CECO Environmental (CECO) investor relations material

Executive summary

• Achieved record Q2 with $799M in orders (up 191–192% YoY), backlog over $1.8B (up 164%), and revenue of $285M (up 54%), driven by strong demand and the Thermon acquisition.

• Thermon acquisition closed June 1, 2026, with integration ahead of schedule, $13M in annualized synergies captured in 60 days, and expanded sales pipeline to $8.5B.

• Net loss of $(34.8)M in Q2 2026 due to acquisition and integration costs, despite non-GAAP net income rising 147% to $21.5M.

• Raised full-year 2026 outlook, reflecting strong market momentum and execution.

Financial highlights

• Q2 revenue: $285M, up 54% YoY; adjusted EBITDA: $40.2M, up 73% YoY; adjusted EBITDA margin: 14.1%.

• Q2 adjusted gross profit: $96M (33.7% margin); GAAP gross margin: 30.3%.

• Adjusted EPS for Q2: $0.47; GAAP EPS (diluted): $(0.80).

• Adjusted free cash flow in Q2: $53.2M, up $56.2M YoY; cash and equivalents at quarter-end: $63.8M.

• Net bank leverage at 2.7x, with debt up to $727.7M post-acquisition.

Outlook and guidance

• Raised full-year 2026 revenue guidance to $1.3B–$1.375B; pro forma revenue (including Thermon) $1.5B–$1.6B.

• Adjusted EBITDA guidance increased to $200M–$225M; pro forma $255M–$280M.

• Orders expected to exceed $2B for the year; sales pipeline over $8.5B.

• Free cash flow conversion expected at least 55% of adjusted EBITDA.

• Majority of backlog expected to convert to revenue within 12 months.