CECO Environmental Corp. reported first‑quarter 2026 results that included $205.9 million in revenue, a 17% year‑over‑year increase, and a non‑GAAP net loss of $0.4 million. Adjusted EBITDA rose to $20.4 million, up 46% from $14.0 million in Q1 2025, reflecting stronger volume conversion and the early impact of the company’s 80/20 operational simplification program. Gross margin contracted to 31.0% year‑over‑year, a decline driven by the divestiture of the Global Pumps business and the mix of larger backlog projects booked in 2025, but management expects a rebound in Q2 as higher‑margin projects convert to revenue.
The quarter’s performance was offset by a sequential decline: Q4 2025 revenue was $214.7 million, higher than the $205.9 million reported in Q1 2026, and Q1 2025 net income of $36.0 million included a $64.5 million gain from the sale of Global Pump Solutions. These comparisons highlight the impact of one‑time gains and the shift in the company’s product mix on profitability.
CECO’s backlog surpassed $1 billion for the first time, driven by a 97% jump in new orders to $449.5 million in April 2026. The order book includes the company’s largest natural‑gas power order to date and reflects robust demand from data‑center and AI power markets. The record backlog and accelerated order pace provide strong revenue visibility for the coming quarters.
Management raised its full‑year 2026 outlook, projecting revenue of $940 million to $1 billion and adjusted EBITDA of $120 million to $140 million—an increase of 15% to 25% and 45% respectively from 2025 guidance. The company also confirmed that the pending merger with Thermon Group Holdings is on track to close in June 2026, with expected cost synergies of at least $40 million and a combined entity positioned for double‑digit growth.
Analysts had consensus estimates of $0.12–$0.15 in non‑GAAP EPS and $198.88–$199.08 million in revenue. CECO reported $0.36 in EPS and $205.9 million in revenue, beating expectations by $0.21 in EPS (a 140%–192% beat) and $6.8 million in revenue. CEO Todd Gleason noted that the results demonstrate the strength of the business model and the demand across multiple markets, and that the company’s first quarter backlog exceeding $1 billion reflects a 2.2 book‑to‑bill ratio.
The company’s margin dynamics illustrate a strategic focus on operational efficiency: adjusted EBITDA margin expanded by roughly 200 basis points to 9.9% from 7.9% in the prior year, driven by volume conversion and the 80/20 simplification program. Gross margin contraction is expected to recover in Q2 as the company’s higher‑margin backlog projects convert. The record backlog, raised guidance, and merger progress signal strong confidence in continued growth and a solid foundation for future profitability.
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