Ceco Raises Outlook as Thermon Deal Accelerates Growth
Second-quarter revenue climbed 54% to $285.0 million as the Thermon acquisition entered the results.
Ceco Environmental (CECO), an industrial environmental-solutions provider, raised its 2026 outlook as its first reporting period incorporating Thermon brought faster growth in orders and backlog.
Orders reached $798.5 million, up 191% from a year earlier, after growing 97% in the first quarter. Backlog climbed 164% to $1.819 billion, compared with 72% growth in the preceding quarter.
Second-quarter revenue rose 54% from a year earlier to $285.0 million, accelerating from 17% growth in the first quarter. The company recorded a net loss of $34.8 million, or $0.80 a share, compared with net income of $9.5 million, or $0.26 a share, a year earlier.
The GAAP loss reflected $45.5 million in acquisition and integration expense, which contributed to an operating loss of $33.2 million. Excluding certain items, net income increased 147% to $21.5 million, while adjusted earnings rose sequentially to $0.47 a share from $0.36.
Adjusted EBITDA rose 73% to $40.2 million and nearly doubled from the first quarter, lifting the margin to 14.1% from about 9.9%. GAAP gross margin narrowed to 30.3% from 36.2% a year earlier; excluding a $9.5 million purchase-accounting inventory adjustment, gross margin was 33.7%.
Ceco now expects 2026 revenue of $1.300 billion to $1.375 billion, raising the lower end by $25 million. Its adjusted EBITDA forecast is $200 million to $225 million, with the floor increased by $5 million, while free cash flow is still expected to equal at least 55% of adjusted EBITDA.
Reported free cash flow remained negative at $24.3 million, though transaction-adjusted free cash flow improved to positive $53.2 million from negative $3.0 million a year earlier. Thermon synergy capture was ahead of its pre-acquisition plan, which had targeted at least $40 million in cost savings.