Enpro (EP9) Q2 2026 Earnings Report

The call conveyed strong operational momentum: meaningful top-line growth, notable margin expansion (particularly in AST), raised full-year guidance, solid free cash flow and successful integration of recent acquisitions. Headwinds were limited but material—commercial vehicle softness, regional pockets of weakness in Europe and increased legacy environmental reserves and corporate expenses. Overall the positives (strong revenue, EBITDA growth, raised guidance, AST backlog and healthy balance sheet) substantially outweigh the identified lowlights.

Enpro raised full‑year 2026 guidance, now expecting total sales growth of 14%–16% (up from 10%–14%), adjusted EBITDA of $330M–$340M (up from $315M–$330M) and adjusted diluted EPS of $9.30–$9.80 (up from $8.85–$9.50), using a 25% normalized tax rate and 21.4M fully diluted shares; Q2 revenue was $338.8M (+17.6% YoY) with adjusted EBITDA $86.9M (25.6% margin). Management said the majority of the raise is AST‑driven, with AST now expecting ~20% YoY growth in H2 and segment revenue growth and adjusted EBITDA margin approaching 25% exiting the year (AST long‑term target: high single‑ to low double‑digit organic growth and ~30% adjusted EBITDA margin ±250 bps by 2030). Sealing Technologies is expected to deliver high‑single‑digit organic growth in H2 excluding AlpHa/Overlook (the two acquisitions are forecast to contribute $60M–$65M in 2026), with Sealing margins at the high end of its long‑term 30% ±250 bps target. Balance sheet and cash metrics include >$60M YTD free cash flow, YTD capex + capitalized software ~ $30M (2026 capex guidance raised to $60M–$65M from ~ $50M), $80M revolver paydown bringing trailing‑12m net leverage to ~1.6x, net debt ~ $500M, a $0.32/share Q2 dividend ($6.9M) and a $50M repurchase authorization.