Earnings Recap — Q2 FY2026
CY Q3 2026 · Reported August 6, 2026 · Beat 6 of last 7 quarters
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ESAB's continued shift toward equipment and automation, now over 50% of revenue, underscores the broader AI infrastructure buildout's demand for advanced fabrication and inspection technologies. The Eddyfi acquisition adds high-margin inspection and monitoring capabilities that support mission-critical infrastructure, aligning with secular tailwinds in energy, defense, and aerospace. Management's confidence in back-half growth and margin expansion signals sustained investment in the industrial base that underpins AI-driven data center and energy infrastructure projects.
ESAB delivered record total core sales and adjusted EBITDA in Q2, with organic growth returning to both segments. The Eddyfi acquisition closed ahead of schedule, adding a high-margin inspection and monitoring business. The Americas grew 12% to $316 million with 5% organic growth, while EMEA & APAC grew 14% to $450 million with 1% organic growth despite Middle East headwinds. Adjusted EBITDA margin declined 90 bps year-over-year due to transitory price/cost neutrality and targeted commercial investments in equipment growth. The company raised its full-year outlook to incorporate Eddyfi.
Management raised full-year 2026 guidance to total core sales of approximately $3.0-$3.1 billion, assuming organic growth of 2%-4% and acquisitions contributing ~9 points. Adjusted EBITDA guidance was raised to $615-$625 million, including 7 months of Eddyfi, with ~$15 million of transitory price/cost drag from logistics and commodity inflation. Adjusted EPS guidance of $5.40-$5.50 reflects Eddyfi dilution, with management expecting Eddyfi to be slightly dilutive to neutral in Q4 and confidently positive in 2027. Pricing is expected to improve sequentially, with volumes flat to slightly better. The company plans to continue investing in equipment growth and expects strong second-half cash generation with ~90% free cash flow conversion.
“ESAB delivered a strong second quarter, headlined by record total core sales and adjusted EBITDA and a return to organic growth in both segments.”
on Q2 performance
“The ESAB you see today is a transformed enterprise with equipment now representing over 50% of our revenue and powering our ability to accelerate organic growth.”
on Portfolio transformation
“We expect to continue that core growth trend into Q3 and Q4.”
on Growth outlook
Could you offer a little more color on how orders progressed through Q2 and into Q3 and how your team is thinking about organic growth in the back half?
We were very happy with how things progressed from Q1 to Q2, and that trend has continued into Q3. We expect to continue that core growth trend into Q3 and Q4, supported by EWM initiatives, equipment growth, and standard automation orders shipping in the second half.
Has your pricing outlook changed versus the last time we spoke? And does that mean your volume outlook is now weaker?
There's a little bit of uncertainty out there. Sequentially, pricing gets slightly better, and we're flat to slightly better on organic volume as we go through the second half. We feel confident about where we've guided.
Can you tell us exactly what the contribution from Eddyfi is in your updated guidance?
We increased adjusted EBITDA by $35 million. We said we had $15 million of price cost headwinds and investments, so it's approaching $50 million from Eddyfi.