Executive Summary

Q1 2025 delivered multiple records: orders $227.9M (+57% y/y), backlog $602.0M (+55% y/y), and record quarterly revenue $176.7M (+40% y/y). Adjusted EBITDA was $14.0M (+6% y/y) with a 7.9% margin; non‑GAAP diluted EPS was $0.10 and GAAP diluted EPS was $0.98, inflated by a $64.5M gain on the divestiture of the Global Pump Solutions business .
Results beat S&P Global consensus: revenue $176.7M vs $151.5M (+16.6%), Primary EPS $0.10 vs $0.085 (+18%). Management maintained FY25 guidance (revenue $700–$750M, adj. EBITDA $90–$100M, FCF 60–75% of adj. EBITDA) and reiterated positive book‑to‑bill for 2025 . Values retrieved from S&P Global.*
Margin headwinds were driven by tariff mitigation and proactive resource adds (engineering, PM, BD) to execute record backlog, plus inventory pull-ins; management initiated Q2 cost actions (eliminating redundant G&A, productivity) to support margin expansion through 2025 .
Key catalysts: sustained bookings momentum (pipeline >$5B, second consecutive $200M+ bookings quarter), approaching large power/nuclear awards (timed mostly for 2026–2027 revenue), and maintained guidance despite tariff uncertainty .

What Went Well and What Went Wrong

What Went Well
- Record commercial momentum: orders $227.9M, backlog $602.0M, revenue $176.7M; “second consecutive quarter with bookings greater than $200 million,” backlog >$600M for first time .
- Strong pipeline and diversified growth themes: sales pipeline >$5B with ~a dozen $50M+ opportunities; portfolio aligned to reshoring, electrification, power gen, natural gas infrastructure, and industrial water .
- Maintained full‑year outlook despite tariffs; initiated pricing and productivity to offset known impacts; “CECO benefits from supply chain aligned to regions of sale” .
- Quote: “We started 2025 with outstanding first quarter record orders… This is a powerful statement on the strength of our well‑positioned portfolio…” — CEO Todd Gleason .
What Went Wrong
- Profitability pressure: Adjusted EBITDA margin 7.9% as CECO “selectively pulled‑in inventory purchases and added key operational and customer‑centric personnel,” depressing Q1 margins; free cash flow of $(15.1)M .
- Tariff cost exposure identified at $3–$10M gross for 2025; while largely pass‑through on projects, component inflation and fabricator inflation are harder to quantify and could weigh on margins .
- Non‑GAAP EPS down y/y to $0.10 (from $0.11), and non‑GAAP operating income down y/y to $8.6M (from $10.2M) as integration costs and resource adds weighed on earnings .

Financial Results

Actuals by quarter

Metric	Q3 2024	Q4 2024	Q1 2025
Revenue ($USD Millions)	$135.5	$158.6	$176.7
Gross Margin %	33.4%	35.8%	35.2%
Adjusted EBITDA ($USD Millions)	$14.3	$19.0	$14.0
Adjusted EBITDA Margin %	10.6%	12.0%	7.9%
GAAP Diluted EPS ($)	$0.06	$0.13	$0.98
Non‑GAAP Diluted EPS ($)	$0.14	$0.27	$0.10
Orders ($USD Millions)	$162.3	$218.9	$227.9
Backlog ($USD Millions)	$437.5	$540.9	$602.0
Free Cash Flow ($USD Millions)	$11.1	$(4.4)	$(15.1)

Q1 2025 vs S&P Global consensus

Metric	Actual	Consensus*	Surprise
Revenue ($USD Millions)	$176.7	$151.5*	+16.6% vs. consensus (calc; sources: , S&P*)
Primary EPS ($)	$0.10	$0.085*	+17.6% vs. consensus (calc; sources: , S&P*)

Notes:

Q1 GAAP EPS boosted by $64.5M gain on sale of Global Pump Solutions (GPS) .
The press release and call reference “gross profit of $68.0M,” while the consolidated statement shows $62.2M at 35.2% margin; 35.2% of $176.7M = ~$62.1M, suggesting the $68M figure may be a typographical error. We rely on the financial statement for $62.2M and on 35.2% for gross margin .

KPIs and other items (Q1 2025)

Book‑to‑bill ~1.3x .
TTM revenue $608M (record) .
Net debt ~$190M at quarter end; leverage ~2.7x; gross debt reduced to ~$238M in early April using GPS sale proceeds .

Segment breakdown: Not disclosed in the furnished Q1 2025 8‑K exhibit; management commentary references portfolio mix by cycle (short/mid/long) and regional footprint rather than segment revenues .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	FY 2025	$700–$750M	$700–$750M	Maintained
Adjusted EBITDA	FY 2025	$90–$100M	$90–$100M	Maintained
Adjusted Free Cash Flow Conversion	FY 2025	60–75% of Adj. EBITDA	60–75% of Adj. EBITDA	Maintained
Orders / Book‑to‑Bill	FY 2025	—	Orders to exceed revenue; book‑to‑bill >1x	Introduced/affirmed

Management reiterated sequencing: step‑up in revenue and margins through 2025 (Q2 up vs Q1; continued ramp into 2H) as cost actions and productivity benefits flow through .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3’24)	Previous Mentions (Q4’24)	Current Period (Q1’25)	Trend
Orders/Backlog momentum	Record Q3 bookings; backlog at record but revenue hit by customer delays	Record Q4 orders $219M; backlog $541M	Orders $228M; backlog $602M; pipeline >$5B	Strengthening
Tariffs & mitigation	—	—	Identified $3–$10M gross exposure; price actions, G&A cuts, productivity to offset; largely pass‑through on projects	Emerging headwind; mitigated
Power/nuclear and data center demand	Referenced energy transition wins	Strong power gen and data center markets cited	Power pipeline >$1B; nuclear momentum; awards likely in coming quarters; revenue skewed to 2026–2027	Building pipeline; revenue later
Portfolio/M&A integration	WK closed; Profire announced	Multiple M&A; upgraded credit facility	Profire off to strong start (record Q1 bookings); integration on track	Positive execution
Margins	Margin expansion despite Q3 revenue delays	Gross margin 35.8% in Q4	Gross margin steady‑state mid‑30s; Q1 adj. EBITDA margin 7.9% with near‑term opex adds	Stable gross; EBITDA to expand
Regional trends	—	—	Non‑U.S. mix rising; strong ME/India/SE Asia; less politicized, focused on industrial dev’t	International tailwind
Working capital/FCF	Q3 FCF $11.1M	Q4 FCF $(4.4)M	Q1 FCF $(15.1)M; headwinds ~ $12M from M&A/integration/interest; inventory pull‑ins	Weaker near‑term; improve with ramp

Management Commentary

“This marks the second consecutive quarter with bookings greater than $200 million, which has enabled our backlog to exceed $600 million for the first time in Company history… With our order pursuit pipeline now over $5 billion, we remain highly confident in our continued growth outlook.” — Todd Gleason, CEO .
“We… selectively pulled‑in some inventory purchases and added key operational and customer‑centric personnel… These additions… had the effect of depressing Adjusted EBITDA in the quarter, but… were important to better position CECO for executing on our record backlog.” — Todd Gleason .
“We will take strategic cost actions associated with eliminating redundant general and administrative roles and expenses… and will expand our ongoing productivity and efficiency initiatives… to underpin operating margin expansion throughout the year.” — Todd Gleason .
“We are maintaining our full year 2025 guidance…” — Todd Gleason .
“We feel that we have now reached a steady‑state gross margin level in the 34% to 36% range… borne out in the first quarter of 2025… gross margin of 35.2%.” — Peter Johansson, CFO/CSO .
“Net debt… approximately $190 million… leverage… ~2.7x… we intend to prioritize capital deployment in Q2 towards further reducing our debt.” — Peter Johansson .

Q&A Highlights

Power pipeline and timing: Power‑related pipeline “certainly over $1 billion,” with larger awards expected in coming quarters; majority of revenue impact in 2026–2027; some engineering revenue could start earlier .
Tariff pass‑through/contracting: Most contracts allow pass‑through of tariff‑related increases; supplier quotes being revisited; pass‑through may slightly compress margin; broader component inflation remains uncertain .
Orders mix and demand cadence: No evidence of tariff pull‑forward; momentum continued into early Q2; strength noted in gas infrastructure, nuclear, and power infrastructure .
EBITDA cadence and margin roadmap: Expect sequential step‑up through 2025 (Q2 > Q1, then stronger 2H) as cost actions and volume ramp support margin expansion; mid‑teens EBITDA margin remains a goal over time .
M&A pacing: Near‑term focus on digestion and balance sheet; next wave of M&A more likely 2H25/2026 as pipeline rebuilds .
Capex priorities: Capital‑light; primary investment in Microsoft D365 ERP/data platform over next 7–8 quarters; selective process automation in Houston .

Estimates Context

Beat vs consensus: Revenue $176.7M vs $151.5M (+16.6%); Primary EPS $0.10 vs $0.085 (+17.6%); 6 estimates on revenue and EPS for Q1 2025 (Primary) . Values retrieved from S&P Global.*
Street revision setup: With maintained FY25 outlook and strong bookings/backlog, Street models may lift near‑term revenue/EBITDA trajectories, while incorporating tariff mitigation and near‑term opex normalization discussed by management .
Forward snapshot (consensus): Q4 2025 revenue ~$205.4M; EPS ~$0.405; Q1 2026 revenue ~$192.1M; EPS ~$0.168 — consistent with management’s ramp commentary . Values retrieved from S&P Global.

Key Takeaways for Investors

Bookings engine is the core bull point: back‑to‑back $200M+ orders and a $5B+ pipeline support sustained revenue growth into 2026–2027, particularly in power/nuclear and gas infrastructure .
Quality of backlog improves visibility: $602M backlog expected to largely convert within ~30 months (majority within 18 months), de‑risking the 2025–2026 revenue trajectory .
Near‑term margin headwinds are tactical: Q1 margin pressure stemmed from deliberate resource adds and inventory pulls; cost/productivity actions in Q2 are set to support sequential EBITDA margin expansion through 2025 .
Tariffs are a managed risk: $3–$10M gross exposure mostly pass‑through on project work; component/fabricator inflation remains the swing factor but is actively mitigated via price/productivity .
Balance sheet optionality improving: GPS proceeds used to reduce debt in April; leverage ~2.7x at Q1 end with intent to delever further in Q2, enabling future programmatic M&A .
Estimate dynamics: Strong Q1 beat and maintained guide should support estimate stability to upward bias; watch for second‑half operating leverage as volume and cost actions combine .
Trading setup: Positive catalysts include potential large power awards and margin inflection across 2025; monitor tariff flow‑through and execution on opex normalization as key swing variables .

Footnotes and disclosures:

All company figures and quotes are from CECO’s Q1 2025 8‑K/press release and earnings call transcript –.
The press release lists “gross profit of $68.0M,” while the consolidated statement shows $62.2M (35.2% margin). We anchor to the financial statement and disclosed margin and note the apparent discrepancy .
*Values retrieved from S&P Global.

CECO ENVIRONMENTAL CORP (CECO)·Q1 2025 Earnings Summary