CECO Environmental (CECO) Q4 2024 earnings summary

Executive summary

• Achieved record full-year revenue of $558 million (up 2% year-over-year) and adjusted EBITDA of $62.8 million (up 9% year-over-year), despite customer-driven project delays and market-related headwinds impacting original guidance.

• Q4 and full-year orders reached new records, with Q4 at $219 million (up 71% year-over-year) and full-year at $667 million (up mid-teens percentage year-over-year), driving year-end backlog to $541 million (up 46%).

• Completed four strategic acquisitions in the past six months, including Profire and Verantis, expanding market reach and capabilities in industrial air and energy transition markets.

• Adjusted EBITDA margin expanded to 11.3%, up 70 basis points year-over-year and over 300 basis points since 2021.

• Balance sheet remains strong entering 2025, with the pending sale of the Fluid Handling business expected to further improve financial flexibility.

Financial highlights

• Q4 revenue was $159 million, up 3% year-over-year and 17% sequentially; full-year revenue reached $558 million.

• Q4 adjusted EBITDA was $19.1 million, down 2% year-over-year but up 34% sequentially; full-year adjusted EBITDA was $62.8 million.

• Gross profit margin in Q4 was 35.8%, up 120 basis points year-over-year; full-year gross margin was 35.2%, up 380 basis points year-over-year.

• Adjusted EPS for Q4 was $0.27 (down $0.01 year-over-year); full-year adjusted EPS was $0.73 (down $0.02 year-over-year).

• Free cash flow for 2024 was $7.4 million, down $30 million year-over-year, impacted by project delays and working capital timing.

Outlook and guidance

• 2025 revenue guidance is $700–$750 million, representing 30% year-over-year growth at the midpoint, with organic and inorganic growth each contributing about 15%.

• Adjusted EBITDA expected between $90–$100 million, a 50% increase versus 2024 at the midpoint, with margin guidance of 12.8%–13.3%.

• Free cash flow guidance set at 60–75% of full-year adjusted EBITDA, higher than standard due to receivables sliding into 2025.

• Orders expected to exceed revenue in 2025, continuing a positive book-to-bill trend, supported by a $4.5 billion+ sales pipeline.

• Guidance includes the impact of recent acquisitions and the planned Fluid Handling business divestiture.