Madison Air Solutions (MAIR) Q1 2026 earnings summary

Executive summary

• First quarter 2026 marked the inaugural earnings call as a public company after a successful IPO, with a focus on scalable, profitable long-term growth and delivering superior air quality solutions across commercial and residential markets.

• Achieved strong financial performance in Q1 2026, with broad-based growth across commercial and residential segments, driven by innovation, market penetration, and the AprilAire acquisition.

• Positioned for sustainable, profitable growth and robust free cash flow, leveraging a diversified portfolio, decentralized operating model, and disciplined capital allocation.

• Strong demand in mission-critical end markets, especially data centers, institutional, government, and clean energy, contributed to broad-based growth across 15 verticals.

• Backlog increased 115.5%–117.1% year-over-year, with orders up 29.1%–41% and a record backlog of $2.5 billion.

Financial highlights

• Net sales reached $923.7–$924 million, up 33.8% year-over-year and 13% pro forma, with adjusted EBITDA up 16%–38.7% to $233.4 million and margin at 25.3%.

• Adjusted net income was $92.5–$93 million, up 32.1%–36% year-over-year; reported free cash flow was $50–$50.4 million, with 117%–117.2% conversion.

• Commercial segment net sales grew 18%–24% to $609.8–$610 million, with adjusted EBITDA up 25%–25.4%; residential segment net sales increased 4%–59.8% to $315.6–$316 million, with adjusted EBITDA up 83.6%–84%.

• Organic revenue growth was 11.7% overall, with 17.2% in Commercial and -1.9% in Residential.

• Gross margin improved to 37.2% from 35.8% a year ago.

Outlook and guidance

• Full-year 2026 net sales guidance: $3,750–$3,850 million, with adjusted EBITDA guidance of $1,020–$1,065 million, representing mid- to high-single-digit growth.

• Free cash flow conversion expected to remain above 100% of net income; CapEx to be less than 2% of sales; interest expense around $250 million; adjusted tax rate of 29%.

• Guidance assumes stable demand in commercial markets, gradual improvement in residential, and ongoing monitoring of macro and geopolitical risks.

• Net leverage targeted below 2.5x within 12 months post-IPO.