploration of M&A opportunities, despite current high valuation environments.

This reflects our confidence in continued revenue growth and higher growth margin dollars during the second half. Also incorporates a prudent assessment of ongoing operating and input cost environment. That concludes our formal remarks. I will now turn the call back to the operator for the question and answer session with financial analysts. Thank you.

Thank you. If you'd like to ask a question, please press Star one on your telephone keypad. One moment please for your first question. Your first question comes from Baltej Sidhu from National bank of Canada. Please go ahead.

Hey, good morning, Richard and Albon. A few questions from you. So you noted higher metal input costs and the unplanned equipment maintenance at both the renewable and solar side as the primary drivers for the pressure and the semi business. Could you help us think about the relative impact of both those factors as it pertains to margins?

Yeah. We assess that both factors, the higher metal input cost and the operational difficulties, have had a fairly equal impact on our gross margin during the second quarter of the year. So it's been fairly well shared between both parameters.

And I think Richard had noted that the unplanned maintenance is temporary. How much of an impact could we see in the second half of the year? And by Extension didn't have any impact on the backlog and decision to maintain

guidance at this point in time. We don't see, we don't foresee impact from a. From a delivery perspective in H2, all of our people applying themselves obviously to on the remaining issues, improving or preventing plan better staffing, our night and weekend shift. So everyone is applying themselves to turn this around. So we continue to say it's a temporary measure with no expected impact from a shipment perspective in H2.

Great. And then turning over to the ongoing capacity expansions, how much of an impact did it have on margins in Q2 and would it be correct to think of it as not being able to attribute the absorb overhead?

Yeah. So how much of an impact did the ongoing capacity expansion have on the margins? And is it accurate to assume that this is largely attributable to unabsorbed overhead?

Yeah, exactly. It's a combination of unabsorbed overhead and also extra maintenance expenses. Okay. That's all we come up with. As Aban just mentioned earlier, the actual impact in Q2 was pretty balanced between the two. So a combination of it in the case of the equipment, a combination of extra maintenance expenses and as you just referred to on absorb operating costs during the.