Madison Air Solutions (MAIR) Q1 2026 earnings summary

Executive summary

• First quarter 2026 marked the inaugural earnings call as a public company after a successful IPO, with a focus on scalable, profitable long-term growth and delivering superior air quality solutions across commercial and residential markets.

• Achieved strong financial performance in Q1 2026, with net sales rising 33.8% year-over-year to $923.7 million, driven by the AprilAire acquisition and robust commercial segment growth.

• Core strengths include outcome-driven solutions, leadership in growth markets, and a disciplined value creation model, supported by a decentralized, entrepreneurial culture and significant investment in innovation and talent.

• Positioned for sustainable, profitable growth and robust free cash flow, leveraging a differentiated value creation model and disciplined capital allocation.

• Backlog increased 115.5% year-over-year and orders rose 29.1% on a combined basis, reflecting strong demand and execution.

Financial highlights

• Pro forma net sales grew 13% year-over-year to $924 million in Q1 2026, with adjusted EBITDA up 16% to $233 million and margins expanding to 25.3%.

• Adjusted net income reached $93 million, up 36% year-over-year; reported free cash flow was $50 million, representing 117% conversion.

• Commercial segment net sales grew 23.5% to $609.8 million, with organic growth of 17.2% and adjusted EBITDA up 25.4%.

• Residential segment net sales rose 59.8% to $315.6 million, driven by acquisitions; organic sales declined 1.9%, with adjusted EBITDA up 83.6%.

• Record backlog of $2.5 billion, up 116% year-over-year, and a book-to-bill ratio of 1.4x in Q1.

Outlook and guidance

• Full-year 2026 guidance: net sales of $3,750–$3,850 million, adjusted EBITDA of $1,020–$1,065 million, and EBITDA margins of 27%.

• Free cash flow conversion expected to exceed 100% of net income; CapEx below 2% of sales; interest expense ~$250 million; effective tax rate 29%; diluted share count ~510 million.

• Guidance incorporates $100 million in gross tariff costs, with mitigation actions planned.

• Path to net leverage below 2.5x within 12 months, with current pro forma net leverage at 3x post-IPO.

• Operating cash flows and liquidity expected to support investments and debt service for at least the next 12 months.