Ceco Environmental Corp. ((CECO)) has held its Q3 earnings call. Read on for the main highlights of the call.
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CECO Environmental’s recent earnings call for Q3 2025 painted a picture of robust growth and optimism for the future. The company reported record-breaking revenue and backlog figures, alongside a strong order intake, which contributed to a generally positive sentiment. Despite facing challenges such as a seasonal decline in gross margins and increased interest expenses, CECO’s impressive sales pipeline and significant growth in adjusted EBITDA and EPS have bolstered confidence in its future performance.
Record-Breaking Revenue and Growth
CECO Environmental achieved a remarkable milestone in Q3 2025, recording a quarterly revenue of $198 million, which marks a 46% increase year-over-year. Additionally, the company set a new record backlog of $720 million, reflecting a 64% rise from the previous year. This growth underscores CECO’s strong market position and its ability to capitalize on industry opportunities.
Strong Order Intake and Bookings
The company reported an impressive $233 million in new bookings for Q3 2025, representing a 44% increase compared to Q3 2024. With a year-to-date book-to-bill ratio approaching 1.3 and $735 million in orders, CECO’s order intake highlights its robust demand and effective sales strategies.
Adjusted EBITDA and EPS Growth
CECO’s financial performance was further bolstered by a 62% increase in adjusted EBITDA, reaching $23.2 million for the quarter. Adjusted EPS also saw significant growth, rising 86% year-over-year to $0.26, demonstrating the company’s operational efficiency and profitability.
Positive 2026 Outlook
Looking ahead, CECO provided an optimistic initial outlook for 2026, projecting revenue between $850 million and $950 million. The company also anticipates adjusted EBITDA to range from $110 million to $130 million, reflecting continued strong growth and confidence in its strategic initiatives.
Robust Sales Pipeline
CECO’s sales pipeline, valued at over $5.8 billion, indicates substantial future growth potential. This pipeline is expected to support sustainable growth and contribute significantly to the company’s long-term success.
Seasonal Gross Margin Decline
Despite the positive financial results, CECO experienced a decrease in gross profit margins by 70 basis points year-over-year for Q3. This decline was attributed to adverse project mix and seasonal dynamics, which the company aims to address in future quarters.
Interest Expense Impact
Higher interest expenses partially offset the gains in adjusted EPS, reflecting the impact of debt servicing on CECO’s financial performance. This highlights the importance of managing financial costs as the company continues to expand.
Guidance and Future Expectations
CECO Environmental provided robust guidance for the remainder of 2025 and an initial outlook for 2026. The company reaffirmed its full-year 2025 revenue guidance of $725 million to $775 million, representing a 35% increase at the midpoint compared to the previous year. Adjusted EBITDA guidance for 2025 is maintained at $90 million to $100 million, with free cash flow expected to be around 60% of adjusted EBITDA. For 2026, CECO targets revenue between $850 million and $950 million and adjusted EBITDA between $110 million and $130 million, projecting significant growth and margin expansion.
In summary, CECO Environmental’s Q3 2025 earnings call reflected a strong performance and a positive outlook for the future. The company’s record-breaking revenue and backlog, coupled with robust order intake and a promising sales pipeline, position it well for continued growth. Despite some challenges, CECO’s strategic initiatives and financial guidance underscore its commitment to delivering value to shareholders and maintaining its upward trajectory.