Westinghouse Air Brake Technologies (WAB) Q1 2026 earnings summary

Executive summary

• Q1 2026 sales rose 13% to $2.95 billion, with growth in both Freight and Transit segments, supported by acquisitions and favorable FX.

• Adjusted EPS increased 18.9% to $2.71; GAAP EPS up 12.8% to $2.12, driven by revenue growth and margin expansion.

• Multi-year backlog reached $30.8 billion, up 38.1% year-over-year, with 12-month backlog up 12.8%, providing strong visibility.

• Operating cash flow was $199 million, with a 40% cash conversion rate.

• Major acquisitions, including Dellner Couplers, are integrating well and delivering ahead of plan.

Financial highlights

• Net sales: $2.95 billion, up 13% year-over-year; adjusted operating margin 21.9%, up 0.2 pts; GAAP operating margin 17.5%, down 0.7 pts.

• GAAP net income: $362 million; adjusted net income: $462 million; adjusted EPS: $2.71.

• Gross margin improved to 36.0% (GAAP) and 36.9% (adjusted), up from 34.5% and 34.6% respectively.

• EBITDA for Q1 2026 was $677 million; adjusted EBITDA was $716 million.

• Cash and equivalents at quarter-end were $531 million; total available liquidity $2.09 billion; net debt leverage ratio at 2.3x.

Outlook and guidance

• Adjusted EPS guidance for 2026 raised to $10.25–$10.65, up 16.5%–18.7% year-over-year; revenue guidance unchanged at $12.19–$12.49 billion.

• Five-year outlook targets mid-single-digit organic sales CAGR, 350+ bps adjusted operating margin expansion, double-digit adjusted EPS CAGR, and >90% cash conversion.

• Tariff headwinds expected to pressure margins in H1, dissipating in H2; no material impact from tariffs expected in 2026 due to mitigation.

• Organic growth expected in mid-single digits for full year, with lumpiness by quarter.

• Management notes ongoing macroeconomic volatility, inflation, and supply chain risks.