Second Quarter 2026
Filed Jul 30, 2026Net sales of $991.3 million, up 21%, and adjusted EBITDA of $265.8 million, up 18%; full-year net sales guidance raised to $3,825 to $3,925 million.
Commercial demand, orders and backlog were strong, while Residential reported organic sales declines and adjusted EBITDA margin declined year-over-year.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Net salesGAAP | $ 991.3 million | – | up 21% |
| Net income (loss)GAAP | $ 70.5 million | – | up 129% |
| Net income (loss) marginGAAP | 7.1 % | – | – |
| Earnings per share (EPS) - continuing operationsGAAP | 0.15 | – | – |
| Cash from operating activitiesGAAP | $ 98.6 million | – | – |
| Organic salesnon-GAAP | $ 837.0 million | – | – |
| Adjusted net income (loss)non-GAAP | $ 147.7 million | – | up 71% |
| Adjusted net income (loss) marginnon-GAAP | 14.9 % | – | – |
| Adjusted EPSnon-GAAP | 0.31 | – | – |
| Free cash flow (FCF)non-GAAP | $ 89.6 million | – | – |
| Adjusted EBITDAnon-GAAP | $ 265.8 million | – | up 18% |
| Adjusted EBITDA marginnon-GAAP | 26.8 % | – | – |
| Six months net salesGAAP | $ 1,915.0 million | – | – |
| Six months net income (loss)GAAP | $ 113.5 million | – | – |
| Six months net income (loss) marginGAAP | 5.9 % | – | – |
| Six months earnings per share (EPS) - continuing operationsGAAP | 0.26 | – | – |
| Six months cash from operating activitiesGAAP | $ 156.4 million | – | – |
| Six months organic salesnon-GAAP | $ 1,607.9 million | – | – |
| Six months adjusted net income (loss)non-GAAP | $ 243.3 million | – | – |
| Six months adjusted EPSnon-GAAP | 0.59 | – | – |
| Six months free cash flow (FCF)non-GAAP | $ 140.0 million | – | – |
| Six months adjusted EBITDAnon-GAAP | $ 499.2 million | – | – |
| Six months adjusted EBITDA marginnon-GAAP | 26.1 % | – | – |
| Operating cash flow conversion—continuing operationsother | 137.8 % | – | – |
| FCF Conversionother | 123.3 % | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| CommercialOrganically, Commercial net sales increased by 22.3% driven by broad-based growth, led by air, liquid and hybrid cooling, custom air handling, and air movement solutions. Acquisitions contributed $9.3 million, or 1.7%, of additional net sales. | $ 658.9 million | – | 23.8% |
| ResidentialOrganically, Residential net sales decreased by 4.8% driven by modest volume declines in professional distribution channels for ventilation solutions, net of price increases. Acquisitions contributed $56.4 million, or 19.6%, of additional net sales. | $ 333.8 million | – | 16.2% |
| EliminationsEliminations were $(1.4) million for the three months ended June 30, 2026, compared with $(0.1) million for the three months ended June 30, 2025. | (1.4) million | – | – |
Full-Year 2026 outlook
- Revenue$3,825 to $3,925 million
- NotePro forma net sales growth: high-single-digit-plus
- NoteAdjusted EBITDA: $1,020 to $1,065 million
- NotePro forma Adjusted EBITDA growth: high-single-digit to low-double-digit
Capital returns
- Successfully completed an initial public offering and concurrent private placement on April 17, 2026, generating net proceeds of $2,584.2 million.
- Net proceeds from the IPO and concurrent private placement, together with $77.1 million of cash on hand, were used to repay $2,661.2 million of outstanding borrowings under the Initial Term Loan Facility and Incremental Term Loan Facility.
What drove it
- Commercial orders were up 45% on a combined basis, driven by wins in mission-critical applications including liquid cooling, semiconductor cleanrooms and public health laboratories.
- Backlog was $2,868.4 million, up 133% year-over-year on a combined basis.
- Commercial growth was led by air, liquid and hybrid cooling, custom air handling and air movement solutions.
- Residential growth reflected the AprilAire Acquisition, while the company expanded Healthy Air Systems adoption through contractor engagement.
- Residential adjusted EBITDA excluding the AprilAire Acquisition increased by $4.1 million due to productivity, pricing and favorable net tariff impacts.
Concerns
- Commercial growth was partially offset by modest volume declines in commercial dehumidification.
- Residential organic net sales decreased by 4.8% in the quarter, driven by modest volume declines in professional distribution channels for ventilation solutions, net of price increases.
- Adjusted EBITDA margin was 26.8 %, compared with 27.5 % in the prior-year quarter.
- Quarterly cash from operating activities was $98.6 million and free cash flow was $89.6 million, compared with $105.5 million and $102.0 million, respectively, in the prior-year quarter.
- The release cites $41.5 million of cash on hand in its IPO highlight and $77.1 million of cash on hand in its later debt-repayment discussion.
What to watch
- Conversion of the $2,868.4 million backlog and 45% combined-basis Commercial order growth into net sales.
- Whether Commercial dehumidification and Residential professional-distribution ventilation volumes recover.
- The contribution of the AprilAire Acquisition to Residential sales and adjusted EBITDA.
- Adjusted EBITDA margin progression following the 26.8 % second-quarter margin.
- Execution against full-year net sales guidance of $3,825 to $3,925 million and adjusted EBITDA guidance of $1,020 to $1,065 million.
Balance sheet and cash flow
- Cash flow from operations - continuing operations was $98.6 million and free cash flow was $89.6 million for the three months ended June 30, 2026.
- Six months cash flow from operations was $156.4 million, with net investment of $16.4 million in capital expenditures, resulting in free cash flow of $140.0 million.
- Cash and cash equivalents were $261.8 million as of June 30, 2026.
- Available capacity under the revolving credit facility was $1,294.3 million as of June 30, 2026, after the revolving credit facility commitment was increased to $1,300.0 million.
- Total debt was $3,053.7 million at quarter-end.
- Net leverage was 2.8x as of June 30, 2026, down ~0.2x from immediately following the IPO.
- The June 2026 repricing of the remaining Incremental Term Loan Facility lowered the spread by 100 bps; following the amendment, the applicable margin is 1.75%.
Analysis
Madison Air reported second-quarter net sales of $ 991.3 million, up 21%, and net income of $ 70.5 million, up 129%. Adjusted EBITDA increased 18% to $ 265.8 million, although adjusted EBITDA margin declined to 26.8 % from 27.5 %. The company also reported adjusted net income of $ 147.7 million, up 71%, and adjusted EPS of 0.31 versus 0.24 in the prior-year quarter.
Commercial was the principal organic growth engine. Segment net sales increased 23.8% to $ 658.9 million, including 22.3% organic growth, led by cooling, custom air handling and air movement solutions. Commercial orders increased 45% on a combined basis, while backlog reached $2,868.4 million, up 133% year-over-year on a combined basis. Commercial growth was partly offset by modest volume declines in commercial dehumidification.
Residential net sales rose 16.2% to $ 333.8 million, but organic sales declined 4.8% as modest volume declines in professional-distribution ventilation solutions more than offset price increases. Acquisitions contributed $56.4 million, or 19.6%, of Residential sales growth. Residential adjusted EBITDA increased $25.9 million, with $21.8 million contributed by acquisitions; excluding the AprilAire Acquisition, adjusted EBITDA increased $4.1 million on productivity, pricing and favorable net tariff impacts, partly offset by lower volume.
Cash generation was lower than the prior-year quarter, with cash from operating activities of $ 98.6 million and free cash flow of $ 89.6 million, versus $ 105.5 million and $ 102.0 million, respectively. For the six months ended June 30, 2026, free cash flow was $ 140.0 million. The company ended the quarter with $261.8 million of cash and cash equivalents, $3,053.7 million of total debt, $1,294.3 million of revolving-facility availability and net leverage of 2.8x.
Management raised full-year net sales guidance to $3,825 to $3,925 million from $3,750 to $3,850 million. Adjusted EBITDA guidance remained $1,020 to $1,065 million. The reporting period therefore combines strong Commercial demand visibility and a raised sales outlook with a lower adjusted EBITDA margin, lower quarterly cash flow and organic volume pressure in Residential.
Management, verbatim
We delivered double-digit net sales growth, strong orders momentum and record backlog across a diverse set of end markets.
Jill Wyant, President and CEO
The combination of strong first-half execution, continued customer demand and the visibility provided by our backlog gives us confidence to raise our full-year outlook.
Jill Wyant, President and CEO
Not in the filing
stated, not guessed- Gross profit and gross margin
- Operating income
- Operating expenses
- GAAP diluted share count
- GAAP effective tax rate
- Dividend declarations or payments
- Share repurchases
- Forward gross-margin guidance
- Forward operating-expense guidance
- Forward tax-rate guidance
- Prior-quarter comparisons for reported metrics
- Previous-release 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.