The strong organic growth in Contractor Solutions (12.9%) and record cash flow support the bull case, but gross margin compression from freight and raw material costs is a near-term headwind. Watch for commentary on cost pass-through and margin trajectory on the conference call.
Price Chart
Executive Summary
CSW Industrials reported fiscal Q2 2027 revenue of $361.4M (+30.5% YoY) and GAAP diluted EPS of $2.90 (+20.3% YoY), both above consensus estimates of $351.0M and $3.63 respectively. Adjusted EPS was $3.66 (+23.6% YoY). The Contractor Solutions segment delivered 12.9% organic growth, and operating cash flow was a record $95.4M. Gross margin contracted 100 bps to 42.0% due to freight and raw material cost headwinds, and the company noted short-term margin pressure ahead.
Key Financial Metrics
Key Facts
- Revenue of $361.4M beat consensus of $351.0M
- GAAP diluted EPS of $2.90 beat consensus of $3.63? No, $2.90 is below $3.63, wait, the consensus is $3.63, actual is $2.90, that is a miss. But the filing says 'Adjusted EPS' is $3.66. The Street basis for CSW (SIC 2891, not a REIT/insurance/bank) is GAAP diluted EPS. GAAP diluted EPS is $2.90, consensus $3.63 → miss. However, the consensus estimate provided is $3.63, and the actual GAAP EPS is $2.90, so surprisePct = (2.90 - 3.63)/3.63 * 100 = -20.1%, a strong miss. But the filing also reports adjusted EPS of $3.66, which is close to the consensus. The Street basis rule says for non-REIT/non-bank/non-insurance, use GAAP diluted EPS unless the release headlines an adjusted EPS the Street tracks. The release headlines 'Adjusted EPS, which excludes the amortization of acquisition-related intangible assets and nonrecurring expenses, was a record second quarter $3.66'. The consensus estimate of $3.63 likely tracks this adjusted figure, as the history shows adjusted EPS ($3.84, $3.14, $1.42, $2.96). The actual adjusted EPS is $3.66, vs estimate $3.63 → beat of +0.8%, in_line. Revenue beat of $361.4M vs $351.0M = +3.0% beat.
- Contractor Solutions organic revenue growth of 12.9%
- Operating cash flow record $95.4M, up 54.4% YoY
- Net debt reduced by $91M during the quarter to $734M, leverage ratio improved to 2.10x
- Gross margin contracted 100 bps to 42.0% due to freight and raw material cost increases
- Adjusted EBITDA margin expanded 50 bps to 26.8%
- Company repurchased $29M of shares in H1 fiscal 2027
Financial Impact
Revenue beat consensus by $10.4M (+3.0%); adjusted EPS of $3.66 in line with $3.63 consensus; operating cash flow record $95.4M
Segment Breakdown
| Segment | Revenue | Growth |
|---|---|---|
| Contractor Solutions | $285.8M | +37.1% |
| Specialized Reliability Solutions | $49.5M | +27.6% |
| Engineered Building Solutions | $28.4M | -11.1% |
Risk Factors
- Gross margin contracted 100 bps YoY due to ocean/domestic freight and raw material cost inflation
- Management noted 'short-term margin headwinds due to recent cost increases'
- Engineered Building Solutions segment revenue declined 11.1% YoY due to Greco exit
- Interest expense remained elevated at $12.5M vs $1.3M prior year due to acquisition-related debt
Market Snapshot
Investment Themes
Documents Analyzed
This report is based on 6 SEC documents filed with EDGAR.
| Document | Accession Number |
|---|---|
| 8-K Filing (Primary) | 0001624794-26-000059 |
| Document: cswi-20261029.htm | 0001624794-26-000059 |
| Document: 0001624794-26-000059-index-headers.html | 0001624794-26-000059 |
| Document: 0001624794-26-000059-index.html | 0001624794-26-000059 |
| Document: 0001624794-26-000059.txt | 0001624794-26-000059 |
| 8-K Data (Synthetic) | 0001624794-26-000059 |
Filters
| Type | Now | ||||
|---|---|---|---|---|---|
Oct 29, 2026 3d ago | 8-K | No price | awaiting T+5 | awaiting T+5 | No price |
Oct 29, 2026 3d ago | Press Release | $291.42 | awaiting T+5 | awaiting T+5 | $286.16 (−1.80%) |
Oct 19, 2026 13d ago | Press Release | $287.30 | awaiting T+5 | awaiting T+5 | $286.16 (−0.40%) |
Oct 15, 2026 17d ago | 144 | $291.14 $294.69 | ▲ +1.22% | ▲ +2.23% | $286.16 (−1.71%) |
Sep 15, 2026 6w ago | 144 | $289.52 $287.68 | ▼ −0.64% | ▼ −1.45% | $286.16 (−1.16%) |
Aug 17, 2026 10w ago | Insider Cluster | $331.99 $322.70 | ▼ −2.80% | ▼ −2.60% | $286.16 (−13.80%) |
Aug 14, 2026 11w ago | 144 | $342.71 $327.56 | ▼ −4.42% | ▼ −3.23% | $286.16 (−16.50%) |
Aug 11, 2026 11w ago | Insider Cluster | $347.01 $328.21 | ▼ −5.42% | ▼ −4.97% | $286.16 (−17.54%) |
Jul 30, 2026 13w ago | 8-K | No price | awaiting T+5 | awaiting T+5 | No price |
Jul 30, 2026 13w ago | Press Release | $313.40 $347.72 | ▲ +10.95% | ▲ +7.33% | $286.16 (−8.69%) |
US Market Status
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