Carlisle Q3 Revenue Rises 9% as Adjusted EPS Hits Record

Carlisle Companies (CSL) reported 9% third-quarter revenue growth and record adjusted earnings per share, as higher volumes and cost controls helped offset input and freight inflation that weighed on margins. The company expects high-single-digit revenue growth in the fourth quarter, with adjusted EBITDA margin remaining flat from a year earlier as pricing builds toward anticipated price-cost parity exiting 2026.

Revenue for the quarter ended September 30 rose to $1.46 billion from $1.35 billion a year earlier. Organic revenue also increased 9%. Adjusted EPS climbed 6% to $5.92 from $5.61, supported by higher segment earnings and share repurchases, while higher net interest expense and corporate costs were headwinds.

Adjusted EBITDA was $348.1 million, little changed from $348.7 million in the prior-year quarter. The adjusted EBITDA margin contracted 210 basis points to 23.8% from 25.9% because raw-material and freight inflation exceeded price realization. Higher volumes, cost-of-sales productivity and disciplined cost management provided partial offsets.

On a GAAP basis, net income declined to $208.1 million from $214.2 million. Diluted EPS nevertheless increased to $5.24 from $4.98.

Construction Materials Growth Outpaces Margin Pressure

Carlisle Construction Materials, the company’s largest segment, increased revenue 8% to $1.08 billion, including 9% organic growth. Strategic initiatives, commercial execution and healthy re-roofing demand drove volume growth, while new-construction markets remained soft. The company said price realization strengthened during the quarter.

The segment’s adjusted EBITDA increased 1% to $305.7 million, but its margin fell 200 basis points to 28.2%. Inflation in raw materials, diesel and freight ran ahead of pricing, partially offsetting benefits from higher volumes, cost-of-sales productivity and cost controls.

Carlisle Weatherproofing Technologies generated revenue of $378.5 million, up 9%, with organic growth of 10%. The segment benefited from commercial share gains and weather-related demand for roof coatings, though weakness in new construction continued.

CWT adjusted EBITDA rose 13% to $68.3 million, and its adjusted EBITDA margin expanded 60 basis points to 18.0%. Volume leverage and structural savings from automation, footprint consolidation and internal expanded-polystyrene resin capacity more than offset input and freight inflation that exceeded price realization.

Cash Flow and Capital Deployment

Third-quarter GAAP operating cash flow decreased to $314.1 million from $426.9 million. Free cash flow from continuing operations fell to $277.3 million from $392.7 million, as higher working capital supported sales growth. For the first nine months, free cash flow from continuing operations was $406.9 million, compared with $620.3 million a year earlier. Management expects strong seasonal cash flow in the fourth quarter.

Carlisle repurchased $350 million of shares during the quarter and said it remained on track for its $1.2 billion repurchase target for 2026. The company also increased its quarterly dividend by 14%, marking its 50th consecutive annual increase.

At September 30, Carlisle had $1.5 billion of liquidity, including $546.7 million in cash and $1.0 billion available under its revolving credit facility. Its net debt-to-EBITDA ratio was 1.8 times, within its target range of 1.0 to 2.0 times.

Fourth-Quarter Outlook

Carlisle expects fourth-quarter revenue to grow at a high-single-digit rate year over year and adjusted EBITDA margin to remain flat. Management anticipates high-single-digit revenue growth in both business segments, with pricing and re-roofing demand expected to more than offset slower new construction at CCM, and pricing and share gains expected to outweigh end-market softness at CWT.

For the full year, the company projects an approximately 15% free cash flow margin and roughly 25% return on invested capital. It also expects corporate expense of about $95 million, capital expenditures of approximately $180 million, depreciation and amortization of around $195 million, net interest expense of about $85 million and a base tax rate of 23% to 24%.

Carlisle said its Vision 2030 targets remain intact, including organic revenue compound annual growth of at least 5%, adjusted EBITDA margin above 25%, adjusted EPS exceeding $40 with a mid-teens compound annual growth rate, return on invested capital above 25% and free cash flow margin above 15%.

Near-term uncertainties include continued softness in new construction and the timing of pricing relative to raw-material, energy and freight inflation. The company also identified competition, reliance on key customers, manufacturing disruptions, tariffs, interest-rate and currency movements, cybersecurity risks, regulatory changes, cyclical market conditions and geopolitical conflicts among factors that could cause future results to differ from current expectations.