Kadant (KAI) Q1 2026 earnings summary

Executive summary

• Q1 2026 delivered record bookings of $321 million, strong profitability, and solid earnings growth, driven by robust aftermarket demand and recent acquisitions, exceeding expectations across most financial metrics.

• Revenue rose 18% to $282 million, with organic revenue slightly down but acquisitions contributing 14% growth.

• Adjusted EBITDA increased 19% to $57 million (20.2% margin); adjusted EPS rose 14% to $2.84, beating guidance.

• Net income increased 6% to $26 million.

Financial highlights

• Bookings reached $321 million, up 25% year-over-year; revenue was $282 million, up 18%.

• Gross margin was 45%, down 110 bps year-over-year, mainly due to acquisition-related costs and product mix.

• Operating cash flow was $22 million; free cash flow was $18.7 million, both slightly down year-over-year.

• Backlog stood at $326 million at quarter-end.

• GAAP EPS was $2.16, up from $2.04 year-over-year.

Outlook and guidance

• 2026 revenue guidance raised to $1.178–$1.203 billion; adjusted EPS guidance revised to $12.33–$12.68, reflecting short-term acquisition dilution.

• Q2 2026 revenue guidance is $296–$306 million; adjusted EPS guidance is $2.88–$2.98.

• Guidance assumes gross margins of 44.5–45%, SG&A at 27.6–28.1% of revenue, and tax rate of 27.5–28%.

• Only change to guidance is inclusion of Kadant Profil’s external revenue and costs; acquisition expected to be $0.20 dilutive to adjusted EPS in 2026.

• Aftermarket parts demand expected to remain healthy; capital equipment environment improving but timing uncertain.