ESCO Reports Second Quarter Fiscal 2026 Results

St. Louis, May 07, 2026 (GLOBE NEWSWIRE) — ESCO Technologies Inc. (NYSE: ESE) (ESCO, or the Company) today reported its operating results for the second quarter ended March 31, 2026 (Q2 2026).    

Operating Highlights

• Q2 2026 Sales increased $78 million (33.5 percent) to $309 million compared to $232 million in Q2 2025. Q2 2026 organic sales increased $30 million (12.8 percent) and Maritime contributed $48 million (20.7 percent) of revenue growth in the quarter.   
• Q2 2026 GAAP EPS from Continuing Operations increased 26.5 percent to $1.29 per share compared to $1.02 per share in Q2 2025. Q2 2026 Adjusted EPS from Continuing Operations increased 63.2 percent to $1.91 per share compared to $1.17 per share in Q2 2025.
• Q2 2026 Entered Orders increased $113 million (42.4 percent) to $378 million (book-to-bill of 1.22), resulting in record backlog of $1.5 billion.        
• Net cash provided by operating activities was $135 million YTD, an increase of $88 million compared to the prior year period.

Bryan Sayler, Chief Executive Officer and President, commented, “Q2 was another excellent quarter, highlighted by $378 million in orders, 33% revenue growth, and 320 basis points of Adjusted EBITDA margin expansion. We saw broad-based revenue strength across our Navy, aerospace, Test, and utilities markets. It has been particularly encouraging to see a strong rebound in our Test business, with increasing orders driving solid revenue growth across many of their served markets.  

“We believe this quarter’s results further demonstrate the strength of our strategic positioning and our ability to execute consistently and deliver sustainable value. ESCO has taken concrete steps to strengthen our business portfolio and we remain positive about the long-term outlook for our target markets. Across these markets, durable demand drivers continue to be in place, and we are excited for the future.”

Segment Performance
Aerospace & Defense (A&D)

• Q2 2026 sales increased $60.7 million (67.7 percent) to $150.3 million from $89.6 million in Q2 2025. Organic sales increased $12.9 million (14.3 percent) and Maritime added $47.8 million (53.4 percent) of revenue growth in the quarter. Quarterly sales growth was led by strong performance in Navy, commercial aerospace, and military aerospace.
• Q2 2026 EBIT increased $18.8 million to $43.0 million from $24.2 million in Q2 2025. Adjusted EBIT increased $18.9 million in Q2 2026 to $43.1 million (28.6 percent margin) from $24.2 million (27.0 percent margin) in Q2 2025. The 78 percent increase in Adjusted EBIT was driven by the addition of Maritime as well as leverage on higher volume, and price increases, partially offset by inflationary pressures and unfavorable mix.
• Q2 2026 entered orders increased $87.3 million (90.4 percent) to $183.8 million (book-to-bill of 1.22), resulting in record backlog of $1.1 billion. Orders strength in the quarter was primarily driven by $53 million in orders at Maritime, $24 million in Virginia Class orders at Globe, and higher commercial aerospace OEM orders.

Utility Solutions Group (USG)

• Q2 2026 sales increased $2.7 million (3.0 percent) to $93.5 million from $90.8 million in Q2 2025. Doble sales increased by $8.4 million (11.3 percent) while NRG sales decreased by $5.7 million (35.8 percent).   Sales growth in the quarter was driven by higher protection testing, offline test equipment, and services revenue at Doble, partially offset by lower wind and solar revenue at NRG.
• Q2 2026 EBIT increased $1.7 million to $22.5 million from $20.8 million in Q2 2025. Adjusted EBIT increased $2.2 million in Q2 2026 to $23.1 million (24.7 percent margin) from $20.9 million (23.0 percent margin) in Q2 2025. The 11 percent increase in Adjusted EBIT was driven by leverage on higher volume at Doble, price increases, and mix, partially offset by deleverage on lower volume at NRG and inflationary pressures.
• Q2 2026 entered orders increased $9.1 million (9.9 percent) to $101.3 million (book-to-bill of 1.08), resulting in backlog of $162.5 million. Doble orders increased $15.5 million (20.3 percent) to $92.1 million due to strength in services, offline test equipment, and condition monitoring orders. NRG orders decreased $6.4 million (41.3 percent) to $9.2 million, primarily due to lower wind and solar orders.

RF Test & Measurement (Test)

• Q2 2026 sales increased $14.1 million (27.5 percent) to $65.5 million from $51.4 million in Q2 2025. Sales growth in the quarter was primarily driven by higher U.S Test & Measurement (EMC) and filter sales for government funded data centers.
• Q2 2026 EBIT increased $2.4 million to $8.8 million from $6.4 million in Q2 2025.   Q2 2026 Adjusted EBIT increased $3.7 million to $10.1 million (15.4 percent margin) from $6.4 million (12.4 percent margin) in Q2 2025. The 59 percent increase in Adjusted EBIT was driven by leverage on higher volume and price increases, partially offset by inflationary pressures.
• Q2 2026 entered orders increased $16.1 million (21.0 percent) to $93.1 million (book-to-bill of 1.42), resulting in ending backlog of $232.5 million.   Orders strength in the quarter was driven by higher Test and Measurement (EMC) orders in the U.S. and EMEA, filter orders for government funded data centers, and multiple industrial shielding projects.  

Megger Acquisition
As announced on April 15, 2026, ESCO has agreed to acquire Megger Group Limited. Megger will become part of ESCO’s Utility Solutions Group, creating a business of substantial scale and expanding our capabilities as a valued partner to utilities worldwide. All filings for regulatory approval are underway and we anticipate closing on the transaction in Q1 of fiscal 2027.

Business Outlook – FY 2026
FY 2026 Sales and Adjusted EPS Guidance Update:

• Maintaining full year FY 2026 revenue guidance of $1.29 to $1.33 billion (18 to 21 percent growth over the prior year).
• Raising full year Adjusted EPS guidance to be in the range of $8.00 – $8.25 per share (33 to 37 percent growth), which reflects a midpoint increase of $0.48 per share from our initial November guidance ($7.50 – $7.80) and $0.10 per share from our more recent February guidance update ($7.90 – $8.15).
• Q3’26 Adjusted EPS is expected to be in the range of $2.05 – $2.15 per share (28 to 34 percent growth compared to Q3’25 Adjusted EPS).

Dividend Payment
The next quarterly cash dividend of $0.08 per share will be paid on July 17, 2026 to stockholders of record on July 2, 2026.  

Conference Call
The Company will host a conference call today, May 7, at 4:00 p.m. Central Time, to discuss the Company’s Q2 2026 results. A live audio webcast and an accompanying slide presentation will be available in the Investor Center of ESCO’s website. Participants may also access the webcast using this registration link. For those unable to participate, a webcast replay will be available after the call in the Investor Center of ESCO’s website.

Forward-Looking Statements
Statements in this press release regarding Management’s intentions, expectations and guidance for fiscal 2026, including restructuring and cost reduction actions, sales, orders, revenues, margin, earnings, Adjusted EPS, acquisition related amortization, and any other statements which are not strictly historical, are “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. securities laws.

Investors are cautioned that such statements are only predictions and speak only as of the date of this release, and the Company undertakes no duty to update them except as may be required by applicable laws or regulations. The Company’s actual results in the future may differ materially from those projected in the forward-looking statements due to risks and uncertainties that exist in the Company’s operations and business environment including but not limited to those described in Item 1A, “Risk Factors”, of the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2025 and the following: the impacts of climate change and related regulation of greenhouse gases; the impacts of labor disputes, civil disorder, wars including the conflicts involving Iran and Lebanon, elections, political changes, tariffs and trade disputes, terrorist activities, cyberattacks or natural disasters on the Company’s operations and those of the Company’s customers and suppliers; disruptions in manufacturing or delivery arrangements due to shortages or unavailability of materials or components; restrictions or closures of critical supply routes such as the Strait of Hormuz; other supply chain disruptions; inability to access work sites; the timing and content of future contract awards or customer orders; the timely appropriation, allocation and availability of Government funds; the termination for convenience of Government and other customer contracts or orders; weakening of economic conditions in served markets; the success of the Company’s competitors; changes in customer demands or customer insolvencies; competition; intellectual property rights; technical difficulties or data breaches; the availability of acquisitions; delivery delays or defaults by customers; performance issues with key customers, suppliers and subcontractors; material changes in the costs and availability of certain raw materials; material changes in the cost of credit; changes in laws and regulations including but not limited to changes in accounting standards and taxation; changes in interest, inflation and employment rates; costs relating to environmental matters arising from current or former facilities; uncertainty regarding the ultimate resolution of current disputes, claims, litigation or arbitration; and the integration and performance of acquired businesses.

Non-GAAP Financial Measures
The financial measures EBIT, Adjusted EBIT, EBITDA, Adjusted EBITDA, and Adjusted EPS are presented in this press release. The Company defines “EBIT” as earnings before interest and taxes, “EBITDA” as earnings before interest, taxes, depreciation and amortization, “Adjusted EBIT” and “Adjusted EBITDA” as excluding the net impact of the items described in the attached Reconciliation of Non-GAAP Financial Measures, and “Adjusted EPS” as GAAP earnings per share excluding the net impact of the items described and reconciled in the attached Reconciliation of Non-GAAP Financial Measures.

EBIT, Adjusted EBIT, EBITDA, Adjusted EBITDA, and Adjusted EPS are not recognized in accordance with U.S. generally accepted accounting principles (GAAP). However, Management believes EBIT, Adjusted EBIT, EBITDA, and Adjusted EBITDA are useful in assessing the operational profitability of the Company’s business segments because they exclude interest, taxes, depreciation, and amortization, which are generally accounted for across the entire Company on a consolidated basis. EBIT is also one of the measures used by Management in determining resource allocations within the Company as well as incentive compensation. The presentation of EBIT, Adjusted EBIT, EBITDA, Adjusted EBITDA, and Adjusted EPS provides important supplemental information to investors by facilitating comparisons with other companies, many of which use similar non-GAAP financial measures to supplement their GAAP results. The use of non-GAAP financial measures is not intended to replace any measures of performance determined in accordance with GAAP.

About ESCO
ESCO Technologies is a global provider of highly engineered products and solutions serving diverse end-markets. It manufactures filtration and fluid control products, advanced composites, as well as signature and power management solutions for aviation, Navy, and industrial customers. ESCO is an industry leader in designing and manufacturing RF test and measurement products and systems; and provides diagnostic instruments, software and services to industrial power users and the electric utility and renewable energy industries. Headquartered in St. Louis, Missouri, ESCO and its subsidiaries have offices and manufacturing facilities worldwide. For more information on ESCO and its subsidiaries, visit ESCO’s website at www.escotechnologies.com.
  

ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations (Unaudited)
(Dollars in thousands, except per share amounts)
						Three Months Ended March 31, 2026			Three Months Ended March 31, 2025
Net Sales					$	309,341			231,777
Cost and Expenses:
		Cost of sales				178,026			132,504
		Selling, general and administrative expenses				62,830			54,294
		Amortization of intangible assets				20,420			7,989
		Interest expense				2,399			2,195
		Other expenses (income), net				1,802			375
			Total costs and expenses			265,477			197,357
Earnings before income taxes						43,864			34,420
Income tax expense						10,308			8,037
			Earnings from continuing operations			33,556			26,383
Earnings from discontinued operations, net of tax expense
of $363 and $1,429, respectively						1,177			4,650
			Net earnings		$	34,733			31,033
				Diluted – GAAP
				Continuing operations	$	1.29			1.02
				Discontinued operations		0.05			0.18
				Net earnings	$	1.34			1.20
				Diluted – As Adjusted Basis
				Continuing Operations	$	1.91	(1	)	1.17	(2	)
				Diluted average common shares O/S:		25,938			25,877
(1	)	Q2 2026 Adjusted EPS from continuing operations excludes $0.62 per share of after-tax charges consisting of: $0.06 of Test & USG segment restructuring charges, $0.03 of Corporate acquisition costs and $0.53 of acquisition related amortization.
(2	)	Q2 2025 Adjusted EPS from continuing operations excludes $0.15 per share of after-tax charges consisting primarily of acquisition related amortization.

   
   

ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations (Unaudited)
(Dollars in thousands, except per share amounts)
						Six Months Ended March 31, 2026			Six Months Ended March 31, 2025
Net Sales					$	599,000			446,370
Cost and Expenses:
		Cost of sales				347,766			256,718
		Selling, general and administrative expenses				124,037			109,263
		Amortization of intangible assets				40,744			15,982
		Interest expense				5,279			4,452
		Other expenses (income), net				1,832			(262	)
			Total costs and expenses			519,658			386,153
Earnings before income taxes						79,342			60,217
Income tax expense						17,095			13,527
			Earnings from continuing operations			62,247			46,690
Earnings from discontinued operations, net of tax expense
of $363 and $2,407, respectively						1,177			7,816
			Net earnings		$	63,424			54,506
				Diluted – GAAP
				Continuing operations	$	2.40			1.81
				Discontinued operations		0.05			0.30
				Net earnings	$	2.45			2.11
				Diluted – As Adjusted Basis
				Continuing Operations	$	3.55	(1	)	2.12		(2	)
				Diluted average common shares O/S:		25,909			25,854
(1	)	YTD Q2 2026 Adjusted EPS from continuing operations excludes $1.15 per share of after-tax charges consisting primarily of: $0.07 of restructuring charges within Test, USG & A&D segments, $0.03 of Corporate acquisition costs and $1.05 of acquisition related amortization.
(2	)	YTD Q2 2025 Adjusted EPS from continuing operations excludes $0.31 per share of after-tax charges consisting of: $0.01 of restructuring charges within the Test segment and $0.30 of acquisition related amortization.

   
   

ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
Condensed Business Segment Information (Unaudited) – Continuing Operations basis
(Dollars in thousands)
				GAAP						As Adjusted
				Q2 2026			Q2 2025			Q2 2026			Q2 2025
Net Sales
	Aerospace & Defense		$	150,310			89,627			150,310			89,627
	USG			93,529			90,767			93,529			90,767
	Test			65,502			51,383			65,502			51,383
		Totals	$	309,341			231,777			309,341			231,777
EBIT
	Aerospace & Defense		$	42,967			24,217			43,062			24,219
	USG			22,486			20,779			23,068			20,862
	Test			8,773			6,369			10,095			6,369
	Corporate			(27,963	)		(14,750	)		(9,011	)		(9,648	)
		Consolidated EBIT		46,263			36,615			67,214			41,802
		Less: Interest expense		(2,399	)		(2,195	)		(2,399	)		(2,195	)
		Less: Income tax expense		(10,308	)		(8,037	)		(15,126	)		(9,230	)
		Net earnings	$	33,556			26,383			49,689			30,377
Note 1: Adjusted net earnings of $49.7 million in Q2 2026 exclude $16.2 million (or $0.62 per share) of after-tax charges consisting of: $0.06 of Test & USG segment restructuring charges, $0.03 of Corporate acquisition costs and $0.53 of acquisition related amortization.
Note 2: Adjusted net earnings of $30.4 million in Q2 2025 exclude $4.0 million (or $0.15 per share) of after-tax charges consisting primarily of acquisition related amortization.
EBITDA Reconciliation to Net earnings:										Q2 2026 –			Q2 2025 –
				Q2 2026			Q2 2025			As Adj			As Adj
Consolidated EBITDA			$	73,100			49,685			76,380			49,912
Less: Depr & Amort				(26,837	)		(13,070	)		(9,166	)		(8,110	)
Consolidated EBIT				46,263			36,615			67,214			41,802
Less: Interest expense				(2,399	)		(2,195	)		(2,399	)		(2,195	)
Less: Income tax expense				(10,308	)		(8,037	)		(15,126	)		(9,230	)
Net earnings			$	33,556			26,383			49,689			30,377

   
   

ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
Condensed Business Segment Information (Unaudited) – Continuing Operations basis
(Dollars in thousands)
				GAAP						As Adjusted
				YTD			YTD			YTD			YTD
				Q2 2026			Q2 2025			Q2 2026			Q2 2025
Net Sales
	Aerospace & Defense		$	294,139			171,495			294,139			171,495
	USG			181,013			177,427			181,013			177,427
	Test			123,848			97,448			123,848			97,448
		Totals	$	599,000			446,370			599,000			446,370
EBIT
	Aerospace & Defense		$	80,954			41,669			81,195			41,697
	USG			42,015			41,268			42,647			41,351
	Test			16,815			10,791			18,137			11,256
	Corporate			(55,163	)		(29,059	)		(18,644	)		(18,958	)
		Consolidated EBIT		84,621			64,669			123,335			75,346
		Less: Interest expense		(5,279	)		(4,452	)		(5,279	)		(4,452	)
		Less: Income tax		(17,095	)		(13,527	)		(25,998	)		(15,983	)
		Net earnings	$	62,247			46,690			92,058			54,911
Note 1: Adjusted net earnings of $92.1 million in YTD 2025 exclude $29.8 million (or $1.15 per share) of after-tax charges consisting of: $0.07 of restructuring charges within Test, USG, A&D segments, $0.03 of Corporate acquisition costs and $1.05 of acquisition related amortization.
Note 2: Adjusted net earnings of $54.9 million in YTD 2025 exclude $8.2 million (or $0.31 per share) of after-tax charges consisting of: $0.01 of restructuring charges within the Test segment and $0.30 of acquisition related amortization.
EBITDA Reconciliation to Net earnings:										YTD			YTD
				YTD			YTD			Q2 2026 –			Q2 2025 –
				Q2 2026			Q2 2025			As Adj			As Adj
Consolidated EBITDA			$	137,951			90,710			141,427			91,430
Less: Depr & Amort				(53,330	)		(26,041	)		(18,092	)		(16,084	)
Consolidated EBIT				84,621			64,669			123,335			75,346
Less: Interest expense				(5,279	)		(4,452	)		(5,279	)		(4,452	)
Less: Income tax expense				(17,095	)		(13,527	)		(25,998	)		(15,983	)
Net earnings			$	62,247			46,690			92,058			54,911

   
   

ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets (Unaudited)
(Dollars in thousands)
				March 31, 2026		September 30 2025
Assets
	Cash and cash equivalents		$	92,252		101,350
	Accounts receivable, net			256,835		253,554
	Contract assets			103,532		90,730
	Inventories			237,090		217,807
	Other current assets			37,084		25,065
		Total current assets		726,793		688,506
	Property, plant and equipment, net			170,860		172,493
	Intangible assets, net			682,372		723,973
	Goodwill			761,181		761,931
	Operating lease assets			48,977		47,707
	Other assets			15,622		15,778
			$	2,405,805		2,410,388
Liabilities and Shareholders’ Equity
	Current maturities of long-term debt		$	20,000		20,000
	Accounts payable			106,677		96,534
	Contract liabilities			269,402		216,590
	Current income tax payable			5,619		62,007
	Other current liabilities			98,667		113,017
		Total current liabilities		500,365		508,148
	Deferred tax liabilities			115,140		112,390
	Non-current operating lease liabilities			45,707		44,403
	Other liabilities			34,173		38,576
	Long-term debt			125,000		166,000
	Shareholders’ equity			1,585,420		1,540,871
			$	2,405,805		2,410,388

   
   

ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows (Unaudited)
(Dollars in thousands)
		Six Months Ended March 31, 2026			Six Months Ended March 31, 2025
Cash flows from operating activities:
Net earnings	$	63,424			54,506
(Earnings) loss from discontinued operations		(1,177	)		(7,816	)
Adjustments to reconcile net earnings to net cash
provided by operating activities:
Depreciation and amortization		53,330			26,041
Stock compensation expense		6,565			5,323
Changes in assets and liabilities		7,304			(30,033	)
Effect of deferred taxes		5,176			(1,714	)
Net cash provided by operating activities – continuing operations		134,622			46,307
Net cash used by operating activities – discontinued operations		(59,340	)		11,968
Net cash provided by operating activities		75,282			58,275
Cash flows from investing activities:
Acquisition of business, net of cash acquired		(10,232	)		–
Capital expenditures		(13,134	)		(14,864	)
Additions to capitalized software and other		(4,801	)		(5,465	)
Net cash used by investing activities – continuing operations		(28,167	)		(20,329	)
Net cash provided by investing activities – discontinued operations		1,540			(486	)
Net cash used by investing activities		(26,627	)		(20,815	)
Cash flows from financing activities:
Proceeds from long-term debt and short term borrowings		110,000			66,000
Principal payments on long-term debt and short-term borrowings		(151,000	)		(100,000	)
Dividends paid		(4,143	)		(4,130	)
Other		(10,645	)		(6,146	)
Net cash used by financing activities		(55,788	)		(44,276	)
Effect of exchange rate changes on cash and cash equivalents		(1,965	)		(1,750	)
Net decrease in cash and cash equivalents		(9,098	)		(8,566	)
Cash and cash equivalents, beginning of period		101,350			65,963
Cash and cash equivalents, end of period	$	92,252			57,397

   
   

ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
Other Selected Financial Data (Unaudited)
(Dollars in thousands)
Backlog And Entered Orders – Q2 2026				A&D			USG			Test			Total
	Beginning Backlog – 1/1/26		$	1,041,514			154,772			204,863			1,401,149
	Entered Orders			183,783			101,267			93,146			378,196
	Sales			(150,310	)		(93,529	)		(65,502	)		(309,341	)
	Ending Backlog – 3/31/26		$	1,074,987			162,510			232,507			1,470,004
Backlog And Entered Orders – YTD Q2 2026				A&D			USG			Test			Total
	Beginning Backlog – 10/1/25		$	803,002			143,460			187,175			1,133,637
	Entered Orders			566,124			200,063			169,180			935,367
	Sales			(294,139	)		(181,013	)		(123,848	)		(599,000	)
	Ending Backlog – 3/31/26		$	1,074,987			162,510			232,507			1,470,004

ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
Reconciliation of Non-GAAP Financial Measures (Unaudited)
EPS – Adjusted Basis Reconciliation – Q2 2026
	EPS Continuing Operations – GAAP Basis – Q2 2026	$	1.29
	Adjustments (defined below)		0.62
	EPS Continuing Operations – As Adjusted Basis – Q2 2026	$	1.91
	Adjustments of $0.62 per share consist of: $0.06 of restructuring charges
	within the Test & USG segments, $0.03 of Corporate acquisition costs
	and $0.53 of acquisition related amortization.
EPS – Adjusted Basis Reconciliation – Q2 2025
	EPS Continuing Operations– GAAP Basis – Q2 2025	$	1.02
	Adjustments (defined below)		0.15
	EPS Continuing Operations– As Adjusted Basis – Q2 2025	$	1.17
	Adjustments of $0.15 per share consist of acquisition related
	amortization.
EPS – Adjusted Basis Reconciliation – YTD Q2 2026
	EPS Continuing Operations – GAAP Basis – YTD Q2 2026	$	2.40
	Adjustments (defined below)		1.15
	EPS Continuing Operations – As Adjusted Basis – YTD Q2 2026	$	3.55
	Adjustments of $1.15 per share consist of: $0.07 of restructuring charges
	within the Test, USG and A&D segments, $0.03 of Corporate acquisition
	costs and $1.05 of acquisition related amortization.
EPS – Adjusted Basis Reconciliation – YTD Q2 2025
	EPS Continuing Operations– GAAP Basis – YTD Q2 2025	$	1.81
	Adjustments (defined below)		0.31
	EPS Continuing Operations– As Adjusted Basis – YTD Q2 2025	$	2.12
	Adjustments of $0.31 per share consist of: $0.01 of restructuring charges
	within the Test segment, and $0.30 of acquisition related amortization.

          
SOURCE ESCO Technologies Inc.
Kate Lowrey, Vice President of Investor Relations, (314) 213-7277