Kadant Q3 2026: EPS Beats by 27%, Guidance Raised to Record Levels

Kadant reported adjusted earnings per share of $3.64 for its third quarter of fiscal 2026, clearing the consensus estimate of $2.86 by 27.4%. Revenue of $313.16 million came in 3.65% above the $302.14 million estimate and rose 15.3% from the same quarter a year earlier. CEO Jeffrey L. Powell called it an exceptional quarter with record results across revenue, adjusted EPS, and cash flow.

Acquisitions did a lot of the heavy lifting, contributing $31 million to the top line and accounting for 11 percentage points of that year-over-year revenue gain. Organic revenue added another 4 points, and parts and consumables made up 70% of total revenue, up from 69% a year earlier, underscoring how durable the aftermarket base has become. Industrial Processing was the standout segment, with revenue climbing 34.8% and bookings surging 44.5%, of which 12 points were organic.

Operational discipline amplified the revenue gains. SG&A expenses fell to 26.4% of revenue from 27.9%, and adjusted EBITDA rose 24% to $71.7 million, a 22.9% margin. Operating cash flow surged 33% to $62.9 million, giving Kadant tangible financial flexibility heading into the fourth quarter.

Management raised full-year 2026 adjusted EPS guidance to a range of $12.58 to $12.73, up from the prior range of $12.43 to $12.68, and narrowed revenue guidance to $1.195 to $1.210 billion. Powell stated explicitly that the company expects 2026 to close as a record year. Bookings rose 22% overall, with organic bookings up 10% across all three segments, suggesting the momentum is not concentrated in a single business line.

Gross margin edged down 50 basis points to 44.7%, Material Handling revenue fell 4.2% on lower capital equipment shipments, and interest expense climbed to $5.6 million from $3.1 million, a $0.15 headwind to adjusted EPS reflecting the debt taken on to fund acquisitions. Powell also flagged that the timing of large capital orders remains uncertain given ongoing economic and geopolitical pressures, leaving the capital equipment recovery an open question for Q4 and beyond.