Executive Summary

Q2 2025 delivered solid top-line growth with net sales up 9% year-over-year to $157.1M and gross margin up 30 bps to 40.9%, while diluted EPS was $0.30 and Adjusted EBITDA was $27.0M .
Against S&P Global consensus, CDRE beat on revenue ($157.1M vs $153.2M*) and EPS ($0.30 vs $0.26*), while EBITDA under-ran S&P’s definition; on company basis, Adj. EBITDA was $27.0M (vs ~$27.2M* consensus) .
FY25 guidance tightened: net sales $624–$630M (prior $618–$648M), Adj. EBITDA $112–$116M (prior $112–$122M), capex $7–$8M; ranges exclude newly announced tariffs effective August and assume USMCA remains in place .
Stock reaction catalysts: clearer order timing narrative (Q3 expected flat sequentially; stronger H2 on armor/EOD timing), tariff mitigation confidence, and nuclear acquisition integration progress .

What Went Well and What Went Wrong

What Went Well
- Strong demand across core markets; net sales +9% y/y and gross profit +10% y/y. “We delivered strong revenue growth and profitability… best-in-class safety products across our law enforcement, first responder, military and nuclear categories.” — CEO Warren Kanders .
- Pricing execution: pricing growth exceeded target, aiding gross margin expansion; Q2 gross margin up 30 bps y/y on pricing, mix, absence of inventory step-up, and FX favorability .
- Nuclear vertical scaled via acquisition; management highlighted long-term tailwinds in environmental cleanup, national defense, and nuclear energy, with cash of $137M and $175M undrawn revolver to pursue organic/inorganic growth .
What Went Wrong
- EBITDA margin compression y/y (17.2% vs 19.6%); Adjusted EBITDA down y/y (Q2: $27.0M vs $28.3M) on acquisition-related costs and mix shift .
- Higher debt from acquisition financing: total debt rose to ~$315.2M; net debt to $177.7M .
- Timing shifts in large opportunities increased uncertainty intra-year; management narrowed guidance midpoints and indicated Q3 to be flat sequentially, pushing some higher-margin projects into late 2025/2026 .

Financial Results

Metric	Q4 2024	Q1 2025	Q2 2025
Revenue ($USD Millions)	$176.0	$130.1	$157.1
Gross Margin %	43.9%	43.1%	40.9%
Operating Income ($USD Millions)	$29.4	$13.6	$14.7
Net Income ($USD Millions)	$13.0	$9.2	$12.2
Diluted EPS ($USD)	$0.32	$0.23	$0.30
Adjusted EBITDA ($USD Millions)	$38.5	$20.5	$27.0
Adjusted EBITDA Margin %	21.9%	15.8%	17.2%

Segment breakdown (Net Sales and Gross Profit):

Segment Metric	Q2 2024	Q1 2025	Q2 2025
Product Net Sales ($USD Millions)	$128.4	$112.7	$140.1
Distribution Net Sales ($USD Millions)	$25.6	$27.9	$25.5
Total Net Sales ($USD Millions)	$144.3	$130.1	$157.1
Product Gross Profit ($USD Millions)	$52.8	$50.1	$58.4
Distribution Gross Profit ($USD Millions)	$5.9	$6.0	$5.9
Total Gross Profit ($USD Millions)	$58.7	$56.1	$64.2

KPIs and balance sheet:

KPI	Q2 2025
Cash And Equivalents ($USD Millions)	$137.5
Total Debt ($USD Millions)	$315.2
Net Debt ($USD Millions)	$177.7
Capital Expenditure ($USD Millions)	$1.3 (Q2)
LTM Adjusted EBITDA ($USD Millions)	$99.5

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Net Sales ($USD Millions)	FY 2025	$618–$648 (Q1 guide)	$624–$630	Narrowed; midpoint lowered
Adjusted EBITDA ($USD Millions)	FY 2025	$112–$122 (Q1 guide)	$112–$116	Narrowed; midpoint lowered
Capital Expenditures ($USD Millions)	FY 2025	$8–$10 (Q1 guide)	$7–$8	Lowered range
Dividend (per share)	Quarterly	$0.095 (declared Apr)	$0.095 (declared Jul)	Maintained
Implied Adj. EBITDA Margin %	FY 2025	~18% (from prior ranges)	~18.2% (CFO commentary)	Maintained trajectory
Tariff Assumptions	FY 2025	Tariffs in place incorporated; mitigations assumed	New tariffs announced July 31 not incorporated; assumes USMCA remains	More conservative stance

Earnings Call Themes & Trends

Topic	Q-2 (Q4 2024)	Q-1 (Q1 2025)	Current (Q2 2025)	Trend
Pricing execution	Exceeded target; mix favorable on Duty Gear	Gross margin +130 bps y/y; pricing net of material inflation	Pricing exceeded target; 30 bps GM expansion y/y	Positive, consistent
Tariffs/macro	Planning contingencies; guidance excluded tariffs	Guidance incorporated tariffs in place; mitigations assumed	New tariffs not in ranges; USMCA assumption; mitigation plans ready	Elevated uncertainty; cautious
Order timing/large ops	Backlog flat y/y; EOD/Armor shipped in 2024	EOD/Armor timing impacted Q1 sales	Larger proportion of “large ops”; timing shifts; Q3 flat; H2 stronger	Timing pushed right
Nuclear vertical/M&A	Agreement to acquire Carr’s Engineering	Acquisition completed; increased FY25 ranges	Integration underway; leadership appointed; long-term tailwinds	Scaling; integration
Consumer holsters	Strong demand despite weak gun sales	Continued resilience	Demand held up; new Ballast holster traction	Stable/positive
EOD opportunity	2024 shipments; backlog offset	Timing impacted early 2025	Cleanup phase not started; Q4 weighted lift expected	H2 improvement expected
Regional trends	EU defense budgets rising	Global tailwinds	US public safety/ICE/Border Patrol investments; global conflicts	Supportive

Management Commentary

“We delivered strong revenue growth and profitability… underscores the positive demand trends we continue to see for Cadre’s best-in-class safety products.” — Warren Kanders, CEO .
“We see opportunities for core CADRE operating model tools to help unlock further efficiency and profitability” in nuclear businesses .
“Guidance… assumes USMCA remains in place… Q3 revenue and adjusted EBITDA [to] be flat sequentially to Q2… H2 stronger… driven by ARMOR and EOD project timing.” — Blaine Browers, CFO .
“Timing of large opportunities shift more than in prior years… we are well positioned to continue to leverage our strong brands and drive growth.” — Warren Kanders .

Q&A Highlights

Order timing: Mix of large opportunities across armor, duty gear, nuclear, and EOD shifting; budgets intact, but some orders moved out of 2025 and into 2026, prompting guidance narrowing .
Margins: Long-term path to mid-to-upper-40s gross margin via operating model and synergy capture; nuclear acquisitions initially dilutive to GM but targeted for improvement .
Tariffs: Current tariffs embedded; future unknowns monitored; regionalized supply chains and multi-country production enable mitigation, though shifts take time due to certifications .
Nuclear integration: Early-stage functional integration; identified commercial synergy areas (channels, customer relationships, manufacturing) with action plans to follow .
Backlog: Organic backlog flat sequentially; increase largely from acquired businesses; timing-driven orders not yet in backlog .

Estimates Context

Metric	Consensus (Q2 2025)	Actual (Q2 2025)	Result
Revenue ($USD Millions)	$153.23*	$157.11	Beat
Primary EPS ($USD)	$0.26*	$0.30	Beat
EBITDA ($USD Millions)	$27.22*	$25.48 (EBITDA) / $27.00 (Adj.)	Miss (S&P EBITDA basis); near inline on Adj. EBITDA

Values retrieved from S&P Global.*

Implications: Consensus should narrow toward management’s updated ranges; revenue midpoint modestly trimmed while Adj. EBITDA midpoint reduced, reflecting order timing and tariff caution. Near-term estimates may shift later-quarter weighting (Q4 uplift) and slightly lower H2 margin assumptions consistent with commentary .

Key Takeaways for Investors

Cadre remains a demand-driven, execution story: pricing and mix discipline sustain gross margin resilience despite macro uncertainty .
The order timing narrative is central near term: expect Q3 flat sequentially with a stronger Q4 from armor/EOD — position for potential late-year upside catalysts .
Nuclear platform expansion is a multi-year value lever; integration milestones and synergy disclosures are catalysts to watch (operating model, cross-selling, international channels) .
Tariff policy remains a swing factor; Cadre’s regional supply chains and multi-site production provide mitigation, but watch for margin/price pass-through cadence .
Balance sheet supports continued M&A and organic investment: $137.5M cash, $175M undrawn revolver; leverage manageable (Net debt / LTM Adj. EBITDA ~1.8x) .
Estimate revisions likely modestly lower on EBITDA midpoints and tighter ranges; downside supported by diversified markets, upside tied to large-order timing clearing .
Dividends maintained at $0.095/share, signaling confidence in cash generation amidst acquisition integration .

Cadre Holdings, Inc. (CDRE)·Q2 2025 Earnings Summary