Westinghouse Air Brake Technologies (WAB) Q2 2026 earnings summary

Executive summary

• Q2 2026 sales reached $3.18B, up 17.5% year-over-year, with strong growth in both Freight and Transit segments, supported by robust execution, strategic acquisitions, and significant business wins in Australia, Brazil, and Europe.

• Adjusted diluted EPS rose 21.6% to $2.76, and GAAP diluted EPS increased 18.9% to $2.33, driven by revenue growth and margin expansion despite tariff headwinds.

• Backlog remains robust at $9.14B for 12 months (+11.3% YoY) and over $30B multi-year (+41.7% YoY), providing strong visibility for future periods.

• Integration and early performance of recent acquisitions, including Dellner Couplers, are strengthening the portfolio and expanding addressable markets.

• Healthy pipeline and strong demand for core products and services, with continued investment in productivity and innovation.

Financial highlights

• Q2 net sales: $3.18B (+17.5% YoY); gross margin: 36.5% (+1.8 pts YoY); adjusted operating margin: 21.9% (+0.8 pts YoY); GAAP operating income: $600M (+27.1%).

• Adjusted EPS: $2.76 (+21.6% YoY); GAAP EPS: $2.33 (+18.9% YoY); Q2 net income: $395M.

• Cash flow from operations: $441M; cash conversion rate: 82%.

• EBITDA: $740M; adjusted EBITDA: $746M.

• 12-month backlog: $9.14B (+11.3% YoY); multi-year backlog: $30.93B (+41.7% YoY).

Outlook and guidance

• Raised 2026 revenue guidance to $12.30B–$12.60B (up 11.5% YoY at midpoint); adjusted EPS guidance to $10.60–$10.90 (up 19.9% YoY at midpoint).

• Expect majority of margin expansion in the second half, with Q4 margin growth outpacing Q3.

• Five-year outlook targets mid-single-digit organic sales CAGR, 350+ bps adjusted operating margin expansion, double-digit adjusted EPS CAGR, and >90% cash conversion.

• Guidance assumes continued tariff environment and includes Dellner Couplers acquisition.

• Anticipate continued mid-single-digit organic growth, supported by strong backlog and flow business.