second quarter 2026
Filed Aug 4, 2026Kadant Reports Second Quarter 2026 Results
Record revenue, adjusted EPS, and adjusted EBITDA, along with double-digit growth in operating cash flow, were offset by gross-margin contraction, a decline in organic bookings, and continued capital-project approval-cycle pressure.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Bookingsother | $312.1 million | – | increased 16 percent |
| Organic bookingsnon-GAAP | decreased one percent | – | decreased one percent |
| RevenueGAAP | $312.9 million | – | increased 23 percent |
| Organic revenuenon-GAAP | increased eight percent | – | increased eight percent |
| Gross marginGAAP | 43.8 percent | – | decreased 210 basis points |
| Net incomeGAAP | $32.5 million | – | increasing 24 percent |
| EPSGAAP | $2.75 | – | increased 24 percent |
| Adjusted EPSnon-GAAP | $3.42 | – | increased 26 percent |
| Adjusted EBITDAnon-GAAP | $68.1 million | – | increased 30 percent |
| Adjusted EBITDA marginnon-GAAP | 21.8 percent of revenue | – | – |
| Operating cash flowGAAP | $53.5 million | – | increased 32 percent |
| Free cash flownon-GAAP | $42.6 million | – | increased 17 percent |
| Revenue from acquisitionsother | $33.9 million | – | – |
| Favorable foreign currency translation effect on revenueother | $4.1 million | – | – |
| Pre-tax intangible asset amortization expensenon-GAAP | $8.6 million | – | – |
| Pre-tax profit in inventory and backlog amortization expensenon-GAAP | $1.2 million | – | – |
| Pre-tax acquisition costsnon-GAAP | $0.6 million | – | – |
| After-tax intangible asset amortization expensenon-GAAP | $6.5 million ($8.6 million net of tax of $2.1 million) | – | – |
| After-tax profit in inventory and backlog amortization expensenon-GAAP | $0.9 million ($1.2 million net of tax of $0.3 million) | – | – |
| After-tax acquisition costsnon-GAAP | $0.6 million | – | – |
| Capital expendituresother | $10.9 million | – | – |
| First six months revenue from acquisitionsother | $67.9 million | – | – |
| First six months favorable foreign currency translation effect on revenueother | $13.9 million | – | – |
| First six months pre-tax intangible asset amortization expensenon-GAAP | $17.0 million | – | – |
| First six months pre-tax profit in inventory and backlog amortization expensenon-GAAP | $2.6 million | – | – |
| First six months pre-tax acquisition costsnon-GAAP | $1.3 million | – | – |
| First six months after-tax intangible asset amortization expensenon-GAAP | $12.8 million ($17.0 million net of tax of $4.2 million) | – | – |
| First six months after-tax profit in inventory and backlog amortization expensenon-GAAP | $2.0 million ($2.6 million net of tax of $0.6 million) | – | – |
| First six months after-tax acquisition costsnon-GAAP | $1.3 million | – | – |
| First six months capital expendituresother | $14.2 million | – | – |
2026 and third quarter of 2026 outlook
- Revenue2026: $1.190 to $1.210 billion; third quarter of 2026: $297 to $307 million
- Note2026 GAAP EPS: $9.78 to $10.03
- Note2026 adjusted EPS: $12.43 to $12.68
- Note2026 adjusted EPS guidance excludes $2.65 per share of acquisition-related costs
- NoteThird quarter of 2026 GAAP EPS: $2.28 to $2.38
- NoteThird quarter of 2026 adjusted EPS: $2.90 to $3.00
- NoteThird quarter of 2026 adjusted EPS excludes $0.62 per share of acquisition-related costs
What drove it
- Robust demand for aftermarket parts and services.
- Revenue growth included $33.9 million from acquisitions and a favorable foreign currency translation effect of $4.1 million compared to the second quarter of 2025.
- Organic revenue increased eight percent.
- Healthy quote activity and active commercial engagement.
- A large installed base and disciplined operational execution supported quarterly results.
Concerns
- Gross margin decreased 210 basis points to 43.8 percent due in part to an unfavorable product mix and a lower gross margin profile associated with recent acquisitions.
- Organic bookings decreased one percent.
- Capital project timing remains challenged by customer caution and extended approval cycles.
- Management identified geopolitical uncertainty as a primary headwind.
What to watch
- Customer approval cycles and the timing of capital project spending across end markets and geographies.
- Whether healthy quote activity and commercial engagement convert into bookings growth.
- The impact of unfavorable product mix and the gross-margin profile of recent acquisitions on gross margin.
- Execution against third-quarter revenue guidance of $297 to $307 million and adjusted EPS guidance of $2.90 to $3.00.
Balance sheet and cash flow
- Operating cash flow increased 32 percent to $53.5 million compared to $40.5 million in 2025.
- Free cash flow increased 17 percent to $42.6 million compared to $36.5 million in 2025.
- Capital expenditures were $10.9 million in 2026 and $4.0 million in 2025.
- Backlog was $340 million.
Analysis
Kadant delivered record second-quarter revenue of $312.9 million, up 23 percent from $255.3 million, while GAAP EPS increased 24 percent to $2.75 and adjusted EPS increased 26 percent to a record $3.42. Adjusted EBITDA rose 30 percent to a record $68.1 million, and adjusted EBITDA margin increased to 21.8 percent of revenue from 20.5 percent of revenue. Operating cash flow and free cash flow also increased to $53.5 million and $42.6 million, respectively.
Growth reflected both underlying and acquired business contributions. Organic revenue increased eight percent, while revenue included $33.9 million from acquisitions and a favorable foreign currency translation effect of $4.1 million. Demand for aftermarket parts and services was described as robust, and management cited the company’s large installed base and disciplined operational execution as support for results.
The principal operating pressure was gross margin, which decreased 210 basis points to 43.8 percent from 45.9 percent. Kadant attributed the decline in part to unfavorable product mix and the lower gross-margin profile associated with recent acquisitions. Bookings increased 16 percent to $312.1 million, but organic bookings decreased one percent, indicating that acquisition and currency effects accounted for the reported bookings growth.
Management continues to identify customer caution, extended approval cycles, and geopolitical uncertainty as headwinds for capital projects. Backlog was $340 million, while management cited healthy quote activity and active commercial engagement entering the second half. These demand indicators warrant attention alongside the conversion of quotes into organic bookings.
For 2026, Kadant expects revenue of $1.190 to $1.210 billion, GAAP EPS of $9.78 to $10.03, and adjusted EPS of $12.43 to $12.68. Third-quarter guidance calls for revenue of $297 to $307 million, GAAP EPS of $2.28 to $2.38, and adjusted EPS of $2.90 to $3.00. The release states that full-year revenue guidance was revised from $1.178 to $1.203 billion, while GAAP EPS was revised from $9.80 to $10.15 and adjusted EPS from $12.33 to $12.68.
Management, verbatim
Our second-quarter results reflect solid execution across our businesses and robust demand for our aftermarket parts and services, resulting in record revenue and strong earnings growth.
Jeffrey L. Powell, president and chief executive officer of Kadant
Although capital project timing remains challenged by customer caution and extended approval cycles, we continue to see evidence that interest in our products and technologies remains healthy.
Jeffrey L. Powell, president and chief executive officer of Kadant
As we look ahead to the second half of the year, we are encouraged by healthy quote activity and active commercial engagement, while the primary headwinds remain customer approval cycles and geopolitical uncertainty.
Jeffrey L. Powell, president and chief executive officer of Kadant
Not in the filing
stated, not guessed- GAAP operating income for the second quarter of 2026 and 2025
- Non-GAAP adjusted operating income for the second quarter of 2026 and 2025
- Segment revenue, segment profitability, and segment comparisons
- Cash balance
- Debt balance
- Dividend information
- Share repurchase information
- GAAP and non-GAAP tax rates
- Prior-quarter comparisons for reported second-quarter metrics
- Gross-margin, operating-expense, and tax-rate guidance
- A separately provided previous outlook section for formal actual-versus-prior-guidance comparison
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.