Executive Summary

Q4 2024 delivered modest top-line growth but strong order momentum: revenue $158.6M (+3% YoY), diluted EPS $0.13 (+18% YoY), gross margin 35.8% (+120 bps YoY); adjusted EBITDA $19.0M (12.0% margin) slightly down YoY, as higher SG&A preceded revenue conversion .
Record orders of $218.9M and record year‑end backlog of $540.9M set up 2025; book‑to‑bill 1.4x in Q4 and 1.2x for FY24 underscore demand in power generation, data centers, and industrial markets .
2025 outlook reaffirmed: revenue $700–$750M and adjusted EBITDA $90–$100M; free cash flow guidance increased to 60–75% of EBITDA (from 50–70%) on working capital timing; guidance includes completed M&A and expected late‑Q1 divestiture of Fluid Handling .
Working capital timing weighed on Q4 FCF (–$4.4M) as ~$15M of collections slipped into early 2025; management expects catch‑up in 1H25, providing a near‑term cash tailwind .
Street consensus (S&P Global) for Q4 2024 EPS/revenue was unavailable at time of analysis; we cannot quantify beat/miss vs estimates (see Estimates Context).

What Went Well and What Went Wrong

What Went Well

Record bookings and backlog: Q4 orders $218.9M (+71% YoY) and year‑end backlog $540.9M (+46% YoY) driven by large power generation awards and broad industrial demand .
Margin progression: Q4 gross margin 35.8% (+120 bps YoY) on material sourcing, productivity and mix; TTM gross margin expanded ~500 bps since Q4’22 with ~$10M annualized productivity savings .
Strategic portfolio upgrades: completed EnviroCare, WK, Verantis in 2H24 and closed Profire Energy in Jan’25; management expects accretive growth, synergies, and faster international expansion for Profire .

Key management quote: “Record orders bookings of $219 million… provides incredible momentum moving into 2025… expanding margins and upgrading our portfolio… in power generation… and data center expansion.”

What Went Wrong

Revenue conversion delays: customer‑driven project and booking timing pushed revenue/FCF out of 2024; Q4 FCF was –$4.4M on receipts that slipped into early 2025 (~$15M) .
Adjusted profitability softness: Q4 adjusted EBITDA $19.0M (–2% YoY) and non‑GAAP EPS $0.27 (–4% YoY) as SG&A investments preceded revenue recognition; FY24 FCF $7.4M (–80% YoY) .
Leverage ticked up with M&A: gross debt ended Q4 at ~$217M; net debt ~ $180M, leverage ~3.0x bank EBITDA; management targets ~2.2x post Fluid Handling sale and operating cash flow deployment .

Financial Results

Metric	Q4 2023	Q3 2024	Q4 2024
Revenue ($USD Millions)	$153.711	$135.513	$158.566
Diluted EPS ($)	$0.11	$0.06	$0.13
Gross Margin %	—	33.4%	35.8%
Adjusted EBITDA ($M)	$19.4	$14.3	$19.0
Adjusted EBITDA Margin %	—	10.6%	12.0%
Non‑GAAP Diluted EPS ($)	$0.28	$0.14	$0.27
Free Cash Flow ($M)	$12.2	$11.1	$(4.4)
Consensus Revenue ($M)	N/A	N/A	N/A
Consensus EPS ($)	N/A	N/A	N/A

Notes: “Consensus” cells are N/A because S&P Global consensus was unavailable at run‑time (see Estimates Context).

KPIs and Balance Sheet

KPI / Balance	Q2 2024	Q3 2024	Q4 2024
Orders ($M)	$140.8	$162.3	$218.9
Backlog ($M)	$390.9	$437.5	$540.9
Book‑to‑Bill	—	—	1.4x
Net Debt ($M)	~$83	~ $90	~ $180
Leverage (Bank EBITDA)	~1.5x	~1.6x	~3.0x

Segment breakdown: Not disclosed in Q4 8‑K/press materials; company reports two segments (Engineered Systems and Industrial Process Solutions) but did not provide a quarterly revenue split in the provided documents .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	FY 2025	$700–$750M (introduced 10/29/24)	$700–$750M (reaffirmed 2/25/25)	Maintained
Adjusted EBITDA	FY 2025	$90–$100M (introduced 10/29/24)	$90–$100M (reaffirmed 2/25/25)	Maintained
Free Cash Flow (as % of Adj. EBITDA)	FY 2025	50%–70% (10/29/24)	60%–75% (2/25/25)	Raised
FY 2024 (preliminary) Revenue/Adj. EBITDA	FY 2024	$575–$600M / $65–$70M (10/29/24)	$555–$558M / $62–$63M (1/16/25 prelim.)	Lowered (final reported FY24: revenue $557.9M; adj. EBITDA $62.8M)

Guidance incorporates net impact of completed acquisitions and expected late‑Q1 divestiture of the Fluid Handling business .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 & Q3 2024)	Current Period (Q4 2024)	Trend
Orders & Backlog Momentum	Q2: Pipeline ~$4B; bookings lumpy; backlog near record; expect large orders in 2H . Q3: Record Q3 bookings; backlog $438M; October orders >$100M .	Record Q4 orders $219M; backlog $541M; book‑to‑bill 1.4x; strength across power gen, data centers, industrial .	Improving
Power Generation “super cycle”	Q2: Larger project sizes ($60–$100M); multi‑year pipeline; broad energy transition . Q3: 15–20 active U.S. opportunities; potential $450M over eight quarters .	Strong momentum continues; two large power projects (~$100M) helped Q4 orders; expecting multiyear capex cycle .	Strengthening
Project/Revenue Timing Delays	Q2/Q3: Customer‑driven delays in large projects slowed revenue and bookings .	Delays persisted into Q4; revenues/FCF slipped; ~$15M receipts moved into early 2025; expect recovery in 2025 .	Easing (early 2025 recovery)
Margins & Productivity	Q2: Gross margin 35.6% (+480 bps YoY); Ops excellence/lean/sourcing; mid‑teens EBITDA margin target 2025–26 . Q3: Gross margin 33.4% (+460 bps YoY) .	Q4 gross margin 35.8% (+120 bps YoY); incremental EBITDA margin expansion expected in 2025 on scale and cost actions .	Improving
Tariffs / Macro	Q2/Q3: Monitoring; mixed macro; interest rate stability preferred .	Tariffs uncertain but manageable; price pass‑through feasible; bigger risk would be temporary “pause,” which they have not seen .	Neutral
Working Capital & FCF	Q2: FCF $2.6M; higher capex for ERP and capacity . Q3: Bookings timing increased receivables; cash tied in late 2H .	Q4 FCF –$4.4M on timing; ~$15M slipped into early Jan’25; FY25 FCF target 60–75% of EBITDA .	Near‑term tailwind
M&A / Portfolio Actions	Q2: Acquired EnviroCare; raised FY24 guidance . Q3: Announced Profire (close Jan’25), acquired WK; upsized revolver to $400M .	Closed Profire (Jan’25); acquired Verantis (Dec’24); plan to divest Fluid Handling (late Q1’25) .	Active/Accretive

Management Commentary

“We closed 2024 in line with the revised outlook issued in mid‑January... our fourth quarter record orders bookings of $219 million... provides incredible momentum moving into 2025.” – CEO Todd Gleason .
“Backlog closed at $541 million, an increase of 46%... including 2 large projects in power generation totaling around $100 million.” – CEO .
“Gross profit margin was 35.8%... up 120 basis points YoY... Adjusted EBITDA margin of 12% was down 54 bps YoY driven mainly by timing of investments in SG&A.” – CFO Peter Johansson .
“Cash flow for the fourth quarter was an outflow of $4 million due to working capital timing... delayed cash receipts amounted to approximately $15 million” – CFO .
“Leverage at the end of the period reaching approximately 3x our bank EBITDA... expect... reduce... to ~2.2x EBITDA after Fluid Handling sale and operating cash flow.” – CFO .
“Profire... integration going well... we think... could be another one of our acquisitions that we believe we can double in ~3 years.” – CEO .
LNG: “We’re seeing order activity begin... in Louisiana and Texas... 2025 and 2026 are going to yield some very robust project work.” – CEO .

Q&A Highlights

Orders/backlog visibility: Management reiterated strong early‑2025 order activity and higher visibility vs entering 2024 given richer backlog and acquisitions completed (vs pending last year) .
Tariffs: Financial impact expected to be minimal due to pass‑through mechanisms; greater risk would be delays from uncertainty, which have not materialized to date .
Profire integration: Attractive cross‑sell and international expansion via CECO’s Middle East/Asia channels; early integration progress is ahead of schedule .
Working capital/FCF: ~$15M collections slipped into early 2025; expect 2024 working capital drag to reverse in 2025 with stronger FCF conversion (60–75% of EBITDA) .
Capacity/resources: Hiring and integration of acquired teams to support execution; balancing SG&A investment with backlog conversion timing .

Estimates Context

S&P Global (Capital IQ) consensus estimates for CECO’s Q4 2024 revenue and EPS were unavailable due to temporary access limits at run‑time; as a result, we cannot definitively classify Q4 as a beat or miss versus Street expectations. Management and the press release did not cite specific consensus comparisons in their materials .
Where possible, we anchored comparisons to prior quarter and prior year actuals from company filings and press releases (see tables with citations).
We will update with consensus vs. actuals upon restored S&P Global access if desired.

Key Takeaways for Investors

Orders lead narrative: Record Q4 bookings ($218.9M) and record backlog ($540.9M) provide strong revenue visibility into 2025+; book‑to‑bill of 1.4x in Q4 indicates sustained demand in power gen and industrial verticals .
2025 guide intact and FCF raised: Revenue $700–$750M and adj. EBITDA $90–$100M reaffirmed; FCF raised to 60–75% of EBITDA on working capital timing tailwinds—supportive for deleveraging and capital deployment .
Margin trajectory favorable: Gross margin expansion continued (35.8% in Q4); management expects EBITDA margin expansion in 2025 as scale, mix, and lean initiatives compound .
Portfolio upgrade & catalysts: Profire (closed Jan’25) and Verantis (Dec’24) broaden technology and geographic reach; planned Fluid Handling divestiture (late Q1’25) should reduce leverage to ~2.2x and sharpen focus .
Execution risk: Revenue/FCF timing remains a swing factor as larger, multi‑party projects ramp; however, early‑2025 collections and ongoing bookings mitigate risk near‑term .
Macro watch: Tariff uncertainty monitored; pass‑through mechanisms limit financial impact, but any broader pause could affect order timing (no such pause evident yet) .
Trading lens: Near‑term stock reactions likely hinge on backlog conversion pace, cash collection updates, and progress on the Fluid Handling sale; medium‑term thesis centers on power/LNG super‑cycle exposure, accretive M&A, and mid‑teens EBITDA margin pathway .

All figures sourced from CECO’s Q4 2024 8-K/press release and earnings call transcript unless otherwise noted. Citations appear in brackets.

CECO ENVIRONMENTAL CORP (CECO)·Q4 2024 Earnings Summary