10-Q · May 13, 2026
Kadant Inc. reported strong Q1 2026 results with revenue of $281.5 million, up 18% year-over-year, and EPS of $2.16, reflecting an increase from $2.05 in Q1 2025. Segment disparities appeared, with the Flow Control…
Earnings analysis · 10-Q
KAI earnings analysis
Filed August 12, 2026 · Our reading of the company's report
The latest report
Kadant delivered strong Q2 operating performance, with revenue up 23% to $312.875M, diluted GAAP EPS up to $2.75, and Industrial Processing providing substantial acquisition-assisted growth. Cash generation and bookings…
Read full summary
Kadant delivered strong Q2 operating performance, with revenue up 23% to $312.875M, diluted GAAP EPS up to $2.75, and Industrial Processing providing substantial acquisition-assisted growth. Cash generation and bookings improved, and management expects stronger capital bookings in the second half of 2026. However, gross-margin compression, higher acquisition-related debt and interest expense, and continued uncertainty around large capital projects temper the outlook.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
Where revenue came from
The business segments reported by the company.
Shares of the segments disclosed in this filing, largest first.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $2.75
What stood out
-
Record revenue growth
Q2 revenue was $312.875M, up 23% from $255.267M year over year and approximately 11% from $282M in Q1 2026. Organic revenue increased 8%, while acquisitions contributed 13% of consolidated growth.
-
EPS and earnings accelerated
Diluted GAAP EPS increased to $2.75 from $2.22 year over year and $2.16 in Q1 2026. Net income attributable to Kadant rose to $32.468M from $26.159M.
-
Industrial Processing led growth
Industrial Processing revenue increased 50% to $143.800M, while segment operating income increased to $27.283M from $15.486M. Management attributed growth to acquisitions and higher capital-project volume.
-
Bookings momentum improved
Consolidated bookings increased 16% to $312M, with parts and consumables bookings up 25% and representing 72% of bookings. Management expects 2026 bookings to exceed 2025 levels and capital bookings to strengthen in the second half.
-
Cash generation strengthened
Six-month operating cash flow increased to $75.426M from $63.317M, and free cash flow increased to $61.221M from $55.513M. Q2 free cash flow was $42.563M versus $36.514M in the prior-year quarter.
-
Liquidity remains adequate
Cash and cash equivalents increased to $134.533M from $119.551M at year-end, while working capital increased to $356.7M from $313.8M. The company reported $248.668M of committed borrowing capacity plus a $200.0M incremental facility.
What to watch
-
Tariff and trade-policy exposure
The revised global-operations risk factor highlights tariffs and trade-policy uncertainty: U.S. tariffs include 50% on certain Canadian imports, 25% on Chinese pulp and paper machinery, and 50% on numerous steel, aluminum, and copper categories. The USTR also declined renewal of USMCA in its current form on July 1, 2026.
-
Gross-margin compression
Gross margin declined to 43.8% from 45.9% year over year and 45.0% in Q1 2026, a 210-basis-point annual decline. Management cited lower aftermarket mix, adverse product mix, and the lower margin profile of recent acquisitions.
-
Acquisition-driven leverage
Debt increased to $510.632M from $374.501M at year-end, primarily to fund the $170.132M Kadant Profil acquisition. Interest expense rose to $5.314M from $3.338M in Q2, and management expects interest expense to remain above prior-year levels for the rest of 2026.
-
Large-project timing risk
Capital-project timing remains uncertain: capital equipment bookings decreased 3% year over year, and management said customers are deferring larger investments amid trade-policy, inflation, and geopolitical uncertainty. The company expects stronger second-half capital bookings but does not quantify them.
Management's outlook
The 10-Q does not provide new numeric revenue or EPS guidance. Management expects 2026 bookings to exceed 2025 levels, anticipates stronger capital bookings in the second half of 2026, and plans $12.0M-$16.0M of property, plant, and equipment expenditures during the remainder of 2026.
Earlier filings 4
10-K · March 3, 2026
Kadant frames its strategy around “Sustainable Industrial Processing” delivered through three reportable segments (Flow Control, Industrial Processing, Material Handling) and is pursuing growth by bolt-on M&A and…
10-Q · November 5, 2025
Kadant reported Q3 revenue of $271,567,000, essentially flat vs. Q3 2024 ($271,614,000) and up $16,300,000 vs. the prior quarter ($255,267,000). Gross margin expanded slightly to 45.16% while operating margin compressed…
10-Q · August 6, 2025
Kadant reported Q2 revenue of $255,267,000 (Q2 2024: $274,765,000) and GAAP diluted EPS of $2.22 (Q2 2024: $2.66). Gross margin expanded to ~45.9% while operating margin compressed to ~15.4%; operating cash flow for the…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.