Slides
Page 1
ESCO TECHNOLOGIES ESCO Technologies Third Quarter FY 2026 Earnings Call Bryan Sayler President & CEO Chris Tucker Sr. Vice President & CFO August 6 , 2026
Page 2
Forward Looking Statement Statements in this presentation regarding Management’s intentions, expectations and guidance for fiscal 2026, including restructuring and cost reduction actions, sales, orders, revenues, margin, earnings, Adjusted EPS, acquisition related amortization, and any other statements which are not strictly historical, are “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. securities laws. Investors are cautioned that such statements are only predictions and speak only as of the date of this release, and the Company undertakes no duty to update them except as may be required by applicable laws or regulations. The Company’s actual results in the future may differ materially from those projected in the forward-looking statements due to risks and uncertainties that exist in the Company’s operations and business environment including but not limited to those described in Item 1A, “Risk Factors”, of the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2025 and the following: the impacts of climate change and related regulation of greenhouse gases; the impacts of labor disputes, civil disorder, wars including the conflicts involving Iran and Lebanon, elections, political changes, tariffs and trade disputes, terrorist activities, cyberattacks or natural disasters on the Company’s operations and those of the Company’s customers and suppliers; disruptions in manufacturing or delivery arrangements due to shortages or unavailability of materials or components; restrictions or closures of critical supply routes such as the Strait of Hormuz; other supply chain disruptions; inability to access work sites; the timing and content of future contract awards or customer orders; the timely appropriation, allocation and availability of Government funds; the termination for convenience of Government and other customer contracts or orders; weakening of economic conditions in served markets; the success of the Company’s competitors; changes in customer demands or customer insolvencies; competition; intellectual property rights; technical difficulties or data breaches; the availability of acquisitions; delivery delays or defaults by customers; performance issues with key customers, suppliers and subcontractors; material changes in the costs and availability of certain raw materials; material changes in the cost of credit; changes in laws and regulations including but not limited to changes in accounting standards and taxation; changes in interest, inflation and employment rates; costs relating to environmental matters arising from current or former facilities; uncertainty regarding the ultimate resolution of current disputes, claims, litigation or arbitration; and the integration and performance of acquired businesses. During the call, the Company may discuss some non-GAAP financial measures in describing the Company’s operating results. A reconciliation of these measures to their most comparable GAAP measures can be found in the press release issued today and found on the Company’s website at www.escotechnologies.com under the link: Investor Relations. In addition, the financial results presented in this presentation include certain non-GAAP financial measures such as EBIT, Adjusted EBIT, EBITDA, Adjusted EBITDA and Adjusted EPS. These non-GAAP financial measures are reconciled to their respective GAAP equivalents in the “Reconciliation of Non-GAAP Measures” presented below. 2
Page 3
Q3 Results – Continuing Operations ($ in Millions, except per share amounts) Q3’25 Q3’26 Delta $ Delta % Entered Orders $749.0 409.5 (339.5) -45.3% Sales 296.3 339.0 42.7 14.4% Adjusted EBIT 62.7 74.7 12.0 19.2% Adj EBIT Margin 21.1% 22.0% +0.9 pts Adjusted EBITDA 71.5 83.8 12.3 17.1% Adj EBITDA Margin 24.1% 24.7% +0.6 pts EPS GAAP-Cont Ops $0.96 $1.26 $0.30 31.3% EPS Adjusted-Cont Ops $1.60 $2.20 $0.60 37.5% Entered Orders • Orders down $339M (-45%) • Organic Orders +$12M (+4%) • Aerospace, Test and Regulated Utility Orders all up >30% • Navy - Q3’25 contained large VA & Columbia Class orders • Q3’25 included $364M of acquired Maritime backlog • Q3 Book-to-Bill of 1.21 / Record Backlog of $1.5B (+36% from 9/30/25) Sales • Sales +$43M (+14%) / Organic +$20M (+8%) / Maritime +$23M • Broad Strength in Aerospace, Navy, Test and Regulated Utilities Adjusted EBIT • Adjusted EBIT Margin increased 90 basis points to 22.0% Adjusted EPS • Adjusted EPS of $2.20 increased 38% 296.3 339.0 Q3'25 Q3'26 Sales 62.7 74.7 Q3'25 Q3'26 Adjusted EBIT 22.0% 21.1% $1.60 $2.20 Q3'25 Q3'26 Adjusted EPS 749.0 409.5 Q3'25 Q3'26 Entered Orders 3
Page 4
A&D - Continuing Operations – Q3 ($ in Millions) Q3’25 Q3’26 Delta $ Delta % Entered Orders $582.4 195.7 (386.7) -66.4% Sales 136.3 168.2 31.9 23.4% Adjusted EBIT 39.3 50.5 11.2 28.3% Adj EBIT Margin 28.8% 30.0% +1.2 pts Adjusted EBITDA 42.4 53.9 11.5 27.2% Adj EBITDA Margin 31.1% 32.1% +1.0 pts Prior YE 6/30/26 Delta $ Delta % Backlog $803.0 1,102.4 299.4 37.3% Entered Orders • Q3 Book-to-Bill of 1.16 / Record Backlog of $1.1B up (+37% from 9/30/25) • Organic Orders down $35M (-21%) • Navy down $66M (-70%) - Q3’25 included $82M in VA/Columbia Class Orders • Aerospace +$31M (+41%) – broad strength in commercial & military orders • Maritime - Q3’25 included $364M of acquired backlog • Maritime - Q3’26 orders of $62M +$13M (+26%) compared to Q3’25 Sales • Sales +$32M (+23%) / Organic +$9M (+9%) / Maritime +$23M • Aerospace +$8M (+10%) – Organic +$7M (+10%) / Maritime +$1M • Navy +$22M (+43%) / Organic +$2M (+10%) / Maritime +$20M Adjusted EBIT • Driven by price increases and leverage on higher volume, partially offset by mix and inflationary pressures • Adjusted EBIT Margin reached 30.0% 136.3 168.2 Q3'25 Q3'26 Sales 39.3 50.5 Q3'25 Q3'26 Adjusted EBIT 30.0% 28.8% 582.4 195.7 Q3'25 Q3'26 Entered Orders 4
Page 5
USG – Q3 ($ in Millions) Q3’25 Q3’26 Delta $ Delta % Entered Orders $105.5 126.9 21.4 20.2% Sales 92.4 100.0 7.6 8.2% Adjusted EBIT 21.8 22.3 0.5 2.3% Adj EBIT Margin 23.6% 22.3% -1.3 pts Adjusted EBITDA 26.0 26.4 +0.4 +1.3% Adj EBITDA Margin 28.2% 26.4% -1.8 pts Prior YE 6/30/26 Delta $ Delta % Backlog $143.5 189.4 45.9 32.0% Entered Orders • Doble +$26M (+30%) – Record orders driven by broad increases in demand from utility customers across all product lines • NRG down $5M (-27%) - sunsetting of U.S. tax credits • Q3 Book-to-Bill of 1.27 / Backlog of $189M (+32% from 9/30/25) Sales • Doble +$13M (+17%) – primarily driven by higher Protection Testing, Offline Test Equipment and Services • NRG down $5M (-29%) – sunsetting of U.S. tax credits Adjusted EBIT • Driven by leverage on higher volume at Doble and price increases, partially offset by deleverage on lower volume at NRG, and inflationary pressures 92.4 100.0 Q3'25 Q3'26 Sales 21.8 22.3 Q3'25 Q3'26 Adjusted EBIT 22.3%23.6% 105.5 126.9 Q3'25 Q3'26 Entered Orders 5
Page 6
Test – Q3 ($ in Millions) Q3’25 Q3’26 Delta $ Delta % Entered Orders $61.2 87.0 25.8 42.3% Sales 67.7 70.9 3.2 4.7% Adjusted EBIT 10.7 11.6 0.9 8.2% Adj EBIT Margin 15.9% 16.4% +0.5 pts Adjusted EBITDA 12.2 13.0 0.8 6.7% Adj EBITDA Margin 18.1% 18.4% +0.3 pts Prior YE 6/30/26 Delta $ Delta % Backlog $187.2 248.6 61.4 32.8% Entered Orders • Orders +$26M (+42%) • Strength driven by Industrial Shielding projects & EMI Filters for U.S. data centers • Q3 Book-to-Bill of 1.23 / Record Backlog of $249M (+33% from 9/30/25) Sales • Sales +$3M (+5%) • U.S. sales +$7M offset by lower sales in Asia ($4M) • Growth driven by higher Test & Measurement (EMC), Medical & Industrial Shielding Adjusted EBIT • Leverage on higher volume and price increases, partially offset by inflationary pressures 67.7 70.9 Q3'25 Q3'26 Sales 10.7 11.6 Q3'25 Q3'26 Adjusted EBIT 16.4% 15.9% 61.2 87.0 Q3'25 Q3'26 Entered Orders 6
Page 7
Q3 YTD Results – Continuing Operations ($ in Millions, except per share amounts) Q3 YTD FY’25 Q3 YTD FY’26 Delta $ Delta % Entered Orders $1,243.9 1,344.9 101.0 8.1% Sales 742.7 938.0 195.3 26.3% Adjusted EBIT 138.0 198.0 60.0 43.5% Adj EBIT Margin 18.6% 21.1% +2.5 pts Adjusted EBITDA 163.0 225.2 62.2 38.2% Adj EBITDA Margin 21.9% 24.0% +2.1 pts EPS GAAP $2.76 $3.66 $0.90 32.6% EPS Adjusted $3.71 $5.75 $2.04 55.0% Entered Orders • Orders strength across Aerospace, Navy, Test & Regulated Utilities • Organic Growth +$161M (+19%) - A&D +20%, Test +26%, USG +14% (Doble +22% & NRG -26%) • Maritime lower by $60M - YTD’25 included $364M in acquired backlog • Maritime YTD’26 orders of $354M vs $50M YTD’25 • YTD Book-to-Bill of 1.43, Ending Backlog of $1.5B (+36% from 9/30/25) Sales • Continuing strength in Aerospace, Navy, Test & Regulated Utilities • Organic Growth +$74M (+11%) - A&D +12%, Test +18%, USG +4% (Doble +12% & NRG -29%) • Maritime Sales +$121M Adjusted EBIT • Margins increased 250 basis points as leverage on higher sales and price increases more than offset inflationary impacts 742.7 938.0 Q3 YTD '25 Q3 YTD '26 Sales 138.0 198.0 Q3 YTD '25 Q3 YTD '26 Adjusted EBIT 21.1% 18.6% $3.71 $5.75 Q3 YTD '25 Q3 YTD '26 Adjusted EPS 1,243.9 1,344.9 Q3 YTD '25 Q3 YTD '26 Entered Orders 7
Page 8
Cash Flow & Capital Expenditures – Continuing Operations ($ in Millions) Cash Flow YTD Q3’25 YTD Q3’26 Delta Operating Cash Flow - Contin Ops $88.3 193.4 105.1 Capital Expenditures – Contin Ops (24.2) (24.6) (0.4) Acquisitions/Divestitures (472.0) (10.2) 461.8 EBITDA Leverage 1.7X 0.2X (1.5X) Operating Cash Flow • Improvement mainly driven by lower working capital requirements and higher earnings Capital Expenditures • Flat to prior year Acquisitions/Divestitures • Maritime acquisition completed in Q3’25, some related Maritime working capital and tax settlements in Q1/Q2’26 EBITDA Leverage • Leverage ratio at 0.2X - strong cash generation and healthy balance sheet 88.3 193.4 YTD Q3'25 YTD Q3'26 Operating Cash Flow 24.2 24.6 YTD Q3'25 YTD Q3'26 Capital Spending 8
Page 9
FY’26 Guidance – Continuing Operations Sales • Raising the lower end of guidance range and now expect Sales to be in the range of $1.30B - $1.33B (19% - 21% growth) Adjusted EPS • Full Year - Raising to be in the range of $8.30 - $8.40 per share (38% - 39% growth) • Midpoint increase of $0.22 from May guidance of $8.00 - $8.25 per share (33% - 37% growth) • Midpoint increase of $0.70 from initial November guidance of $7.50 - $7.80 per share (24% - 29% growth) • Q4’26 - Expected to be in the range of $2.55 – 2.65 per share (10% - 14% growth compared to Q4’25 Adjusted EPS) FY’26 Guidance excludes: • Megger – the Megger acquisition is expected to close in Q1 of FY’27 $2.28 $3.09 $3.97 $4.77 $6.03 FY'21 FY'22 FY'23 FY'24 FY'25 FY'26 Adjusted EPS Trends +38-39% +20% 605 746 856 919 1,095 FY'21 FY'22 FY'23 FY'24 FY'25 FY'26 Sales Trends ($in Millions) +19-21% +7% 94 Year CAGR (FY21-FY’25) = 16.0% 4 Year CAGR (FY’21-FY’25) = 27.5% +23% +15% +36% +28% +19% 1,300- 1,330 +26% 8.30 - 8.40
Page 10
10 ESCO Technologies Third Quarter FY 2026 Earnings Call Q&A
Page 11
Reconciliation of Non-GAAP Measures – Continuing Operations 11