Madison Air Solutions (NYSE:MAIR) reported first-quarter 2026 results in its first earnings call as a public company, highlighting double-digit pro forma sales and earnings growth, strong commercial demand and a record backlog following its recent initial public offering.
President and CEO Jill Wyant said the company’s IPO marked “an historic milestone” and positioned Madison Air to continue investing in high-growth air quality markets. The company operates across commercial and residential air quality businesses, including Addison, AprilAire, Big Ass Fans, Broan-NuTone, Nortek Air Solutions, Nortek Data Center Cooling and Reznor.
Wyant described Madison Air’s business model around what the company calls “Return on Air,” or the value customers receive from air quality solutions in environments where air affects uptime, productivity, compliance, health and energy efficiency. She said the company serves 15 commercial end markets and has a residential strategy focused on training contractors to identify indoor air quality opportunities.
First-Quarter Sales and EBITDA Rise
Chief Financial Officer JJ Foley said pro forma net sales increased 13% year over year to $924 million in the first quarter. Adjusted EBITDA rose 16%, and adjusted EBITDA margin expanded approximately 70 basis points to 25.3%.
Foley said the growth reflected strong volume and price realization in the commercial segment, along with demand for residential healthy air systems and pricing in that business. Adjusted net income was $93 million, up 36% on a pro forma basis from the prior year.
Madison Air generated $50 million of reported free cash flow in the quarter, representing free cash flow conversion of 117%. Foley said the result was in line with expectations and included a normal seasonal working capital build that the company expects to normalize over the course of the year.
Wyant said Madison Air had $3.5 billion of revenue in 2025, with 26.6% EBITDA margins and $440 million in free cash flow. She also said aftermarket sales are currently about 10% of total revenue, with the services opportunity growing at a double-digit compound annual growth rate.
Commercial Demand Drives Orders and Backlog
Madison Air reported combined company orders growth of 29% in the quarter, including AprilAire orders before the acquisition. The company’s book-to-bill ratio was 1.4x, and backlog reached a record $2.5 billion, up 116% year over year on a combined company basis.
In the commercial segment, orders increased 41% year over year on a combined company basis, while backlog rose 124%. Reported commercial net sales increased 24%, or 18% on a combined company basis, to $610 million. Segment adjusted EBITDA rose 25% to $161 million.
Foley said the commercial segment benefited from momentum across technology platforms including thermal management, air handling and energy efficiency, as well as exposure to mission-critical end markets such as data centers, clean energy, healthcare and other commercial applications.
During the question-and-answer portion of the call, Wyant said data centers were a “primary commercial orders and revenue growth driver” in the quarter, but she emphasized that Madison Air also saw broad-based growth in areas such as institutional and government markets and clean energy. She said demand in data centers remained strong and that liquid cooling is becoming a larger share of the company’s data center activity than it was last year, while air-based solutions also remain important.
On backlog duration, Wyant said about two-thirds of the company is backlog-driven, with backlog typically extending one to three quarters. In data centers, she said the duration can extend to four to five quarters because customers want longer-term visibility and supply chain readiness.
Residential Segment Shows Resilience
Madison Air’s residential segment reported low-single-digit orders growth in the first quarter. Reported net sales rose 60%, or 4% on a combined company basis, to $316 million. Reported segment adjusted EBITDA increased 84% to $79 million, with margin expansion driven by cost actions, productivity and favorable mix.
Foley said the residential business continued to benefit from demand for AprilAire’s healthy air system, even with softness in housing starts and remodeling activity. He said overall volume was roughly flat, while pricing supported sales growth.
Wyant said AprilAire performed well in the quarter, with low-double-digit demand growth for healthy air solutions. She described a large remaining opportunity, saying 92% of U.S. homes have no indoor air quality solutions across categories such as purification, ventilation, humidification, dehumidification, sensing or controls.
Wyant also highlighted Madison Air’s approximately 40 million annual in-home touchpoints through HVAC service and replacement activity. She said contractor conversion remains a meaningful opportunity, noting that the company is still in the early stages of penetrating the HVAC contractor base.
IPO Proceeds Used to Reduce Debt
As of March 31, Madison Air had approximately $5.5 billion of net debt and net leverage of 5.7x. Foley noted that the quarter-end figures did not yet reflect roughly $2.6 billion in net proceeds from the IPO, including the full greenshoe exercise and a concurrent private placement.
Foley said 100% of the net proceeds were used to retire debt, including accrued and unpaid interest. That included the company’s full $2.4 billion initial term loan and an additional $200 million on its incremental term loan.
Including the IPO and private placement proceeds, Foley said net leverage would be 3x trailing. He said Madison Air has “clear line of sight” to reach its long-term target of less than 2.5x net debt to EBITDA within the next 12 months.
The company reported liquidity of approximately $563 million as of the first quarter, including $229 million in cash and $334 million of available revolver capacity. Foley also said the company’s credit ratings were upgraded two notches in the second quarter and that Madison Air completed an upsizing of its revolver to $1.3 billion, which will become active in the second quarter.
2026 Guidance Calls for Continued Growth
Madison Air introduced full-year 2026 guidance for net sales of $3.75 billion to $3.85 billion, which Foley said represents mid-single-digit to high-single-digit pro forma growth year over year. The company expects adjusted EBITDA of $1.02 billion to $1.065 billion, implying high-single-digit to low-double-digit growth on a pro forma basis.
Foley said the outlook assumes stable overall demand, continued strength in core commercial end markets including data centers, logistics and healthcare, and slow but steady improvement in housing. The company expects free cash flow conversion to exceed 100% of net income.
Madison Air also expects capital expenditures to be less than 2% of sales, interest expense of approximately $250 million, an adjusted effective tax rate of 29% and a diluted share count of approximately 510 million. Foley said guidance includes about $40 million in central expenses associated with being a public company.
The company’s guidance assumes gross tariff costs of approximately $100 million. Foley said that figure includes about $50 million of incremental costs in 2026, excluding mitigation actions. He said Madison Air expects to offset tariff-related costs over time through pricing and operational actions.
Wyant and Foley said the company is monitoring the potential impact of the Middle East conflict and broader global conditions on supply chains and customer decision-making. As of the call, both executives said Madison Air was not seeing a material near-term impact.
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.
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