# Kadant Inc. (KAI) Q2 2025 Financial Results Summary
Kadant Inc. (NYSE: KAI) reported its financial results for the second quarter ended June 28, 2025, on July 29, 2025.
## Financial Highlights
– **Bookings**: Increased **7%** to **$269 million** (from **$251 million** in 2024).
– **Revenue**: Decreased **7%** to **$255 million** (from **$275 million** in 2024).
– **Gross Margin**: Increased **150 basis points** to **45.9%** (from **44.4%** in 2024).
– **Net Income**: Decreased **16%** to **$26 million** (from **$31 million** in 2024).
– **GAAP EPS**: Decreased **17%** to **$2.22** (from **$2.66** in 2024).
– **Adjusted EPS**: Decreased **18%** to **$2.31** (from **$2.81** in 2024).
– **Adjusted EBITDA**: Decreased **15%** to **$52 million**, representing **20.5%** of revenue (from **$62 million** and **22.5%** of revenue in 2024).
– **Operating Cash Flow**: Increased **44%** to **$40 million** (from **$28 million** in 2024).
– **Free Cash Flow**: Increased **58%** to **$37 million** (from **$23 million** in 2024).
– **Ending Backlog**: Totaled **$299 million**.
## Comparative Analysis (Q2 2025 vs. Q2 2024)
– **Revenue**:
– Decreased **7%** to **$255 million** from **$275 million**.
– Organic revenue decreased **8%**, impacted by foreign currency translation favorable effect of **1%**.
– **Net Income**:
– **$26 million**, a **16%** decrease from **$31 million**.
– **Earnings Per Share (EPS)**:
– GAAP EPS fell **17%** to **$2.22** from **$2.66**.
– Adjusted EPS dropped **18%** to **$2.31** from **$2.81**.
– **Adjusted EBITDA**:
– Decreased **15%** from **$62 million** (22.5% of revenue in Q2 2024) to **$52 million** (20.5% of revenue).
– **Free Cash Flow**:
– Jumped **58%**, rising from **$23 million** to **$37 million**.
– **Bookings**:
– Increased **7%** to **$269 million** from **$252 million** in 2024.
– Organic bookings increased **6%** (excluding currency effects).
## Management Commentary
– President and CEO Jeffrey L. Powell noted strong cash flow and improved capital equipment bookings despite a challenging trade environment, indicating robust customer confidence in Kadant’s equipment to foster sustainable value.
## Outlook
– The company anticipates stronger bookings in the second half of 2025 and maintains full-year revenue guidance of **$1.020 to $1.040 billion** and adjusted EPS of **$9.05 to $9.25**.
– For Q3 2025:
– Expected revenue of **$256 to $263 million**.
– GAAP EPS forecasted at **$2.12 to $2.22** and Adjusted EPS of **$2.13 to $2.23** after excluding acquisition-related costs.
## Dividends and Share Repurchase
– The report did not mention any quarterly dividends or share repurchase programs.
## Summary
Kadant Inc. displayed a mix of performance metrics with notable increases in bookings and cash flows but faced declines in revenue and net income relative to the same quarter last year. The management’s outlook remains positive, projecting a return to stronger performance in the upcoming quarters, supported by ongoing demand for their products and a solid backlog.
| June 28, 2025 | June 29, 2024 | June 28, 2025 | June 29, 2024 | |
|---|---|---|---|---|
| Revenue | $255,267 | $274,765 | $494,477 | $523,740 |
| Costs and Operating Expenses: | ||||
| Cost of revenue | $138,225 | $152,878 | $267,105 | $290,891 |
| Selling, general, and administrative expenses | $73,941 | $70,004 | $145,162 | $140,309 |
| Research and development expenses | $3,724 | $3,482 | $7,247 | $7,212 |
| $215,890 | $226,364 | $419,514 | $438,412 | |
| Operating Income | $39,377 | $48,401 | $74,963 | $85,328 |
| Interest Income | $439 | $368 | $956 | $979 |
| Interest Expense | $-3,338 | $-5,201 | $-7,160 | $-9,870 |
| Other Expense, Net | $-17 | $-2 | $-33 | $-32 |
| Income Before Provision for Income Taxes | $36,461 | $43,566 | $68,726 | $76,405 |
| Provision for Income Taxes | $9,822 | $11,992 | $17,650 | $19,846 |
| Net Income | $26,639 | $31,574 | $51,076 | $56,559 |
| Net Income Attributable to Noncontrolling Interests | $-480 | $-283 | $-854 | $-579 |
| Net Income Attributable to Kadant | $26,159 | $31,291 | $50,222 | $55,980 |
| Earnings per Share Attributable to Kadant: | ||||
| Basic | $2.22 | $2.66 | $4.27 | $4.77 |
| Diluted | $2.22 | $2.66 | $4.26 | $4.76 |
| Weighted Average Shares: | ||||
| Basic | 11,776 | 11,743 | 11,768 | 11,734 |
| Diluted | 11,793 | 11,766 | 11,784 | 11,755 |
| June 28, 2025 | December 28, 2024 | |
|---|---|---|
| Assets | ||
| Cash, Cash Equivalents, and Restricted | $97,188 | $95,946 |
| Accounts Receivable, Net | $152,574 | $142,462 |
| Inventories | $168,588 | $146,092 |
| Contract Assets | $11,105 | $18,408 |
| Property, Plant, and Equipment, Net | $174,724 | $170,331 |
| Intangible Assets | $272,973 | $279,494 |
| Goodwill | $497,824 | $479,169 |
| Other Assets | $109,538 | $98,443 |
| Total Assets | $1,484,514 | $1,430,345 |
| Liabilities and Stockholders’ Equity | ||
| Accounts Payable | $52,541 | $51,062 |
| Debt Obligations | $247,219 | $286,504 |
| Other Borrowings | $1,704 | $2,023 |
| Other Liabilities | $245,757 | $232,628 |
| Total Liabilities | $547,221 | $572,217 |
| Stockholders’ Equity | $937,293 | $858,128 |
| Total Liabilities and Stockholders’ Equity | $1,484,514 | $1,430,345 |
