Esab Corp.: Q2 FY2026 earnings call

What management said about Q2 FY2026, from the documents filed with the SEC on 6 August 2026: press release. Guidance figures: 3 raised, 1 lowered, 2 kept. The quarter’s numbers.

Read the filing

Key takeaways

• Sales rose 12.9%, organic 2.5%: Net sales were $807.6 million, up 12.9%. Core organic growth was 2.5%. Acquisitions added $55.5 million (7.8%) and currency added $18.6 million (2.6%). Source
• Core adjusted net income down 1%: Core adjusted net income was $83 million, or $1.33 diluted EPS, against $1.36 a year earlier. GAAP diluted EPS from continuing operations was $0.54, against $1.12. The reconciliation shows $33.4 million on the attributable line. Source
• Core margin fell 90 basis points: Core adjusted EBITDA was $150 million, up 8.0%. The core margin was 19.5%, down 90 basis points. Management attributed the decline to transitory price/cost neutrality and targeted commercial investment. Source
• Eddyfi closed one month early: The Eddyfi acquisition closed one month ahead of schedule, according to management, which called it a step in extending workflow solutions. Source
• Long-term debt rose to $2.39 billion: Long-term debt was $2,391.4 million at July 3, against $1,232.5 million at December 31, 2025. Six-month proceeds from senior notes were $1,000.0 million. Source
• Middle East described as challenging: Management described a challenging environment in the Middle East and said performance exceeded its expectations. Source

“ESAB delivered a record second quarter, with a solid return to organic growth in both regions, underscoring the strength of our platform even in a challenging macro environment.”

Shyam P. Kambeyanda, ESAB President and CEO

Guidance

What changed from last quarter

• Guidance raised: Core net sales growth range raised to 11.0% to 14.0% from 6.0% to 9.0%. Source
• Guidance raised: Core adjusted EBITDA range raised to $615 million to $625 million from $575 million to $595 million. Source
• Guidance lowered: Core adjusted EPS range lowered to $5.40 to $5.50 from $5.70 to $5.90. Source
• Guidance kept: Organic growth range and currency impact range were kept at 2.0% to 4.0% and 0.0% to 1.0%. Source
• New: Eddyfi acquisition closed one month ahead of schedule. The first-quarter release had said it was expected to close mid-year. Source
• New: Mandatory convertible preferred stock (MCPS) with $175.0 million aggregate liquidation preference was issued in June 2026. Source

Results and growth drivers

• Sales rose 12.9%, organic 2.5%: Net sales were $807.6 million, up 12.9%. Core organic growth was 2.5%. Acquisitions added $55.5 million (7.8%) and currency added $18.6 million (2.6%). Source
• Core adjusted net income down 1%: Core adjusted net income was $83 million, or $1.33 diluted EPS, against $1.36 a year earlier. GAAP diluted EPS from continuing operations was $0.54, against $1.12. The reconciliation shows $33.4 million on the attributable line. Source
• Operating income fell on charges: Operating income was $78.7 million, against $109.1 million. Restructuring charges were $18.3 million, against $1.4 million. SG&A rose to $210.2 million from $155.6 million. Source
• Interest and tax lines moved: Interest expense and other, net rose to $30.6 million from $21.0 million. Income tax expense was $11.7 million, against $18.3 million. Net income from continuing operations was $36.4 million. Source
• Six-month sales up 11.4%: Six-month net sales were $1,553.2 million, up 11.4%. Six-month core organic growth was 0.7%. Source

Segments and regions

• Americas organic growth reached 4.9%: Americas net sales were $315.9 million, up 11.7%, with organic growth of 4.9%. Americas core adjusted EBITDA was $64.0 million at a 20.3% margin, against 20.1% a year earlier. Source
• EMEA and APAC organic growth 0.9%: EMEA and APAC net sales were $491.7 million, up 13.6%, with organic growth of 0.9%. Core adjusted EBITDA margin was 19.0%, against 20.6%, on core adjusted EBITDA of $85.5 million. Source
• Russia excluded from core measures: Core measures exclude Russia. Russia net sales were $41.4 million in the quarter, against $37.1 million a year earlier, and Russia adjusted EBITDA was $1.8 million against $5.0 million. Source

“Despite a challenging environment in the Middle East, our performance exceeded expectations, with particular strength in North America and Asia and a resilient Europe.”

Shyam P. Kambeyanda, ESAB President and CEO

Costs, margins and pricing

• Core margin fell 90 basis points: Core adjusted EBITDA was $150 million, up 8.0%. The core margin was 19.5%, down 90 basis points. Management attributed the decline to transitory price/cost neutrality and targeted commercial investment. Source
• Acquisition-related charges rose: Acquisition-related charges were $41.3 million, against $21.6 million. They include transaction and integration costs, intangible amortization and inventory step-up. Source
• Transaction costs rose in quarter: Transaction, diligence and integration expenses were $24.8 million in the quarter and $35.1 million for six months. Source
• Performance option grant added expense: A one-time, non-cash performance option award granted in June and July 2026 added $0.7 million of compensation expense in the quarter. Source

Acquisitions and Eddyfi closing

• Eddyfi closed one month early: The Eddyfi acquisition closed one month ahead of schedule, according to management, which called it a step in extending workflow solutions. Source
• Higher-growth, higher-margin enterprise strategy: Management described the acquisition as a defining step in extending workflow solutions into new adjacencies and in shaping ESAB into a higher-growth, higher-margin enterprise. Source
• Bridge fees tied to Eddyfi: The six-month figures include $4.8 million of bridge loan commitment fees related to the Eddyfi Technologies acquisition. Source
• Acquisition spending in six months: Acquisitions, net of cash received, used $1,469.4 million in the six months, against $86.3 million a year earlier. Source
• Goodwill and intangibles increased: Goodwill was $2,746.2 million and intangible assets were $1,372.1 million, against $1,949.7 million and $673.0 million at December 31, 2025. Source

“Our performance this quarter reaffirms my full confidence in achieving our long-term financial targets as we continue to focus on organic growth, margin expansion, and deleveraging the business to create sustainable, long-term shareholder value.”

Shyam P. Kambeyanda, ESAB President and CEO

Cash flow and capital spending

• Quarter free cash flow lower, six-month higher: Adjusted free cash flow was $41.4 million in the quarter, against $46.4 million, and $80.9 million for six months, against $76.8 million. Source
• Capital spending nearly doubled: Capital spending was $17.7 million in the quarter, against $9.2 million, and $31.4 million for six months, against $16.5 million. Source
• Operating cash flow for six months: Operating cash flow was $33.4 million in the quarter, against $46.6 million, and $80.3 million for six months, against $82.0 million. Source

Debt, equity and shareholder returns

• Long-term debt rose to $2.39 billion: Long-term debt was $2,391.4 million at July 3, against $1,232.5 million at December 31, 2025. Six-month proceeds from senior notes were $1,000.0 million. Source
• Cash fell from April balance: Cash was $217.5 million at July 3, against $185.9 million at December 31. The first-quarter release reported $1,004.8 million at April 3, 2026. Source
• Equity raised through preferred and common: Net proceeds were $171.1 million from the mandatory convertible preferred stock and $139.8 million from common stock issued in the six months. Source
• Preferred pays 6.50% cumulative dividend: The preferred stock pays cumulative dividends at 6.50% on a $1,000 liquidation preference. It converts around June 2029 into between 7.1806 and 8.2576 common shares, subject to adjustment. Source
• Dividends paid rose in six months: Payment of dividends in the six months was $12.2 million, against $9.7 million a year earlier. Source

Demand, footprint and workforce

• Middle East described as challenging: Management described a challenging environment in the Middle East and said performance exceeded its expectations. Source
• Organic growth returned in both regions: Management said organic growth returned in both regions, underscoring platform strength despite a challenging macro environment. Source
• North America and Asia led: Management named North America and Asia as areas of particular strength and described Europe as resilient. Source
• Headcount about 11,300 associates: The company said it employs about 11,300 associates, up from about 10,300 in the first-quarter release, and serves customers in about 150 countries. Source

Coming up, as management said on 6 August 2026

• Logistics and commodity cost mitigation: Management expects to mitigate transitory cost increases from logistics and commodities over the next few quarters. Source
• Audio and slides available until next call: Audio of the call and the slide presentation will be archived on the website and remain available until the next quarterly call. Source

Risks management discussed

• External: Management named a challenging environment in the Middle East as a condition of the quarter. Source
• Operational: Price/cost neutrality and commercial investment for equipment growth reduced the core margin to 19.5%. Source
• Financial: Long-term debt rose to $2,391.4 million; management named deleveraging as a continuing focus. Source

Earlier plans management reported on

• Ahead: The first-quarter release expected Eddyfi to close mid-year. The company says it closed one month ahead of schedule. Source
• Ahead: Management said second-quarter performance exceeded its expectations despite a challenging Middle East environment. Source
• Not stated: Management said it is fully confident in achieving its long-term financial targets. Source

Other quarters

• Q1 FY2026 earnings call
• Q4 FY2025 earnings call
• Q3 FY2025 results
• Q2 FY2025 results

Summarised with AI from the documents the company filed with the SEC. Every point is checked against the filing before it is shown: management’s own words word for word, figures against the line or table row they come from. A point that fails the check is left out. Source opens the filing at that line.