CECO Environmental(US:CECO)2025-10-28 13:30Financial Data and Key Metrics Changes - The company reported a record backlog of $720 million, up 64% year-over-year and 5% sequentially [15][19] - Quarterly revenue reached $198 million, marking a 46% increase year-over-year [16][17] - Adjusted EBITDA increased by 62% to $23.2 million, with adjusted EPS rising 86% to $0.26 [9][17] Business Line Data and Key Metrics Changes - The company achieved $233 million in new bookings, a 44% increase compared to Q3 2024, with a book-to-bill ratio of approximately 1.2 [6][15] - The backlog growth was driven by strong demand in power generation, natural gas infrastructure, and industrial water applications [16][19] Market Data and Key Metrics Changes - The sales pipeline now exceeds $5.8 billion, indicating strong future growth potential [8][35] - The company is well-positioned to benefit from market dynamics in power, industrial reshoring, and water infrastructure sectors [11][12] Company Strategy and Development Direction - The company is focused on expanding its capabilities in industrial air and energy applications while optimizing project pricing and margins [12][50] - There is an ongoing emphasis on M&A opportunities to enhance the sustainability of the company's portfolio [13][27] Management's Comments on Operating Environment and Future Outlook - Management remains bullish about the market dynamics and has reaffirmed the full-year 2025 outlook while providing an optimistic initial outlook for 2026 [5][31] - The company is monitoring potential challenges such as tariffs and inflation but believes it is well-prepared to navigate these issues [14][30] Other Important Information - The company expects Q4 bookings to exceed $250 million, with the potential for a record quarter above $300 million depending on project timing [10][68] - The company has made significant investments in operational excellence and cost management initiatives to drive future profitability [23][50] Q&A Session Summary Question: Update on project pipeline in industrial water and power generation - Management indicated strong positioning in large projects, particularly in the Middle East and Asia, focusing on produced water and water reuse applications [38] Question: Visibility on 2026 outlook and potential for upward adjustments - Management expressed confidence in the $5.8 billion sales pipeline and noted that winning additional large projects could enhance the 2026 outlook [39][40] Question: Update on power generation pipeline and activity levels - Management noted robust activity in the power generation sector, with a pipeline exceeding $1 billion, and emphasized the multi-year nature of these projects [44][46] Question: Confidence in targeted adjusted EBITDA margin expansion - Management outlined a three-pronged approach to margin expansion, focusing on volume growth, operational efficiencies, and cost management initiatives [48][50] Question: Cross-selling opportunities with Profire Energy - Management highlighted ongoing discussions and initiatives to leverage Profire's offerings across CECO's broader industrial customer base [63][66] Question: Macroeconomic backdrop for 2026 guidance - Management indicated a stable macroeconomic environment, with no significant changes expected to impact the company's outlook [60][62]