About Kadant Inc.
Kadant Inc. (NYSE: KAI) is a U.S.-based global supplier of engineered systems and equipment used primarily in process industries such as paper, packaging, recycling, and wood processing. The company designs and manufactures products that improve efficiency, reduce energy and water consumption, and enhance sustainability in industrial operations.
Headquartered in Westford, Massachusetts, Kadant operates through multiple segments, including Flow Control, Industrial Processing, and Material Handling. Its solutions include fluid handling systems, rotary joints, filtration and cleaning equipment, fiber processing machinery, and automated material handling technologies.
Kadant serves customers worldwide, with a strong presence in North America, Europe, and Asia. The company is known for combining proprietary technologies with aftermarket services, providing recurring revenue through maintenance, parts, and system upgrades. Overall, Kadant focuses on helping manufacturers improve productivity, environmental performance, and operational reliability.
Fourth Quarter Financial Highlights
In the fourth quarter, Kadant Inc. reported strong performance, with revenue increasing 11% year-over-year to a record $286 million. Gross margin improved by 50 basis points to 43.9%, reflecting better pricing and operating efficiency.
Net income remained steady at $24 million, and GAAP earnings per share also stayed unchanged at $2.04. However, adjusted EPS rose slightly by 1% to $2.27, while adjusted EBITDA increased 11% to $58 million, representing 20.3% of revenue.
Cash generation remained robust, with operating cash flow rising 17% to $61 million. Additionally, bookings grew 12% to $270 million, indicating healthy demand and a solid pipeline for future quarters.
Fiscal Year Financial Highlights
For the full fiscal year, Kadant reported revenue of $1.05 billion, unchanged from the prior year, while gross margin improved by 90 basis points to 45.2%.
Net income declined 9% to $102 million, and GAAP EPS fell by 9% to $8.65. Adjusted EPS also decreased 10% to $9.26, and adjusted EBITDA declined 6% to $216 million, representing 20.6% of revenue.
Despite the earnings decline, cash flow remained strong, with operating cash flow increasing 10% to a record $171 million. Bookings rose 5% to a record $1.03 billion, demonstrating continued customer demand and long-term growth visibility.
Fourth Quarter 2025 vs. 2024
Kadant Inc. reported fourth-quarter revenue of $286.2 million, up 11% from $258.0 million in 2024, driven by an 8% contribution from acquisitions and a 3% favorable impact from foreign currency translation. Gross margin improved slightly to 43.9%, compared to 43.4% in the prior year.
Net income remained unchanged at $24.0 million, with GAAP EPS also steady at $2.04. Adjusted EPS increased 1% to $2.27, reflecting the exclusion of acquisition-related and other one-time costs. Adjusted EBITDA rose 11% to $58.0 million, maintaining a margin of 20.3% of revenue.
Cash generation was strong, with operating cash flow increasing 17% to $60.8 million and free cash flow rising 18% to $54.7 million. Bookings grew 12% to $270.0 million, while organic bookings increased 1%, excluding acquisition and currency effects.
Fiscal Year 2025 vs. 2024
For the full year, Kadant reported revenue of $1,052.2 million, largely unchanged from the record $1,053.4 million in 2024. Organic revenue declined 4%, partially offset by contributions from acquisitions and currency translation. Gross margin improved to 45.2%, compared to 44.3% in 2024.
Net income decreased 9% to $102.0 million, while GAAP EPS fell to $8.65 and adjusted EPS declined 10% to $9.26, reflecting lower profitability after adjusting for acquisition-related and other costs. Adjusted EBITDA decreased 6% to $216.3 million, representing 20.6% of revenue, compared to 21.8% in 2024.
Despite lower earnings, cash flow remained strong, with operating cash flow increasing 10% to a record $171.3 million and free cash flow rising 15% to $154.3 million. Bookings increased 5% to a record $1,033.9 million, with organic bookings rising 1%, demonstrating steady underlying demand.
Outlook
For 2026, Kadant Inc. expects revenue to be between $1.160 billion and $1.185 billion, GAAP EPS to range from $10.27 to $10.62, and adjusted EPS to be between $10.40 and $10.75, after excluding $0.13 of acquisition-related costs.
For the first quarter of 2026, the company anticipates revenue of $270 million to $280 million, GAAP EPS of $1.69 to $1.79, and adjusted EPS of $1.78 to $1.88, after excluding $0.09 of acquisition-related costs.