CECO Environmental (CECO) Q2 2024 earnings summary

Executive summary

• Achieved record Q2 2024 sales of $138 million, up 6% year-over-year, with gross profit up 23% and gross margin at a record 35.6%, driven by operational excellence and favorable mix.

• Adjusted EBITDA reached $16.1 million, up 18% year-over-year, and adjusted EPS rose 33% to $0.20.

• First-half 2024 sales totaled $264 million, up 9% year-over-year, with adjusted EBITDA up 26% and adjusted EPS up 28%.

• Completed the acquisition of EnviroCare International, expanding industrial air and processing solutions, expected to add $13–$17 million in annualized sales.

• Raised full-year 2024 revenue guidance to $600–$620 million and adjusted EBITDA to $68–$72 million, reflecting confidence in backlog and pipeline.

Financial highlights

• Q2 2024 gross margin reached 35.6%, up 480–500 basis points year-over-year.

• Q2 2024 net sales: $137.5–$138 million (+6–6.4% YoY); gross profit: $49 million (+23% YoY).

• Adjusted EBITDA margin improved to 11.7% in Q2 2024, up 119–120 basis points year-over-year.

• Backlog remained near record levels at $390.9–$391 million, supporting future revenue.

• Free cash flow for Q2 2024 was $2.6 million; TTM FCF at $41.4 million, with FCF/EBITDA conversion at 65%.

Outlook and guidance

• Full-year 2024 revenue guidance raised to $600–$620 million (up ~12% at midpoint); adjusted EBITDA to $68–$72 million (up ~21% at midpoint).

• Free cash flow expected at 50%–70% of adjusted EBITDA for the year.

• Anticipates stronger sales and order levels in the second half as delayed projects convert.

• Large project pipeline in energy transition, power, and industrial markets expected to drive future growth.

• Substantially all backlog is expected to be delivered within 12 to 18 months.