Kadant Raises 2026 Outlook After Record Cash Flow

The Tip Desk · November 4, 2026 · 3 min read

The industrial-technology supplier posted record $313.2 million of third-quarter revenue and lifted full-year adjusted EPS to $12.58–$12.73.

Kadant Inc. (KAI) raised its 2026 revenue and earnings outlook after a third quarter in which it posted record revenue, adjusted earnings, and cash generation, even as year-over-year growth slowed from the second quarter.

The global supplier of technologies and engineered systems for process industries reported revenue of $313.2 million for the quarter ended October 3, 2026, up 15% from $271.6 million a year earlier. That compared with 23% growth to a record $312.9 million in the second quarter. Organic revenue increased 4%, excluding an 11% increase from acquisitions.

Bookings rose 22% to $291.1 million. Organic bookings increased 10%, excluding a 12% increase from acquisitions, after a 1% organic decline in the second quarter. Chief executive Jeffrey L. Powell said the company generated strong bookings growth across all three operating segments and that aftermarket strength, combined with disciplined execution, positioned Kadant for a strong finish to the year.

Net income attributable to Kadant was $35.1 million, up 27% from $27.7 million. GAAP diluted EPS increased 26% to $2.96. Adjusted EPS rose 21% to a record $3.64, versus 26% growth to a record $3.42 in the prior quarter. Adjusted EBITDA increased 24% to a record $71.7 million, or 22.9% of revenue.

Gross margin decreased 50 basis points to 44.7%, after a 210-basis-point decline to 43.8% in the second quarter. Operating cash flow increased 33% to a record $62.9 million. Free cash flow rose 32% to a record $58.1 million.

Industrial Processing was the largest engine of the year-over-year lift. Segment revenue rose to $143.4 million from $106.4 million, with a $6.3 million increase excluding acquisitions and foreign currency. Flow Control revenue rose to $102.4 million from $94.8 million, with a $6.8 million organic increase. Material Handling revenue fell to $67.4 million from $70.3 million, with a $3.1 million organic decrease. Parts and consumables accounted for 70% of revenue.

Industrial Processing operating income rose to $26.4 million from $18.8 million. Flow Control operating income rose to $28.3 million from $22.3 million. Material Handling operating income fell to $11.0 million from $12.5 million. Industrial Processing adjusted EBITDA was $37.5 million, with a 26.1% margin. Flow Control adjusted EBITDA was $31.4 million, with a 30.7% margin. Material Handling adjusted EBITDA was $14.9 million, with a 22.1% margin.

Industrial Processing bookings rose to $123.0 million from $85.2 million, with a $10.6 million organic increase. Flow Control bookings rose to $100.9 million from $93.8 million, with a $6.3 million organic increase. Material Handling bookings rose to $67.2 million from $59.3 million, with an $8.0 million organic increase.

Powell said the company expects aftermarket demand to remain stable and project activity to show some improvement for the remainder of the year, although the timing of large capital orders continues to be influenced by economic and geopolitical uncertainty. He said year-to-date performance positions Kadant to deliver a record-setting 2026.

The company now expects 2026 revenue of $1.195 billion to $1.210 billion, revised from $1.190 billion to $1.210 billion, GAAP EPS of $9.88 to $10.03, revised from $9.78 to $10.03, and adjusted EPS of $12.58 to $12.73, revised from $12.43 to $12.68. Revised adjusted EPS guidance excludes $2.19 a share of intangible amortization and $0.51 a share of acquisition-related costs.

For the fourth quarter of 2026, Kadant expects revenue of $287 million to $302 million, GAAP EPS of $2.01 to $2.16, and adjusted EPS of $2.67 to $2.82.