Madison Air Solutions (NYSE:MAIR) reported second-quarter results marked by double-digit sales growth, a record backlog and higher full-year revenue guidance, as demand remained strong across commercial markets including data centers, healthcare, advanced manufacturing and institutional applications.
On a pro forma basis that combines Madison Air and AprilAire as if AprilAire had been owned since Jan. 1, 2025, net sales rose 14% year over year to $991 million. Adjusted EBITDA increased 12%, while the adjusted EBITDA margin was 26.8%, up 155 basis points sequentially from the first quarter but down about 59 basis points from a year earlier.
Orders and Backlog Reach Records
Combined company orders increased 45% during the quarter and 37% in the first half, producing a 1.3x book-to-bill ratio. Madison Air ended the quarter with record backlog of $2.9 billion, up 133% from the prior year on a combined-company basis.
More than half of the backlog is expected to convert into revenue in 2027 and later, according to Chief Executive Officer Jill Wyant. The company said the backlog provides visibility into future demand despite what management described as a fluid macroeconomic, trade and geopolitical environment.
Commercial orders increased more than 70% year over year, while orders outside data centers rose nearly 50%. Wyant said growth beyond data centers was driven by advanced manufacturing, including clean-room and clean-energy applications, as well as healthcare and institutional markets supported by air movement and air-handling platforms.
Commercial segment sales rose 22% to $659 million, driven by low-single-digit pricing and high-teens volume growth. Segment adjusted EBITDA increased 11% to $173 million, with a 26.3% adjusted EBITDA margin.
Management said data-center cooling remains the largest contributor to commercial orders growth, though the company emphasized that it serves 15 commercial end markets. Wyant said Madison Air has a balanced mix of hyperscale and colocation data-center customers, as well as air- and liquid-cooling products. She added that the company does not view production-floor space as a near- or medium-term constraint and said it has the capacity needed to fulfill backlog.
On supply chains, Wyant said data-center demand has strained some global supply categories, particularly electrical components. However, she said the company works with customers and suppliers using forward backlog visibility to plan component sourcing and production needs.
Residential Growth Despite Soft Housing Conditions
Residential sales increased 2% on a combined-company basis despite soft housing and traditional HVAC conditions. Reported residential sales rose 16% to $334 million, reflecting the AprilAire acquisition; on a combined basis, pricing was low single digits and volume was approximately flat.
Madison Air said it continued to expand adoption of its Healthy Air Systems through contractor partners, with management estimating roughly 40 million annual in-home opportunities through HVAC replacement and service calls. AprilAire delivered double-digit revenue growth, supported by contractor and distribution conversions and new product launches.
Residential adjusted EBITDA rose 36% to $99 million, and the segment margin expanded 423 basis points. Foley said about one-third of the margin improvement came from mix, including a greater contribution from AprilAire, while the remainder reflected pricing, productivity and a modest benefit from tariff refunds. He said residential margins are expected to decline somewhat sequentially from the second quarter.
Cash Flow, Leverage and Capital Allocation
Madison Air generated approximately $140 million of free cash flow in the first half, representing net-income conversion of 123%. On a last-12-month basis, free cash flow was $430 million and the company reported a 26.6% adjusted EBITDA margin.
As of June 30, net debt was approximately $2.8 billion and trailing net leverage was 2.8x, an improvement of 0.2x from the IPO pro forma leverage level at the end of March. The company used $2.6 billion in net proceeds from the AprilAire IPO and concurrent private placement to retire debt and interest.
Foley said Madison Air has a “clear line of sight” to reach its longer-term target of less than 2.5x net debt to EBITDA by the end of 2026 through earnings growth and cash generation. The company had roughly $1.6 billion of liquidity at quarter-end, including $262 million in cash and about $1.3 billion available under its revolving credit facility.
Management reiterated a capital-allocation framework centered on high-return organic investment, balance-sheet deleveraging and strategic acquisitions. Wyant said acquisition targets would ideally strengthen technology platforms, expand channel access, add capabilities in attractive end markets or increase service and aftermarket exposure.
Company Raises Full-Year Revenue Outlook
Madison Air increased its 2026 net sales outlook by about $75 million at the midpoint. The company now expects full-year sales of $3.825 billion to $3.925 billion, representing high-single-digit-plus pro forma growth.
Adjusted EBITDA is projected to be between $1.02 billion and $1.065 billion, implying high-single-digit to low-double-digit pro forma growth and a full-year adjusted EBITDA margin of about 27%.
The company expects the second-half margin rate to increase modestly from the first half, supported by operating leverage, productivity initiatives and additional price realization. Foley said adjusted EBITDA margins in the third and fourth quarters are expected to be in a 27% to 28% range, with more expansion anticipated in the fourth quarter.
Madison Air continues to expect capital expenditures of less than 2% of sales, cash interest expense of about $240 million, an effective tax rate of 29% and free-cash-flow conversion of net income above 100%.
About Madison Air Solutions (NYSE:MAIR)
We take up to 25,000 breaths a day and spend up to 90% of our lives indoors, often breathing air that’s two to five times more polluted than outdoor air. Clean air is absolutely essential to human life, yet most people rarely think about the air we breathe at home, in our schools, in healthcare facilities and in the workplace. Poor air quality doesn’t just affect comfort; it undermines health, productivity and performance. Improving air quality is a fundamental principle that is a key tenet in everything we do.
