Westinghouse Air Brake Technologies (WAB) Q2 2026 earnings summary

Executive summary

• Q2 2026 sales rose 17.5% year-over-year to $3.18B, with growth in both Freight and Transit segments, supported by organic growth, acquisitions, and favorable FX.

• Adjusted diluted EPS increased 21.6% to $2.76, and GAAP EPS rose 18.9% to $2.33, driven by strong revenue growth and margin expansion.

• Backlog reached $30.93B (+41.7% YoY), with a 12-month backlog of $9.14B (+11.3% YoY), providing strong revenue visibility.

• Dellner Couplers acquisition closed in February 2026, strengthening the Transit segment and contributing to growth.

• Productivity initiatives, commercial awards, and disciplined execution supported margin expansion and double-digit EPS growth.

Financial highlights

• Q2 gross profit was $1.16B, with gross margin at 36.5% (+1.8 pts YoY); adjusted gross margin at 36.7%.

• GAAP operating income was $600M (+27.1% YoY); adjusted operating margin reached 21.9% (+0.8 pts YoY).

• Q2 net income attributable to shareholders was $395M (+17.6% YoY); Q2 operating cash flow was $441M, with 82% cash conversion.

• EBITDA for Q2 was $740M; adjusted EBITDA was $746M.

• Interest expense increased to $80M, reflecting higher debt from acquisitions.

Outlook and guidance

• 2026 revenue guidance raised to $12.30B–$12.60B (up $110M at midpoint, +11.5% YoY).

• Adjusted EPS guidance increased to $10.60–$10.90 (up $0.30 at midpoint, +19.9% YoY).

• 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.

• H2 revenue growth expected to moderate as prior year acquisitions are lapped.

• Majority of margin expansion expected in Q4, driven by easing tariff impacts and productivity gains.