Chart Industries (GTLS) Q3 2024 earnings summary

Executive summary

• Q3 2024 sales reached $1.06 billion, up 22.4% year-over-year, with all segments reporting sales and margin growth; orders rose 5.4% to $1.17 billion, and gross margin improved to 34.1% due to cost synergies from the Howden acquisition.

• Adjusted EBITDA was $260.7 million (24.5% margin), up 39.3% year-over-year; adjusted EPS was $2.18, impacted by FX and tax rate changes.

• Free cash flow reached $174.6 million, supporting net leverage reduction to 3.04, with net cash from operations at $200.7 million.

• Backlog increased to $4.54 billion, with a $23 billion commercial pipeline and $1.95 billion in customer commitments not yet in backlog.

• Notable commercial wins included major LNG and hydrogen projects, with all segments contributing to improved profitability.

Financial highlights

• Q3 2024 sales: $1.06 billion (+22.4% YoY); gross margin: 34.1% (+350 bps YoY); adjusted operating income: $236 million (22.2% margin); adjusted EBITDA: $260.7 million (24.5% margin).

• Reported operating income: $178.5 million (16.8% margin); reported EBITDA: $248.4 million (23.4% margin); adjusted EPS: $2.18; reported EPS: $1.34.

• Free cash flow: $174.6 million; net cash from operations: $200.7 million; CapEx: $26.1 million.

• Net leverage ratio: 3.04 at September 30, 2024.

• Book-to-bill ratio: 1.10; backlog up 9.5% year-over-year.

Outlook and guidance

• FY 2024 sales outlook: $4.2–$4.3 billion (+18–21% YoY); adjusted EBITDA: $1.015–$1.045 billion; adjusted EPS: ~$9; free cash flow: ~$400 million.

• FY 2025 sales guidance: $4.65–$4.85 billion; adjusted EBITDA: $1.175–$1.225 billion; adjusted EPS: $12–$13; free cash flow: $550–$600 million; net leverage target: 2.0–2.5 by end of 2025.

• Strong backlog coverage for 2025, with 61% of backlog scheduled to convert in the next 12 months.

• Q4 2024 expected to see sequential sales growth of 10–15%, with continued strength in HTS, specialty, and RSL segments.