Madison Air Solutions Corporation

Pro forma net sales increased 13% year over year to $924 million. Adjusted EBITDA grew 16% with margins expanding about 70 bps to 25.3%. Adjusted net income was $93 million, up 36% year over year. Reported free cash flow was $50 million, with 117% conversion; LTM free cash flow margins were 12%. Commercial reported net sales were up 24% to $610 million, and Residential reported net sales were up 60% to $316 million. For full-year 2026, management guided to net sales of $3.75 billion to $3.85 billion and adjusted EBITDA of $1.020 billion to $1.065 billion, with free cash flow conversion above 100% of net income. They also guided to gross tariff costs of about $100 million, CapEx below 2% of sales, interest expense of about $250 million, and diluted shares of about 510 million.

Jill Wyant framed the IPO quarter as a milestone and emphasized Madison Air’s 'Return on Air' strategy: selling engineered solutions that improve uptime, health, productivity and efficiency in high-value environments. She highlighted broad-based demand across 15 commercial end markets, the growth runway in residential indoor air quality, and a decentralized operating model that keeps the company close to customers. Her tone was confident and constructive, with repeated emphasis that the company is still early in its penetration opportunity and is positioned to invest through cycles.

JJ Foley focused on execution translating into financial leverage: 13% pro forma sales growth to $924 million, 16% adjusted EBITDA growth to $1.020 billion-$1.065 billion full-year guidance, and 117% free cash flow conversion in Q1. He noted Q1 adjusted EBITDA margin of 25.3%, net debt of about $5.5 billion and net leverage of 5.7x as of March 31, while also saying IPO and private placement proceeds totaled about $2.6 billion and were used 100% to retire debt. He said leverage would be about 3x trailing including those proceeds, the company expects to get below 2.5x net debt/EBITDA within 12 months, and tariff costs are expected to run about $100 million gross in 2026, offset over time through pricing and operational actions.

Analysts pressed on how quickly Commercial orders would convert to revenue, given strong Q1 bookings and backlog; management said some step-up should occur, especially in Q2 and the back half, but data center and seasonal timing make the path uneven. Questions also focused on data centers, liquid versus air cooling, and backlog duration; management said data centers are a primary driver, liquid cooling is becoming a larger share, and some data-center backlog now runs 4 to 5 quarters. On residential, analysts asked about AprilAire growth and penetration; management said the business is still in the early innings, with 92% of U.S. homes offering whitespace and contractor penetration still relatively low.