Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Performance was driven by the nondiscretionary, replacement-driven nature of commercial laundry, which management describes as an essential industry that remains resilient across economic cycles.
Revenue growth of 7% was balanced between pricing discipline and volume, with North America showing broad-based strength across all vertical markets. The company is successfully executing a 'local-for-local' manufacturing strategy, which provides a structural advantage in mitigating tariff impacts and inflationary pressures. Strategic focus on digital innovation and connected equipment is driving higher adoption, aimed at improving customer uptime and lowering total cost of ownership.
Management highlighted Southeast Asia as a structural growth engine, where urbanization and a growing middle class are creating a durable vended laundry market from scratch. Operational excellence and supply chain efficiencies contributed to a 135 basis point expansion in adjusted EBITDA margins, though expansion was 60 basis points when excluding one-time benefits such as insurance recoveries and tariff refunds. The company achieved significant deleveraging, reducing net leverage from 4.6x to 2.4x over 12 months through organic cash flow and IPO proceeds.
Full-year adjusted EBITDA growth guidance was raised to 8% to 10%, supported by strong first-half visibility and consistent demand expectations. Management expects revenue to remain consistent between quarters in the second half, with margin expansion weighted toward the fourth quarter due to seasonal patterns. The company anticipates reaching a net leverage target of 2.0x by year-end 2026, driven by strong organic cash generation.
Guidance assumes a stable pricing environment where the company will proactively implement price increases to stay ahead of potential 2027 inflationary 'heat'. International growth is expected to be 'lumpy' in the near term due to regional conflicts and energy costs, but management maintains a long-term trajectory toward margin parity with North America. Second quarter results included a $3.8 million benefit from tariff refunds and a business interruption insurance claim.
The Middle East and Africa region, representing less than 2% of revenue, is experiencing a temporary pause in demand and transit delays due to regional conflict. Management noted that while steel costs are locked through Q1 2027, the broader inflationary environment for 2027 appears 'hotter' than preferred. Higher energy costs in Europe and Asia are acting as a temporary headwind, causing some international operators to pause investment cycles.
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