Astec Industries has demonstrated a solid financial performance in the second quarter of 2026, marking a significant increase in both revenue and adjusted EBITDA. While the company achieved notable growth in its Material Solutions segment and parts and service sales, a recalibration of its full-year adjusted EBITDA guidance was necessary, primarily due to shifts in asphalt plant delivery schedules. Macroeconomic factors, including fluctuations in fuel prices and legislative uncertainties regarding federal highway funding, have influenced these delivery timelines. Despite these adjustments, Astec maintains a positive outlook, supported by consistent order activity, a substantial increase in its total backlog, and strategic initiatives aimed at driving future profitability and market expansion.
During the second quarter of 2026, Astec Industries experienced an impressive 23.6% rise in net sales, reaching $408.1 million. This growth was complemented by a 26% increase in adjusted EBITDA, which climbed to $42.6 million from $33.8 million in the same period of 2025. The adjusted EBITDA margin improved to 10.4%, reflecting a 20-basis-point increase, and the company reported positive free cash flow. A key driver of this performance was the Material Solutions segment, which saw net sales jump by 43% to $179.8 million, fueled by both organic expansion and strategic acquisitions. This segment also achieved a 90-basis-point increase in adjusted EBITDA margin, reaching 12.3%, benefiting from normalized dealer inventory levels and heightened demand for mobile plants.
The Infrastructure Solutions segment also contributed positively, with an 11.6% increase in net sales to $228.3 million, largely due to demand for concrete, mobile paving, and forestry equipment. However, the adjusted EBITDA margin for this segment decreased by 130 basis points to 14.4%, primarily due to a shift in product mix between asphalt plants and mobile paving equipment. Parts and service revenue across the company surged by 34.8% to $135.5 million, accounting for 33.2% of net sales, demonstrating the company's commitment to aftermarket support.
The company's total backlog saw a significant increase of 57.9%, reaching $601.1 million, with the Material Solutions segment contributing the majority of this growth at a 150.6% increase. Despite strong overall order activity, the timing of asphalt plant deliveries led to a revision of the full-year 2026 adjusted EBITDA guidance, now projected between $160 million and $175 million, down from the previous range of $170 million to $190 million. Management noted that strong bookings in July, particularly for asphalt plants and parts, provide confidence in achieving the revised targets, with an anticipated split of approximately one-third of adjusted EBITDA in the third quarter and two-thirds in the fourth quarter.
Astec's commitment to innovation was highlighted at the Hillhead 2026 event in the United Kingdom, where eight new models, including the Frontier series manufactured in Northern Ireland, were launched. These new products are designed with advanced technology and comply with CE standards, targeting the global market. The company also introduced two new prototypes and expanded its dealer network in the U.K., reinforcing its growth strategy. Furthermore, the proposed BUILD America 250 Act, expected to succeed the Infrastructure Investment and Jobs Act, is poised to provide significant funding for surface transportation. While the headline figure appears smaller, the act proposes a 7% increase in highway funding and a 12% increase for bridges, with a higher percentage of formula-funded guaranteed money, which is seen as a positive for Astec's customers and the infrastructure industry.
Looking ahead, Astec aims to reduce its net leverage to approximately 1.7x by the end of 2026, down from the current 2.2x, reflecting a strong balance sheet and strategic capital allocation. The company anticipates full-year capital expenditures between $35 million and $45 million, and quarterly adjusted SG&A guidance of $70 million to $75 million. Management expressed confidence in achieving its 2030 revenue and EBITDA targets, supported by ongoing manufacturing and procurement initiatives, new product development, and the resilient nature of public end markets. The company's robust digital offerings and engagement with industry megatrends, such as the demand for construction materials driven by data center construction, reindustrialization, and domestic mining, further bolster its long-term growth prospects.
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