ESAB’s second quarter saw a positive market response, with sales growth driven primarily by robust demand for equipment and automation, especially in North America and Asia. Management highlighted double-digit growth in these segments, while Europe showed resilience despite ongoing geopolitical headwinds in the Middle East. CEO Shyam Kambeyanda emphasized that recent acquisitions—most notably Eddyfi—have expanded ESAB’s capabilities in inspection and monitoring, helping the company return to organic growth across both segments. Higher logistics and commodity costs pressured margins, but management cited successful navigation of these challenges.
Is now the time to buy ESAB? Find out in our full research report (it’s free for active Edge members).
ESAB (ESAB) Q2 CY2026 Highlights:
- Revenue: $807.6 million vs analyst estimates of $787.2 million (12.9% year-on-year growth, 2.6% beat)
- Adjusted EPS: $1.33 vs analyst expectations of $1.37 (3% miss)
- Adjusted EBITDA: $151.4 million vs analyst estimates of $150.2 million (18.7% margin, 0.8% beat)
- Adjusted EPS guidance for the full year is $5.45 at the midpoint, missing analyst estimates by 4.4%
- EBITDA guidance for the full year is $620 million at the midpoint, below analyst estimates of $624.8 million
- Operating Margin: 9.7%, down from 15.2% in the same quarter last year
- Organic Revenue rose 2.5% year on year (beat)
- Market Capitalization: $5.35 billion
While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From ESAB’s Q2 Earnings Call
- Bryan Blair (Oppenheimer) asked about the cadence of organic growth in the back half of the year. CEO Shyam Kambeyanda explained that sequential improvement is expected, with confidence in equipment and automation orders supporting organic growth.
- Tami Zakaria (JPMorgan) questioned the impact of price/cost neutrality on guidance. Kambeyanda clarified that pricing is expected to improve slightly, while organic volume should remain flat or slightly better as cost pressures ease.
- Nathan Jones (Stifel) inquired about Eddyfi’s higher SG&A and synergy potential. Kambeyanda outlined that the commercial model requires more engagement but expects operational leverage as the business scales, citing $20 million in targeted synergies.
- Mircea Dobre (Baird) asked how ESAB and Eddyfi’s combined offerings benefit customers. Kambeyanda detailed the end-to-end workflow, enabling traceability from material joining to ongoing monitoring, citing examples in nuclear and rail.
- Christopher Dankert (D.A. Davidson) sought updates on European defense spending and pricing trends. Kambeyanda pointed to broad-based strength in Eastern Europe and Germany, with modest sequential pricing improvements anticipated.
Catalysts in Upcoming Quarters
As we move forward, the StockStory team will be monitoring (1) the pace of integration and synergy realization from the Eddyfi acquisition, (2) the effectiveness of pricing actions in offsetting ongoing logistics and commodity cost pressures, and (3) the stability and recovery prospects in the Middle East, particularly regarding infrastructure rebuilds. Progress in expanding equipment and automation sales will also be a key signpost.
ESAB currently trades at $86.07, down from $92.47 just before the earnings. In the wake of this quarter, is it a buy or sell? The answer lies in our full research report (it’s free).
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