Key Highlights

• CECO Environmental reported Q2 2026 Revenue of $285 million, up 54 percent year-over-year, with adjusted EBITDA of $40.2 million, up 73 percent, beating the estimate by 0.97 percent.

• Second quarter orders reached a record $799 million, up 191 percent year-over-year, with quarter-ending Backlog of $1.82 billion, up 164 percent.

• The company captured approximately $13 million of annualized net adjusted EBITDA savings from the Thermon Acquisition in the first 60 days, roughly one-third of its $40 million synergy target.

• Management raised full-year 2026 revenue guidance to $1.3 billion-$1.375 billion and adjusted EBITDA guidance to $200 million-$225 million.

Record Orders and Backlog Following Thermon Acquisition

CECO Environmental Corp. ( Nasdaq :CECO) reported second quarter revenue of $285 million, up 54 percent year-over-year, including one full month of results from Thermon following the acquisition's June 1 close. CECO Environmental provides engineered environmental and industrial technology solutions spanning air quality, water treatment, and thermal management across power generation, semiconductor, and industrial end markets. Adjusted EBITDA reached $40.2 million, a company record, with margins expanding approximately 150 basis points to 14.1 percent, marking the company's first quarter with mid-teens EBITDA margins.

Orders reached a record $799 million for the quarter, up 191 percent year-over-year, driving quarter-ending backlog to $1.82 billion, up 164 percent and 76 percent sequentially. The trailing twelve-month book-to-bill ratio stood at 2.0 times, with management emphasizing that backlog is supported by legally binding purchase orders rather than speculative reservations, and that the company's de-booking rate has remained below half of one percent.

Thermon Integration Progresses Ahead of Synergy Targets

CECO captured approximately $13 million of annualized net adjusted EBITDA synergies from the Thermon acquisition within the first 60 days, representing roughly one-third of its total $40 million target, driven primarily by public company cost reductions in headcount and board-related services. Management said it expects to capture $17 million to $20 million of annualized savings by the end of the first year of the transaction, representing 45 to 50 percent of the total target, while incurring approximately $21 million of year-to-date costs to achieve those savings, largely tied to change-in-control provisions for former Thermon officers.

Commercial cross-selling opportunities have emerged more quickly than cost synergies in some respects, with teams identifying more than 100 commercial opportunities and already incorporating more than $500,000 worth of Thermon heat trace solutions into existing CECO power generation projects. Management characterized this as early-stage partner selling built on CECO's existing project visibility rather than traditional cross-selling, and said the dollar figures involved in any individual project remain modest relative to CECO's overall backlog even as the number of qualifying opportunities continues to grow.

Guidance Raised on Backlog Conversion and Power Generation Demand

Management raised full-year 2026 revenue guidance to a range of $1.3 billion to $1.375 billion and adjusted EBITDA guidance to $200 million to $225 million, an increase of $25 million and $5 million respectively at the low end of prior ranges. Power generation-related projects account for approximately half of the company's backlog, supported by what management described as unusually strong multi-year visibility into customer capacity expansion plans across Natural Gas power generation, semiconductor Manufacturing , and gas infrastructure end markets.

Some previously anticipated large industrial water orders in the Middle East remain delayed due to regional conflict-related disruptions, though management said these were never included in current-year guidance and could represent upside if they materialize. Gross Debt increased by approximately $523 million since year-end to fund the Thermon acquisition, with Leverage at 2.7 times trailing EBITDA near the high end of the company's previously communicated range, though management noted subsequent free Cash Flow has already reduced gross debt by $39.5 million through the end of July.

Conclusion

CECO Environmental's second quarter combined record orders and backlog with Thermon integration synergies running ahead of initial expectations, prompting a raise to full-year revenue and EBITDA guidance. The company's leverage sits near the high end of its target range following the debt-funded acquisition, though management pointed to strong free cash flow conversion as evidence the Balance Sheet will normalize as integration progresses. Continued momentum in power generation and semiconductor end markets, alongside the eventual timing of delayed Middle East industrial water orders, are likely to shape whether the current backlog conversion pace and Margin expansion trajectory can be sustained through 2027.