ESAB (ESAB) Q2 2026 earnings summary

Executive summary

• Achieved record Q2 2026 sales of $808 million, up 12.9% year-over-year, with core organic growth of 2.5%, driven by robust demand in North America and Asia, and resilient performance in Europe.

• Adjusted EBITDA rose 8% to $151.4 million, with a margin of 19.5%, despite a 90-basis-point margin decline due to price/cost neutrality and targeted investments.

• Net income from continuing operations was $36.4 million, down from $69.8 million year-over-year, impacted by higher costs and acquisition-related charges.

• Closed the $1.5 billion Eddyfi acquisition ahead of schedule, integrating a high-margin, innovative asset and expanding advanced inspection and monitoring capabilities.

• Transformation efforts shifted the business mix toward higher-margin equipment and gas control products, with a focus on organic growth, margin expansion, and deleveraging.

Financial highlights

• Q2 total/core sales reached $808 million, up 12.9% year-over-year; core organic growth was 2.5%.

• Adjusted EBITDA for Q2 2026 was $151.4 million, up from $143.5 million year-over-year, with a 19.5% margin.

• Adjusted EPS (excluding one month of Eddyfi and related financing) was $1.41; including Eddyfi, core aEPS was $1.33.

• Free cash flow conversion expected at approximately 90% for the year; adjusted free cash flow for Q2 was $41.4 million.

• Gross profit for the quarter was $307.2 million, with a gross margin of 38%.

Outlook and guidance

• Raised full-year 2026 outlook: total/core sales expected at $3.0–$3.1 billion, with 2–4% organic growth and ~9% growth from acquisitions.

• Adjusted EBITDA guidance increased to $615–$625 million, including seven months of Eddyfi.

• Adjusted EPS range set at $5.40–$5.50, reflecting acquisition impacts and investments.

• Sequential improvement in pricing expected, with organic volume flat to slightly better in the second half.

• Management expects continued organic growth, supported by strategic acquisitions and a balanced business mix.