CSW Industrials (CSWI) Q2 2026 earnings summary

Executive summary

• Achieved record quarterly and first-half results for revenue, adjusted EBITDA, net income, and adjusted EPS, primarily driven by recent acquisitions in HVAC/R and plumbing markets despite organic revenue declines from softer residential HVAC/R demand.

• Major acquisitions included Aspen Manufacturing, PF WaterWorks, PSP Products, and a definitive agreement to acquire Mars Parts for $650 million plus up to $20 million contingent on revenue growth, expected to close in November 2025.

• Leadership continuity confirmed, with the CEO committing to remain in role for several more years.

• Returned $32.1 million to shareholders year-to-date through $23.0 million in share repurchases and $9.1 million in dividends.

• Celebrated 10th anniversary as an independent public company and transferred stock listing to NYSE in June 2025.

Financial highlights

• Q2 revenue reached $277 million, up 21.5% year-over-year, with net income up 12.8% to $40.7 million and adjusted EBITDA up 19.9% to $72.9 million; adjusted EPS rose 15.2% to $2.96.

• First half revenue increased 19.0% to $540.6 million, net income up 9.3% to $81.6 million, and adjusted EBITDA up 12.4% to $141.7 million.

• Gross profit margin declined to 43.0% in Q2 (down 260 bps), mainly due to acquisition mix and increased tariffs and material costs.

• Free cash flow for Q2 was $58.7 million; operating cash flow for the first half was $122.5 million.

• Adjusted EBITDA margin for Q2 was 26.3%; net leverage ratio at 0.12x as of quarter-end.

Outlook and guidance

• Management expects record full-year results in revenue, adjusted EBITDA, adjusted EPS, and operating cash flow.

• No updated organic growth outlook for the remainder of the fiscal year due to HVAC/R market volatility; more guidance expected next quarter.

• Mars Parts acquisition expected to close in November 2025, with anticipated synergies to lift EBITDA margin to 30% run rate within a year.

• Aspen Manufacturing revenue expected to grow mid-teens through fiscal 2026, normalizing in the second half.

• Ongoing focus on disciplined acquisitions, product expansion, and monitoring macroeconomic and trade policy risks.