CECO Environmental Corp. (CECO) Q3 2025 Earnings Call Transcript
Backlog $720 million, up approximately $280 million or 64% year-over-year. Reasons for change: Robust order intake of $233 million in new bookings, up 44% versus Q3 of 2024, driven by demand in power generation and energy transition sectors.
Quarterly Revenue $198 million, up 46% year-over-year. Reasons for change: Strong demand in power, natural gas infrastructure, semiconductor, and industrial water applications, as well as contributions from recent acquisitions.
Adjusted EBITDA $23.2 million, up 62% year-over-year. Reasons for change: Sales growth and improving G&A cost profile, allowing for EBITDA margin expansion.
Free Cash Flow Approximately $19 million in Q3, a strong rebound from the first half of 2025. Reasons for change: Improved working capital position and operational cash generation.
Adjusted EPS $0.26, up approximately 86% year-over-year. Reasons for change: Higher volumes, operational excellence efforts, and G&A expense management, partially offset by higher interest expense.
Gross Profit Margin Approximately 33%, down 70 basis points year-over-year. Reasons for change: Adverse project mix and a medium-sized project closeout with dilutive gross margins.
Orders $233 million in Q3, up 44% year-over-year. Reasons for change: Strong demand in power, natural gas infrastructure, semiconductor, and industrial water applications.
Net Debt $186 million, with a net debt-to-EBITDA leverage ratio of approximately 2.3x. Reasons for change: Cash generated from operations and working capital initiatives.
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CECO Environmental to Participate in 28th Annual Needham Growth Conference
- Conference Participation: CECO Environmental Corp. will participate in the 28th Annual Needham Growth Conference on January 14, 2026, showcasing its leadership in environmental and industrial solutions, which is expected to attract investor attention and enhance the company's visibility.
- Investor Relations: The presentation will be available on the company's website in the Investor Relations section, aimed at enhancing interaction with investors through transparent information disclosure and fostering relationships with potential investors.
- Company Background: Founded in 1966 and headquartered in Addison, Texas, CECO focuses on providing environmental and industrial equipment protection solutions across industrial air, water, and energy transition markets, demonstrating its diversified business presence globally.
- Technological Innovation: CECO is committed to improving air quality and optimizing the energy value chain through its Engineered Systems and Industrial Process Solutions, aligning with the growing global demand for sustainable technologies.
Loomis Sayles Small Cap Value Fund Reports 6.21% Q3 Return
- Strong Market Performance: Driven by easing tariff concerns and a pro-growth budget passed by Congress, U.S. equities performed well in Q3 2025, with the Loomis Sayles Small Cap Value Fund returning 6.21%, which lagged behind the Russell 2000 Value Index's 12.60% return.
- CECO's Outstanding Performance: CECO Environmental Corp. (NASDAQ:CECO) achieved a one-month return of 20.40% and a remarkable 113.27% increase over the past 52 weeks, reflecting strong market demand in industrial air quality and water treatment solutions.
- Portfolio Dynamics: The Loomis Sayles Small Cap Value Fund added CECO to its portfolio in September 2023 when it was relatively under the radar, but the turnaround strategy implemented by the new management team has begun to yield results, driving both organic growth and acquisitions.
- Future Outlook: Despite CECO reporting strong earnings and a third consecutive quarter of exceptional incoming orders, Loomis Sayles believes that certain AI stocks present greater upside potential, leading them to reduce their position size when share prices were significantly above their original purchase price.
