ESCO Technologies (ESE) investor relations material

Executive summary

• Q1 2026 delivered strong results with sales up 35% to $290 million, orders up 143% to $557 million, and record backlog of $1.4 billion, driven by robust performance in Navy, Aerospace, Test, and Utility markets and significant Maritime acquisition contributions.

• Adjusted EPS surged 73% to $1.64, with GAAP EPS from continuing operations up 41% to $1.11.

• Top-line sales grew 35%, with adjusted EBIT margin expanding by 380 basis points, and adjusted EBITDA margin up 320 basis points to 22.5%.

• Backlog increased to $1.4 billion, up 24% from September 2025, and book-to-bill ratio reached 1.92.

• Robust business strength prompted an increase in full-year sales and earnings guidance.

Financial highlights

• Orders increased 143% year-over-year to $557.2 million, with organic orders up 39% and Maritime contributing $238 million.

• Sales grew 35% to $289.7 million (11% organic), with $51 million from Maritime; adjusted EBIT margin rose to 19.4%.

• Adjusted EPS rose 73% to $1.64; GAAP EPS from continuing operations was $1.11, up 41%.

• Operating cash flow more than doubled to $68.9 million.

• Adjusted EBITDA margin improved to 22.5%, up 320 basis points.

Outlook and guidance

• Full-year sales guidance raised to $1.29–$1.33 billion (18–21% growth), mainly due to Test business outperformance.

• Adjusted EPS guidance increased to $7.90–$8.15, up $0.38 at midpoint, representing 31–35% growth.

• Q2 2026 Adjusted EPS expected at $1.75–$1.85, up 50–58% year-over-year.

• Test business revenue growth guidance increased to 9–11%; A&D sales outlook raised to 34–39%.

• Full-year tax rate guidance lowered to 23–23.5%.