Kadant Delivers Record Third Quarter 2026 Results, with Revenue Growing 15% and Adjusted EBITDA Rising 24%

Kadant Inc. (NYSE: KAI), a global supplier of technologies and engineered systems that drive sustainable industrial processing, today announced strong financial results for the third quarter ended October 3, 2026, delivering record revenue, adjusted earnings per share, Adjusted EBITDA and operating cash flow.

Revenue increased 15% year over year to a record $313.2 million, compared with $271.6 million in the third quarter of 2025. The increase reflected organic revenue growth of 4% and an 11% contribution from acquisitions.

Net income attributable to Kadant increased 27% to $35.1 million, compared with $27.7 million in the prior-year quarter. Diluted earnings per share rose 26% to $2.96, while adjusted diluted EPS increased 21% to a record $3.64.

Adjusted EBITDA increased 24% to a record $71.7 million, compared with $58.0 million in the third quarter of 2025. Adjusted EBITDA margin improved to 22.9%, compared with 21.4% in the prior-year period.

The company also reported record operating cash flow of $62.9 million, representing an increase of 33% year over year.

Third Quarter 2026 Financial Highlights

• Revenue: $313.2 million, up 15% year over year.

• Organic revenue growth: 4%, excluding acquisitions and foreign currency translation.

• Bookings: $291.1 million, up 22% year over year.

• Net income attributable to Kadant: $35.1 million, up 27%.

• GAAP diluted EPS: $2.96, up 26%.

• Adjusted diluted EPS: $3.64, up 21%, reaching a quarterly record.

• Adjusted EBITDA: $71.7 million, up 24%, reaching a quarterly record.

• Adjusted EBITDA margin: 22.9%, compared with 21.4% in the prior-year quarter.

• Operating cash flow: $62.9 million, up 33%.

• Free cash flow: $58.1 million, up 32%.

Strong Revenue Growth and Record Earnings Performance

Kadant's third-quarter results reflected solid demand across its business portfolio, strong aftermarket activity and continued execution of its operational improvement initiatives.

Revenue increased by $41.6 million to $313.2 million, compared with $271.6 million in the third quarter of 2025. Acquisitions contributed $31.0 million of incremental revenue, while favorable foreign currency translation contributed $0.6 million.

Organic revenue increased 4%, demonstrating underlying growth across the company's operations.

Bookings increased 22% to $291.1 million, compared with $238.4 million in the prior-year quarter. Organic bookings grew 10%, excluding a 12% contribution from acquisitions.

Parts and consumables continued to represent a significant portion of the business, accounting for 70% of third-quarter revenue.

Although consolidated gross margin decreased 50 basis points to 44.7%, Adjusted EBITDA margin expanded to 22.9%, reflecting improved operating profitability and the benefits of operational execution.

Segment Performance

Kadant delivered mixed but generally positive operating performance across its three business segments, with Industrial Processing and Flow Control contributing significantly to revenue and earnings growth.

Flow Control

Third-quarter revenue increased 8% to $102.4 million, compared with $94.8 million in the prior-year period. Adjusted EBITDA increased to $31.4 million from $25.7 million, while Adjusted EBITDA margin improved to 30.7% from 27.1%.

The segment benefited from stronger operating performance and continued demand for its aftermarket products and services.

Industrial Processing

Industrial Processing delivered strong growth, with revenue increasing 35% to $143.4 million, compared with $106.4 million in the third quarter of 2025.

Adjusted EBITDA increased 39% to $37.5 million, compared with $27.0 million in the prior-year quarter. Adjusted EBITDA margin improved to 26.1% from 25.4%.

Acquisitions contributed meaningfully to the segment's growth, alongside positive organic bookings and revenue performance.

Material Handling

Material Handling reported revenue of $67.4 million, compared with $70.3 million in the prior-year quarter. Adjusted EBITDA was $14.9 million, compared with $16.4 million in the third quarter of 2025.

The segment continued to benefit from its established customer relationships and aftermarket business, although lower revenue affected its overall performance.

Strong Cash Flow Generation

Kadant continued to strengthen its cash generation capabilities during the third quarter.

Operating cash flow increased 33% to a record $62.9 million, compared with $47.3 million in the corresponding period of 2025.

Free cash flow increased 32% to a record $58.1 million, compared with $44.1 million in the prior-year quarter.

For the first nine months of 2026, operating cash flow reached $138.3 million, compared with $110.6 million in the same period last year. Free cash flow increased to $119.4 million from $99.6 million.

These results reflect the company's continued focus on operational efficiency, working capital management and disciplined capital allocation.

Management Commentary

Jeffrey L. Powell, Chief Executive Officer of Kadant, commented:

"We delivered an exceptional third quarter, achieving record results across multiple key financial metrics, including revenue, adjusted EPS, and cash flow, while generating strong bookings growth across all three operating segments. The strength of our aftermarket business, combined with disciplined execution and operational excellence, positions us well for a strong finish to the year."

Looking ahead, Mr. Powell added:

"Looking ahead to the remainder of the year, we expect aftermarket demand to remain stable and project activity to show some improvement, although the timing of large capital orders continues to be influenced by economic and geopolitical uncertainty.

"Our strong year-to-date performance positions us to deliver a record-setting 2026."

Kadant Raises Full-Year 2026 Adjusted EPS Guidance

Following its strong year-to-date performance, Kadant revised its full-year 2026 financial outlook, increasing its revenue, GAAP EPS and adjusted EPS expectations at the upper end of its previous guidance.

The company now expects:

• Full-year 2026 revenue: $1.195 billion to $1.210 billion, compared with previous guidance of $1.190 billion to $1.210 billion.

• Full-year 2026 GAAP EPS: $9.88 to $10.03, compared with previous guidance of $9.78 to $10.03.

• Full-year 2026 adjusted EPS: $12.58 to $12.73, compared with previous guidance of $12.43 to $12.68.

For the fourth quarter of 2026, Kadant expects:

• Revenue: $287 million to $302 million.

• GAAP EPS: $2.01 to $2.16.

• Adjusted EPS: $2.67 to $2.82.

The adjusted EPS guidance excludes $2.19 per share of intangible amortization expense and $0.51 per share of acquisition-related costs for the full year.

Management expects stable aftermarket demand and some improvement in project activity, while acknowledging that economic and geopolitical uncertainty continues to influence the timing of large capital equipment orders.

Business Outlook and Strategic Priorities

Kadant remains focused on delivering sustainable growth through its aftermarket business, operational excellence, innovation and disciplined execution.

The company's priorities include strengthening customer relationships, expanding its aftermarket offerings, improving manufacturing efficiency and pursuing strategic acquisitions that complement its existing technology portfolio.

With record bookings, strong cash generation and improved financial guidance, Kadant expects to maintain positive momentum through the remainder of fiscal 2026.