Zurn Elkay Water Solutions (ZWS) Q2 2026 earnings summary

Executive summary

• Net sales for Q2 2026 reached $491 million, up 10–10.5% year-over-year, with core sales growth across all product categories.

• Adjusted EBITDA grew 15% to $136 million (27.7% margin), the highest since the merger.

• Net income more than doubled to $113.3 million in Q2 2026, aided by a $47.6–$48 million tariff refund.

• Completed the $108.5–$109 million acquisition of Intellihot, expanding into high-efficiency tankless water heating.

• Raised full-year outlook for sales, EBITDA, and free cash flow following a strong first half.

Financial highlights

• Q2 2026 net sales: $491 million, up from $444.5 million in Q2 2025 (+10%).

• Adjusted EBITDA was $136 million (27.7% margin), up from $118 million (26.5%) year-over-year.

• Free cash flow for Q2 was $111.8–$112 million; $50 million in share repurchases completed.

• Received $47.6–$48 million in tariff refunds, excluded from adjusted results.

• Net debt leverage at 0.3x as of June 30, 2026, lowest as a public company.

Outlook and guidance

• Q3 2026 core sales growth projected at 6–7%, with adjusted EBITDA margin around 28%.

• Full-year 2026 adjusted EBITDA expected between $503 million and $513 million; free cash flow at least $350 million, excluding tariff refunds.

• Intellihot expected to contribute $16–$18 million in net sales in the second half.

• Guidance reflects transition from Section 122 to Section 301 tariffs.

• Management expects continued restructuring to optimize margins and manufacturing footprint.