Kadant (KAI) Q4 2025 earnings summary

Executive summary

• Achieved record Q4 2025 revenue of $286 million, up 11% year-over-year, driven by acquisitions, favorable currency effects, and strong aftermarket parts sales.

• Full-year 2025 revenue was $1.05 billion, essentially flat year-over-year, with aftermarket parts comprising a record 71% of total revenue.

• Net income for Q4 was $24 million, unchanged from the prior year; full-year net income declined 8.6%–9% to $102 million.

• Adjusted EBITDA margin for Q4 was 20.3%, with free cash flow for the year reaching a record $154 million, up 14.9%–15%.

• Named one of America's Most Responsible Companies for the sixth consecutive year.

Financial highlights

• Q4 adjusted EBITDA increased 10.6%–11% to $58 million; full-year adjusted EBITDA was $216.3 million, down 5.8%–6% from 2024.

• Q4 adjusted EPS was $2.27, up 1%; full-year adjusted EPS was $9.26, down 10% from $10.28 in 2024.

• Gross margin for Q4 rose 50 bps to 43.9%; full-year gross margin increased 90 bps to 45.2%.

• SG&A expenses increased to 28.7% of revenue in 2025, mainly due to acquisitions and higher compensation costs.

• Net debt at year-end was $251.8 million, with a leverage ratio of 1.33.

Outlook and guidance

• 2026 revenue guidance: $1.16–$1.185 billion; adjusted EPS guidance: $10.40–$10.75 (excluding $0.13 amortization), $12.53–$12.88 (including amortization add-back).

• Q1 2026 expected to be the weakest quarter, with revenue of $270–$280 million and adjusted EPS of $1.78–$1.88.

• Guidance does not include impact from pending acquisition of voestalpine Böhler Profil GmbH.

• Gross margin expected at 45.2%–45.7% for 2026; SG&A at 27.7%–28.3% of revenue.

• Management anticipates strengthening capital project bookings and steady aftermarket demand.