Federal Signal (FSS) Q1 2026 earnings summary

Executive summary

• Achieved record-setting Q1 performance with net sales of $626 million, up 35% year-over-year, and strong growth in operating income and net income, each up 52%, driven by broad-based strength across product verticals and successful integration of recent acquisitions.

• Adjusted EPS was $1.18, up 55% year-over-year; adjusted EBITDA rose 48% to $126.3 million, with margin improving to 20.2%.

• Orders increased 10% to $623 million, while backlog stood at $1.04 billion, providing strong visibility for 2026.

• Strong operating cash flow of $101 million, up 176% year-over-year, supported by healthy demand and robust order intake.

• Both Environmental Solutions Group (ESG) and Safety and Security Systems Group (SSG) delivered strong results, with notable contributions from recent acquisitions.

Financial highlights

• Net sales reached $626 million, up 35% year-over-year; organic sales growth was 15%.

• Operating income rose 52% to $99.7 million; adjusted EBITDA increased 48% to $126.3 million (20.2% margin, up 190 bps).

• GAAP diluted EPS was $1.14, up 52%; adjusted EPS was $1.18, up 55%.

• Gross profit increased 37% to $179.4 million; gross margin improved to 28.7%.

• Operating margin improved to 15.9% from 14.2% year-over-year.

Outlook and guidance

• Raised full-year adjusted EPS outlook to $4.80–$5.05 (from $4.50–$4.80).

• Increased full-year net sales outlook to $2.57–$2.66 billion (from $2.55–$2.65 billion).

• Maintained CapEx guidance of $45–$55 million for the year.

• EBITDA margin targets for Safety and Security Systems Group raised to 22–28%.

• EPS expected to be evenly split by quarter for the remainder of the year due to acquisition seasonality.