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    CDRE
    Earnings call· Jun 2026(Q2 FY26)

    Cadre Holdings Q2 FY26 earnings call CDRE

    Aug 6, 2026 Source

    Executive summary

    Cadre Holdings Q2 FY26 — Record Backlog and Raised Full-Year Guidance

    Cadre Holdings delivered strong Q2 FY26 results, marked by significant organic and inorganic growth, record backlog, and raised full-year guidance. The company's disciplined M&A strategy continues to expand its portfolio, with recent acquisitions like Alien Gear outperforming expectations. Strong demand for mission-critical safety products across public safety and nuclear markets, coupled with strategic wins, underpins confidence in sustained long-term value creation.

    Highlights

    5

    • Net sales grew 32% year-over-year to $207.1 million, with 5% organic growth.

    • Adjusted EBITDA increased 56% year-over-year, driven by strong demand and acquisitions.

    • Backlog reached a new record level, increasing $13 million sequentially, driven by EOD products and nuclear.

    • Med-Eng secured a second purchase order for $8.4 million for the BEMO program, bringing total to $18.4 million.

    • Safariland's SXHP ballistic panel was selected for a 5-year, $61 million IDIQ contract with the FBI and other DOJ agencies.

    Concerns

    2

    • FX headwinds of $6.6 million adversely impacted bottom line earnings in Q2.

    • Downblending executive order caused some margin and mix pressure confined to one subsegment, impacting less than 8% of nuclear revenue.

    Guidance & targets

    9
    CategoryTargetConfidence
    Full-year 2026 Net Sales
    $749 million and $769 million
    high materiality
    High
    Full-year 2026 Adjusted EBITDA
    $139 million and $144 million
    high materiality
    High
    Full-year 2026 Adjusted EBITDA Margins
    18.6%
    medium materiality
    High
    Full-year 2026 Organic Revenue Growth
    3% to 5% range
    medium materiality
    High
    Q3 Revenue
    around $190 million
    medium materiality
    Medium
    Q3 Adjusted EBITDA Margins
    about 18%
    medium materiality
    Medium
    Full-year 2026 Revenue Growth
    24.4%
    high materiality
    High
    Full-year 2026 Adjusted EBITDA Growth
    26.7%
    high materiality
    High
    Acquisitions
    at least one more acquisition
    medium materiality
    Medium

    Segment performance

    3
    SegmentRevenueYoYQoQMargin
    Public Safety
    Core public safety businesses (crowd control, duty gear, armor) had very strong quarters, driven by demand and pull-aheads.
    		—just a touch below 5%——
    Nuclear
    Backlog increase driven by commercial nuclear energy and environmental remediation in the U.S. and Europe. European commercial nuclear revenue showed positive strength and momentum.
    Backlog increase since year-end 2025: $13 million
    		—high singles, low double digits——
    Distribution
    Demand normalized, helping drive organic growth toward the high end of the 3% to 5% range.
    		—mid-single digits——

    Operational metrics

    18
    Net sales growth
    32%YoY
    Q2 FY26

    Reflects strong demand and contributions from acquisitions.

    Organic top line growth
    5%
    Q2 FY26

    Achieved despite some prior softness in discretionary products within the distribution segment.

    Adjusted EBITDA growth
    56%YoY
    Q2 FY26

    Supported by strong demand for mission-critical safety products.

    Gross margin
    42.6%
    Q2 FY26

    Reported gross profit was $87.1 million.

    Gross margin (adjusted for inventory step-up amortization)
    43.8%
    Q2 FY26

    Adjusted for $2 million of inventory step-up amortization.

    Gross margin expansion
    120YoY
    Q2 FY26

    Reported expansion.

    Gross margin expansion (adjusted for inventory step-up amortization)
    209
    Q2 FY26

    Adjusted for inventory step-up amortization.

    Inventory step-up amortization
    $2 million
    Q2 FY26

    Included in net income.

    Contingent consideration expense
    $5.9 million
    Q2 FY26

    Included in net income.

    FX headwinds impact on bottom line
    $6.6 million
    Q2 FY26

    Adversely impacted bottom line earnings.

    Net leverage
    2.5xdown
    as of June 30, 2026

    Reflects strong free cash flow generation and balance sheet strength.

    M&A capital deployed
    $455 million
    last 4 years

    Across 7 transactions, including Alien Gear.

    Alien Gear Q2 revenue contribution
    $4.8 million
    Q2 FY26

    Contributed to outstanding results, ahead of expectations.

    NNSA budget request
    $32.8 billion
    FY26

    Part of the U.S. Department of Energy, supporting national defense modernization.

    NNSA budget increase
    29%YoY
    FY26

    Supports demand for Cadre Pod products.

    Plutonium pit production target
    80
    ongoing

    Split between Los Alamos National Laboratory and Savannah River site.

    Nuclear revenue impacted by downblending executive order
    <8%
    ongoing

    Confined to one subsegment, causing some margin and mix pressure.

    Nuclear cleanup activity duration
    50, 60+
    long-term

    Reflects persistent decade-long environmental cleanup work.

    Industry KPIs

    3
    MetricValueDetails
    Total company backlognew record level
    Defense program awards$50 millionUSD
    Program segment backlog$13 millionUSD

    Orderbook & backlog

    4
    Total company backlognew record levelQ2 FY26

    increased by $13 million sequentially

    Nuclear backlog$13 millionsince year-end 2025

    increase

    Driven by commercial nuclear energy and environmental remediation in the U.S. and Europe.

    Armor business backlog10-15% growthQ2 FY26

    growth

    Duty gear backlogvery sizable increaseQ2 FY26

    increase

    Product announcements

    2
    ProductTypeDetails
    Safariland's SXHP ballistic panelmilestone
    Med-Eng Blast Exposure Monitoring (BEMO) programmilestone

    Deals & partnerships

    4
    TYR TacticalAcquisition of a tactical gear brand.

    Largest transaction since IPO, strengthening the portfolio and enhancing long-term earnings and cash flow profile. Integration efforts are ongoing, with potential for commercial synergies and product rotation.

    Alien GearAcquisition of a recognized holster brand.just over $10 million

    A smaller, highly complementary bolt-on acquisition. Integration of consumer teams is complete. Manufacturing facility in Idaho will close, with operations integrating into Safariland's infrastructure over 12-18 months to achieve Cadre-like margins.

    U.S. militaryIDIQ contract for Blast Exposure Monitoring (BEMO) program.$50 million5-year

    Med-Eng subsidiary was awarded the IDIQ contract to deliver and support the BEMO program. This program is a testament to Med-Eng's ability to develop best-in-class products.

    FBI and other Department of Justice agencies (via Predictive Ballistics)IDIQ contract for ballistic panels.$61 million5-year

    Safariland's SXHP ballistic panel was selected as the ballistic package for the FBI. Predictive Ballistics was awarded the 5-year IDIQ contract to supply the kit, which is also available to the U.S. Marshals Service, the DEA, and other DOJ agencies.

    Risks & headwinds

    4
    FX headwindsQ2 FY26

    $6.6 million

    Downblending executive order impact on nuclear revenueongoing

    impacts less than 8% of nuclear revenue

    Mitigation: Offset by pickup in demand in other nuclear applications (e.g., manual manipulators) and long-term cleanup activities.

    Municipal budget pressuresnear-term

    unquantified

    Mitigation: Public safety spending has historically proven very resilient, with mission-critical equipment prioritized; no meaningful pullback in demand for Cadre products observed.

    Government procurement delaysongoing

    unquantified (potential for 1-2 week delays)

    Mitigation: Company takes a cautious approach on the outlook to mitigate out-of-control risks and ensure high say-do.

    What to watch in Q3 FY26

    5

    European nuclear margin quality

    H2 FY26
    CurrentQ2 had favorable mix from robotic arms, higher margin
    TargetNormalization to Q1 levels (slightly down)

    Why it matters

    Indicates underlying profitability trends and mix effects in the nuclear segment.

    On the more European side of the business, Q2 was favorable margin or favorable mix in the quarter driven by some of the robotic arms. We don't expect that to recur. So, we expect the European side to look more like we saw in Q1, which would be slightly down on a margin basis, just really returning to normal mix.

    Q&A highlights

    7

    Could you break down the $13 million year-to-date increase in nuclear backlog across environmental management, national defense, and commercial nuclear, and provide color on key drivers?

    The majority of the nuclear backlog increase is from commercial nuclear energy and environmental remediation in the U.S. and Europe. Europe, in particular, showed a nice pickup in environmental remediation projects, and commercial nuclear revenue from Europe was also strong.

    “Majority of the increase we've seen through this quarter is really been in the commercial nuclear energy and environmental remediation. We've talked quite a bit previously that we started to see the funnel increase in those areas, in particular, commercial nuclear.”

    asked by Tomohiko Sano · answered by Warren Kanders

    2 min read6 chapters

    Detailed Narrative

    01

    Strong Q2 Performance and Drivers

    Cadre reported significant financial progress in Q2 FY26, with net sales up 32% and adjusted EBITDA up 56%. This performance was driven by strong execution in core public safety businesses (crowd control, duty gear, armor) and better-than-expected contributions from recent acquisitions, TYR Tactical and Alien Gear. The company also benefited from customer pull-ahead📎s, where orders initially expected in Q3 were shipped earlier, contributing to the outstanding results.

    02

    Record Backlog and Future Confidence

    The company achieved a new record backlog for the second consecutive quarter, increasing $13 million sequentially. This growth was broad-based, including significant demand in EOD products, 10-15% growth in armor business backlog, a sizable increase in duty gear backlog, and a $13 million increase in nuclear backlog. This robust backlog provides strong confidence in the revised full-year 2026 guidance and the back half of the year.

    03

    Strategic Wins in Public Safety

    Cadre secured two major wins in the quarter: Med-Eng received a second purchase order valued at $8.4 million for the Blast Exposure Monitoring (BEMO) program, bringing the total to date to $18.4 million. Additionally, Safariland's SXHP ballistic panel was selected as the ballistic package for the FBI, part of a 5-year, $61 million IDIQ contract awarded to Predictive Ballistics, which is also available to other Department of Justice agencies.

    04

    Nuclear Vertical Momentum

    The nuclear vertical is experiencing robust activity, with backlog increasing $13 million since year-end, primarily driven by commercial nuclear energy and environmental remediation in the U.S. and Europe. Despite some margin and mix pressure from a downblending executive order affecting less than 8% of nuclear revenue, the long-term demand trends remain very healthy, supported by national defense priorities and the 'commercial nuclear renaissance'.

    05

    Disciplined M&A Strategy

    Cadre continues its disciplined M&A approach, having deployed approximately $455 million across seven transactions over the last four years, including the recent Alien Gear acquisition. The company seeks businesses with strong margins, defensible market positions, recurring revenues, and clear value creation opportunities. Management maintains a robust pipeline and expects at least one more acquisition in 2026, focusing on complementary capabilities and market access.

    06

    Alien Gear Integration and Outlook

    The Alien Gear acquisition, a smaller bolt-on deal valued at just over $10 million, has performed ahead of expectations. Integration efforts are underway, with consumer teams already combined. The company plans to close Alien Gear's Idaho manufacturing facility and integrate its operations into Safariland's global manufacturing infrastructure over the next 12-18 months, aiming to achieve Cadre-like margins for the brand.

    AI-generated summary of the company’s earnings call. Not investment advice.