AI Takeaway
APD delivered solid Q1 FY2026 results with revenue rising 5.8% YoY to $3.1B and operating income surging 14.1% to $734.5M, reflecting improved margins and disciplined cost management despite a significant increase in total liabilities.
Revenue
$3.1B
++5.83% YoY
EPS (Basic)
$3.04
++9.75% YoY
Operating Income
$734.5M
++14.12% YoY
Filed · Analysis updated · Source: SEC EDGAR 10-Q filing
APD grew revenue by 5.8% YoY to $3,102.5M in Q1 FY2026, up from $2,931.5M in Q1 FY2025, suggesting continued demand for its industrial gases and related products across key end markets.
Source: Source: 10-Q Income Statement Data
Operating margin improved by approximately 1.7 percentage points to 23.7% (from 22.0%), while net margin reached 21.9%, indicating that revenue growth outpaced cost increases and that cost controls on SG&A (down 5.7% YoY to $228.7M) and R&D (down 7.3% to $20.4M) contributed meaningfully to profitability.
Source: Source: 10-Q Income Statement & Key Ratios Data
Operating cash flow increased 11.0% YoY to $900.7M, outpacing net income growth of 9.8%, which reflects healthy cash conversion and solid underlying business fundamentals.
Source: Source: 10-Q Cash Flow Statement Data
2 more insights available
Upgrade to unlockTotal liabilities grew 10.0% YoY to $23.4B while equity contracted 7.7% to $15.4B, resulting in a debt-to-equity ratio of ~1.52x. Sustained leverage at this level could constrain financial flexibility and increase interest expense, particularly in a higher-for-longer interest rate environment.
Source: Source: 10-Q Balance Sheet Data
Unlock 4 more detailed risk analysis
Upgrade to unlockReported EPS of $3.16 versus the $3.08 analyst consensus — a +2.7% beat for Q1 FY2026.
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue | $3.1B | $2.93B | +5.83% |
Cost of Revenue | $2.11B | $2.02B | +4.51% |
Operating Income | $734.5M | $643.6M | +14.12% |
Net Income | $678.2M | $617.4M | +9.85% |
EPS (Basic) | $3.04 | $2.77 | +9.75% |
EPS (Diluted) | $3.04 | $2.77 | +9.75% |
R&D Expense | $20.4M | $22M | -7.27% |
SG&A Expense | $228.7M | $242.4M | -5.65% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Total Assets | $41.24B | $40.02B | +3.06% |
Current Assets | $5.1B | $5.35B | -4.64% |
Total Liabilities | $23.4B | $21.28B | +9.99% |
Current Liabilities | $3.5B | $4.81B | -27.27% |
Stockholders' Equity | $15.41B | $16.69B | -7.67% |
Cash & Equivalents | $1.03B | $1.85B | -44.38% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Cash Flow | $900.7M | $811.7M | +10.96% |
Investing Cash Flow | $-1.24B | $-2.18B | +43.04% |
Financing Cash Flow | $-490.1M | $274.2M | -278.74% |
D&A | $370.7M | $366.8M | +1.06% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Margin | 23.7% | 22.0% | +1.72% |
Net Margin | 21.9% | — | — |
ROE | 4.4% | — | — |
ROA | 1.6% | — | — |
Current Ratio | $1.459 | — | — |
Debt to Equity | $1.519 | — | — |
Other companies in Industrial Gases
APD delivered strong Q1 FY2026 results with revenue of $3,102.5M (+5.8% YoY) and net income of $678.2M (+9.8% YoY). EPS came in at $3.04, up 9.7% from $2.77 in Q1 FY2025, and operating margin expanded to 23.7% from 22.0%.
Yes, APD grew revenue by 5.8% YoY to $3,102.5M in Q1 FY2026, compared to $2,931.5M in Q1 FY2025. This growth was accompanied by even faster operating income growth of 14.1%, reflecting improved cost efficiency.
Key risks include rising leverage (debt-to-equity of ~1.52x), a 44.4% YoY decline in cash to $1.03B, and execution risk on its capital-intensive project pipeline with investing outflows of -$1,242.9M. Energy cost volatility also poses a risk to gross margins given that cost of revenue was $2,107.5M in the quarter.
APD's short-term liquidity appears adequate with a current ratio of 1.46x and operating cash flow of $900.7M, but the balance sheet shows increasing leverage with total liabilities up 10.0% YoY to $23.4B and cash down 44.4% to $1.03B. The company's ROA of 1.6% and ROE of 4.4% reflect the early-stage return profile of its large capital projects.
APD's operating margin improved by approximately 1.7 percentage points to 23.7% in Q1 FY2026, driven by SG&A declining 5.7% YoY to $228.7M and cost of revenue growing more slowly (4.5%) than revenue (5.8%). Net margin reached 21.9%, reflecting strong overall profitability for the quarter.