Ceco Environmental (WCE) Q3 2026 Earnings Report

The call was strongly positive, characterized by record revenue, orders, backlog, adjusted EBITDA, margins, and free cash flow; accelerated Thermon integration; debt reduction; raised orders and cash flow guidance; and an ambitious 2027 outlook. Management acknowledged geopolitical, inflationary, supply chain, labor, and seasonal challenges, including delays to some Middle East water projects, but stated that these risks are being monitored and incorporated into planning.

For full year 2026, CECO increased its orders outlook to $2.5 billion or greater, expects year-end backlog to exceed $2.2 billion and raised adjusted free cash flow outlook to approximately 100% of adjusted EBITDA, while maintaining revenue guidance of $1.3 billion to $1.375 billion and adjusted EBITDA guidance of $200 million to $225 million; on a pro forma calendar year basis, 2026 revenue would reach $1.5 billion to $1.6 billion and adjusted EBITDA $255 million to $280 million. For 2027, the outlook is revenue of $2.1 billion to $2.3 billion, adjusted EBITDA of between $475 million and $525 million, orders growth of 20% or more, adjusted free cash flow conversion in the range of 50% to 60% of adjusted EBITDA, and at least 70% of ending 2026 backlog converting to revenue; at the midpoint, CECO expects approximately $2.2 billion of revenue, $500 million of adjusted EBITDA and an adjusted EBITDA margin of approximately 22.7%, with Thermon growth modeled at high single digit and Thermon organic growth potentially adding 1 or 2 percentage points through commercial synergies. Preliminary 2028 expectations are double-digit top line and bottom line growth and adjusted EBITDA margins of approximately 23.5%, with the opportunity pipeline anticipated to grow above $10 billion in the next few quarters.