We will refer to some presentation slides today, as well as to the earnings release, which we issued this morning. We've also posted the slide presentation and the earnings release under the investor tab on our website. In our earnings release and filings, we reconcile these non-GAAP measures to GAAP measures. Jennifer will then provide her perspective on our performance, current market conditions, and go over our increased guidance for 2026 before we open the line for any questions.

Our consolidated second quarter financial results are provided in today's earnings release. Consolidated net sales for the quarter were $670 million, an increase of $106 million or 19% compared to last year. Consolidated Adjusted EBITDA for the quarter was $144.4 million, up $26.2 million or 22% compared to last year. That translates to a margin of 21.5% in Q2 this year, up 60 basis points compared to last year.

GAAP diluted EPS for the quarter was $1.40 per share, up $0.24 per share or 21% compared to last year. On an adjusted basis, EPS for the quarter was $1.42 per share, an increase of $0.25 per share or 21% from last year. Customer demand remained strong during the quarter, with orders of $637 million, representing an increase of $97 million or 18% compared to last year. Backlog at the end of the quarter was $1 billion, compared to $1.08 billion last year.

What went well
  • Record-setting second quarter with net sales of $670 million, up 19% year-over-year, and orders up 18% to $637 million.
  • Consolidated operating income rose 21% to $118.2 million and Adjusted EBITDA rose 22% to $144.4 million, with margin up 60 basis points to 21.5%.
  • Adjusted EPS increased 21% to $1.42; GAAP diluted EPS rose 21% to $1.40.
  • Generated $113 million of operating cash flow (up 89%), a 131% cash conversion rate, and paid down approximately $97 million of debt to reduce net debt to $391 million.
  • ESG Adjusted EBITDA margin expanded 80 basis points to 23.9%; aftermarket revenue grew 24% and rental income grew 16%.
  • Management raised full-year 2026 guidance.
What went wrong
  • SSG results softened: net sales grew 10% but Adjusted EBITDA rose only 3% and margin fell to 25.1% from 26.9% a year earlier, hurt by mix headwinds.
  • SSG orders declined to $89 million from $99 million a year earlier.
  • Organic sales growth decelerated to 6% ($31 million), and backlog fell about 8% year-over-year to $1 billion (including a $75 million planned decline in third-party Labrie refuse backlog).
  • The company expects to incur additional expenses in the second half of 2026 as it scales its centers of excellence.

More on Federal Signal Corp /De/

Reported 2026-07-30 · figures from the Federal Signal Corp /De/ Q2 2026 earnings call.

See how VectorShift works for your firm

Request Demo