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Twin Disc (TWIN) Reports FQ2 2026 Profit Boost from Non-Recurring Tax Benefit

Twin Disc Incorporated (NASDAQ:TWIN) is one of the most promising micro-cap stocks according to analysts. On February 4, Twin Disc announced its FQ2 2026 results, reporting a slight revenue increase of 0.3% to $90.2 million. While organic sales fell 7.9% when excluding acquisitions and currency fluctuations, the company achieved a net income of $22.4 million. This bottom-line surge was driven by a non-recurring $21.8 million income tax benefit.

Strategic momentum remains strong in the defense and hybrid propulsion sectors, with the company’s six-month backlog reaching a robust $175.3 million. The CEO noted that while macro-economic uncertainty caused some short-term disruption, demand across end markets, particularly for the Katsa and Veth product lines, remains healthy. The industrial product group saw a 22% increase in sales, while marine and propulsion systems remained stable year-over-year.

filmfoto / Shutterstock.com

The company ended the quarter with $14.9 million in cash and a total debt of $44.5 million, largely influenced by the acquisition of Kobelt. Looking toward H2 FY2026, Twin Disc Incorporated (NASDAQ:TWIN) is focused on converting its record backlog into shipments as global supply chain and tariff timings normalize.

Twin Disc Incorporated (NASDAQ:TWIN) designs, manufactures, and sells marine and heavy-duty off-highway power transmission equipment in the US, the Netherlands, China, Australia, Finland, Italy, and internationally. The company operates in two segments: Manufacturing and Distribution.

While we acknowledge the potential of TWIN to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than TWIN and that has 100x upside potential, check out our report about this cheapest AI stock.

READ NEXT: 40 Most Popular Stocks Among Hedge Funds Heading Into 2026 and 11 Best Small Cap Tech Stocks With High Upside Potential.

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