Cadre Q2 Earnings Call Highlights

Key Points

• Strong Q2 performance: Net sales rose 32% year over year to $207.1 million, adjusted EBITDA increased 56%, and gross margin expanded. Cadre cited broad demand across armor, duty gear, public safety and nuclear safety markets.
• Full-year outlook raised: Cadre now expects 2026 revenue of $749 million to $769 million and adjusted EBITDA of $139 million to $144 million, including the contribution from its Alien Gear Holsters acquisition.
• Record backlog and acquisition integration: Backlog reached a new high, supported by EOD, armor and nuclear orders, including major U.S. government contracts. Cadre is consolidating Alien Gear production into Safariland’s network and expects further margin improvement as integration progresses.

Cadre NYSE: CDRE reported second-quarter results marked by higher sales, profitability and backlog, citing demand across public safety and nuclear safety markets and contributions from recent acquisitions.

Chairman and CEO Warren Kanders said net sales increased 32% year over year in the second quarter, while adjusted EBITDA rose 56%. The company also reported 5% organic top-line growth. Kanders said the results reflected recurring demand for mission-critical products serving law enforcement, first responders, military customers and nuclear markets.

“Our performance through the first half of the year, combined with our record orders backlog and continued momentum, reinforces our confidence in Cadre’s outlook,” Kanders said.

Raised Full-Year Outlook

Chief Financial Officer Blaine Browers said second-quarter net sales totaled $207.1 million, up 32% from a year earlier, with growth in armor, duty gear, nuclear products and distribution. Gross profit rose 36% to $87.1 million. Gross margin expanded 120 basis points year over year, or 209 basis points excluding inventory step-up amortization.

Second-quarter net income included $2 million of inventory step-up amortization and $5.9 million of contingent consideration expense, Browers said. Foreign-exchange headwinds adversely affected bottom-line earnings by $6.6 million.

Cadre raised its 2026 guidance and now expects:

• Net sales of $749 million to $769 million.
• Adjusted EBITDA of $139 million to $144 million.
• Adjusted EBITDA margin of approximately 18.6%.
• Organic revenue growth of 3% to 5% for the full year.

At the midpoint of the updated ranges, the outlook implies revenue growth of 24.4% and adjusted EBITDA growth of 26.7% year over year, according to Browers. The guidance incorporates the acquisition of Alien Gear Holsters and reflects the company’s improved view of full-year revenue and profitability.

For the third quarter, Cadre expects revenue of about $190 million and adjusted EBITDA margins of roughly 18%. Browers said the company expects the fourth quarter to have a financial profile similar to the second quarter.

The company’s net leverage stood at 2.5 times as of June 30, 2026.

Backlog, Contract Awards and Nuclear Demand

President Brad Williams said Cadre’s backlog reached a record level for the second consecutive quarter and increased $13 million sequentially. The increase was supported by demand for explosive ordnance disposal, or EOD, products. Browers said backlog also rose in armor, duty gear and nuclear operations, with armor backlog up 10% to 15% from year-end even excluding the impact of large EOD-related awards.

During the quarter, Med-Eng received an $8.4 million purchase order under its five-year, $50 million indefinite-delivery, indefinite-quantity contract for the U.S. military’s Blast Exposure Monitoring program. The order brought total purchase orders received under the program to $18.4 million.

Separately, Safariland’s SX HP ballistic panel was selected as the ballistic package for Predictive Ballistics’ OVERT armor kit for the FBI. Predictive Ballistics received a five-year, $61 million IDIQ contract for the kit, which is also available to the U.S. Marshals Service, the Drug Enforcement Administration and other Department of Justice agencies. Williams said Cadre has already received demand under the program, though volumes are not yet stabilized.

Within nuclear safety, Cadre said backlog has increased by $13 million since the end of 2025. Browers said most of the increase came from commercial nuclear energy and environmental remediation, including activity in the U.S. and northern Europe. Commercial nuclear operations in Europe also showed positive revenue momentum during the quarter.

Management said an executive order related to downblending affected a portion of the Alpha Safety container business, creating margin and mix pressure in that subsegment. Williams said the affected area accounts for less than 8% of Cadre’s nuclear revenue and does not indicate weaker demand in the company’s broader nuclear safety business.

Acquisitions and Integration Efforts

Cadre completed the acquisition of Alien Gear Holsters during the second quarter. Kanders said the transaction illustrates the company’s strategy of pursuing smaller, complementary bolt-on acquisitions alongside potentially larger strategic opportunities.

Browers said Cadre has deployed approximately $455 million across seven transactions during the past four years, including Alien Gear. Management said it expects at least one additional acquisition in 2026 and continues to evaluate opportunities in both public safety and nuclear markets.

Alien Gear generated about $4.8 million of revenue in the quarter, and Cadre has included approximately $11 million from the business in its full-year guidance, Browers said. Management said the business performed above expectations but remained cautious because Alien Gear was acquired out of bankruptcy.

Williams said Cadre has completed the consumer-side integration of Alien Gear with Safariland’s consumer team. The company also plans to close Alien Gear’s manufacturing facility in Idaho and shift production into Safariland’s manufacturing network over the next 12 to 18 months. Cadre expects Alien Gear’s margins to move toward Cadre-level margins as integration work progresses.

Management also cited early collaboration between TYR Tactical and Safariland, including efforts to identify TYR products that could fill gaps in Safariland’s product offerings and potential product-development work involving Med-Eng.

Looking ahead, Williams said government procurement timing remains a factor in reaching the high end of Cadre’s guidance range, as awards can be delayed even when underlying demand remains intact. Still, management said it sees broad-based momentum across public safety, distribution and nuclear operations.

About Cadre (NYSE:CDRE)

Cadre NYSE: CDRE is a technology‐driven real estate investment platform that offers accredited and institutional investors direct access to institutional‐grade commercial properties. Established in 2014, Cadre leverages a data-centric approach to identify, underwrite and manage investments in multifamily, office, retail and industrial assets across major U.S. markets. The firm's platform is designed to streamline the investment process, from deal sourcing and due diligence to ongoing asset management and reporting.

Through its online marketplace, Cadre provides a curated selection of equity and preferred equity offerings, allowing investors to participate in individual properties or diversify across a managed portfolio.

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