MAIR 10-K & 10-Q changes, risk factors and insider trading
Madison Air Solutions Corp · NYSE · Industrial & Commercial Fans & Blowers & Air Purifing Equip · CIK 2098430 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
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What changed in the latest 10-Q
Risk Factors
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Management's Discussion & Analysis (MD&A)
New heading “2026 2Q Madison Air 11”
New heading “2026 2Q Madison Air 15”
Removed heading “This Quarterly Report on Form 10-Q covers a period prior to the completion of Madison Air Solutions Corporation’s initial public offering (“IPO”) on April 17, 2026. In connection with the completion of the IPO, we effected a series of organizational transactions described in the unaudited consolidated financial statements included herein.”
Removed heading “2026 1Q Madison Air 7”
Removed heading “Comparison of the Three Months ended March 31, 2026 and March 31, 2025”
Removed heading “Comparison of the Three Months ended March 31, 2026 and March 31, 2025”
Removed heading “2026 1Q Madison Air 9”
Removed heading “2026 1Q Madison Air 11”
Removed heading “Comparison of the three months ended March 31, 2026 and March 31, 2025”
Largest changes
“Both the Secured Notes and the Unsecured Notes are subject to certain customary operating and financial covenants, including limitations on the incurrence of additional debt, the creation of liens, the making of restricted payments, asset sales, affiliate transactions, and mergers or consolidations, among others. The Secured Notes and Unsecured Notes are also subject to customary events of default, which, if triggered, could result in the acceleration of the Secured Notes or Unsecured Notes, as applicable. …”see in full comparison
U.S. trade policy continues to evolve, contributing to macroeconomic uncertainty. In February 2026, the U.S. Supreme Court invalidated certain tariffs previously imposed under emergency authorities, resulting insee in full comparisonpotentialrefund obligations and ongoing litigation. The Companyisbegancurrentlytoevaluatingreceive tariff refunds in the three months ended June 30, 2026, and has recorded the associated benefit as a reduction to costs of goods sold. The Company continues to evaluate its exposure related to these matters, including the potential for additional refunds of previously paid tariffs.Based on information available to date, the Company has not recognized any amounts related to these potential refunds in its condensed consolidated financial statements.The ultimate outcome, including the timing and amount of any additional refunds, remains uncertain and may be affected by ongoing administrative processes. Concurrently, the U.S. government has implementednewandtariffs,continues to evaluate additional tariff 2026 2Q Madison Air 5 measures affecting imports from numerous trading partners, includingacountry-specifictemporary global tarifftariffs andtargetedduties on certain importedgoodsgoods, components and rawmaterials, and has indicated that additional measures may be forthcoming.materials. The Company is also monitoring ongoing trade negotiations with key partners, including Canada and Mexico, and potential changes to rules of origin and other provisions that could affect the availability of duty-free treatment. Recent changes to Section 232 tariffs on steel, aluminum, and copper, particularly the expansion of duties to the full value of certain imported products, may further increase effective tariff rates on metal intensive goods. These developments,alongtogether with ongoing inflationary pressures affecting labor, transportation, energy and raw material costs, elevated global tariff levels and increasing protectionist measures in other jurisdictions, may result in increased inputcost,costs, supply chain disruptions, pricing volatility, and reduced demand for the Company's products.
“This Quarterly Report on Form 10-Q covers a period prior to the completion of Madison Air Solutions Corporation’s initial public offering (“IPO”) on April 17, 2026. In connection with the completion of the IPO, we effected a series of organizational transactions described in the unaudited consolidated financial statements included herein.”see in full comparison
“Comparison of the Three Months ended March 31, 2026 and March 31, 2025”see in full comparison
“Comparison of the Three Months ended March 31, 2026 and March 31, 2025”see in full comparison
“Comparison of the three months ended March 31, 2026 and March 31, 2025”see in full comparison
Full comparison: every changed paragraph (126)
The following discussion and analysis summarizes the significant factors affecting the consolidated operating results, financial condition, liquidity, and cash flows of Madison Air Solutions Corporation as of and for the periods presented below. The following discussion and analysis of our financial condition and results of operations should be read together with the unaudited condensed consolidated financial statements and the related notes and other financial information of Madison Air Solutions Corporation and Madison Industries IAQ Solutions Corporation ("MIAQ Solutions") included elsewhere in this Quarterly Report on Form 10-Q as well as audited consolidated financial statements and the related notes and other financial information of Madison Air Solutions Corporation and Madison Industries IAQ Solutions Corporation included in the prospectus (the "Prospectus") filed pursuant to Rule 424(b)(4) with the Securities and Exchange Commission ("SEC"). The following discussion contains forward-looking statements that involve risks and uncertainties. Actual results and timing of selected events could differ materially from those discussed or implied by the forward-looking statements as a result of various factors, including those discussed below and detailed elsewhere in this Quarterly Report on Form 10-Q, particularly in the section entitled “Forward-Looking Statements.” The operating results presented within this section are not necessarily indicative of the results that may be expected in any future period.
This Quarterly Report on Form 10-Q covers a period prior to the completion of Madison Air Solutions Corporation’s initial public offering (“IPO”) on April 17, 2026. In connection with the completion of the IPO, we effected a series of organizational transactions described in the unaudited consolidated financial statements included herein.
Unless we state otherwise or the context otherwise requires, the terms “we,” “us,” “our,” “our business,” “the Company,” “Madison Air” and similar references refer: (1) on or following the consummation of the organizational transactions, to Madison Air Solutions Corporation and its consolidated subsidiaries,subsidiaries including Madison Industries IAQ Solutions Corporation and its consolidated subsidiaries, and (2) prior tofollowing the consummation of the organizational transactions,transactions toeffected Madisonin Industriesconnection IAQwith Solutionsthe CorporationCompany's andinitial itspublic consolidatedoffering subsidiaries.("IPO").
We take up to 25,000 breaths a day and spend up to 90% of our lives indoors, often breathing air that’s up to two to five times more polluted than outdoor air. Yet most people rarely think about the air we breathe at home, at schools,school, in healthcare facilities and at work. Poor air quality doesn’t just affect comfort; it undermines health, productivity and performance.
On April 17, 2026, the Company completed its IPO of 95,096,154 shares of Class A common stock, which includes shares issued after the underwriters fully exercised their option, at an offering price of $27.00 per share. In addition, the Company issued 3,703,704 shares of Class B common stock under a concurrent private placement at a price of $27.00 per share. The Company received net proceeds from the IPO and concurrent private placement of $2,584.2 million after deducting underwriting discounts and commissions (excluding offering related expenses).
Prior to the consummation of the IPO, Madison Air Solutions Corporation engaged in a series of organizational transactions (the “Organizational Transactions”), including (i) a spin-off of Madison Industries IAQ Solutions Corporation (the "Predecessor") from Madison Industries Holdings LLC ("Holdings" or "Madison Industries") whereby ownership interests in the Predecessor were distributed up from Madison Industries US Holdings Corporation to Holdings, which then contributed such ownership interests in the Predecessor to Madison Air Solutions Corporation in exchange for shares of its Class B common stock and, as a result, the Predecessor became a wholly owned subsidiary of the Company and (ii) certain holders of non-controlling interests in intermediary holding entities between the Predecessor and Madison Indoor Air Solutions LLC ("Madison IAS") engaged in a series of transactions that resulted in such holders of non-controlling interests receiving shares of the Company’s Class A common stock in exchange for their respective non-controlling interests in the intermediary holding entities and, as a result, each entity in the chain below the Company became a wholly owned subsidiary thereof.
Following the Organizational Transactions, the Company's capital structure consists of Class A and Class B common stock. The two classes of stock are identical in all economic respects, including rights to dividends and distributions, but differ with respect to voting rights. Holders of Class A common stock are entitled to one vote per share, while holders of Class B common stock are entitled to ten votes per share. As of June 30, 2026, Holdings retained approximately 64.7% of the economic interests in the Company and controlled approximately 95.2% of the voting power of the Company's outstanding common stock.
We believe that our performance and future success depend on many factors that present significant opportunities for us but also pose risks and challenges, including those discussed below. The following are key factors that have,have affected, and may continue to,to affectaffect, our operating results and financial performance:
Impacts of Macroeconomic and Geopolitical Conditions. Our operating results have been, and will likely continue to be, influenced by numerous factors affecting the markets we serve, including levels of residential and non-residential new construction, aging commercial and residential building stocks, and megatrends including energy resilience, AI and cloud-computing growth, reshoringrestoring of advanced manufacturing, and a growing focus on human health. New residential and non-residential construction activity and, to a lesser extent, residential remodeling and replacement activity are affected by seasonality and cyclical factors such as interest rates, credit availability, inflation, consumer spending, employment levels and other macroeconomic factors.
U.S. trade policy continues to evolve, contributing to macroeconomic uncertainty. In February 2026, the U.S. Supreme Court invalidated certain tariffs previously imposed under emergency authorities, resulting in potential refund obligations and ongoing litigation. The Company isbegan currentlyto evaluatingreceive tariff refunds in the three months ended June 30, 2026, and has recorded the associated benefit as a reduction to costs of goods sold. The Company continues to evaluate its exposure related to these matters, including the potential for additional refunds of previously paid tariffs. Based on information available to date, the Company has not recognized any amounts related to these potential refunds in its condensed consolidated financial statements. The ultimate outcome, including the timing and amount of any additional refunds, remains uncertain and may be affected by ongoing administrative processes. Concurrently, the U.S. government has implemented newand tariffs,continues to evaluate additional tariff 2026 2Q Madison Air 5 measures affecting imports from numerous trading partners, including acountry-specific temporary global tarifftariffs and targeted duties on certain imported goodsgoods, components and raw materials, and has indicated that additional measures may be forthcoming.materials. The Company is also monitoring ongoing trade negotiations with key partners, including Canada and Mexico, and potential changes to rules of origin and other provisions that could affect the availability of duty-free treatment. Recent changes to Section 232 tariffs on steel, aluminum, and copper, particularly the expansion of duties to the full value of certain imported products, may further increase effective tariff rates on metal intensive goods. These developments, alongtogether with ongoing inflationary pressures affecting labor, transportation, energy and raw material costs, elevated global tariff levels and increasing protectionist measures in other jurisdictions, may result in increased input cost,costs, supply chain disruptions, pricing volatility, and reduced demand for the Company's products.
Innovate and Strengthen Our Core Product Portfolio. We're building on our legacy of entrepreneurship and innovation to grow market share with new or underpenetrated products and value-added services. Our close connection to customers, at the point where decisions are made, gives us a deep understanding of their needs and the underlying market trends shaping their businesses. We believe this insight drives focused, purposeful innovation, helping us develop solutions our customers require. In addition, we believe that our new product pipeline is aligned with evolving energy efficiency requirements, which we expect will accelerate replacement demand. We have identified opportunities to enhance and extend our product portfolio, particularly in attractive, high-growth end markets like healthcare and cleanrooms where increasingly stringent building codes related to indoor air quality, digitization, and energy efficiency are driving demand. As we bring new products and enhancements to market, we may incur additional operating expenses, 2026 1Q Madison Air 5 including research and development expense. Furthermore, we intend to capture additional upgrade and replacement opportunities by integrating more digital applications and features into our solutions.
Leverage. We are a highly leveraged company, and our interest expense is significant. As of March 31, 2026, we had $5,712.5 million of aggregate principal amount of outstanding indebtedness and $12.9 million of letters of credit outstanding, of which $5.7 million reduces our borrowing capacity, resulting in up to $334.3 million of additional borrowing capacity available under the Revolving Credit Facility. If interest rates increase, certain portions of the debt service obligations on the loans will increase and cash required for servicing indebtedness will increase. Our significant indebtedness limits our flexibility in planning for, or reacting to, changes in our business and future business opportunities since a substantial portion of our cash flow from operations will be dedicated to servicing our indebtedness, and this may place us at a disadvantage to competitors who are less leveraged. Our leverage also makes us more vulnerable to a downturn in our business, industry or the economy in general.
The Company received net proceeds from the IPO and concurrent private placement of $2,584.2 million after deducting underwriting fees and commissions (excluding offering related expenses). Proceeds from the IPO and private placement, together with $77.1 million of cash on hand, were used to repay $2,661.2 million of outstanding borrowings under the Initial Term Loan Facility and Incremental Term Loan Facility, consisting of $2,425.7 million of principal and $35.5 million of accrued interest on our Initial Term Loan and $158.4 million of principal and $41.6 million of accrued interest on our Incremental Term Loan..
Incremental Public Company Expenses. During the period leading up to, and following our IPO, we have will incurred and will continue to incur significant expenses that we did not incur as a private company. Those costs include director and officer liability insurance expenses, as well as costs associated with third-party and internal resources related to accounting, auditing, Sarbanes-Oxley Act compliance, legal, and investor and public relations activities. These costs will generally be expensed as selling, general and administrative expenses in the consolidated statements of income.
Seasonality. Certain of our sales are seasonal as construction, repair and restoration activity generally increases during the summer months when there is favorable weather and longer daylight conditions. For certain high volume low speed fan customers, sales peak in the summer months as fans are replaced whereas sales of unit heaters and other heat products peak in the winter months. Significant tropical storms, hurricanes, regional floods and deep freezes increase the demand for restoration dehumidifiers and fans; such events are sporadic in nature and typically occur during their 2026 2Q Madison Air 6 respective seasons. This seasonality is generally mitigated by other products and services we provide that have no material seasonal effect.
Incremental Public Company Expenses. During the period leading up to, and following our IPO, we have incurred and will continue to incur significant expenses that we did not incur as a private company. Those costs include director and officer liability insurance expenses, as well as costs associated with third-party and internal resources related to accounting, auditing, Sarbanes-Oxley Act compliance, legal and investor and public relations activities. These costs are generally expensed as selling, general and administrative expenses in the condensed consolidated statements of income (loss).
Our management team also monitors key performance indicators to assist us in evaluating the performance of our business, including backlog and orders. We believe these key performance indicators are useful to investors in 2026 1Q Madison Air 6 understanding and evaluating our results of operations in the same manner as our management team. However, the presentation of key performance indicators is presented for supplemental information purposes only and should not be considered as superior to or as a substitute for financial information presented in accordance with GAAP and may be different from similarly titled key performance indicators used by other companies. Key performance indicators have limitations as analytical tools, and you should not consider them in isolation, or as substitutes for an analysis of our results as reported under GAAP.
Total backlog was $2,868.4 million as of June 30, 2026, an increase of 32.7% compared to December 31, 2025 and 133.0% compared to June 30, 2025. The increases were driven primarily by Commercial backlog, which represented substantially all of the growth for each period presented. Residential backlog remained relatively stable during each period. The growth in Commercial backlog reflects continued wins across several key technologies including air, liquid, and hybrid cooling, air handling and air movement.
Total orders were $1,331.4 million and $2,645.3 million for the three and six months ended June 30, 2026, respectively, compared to $870.3 million and $1,752.6 million for the corresponding prior-year periods. The increases were driven primarily by broad-based growth across the Commercial segment's end markets, including continued strength in data centers related demand. Comparability of the year-over-year periods was also impacted by the acquisition of Research Products Corporation ("AprilAire," and such acquisition, the "AprilAire Acquisition") on May 7, 2025, which contributed approximately $45.6 million and $246.3 million of Commercial and Residential orders, respectively, during the six months ended June 30, 2026, compared to approximately $16.5 million and $80.9 million of Commercial and Residential orders, respectively, during the period from May 7, 2025 through June 30, 2025.
As of March 31, 2026 our consolidated backlog was $2,520.2 million, an increase of $359.4 million or 16.6% from December 31, 2025 and an increase of $1,359.6 million or 117.1% from March 31, 2025.The increases were fueled by backlog related to our Commercial segment which closed at $2,456.5 million as of March 31, 2026, an increase of $1,365.2 million or 125.1% from March 31, 2025. Orders related to our Commercial segment increased $316.0 million, or 46.6%, to $993.9 million as of March 31, 2026 compared to the three months ended March 31, 2025. This growth for both backlog and orders builds on momentum from 2025, with progress across several key technologies including thermal management, where we continue to win new projects and customers in the air, liquid, and hybrid cooling market, as well as air handling and energy efficiency.
Residential segment backlog remained relatively flat from December 31, 2025 to March 31, 2026, while orders grew $115.6 million, or 56.6%, to $320.0 million, compared to the three months ended March 31, 2025.
For the period from JanuaryApril 1, 2025 to MarchMay 31,7, 2025, AprilAire’s commercial brands generated orders of $26.0$10.3 million, that would have been accounted for in Madison Air’s Commercial segment had we owned AprilAire and its associated commercial brands during the period. AsFor ofthe Marchperiod 31,from January 1, 2025 to May 7, 2025, AprilAire'sAprilAire’s commercial brands had2026 backlog2Q Madison Air 7 generated orders of $7.3$36.3 million.million, that would have been accounted for in Madison Air’s Commercial segment had we owned AprilAire and its associated commercial brands during the period.
For the period from JanuaryApril 1, 2025 to MarchMay 31,7, 2025, AprilAire’s residential brands generated orders of $109.1$38.3 million, that would have been accounted for in Madison Air’s Residential segment had we owned AprilAire and its associated residential brands during the period. AsFor ofthe Marchperiod 31,from January 1, 2025 to May 7, 2025, AprilAire'sAprilAire’s residential brands hadgenerated backlogorders of $1.3$147.4 million.million, that would have been accounted for in Madison Air’s Residential segment had we owned AprilAire and its associated residential brands during the period.
The following tables and accompanying narrative disclosures present our results of operations for the three and six months ended MarchJune 31,30, 2026 and 2025. The results of operations presented are not necessarily indicative of results for future periods. The Company classified the results of operations and cash flows of Nortek Global HVAC LLC ("NGH") as discontinued operations in our condensed consolidated statements of income (loss) and condensed consolidated statements of cash flows for all periods presented.
(1)Exclusive of intangible amortization shown separately.
2026 1Q Madison Air 7
Comparison of the Three Months ended March 31, 2026 and March 31, 2025
(1)Exclusive of intangible amortization shown separately (2)IncludesInclusive of equity appreciation rights expense of $10.4$16.3 million and $5.2$22.1 million for the three months ended MarchJune 31,30, 2026 and 2025, respectively, and $26.7 million and $27.3 million for the six months ended June 30, 2026 and 2025, respectively.
(3)Adjusted Net Income and Adjusted Net Income (loss) margin are non-GAAP financial measures. For a reconciliation of each of Adjusted Net Income and Adjusted Net Income (loss), see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Financial Measures.”
(43)Gross Profit and Gross Profit Margin are presented in accordance with GAAP. For a reconciliation of Gross Profit and Gross Profit Margin, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—"Non-GAAP Financial Measures.”
(54)Adjusted Gross Profit, Adjusted Gross Profit Margin, Adjusted Net Income (loss), Adjusted Net Income (loss) margin, Adjusted EBITDA and Adjusted EBITDA Margin are non-GAAP financial measures. For a reconciliation of each of Adjusted Gross Profit, Adjusted Gross Profit Margin, Adjusted Net Income (loss), Adjusted Net Income (loss) margin, Adjusted EBITDA and Adjusted EBITDA Margin to the most directly comparable financial measures under GAAP, see “—Non-GAAP Financial Measures.”
Net Sales. Net sales increased $233.3 million, or 33.8%, to $923.7 million forFor the three months ended MarchJune 31,30, 2026,2026. Net sales increased $171.7 million, or 20.9%, compared to $690.4 million for the three months ended MarchJune 31,30, 2025. The acquisition of AprilAire in May 2025 (the "AprilAire Acquisition") drove an aggregate $146.2$66.9 million of the net sales increase year-over-year. The remaining $87.1$104.8 million ofwas attributable to organic growth in our Commercial segment partially offset by a modest organic net sales growthdecline was due to growth ofin our CommercialResidential segment. Refer to "Results of Operations by Segment" below for a discussion of Net Sales by segment.
The components of the period change were as follows:
(1)Organic revenue growth rate is a non-GAAP financial measure. For a reconciliation of organic revenue growth rate to the most directly comparable financial measures under GAAP, see “—Non-GAAP Financial Measures.”
Gross Profit. Gross profit increased $96.5 million, or 39.1%, to $343.5 million for the three months ended March 31, 2026, compared to $247.0 million for the three months ended March 31, 2025, resulting in a gross profit margin of 37.2% compared to 35.8% the year prior. The AprilAire Acquisition in May 2025 contributed to $64.6 million of the year-over-year increase. The remaining $31.9 million increase was driven by higher year-over-year sales resulting in incremental gross profit.
The AprilAire Acquisition also impacted the comparability of gross profit and operating expenses between periods. Incremental costs of goods sold, selling, general and administrative expenses and technology intangible amortization attributable to the AprilAire Acquisition were approximately $26.1 million, $11.2 million, and $0.8 million respectively.
Interest and financing expenses decreased $4.3 million compared to the corresponding prior-year period. Interest and financing expenses included a $27.7 million loss on debt extinguishment in connection with the repayment and modification of our Credit Agreement. Proceeds from the IPO and concurrent private placement, together with cash on hand, were used to repay $2,425.7 million of remaining principal under the Company's Initial Term Loan and repay $200.0 million in principal under the Company's Incremental Term Loan. Excluding the impact of the debt extinguishment, interest expense decreased $32.0 million, driven by lower average borrowings following the debt repayment transactions and lower interest rate on the Incremental Term Loan.
Selling, General and Administrative Expenses. Selling, general and administrative expenses increased $48.7 million, or 46.1%, to $154.3 million for the three months ended March 31, 2026, compared to $105.6 million for the three months ended March 31, 2025. The AprilAire Acquisition in May 2025 contributed to $27.4 million of the year-over-year increase. Equity Appreciation Rights ("EAR") expense, included in selling, general and administrative expenses, increased $5.2 million for the three months ended March 31, 2026 compared to March 31, 2025. In December 2025, the Company amended its EAR Plan and began accounting for the plan as an equity classified award. EAR expense for the three months ended March 31, 2026 represents the amortization of the grant date fair value. The remaining $16.1 million increase was driven by increased commissions to our sales team associated with higher volumes, wage inflation, investments in research and development, and increased professional fees, including insurance costs, and audit fees associated with our initial public offering, increased allocated Madison Industries costs, and a positive legal settlement in the prior year.
Intangible Amortization. Intangible amortization expenses increased $15.7 million to $40.9 million for the three months ended March 31, 2026, compared to $25.2 million for the three months ended March 31, 2025. The AprilAire Acquisition in May 2025 contributed $15.5 million of the year-over-year change, primarily the result of customer relationships recognized at the time of acquisition.
Interest and Financing Expenses. Interest and financing expenses were $90.7 million and $65.8 million for the three months ended March 31, 2026 and 2025, respectively. The $24.9 million increase was driven by interest on the Incremental Term Loan Facility obtained in May 2025 to partially fund the acquisition of AprilAire offset by a lower interest rate on the Term Loan Facility and the impact of favorable interest rate swaps.
Income Tax Expense. Income tax expense was $17.3$40.6 million for the three months ended MarchJune 31,30, 2026, an increase of $2.6$22.1 million compared to income tax expense of $14.7$18.5 million for the three months ended MarchJune 31,30, 2025.The2025. increaseThe decrease in incomethe effective tax expenserate isfor primarilythe three months ended June 30, 2026 was driven by increasedlower overall state tax onimpacts, non-USprimarily operations.discrete items recorded in the second quarter of 2025; the decrease is partially offset by discrete write-offs in the second quarter of 2026 for executive compensation that is no longer deductible for tax purposes after the Company became a public business entity.
For the six months ended June 30, 2026. Net sales increased $405.0 million, or 26.8%, compared to the six months ended June 30, 2025. The AprilAire Acquisition drove an aggregate $213.1 million of the net sales increase year-over-year. The remaining $191.9 million was attributable to organic growth in our Commercial segment, partially offset by a modest organic net sales decline in our Residential segment. Refer to "Results of Operations by Segment" below for a discussion of Net Sales by segment.
The AprilAire Acquisition also impacted the comparability of gross profit and operating expenses between periods. Incremental costs of goods sold, selling, general and administrative expenses and technology intangible amortization attributable to the AprilAire Acquisition were approximately $106.4 million, $38.6 million, and $2.8 million respectively.
Interest and financing expenses increased $20.6 million compared to the corresponding prior-year period. Interest and financing expenses included a $27.7 million loss on debt extinguishment recognized in connection with the repayment and modification of the Credit Agreement in 2026 as described above. Excluding the impact of the debt extinguishment, interest expense decreased $7.1 million driven by lower average borrowings following the debt repayment transactions and lower interest rate on the Incremental Term Loan.
Income tax expense was $57.9 million for the six months ended June 30, 2026, an increase of $24.7 million compared to income tax expense of $33.2 million for the six months ended June 30, 2025. The increase in the effective tax rate for the six months ended June 30, 2026 is primarily due to discrete write-offs in the second quarter of 2026 for executive compensation that is no longer deductible for tax purposes.
The following tables and accompanying narrative disclosures present our results of segment operations for the three and six months ended June 30, 2026 and 2025. The results of operations presented are not necessarily indicative of results for future periods. We report and manage our business through two segments: Commercial and Residential. We report certain activities and items that are not included in these segments within Central and other costs.
We report and manage our business through two segments: Commercial and Residential. We report certain activities and items that are not included in these segments within Central and other costs. The reconciliation of segment net sales to total net sales and Segment Adjusted EBITDA to total Adjusted EBITDA, respectively, is as follows:
Commercial. Commercial segment net sales increased $126.5 million, or 23.8%, for the three months ended June 30, 2026, compared to the three months ended June 30, 2025. Organically, our Commercial net sales increased by 22.3% 2026 2Q Madison Air 9 driven by broad-based growth across the segment, led by air, liquid and hybrid cooling, custom air handling, and air movement solutions. These increases were partially offset by modest volume declines in commercial dehumidification. Acquisitions contributed $9.3 million, or 1.7%, of additional net sales for the three months ended June 30, 2026.
Comparison of the Three Months ended March 31, 2026 and March 31, 2025
Commercial. Net sales for our Commercial segment increased $116.2 million, or 23.5%, for the three months ended March 31, 2026, compared to the three months ended March 31, 2025. Acquisitions contributed $25.7 million or 5.2% of net sales. For the period from JanuaryApril 1, 2025 to MarchMay 31,7, 2025, AprilAire’sAprilAire's commercial brands generated net sales of $24.3$9.9 million, that would have been accounted for in Madisonthe Air’sCompany's Commercial segment had we owned AprilAire and its associated commercial brands during thosesuch periods.period.
Organically, our Commercial net sales increased by 17.2%. More than half of this organic growth was driven by our air, liquid, and hybrid cooling platform. These increases were partially offset by volume declines in air handling and commercial dehumidification.
Commercial segment Adjusted EBITDA increased $32.6$17.3 million, or 25.4%,11.1%, for the three months ended MarchJune 31,30, 2026, compared to the three months ended MarchJune 31,30, 2025. Acquisitions contributed $5.8$3.4 million of incremental Adjusted EBITDA to the Commercial segment growth. Excluding the AprilAire acquisition, Commercial segment Adjusted EBITDA growth was mainly driven by volume growth, and productivity improvements.growth.
Net sales for our Commercial segment increased $242.7 million, or 23.7%, for the six months ended June 30, 2026, compared to the six months ended June 30, 2025. Organically, our Commercial net sales increased by 19.8% driven by broad-based growth across the segment, led by air, liquid and hybrid cooling, air movement, and energy efficiency solutions. These increases were partially offset by modest volume declines in commercial dehumidification. Acquisitions contributed $36.1 million, or 3.5%, of additional net sales for the six months ended June 30, 2026.
2026 1Q Madison Air 9
Residential. Net sales for our Residential segment increased $118.1 million, or 59.8%, for the three months ended March 31, 2026, compared to the year ended March 31, 2025. Acquisitions contributed $120.7 million or 61.1% to net sales. For the period from January 1, 2025 to MarchMay 31,7, 2025, AprilAire’sAprilAire's residentialcommercial brands generated net sales of $106.2$34.2 million, that would have been accounted for in Madisonthe Air’sCompany's ResidentialCommercial segment had we owned AprilAire and its associated residentialcommercial brands during thosesuch periods.period.
Organically, our Residential net sales decreased by 1.9% driven by modest volume declines in our professional distribution channels for ventilation solutions, net of price increases.
ResidentialCommercial segment Adjusted EBITDA increased $36.1$49.7 million, or 83.6%,17.5%, for the threesix months ended MarchJune 31,30, 2026, compared to the threesix months ended MarchJune 31,30, 2025. Acquisitions contributed $37.5$9.2 million of incremental Commercial segment Adjusted EBITDA.EBITDA Afterto consideringthe Commercial segment growth. Excluding the AprilAire AcquisitionAcquisition, inCommercial May 2025,Segment Adjusted EBITDA decreasedgrowth was mainly driven by $1.4 million due to modest volume declines in our professional distribution channels for ventilation solutions.growth.
Residential. Residential segment net sales increased $46.5 million, or 16.2%, for the three months ended June 30, 2026, compared to the three months ended June 30, 2025. Organically, our Residential net sales decreased by 4.8% driven by modest volume declines in our professional distribution channels for ventilation solutions, net of price increases. Acquisitions contributed $56.4 million, or 19.6%, of additional net sales for the three months ended June 30, 2026.
For the period from April 1, 2025 to May 7, 2025, AprilAire's residential brands generated net sales of $38.4 million, that would have been accounted for in the Company's Residential segment had we owned AprilAire and its associated commercial brands during such period.
Residential segment Adjusted EBITDA increased $25.9 million, or 35.6%, for the three months ended June 30, 2026, compared to the three months ended June 30, 2025. Acquisitions contributed $21.8 million of incremental Adjusted EBITDA. Excluding the AprilAire Acquisition, Residential segment Adjusted EBITDA increased by $4.1 million due to productivity, pricing and favorable net tariff impacts partially offset by modest volume declines.
MAIR insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 2 Form 4 filings (2 insiders, 1 trade date, 8,790,524 shares, about $219.6M) and open-market sales in 0 filings. Net open-market shares: 8,790,524 (purchases minus sales); net value about $219.6M.Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-08-25 | Gies Larry |
Grant/award | 12,815,378 | $24.97 | $320.0M |
| 2026-08-25 | Gies Larry |
Grant/award | 12,014,417 | $24.97 | $300.0M |
| 2026-08-25 | Bertarelli Ernesto |
Open-market purchase | 8,770,524 | $24.97 | $219.0M |
| 2026-08-25 | La Force Andrew Hudson Iii |
Open-market purchase | 20,000 | $27.84 | $556.8K |
| 2026-08-21 | Larson Leah |
Shares withheld for tax | 20,518 | $26.25 | $538.6K |
| 2026-07-15 | Wisniewski David M |
Grant/award | 19,808 | — | — |
| 2026-06-25 | La Force Andrew Hudson Iii |
Grant/award | 5,711 | — | — |
| 2026-06-25 | Nolen George |
Grant/award | 5,077 | — | — |
| 2026-06-23 | Wyant Jill S |
Shares withheld for tax | 93,618 | $38.13 | $3.6M |
| 2026-06-23 | Foley John Joseph V |
Shares withheld for tax | 21,143 | $38.13 | $806.2K |
| 2026-06-16 | Wyant Jill S |
Shares withheld for tax | 167,516 | $39.02 | $6.5M |
| 2026-05-18 | Philippi Dale |
Grant/award | 18,293 | — | — |
Well-known investors holding MAIR (13F)
| Investor | Quarter | Shares | Reported value | % of their 13F | Change vs prior quarter |
|---|---|---|---|---|---|
| Durable Capital Partners (Henry Ellenbogen) | 2026-06-30 | 10,196,486 | $397.7M | 3.87% | New position |
| Citadel Advisors (Ken Griffin) | 2026-06-30 | 6,448,221 | $251.5M | 0.14% | New position |
| D1 Capital Partners (Dan Sundheim) | 2026-06-30 | 1,250,000 | $48.8M | 0.14% | New position |
| Soros Fund Management | 2026-06-30 | 625,004 | $24.4M | 0.32% | New position |
| Millennium Management (Israel Englander) | 2026-06-30 | 580,455 | $22.6M | 0.02% | New position |
| Two Sigma Investments | 2026-06-30 | 318,481 | $12.4M | 0.01% | New position |
| D. E. Shaw & Co. | 2026-06-30 | 261,600 | $10.2M | 0.01% | New position |
| Point72 Asset Management (Steve Cohen) | 2026-06-30 | 149,881 | $5.8M | 0.01% | New position |