CSW Industrials (CSWI) Q4 2026 earnings summary

Executive summary

• Achieved record fiscal Q4 and full-year revenue, adjusted EBITDA, and adjusted EPS, surpassing $1.08 billion in annual revenue for the first time, driven by both organic and inorganic growth, with $223M from acquisitions and a minor organic revenue decline due to softer demand in residential HVAC/R.

• Adjusted EBITDA grew 18% to $270M, with margin contracting 100 bps to 24.9% due to gross margin pressure from acquisitions and higher material costs.

• Adjusted EPS increased 7% to $10.38, reflecting higher operating income but offset by increased interest expense and share count from a recent equity offering.

• Returned $146M to shareholders via $128M in share repurchases and $18M in dividends.

• Proactively exited non-core Greco businesses to focus on higher-margin, core operations, recording a $15.6M impairment and $2.1M exit costs.

Financial highlights

• Q4 revenue reached $309M, up 34% year-over-year, with $72M from acquisitions and $6.4M organic growth.

• Q4 adjusted EBITDA grew 39% to $83M; adjusted EPS rose 21% to $3.14.

• Adjusted gross profit was $135M (+32%), with adjusted gross margin at 43.5% (down 70bps due to acquisition dilution and inflation).

• Free cash flow for Q4 was an outflow of $6.8M, down from a $22.8M inflow last year, mainly due to working capital and integration costs; full-year free cash flow was $132.4M.

• Interest expense increased to $11.8M in Q4 (from $1.6M income last year) due to acquisition financing.

Outlook and guidance

• Management expects continued growth in revenue, adjusted EBITDA, adjusted EPS, and cash flows in fiscal 2027, with all segments projected to deliver revenue growth and margin expansion.

• Interest expense for FY27 estimated at $45.8M; annualized intangible amortization projected at $60.7M.

• Forecast GAAP tax rate of ~23% and adjusted tax rate of ~26% for fiscal 2027.