Savaria Q2FY26 Results: Net profit up 54.4% to $25.2m
- Revenue reached a record $245.8 million, up 8.4% YoY with 6.6% organic growth
- Net earnings increased 54.4% to $25.2 million, driven by margin expansion and lower interest costs
- Accessibility adjusted EBITDA margin expanded 170 bps to 23.6%; Patient care margin fell to 18.4%
- Net debt to EBITDA ratio improved to 0.87x, with available funds at $333.4 million
- Completed acquisition of VPAL SpA in Italy for CAD 13 million to expand European product portfolio
*this image is generated using AI for illustrative purposes only.
Savaria Corporation (TSX: SIS) reported its highest-ever quarterly revenue of $245.8 million for the second quarter of fiscal year 2026, marking an 8.4% increase year-over-year. Net earnings surged 54.4% to $25.2 million, reflecting significant operational leverage and reduced financing costs.
The company achieved a record gross margin of 39.6%, up 60 basis points from the prior year. Adjusted EBITDA reached $51.8 million, representing a margin of 21.1%, a 50 basis point improvement over Q2FY25. This performance was supported by organic growth of 6.6% and a 1% positive foreign exchange impact.
Segment Performance and Margins
Accessibility revenue grew 8.7% to $192 million, driven by strong sales in Canada, the United States, and Europe. The segment’s adjusted EBITDA margin expanded significantly to 23.6%, up 170 basis points from 21.9% in the prior year. Patient care revenue increased 7.3% to $53.7 million, entirely driven by organic growth. However, this segment’s adjusted EBITDA margin contracted to 18.4% from 20.9%, attributed to commodity cost inflation in foam and aluminum.
| Metric | Q2FY26 | Q2FY25 | Change |
|---|---|---|---|
| Revenue | $245.8 million | $226.8 million | +8.4% |
| Gross Margin | 39.6% | 39.0% | +60 bps |
| Operating Income | $35.8 million | $26.7 million | +34.1% |
| Adjusted EBITDA | $51.8 million | $46.7 million | +10.9% |
| Net Earnings | $25.2 million | $16.3 million | +54.4% |
Balance Sheet and Liquidity
Savaria’s financial position strengthened during the quarter, with net debt decreasing to $172.8 million from $191.5 million at year-end. The net debt to EBITDA ratio improved to 0.87 times, providing substantial flexibility for capital allocation. Available funds stood at $333.4 million as of June 30, 2026.
Cash flow from operating activities rose to $33.3 million from $30.3 million in the prior year quarter. Investing activities utilized $13.4 million, primarily for fixed and intangible assets, including $5.3 million for the Greenville building expansion.
Strategic Acquisitions and Growth Initiatives
The company completed the acquisition of VPAL SpA, an Italian manufacturer of residential elevators, on July 1, 2026, for a total consideration of CAD 13 million. This follows the earlier acquisition of Baxter Laboratories in Texas. Management reiterated its long-term target of 12% annual revenue growth through 2030, aiming for $1.6 billion in sales while maintaining adjusted EBITDA margins above 20%.
What the Numbers Show
A divergence between top-line growth and bottom-line expansion highlights the impact of Savaria One initiatives. While revenue grew 8.4%, operating income jumped 34.1%. This disproportionate increase was driven by the termination of strategic initiative expenses following the completion of the Savaria One program last year, alongside procurement efficiencies that offset inflationary pressures in most segments except patient care.
How will the ongoing commodity cost inflation in foam and aluminum impact the patient care segment's margin trajectory in upcoming quarters?
What specific integration synergies and revenue contributions are expected from the newly acquired VPAL SpA to support the 12% annual growth target?
Given the low net debt-to-EBITDA ratio of 0.87x, will Savaria prioritize further M&A activity or return capital to shareholders in the near term?
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