Federal Signal (FSS) Q3 2026 earnings summary

Executive summary

• Q3 net sales reached $655.5M, up 18% YoY; operating income rose 19% to $111.4M, adjusted EBITDA rose 21% to $140.4M, and orders increased 33% to $620.1M.

• Adjusted EPS rose 18% YoY to $1.34; FY 2026 adjusted EPS outlook increased to $5.20–$5.32.

• Full-year sales outlook narrowed to $2.61B–$2.64B, primarily due to anticipated third-party refuse truck delivery delays; management expects another record year in 2027.

Financial highlights

• Q3 net income increased 17% to $79.6M; GAAP diluted EPS was $1.29, up 16%, and adjusted net income was $82.6M.

• Gross profit rose 17% to $189.2M; gross margin was 28.9% versus 29.1% YoY, while operating margin improved to 17.0% from 16.9%.

• 9M net sales rose 23% to $1.951B; operating income increased 28% to $329.3M and diluted EPS reached $3.84.

• 9M adjusted net income was $243.5M and adjusted EPS was $3.96; adjusted EBITDA was $412.1M, up from $319.5M.

• Q3 operating cash flow was $91M, up 50% YoY; 9M operating cash flow was $305.6M versus $157.5M.

Outlook and guidance

• FY 2026 adjusted EPS outlook raised to $5.20–$5.32 from $5.12–$5.30; sales outlook narrowed to $2.61B–$2.64B from $2.58B–$2.67B.

• Revised sales guidance implies 20%–21% YoY growth and reflects anticipated third-party refuse truck delivery delays.

• FY assumptions include CapEx of $45M–$55M, interest expense of $24M–$25M excluding additional M&A, and a Q4 tax rate near 25% excluding discrete items.

• Other FY assumptions include weighted average shares of 61.7M, acquisition-related amortization of $26M–$27M, and depreciation of $72M–$73M.