CECO Environmental (CECO) Q1 2025 earnings summary

Executive summary

• Achieved record Q1 orders of $227.9M–$228M, up 57% year-over-year, with backlog at $602M, up 55%, and a robust $5B+ sales pipeline.

• Revenue reached $176.7M–$177M, up 40% year-over-year, with about 28% of growth from recent acquisitions and the remainder organic.

• Net income was $36.0M, up from $1.5M, mainly due to a $64.5M gain on the sale of Global Pump Solutions.

• Adjusted EBITDA was $14M, up 6% year-over-year, and adjusted EPS was $0.10, above consensus but flat year-over-year due to higher interest expense.

• Completed acquisitions of Profire Energy, Verantis, WK Group, and EnviroCare, and divested Global Pump Solutions, aligning the portfolio for higher margin and strategic fit.

Financial highlights

• Gross profit was $62.2M–$68M, with a gross margin of 35.2%, consistent with the TTM margin.

• Operating income was $61.9M, up from $7.7M, primarily from the divestiture gain; non-GAAP operating income was $8.6M (4.9% margin), down from $10.2M (8.1%).

• Interest expense rose to $6.2M, with a blended borrowing rate of ~6.9%.

• Cash and equivalents increased to $146.5M–$147M, mainly from divestiture proceeds.

• Debt increased to $338M–$339.7M, with $98.7M paid down in April 2025.

Outlook and guidance

• 2025 revenue guidance maintained at $700–$750M, representing up to 30% year-over-year growth, with about half organic and half from acquisitions.

• Adjusted EBITDA guidance maintained at $90–$100M, up 50% at midpoint versus prior year.

• Adjusted free cash flow conversion guidance remains at 60–75% of adjusted EBITDA.

• Management expects strong backlog execution, with substantially all backlog to be delivered within 18–24 months.

• Guidance reflects known tariff and inflation risks, with $0–10M potential exposure.