Madison Air Solutions (MAIR) 46th Annual William Blair Growth Stock Conference summary

Company highlights and strategy

• Focuses on transforming air into a strategic asset, serving diverse end markets including data centers, healthcare, education, manufacturing, and residential.

• Operates a highly decentralized model with less than 0.5% of headcount at the center, supporting agility and customer focus.

• Strong presence in both commercial (63%) and residential (37%) markets, with leadership in high-growth sectors and 12% of revenue from data centers.

• 95% of revenue is generated in North America, with significant R&D investment and presence in critical air quality markets.

• Broad application of solutions across data centers, healthcare, education, manufacturing, and residential housing.

Growth, innovation, and market positioning

• Demonstrated 8% CAGR from 2020–2025 and ~5% CAGR since 2007, outpacing U.S. GDP growth in 16 of the last 18 years.

• Innovation is prioritized, with new products like the Velocity Trailer Fan opening new TAM and fueling order and backlog growth.

• Maintains robust margins (26.5–26.6% EBITDA, 39% gross), with a growth-focused 80/20 business model driving both margin expansion and simplification.

• Q1 2025 saw 13% sales growth, 16% adjusted EBITDA growth, and a $2.5 billion backlog, with commercial outpacing residential.

• Commercial segment led growth (+18%), especially in data centers, while residential grew 4% with AprilAire penetration.

Financial performance and recent results

• Achieved $3.5 billion in pro forma net sales for 2025, with 26.5–26.6% adjusted EBITDA margins and $442 million in free cash flow.

• Delivered 38.9% adjusted gross profit margin and ~680bps EBITDA margin expansion from 2022 to 2025.

• In 1Q 2026, net sales grew 13% YoY pro forma to $924 million, with adjusted EBITDA up 16% to $233 million and margin expanding to 25.3%.

• Orders increased 29% YoY and backlog reached $2.5 billion, reflecting robust demand and sales momentum.

• Free cash flow conversion reached 117% in 1Q 2026, with $50 million generated and 12.4% LTM FCF margin.