Financial Performance - Net sales for Q3 2025 increased by $62.1 million, or 45.8%, to $197.6 million compared to Q3 2024, with organic growth of 35%[122] - Net sales for the nine months ended September 30, 2025 increased by $160.3 million, or 40.1%, to $559.7 million compared to the same period in 2024, with organic growth of 24%[123] - Orders booked increased by $70.6 million, or 44%, to $232.9 million in Q3 2025 compared to Q3 2024, with organic growth of 33%[120] - Gross profit for Q3 2025 increased by $19.3 million, or 42.6%, to $64.6 million, with a gross profit margin of 32.7%[124] - Operating income for Q3 2025 increased by $2.2 million to $9.4 million compared to Q3 2024, with an operating margin of 4.8%[130] - Non-GAAP operating income for Q3 2025 was $17.5 million, with a non-GAAP operating margin of 8.9%[132] - Total net sales for the three months ended September 30, 2025, were $197.6 million, a 46% increase from $135.5 million in 2024, and for the nine months ended September 30, 2025, net sales were $559.7 million, up 40% from $399.4 million in 2024[137] Expenses and Costs - Selling and administrative expenses for Q3 2025 were $47.0 million, up from $34.3 million in Q3 2024[126] - Amortization expense for Q3 2025 was $6.1 million, compared to $2.5 million in Q3 2024, due to increased intangible assets from acquisitions[128] - Interest expense increased to $5.1 million in Q3 2025 from $2.6 million in Q3 2024, primarily due to increased debt balances[134] - Interest expense increased to $16.2 million for the nine months ended September 30, 2025, compared to $9.3 million for the same period in 2024, primarily due to increased debt balances[135] - Income tax expense for the nine months ended September 30, 2025, was $23.6 million, up from $2.7 million in the same period in 2024, with an effective tax rate of 32.8% compared to 21.8% in 2024[136] Orders and Backlog - Engineered Systems segment orders booked increased by $239.9 million, or 74%, to $562.6 million for the nine months ended September 30, 2025, with organic growth of 73%[140] - Industrial Process Solutions segment orders booked increased by $46.7 million, or 37%, to $172.3 million for the nine months ended September 30, 2025, with organic growth of 7%[146] - Backlog increased to $719.6 million as of September 30, 2025, from $540.9 million as of December 31, 2024[151] Cash Flow and Debt - Cash and cash equivalents totaled $32.8 million as of September 30, 2025, down from $37.8 million at December 31, 2024[155] - Total outstanding borrowings increased to $220.9 million as of September 30, 2025, compared to $218.9 million at December 31, 2024[156] - Net cash used in operating activities was $4.1 million for the nine months ended September 30, 2025, compared to $23.0 million provided in the prior year period[162] - Net cash provided by investing activities was $1.5 million for the nine months ended September 30, 2025, compared to $26.2 million used in the prior year period, primarily due to the sale of the Global Pump Solutions business[163] - The carrying value of the Company's total long-term debt and current maturities of long-term debt at September 30, 2025, was $222.4 million[169] Market and Operational Risks - The company experienced shortages of raw materials and inflationary pressures, which could adversely affect future business results[115] - Market risk is primarily related to changes in interest rates, with no derivatives held for trading or speculative purposes[168] - The Company is exposed to risks associated with fixed price contracts, including actual costs exceeding estimates[169] - Future changes in foreign exchange rates may impact revenues, operating expenses, and earnings[171] - The Company faces potential challenges in expanding operations in new and existing markets due to supply chain issues[169] - The Company has incurred substantial debt related to strategic transactions, impacting its ability to repay or refinance[169] Transaction Gains and Losses - Transaction gains and losses included in "Other expense, net" were $2.0 million for the three months ended September 30, 2025, compared to $0.3 million for the same period in 2024[171] - For the nine months ended September 30, 2025, transaction gains and losses were $1.1 million, down from $1.9 million in the same period in 2024[171] Subsidiaries - The Company has wholly-owned subsidiaries in several countries, including the Netherlands, Canada, China, and the United Kingdom[171]

Financial Data and Key Metrics Changes - The company reported a record backlog of $720 million, up 64% year-over-year and 5% sequentially [14][15] - Quarterly revenue reached $198 million, marking a 46% increase year-over-year [15][16] - Adjusted EBITDA increased by 62% to $23.2 million, with adjusted EPS rising 86% to $0.26 [9][16] Business Line Data and Key Metrics Changes - The company achieved $233 million in new bookings, a 44% increase compared to Q3 2024, with a book-to-bill ratio of approximately 1.2 times [14][15] - The backlog has more than tripled since the end of 2021, with a year-to-date book-to-bill ratio of approximately 1.3 times [18][19] Market Data and Key Metrics Changes - The sales pipeline now exceeds $5.8 billion, indicating strong future growth potential [8][35] - The company is well-positioned in sectors such as power generation, industrial water, and natural gas infrastructure, with substantial orders expected in the coming quarters [11][12] Company Strategy and Development Direction - The company aims to exceed $1 billion in orders for 2026, with projected revenue between $850 million and $950 million, reflecting a year-over-year increase of 15% to 25% [30][31] - Continued focus on operational excellence and cost management initiatives, including the implementation of the 80/20 model, to enhance efficiency and margins [22][54] Management's Comments on Operating Environment and Future Outlook - Management remains optimistic about market dynamics, particularly in energy transition investments and industrial reshoring [28][29] - The company is closely monitoring potential challenges such as tariffs and inflation but believes it is well-prepared to navigate these issues [14][29] Other Important Information - The company has not announced any new M&A transactions since the sale of its global pump business and the acquisition of Profire Energy, but it is actively building its M&A pipeline [13][27] - Free cash flow for the quarter was approximately $19 million, with a year-to-date capital expenditure of about $8.7 million [23][24] Q&A Session Summary Question: Update on large projects in industrial water and power generation - Management indicated strong positioning for large projects, particularly in the Middle East and Asia, focusing on produced water and water reuse applications [39][40] Question: Visibility on 2026 outlook and potential for upward adjustments - Management expressed confidence in the $5.8 billion sales pipeline and noted that winning additional large projects could enhance the 2026 outlook [41][43] Question: Update on the power generation pipeline - Management reported a robust pipeline exceeding $1 billion, with ongoing positive discussions with major OEMs [47][48] Question: Confidence in targeted adjusted EBITDA margin expansion - Management outlined a three-pronged approach to margin expansion, focusing on volume growth, operational investments, and cost management initiatives [52][54] Question: Opportunities in disaggregated power solutions - Management noted limited opportunities depending on the type of power solutions being implemented, with potential for small format gas turbines [61] Question: Macroeconomic backdrop for 2026 guidance - Management indicated a stable macroeconomic environment, with no significant changes expected to impact the company's outlook [69][71] Question: Cross-selling opportunities with Profire Energy - Management highlighted ongoing discussions and initiatives to leverage Profire's offerings across a broader industrial customer base [72][75] Question: Confidence in Q4 bookings potentially being the largest ever - Management cited strong order performance and a record backlog as reasons for confidence in achieving significant bookings in Q4 [76][77]

Financial Data and Key Metrics Changes - The company reported a record backlog of $720 million, up approximately 64% year-over-year and 5% sequentially [6][14] - Quarterly revenue reached an all-time high of $198 million, representing a 46% increase year-over-year [8][15] - Adjusted EBITDA increased by 62% to $23.2 million, with adjusted EPS rising 86% to $0.26 [9][16] - Free cash flow for the quarter was approximately $19 million, showing a strong rebound from the first half of 2025 [9][23] Business Line Data and Key Metrics Changes - The company achieved new bookings of $233 million in Q3 2025, a 44% increase compared to Q3 2024, with a book-to-bill ratio of approximately 1.2x [7][14] - Approximately 30% of the year-over-year revenue increase was attributed to recent acquisitions, with the remainder from organic growth [16] - The sales pipeline now exceeds $5.8 billion, indicating strong future growth potential [8][34] Market Data and Key Metrics Changes - The company is well-positioned in sectors such as power generation, industrial water, and natural gas infrastructure, with substantial order growth expected in these areas [11][12] - The company anticipates significant orders in the next four to six quarters, particularly in international water infrastructure projects [12][28] Company Strategy and Development Direction - The company aims to maintain a strong market presence by optimizing project pricing and margin levels while expanding into new geographies [12][13] - The focus remains on building a world-class industrial company through strategic M&A activities and enhancing operational excellence [13][26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate potential challenges such as tariffs and inflation while maintaining a strong growth trajectory [14][28] - The outlook for 2026 includes projected revenue between $850 million and $950 million, reflecting a year-over-year increase of 15%-25% [29][30] Other Important Information - The company has not announced any new M&A transactions since the sale of its global pump business and the acquisition of Profire Energy, but remains active in building its M&A pipeline [13][26] - The company expects to achieve a net debt to EBITDA leverage ratio of approximately 2.3x, improving its financial flexibility [25] Q&A Session Summary Question: Update on project pipeline in industrial water and power generation - Management highlighted strong positioning in large projects, particularly in the Middle East and Asia, focusing on produced water and water reuse applications [38][39] Question: 2026 outlook and potential for upward adjustments - Management indicated that the $5.8 billion sales pipeline provides high confidence for future bookings, with potential for exceeding current guidance based on project wins [40][42] Question: Activity levels in power generation and data center connections - Management noted robust activity in the power generation sector, with a well over $1 billion pipeline, but cautioned against over-expectation due to the multi-year nature of these projects [46][48] Question: Confidence in adjusted EBITDA margin expansion - Management expressed confidence in achieving 100-150 basis points of margin expansion through volume growth, operational excellence initiatives, and cost management [51][53] Question: Opportunities in disaggregated power solutions - Management acknowledged potential opportunities depending on the type of power solutions chosen, with a focus on small format gas turbines [60] Question: Macroeconomic backdrop for 2026 guidance - Management indicated a stable macroeconomic environment is assumed, with no significant positive or negative changes expected [68][70] Question: Cross-selling opportunities with Profire - Management confirmed ongoing discussions and initiatives to leverage Profire's offerings across CECO's broader industrial customer base [71][74] Question: Confidence in Q4 bookings potentially being the largest ever - Management cited strong order performance and ongoing dialogues with customers as reasons for confidence in achieving record bookings in Q4 [75][77]

Financial Data and Key Metrics Changes - The company reported a record backlog of $720 million, up 64% year-over-year and 5% sequentially [15][19] - Quarterly revenue reached $198 million, marking a 46% increase year-over-year [16][17] - Adjusted EBITDA increased by 62% to $23.2 million, with adjusted EPS rising 86% to $0.26 [9][17] Business Line Data and Key Metrics Changes - The company achieved $233 million in new bookings, a 44% increase compared to Q3 2024, with a book-to-bill ratio of approximately 1.2 [6][15] - The backlog growth was driven by strong demand in power generation, natural gas infrastructure, and industrial water applications [16][19] Market Data and Key Metrics Changes - The sales pipeline now exceeds $5.8 billion, indicating strong future growth potential [8][35] - The company is well-positioned to benefit from market dynamics in power, industrial reshoring, and water infrastructure sectors [11][12] Company Strategy and Development Direction - The company is focused on expanding its capabilities in industrial air and energy applications while optimizing project pricing and margins [12][50] - There is an ongoing emphasis on M&A opportunities to enhance the sustainability of the company's portfolio [13][27] Management's Comments on Operating Environment and Future Outlook - Management remains bullish about the market dynamics and has reaffirmed the full-year 2025 outlook while providing an optimistic initial outlook for 2026 [5][31] - The company is monitoring potential challenges such as tariffs and inflation but believes it is well-prepared to navigate these issues [14][30] Other Important Information - The company expects Q4 bookings to exceed $250 million, with the potential for a record quarter above $300 million depending on project timing [10][68] - The company has made significant investments in operational excellence and cost management initiatives to drive future profitability [23][50] Q&A Session Summary Question: Update on project pipeline in industrial water and power generation - Management indicated strong positioning in large projects, particularly in the Middle East and Asia, focusing on produced water and water reuse applications [38] Question: Visibility on 2026 outlook and potential for upward adjustments - Management expressed confidence in the $5.8 billion sales pipeline and noted that winning additional large projects could enhance the 2026 outlook [39][40] Question: Update on power generation pipeline and activity levels - Management noted robust activity in the power generation sector, with a pipeline exceeding $1 billion, and emphasized the multi-year nature of these projects [44][46] Question: Confidence in targeted adjusted EBITDA margin expansion - Management outlined a three-pronged approach to margin expansion, focusing on volume growth, operational efficiencies, and cost management initiatives [48][50] Question: Cross-selling opportunities with Profire Energy - Management highlighted ongoing discussions and initiatives to leverage Profire's offerings across CECO's broader industrial customer base [63][66] Question: Macroeconomic backdrop for 2026 guidance - Management indicated a stable macroeconomic environment, with no significant changes expected to impact the company's outlook [60][62]

Core Insights - CECO Environmental reported quarterly earnings of $0.26 per share, missing the Zacks Consensus Estimate of $0.27 per share, but showing an increase from $0.14 per share a year ago [1] - The company posted revenues of $197.6 million for the quarter ended September 2025, exceeding the Zacks Consensus Estimate by 4.26% and up from $135.51 million year-over-year [3] Earnings Performance - The earnings surprise for the quarter was -3.70%, following a previous quarter where the company had a positive surprise of +20% [2] - Over the last four quarters, CECO has surpassed consensus EPS estimates two times [2] Revenue Performance - CECO has topped consensus revenue estimates four times over the last four quarters [3] - The current consensus EPS estimate for the upcoming quarter is $0.39 on revenues of $207.03 million, and for the current fiscal year, it is $0.99 on revenues of $762.31 million [8] Stock Performance - CECO shares have increased approximately 76.5% since the beginning of the year, significantly outperforming the S&P 500's gain of 16.9% [4] Industry Outlook - The Pollution Control industry, to which CECO belongs, is currently ranked in the bottom 26% of over 250 Zacks industries, indicating potential challenges ahead [9] - The performance of CECO's stock may be influenced by the overall outlook for the industry [9]

Q3 2025 Performance Highlights - Backlog reached a record level of $720 million, a 64% increase year-over-year[13, 20] - Orders increased by 44% year-over-year to $233 million, resulting in a book-to-bill ratio of approximately 1.2x[12, 13] - Revenue grew by 46% year-over-year to $198 million, driven by market position, M&A, and growth investments[12, 13] - Adjusted EBITDA increased by 62% year-over-year to $23.2 million, with margin expansion of 120 bps[12, 13, 20] - Adjusted EPS increased by 86% year-over-year to $0.26[13, 20] Full Year 2025 Outlook (Reaffirmed) - Revenue is projected to be between $725 million and $775 million, representing approximately 35% year-over-year growth, with 20% organic growth[15] - Adjusted EBITDA is expected to be between $90 million and $100 million, up approximately 50% year-over-year, with margins in the range of 12.5% - 13.0%[12, 15] - Expect Q4 bookings to be greater than $250 million[15] 2026 Outlook (Introducing) - Revenue is projected to be between $850 million and $950 million, representing a 15% to 25% year-over-year increase[10, 36, 38] - Orders are expected to exceed $1 billion[10, 36, 38] - Adjusted EBITDA is projected to be between $110 million and $130 million, representing a 20% to 40% year-over-year increase[10, 36, 38]

Financial Performance - Third quarter revenue reached $197.6 million, an increase of 46% compared to $135.5 million in the same quarter of 2024[7] - Operating income for the third quarter was $9.4 million, up from $7.2 million in the third quarter of 2024, while adjusted non-GAAP operating income increased by 59% to $17.5 million[4] - Free cash flow for the quarter was $19.0 million, up 71% from $11.1 million in the third quarter of 2024[7] - Adjusted EBITDA for the third quarter was $23.2 million, reflecting a 62% increase from $14.3 million in the same quarter of 2024[4] - Net income for the nine months ended September 30, 2025, was $48.356 million, a significant increase from $9.561 million in 2024, representing a growth of 406%[20] - Operating income for the nine months ended September 30, 2025, was reported at $89.3 million, compared to $24.1 million in 2024, reflecting a year-over-year increase of 270%[22] - Non-GAAP operating income for the nine months ended September 30, 2025, was $44.5 million, up from $33.8 million in 2024, indicating a growth of 32%[22] - The operating margin in accordance with GAAP for the nine months ended September 30, 2025, was 16.0%, up from 6.0% in 2024[22] Revenue Outlook - The company maintains its 2025 revenue outlook of $725 to $775 million, which is approximately 35% higher at the midpoint compared to 2024[5] - For 2026, the company projects revenue between $850 and $950 million, indicating a 20% increase at the midpoint[8] Backlog and Sales Pipeline - The company reported a backlog of $719.6 million, representing a 64% increase year-over-year[7] - The sales pipeline now exceeds $5.8 billion, indicating strong future growth potential across business segments and geographies[4] Cash Flow and Financial Position - The company reported a net cash used in operating activities of $(4.1) million for the nine months ended September 30, 2025, compared to $23 million in 2024[23] - Cash flows from investing activities resulted in a net cash provided of $1.520 million for the nine months ended September 30, 2025, contrasting with $(26.191) million in 2024[20] - Free cash flow for the nine months ended September 30, 2025, was $0.9 million, compared to $11.8 million in 2024, showing a decline[23] - The company had cash, cash equivalents, and restricted cash of $32.873 million at the end of the period, down from $38.926 million at the end of the previous year[20] - Borrowings on revolving credit lines increased to $185.8 million in 2025 from $58.4 million in 2024, indicating a significant rise in financing activities[20] Strategic Actions and Challenges - The company successfully divested its Global Pumps business and integrated multiple acquisitions, enhancing its operational capabilities[6] - Management's focus on integrating acquired businesses and realizing synergies is critical for future performance[31] - The company is actively identifying acquisition targets to optimize its business portfolio[31] Risks and Uncertainties - Potential risks include the impact of divesting the Global Pump Solutions business on relationships and operating results[31] - The company faces challenges related to supply chain disruptions, which may lead to contract delays or cancellations[31] - Rising costs of raw materials and labor are contributing to inflationary pressures affecting the company's operations[31] - The company has incurred substantial debt from strategic transactions, raising concerns about its ability to repay or refinance[31] - Economic and political conditions, including government regulations, may impact the company's operations and profitability[31] - The unpredictability of catastrophic events, such as cyber threats or public health crises, poses additional risks[31] - Investors are advised not to place undue reliance on forward-looking statements as actual results may vary significantly[31]

Core Insights - CECO Environmental Corp. reported strong financial results for Q3 2025, achieving record revenues and backlog, with year-to-date revenue surpassing the total revenue of 2024 [4][5][10] Financial Performance - Q3 2025 operating income was $9.4 million, an increase of $2.2 million from $7.2 million in Q3 2024. Adjusted non-GAAP operating income rose to $17.5 million, up 59% from $11.0 million [4][8] - Net income for the quarter was $1.5 million, down from $2.1 million in Q3 2024, while non-GAAP net income increased to $9.3 million from $5.2 million [4][8] - Adjusted EBITDA reached $23.2 million, reflecting a 62% increase compared to $14.3 million in Q3 2024, with an adjusted EBITDA margin of 11.7% [4][8] - Free cash flow for the quarter was $19.0 million, up from $11.1 million in Q3 2024 [4][8] Guidance and Outlook - The company maintains its full-year 2025 revenue guidance of $725 to $775 million, representing a 35% increase at the midpoint, and expects adjusted EBITDA between $90 to $100 million, a 50% increase at the midpoint [5][9] - For 2026, CECO projects revenue between $850 and $950 million, a 20% increase at the midpoint, and adjusted EBITDA between $110 and $130 million, a 30% increase at the midpoint [9][10] Orders and Backlog - CECO booked over $232.9 million in new orders during the quarter, a 44% increase, and reported a backlog of $719.6 million, up 64% [8][10] - The sales pipeline now exceeds $5.8 billion, indicating strong future growth potential across various business segments and geographic areas [4][10] Strategic Initiatives - The company successfully divested its Global Pumps business and integrated multiple acquisitions, enhancing its operational capabilities and market position [6][10] - CECO continues to focus on operational excellence initiatives, contributing to margin expansion and overall business transformation [6][10]

Core Viewpoint - The market anticipates CECO Environmental (CECO) will report a year-over-year increase in earnings driven by higher revenues for the quarter ended September 2025, with actual results being crucial for stock price movement [1][2]. Earnings Expectations - CECO is expected to post quarterly earnings of $0.27 per share, reflecting a year-over-year increase of +92.9% [3]. - Revenues are projected to reach $189.52 million, representing a 39.9% increase from the same quarter last year [3]. Estimate Revisions - The consensus EPS estimate has been revised down by 20.62% over the last 30 days, indicating a reassessment by analysts [4]. - The Most Accurate Estimate aligns with the Zacks Consensus Estimate, resulting in an Earnings ESP of 0% [12]. Earnings Surprise Prediction - A positive Earnings ESP is a strong indicator of an earnings beat, especially when combined with a Zacks Rank of 1, 2, or 3 [10]. - CECO currently holds a Zacks Rank of 5, complicating predictions of an earnings beat [12]. Historical Performance - In the last reported quarter, CECO exceeded the expected earnings of $0.20 per share, achieving $0.24, which was a +20.00% surprise [13]. - Over the past four quarters, CECO has beaten consensus EPS estimates twice [14]. Conclusion - CECO does not appear to be a strong candidate for an earnings beat based on current estimates and rankings, but other factors should also be considered for investment decisions [17].

Core Viewpoint - CECO Environmental Corp. will report its third quarter 2025 financial results on October 28, 2025, and will host an earnings call at 8:30 a.m. Eastern Time [1][2] Company Overview - CECO Environmental is a diversified industrial company focused on environmentally friendly solutions, serving industrial air, water, and energy transition markets globally [3] - The company operates through key business segments: Engineered Systems and Industrial Process Solutions, providing innovative technology and application expertise [3] - CECO's solutions aim to improve air quality, optimize energy value chains, and offer custom applications across various industries, including power generation, petrochemical processing, and electric vehicle production [3] Investor Relations - Investor contact for CECO Environmental includes Marcio Pinto, Vice President of Financial Planning & Investor Relations, and additional contacts at Three Part Advisors [4]