EVI Industries Reports 24% Q2 Revenue Gain, Net Income Down to $4.2M
EVI Industries delivered 24% Q2 and 20% H1 FY26 revenue growth with gross margins expanding to 31%. Fiscal 2025 acquisitions added $40 million in revenues and $2 million net income, while SG&A growth of 26% caused net income to dip to $4.2 million.
1. Robust Revenue Growth and Margin Expansion
EVI Industries posted 24% revenue growth in the December quarter and 20% in the first half of FY26, driven by an improved product mix, disciplined pricing and operating leverage. Gross margin widened to approximately 31% as higher-margin services and efficient cost controls boosted profitability.
2. Impact of Acquisitions and Cash Flow Improvement
Fiscal 2025 acquisitions contributed $40 million in incremental revenues and $2 million in net income year-to-date, enhancing the installed base and service visibility. Operating cash flow rose to $5.1 million despite a $12.6 million inventory build, supported by $9.7 million in lease receivables.
3. Rising Costs, Inventory Buildup and Debt Profile
SG&A expenses increased 26%, outpacing revenue gains and pressuring net income to $4.2 million. Inventory levels climbed to $78 million, raising working capital requirements, while debt under a variable-rate facility rose to $58 million, increasing sensitivity to rising interest rates.