ESAB (ESAB) Q1 2026 earnings summary

Executive summary

• Achieved record first quarter sales of up to $746 million, up 10% year-over-year, with core adjusted EBITDA rising 6% to $136 million and margin at 19.0%, driven by acquisitions and resilient execution despite higher costs from geopolitical conflicts.

• Net income from continuing operations was $50 million ($0.82 diluted EPS), with core adjusted net income at $80 million ($1.31 diluted EPS), reflecting higher SG&A and acquisition-related charges.

• Recent and pending acquisitions (EWM, Aktiv, Bavaria, DeltaP, Eddyfi) are driving double-digit growth, expanding workflow solutions, and reducing cyclicality.

• AI initiatives and workflow solutions are enhancing productivity and supporting long-term growth.

• Limited disruption from geopolitical conflicts, with proactive supply chain management and leadership transition including new CFO Brent Jones.

Financial highlights

• Total sales for Q1 reached up to $746 million, up 10% year-over-year; core adjusted EBITDA was $136 million, up 6%, with margin at 19.0%.

• Gross profit increased to $275 million, but gross margin declined to 36.9% from 37.6% year-over-year.

• Adjusted free cash flow was $40 million, with cash conversion improving to 49% from 40% in the prior quarter.

• Net leverage ended at 1.9x, expected to temporarily rise post-Eddyfi acquisition but return below 3x by year-end.

• Core adjusted net income per share from continuing operations was $1.31, up from $1.25 last year.

Outlook and guidance

• Reiterated full-year and 2026 guidance: total sales growth of 6%-9% (2%-4% organic, 4% M&A, 1% FX), adjusted EBITDA of $575–$595 million, and adjusted EPS of $5.70–$5.90.

• Guidance excludes impact from the Eddyfi acquisition and related financing.

• Full-year adjusted free cash flow conversion expected at ~90%.

• Second quarter is tracking to plan with stable sales and orders.