KAI earnings analysis
What we found in KAI's 10-Q: the parts that mattered, the offsets in the same document, and what the company said about what comes next.
Our reading of the filing · Free to read, no account needed
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.
The parts that mattered.
Pulled out of the filing itself, with the figures the company reported.
- 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.
And the other side of it.
The offsets in the same document — the things a summary that only listed the good news would have left out.
- 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.
What they reported.
What the company itself reported, taken out of the document.
- Earnings per share
- $2.75
- Gross margin
- 43.8%
- Operating margin
- 16.3%
- Segment
- Flow Control: Q2 revenue $100.310M, up 5% year over year; segment operating income $24.764M, up from $24.443M, with margin declining to 24.7% from 25.5%.
- Segment
- Industrial Processing: Q2 revenue $143.800M, up 50% year over year, including $33.922M from acquisitions; segment operating income $27.283M, up from $15.486M, with margin rising to 19.0% from 16.1%.
- Segment
- Material Handling: Q2 revenue $68.765M, up 8% year over year; segment operating income $10.853M, up from $9.939M, with margin improving to 15.8% from 15.7%.
What they said about what is next.
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.
The filing reads about the same as the one before it.
What came before.
- 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…
- 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. Read the original on SEC.gov · Educational only. Nothing here is investment advice.
Read the next one first.
We read every filing KAI makes the day it lands, and put it next to what the options market did about it. Members get both, and an alert when a filing arrives.
Cancel anytime · Month to month · Switch tiers whenever