Environmental solutions provider CECO Environmental (NASDAQ: CECO) reported Q4 CY2025 results topping the market’s revenue expectations, with sales up 35.4% year on year to $214.7 million. The company’s full-year revenue guidance of $950 million at the midpoint came in 8.1% above analysts’ estimates. Its GAAP profit of $0.08 per share was 73.9% below analysts’ consensus estimates.

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Todd Gleason, CECO's Chief Executive Officer commented, “We closed the year with our strongest quarter to date, highlighted by order bookings in excess of $300 million, the first time in company history. This performance was primarily driven by a large domestic gas-fired power generation project of approximately $135 million, also a company record in project value. This marks our fifth consecutive quarter with orders above $200 million, underscoring the continued momentum in our core markets as we enter 2026. Revenue of approximately $215 million reflects strong execution against our record and growing backlog, with gross profit margin improving sequentially to 35 percent as we recovered from the seasonal headwinds experienced in the third quarter. Adjusted EBITDA margin of 13.9 percent represents a quarterly record and provides a strong finish to the year. I am also excited to share that today we announced, in a separate press release, a transaction to combine CECO with Thermon – a diversified industrial technology company and a global leader in industrial process heating solutions.”

Company Overview

With roots dating back to 1869 and a focus on creating cleaner industrial operations, CECO Environmental (NASDAQ: CECO) provides technology and expertise that helps industrial companies reduce emissions, treat water, and improve energy efficiency across various sectors.

Revenue Growth

A company’s long-term sales performance is one signal of its overall quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years.

With $774.4 million in revenue over the past 12 months, CECO Environmental is a small player in the business services space, which sometimes brings disadvantages compared to larger competitors benefiting from economies of scale and numerous distribution channels. On the bright side, it can grow faster because it has more room to expand.

As you can see below, CECO Environmental’s 19.6% annualized revenue growth over the last five years was incredible. This is a great starting point for our analysis because it shows CECO Environmental’s demand was higher than many business services companies.

We at StockStory place the most emphasis on long-term growth, but within business services, a half-decade historical view may miss recent innovations or disruptive industry trends. CECO Environmental’s annualized revenue growth of 19.2% over the last two years aligns with its five-year trend, suggesting its demand was predictably strong.

This quarter, CECO Environmental reported wonderful year-on-year revenue growth of 35.4%, and its $214.7 million of revenue exceeded Wall Street’s estimates by 3.1%.

Looking ahead, sell-side analysts expect revenue to grow 14.4% over the next 12 months, a deceleration versus the last two years. Despite the slowdown, this projection is healthy and indicates the market sees success for its products and services.

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Operating Margin

CECO Environmental was profitable over the last five years but held back by its large cost base. Its average operating margin of 7.9% was weak for a business services business.

On the plus side, CECO Environmental’s operating margin rose by 10.6 percentage points over the last five years, as its sales growth gave it immense operating leverage.

In Q4, CECO Environmental generated an operating margin profit margin of 7.7%, in line with the same quarter last year. This indicates the company’s overall cost structure has been relatively stable.

Earnings Per Share

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

CECO Environmental’s EPS grew at an astounding 42.5% compounded annual growth rate over the last five years, higher than its 19.6% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.

Diving into the nuances of CECO Environmental’s earnings can give us a better understanding of its performance. As we mentioned earlier, CECO Environmental’s operating margin was flat this quarter but expanded by 10.6 percentage points over the last five years. This was the most relevant factor (aside from the revenue impact) behind its higher earnings; interest expenses and taxes can also affect EPS but don’t tell us as much about a company’s fundamentals.

Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.

For CECO Environmental, its two-year annual EPS growth of 93.1% was higher than its five-year trend. We love it when earnings growth accelerates, especially when it accelerates off an already high base.

In Q4, CECO Environmental reported EPS of $0.08, down from $0.13 in the same quarter last year. This print missed analysts’ estimates, but we care more about long-term EPS growth than short-term movements. Over the next 12 months, Wall Street expects CECO Environmental’s full-year EPS of $1.36 to shrink by 19.5%.

Key Takeaways from CECO Environmental’s Q4 Results

We were impressed by CECO Environmental’s optimistic full-year revenue guidance, which blew past analysts’ expectations. EBITDA guidance also beat. We were also glad its revenue in the quarter outperformed Wall Street’s estimates. On the other hand, its EBITDA and EPS missed. Overall, this print was mixed. The stock remained flat at $77.17 immediately after reporting.

Is CECO Environmental an attractive investment opportunity at the current price? The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).