CECO Environmental Corp. (NASDAQ: CECO) has reported its financial results for the first quarter of 2025, revealing numerous financial records and highlighting the strength of its well-positioned portfolio.
In the first quarter of 2025: Orders amounted to $227.9 million, marking a substantial increase of 57% compared to the same period last year. Backlog stood at $602.0 million, reflecting a notable 55% increase from the previous year. Revenue reached $176.7 million, indicating a significant 40% increase from the first quarter of the previous year. Gross profit margin was reported at 35.2%, with a gross margin of $68.0 million, up 28% from the same period in 2024. Net income was $36.0 million, a significant increase from $1.5 million in the first quarter of 2024. Adjusted EBITDA reached $14.0 million, showing a 6% increase from the first quarter of 2024. * However, free cash flow was reported at $(15.1) million, down $13.2 million from the first quarter of 2024.
CECO's CEO, Todd Gleason, expressed satisfaction with the outstanding first-quarter results, attributing the performance to record orders that drove new levels of backlog and revenue. The company's backlog exceeded $600 million for the first time in its history, with an order pursuit pipeline now over $5 billion, reinforcing confidence in continued growth outlook.
Despite the strong performance, the company faced challenges, including strategic price actions to address preliminary tariff impacts and proactive measures to manage the record backlog and robust project pipeline, which resulted in increased costs and decreased adjusted EBITDA in the first quarter. However, the CEO announced strategic cost actions associated with eliminating redundant general and administrative roles and expenses, as well as productivity and efficiency initiatives, expected to underpin operating margin expansion throughout the year.
CECO maintains its full-year 2025 outlook, expecting revenue of $700 to $750 million, up approximately 30% at the midpoint, and adjusted EBITDA of $90 to $100 million, up approximately 50% at the midpoint versus 2024. The company also maintains its 2025 adjusted free cash flow to be between 60 and 75% of adjusted EBITDA.
Gleason emphasized confidence in achieving growth targets for the year, acknowledging the dynamic environment's unpredictability due to tariff-related uncertainties. The company is comparatively well-positioned to manage potential additional cost expenses, maintaining its full-year outlook while monitoring the economic situation and working with its supply chain to mitigate risks.
CECO Environmental Corp. is a leading environmentally focused, diversified industrial company, serving the industrial air, industrial water, and energy transition markets globally. The company provides innovative solutions and application expertise to help companies grow their business with safe, clean, and more efficient solutions that protect people, the environment, and industrial equipment. The market has reacted to these announcements by moving the company's shares 16.4% to a price of $22.35. For the full picture, make sure to review CECO Environmental's 8-K report.
