CECO Environmental Corp.

Q2 revenue was $285 million, up 54% year over year, and CECO stand-alone revenue was a company record at $235 million. Adjusted EBITDA was $40.2 million, up 73% year over year, with margin of 14.1%, up 154 basis points; adjusted gross profit margin was 33.7%, up 264 basis points sequentially, and trailing 12-month gross margin was 33.2%. Orders were a record $799 million, up 191% year over year, and backlog ended at a record $1.82 billion, up 164% year over year. Full-year 2026 guidance was raised to revenue of $1.3 billion-$1.375 billion and adjusted EBITDA of $200 million-$225 million; the company also continued to expect full-year orders to easily exceed $2 billion and adjusted free cash flow conversion of at least 55% of adjusted EBITDA. On a pro forma calendar-year basis including Thermon for the full year, management estimated revenue of approximately $1.5 billion-$1.6 billion and adjusted EBITDA of approximately $255 million-$280 million.

Todd Gleason described the quarter as “record-setting across the board,” emphasizing broad-based demand, a pipeline above $8.5 billion and a trailing 12-month book-to-bill over 2. He said the Thermon acquisition expands CECO’s commercial reach and could add 1 to 2 percentage points of organic growth across Thermon’s portfolio, with early cross-selling wins already visible in power generation and other areas. His tone was confident and upbeat, but he repeatedly framed the backlog and orders as firm, contractual work rather than speculative demand.

Peter Johansson focused on margin expansion, backlog conversion, cash generation and leverage. He highlighted adjusted gross profit margin of 33.7%, adjusted EBITDA of $40.2 million, sales/engineering/G&A spending at 22.4% of revenue, and trailing 12-month adjusted EBITDA of $113.4 million with a 12.6% margin. He said second-quarter adjusted free cash flow was about $53 million, year-to-date adjusted free cash flow was about $38 million, and trailing 12-month cash flow was about 58% of EBITDA, above the company’s 55% target. He also noted gross debt rose by about $523 million after the Thermon acquisition, quarter-end leverage was 2.7x, and gross debt was lowered to $692 million as of July 31 after an additional $39.5 million paydown.

Analysts pressed on third-quarter order momentum, power generation competition and supply-chain capacity, and management said the start to Q3 was strong with no slowdown, favorable pricing and a strong global supply chain. Questions also focused on industrial water delays in the Middle East, where Todd said the large projects were still delayed but not lost, and that some could become upside later. There was a detailed discussion of Thermon cross-selling and the $500,000 of early Thermon content added into CECO power projects, which management described as a collection of many smaller applications rather than one large win, plus questions on gas infrastructure, LNG and data center opportunities.