CECO Environmental Delivers Strong Financial Performance in 2025

CECO Environmental Corp., a leading provider of environmental and industrial solutions, has reported impressive financial results for the first nine months of 2025. The company’s diversified business model and strategic acquisitions have enabled it to capitalize on growing demand across its key markets.

Robust Order Growth Drives Revenue Increase

CECO’s orders booked increased by 64% to $735.0 million during the first nine months of 2025 compared to the same period in 2024. This strong order intake was driven by growing demand for the company’s energy and power technologies, as well as increased international industrial water projects.

The company’s Engineered Systems segment, which includes its energy and power businesses, saw a 74% increase in orders during the first nine months. This was fueled by investments in energy infrastructure and growth in midstream and downstream markets, leading to higher demand for CECO’s emissions, separation, and acoustics products. The acquisition of Profire, a specialist in burner management systems, also contributed to the segment’s order growth.

The Industrial Process Solutions segment also delivered a solid performance, with a 37% increase in orders during the first nine months. This was primarily attributable to the company’s recent acquisitions in industrial air treatment applications and increased demand for its scrubber technologies.

The strong order intake translated into a 40.1% increase in net sales to $559.7 million for the first nine months of 2025, with organic growth of 24%. The company was able to execute on its backlog and progress projects per contractual commitments, without any significant delays.

Profitability Improvements and Margin Expansion

CECO’s financial performance was not only characterized by top-line growth but also by improvements in profitability. Gross profit increased by 39.0% to $193.9 million in the first nine months of 2025, with gross margins remaining relatively stable at 34.6%.

The company’s operating income saw a significant jump, rising from $24.1 million in the first nine months of 2024 to $89.3 million in the same period of 2025. This was primarily driven by a $63.7 million gain on the sale of the Global Pump Solutions business and a fair value adjustment to the earn-out liability associated with the acquisition of WK Group.

Even after adjusting for these one-time items, CECO’s non-GAAP operating income increased by 31.7% to $44.5 million, with non-GAAP operating margins holding steady at 8.0%. This demonstrates the company’s ability to effectively manage its costs and leverage its operational efficiency to drive margin expansion.

Acquisitions and Divestitures Reshape the Portfolio

CECO’s strategic initiatives, including acquisitions and divestitures, have been a key driver of its performance in 2025. The company’s acquisition of Profire, a specialist in burner management systems, has strengthened its Engineered Systems segment and expanded its product offerings in the energy and power markets.

Additionally, the divestiture of the Global Pump Solutions business for $107.8 million has allowed CECO to streamline its portfolio and focus on its core environmental and industrial solutions. The gain on this sale was a significant contributor to the company’s strong operating income during the first nine months of 2025.

These portfolio optimization efforts have enabled CECO to allocate capital more effectively, invest in high-growth areas, and improve its overall profitability.

Navigating Market Challenges

Like many companies, CECO has faced some headwinds in 2025, including supply chain disruptions, inflationary pressures, and geopolitical uncertainties. However, the company has demonstrated its ability to proactively manage these challenges.

To mitigate the potential impact of tariffs, CECO has worked strategically with customers and suppliers to optimize terms, pricing, and logistics. While the company has experienced shortages of raw materials and labor inflation, it has secured alternative suppliers and taken other actions to minimize the effects on its operations.

CECO’s diversified business model and global footprint have also helped it navigate these market pressures. By manufacturing and selling its products in the same regions, the company has been able to better align its cost and revenue bases, providing a degree of insulation from external shocks.

Outlook and Future Prospects

Looking ahead, CECO remains optimistic about its growth prospects. The company’s strong backlog of $719.6 million as of September 30, 2025, up from $540.9 million at the end of 2024, provides a solid foundation for future revenue and earnings.

The company’s focus on high-growth markets, such as energy infrastructure, midstream and downstream processing, and industrial water applications, positions it well to capitalize on the increasing demand for its solutions. Additionally, the integration of recent acquisitions and the continued optimization of its portfolio are expected to drive further operational and financial improvements.

However, CECO is mindful of the potential risks and uncertainties that may arise, including the ongoing supply chain challenges, inflationary pressures, and geopolitical tensions. The company remains committed to proactively managing these factors and maintaining its operational agility to deliver consistent performance.

Overall, CECO’s strong financial results in the first nine months of 2025, characterized by robust order growth, revenue increases, and margin expansion, demonstrate the company’s ability to execute its strategic initiatives and capitalize on the growing demand for its environmental and industrial solutions. As CECO continues to navigate the evolving market landscape, investors can be cautiously optimistic about the company’s future prospects.