Kennametal (KMT) Q4 2026 earnings summary

Executive summary

• FY26 delivered strong results with 19% organic sales growth to $2,357M, driven by price realization, volume increases, and strategic initiatives in aerospace, defense, AI data centers, and mining.

• Record adjusted EPS of $4.57 (up from $1.34) and adjusted EBITDA margin of 26.9% were achieved, supported by operational improvements and cost actions.

• $27M in restructuring savings realized in FY26, with a commitment to $110M by end of FY27.

• Returned $71M to shareholders through dividends and share repurchases.

• Management expects continued sales growth in FY27, supported by innovation and improving market conditions.

Financial highlights

• FY26 sales were $2,357M, up 20% year-over-year, with organic growth of 19%.

• Adjusted EBITDA rose 112% to $634M (26.9% margin), and adjusted operating income grew 207% to $484M (20.5% margin).

• Q4 organic sales grew 42% year-over-year, with segment growth of 22% in metal cutting and 74% in infrastructure.

• Free operating cash flow for FY26 was negative $79M, impacted by higher working capital needs from elevated tungsten prices.

• Returned $71M to shareholders via $61M in dividends and $10M in share repurchases.

Outlook and guidance

• FY27 sales expected at $3.33–$3.45B, with volume growth of 1%-4% and adjusted EPS guidance of $4.15–$5.15.

• Q1 FY27 sales projected at $745–$775M and adjusted EPS at $2.50–$2.80.

• Free operating cash flow targeted at approximately 20% of adjusted net income, with positive cash flow anticipated in the second half as working capital pressures ease.

• Share repurchases paused until free cash flow turns positive.

• Q4 FY27 EBITDA margin expected in the mid-teens, providing a baseline for FY28 modeling.