ESCO Reports Second Quarter Fiscal 2026 Results

- Q2 Sales increase 33% to $309 Million - Q2 Entered Orders increase 42% to $378 Million - Q2 GAAP EPS from Continuing Operations increases 26% to $1.29 - Q2 Adjusted EPS from Continuing Operations increases 63% to $1.91 -

St. Louis, May 07, 2026 (GLOBE NEWSWIRE) -- ESCO Technologies Inc. (NYSE: ESE) (ESCO, or the Company) today reported its operating results for the second quarter ended March 31, 2026 (Q2 2026).

Operating Highlights

• Q2 2026 Sales increased $78 million (33.5 percent) to $309 million compared to $232 million in Q2 2025. Q2 2026 organic sales increased $30 million (12.8 percent) and Maritime contributed $48 million (20.7 percent) of revenue growth in the quarter.

• Q2 2026 GAAP EPS from Continuing Operations increased 26.5 percent to $1.29 per share compared to $1.02 per share in Q2 2025. Q2 2026 Adjusted EPS from Continuing Operations increased 63.2 percent to $1.91 per share compared to $1.17 per share in Q2 2025.

• Q2 2026 Entered Orders increased $113 million (42.4 percent) to $378 million (book-to-bill of 1.22), resulting in record backlog of $1.5 billion.

• Net cash provided by operating activities was $135 million YTD, an increase of $88 million compared to the prior year period.

Bryan Sayler, Chief Executive Officer and President, commented, “Q2 was another excellent quarter, highlighted by $378 million in orders, 33% revenue growth, and 320 basis points of Adjusted EBITDA margin expansion. We saw broad-based revenue strength across our Navy, aerospace, Test, and utilities markets. It has been particularly encouraging to see a strong rebound in our Test business, with increasing orders driving solid revenue growth across many of their served markets.

“We believe this quarter’s results further demonstrate the strength of our strategic positioning and our ability to execute consistently and deliver sustainable value. ESCO has taken concrete steps to strengthen our business portfolio and we remain positive about the long-term outlook for our target markets. Across these markets, durable demand drivers continue to be in place, and we are excited for the future.”

Segment Performance
Aerospace & Defense (A&D)

• Q2 2026 sales increased $60.7 million (67.7 percent) to $150.3 million from $89.6 million in Q2 2025. Organic sales increased $12.9 million (14.3 percent) and Maritime added $47.8 million (53.4 percent) of revenue growth in the quarter. Quarterly sales growth was led by strong performance in Navy, commercial aerospace, and military aerospace.

• Q2 2026 EBIT increased $18.8 million to $43.0 million from $24.2 million in Q2 2025. Adjusted EBIT increased $18.9 million in Q2 2026 to $43.1 million (28.6 percent margin) from $24.2 million (27.0 percent margin) in Q2 2025. The 78 percent increase in Adjusted EBIT was driven by the addition of Maritime as well as leverage on higher volume, and price increases, partially offset by inflationary pressures and unfavorable mix.

• Q2 2026 entered orders increased $87.3 million (90.4 percent) to $183.8 million (book-to-bill of 1.22), resulting in record backlog of $1.1 billion. Orders strength in the quarter was primarily driven by $53 million in orders at Maritime, $24 million in Virginia Class orders at Globe, and higher commercial aerospace OEM orders.
  
  

Utility Solutions Group (USG)

• Q2 2026 sales increased $2.7 million (3.0 percent) to $93.5 million from $90.8 million in Q2 2025. Doble sales increased by $8.4 million (11.3 percent) while NRG sales decreased by $5.7 million (35.8 percent). Sales growth in the quarter was driven by higher protection testing, offline test equipment, and services revenue at Doble, partially offset by lower wind and solar revenue at NRG.

• Q2 2026 EBIT increased $1.7 million to $22.5 million from $20.8 million in Q2 2025. Adjusted EBIT increased $2.2 million in Q2 2026 to $23.1 million (24.7 percent margin) from $20.9 million (23.0 percent margin) in Q2 2025. The 11 percent increase in Adjusted EBIT was driven by leverage on higher volume at Doble, price increases, and mix, partially offset by deleverage on lower volume at NRG and inflationary pressures.

• Q2 2026 entered orders increased $9.1 million (9.9 percent) to $101.3 million (book-to-bill of 1.08), resulting in backlog of $162.5 million. Doble orders increased $15.5 million (20.3 percent) to $92.1 million due to strength in services, offline test equipment, and condition monitoring orders. NRG orders decreased $6.4 million (41.3 percent) to $9.2 million, primarily due to lower wind and solar orders.
  
  

RF Test & Measurement (Test)

• Q2 2026 sales increased $14.1 million (27.5 percent) to $65.5 million from $51.4 million in Q2 2025. Sales growth in the quarter was primarily driven by higher U.S Test & Measurement (EMC) and filter sales for government funded data centers.

• Q2 2026 EBIT increased $2.4 million to $8.8 million from $6.4 million in Q2 2025. Q2 2026 Adjusted EBIT increased $3.7 million to $10.1 million (15.4 percent margin) from $6.4 million (12.4 percent margin) in Q2 2025. The 59 percent increase in Adjusted EBIT was driven by leverage on higher volume and price increases, partially offset by inflationary pressures.

• Q2 2026 entered orders increased $16.1 million (21.0 percent) to $93.1 million (book-to-bill of 1.42), resulting in ending backlog of $232.5 million. Orders strength in the quarter was driven by higher Test and Measurement (EMC) orders in the U.S. and EMEA, filter orders for government funded data centers, and multiple industrial shielding projects.
  
  

Megger Acquisition
As announced on April 15, 2026, ESCO has agreed to acquire Megger Group Limited. Megger will become part of ESCO’s Utility Solutions Group, creating a business of substantial scale and expanding our capabilities as a valued partner to utilities worldwide. All filings for regulatory approval are underway and we anticipate closing on the transaction in Q1 of fiscal 2027.

Business Outlook – FY 2026
FY 2026 Sales and Adjusted EPS Guidance Update:

• Maintaining full year FY 2026 revenue guidance of $1.29 to $1.33 billion (18 to 21 percent growth over the prior year).

• Raising full year Adjusted EPS guidance to be in the range of $8.00 - $8.25 per share (33 to 37 percent growth), which reflects a midpoint increase of $0.48 per share from our initial November guidance ($7.50 - $7.80) and $0.10 per share from our more recent February guidance update ($7.90 - $8.15).

• Q3’26 Adjusted EPS is expected to be in the range of $2.05 - $2.15 per share (28 to 34 percent growth compared to Q3’25 Adjusted EPS).
  
  

Dividend Payment
The next quarterly cash dividend of $0.08 per share will be paid on July 17, 2026 to stockholders of record on July 2, 2026.

Conference Call
The Company will host a conference call today, May 7, at 4:00 p.m. Central Time, to discuss the Company’s Q2 2026 results. A live audio webcast and an accompanying slide presentation will be available in the Investor Center of ESCO’s website. Participants may also access the webcast using this registration link. For those unable to participate, a webcast replay will be available after the call in the Investor Center of ESCO’s website.

Forward-Looking Statements
Statements in this press release regarding Management’s intentions, expectations and guidance for fiscal 2026, including restructuring and cost reduction actions, sales, orders, revenues, margin, earnings, Adjusted EPS, acquisition related amortization, and any other statements which are not strictly historical, are “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. securities laws.

Investors are cautioned that such statements are only predictions and speak only as of the date of this release, and the Company undertakes no duty to update them except as may be required by applicable laws or regulations. The Company’s actual results in the future may differ materially from those projected in the forward-looking statements due to risks and uncertainties that exist in the Company’s operations and business environment including but not limited to those described in Item 1A, “Risk Factors”, of the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2025 and the following: the impacts of climate change and related regulation of greenhouse gases; the impacts of labor disputes, civil disorder, wars including the conflicts involving Iran and Lebanon, elections, political changes, tariffs and trade disputes, terrorist activities, cyberattacks or natural disasters on the Company’s operations and those of the Company’s customers and suppliers; disruptions in manufacturing or delivery arrangements due to shortages or unavailability of materials or components; restrictions or closures of critical supply routes such as the Strait of Hormuz; other supply chain disruptions; inability to access work sites; the timing and content of future contract awards or customer orders; the timely appropriation, allocation and availability of Government funds; the termination for convenience of Government and other customer contracts or orders; weakening of economic conditions in served markets; the success of the Company’s competitors; changes in customer demands or customer insolvencies; competition; intellectual property rights; technical difficulties or data breaches; the availability of acquisitions; delivery delays or defaults by customers; performance issues with key customers, suppliers and subcontractors; material changes in the costs and availability of certain raw materials; material changes in the cost of credit; changes in laws and regulations including but not limited to changes in accounting standards and taxation; changes in interest, inflation and employment rates; costs relating to environmental matters arising from current or former facilities; uncertainty regarding the ultimate resolution of current disputes, claims, litigation or arbitration; and the integration and performance of acquired businesses.

Non-GAAP Financial Measures
The financial measures EBIT, Adjusted EBIT, EBITDA, Adjusted EBITDA, and Adjusted EPS are presented in this press release. The Company defines “EBIT” as earnings before interest and taxes, “EBITDA” as earnings before interest, taxes, depreciation and amortization, “Adjusted EBIT” and “Adjusted EBITDA” as excluding the net impact of the items described in the attached Reconciliation of Non-GAAP Financial Measures, and “Adjusted EPS” as GAAP earnings per share excluding the net impact of the items described and reconciled in the attached Reconciliation of Non-GAAP Financial Measures.

EBIT, Adjusted EBIT, EBITDA, Adjusted EBITDA, and Adjusted EPS are not recognized in accordance with U.S. generally accepted accounting principles (GAAP). However, Management believes EBIT, Adjusted EBIT, EBITDA, and Adjusted EBITDA are useful in assessing the operational profitability of the Company’s business segments because they exclude interest, taxes, depreciation, and amortization, which are generally accounted for across the entire Company on a consolidated basis. EBIT is also one of the measures used by Management in determining resource allocations within the Company as well as incentive compensation. The presentation of EBIT, Adjusted EBIT, EBITDA, Adjusted EBITDA, and Adjusted EPS provides important supplemental information to investors by facilitating comparisons with other companies, many of which use similar non-GAAP financial measures to supplement their GAAP results. The use of non-GAAP financial measures is not intended to replace any measures of performance determined in accordance with GAAP.

About ESCO
ESCO Technologies is a global provider of highly engineered products and solutions serving diverse end-markets. It manufactures filtration and fluid control products, advanced composites, as well as signature and power management solutions for aviation, Navy, and industrial customers. ESCO is an industry leader in designing and manufacturing RF test and measurement products and systems; and provides diagnostic instruments, software and services to industrial power users and the electric utility and renewable energy industries. Headquartered in St. Louis, Missouri, ESCO and its subsidiaries have offices and manufacturing facilities worldwide. For more information on ESCO and its subsidiaries, visit ESCO’s website at www.escotechnologies.com.

SOURCE ESCO Technologies Inc.
Kate Lowrey, Vice President of Investor Relations, (314) 213-7277