ESAB Corporation

What they do

ESAB formulates, develops, manufactures and supplies consumable products and equipment, including cutting, joining and welding robotics, as well as gas control equipment, marketed mainly under the ESAB brand. It serves a diversified industrial customer base through independent distributors and direct salespeople. The company operates through two reportable segments: Americas (North America and South America) and EMEA & APAC (Europe, the Middle East, India, Africa and Asia Pacific).

Revenue drivers

• Americas segment — Operations in North America and South America, one of two reportable segments, serving industrial end markets through direct sales and third-party distributors.
• EMEA & APAC segment — Operations across Europe, the Middle East, India, Africa and Asia Pacific, the second reportable segment, with particular second-quarter 2026 strength cited in Asia and a resilient Europe.
• High growth markets — Approximately 52% of 2025 revenues came from markets defined as South America, Eastern Europe, India, Asia Pacific and the Middle East, which management expects to grow at more than twice the rate of North America and Europe.
• Consumables and equipment — The company sells both consumable products and equipment, with management describing its business mix as balanced between the two; equipment growth received targeted commercial investment in the second quarter of 2026.

Recent performance

Second quarter 2026 sales were a record $808 million, up 12.9% reported and up 2.5% on a core organic basis, with core organic growth in both segments. Net income from continuing operations attributable to ESAB was $35 million, or $0.54 diluted EPS, while core adjusted net income was $83 million, or $1.33 diluted EPS, down 1% year over year. Core adjusted EBITDA rose 8.0% to $150 million, but core adjusted EBITDA margin fell 90 basis points to 19.5%, which management attributed to transitory price-cost neutrality and targeted commercial investments for equipment growth. Full-year 2025 revenue was $2.84 billion with net income of $226.8 million and diluted EPS of $3.67.

Strategy

ESAB describes itself as a focused premier industrial compounder and uses its EBXai business management system to drive continuous improvement, margin expansion and cash flow. Acquisitions are a core part of the strategy; the company completed four acquisitions in 2025 and closed the Eddyfi acquisition in 2026 one month ahead of schedule. Eddyfi is a Quebec-based advanced inspection and monitoring technology company acquired for approximately $1.45 billion, expected to have 2026 annual revenue of about $270 million. Management frames the deal as extending workflow solutions into new adjacencies and shaping ESAB into a higher-growth, higher-margin enterprise, alongside priorities of organic growth, margin expansion and deleveraging.

Risks

• Cyclical developed markets — The welding and cutting industry is mature in developed markets such as North America and Western Europe and has historically contracted when industrial capital spending slows.
• Acquisition integration and liabilities — Growth depends on identifying, financing and integrating acquisitions, and the company is exposed to unanticipated liabilities from acquired businesses, including the recently closed Eddyfi deal.
• Tariffs and trade policy — Changes in U.S. international trade policy and tariffs have had a variety of impacts on results, and the company lists tariff and trade protection measures among risks to its international operations.
• Asbestos-related liabilities — ESAB carries asbestos-related liabilities and depends on insurer solvency for payment of related costs, which management lists as a risk affecting financial condition.

Outlook

For full-year 2026, ESAB raised its total core sales growth guidance to 11.0%-14.0% from 6.0%-9.0%, with core organic sales remaining 2.0%-4.0% and the M&A contribution revised up to approximately 9.0% from 4.0%. Core adjusted EBITDA guidance was raised to $615 million-$625 million from $575 million-$595 million, and core adjusted EPS guidance is now $5.40-$5.50. Management said it expects to mitigate transitory logistics and commodity cost inflation over the next few quarters, and reaffirmed confidence in its long-term financial targets.