third quarter of 2026
Filed Oct 28, 2026Q3 2026 net revenue of $349.5 million, up 34% compared to $261.4 million in Q3 2025, with net income attributable to the Company of $41.7 million, or diluted EPS of $1.46.
Revenue, profitability, adjusted EBITDA and free cash flow improved sharply year over year, led by Engineered Composites and the CH-53K contract modification. Machine Clothing revenue and adjusted EBITDA margin declined.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Q3 net revenuesGAAP | $349.5M | – | 34% |
| Q3 cost of goods soldGAAP | $209.2M | – | – |
| Q3 gross profit/(loss)GAAP | $140.4M | – | – |
| Q3 consolidated gross profit marginGAAP | 40.2% | – | – |
| Q3 selling, general, and administrative expensesGAAP | $61.50M | – | – |
| Q3 technical and research expensesGAAP | $12.19M | – | – |
| Q3 restructuring expenses, netGAAP | $7.29M | – | – |
| Q3 operating income/(loss)GAAP | $59.40M | – | – |
| Q3 interest expense, netGAAP | $5.34M | – | – |
| Q3 income/(loss) before income taxesGAAP | $55.79M | – | – |
| Q3 income tax expense/(benefit)GAAP | $13.90M | – | – |
| Q3 effective tax rateGAAP | 24.9% | – | – |
| Q3 net income (loss)GAAP | $41.89M | – | – |
| Q3 net income (loss) attributable to the CompanyGAAP | $41.70M | – | – |
| Q3 basic earnings/(loss) per share attributable to Company shareholdersGAAP | $1.47 | – | – |
| Q3 diluted earnings/(loss) per share attributable to Company shareholdersGAAP | $1.46 | – | – |
| Q3 Adjusted EBITDAnon-GAAP | $100.1M | – | – |
| Q3 Adjusted EBITDA marginnon-GAAP | 28.6% | – | – |
| Q3 adjusted earnings per share attributable to Company shareholders - dilutednon-GAAP | $1.68 | – | – |
| Q3 net cash provided by operating activitiesGAAP | $48.63M | – | – |
| Q3 free cash flownon-GAAP | $36.48M | – | – |
| Nine months ended September 30, 2026 net revenuesGAAP | $990.4M | – | – |
| Nine months ended September 30, 2026 gross profit/(loss)GAAP | $348.1M | – | – |
| Nine months ended September 30, 2026 operating income/(loss)GAAP | $116.9M | – | – |
| Nine months ended September 30, 2026 net income (loss) attributable to the CompanyGAAP | $74.39M | – | – |
| Nine months ended September 30, 2026 diluted earnings/(loss) per share attributable to Company shareholdersGAAP | $2.60 | – | – |
| Nine months ended September 30, 2026 Adjusted EBITDAnon-GAAP | $206.1M | – | – |
| Nine months ended September 30, 2026 adjusted earnings per share attributable to Company shareholders - dilutednon-GAAP | $3.10 | – | – |
| Nine months ended September 30, 2026 net cash provided by operating activitiesGAAP | $51.62M | – | – |
| Nine months ended September 30, 2026 free cash flownon-GAAP | $18.29M | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Machine ClothingPrimarily driven by cyclical declines in the Americas. Management cited steady conditions in Asia, improving volumes in Europe, and market share holding firm. | $169.8M | – | (3.0)% after adjusting for currency translation |
| Albany Engineered CompositesStrength across commercial and defense programs, most notably LEAP commercially and CH-53K and missile programs in defense. | $179.7M | – | 107.0% after adjusting for currency translation |
| Machine Clothing, nine months ended September 30, 2026No additional nine-month segment revenue driver was provided. | $514.5M | – | (4.6)% after adjusting for currency translation |
| Albany Engineered Composites, nine months ended September 30, 2026No additional nine-month segment revenue driver was provided. | $475.9M | – | 42.1% after adjusting for currency translation |
Amounts quoted below without a unit are in thousands, as in the filing’s tables. Per-share figures are as printed.
fourth quarter of 2026 outlook
- RevenueConsolidated net revenue between $325 million and $335 million
- Tax rate29.5%
- NoteMachine Clothing net revenue between $170 million and $175 million
- NoteEngineered Composites net revenue between $155 million and $160 million
- NoteAdjusted EPS between $0.65 and $0.75
- NoteRevised fourth-quarter effective tax rate of 29.5%, vs. previous estimate of 31.5%
Capital returns
- Paid $7.9 million in dividends in the third quarter.
- Dividends declared per Class A share were $0.28 in Q3 2026, compared to $0.27 in Q3 2025.
- Dividends paid were $(23,810) (in thousands) in the nine months ended September 30, 2026, compared to $(24,738) (in thousands) in the prior-year period.
- Purchase of Treasury shares was — in the nine months ended September 30, 2026, compared to $(170,964) (in thousands) in the prior-year period.
What drove it
- Consolidated revenue growth was primarily driven by higher volume in Engineered Composites and approximately $11.6 million in positive program adjustments from the CH-53K contract renegotiation.
- The CH-53K contract modification produced a $33.4 million favorable gross-margin adjustment, offset by catch-up depreciation and amortization.
- Engineered Composites benefited from higher underlying volume and improved efficiency.
- Machine Clothing sales were at the high-end of expectations, according to management.
- Capital expenditures were driven primarily by efficiencies achieved through facility optimizations.
Concerns
- Machine Clothing adjusted EBITDA margin was 27.2%, compared to 31.0% in Q3 2025, primarily due to volume and geographic mix.
- Machine Clothing gross profit margin was 44.4%, compared to 46.9% in Q3 2025.
- Selling, general, and administrative expenses were $61,501 (in thousands), compared to $51,905 (in thousands), driven primarily by increased compensation costs and Strategic Review costs.
- Restructuring expenses, net were $7,293 (in thousands), compared to $3,197 (in thousands), as footprint optimization efforts in Machine Clothing continued.
- The quarter's results included a $44.4 million CH-53K benefit related to the conclusion of the Strategic Review.
What to watch
- Fourth-quarter consolidated net revenue guidance of between $325 million and $335 million.
- Fourth-quarter Engineered Composites net revenue guidance of between $155 million and $160 million.
- Fourth-quarter Machine Clothing net revenue guidance of between $170 million and $175 million.
- Fourth-quarter Adjusted EPS guidance of between $0.65 and $0.75.
- The revised fourth-quarter effective tax rate of 29.5%.
- Volume, geographic mix and fixed-cost absorption in Machine Clothing.
- Production ramps and volume scaling across commercial and defense programs in Engineered Composites.
Balance sheet and cash flow
- Cash and cash equivalents were $79,125 (in thousands) at September 30, 2026, compared to $112,350 (in thousands) at December 31, 2025.
- Total debt was $422,087 (in thousands) at September 30, 2026, compared to $455,663 (in thousands) at December 31, 2025.
- Net debt was $342,962 (in thousands) at September 30, 2026, compared to $343,313 (in thousands) at December 31, 2025 and $372,321 (in thousands) at September 30, 2025.
- Q3 purchases of property, plant and equipment were $(12,107) (in thousands), compared to $(18,033) (in thousands) in Q3 2025.
- Nine-month purchases of property, plant and equipment were $(33,277) (in thousands), compared to $(47,559) (in thousands) in the prior-year period.
- Nine-month net cash used in investing activities was $(30,553) (in thousands), compared to $(45,566) (in thousands) in the prior-year period.
- Nine-month net cash used in financing activities was $(55,454) (in thousands), compared to $(48,268) (in thousands) in the prior-year period.
Analysis
Albany reported a sharp year-over-year recovery in the third quarter. Net revenues were $349,539 (in thousands), compared with $261,434 (in thousands), while net income attributable to the Company was $41,697 (in thousands), compared with a loss of $(97,760) (in thousands). Diluted GAAP EPS was $1.46, compared with $(3.37), and adjusted diluted EPS was $1.68, compared with $(3.29). The result reflected strong Engineered Composites volume and approximately $11.6 million in positive program adjustments from the renegotiation of the CH-53K contract.
Profitability improved materially, with gross profit of $140,378 (in thousands) and a 40.2% consolidated gross profit margin, compared with a gross loss of $(49,938) (in thousands) and a (19.1)% margin in the prior year. The CH-53K contract modification contributed a $33.4 million favorable gross-margin adjustment, while the prior-year quarter absorbed a $147.3 million unfavorable CH-53K cost adjustment. Q3 adjusted EBITDA was $100,097 (in thousands), versus $(91,104) (in thousands), and adjusted EBITDA margin was 28.6%, versus (34.8)%.
The segment mix was highly favorable to Engineered Composites. Segment revenue was $179,737 (in thousands) and increased 107.0% after adjusting for currency translation, supported by LEAP, CH-53K and missile programs. Its adjusted EBITDA margin was 36.5%, compared with (155.5)%. Machine Clothing revenue was $169,802 (in thousands) and declined (3.0)% after adjusting for currency translation, primarily due to cyclical declines in the Americas. Its adjusted EBITDA margin fell to 27.2% from 31.0%, reflecting volume and geographic mix.
Cash generation improved in the quarter, with free cash flow of $36,481 (in thousands), compared with $25,661 (in thousands). Capital expenditures were $(12,107) (in thousands), compared with $(18,033) (in thousands). At September 30, cash and cash equivalents were $79,125 (in thousands), total debt was $422,087 (in thousands), and net debt was $342,962 (in thousands). The company paid $7.9 million in dividends during the quarter and declared a $0.28 per-Class-A-share dividend.
For the fourth quarter, Albany guided consolidated net revenue to between $325 million and $335 million, comprising Machine Clothing revenue of between $170 million and $175 million and Engineered Composites revenue of between $155 million and $160 million. The company guided Adjusted EPS to between $0.65 and $0.75 and revised its fourth-quarter effective tax rate to 29.5% from its previous estimate of 31.5%. The key operating issues are the continuation of Engineered Composites production ramps and the extent to which Machine Clothing volume, geographic mix and footprint optimization affect profitability.
Management, verbatim
I'm incredibly proud of the performance of the team in the third quarter. The team, with Engineered Composites leading the way, was able to favorably finalize the strategic review of our Amelia Earhart Drive facility in under a year and end the quarter with solid performance.
Gunnar Kleveland, President and Chief Executive Officer
As we look at the quarter following the conclusion of the Strategic Review, the underlying performance of the business was solid. In Engineered Composites, we continued to see strength across multiple programs, as production ramps and volumes scale.
Sean Valashinas, Acting Chief Financial Officer
Not in the filing
stated, not guessed- Previous-release outlook was not provided; therefore, no reported actual-versus-prior-guidance comparisons are included.
- Prior-quarter comparisons were not reported for the presented metrics.
- Fourth-quarter gross-margin guidance was not reported.
- Fourth-quarter operating-expense guidance was not reported.
Written by an AI language model from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure is checked against the filing text, and a metric the filing does not print, or whose value, prior period and change do not add up, is dropped from the metrics. The model can still misread a table, in the metrics or in the text, so check a number in the filing before you rely on it. Consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.