Thermon Group Holdings, Inc.

Thermon reported third-quarter revenue of $147.3 million, up 10% year over year. Gross profit was $68.7 million, up 11%, and gross margin was 46.6% versus 46.2% a year ago. Adjusted EBITDA was $35.66 million, up 12%, with adjusted EBITDA margin at 24.2%; GAAP EPS was $0.55 versus $0.54, and adjusted EPS was $0.66 versus $0.56. Orders increased 14% to $158.2 million, backlog rose 10%, and book-to-bill was about 1.1x. For fiscal 2026, management raised revenue guidance to $516 million to $526 million and adjusted EBITDA guidance to $114 million to $120 million, both up at the midpoint from prior year levels.

Bruce Thames framed the quarter as the strongest in company history and said the business is benefiting from secular trends like data centers, power generation, decarbonization, electrification, and reshoring. He emphasized that improved bookings, pipeline growth, and a rebound in large projects support momentum into fiscal 2027. His tone was upbeat and confident, while noting that Q3 is typically Thermon's seasonal peak for margins.

Jan Schott highlighted that Q3 revenue was $147.3 million, gross profit $68.7 million, gross margin 46.6%, adjusted EBITDA $35.66 million, and adjusted EBITDA margin 24.2%. She said growth was driven by favorable spending patterns, large project activity, electrification and decarbonization in Europe, pricing, and productivity gains from Thermon business systems. Working capital was $190 million, free cash flow was $13.1 million for the quarter and $25.7 million year to date, net debt was $96.3 million, leverage was 0.8x, and the company had $141 million in cash and available liquidity. She also noted $4.9 million of CapEx in the quarter and said capital allocation remains balanced across growth, acquisitions, share repurchases, and debt reduction.

Analysts focused mainly on the durability of the 46%+ gross margin, the size and pace of the data center liquid load bank opportunity, and how much CapEx may rise as Thermon scales the new platforms. Management said the margin improvement reflects a mix shift toward design-and-supply projects, operating leverage, pricing, and Thermon business system gains, and added that Q3 is typically the seasonal high point for gross margin. On data centers, management said the quote log has doubled sequentially to $60 million and that the opportunity is both material for FY27 and multiyear. They also said CapEx should be closer to 3% next year versus the historical roughly 2.5%, as they invest to expand capacity.