Kadant (KAI) Q1 2026 earnings summary

Executive summary

• Q1 2026 delivered record bookings of $320.8 million, strong profitability, and double-digit growth in revenue and adjusted EPS, driven by robust aftermarket demand and recent acquisitions, despite global trade and geopolitical challenges.

• Revenue rose 18% year-over-year to $281.5 million, with aftermarket parts and consumables comprising 74% of total revenue.

• Net income increased to $25.8 million, and adjusted EPS grew 14% to $2.84, exceeding guidance.

• Adjusted EBITDA increased 19% to $56.8 million (20.2% margin).

• Recent acquisitions, including Kadant Profil, Babbini, and Clyde Industries, contributed significantly to growth but are expected to be short-term dilutive to EPS.

Financial highlights

• Bookings reached $320.8 million, up 25% year-over-year; backlog stood at $326 million.

• Gross margin was 45.0%, down 110 bps year-over-year, mainly due to acquisition-related amortization and product mix.

• SG&A expenses rose 16% to $82.5 million, but as a percentage of revenue decreased to 29.3%.

• Operating cash flow was $21.9 million; free cash flow was $18.7 million, both slightly down year-over-year.

• Cash and equivalents at $119.8 million; net debt at $243.5 million; leverage ratio at 1.27.

Outlook and guidance

• 2026 revenue guidance raised to $1.178–$1.203 billion; adjusted EPS guidance revised to $12.33–$12.68, reflecting acquisition impacts.

• Q2 2026 revenue guidance is $296–$306 million; adjusted EPS guidance is $2.88–$2.98.

• Guidance assumes gross margins of 44.5–45%, SG&A at 27.6–28.1% of revenue, and tax rate of 27.5–28%.

• Aftermarket parts demand expected to remain robust; capital equipment market improving but project timing remains volatile.

• Kadant Profil acquisition expected to be $0.20 dilutive to adjusted EPS in 2026.