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- **Record Q2 Results**: $277M revenue (+22% YoY), $73M EBITDA (+20% YoY), $2.96 EPS (+15.2% YoY).
- **Acquisition Dominance**: 67% of revenue growth from 2026 acquisitions; Mars Parts ($650M) to drive HVAC/R repair growth.
- **Mars Parts Synergies**: $10M+ annual savings, targeting 30%+ EBITDA margin by Q2 2027.
- **Tariff Headwinds**: 20% margin compression expected, 80% of tariff impact offset by pricing.
- **Share Buybacks**: $18M returned to shareholders, with disciplined capital allocation maintaining 0.12x net debt-to-EBITDA.

**【CEO Summary Section】**
- Delivered record Q2 2026 results: revenue $277M (+22% YoY), adjusted EBITDA $73M (+20% YoY), adjusted EPS $2.96 (+15.2% YoY).
- Highlighted 10-year track record of growth, with 2026 acquisitions (Aspen, PSP, PF Waterworks, Mars Parts) driving 67% of revenue growth.
- Announced Mars Parts acquisition ($650M) to expand HVAC/R repair market presence, targeting 30%+ EBITDA margin within 12 months.
- Emphasized disciplined capital allocation, with $18M share buybacks and net debt-to-EBITDA ratio of 0.12x.

**【CFO Financial Commentary】**
- Revenue growth: 22% YoY, 39% from acquisitions (Aspen, PSP, PF Waterworks), offset by 7.7% organic decline in Contractor Solutions.
- EBITDA: $73M (+20% YoY), margin 26.3% vs. 26.7% prior year, impacted by Aspen margins and tariffs.
- Gross margin: 43% (-260bps YoY), driven by Aspen and input cost increases.
- Free cash flow: $58.7M (-5.3% YoY), excluding $16.8M tax deferral, +30.2% YoY organic growth.
- Mars Parts integration: $10M+ synergies expected, targeting 30%+ EBITDA margin by Q2 2027.

**【Q&A Key Highlights】**
- **Organic Growth Visibility**: Contractor Solutions organic growth -7.7% Q2, but +2.8% including pre-acquisition effect. 2026 organic growth outlook uncertain due to HVAC/R market softness.
- **Mars Parts Performance**: Pre-acquisition revenue $200M, current EBITDA mid-20s%, targeting 30%+ margin via $10M+ synergies and pricing.
- **Tariff Impact**: 10% of COGS exposed to China, 35% to Vietnam. Pricing actions offset 80% of tariff impact, but 20% margin compression expected in 2026.
- **Segment Margins**: Contractor Solutions 30-32% EBITDA margin target; SRS/EBS 20%+ margin goals with 190bps margin contraction in Q2.
- **M&A Pipeline**: $1B+ in recent acquisitions, targeting smaller bolt-ons while integrating Mars Parts. Share buybacks contingent on accretive M&A opportunities.

CSW Industrials, Inc. (CSW) Q2 2026 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

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Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

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Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

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Net Interest Expense

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Net Income from Continuing Operations

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Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

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Other Comprehensive Income

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Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

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Diluted EPS

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Diluted EPS from Discontinued Operations

CSW

CSW fundamentals

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