ESAB Q2 Earnings Call Highlights

ESAB’s sales rose 13% year over year to $766 million, while adjusted EBITDA increased 8% to $150 million, supported by organic growth, acquisitions and strong demand for equipment and automation. The Eddyfi acquisition closed ahead of schedule and adds inspection, monitoring and data-traceability capabilities, with a nearly $450 million commercial funnel and expected synergies of approximately $20 million. ESAB now expects $3.0 billion–$3.1 billion in core sales, $615 million–$625 million in adjusted EBITDA, adjusted EPS of $5.40–$5.50 and free-cash-flow conversion of about 90%, despite temporary logistics, commodity and price-cost pressures.

ESAB NYSE: ESAB reported record total core sales and adjusted EBITDA for the second quarter of 2026, supported by organic growth in both operating segments, double-digit growth in automation and equipment, and contributions from acquisitions. Total sales rose 13% from a year earlier to $766 million, including 2.5% organic growth and an 8% contribution from acquisitions. Adjusted EBITDA increased 8% to $150 million, while adjusted EBITDA margin was 19.5%, down 90 basis points year over year. President and CEO Shyam Kambeyanda said the quarter reflected robust demand in North America and Asia, resilient conditions in Europe, and performance in the Middle East that was in line with the company’s expectations amid a difficult operating environment.

ESAB said it completed its acquisition of Eddyfi ahead of schedule. Eddyfi provides inspection and monitoring technologies used in mission-critical applications, including electromagnetic testing, ultrasonic testing and automated inspection. Kambeyanda said the acquisition expands ESAB’s end-to-end workflow capabilities, combining welding, joining, gas-control and automation offerings with inspection, monitoring and data-traceability technologies. He said the combined businesses are pursuing commercial opportunities across aerospace and defense, nuclear, infrastructure, oil and gas, pipelines, rail and wind-energy applications. “The ESAB you see today is a transformed enterprise with equipment now representing over 50% of our revenue and powering our ability to accelerate organic growth,” Kambeyanda said.

The company said Eddyfi serves markets supported by aging infrastructure, higher inspection requirements, power-generation demand and shortages of skilled labor. Kambeyanda said Eddyfi has high-single-digit growth, gross margins of approximately 65% and EBITDA margins of roughly 30%. During the question-and-answer session, Kambeyanda said Eddyfi’s commercial funnel is close to $450 million, though he cautioned that converting opportunities will take time. He said the company expects to secure some initial orders that could support further growth in 2027 and beyond. ESAB also reiterated that it expects approximately $20 million in synergies from the transaction, with potential for more over time. The company said its initial priority is capturing commercial growth opportunities while also pursuing operational benefits through areas such as supply chain and shared services.

Sales in the Americas segment increased 12% to $316 million, including 5% organic growth. ESAB said North America posted double-digit organic growth, led by equipment, while gas equipment and automation also rose by double digits. Mexico continued to stabilize, while the company said it is working to mitigate expected headwinds in South America. EMEA and APAC sales rose 14% to $450 million, including 1% organic growth. The company said...