Kadant (KAI) Q2 2026 earnings summary

Executive summary

• Achieved record Q2 2026 revenue of $313 million, up 23% year-over-year, driven by strong aftermarket demand, resilient performance, and significant contributions from recent acquisitions.

• Profitability exceeded expectations due to operational discipline and cost control, with robust earnings growth across all segments.

• Net income increased to $32.8 million, reflecting higher operating income despite increased interest and tax expenses.

• Management remains optimistic about future growth, supported by a large installed base and disciplined execution.

Financial highlights

• Revenue rose 23% year-over-year to $313 million; adjusted EBITDA reached a record $68.1 million (21.8% margin), up 30% from Q2 2025.

• Adjusted EPS was a record $3.42, up 26% year-over-year; GAAP EPS rose 24% to $2.75.

• Net income increased to $32.8 million; operating cash flow increased 32% to $54 million; free cash flow up 17% to $43 million.

• Gross margin declined to 43.8% from 45.9% due to product mix and lower-margin acquisitions.

• Backlog at quarter-end was $340 million.

Outlook and guidance

• Full-year 2026 revenue guidance raised to $1.19–$1.21 billion; adjusted EPS guidance increased to $12.43–$12.68.

• Q3 2026 revenue expected at $297–$307 million; adjusted EPS at $2.90–$3.00.

• Demand expected to strengthen in the second half of 2026, but timing of capital projects remains uncertain due to customer caution and geopolitical risks.

• Guidance assumes gross margins of 44–44.5% and SG&A at 27.2–27.7% of revenue.