ESAB (ESAB) Q3 2026 earnings summary

Executive summary

• Q3 core sales reached $786.8M, with 2.3% organic growth; reported net sales were $824.5M, up 13.3% YoY.

• Core adjusted EBITDA rose 17.0% to $156.1M, with margin expanding 40 bps YoY to 19.8%.

• Both segments delivered organic growth; sequential margin and cash generation improved, while inflation and regional weakness weighed on performance.

• Q4 is expected to be the strongest quarter of 2026 for core growth, margins and cash flow, with momentum carrying into 2027.

Financial highlights

• Reported net sales were $824.5M vs. $727.8M; core sales were $786.8M vs. $687.4M.

• Core adjusted gross profit was $316.3M, with a 40.2% margin vs. $258.8M and 37.7% a year earlier.

• Core adjusted EBITDA was $156.1M vs. $133.4M; margin was 19.8% vs. 19.4%.

• Continuing-operations net income was $42.2M vs. $65.3M and diluted EPS was $0.61 vs. $1.04; core adjusted net income was $83.0M vs. $80.5M and EPS was $1.30 vs. $1.32.

• Adjusted free cash flow was $60.0M vs. $86.4M; operating cash flow was $72.7M vs. $81.5M.

Outlook and guidance

• FY26 sales guidance narrowed to $3.055B–$3.060B, with core organic growth of 1.6%–2.0%, M&A contribution of ~9.5% and FX contribution of ~2.0%.

• FY26 core adjusted EBITDA guidance was lowered to $603M–$607M from $615M–$625M; core adjusted EPS guidance fell to $5.28–$5.33 from $5.40–$5.50.

• Adjusted free-cash-flow conversion guidance is ~80%; GAAP free cash flow as a percentage of net income is ~105%.

• Q4 is expected to deliver close to mid-single-digit growth, margin expansion and stronger cash flow; October orders grew mid-single digits, with sales close to that pace.