Results
CECO ENVIRONMENTAL REPORTS SECOND QUARTER 2026 RESULTS
8Record-Setting Second Quarter Highlighted by Strong Orders, Up 191 Percent and Backlog Above $1.8 Billion
Management commentary
Thermon Integration Delivering Synergies Ahead of Plan
Outlook
Company Raises Full Year Consolidated 2026 OutlookGuidance raised
Results
Highlights for the Quarter (1)Guidance raised
Corporate events
First quarter as a combined company following the June 1, 2026 acquisition of Thermon
Results
Orders of $798.5 million, up 191 percent; backlog of $1,819.1 million, up 164 percent
Revenue of $285.0 million, up 54 percent
Gross profit of $86.5 million, up 29 percent; gross margin of 30.3 percent
Non-GAAP gross profit of $96.0 million, up 43 percent; non-GAAP gross margin of 33.7 percent
Net loss of $(34.8) million, compared with net income of $9.5 million; non-GAAP net income of $21.5 million, up 147 percent
GAAP EPS (diluted) of $(0.80); non-GAAP EPS (diluted) of $0.47
Adjusted EBITDA of $40.2 million, up 73 percent
4Free cash flow of $(24.3) million, a $(15.5) million decline; adjusted free cash flow of $53.2 million, a $56.2 million improvement, adjusted for cash payments relating to the Thermon transaction made during the quarter.
Management commentary
Todd Gleason, CECO's Chairman and Chief Executive Officer commented: “We delivered an exceptional second quarter, with numerous financial records led by tremendous growth in both orders and backlog.
Our multi-year, high-performance growth and value creation model continues to demonstrate the power of our operating model and the growing demand for our leading solutions across diverse global end markets.
Additionally, we are pleased to have closed the Thermon acquisition in early June and report that the integration activities are progressing extremely well.
Early synergy capture is proceeding ahead of our pre-acquisition integration objectives, and we are driving strong execution across the combined organization.”
Results
5Second quarter operating loss was $(33.2) million, compared with operating income of $18.1 million in the prior-year quarter.
On an adjusted basis, non-GAAP operating income was $32.1 million, up $13.8 million or 75 percent compared with $18.3 million in the prior-year quarter.
Net loss was $(34.8) million in the quarter, compared with net income of $9.5 million in the prior-year quarter.
6Non-GAAP net income was $21.5 million, an increase of $12.8 million, or 147 percent, from $8.7 million in the prior-year quarter.
7Adjusted EBITDA was $40.2 million, reflecting a margin of 14.1 percent, an increase of $16.9 million, or 73 percent, compared with $23.3 million in the prior-year quarter.
Adjusted free cash flow in the quarter was $53.2 million, an improvement of $56.2 million compared with $(3.0) million in the prior-year quarter.
Management commentary
“Our quarterly results are impressive, and even more so when compared to the then record second quarter results we delivered last year.
Our teams continue to deliver outstanding service and solutions to our global customers.
The addition of Thermon and their industry-leading technologies and talented workforce helps to expand our record sales pipeline to over $8.5 billion.
We expect our sales pipeline will continue to grow as we benefit from organic and inorganic investments to further expand into new markets and introduce new innovations and services.
Our most compelling markets are very demanding and require leading partners with expertise and proven solutions.
Given our trajectory and ability to invest in future growth, we continue to be confident in our long-term, double-digit growth outlook,” added Gleason.Guidance reaffirmed
Outlook
2026 Full Year Guidance Update
1The Company is raising its full-year 2026 outlook as a result of the strong first half performance and record pipeline and backlog.Guidance raised
The
updated full year consolidated 2026 outlook is:
2Revenue between $1.300 billion and $1.375 billion, up from $1.275 billion and $1.375 billionGuidance lowered
3Adjusted EBITDA between $200 million and $225 million, up from $195 million and $225 millionGuidance raised
Free cash flow conversion of at least 55 percent of Adjusted EBITDA
Management commentary
“Our confidence in our operating model and the robustness of our key growth markets, along with the positive trends from the Thermon integration, allows us to raise our full year outlook.Guidance raised
Our third quarter has started very well – with no slowdown in booked projects and sales opportunity discussions proceeding as expected.
We continue to monitor the situation in the Middle East as well as certain inflationary items, but we believe we are navigating these challenges with cost actions and solid performance.
Our teams do an incredible job every day and as I get to know the Thermon organization it is simply another outstanding addition to our leading portfolio of businesses,” concluded Gleason.
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