CECO Environmental's Q2 2025: Unpacking Contradictions in Power Generation, Orders, and Profit Margins

Power generation market opportunities, large orders and bookings guidance, large orders and inflationary pressures, EBITDA margin targets are the key contradictions discussed in CECO Environmental's latest 2025Q2 earnings call.



Revenue and Backlog Growth:
- CECO Environmental reported revenue of $185 million for the quarter, up 35% year-over-year, setting a new record and marking the third consecutive quarter with orders over $200 million.
- The growth was driven by strong project execution, market dynamics, and a significant increase in bookings.

Operational Efficiency and Cost Optimization:
- The company's adjusted EBITDA rose to over $23 million, an increase of 45% year-over-year, with margins improving by approximately 90 basis points.
- This improvement was attributed to volume growth, high gross margins, and the impact of operational and SG&A cost actions.

Sales Opportunity Pipeline and Market Expansion:
- CECO's sales opportunity pipeline surpassed $5.5 billion, with a significant focus on markets like power generation, semiconductors, and industrial water.
- The growth in the pipeline reflects strategic investments in talent, business systems, and market entry, contributing to increased bookings and revenue expansion.

International Market Growth:
- The company has expanded its high-growth regions, with sales from these regions increasing from $30 million to over $100 million over the last four years.
- This expansion is driven by strategic investments in international markets, including the Middle East, Southeast Asia, and South Korea, to penetrate new markets and geographies.