Malibu Boats shares fell 6.6% to $26.55 on Wednesday. The move landed against a full-year filing that showed a company selling more boats, holding more cash, and keeping almost none of the resulting profit.
Revenue rose 13.3% to $914.6 million in the twelve months ended June 30. Operating income fell from $21.8 million to $3.1 million, while net income dropped to $1.7 million. Sales grew; the earnings engine did not.
The pressure showed up before the legal bill. Gross margin slipped to 16.0% from 17.8%, and management said the Malibu segment's material costs rose even as volumes improved.
"In the Malibu segment, per unit material costs increased by $11.4 million driven by a more expensive model mix that corresponded with higher net sales per unit, and inflationary pressures, partially offset by a decrease in per unit labor costs of $2.9 million due to higher unit volumes."
Malibu Boats, 2026 10-K, filed Aug. 27, 2026
That is the central tradeoff in the filing: customers bought a richer mix at higher prices, but the materials needed to build those boats became more expensive. The higher selling price did not translate cleanly into margin.
General and administrative costs added another discrete hit. Malibu said the increase was primarily tied to a $3.5 million legal settlement, along with related fees and higher compensation costs.
"The increase in general and administrative expenses was primarily driven by a $3.5 million legal settlement along with other related legal fees and increases in stock-based compensation expense, incentive pay and salaries."
Malibu Boats, 2026 10-K, filed Aug. 27, 2026
The settlement is not the whole explanation for an 85.8% operating-income decline, but it helps explain why a thin-margin manufacturer had so little room for ordinary cost inflation. Operating margin fell to 0.3% from 2.7%.
Cash flow provides the filing's counterweight. Operating cash flow climbed 19.5% to $67.5 million, while capital spending fell, and cash doubled to $74.4 million. The balance sheet also carried more inventory, up 26.7% to $180.1 million, while accounts receivable rose 44.8% to $33.4 million. The company generated cash, but more of the business sat in working capital at year-end.
There is a longer pattern behind the squeeze. Malibu's own annual results show revenue reaching $1.4 billion in 2023 with a 10.4% operating margin, before falling to $829.0 million in 2024. The latest year restores sales above the prior two years, but not the profitability that once came with them.
The acquisition of Saxdor is part of the new shape: the company disclosed 246 additional units from that segment, while wholesale shipments across the three existing segments were lower because of reduced retail activity. At the latest annual figures, Malibu had $19.0 million of net cash and traded at 35.1 times earnings, a valuation that leaves the earnings question unusually visible.
Malibu has shown that it can add sales and produce cash. It has not answered whether the higher-priced mix can outrun material inflation, legal costs, and the inventory build. The company's next annual report will need to show what happened to those costs and year-end working-capital balances.