Carlisle's Adjusted EBITDA Margin Falls 210 Basis Points

The Tip Desk · November 1, 2026 · 3 min read

Third-quarter revenue reached $1.46 billion, up 9%, while adjusted EPS hit a third-quarter record of $5.92 as petroleum-linked costs outpaced pricing.

Carlisle Companies Incorporated (CSL) reported third-quarter revenue of $1.46 billion, up 9% from a year earlier, and record third-quarter adjusted earnings of $5.92 a share, up 6%. Diluted earnings from continuing operations were $5.22 a share.

The building-envelope supplier said petroleum-derived raw material, diesel and freight costs rose sharply after a renewed escalation of the conflict in the Middle East, well above what it had anticipated in its July outlook. As in prior inflationary cycles, the company said, pricing lagged cost, which drove the year-over-year decline in adjusted EBITDA margin.

Adjusted EBITDA was $348.1 million. Adjusted EBITDA margin compressed to 23.8% from 25.9% a year earlier, a 210-basis-point drop. Operating income was $293.2 million, and operating margin was 20.0%.

Chief Executive Officer Chris Koch said the company expects the benefit of freight surcharges and broad-based price increases implemented across both reportable segments to keep building through the fourth quarter and into 2027, and that margin expansion should resume as raw material costs normalize. He described the margin squeeze as a timing issue rather than a structural one. Customers, he said, have continued to choose Carlisle as those actions have taken hold, with no material change in demand.

Carlisle Construction Materials, the larger of the two segments, posted revenue of $1.08 billion, up 8% (9% organic). Operating income was $281 million. Adjusted EBITDA increased 1% to $306 million, and adjusted EBITDA margin was 28.2%, down 200 basis points year-over-year. The company said the margin decline reflected raw material and freight cost inflation that outpaced pricing realization in the quarter, partially offset by higher volumes, Carlisle Operating System productivity gains and cost controls. Koch attributed CCM growth to volume from strategic initiatives, including growing traction in data centers, together with solid re-roofing demand and price realization.

Carlisle Weatherproofing Technologies revenue rose 9% (10% organic) to $379 million. Operating income increased 31% to $39 million. Adjusted EBITDA grew 13% to $68 million, and adjusted EBITDA margin was 18.0%, up 60 basis points year-over-year. The company said share gains and weather conditions that drove demand for roof coatings outweighed continued weakness in residential and non-residential new construction. Savings from automation, a consolidated manufacturing footprint and added in-house expanded polystyrene resin capacity, along with higher volumes, more than offset raw material and freight cost inflation that outpaced pricing realization.

For the nine months ended September 30, 2026, cash provided by operating activities was $511 million, and free cash flow from continuing operations was $407 million. Capital expenditures were $107 million. The company returned $990 million to shareholders through $850 million of share repurchases and $140 million of dividends. Cash and cash equivalents were $547 million at quarter-end, with $1.0 billion available under its revolving credit facility.

During the third quarter Carlisle repurchased $350 million of shares and increased its quarterly dividend 14%, its 50th consecutive annual increase. It said it remains on track with a $1.2 billion share repurchase target for 2026.

For the fourth quarter, Carlisle expects high-single-digit revenue growth year-over-year, with both CCM and CWT in that range, and a consolidated adjusted EBITDA margin that is flat year-over-year. The outlook does not assume a near-term recovery in new construction markets.

Koch said the company remains committed to advancing Vision 2030 through organic growth, synergistic acquisitions, margin expansion and increased free cash flow, and remains confident in its path to $40 of adjusted EPS and 25%-plus ROIC.