- Q4 Revenue Growth: Record $286 million revenue, up 11% YoY driven by acquisitions and a record aftermarket parts business.
- Full-Year Revenue: $1.05 billion in fiscal 2025, with 3% growth YoY despite macroeconomic challenges.
- Adjusted EBITDA Margin: 20.3% in Q4 2025, up 11% YoY, reflecting improved operational efficiency.
- 2026 Guidance: Revenue of $1.16–$1.185 billion, adjusted EPS of $12.53–$12.88 (up from prior guidance) excluding amortization adjustments.
- Backlog & Capital Orders: $288 million backlog (60% capital), with capital equipment orders expected to stabilize at $290–$300 million in 2026.
Segment Performance and Outlook
The company's consumables business saw increased demand, with Flow Control at 73% of revenues, Industrial at 76%, and Material Handling at 53%. The backlog currently stands at $288 million, with 60% capital and 40% parts. Kadant is cautious with its guidance for 2026 due to uncertainty caused by tariffs and geopolitical volatility, expecting flat to 3% organic growth. The aftermarket business has outperformed expectations, and the company is seeing a focus on parts and services from European peers.
Valuation and Growth Prospects
With a P/E Ratio of 37.78 and an EV/EBITDA of 17.81, Kadant's valuation suggests a premium for its growth prospects. The company's adjusted EPS guidance for 2026 is $10.40 to $10.75, and when adjusted for intangible amortization expense, the range becomes $12.53 to $12.88. Analysts estimate next year's revenue growth at 12.1%. Kadant's ROIC is 7.39%, and ROE is 11.26%, indicating a decent return on capital and equity. The Net Debt/EBITDA ratio is -0.59, highlighting the company's net cash position.
Operational Highlights and Strategic Focus
Kadant's management highlighted the booming data center construction market, which is driving demand for materials such as aggregate, sand, and concrete. The company's material handling group is well-positioned to benefit from this trend. Additionally, the OSB segment within Industrial Process continues to grow, finding new applications and uses for the product. Kadant's focus on creating value for its clients by understanding their operations and helping them increase throughputs and reduce inputs remains a key strategic focus.