Revenue growth accelerated to 12.9% YoY in 2026Q2, but EPS fell 54.1% to $0.50, with operating margin compressing to 9.7% from 16.2% a year earlier, indicating that top-line gains are not translating into profitability.
ESAB Corporation (ESAB) annual income statement — 7-year revenue, gross profit & net income history
| Metric | TTM | Dec'25 | Dec'24 | Dec'23 | Dec'22 | Dec'21 | Dec'20 | Dec'19 |
|---|
| Sales/Revenue | 3B | 2.84B | 2.74B | 2.77B | 2.59B | 2.43B | 1.95B | 2.25B |
| Revenue Growth % | 9.65% | 3.71% | -1.22% | 6.99% | 6.81% | 24.51% | -13.22% | - |
| Cost of Goods Sold | 1.93B | 1.83B | 1.7B | 1.76B | 1.71B | 1.59B | 1.27B | 1.45B |
| COGS % of Revenue | - | 64.46% | 62.15% | 63.39% | 65.86% | 65.49% | 65% | 64.56% |
| Gross Profit | 1.07B | 1.01B | 1.04B | 1.02B | 885.53M | 837.98M | 682.47M | 796.44M |
| Gross Margin % | 35.69% | 35.54% | 37.85% | 36.61% | 34.14% | 34.51% | 35% | 35.44% |
| Gross Profit Growth % | - | -2.62% | 2.14% | 14.71% | 5.67% | 22.79% | -14.31% | - |
| Operating Expenses | 619.09M | 518.44M | 590M | 611.59M | 556.47M | 531.77M | 480.34M | 540.36M |
| OpEx % of Revenue | - | 18.24% | 21.53% | 22.04% | 21.46% | 21.9% | 24.63% | 24.05% |
| Selling, General & Admin | 706.74M | 608.42M | 497.44M | 497.59M | 443.63M | 425.95M | 381.32M | 444.48M |
| SG&A % of Revenue | - | 21.4% | 18.15% | 17.93% | 17.11% | 17.54% | 19.55% | 19.78% |
| Research & Development | 22.6M | 44M | 39.2M | 38.8M | 36M | 39.7M | 34.8M | 32.2M |
| R&D % of Revenue | - | 1.55% | 1.43% | 1.4% | 1.39% | 1.64% | 1.78% | 1.43% |
| Other Operating Expenses | 0 | -133.97M | 53.36M | 75.2M | 76.84M | 66.11M | 64.22M | 63.68M |
| Operating Income | 452.23M | 491.8M | 447.45M | 404.17M | 329.06M | 306.21M | 202.13M | 256.08M |
| Operating Margin % | 15.06% | 17.3% | 16.33% | 14.57% | 12.69% | 12.61% | 10.37% | 11.4% |
| Operating Income Growth % | - | 9.91% | 10.71% | 22.82% | 7.46% | 51.5% | -21.07% | - |
| EBITDA | 563.17M | 575.8M | 514.05M | 473.87M | 394.17M | 380.81M | 276.83M | 332.68M |
| EBITDA Margin % | 18.76% | 20.26% | 18.76% | 17.08% | 15.2% | 15.68% | 14.2% | 14.81% |
| EBITDA Growth % | 11.1% | 12.01% | 8.48% | 20.22% | 3.51% | 37.56% | -16.79% | - |
| D&A (Non-Cash Add-back) | 110.94M | 84M | 66.6M | 69.7M | 65.1M | 74.6M | 74.7M | 76.6M |
| EBIT | 332.55M | 407.56M | 464.81M | 439.67M | 370.3M | 330.23M | 224.55M | 278.16M |
| Net Interest Income | -67.1M | -79.3M | -64.89M | -85.07M | -37.95M | 1.67M | 3.71M | -997K |
| Interest Income | 0 | 0 | 0 | 0 | 0 | 1.67M | 3.71M | 997K |
| Interest Expense | 67.1M | 79.3M | 64.89M | 85.07M | 37.95M | 0 | 0 | 0 |
| Other Income/Expense | -192.12M | -163.54M | -77.05M | -85.07M | -28.81M | 12.87M | 3.71M | -34.61M |
| Pretax Income | 260.11M | 328.26M | 370.4M | 319.09M | 300.25M | 319.09M | 205.84M | 221.47M |
| Pretax Margin % | 8.66% | 11.55% | 13.51% | 11.5% | 11.58% | 13.14% | 10.56% | 9.86% |
| Income Tax | 55.19M | 69.16M | 77.35M | 95.73M | 69.17M | 80.41M | 45.97M | 44.74M |
| Effective Tax Rate % | 21.22% | 21.07% | 20.88% | 30% | 23.04% | 25.2% | 22.33% | 20.2% |
| Net Income | 172.52M | 226.77M | 264.84M | 205.28M | 223.75M | 235.11M | 157.41M | 172.91M |
| Net Margin % | 5.75% | 7.98% | 9.66% | 7.4% | 8.63% | 9.68% | 8.07% | 7.7% |
| Net Income Growth % | -32.67% | -14.38% | 29.01% | -8.25% | -4.83% | 49.36% | -8.96% | - |
| Net Income (Continuing) | 204.92M | 259.1M | 293.06M | 223.37M | 231.08M | 238.68M | 159.87M | 176.73M |
| Discontinued Operations | -4M | -25.87M | -22.31M | -12.34M | -3.07M | 0 | 0 | 0 |
| Minority Interest | 45.54M | 45.49M | 39.24M | 40.26M | 38.25M | 40.99M | 42.14M | 46.06M |
| EPS (Diluted) | 2.80 | 3.72 | 4.31 | 3.36 | 3.72 | 3.92 | 2.62 | 2.88 |
| EPS Growth % | -34.84% | -13.69% | 28.27% | -9.68% | -5.1% | 49.62% | -9.03% | - |
| EPS (Basic) | - | 3.72 | 4.36 | 3.38 | 3.73 | 3.92 | 2.62 | 2.88 |
| Diluted Shares Outstanding | 61.63M | 60.94M | 61.1M | 60.66M | 60.15M | 60.03M | 60.03M | 60M |
| Basic Shares Outstanding | 61.33M | 60.94M | 60.43M | 60.23M | 60.05M | 60.03M | 60.03M | 60M |
| Dividend Payout Ratio | - | 9.66% | 6.42% | 6.5% | 2.71% | - | - | - |
Quick answers to the most common questions about buying ESAB stock.
For fiscal year 2025, ESAB Corporation (ESAB) reported total revenue of $2.84B. This represents a 26.5% increase compared to $2.25B in 2019.
ESAB Corporation (ESAB) is profitable, generating $226.8M in net income for the fiscal year ending 2025 with a net profit margin of 8.0%.
ESAB Corporation (ESAB) reported an operating income of $491.8M, resulting in an operating profit margin of 17.3%. This margin reflects the operational efficiency of the business before interest and taxes.
ESAB Corporation (ESAB) generated $1.01B in gross profit for the year, representing a gross profit margin of 35.5%. This demonstrates the company's core pricing power and production efficiency.
Key Metrics
Top Statement Risk
EPS volatility and margin compression
Metrics are mathematically derived from official filings.
Return to Organic Growth
ESAB's revenue accelerated to 12.9% YoY growth in 2026Q2, up from 1.2% in 2025Q2, signaling a rebound after a period of sluggishness, as per recent financial statements.
The sequential acceleration from 1.2% to 12.9% YoY growth suggests a meaningful inflection in demand, likely driven by both volume recovery and pricing actions. However, the sustainability of this growth is uncertain given the 'challenging macro environment' cited by management, and investors should monitor whether this pace can be maintained in the face of global industrial production volatility.
Gross Margin Resilience Amidst Volatility
Gross margin dipped to 30.5% in 2025Q4 but recovered to 38.0% by 2026Q2, indicating pricing power and cost pass-through, based on reported quarterly data.
The sharp fluctuation in gross margin, from 38.5% in 2024Q4 to 30.5% in 2025Q4, suggests sensitivity to commodity costs and mix shifts. The recovery to 38.0% in 2026Q2 implies that the company can restore margins after temporary disruptions, but the volatility underscores the risk of input cost spikes. Compared to peers like ITW at 44.1%, ESAB's gross margin is structurally lower, reflecting its more transactional equipment mix and emerging market exposure.
Operating Leverage Inconsistent
Operating margin swung from 23.1% in 2025Q4 to 9.7% in 2026Q2, indicating that revenue growth is not consistently translating into operating profit, as per income statement data.
The wide fluctuation in operating margin, despite relatively stable revenue, suggests that operating leverage is not a reliable feature of ESAB's model. The 2025Q4 spike to 23.1% appears anomalous, possibly due to one-time gains or cost timing, while the 2026Q2 drop to 9.7% may reflect elevated SG&A or other expenses. This inconsistency warrants investigation into the drivers of SG&A, which ranged from $91.9M to $210.2M over the period, indicating potential cost control challenges.
EPS Volatility Raises Quality Concerns
Diluted EPS fell 54.1% YoY in 2026Q2 to $0.50, despite revenue growth, highlighting a disconnect between top-line and bottom-line performance, as reported in financial statements.
The significant EPS decline, even as revenue grew, suggests that profitability is being impacted by factors beyond operational performance, such as tax rates, non-operating items, or one-time charges. The net margin compressed to 4.0% in 2026Q2 from 9.3% in 2025Q2, indicating that net income is not scaling with revenue. Stock-based compensation has been modest, but the variability in EPS growth (from -54.1% to +84.9% in 2024Q1) suggests that reported earnings may not be a reliable indicator of underlying economic performance.
SG&A Escalation Pressures Margins
SG&A expenses surged to $210.2M in 2026Q2, up from $155.6M a year earlier, outpacing revenue growth and compressing operating margins, based on quarterly data.
The 35% YoY increase in SG&A in 2026Q2, while revenue grew only 12.9%, indicates that overhead costs are rising faster than sales, potentially due to investments in automation, digital initiatives, or increased selling expenses. This trend, if sustained, could continue to pressure operating margins, which fell to 9.7% in 2026Q2 from 15.2% in 2025Q2. Management's emphasis on the 'ESAB Business System' suggests a focus on efficiency, but the recent data does not yet show consistent cost discipline.
Margin Compression and EPS Miss
Despite raised guidance, the 2026Q2 EPS miss and operating margin drop to 9.7% suggest that profitability conversion is lagging, which could signal structural cost issues, as per reported figures.
Short-sellers might argue that the revenue growth is being bought at the expense of margins, as evidenced by the sharp decline in operating margin from 15.2% in 2025Q2 to 9.7% in 2026Q2. The EPS miss, despite revenue beat, indicates that cost pressures are not fully offset by pricing. Additionally, the volatility in gross margin, with a low of 30.5% in 2025Q4, suggests that the company may not have durable pricing power in the face of commodity swings. If the raised guidance is not met, the stock could face de-rating.