Want to see FSS full AI Analyst Report?
Federal Signal (FSS) Q3 2026 Earnings Report
FSS Q3 2026 EPS Results
- Actual EPS
- $1.34
- Consensus EPS
- $1.32
- Beat/Miss
- Beat by +$0.03
- One Year Ago EPS
- $1.14
FSS Q3 2026 Revenue Results
- Actual Revenue
- $655.50M
- Expected Revenue
- $661.61M
- Beat/Miss
- Missed by -$6.11M
- YoY Revenue Growth
- +18.11%
Earnings Announcement Details
- Quarter
- Q3 2026
- Date
- 10/29/2026
- Time
- Before Open
- Conference Call
- Thursday, October 29, 2026
Federal Signal's next earnings date is estimated for March 3, 2027, based on past reporting schedules.
Q3 2026 Earnings Call Audio
Q3 2026 Earnings Slide Deck
Q3 2026 Earnings Call Summary
The call was strongly positive overall. Record third-quarter financial results, 33% order growth, strong ESG performance, robust cash generation, successful acquisition integration, raised adjusted EPS guidance, and confidence in another record year in 2027 significantly outweighed the limited negatives. The main challenges were lower gross and ESG margins, a year-over-year decline in SSG orders and backlog, delayed third-party Labrie deliveries, moderated Q3 organic ESG sales growth, and expected steel inflation.
For 2026, Federal Signal raised full-year adjusted EPS outlook to $5.20 to $5.32, narrowed full-year net sales outlook to between $2.61 billion and $2.64 billion, and maintained CapEx outlook of $45 million to $55 million; fourth quarter net sales are implied at $659 million to $689 million, representing year-over-year growth of 10%-15%, of which about half is expected to be organic, while the fourth quarter effective tax rate is expected to be approximately 25%, excluding any discrete tax items. Through cycles, the company targets annual low double-digit top-line growth split roughly evenly between inorganic and organic growth, a targeted annual mid to high single-digit organic net sales goal, with each of pricing, end market volume growth, and strategic initiatives expected to contribute 1-3 percentage points of net sales growth in any given year, and mid-single digit annual net sales growth contribution from M&A on average over a multi-year period going forward; it also continues to target 100% cash conversion and expects cash conversion north of 100%, $15 million to $20 million of annual New Way synergies by the end of 2028, SSG organic year-over-year order growth in Q4, and another record year in 2027.
- Record Third-Quarter Consolidated ResultsFederal Signal reported a record-setting third quarter, with net sales of $656 million, up 18% year over year; operating income of $111.4 million, up 19%; adjusted EBITDA of $140.4 million, up 21%; adjusted EBITDA margin of 21.4%, up 50 basis points; GAAP diluted EPS of $1.29, up 16%; and adjusted EPS of $1.34, up 18%.
- Strong Order Intake and BacklogThird-quarter orders increased 33% year over year to $620 million, while ending backlog was $967 million. Excluding the impact of third-party Labrie refuse orders received in Q3 last year, orders increased $158 million, or 34%, year over year.
- Environmental Solutions Group GrowthESG net sales increased 21% year over year to $564 million, operating income rose 19% to $101.4 million, and adjusted EBITDA increased 20% to $126.4 million. ESG orders increased 43% year over year, including high teens organic growth.
- Strong Aftermarket and Rental PerformanceESG aftermarket revenue increased 21% year over year, driven primarily by higher demand for aftermarket parts, higher used equipment sales, and rental income growth. Rental income increased 24%, led by Safe Digging trucks and combination sewer cleaners, and aftermarket represented approximately 26% of ESG revenue in Q3.
- Safety and Security Systems Profitability ImprovementSSG net sales increased 2% year over year to $92 million, operating income increased 4% to $22.8 million, adjusted EBITDA increased 4% to $23.9 million, and adjusted EBITDA margin improved 50 basis points to 26.1%, which was in the upper half of the recently raised 22%-28% target range.
- Robust Cash Generation and Balance Sheet FlexibilityOperating cash flow was $91 million in the quarter, up 50% year over year, and $306 million for the first nine months, up 94%. The company paid down approximately $34 million of debt, ended the quarter with $347 million of net debt and $1.04 billion of credit-facility availability, and stated that its financial position provides flexibility for organic investment, acquisitions, dividends, and share repurchases.
- Capital Returns ContinuedThe company paid $9.2 million of dividends during the quarter, representing $0.15 per share, announced a similar $0.15 per share fourth-quarter dividend, and repurchased approximately $5 million of shares, or around 44,000 shares at an average price of approximately $114 per share.
- Continued Aftermarket ExpansionFederal Signal opened a new branch in Quebec City during the quarter, its 20th new service-center location added since 2019. Management stated that additional service-center footprint opportunities remain in Canada and certain U.S. regions, and that the locations support parts penetration, equipment uptime, and direct sales across multiple vehicle-based businesses.
- Favorable End-Market DemandManagement said underlying fundamentals remain favorable, citing increased adoption of Safe Digging trucks, strong demand for North American utility infrastructure investment, tailwinds from North American mega projects and high commodity prices in metal extraction support, stable funding mechanisms for publicly funded end markets, and strong demand for aftermarket parts and services.
- Strategic Acquisition of Global Vacuum SystemsFederal Signal completed the acquisition of Global Vacuum Systems for an initial payment of approximately $29 million. The acquisition adds code liquid vacuum tank trucks, an 87,000-square-foot Texas manufacturing facility acquired for approximately $15 million, incremental manufacturing capacity, and stated cross-selling and aftermarket opportunities across the company's vacuum truck platform.
- Progress Across Recent AcquisitionsManagement said New Way and Mega exceeded internal margin and profit contribution expectations every quarter of 2026. At Mega, the company merged the Mega and Ground Force sales channels and is pursuing efficiency opportunities in manufacturing, operations, freight, procurement, and aftermarket parts. New Way's planned annual synergies remain $15 million to $20 million by the end of 2028, split roughly between cost and revenue.
- Acquisition Pipeline and Long-Term Growth FrameworkGlobal Vacuum Systems is Federal Signal's fifth acquisition completed within the last two years. The company continues to target mid-single-digit annual net sales growth from M&A on average over a multi-year period, while its through-cycle framework targets low double-digit annual top-line growth split roughly evenly between inorganic and organic growth.
- Raised Adjusted EPS GuidanceThe company raised its full-year 2026 adjusted EPS outlook to $5.20 to $5.32 from the prior range of $5.12 to $5.30, citing third-quarter performance, current backlog, and continued execution against strategic growth initiatives.
- Strong Fourth-Quarter and 2027 OutlookThe updated full-year revenue outlook implies fourth-quarter revenue of $659 million to $689 million and year-over-year Q4 growth of 10%-15%, with approximately half expected to be organic. Management expects SSG organic year-over-year order growth in Q4 and said it is well positioned to achieve another record year in 2027.
- Capacity to Support GrowthExcluding the Global transaction, management said current capacity utilization is around the mid-70% range. The company also has excess capacity from the New Way transaction, is building two warehouses at existing facilities, and intends to use Global's manufacturing facility to support vacuum truck growth for 2027 and 2028.
- Broad-Based Product and Market Share MomentumManagement cited strength across vacuum trucks, aftermarket, sewer cleaners, metal extraction, road marking, hydros, Safe Digging trucks, and other specialty equipment. It also reported progress in integrating sales teams across the road-marking businesses and identified new customer wins from conquest accounts.
- Positive New Way Integration and Product DevelopmentNew Way delivered a sequential pickup in orders in Q3 from Q2. Management said the refuse industry is expected to normalize in 2027 and grow thereafter, while the company is fast-tracking new product development, pursuing a multi-quarter Canadian penetration strategy, and reporting early customer success and positive reception.
- Pricing Remained Net Price-Cost PositivePricing was approximately 3% to 3.5% in the quarter and was net price-cost positive in both absolute dollars and on a slightly margin-accretive year-over-year basis. Management said pricing actions are being considered in response to expected steel inflation and that freight is often passed through to customers.
FSS Earnings History
| Report Date | Fiscal Quarter | Forecast / EPS | Last Year's EPS | EPS YoY Change | Press Release |
|---|---|---|---|---|---|
| Mar 03, 2027 | 2026 (Q4) | 1.30- | 1.16 | ― | ― |
| Oct 29, 2026 | 2026 (Q3) | 1.311.34 | 1.14 | 17.54% (+0.20) | |
| Jul 30, 2026 | 2026 (Q2) | 1.291.42 | 1.17 | 21.37% (+0.25) | |
| Apr 29, 2026 | 2026 (Q1) | 0.881.18 | 0.76 | 55.26% (+0.42) | |
| Feb 25, 2026 | 2025 (Q4) | 1.071.16 | 0.87 | 33.33% (+0.29) | |
| Oct 30, 2025 | 2025 (Q3) | 1.081.14 | 0.88 | 29.55% (+0.26) | |
| Jul 30, 2025 | 2025 (Q2) | 1.061.17 | 0.95 | 23.16% (+0.22) | |
| Apr 30, 2025 | 2025 (Q1) | 0.730.76 | 0.64 | 18.75% (+0.12) | |
| Feb 26, 2025 | 2024 (Q4) | 0.870.87 | 0.74 | 17.57% (+0.13) | |
| Oct 31, 2024 | 2024 (Q3) | 0.830.88 | 0.71 | 23.94% (+0.17) |
The table shows recent earnings report dates and whether the forecast was beat or missed. See the change in forecast and EPS from the previous year.
