Environmental solutions provider CECO Environmental (NASDAQ: CECO) beat Wall Street’s revenue expectations in Q1 CY2026, with sales up 16.5% year on year to $205.9 million. The company’s full-year revenue guidance of $970 million at the midpoint came in 2.3% above analysts’ estimates. Its non-GAAP profit of $0.36 per share was significantly above analysts’ consensus estimates.
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CECO Environmental (CECO) Q1 CY2026 Highlights:
- Revenue: $205.9 million vs analyst estimates of $197.7 million (16.5% year-on-year growth, 4.1% beat)
- Adjusted EPS: $0.36 vs analyst estimates of $0.15 (significant beat)
- Adjusted EBITDA: $20.4 million vs analyst estimates of $18.54 million (9.9% margin, 10% beat)
- The company lifted its revenue guidance for the full year to $970 million at the midpoint from $950 million, a 2.1% increase
- EBITDA guidance for the full year is $130 million at the midpoint, above analyst estimates of $125.5 million
- Operating Margin: 0.9%, down from 35% in the same quarter last year
- Free Cash Flow was -$15.7 million compared to -$15.1 million in the same quarter last year
- Market Capitalization: $2.33 billion
Todd Gleason, CECO's Chief Executive Officer commented, “I am pleased to highlight the tremendous topline growth and steady EBITDA margin expansion we continue to deliver at CECO. This is the first time our quarter-end backlog has eclipsed $1 billion, which reflects our incredible 2.2 book-to-bill ratio during the first quarter. We continue to secure strategic, large-scale projects to enable natural gas power generation expansion in support of a tremendous global investment in electrical power demand for data centers, artificial intelligence computing, industrial reshoring and electrification. This strong momentum continued into April 2026 as we have already booked approximately over $450 million in new orders including the largest ever order in the Natural Gas Power market, setting our second quarter bookings on a course to materially exceed the record we just set in the first quarter.”
Company Overview
With roots dating back to 1869 and a focus on creating cleaner industrial operations, CECO Environmental (NASDAQ: CECO) provides technology and expertise that helps industrial companies reduce emissions, treat water, and improve energy efficiency across various sectors.
Revenue Growth
A company’s long-term sales performance is one signal of its overall quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years.
With $803.6 million in revenue over the past 12 months, CECO Environmental is a small player in the business services space, which sometimes brings disadvantages compared to larger competitors benefiting from economies of scale and numerous distribution channels. On the bright side, it can grow faster because it has more room to expand.
As you can see below, CECO Environmental grew its sales at an incredible 21.2% compounded annual growth rate over the last five years. This is a great starting point for our analysis because it shows CECO Environmental’s demand was higher than many business services companies.
We at StockStory place the most emphasis on long-term growth, but within business services, a half-decade historical view may miss recent innovations or disruptive industry trends. CECO Environmental’s annualized revenue growth of 19.9% over the last two years is below its five-year trend, but we still think the results suggest healthy demand. 
This quarter, CECO Environmental reported year-on-year revenue growth of 16.5%, and its $205.9 million of revenue exceeded Wall Street’s estimates by 4.1%.
Looking ahead, sell-side analysts expect revenue to grow 21.8% over the next 12 months, an improvement versus the last two years. This projection is eye-popping and suggests its newer products and services will catalyze better top-line performance.
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Adjusted Operating Margin
CECO Environmental was profitable over the last five years but held back by its large cost base. Its average adjusted operating margin of 7.5% was weak for a business services business.
On the plus side, CECO Environmental’s adjusted operating margin rose by 2.3 percentage points over the last five years, as its sales growth gave it operating leverage.
This quarter, CECO Environmental generated an adjusted operating margin profit margin of 1.1%, down 33.9 percentage points year on year. This contraction shows it was less efficient because its expenses grew faster than its revenue.
Earnings Per Share
Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.
CECO Environmental’s EPS grew at an astounding 18.4% compounded annual growth rate over the last five years. Despite its adjusted operating margin improvement during that time, this performance was lower than its 21.2% annualized revenue growth, telling us that non-fundamental factors such as interest and taxes affected its ultimate earnings.
Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.
For CECO Environmental, its two-year annual EPS growth of 23.6% was higher than its five-year trend. We love it when earnings growth accelerates, especially when it accelerates off an already high base.
In Q1, CECO Environmental reported adjusted EPS of $0.36, up from $0.10 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects CECO Environmental’s full-year EPS of $1.16 to grow 43.4%.
Key Takeaways from CECO Environmental’s Q1 Results
It was good to see CECO Environmental beat analysts’ revenue and EPS expectations this quarter. We were also glad its EBITDA guidance outperformed Wall Street’s estimates. Zooming out, we think this was a good print with some key areas of upside. The stock remained flat at $64.99 immediately following the results.
CECO Environmental put up rock-solid earnings, but one quarter doesn’t necessarily make the stock a buy. Let’s see if this is a good investment. If you’re making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here (it’s free).
