Executive Summary

Q2 FY25 revenue decreased 5.3% year over year to $47.8M, while diluted EPS increased to $1.01 from $0.93; gross margin expanded to 29.2%, driven by stronger Domestic segment performance, despite International site delays in India .
Backlog reached a record $184.4M (+26% YoY), positioning KEQU for continued delivery strength; management emphasized healthy demand and channel execution .
Corporate costs were elevated due to $1.54M of acquisition-related professional fees tied to the Nu Aire deal; adjusted EPS was $1.41 for the quarter, highlighting underlying strength ex one-time items .
No formal numerical guidance was provided; however, Nu Aire (acquired Nov 1) will be included starting Q3 FY25 and is a key catalyst for revenue mix, margin trajectory, and market reach .

What Went Well and What Went Wrong

What Went Well

Domestic segment delivered higher sales and earnings on improved product demand: Domestic sales +6.5% YoY to $36.4M; segment EBITDA up to $6.84M from $5.23M . “Domestic segment operating performance improved… as a result of higher product demand” — CEO Thomas D. Hull III .
Gross profit increased YoY and gross margin expanded to 29.2% (from 26.7%), demonstrating pricing/productivity gains and cost containment .
Record backlog of $184.4M underpins future visibility; management sees “continued vitality and investment” and expects “another strong year” .

What Went Wrong

International sales declined 30.1% YoY to $11.4M due to construction site delays in India, impacting timing of deliveries and segment profitability (EBITDA fell to $0.59M from $1.64M) .
Corporate segment loss widened (pre-tax loss $2.44M vs. $1.24M prior year), primarily from acquisition-related professional fees and SOX 404(b) readiness costs, weighing consolidated EBITDA .
Operating income fell YoY (to $4.43M from $5.11M), with EBITDA margin compressing to 10.2% from 11.2% as International headwinds offset Domestic strength .

Financial Results

Consolidated Quarterly Comparison

Metric	Q2 FY24 (Oct 31, 2023)	Q1 FY25 (Jul 31, 2024)	Q2 FY25 (Oct 31, 2024)
Revenue ($USD Millions)	$50.436	$48.393	$47.764
Gross Profit ($USD Millions)	$13.468	$12.488	$13.952
Operating Income ($USD Millions)	$5.109	$2.575	$4.434
Net Income - (IS) ($USD Millions)	$2.732	$2.193	$3.008
Diluted EPS - Continuing Operations ($USD)	$0.93	$0.74	$1.01
EBITDA ($USD Millions)	$5.662	$3.325	$4.883
Gross Profit Margin %	26.7%	25.8%	29.2%
EBIT Margin %	10.1%	5.3%	9.3%
EBITDA Margin %	11.2%	6.9%	10.2%
Net Income Margin %	5.4%	4.5%	6.3%

Notes: Margins calculated from cited revenue and profit figures.

Non-GAAP Adjustments (Quarter)

Metric	Q2 FY24	Q1 FY25	Q2 FY25
Adjusted Net Earnings ($USD Millions)	$2.830	$2.770	$4.197
Adjusted Diluted EPS ($USD)	$0.93	$0.93	$1.41
Adjusted EBITDA ($USD Millions)	$5.662	$4.055	$6.423
Acquisition-related Professional Fees ($USD Millions)	—	$0.73	$1.540

Segment Breakdown

Segment Metric	Q2 FY24	Q1 FY25	Q2 FY25
Domestic Sales ($USD Millions)	$34.185	$35.523	$36.409
Domestic Segment Net Earnings ($USD Millions)	$3.054	$2.871	$4.524
Domestic Segment EBITDA ($USD Millions)	$5.230	$4.738	$6.838
International Sales ($USD Millions)	$16.251	$12.870	$11.355
International Segment Net Earnings ($USD Millions)	$0.525	$0.463	$0.356
International Segment EBITDA ($USD Millions)	$1.635	$0.696	$0.592
Corporate Pre-tax Loss ($USD Millions)	$(1.243)	$(1.992)	$(2.444)
Corporate EBITDA ($USD Millions)	$(1.203)	$(2.109)	$(2.547)

KPIs and Balance Highlights

KPI	Q2 FY24	Q1 FY25	Q2 FY25
Backlog ($USD Millions)	$146.3 (as of Oct 31, 2023)	$159.4	$184.4
Working Capital ($USD Millions)	$52.144 (prior-year Q2 end)	$56.012	$59.965
Total Cash on Hand ($USD Millions)	—	$25.186	$29.664
Short-term Debt ($USD Millions)	—	$3.627	$0.805
Long-term Debt ($USD Millions)	—	$28.293	$28.047
Debt-to-Equity Ratio	—	0.68-to-1	0.59-to-1

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	FY25	None provided	None provided	Maintained (no formal guidance)
Margins (Gross/EBITDA)	FY25	None provided	None provided	Maintained (no formal guidance)
OpEx	FY25	None provided	None provided	Maintained (no formal guidance); note acquisition-related fees impacted Q2
Tax Rate	FY25	None provided	None provided	Maintained (no formal guidance)
Segment-specific	FY25	None provided	None provided	Maintained (no formal guidance)
Dividends	FY25	None provided	None provided	Maintained (no formal guidance)

Management emphasized backlog strength and Nu Aire inclusion from Q3 FY25 but did not provide numerical ranges .

Earnings Call Themes & Trends

Note: No Q2 FY25 earnings call transcript was available in our corpus [List: 0 earnings-call-transcript].

Topic	Previous Mentions (Q4 FY24, Q1 FY25)	Current Period (Q2 FY25)	Trend
Supply chain / India site delays	Q1 FY25: India site delays pushing deliveries	Continued delays in India impacting International sales	Persistent headwind
Backlog / Demand	Q4 FY24: backlog up to $155.6M; strong quoting	Backlog at record $184.4M; demand remains healthy	Strengthening
Corporate costs / one-time items	Q4 FY24: pension termination and valuation allowance reversal (non-recurring)	Acquisition-related professional fees ($1.54M) and SOX 404(b) readiness costs	Near-term elevated; expected to normalize
Domestic performance	Q4 FY24: improved productivity/cost containment	Higher product demand driving sales/earnings	Positive
Strategic M&A (Nu Aire)	Announced Nov 1, 2024; $55M acquisition	Not in Q2 results; included from Q3 FY25	Integration catalyst ahead

Management Commentary

“Our financial performance for the second quarter of fiscal year 2025 was strong… Domestic segment operating performance improved… as a result of higher product demand” — Thomas D. Hull III, President & CEO .
“Customer construction site delays in India on multiple projects continue to impact our ability to ship products and deliver services” .
“Our backlog remains very healthy… positions the company well to deliver another strong year” .
On Nu Aire: “Nu Aire… will be included going forward, beginning with our third quarter fiscal year 2025 results… the company incurred expenses related to the acquisition of $2.3 million in the current fiscal year” .

Q&A Highlights

No Q2 FY25 call transcript available; no Q&A themes could be extracted [List: 0 earnings-call-transcript].

Estimates Context

Wall Street consensus (S&P Global) for Q2 FY25 EPS and revenue was unavailable at the time of this analysis due to data access limits; no estimate comparison can be presented. Values from S&P Global were not retrieved — estimates unavailable.
Implications: Given YoY EPS growth and gross margin expansion, and International delays shifting revenue timing, analysts are likely to reassess FY25/26 models to incorporate Nu Aire’s contribution from Q3 and delivery timing normalization in India .

Key Takeaways for Investors

Domestic demand resilience and margin expansion offset International timing issues, yielding stronger EPS despite lower sales; focus on maintaining gross margin gains into Q3 .
International site delays in India remain the principal near-term headwind; watch for catch-up deliveries and backlog conversion rates in H2 FY25 .
Corporate costs elevated due to acquisition and compliance; adjusted metrics show underlying operating strength — monitor normalization of non-core fees .
Record backlog ($184.4M) is a positive leading indicator; execution on backlog conversion will be critical for sustaining revenue and EBITDA momentum .
Nu Aire integration (from Q3) is a strategic catalyst that can broaden product mix, distribution reach, and potentially support margin trajectory; assess synergy realization and cross-sell .
Balance sheet improving (lower short-term debt; debt-to-equity down to 0.59:1) provides flexibility for integration and growth initiatives .
Near-term trading: stock likely sensitive to updates on India project timing and early Nu Aire contribution; medium-term thesis centers on operational synergies, backlog conversion, and sustaining margin discipline .

KEWAUNEE SCIENTIFIC CORP /DE/ (KEQU)·Q2 2025 Earnings Summary