ESCO Reports First Quarter Fiscal 2026 Results

- Q1 Sales increase 35% to $290 Million - Q1 Entered Orders increase 143% to $557 Million - Q1 GAAP EPS from Continuing Operations increases 41% to $1.11 - Q1 Adjusted EPS from Continuing Operations increases 73% to $1.64 -

St. Louis, Feb. 05, 2026 (GLOBE NEWSWIRE) -- ESCO Technologies Inc. (NYSE: ESE) (ESCO, or the Company) today reported its operating results for the first quarter ended December 31, 2025 (Q1 2026).

Operating Highlights

Q1 2026 Sales increased $75 million (35.0 percent) to $290 million compared to $215 million in Q1 2025. Q1 2026 organic sales increased $24 million (11.4 percent) and Maritime contributed $51 million (23.6 percent) of revenue growth in the quarter.
Q1 2026 GAAP EPS from Continuing Operations increased 40.5 percent to $1.11 per share compared to $0.79 per share in Q1 2025. Q1 2026 Adjusted EPS from Continuing Operations increased 72.6 percent to $1.64 per share compared to $0.95 per share in Q1 2025.
Q1 2026 Entered Orders increased $328 million (143.0 percent) to $557 million (book-to-bill of 1.92x), resulting in record backlog of $1.4 billion.
Net Cash provided by Operating Activities from Continuing Operations was $69 million in Q1 2026, an increase of $40 million compared to the prior year period.

Bryan Sayler, Chief Executive Officer and President, commented, “Our fiscal year got off to an outstanding start as we delivered over $550 million in orders, 35 percent revenue growth, 320 basis points of Adjusted EBITDA margin expansion, and a 73 percent increase in Adjusted EPS compared to the prior year. We continue to see favorable end-market conditions, which is reflected in the excellent orders and sales performance. Organic orders increased by 39 percent as all three businesses continue to see a positive environment for growth.

“Our solid operating results were driven by disciplined execution from our team. This performance highlights the strength of our strategic positioning and our capacity to generate sustainable value in attractive markets. It was a great way to start the year, with continuing momentum across our businesses giving us the confidence to raise our full year earnings guidance.”

Segment Performance

Aerospace & Defense (A&D)

Q1 2026 sales increased $62 million (75.7 percent) to $144 million from $82 million in Q1 2025. Organic sales increased $11 million (13.9 percent) and Maritime added $51 million (61.8 percent) of revenue growth in the quarter. Quarterly sales growth was led by strong performance in Navy, along with military and commercial aerospace.
Q1 2026 EBIT increased $20.5 million to $38.0 million from $17.5 million in Q1 2025. Adjusted EBIT increased $20.6 million in Q1 2026 to $38.1 million (26.5 percent margin) from $17.5 million (21.3 percent margin) in Q1 2025. The 118 percent increase in Adjusted EBIT was driven by the addition of Maritime as well as leverage on higher volume, price increases, and favorable mix, partially offset by inflationary pressures.
Q1 2026 entered orders increased $307 million (410.8 percent) to $382.3 million (book-to-bill of 2.66), resulting in record backlog of over $1.0 billion. This orders strength was broad based, including $238 million at Maritime, Virginia Class Block VI funding at Globe, and robust commercial and defense aerospace demand.

Utility Solutions Group (USG)

Q1 2026 sales increased $1 million (1.0 percent) to $87 million from $86 million in Q1 2025. Doble sales increased by $4 million (5.8 percent) while NRG sales decreased by $3 million (22.4 percent). Sales growth in the quarter was driven by higher condition monitoring, offline test equipment, and services revenue at Doble, partially offset by lower renewables revenue at NRG.
Q1 2026 EBIT decreased $1.0 million to $19.5 million from $20.5 million in Q1 2025. Adjusted EBIT decreased $0.9 million in Q1 2026 to $19.6 million (22.4 percent margin) from $20.5 million (23.6 percent margin) in Q1 2025. The decrease in Adjusted EBIT was driven by deleverage on lower renewables volume, unfavorable mix, and inflationary pressures, partially offset by price increases and leverage on higher volume at Doble.
Q1 2026 entered orders increased $9 million (10.3 percent) to $99 million (book-to-bill of 1.13), resulting in backlog of $155 million. Doble orders increased $11 million (14.8 percent) to $84 million due to strength in services, condition monitoring and offline test equipment orders. NRG orders decreased $2 million (10.2 percent) to $15 million compared to Q1 2025, primarily due to lower wind orders in the U.S. and China, partially offset by higher solar orders.

RF Test & Measurement (Test)

Q1 2026 sales increased $12 million (26.7 percent) to $58 million from $46 million in Q1 2025. Sales growth in the quarter was largely driven by higher U.S. and European Test & Measurement (EMC) and filters volume.
Q1 2026 EBIT increased $3.6 million to $8.0 million from $4.4 million in Q1 2025. Q1 2026 Adjusted EBIT increased $3.1 million to $8.0 million (13.8 percent margin) from $4.9 million (10.6 percent margin) in Q1 2025. The 65 percent increase in Adjusted EBIT margin was driven by leverage on higher volume and price increases, partially offset by inflationary pressures.
Q1 2026 entered orders increased $11 million (17.3 percent) to $76 million (book-to-bill of 1.30), resulting in ending backlog of $205 million. Orders strength in the quarter was primarily driven by higher Test & Measurement (EMC), industrial shielding, and medical shielding orders in the U.S and a large Test and Measurement (EMC) chamber order in Japan.

Business Outlook – FY 2026

FY 2026 Sales and Adjusted EPS Guidance Update:

FY 2026 full year revenue guidance is being increased by $20 million and is now expected to be in the range of $1.29 to $1.33 billion (18 to 21 percent sales growth over the prior year).
- A&D revenue guidance is being increased and is expected to grow 34 to 39 percent (from 33 to 38 percent) including 7 to 9 percent organic growth (from 6 to 8 percent) plus Maritime revenue of $230 to $245 million
- Maintaining USG revenue growth expectation of 4 to 6 percent
- Increasing Test revenue growth expectation to 9 to 11 percent (from 3 to 5 percent)
Adjusting the effective income tax rate to be in the range of 23.0 to 23.5 percent (from 23.7 to 24.1 percent) in 2026.
Raising full year Adjusted EPS guidance to be in the range of $7.90 - $8.15 per share (31 to 35 percent growth), which reflects a midpoint increase of $0.38 from initial November guidance of $7.50 - $7.80 per share.
Q2’26 Adjusted EPS is expected to be in the range of $1.75 - 1.85 per share (50 to 58 percent growth compared to Q2’25 Adjusted EPS).

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

Conference Call
The Company will host a conference call today, February 5, at 4:00 p.m. Central Time, to discuss the Company’s Q1 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, 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 or 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.

ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations (Unaudited)
(Dollars in thousands, except per share amounts)

						Three Months Ended December 31, 2025			Three Months Ended December 31, 2024

Net Sales					$	289,659			214,593
Cost and Expenses:
		Cost of sales				169,740			124,214
		Selling, general and administrative expenses				61,207			54,969
		Amortization of intangible assets				20,324			7,993
		Interest expense				2,880			2,257
		Other expenses (income), net				30			(637	)
			Total costs and expenses			254,181			188,796

Earnings before income taxes						35,478			25,797
Income tax expense						6,787			5,490

			Net earnings from continuing operations			28,691			20,307

Earnings from discontinued operations, net of tax expense
		of $978				-			3,166
			Net earnings from discontinued operations			-			3,166

			Net earnings		$	28,691			23,473

				Diluted - GAAP
				Continuing operations	$	1.11			0.79
				Discontinued operations		0.00			0.12
				Net earnings	$	1.11			0.91

				Diluted - As Adjusted Basis
				Continuing Operations	$	1.64	(1	)	0.95		(2	)

				Diluted average common shares O/S:		25,882			25,834

(1	)	Q1 2026 Adjusted EPS excludes $0.53 per share of after-tax charges consisting of: $0.01 of restructuring charges primarily within the A&D segment and $0.52 of acquisition related amortization.

(2	)	Q1 2025 Adjusted EPS from continuing operations excludes $0.16 per share of after-tax charges consisting of: $0.01 of restructuring charges within the Test segment and $0.15 of acquisition related amortization.

ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
Condensed Business Segment Information (Unaudited) - Continuing Operations Basis
(Dollars in thousands)

				GAAP				As Adjusted
				Q1 2026		Q1 2025		Q1 2026		Q1 2025
Net Sales
	Aerospace & Defense		$	143,829		81,868		143,829		81,868
	USG			87,484		86,660		87,484		86,660
	Test			58,346		46,065		58,346		46,065
		Totals	$	289,659		214,593		289,659		214,593

EBIT
	Aerospace & Defense		$	37,987		17,452		38,133		17,478
	USG			19,529		20,489		19,579		20,489
	Test			8,042		4,422		8,042		4,887
	Corporate			(27,200	)	(14,309	)	(9,633	)	(9,310	)
		Consolidated EBIT		38,358		28,054		56,121		33,544
		Less: Interest expense		(2,880	)	(2,257	)	(2,880	)	(2,257	)
		Less: Income tax expense		(6,787	)	(5,490	)	(10,872	)	(6,752	)
		Net earnings	$	28,691		20,307		42,369		24,535

Note 1: Adjusted net earnings of $42.4 million in Q1 2026 exclude $13.7 million (or $0.53 per share) of after-tax charges consisting of: $0.01 of restructuring charges primarily within the A&D segment and $0.52 of acquisition related amortization.

Note 2: Adjusted net earnings of $24.5 million in Q1 2025 exclude $4.2 million (or $0.16 per share) of after-tax charges consisting of $0.01 of restructuring charges within the Test segment and $0.15 of acquisition related amortization.

EBITDA Reconciliation to Net earnings:								Q1 2026 -		Q1 2025 -
				Q1 2026		Q1 2025		As Adj		As Adj
Consolidated EBITDA			$	64,851		41,025		65,047		41,518
Less: Depr & Amort				(26,493	)	(12,971	)	(8,926	)	(7,974	)
Consolidated EBIT				38,358		28,054		56,121		33,544
Less: Interest expense				(2,880	)	(2,257	)	(2,880	)	(2,257	)
Less: Income tax expense				(6,787	)	(5,490	)	(10,872	)	(6,752	)
Net earnings			$	28,691		20,307		42,369		24,535

ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets (Unaudited)
(Dollars in thousands)

				December 31, 2025	September 30, 2025

Assets
	Cash and cash equivalents		$	103,824	101,350
	Accounts receivable, net			245,328	253,554
	Contract assets			88,662	90,730
	Inventories			227,153	217,807
	Other current assets			24,686	25,065
		Total current assets		689,653	688,506
	Property, plant and equipment, net			171,810	172,493
	Intangible assets, net			706,383	723,973
	Goodwill			767,375	761,931
	Operating lease assets			46,592	47,707
	Other assets			17,186	15,778
			$	2,398,999	2,410,388

Liabilities and Shareholders' Equity
	Current maturities of long-term debt and short-term borrowings		$	20,511	20,000
	Accounts payable			92,291	96,534
	Contract liabilities			252,360	216,590
	Current income tax payable			60,478	62,007
	Other current liabilities			92,753	113,017
		Total current liabilities		518,393	508,148
	Deferred tax liabilities			115,776	112,390
	Non-current operating lease liabilities			43,466	44,403
	Other liabilities			35,500	38,576
	Long-term debt			125,000	166,000
	Shareholders' equity			1,560,864	1,540,871
			$	2,398,999	2,410,388

ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows (Unaudited)
(Dollars in thousands)

		Three Months Ended December 31, 2025		Three Months Ended December 31, 2024
Cash flows from operating activities:
Net earnings	$	28,691		23,473
(Earnings) loss from discontinued operations		-		(3,166	)
Adjustments to reconcile net earnings to net cash
provided by operating activities:
Depreciation and amortization		26,493		12,971
Stock compensation expense		3,233		2,524
Changes in assets and liabilities		7,056		(8,171	)
Effect of deferred taxes		3,388		1,521
Net cash provided by operating activities - continuing operations		68,861		29,152
Net cash provided by operating activities - discontinued operations		-		5,022
Net cash provided by operating activities		68,861		34,174

Cash flows from investing activities:
Acquisition of business, net of cash acquired		(5,134	)	-
Capital expenditures		(5,902	)	(5,124	)
Additions to capitalized software and other		(2,196	)	(2,587	)
Net cash used by investing activities - continuing operations		(13,232	)	(7,711	)
Net cash used by investing activities - discontinued operations		-		(84	)
Net cash used by investing activities		(13,232	)	(7,795	)

Cash flows from financing activities:
Proceeds from long-term debt and short-term borrowings		52,511		42,000
Principal payments on long-term debt and short-term borrowings		(93,000	)	(52,000	)
Dividends paid		(2,072	)	(2,064	)
Other		(10,609	)	(6,031	)
Net cash provided by financing activities		(53,170	)	(18,095	)

Effect of exchange rate changes on cash and cash equivalents		15		(2,963	)

Net increase in cash and cash equivalents		2,474		5,321
Cash and cash equivalents, beginning of period		101,350		65,963
Cash and cash equivalents, end of period	$	103,824		71,284

ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
Other Selected Financial Data (Unaudited)
(Dollars in thousands)

Backlog And Entered Orders - Q1 2026			A&D		USG		Test		Total
	Beginning Backlog - 10/1/25	$	803,002		143,460		187,175		1,133,637
	Entered Orders		382,341		98,796		76,034		557,171
	Sales		(143,829	)	(87,484	)	(58,346	)	(289,659	)
	Ending Backlog - 12/31/25	$	1,041,514		154,772		204,863		1,401,149

ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
Reconciliation of Non-GAAP Financial Measures (Unaudited)

EPS – Adjusted Basis Reconciliation – Q1 2026
	EPS – GAAP Basis – Q1 2026	$	1.11
	Adjustments (defined below)		0.53
	EPS – As Adjusted Basis – Q1 2026	$	1.64

	Adjustments exclude $0.53 per share consisting primarily of: $0.01 of restructuring
	charges within the A&D segment and $0.52 of acquisition related amortization.

EPS – Adjusted Basis Reconciliation – Q1 2025
	EPS Continuing Operations– GAAP Basis – Q1 2025	$	0.79
	Adjustments (defined below)		0.16
	EPS Continuing Operations– As Adjusted Basis – Q1 2025	$	0.95

	Adjustments exclude $0.16 per share consisting primarily of: $0.01 of restructuring
	charges within the Test segment and $0.15 of acquisition related amortization.

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

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