Kadant (KAI) Q4 2025 earnings summary

Executive summary

• Achieved record Q4 2025 revenue of $286 million, up 11% year-over-year, driven by acquisitions, favorable currency effects, and strong aftermarket parts sales.

• Full-year 2025 revenue was $1.05 billion, essentially flat year-over-year, with aftermarket parts comprising a record 71% of total revenue.

• Adjusted EBITDA for Q4 rose 11% to $58 million; full-year adjusted EBITDA was $216.3 million, down 6% from 2024.

• Free cash flow reached a record $154 million, up 15% year-over-year, supporting future acquisitions and debt repayment.

• Named one of America's Most Responsible Companies for the sixth consecutive year.

Financial highlights

• Q4 gross margin increased 50 bps to 43.9%; full-year gross margin up 90 bps to 45.2%.

• Q4 adjusted EPS was $2.27, above guidance; full-year adjusted EPS was $9.26, down from $10.28 in 2024.

• Operating cash flow for 2025 was $171.3 million, up 10% from 2024.

• Net debt at year-end was $251.8 million; leverage ratio increased to 1.33.

• Year-end cash and equivalents were $123 million; total assets $1.71 billion; debt obligations $373 million.

Outlook and guidance

• 2026 revenue guidance: $1.16–$1.185 billion; adjusted EPS guidance: $10.40–$10.75 (excluding $0.13 amortization); after adding back recurring intangible amortization, $12.53–$12.88.

• Q1 2026 expected to be the weakest quarter; revenue guidance $270–$280 million, adjusted EPS $1.78–$1.88.

• Guidance does not include pending acquisition of voestalpine Böhler Profil GmbH.

• Management anticipates strengthening capital project bookings and steady aftermarket demand.

• Tariff volatility and cost pressures remain challenges for 2026.