They don't appropriately capture the fundamental transformation we've achieved across our business to drive long-term growth. The strategic investments we've made over the past three years across innovation, go-to-market capabilities, and operational excellence have created an unmatched platform that is poised for growth as market conditions normalize. However, our revenues reflect a reduction in demand from our largest chain customers that are experiencing challenges with lower traffic and cost pressures, resulting in deferred replacement business and revisions down in restaurant openings. Our ice and beverage platforms deserve special attention as they represent transformational growth opportunities.
As a new entrant in the faster-growing beverage category, we are positioned to take share from established competitors as we disrupt the segment with automation and game-changing innovations. Finally, within residential, the outdoor segment is faced with significant challenges from tariff-related pressures, causing our channel partners to reduce inventories. That said, we do believe this segment is at the bottom of a challenging cycle, and Middleby is well-positioned to benefit once the market returns. As innovation becomes in greater demand to the outdoor space, we have already invested.
Moving to food processing, we are pleased with the improvement in sales and orders from the first quarter. Order conversion has been slow in the first half, driven by uncertainties from tariff and food costs, impacting the timing of orders, particularly for larger projects. However, we've seen our order pipeline build, with conditions improving in both our protein and bakery segments. Our strategy to offer best-in-class full-line solutions is continuing to differentiate us in the marketplace, and we're confident this strategy has positioned us for sustained long-term growth, both organic and through strategic M&A.
| Metric | Period | Current guidance |
|---|---|---|
| Total revenue | Q3 2025 | $950M to $975M (new quarterly outlook (Commercial Foodservice $580M to $590M, Residential $170M to $180M, Food Processing $195M to $205M)) |
| Adjusted EBITDA | Q3 2025 | $185M to $195M (new quarterly outlook, a modest seasonal step down) |
| Adjusted EPS | Q3 2025 | $2.02 to $2.16 (new quarterly outlook, assuming approximately 50.8 million weighted average shares) |
| Total revenue | FY2025 | $3.81B to $3.87B (initial full-year quantitative outlook) |
| Adjusted EBITDA | FY2025 | $770M to $800M (initial full-year quantitative outlook) |
| Adjusted EPS | FY2025 | $8.65 to $9.05 (initial full-year quantitative outlook, assuming 51 million weighted average shares in Q4) |
| Metric | YoY | Note |
|---|---|---|
| Commercial Foodservice revenue | below prior year at over $580 million | QSR traffic and cost pressures, deferred replacement, and revised-down restaurant openings, partly offset by sequential technology-driven growth |
| Residential revenue | over $181 million | tariff hits to outdoor products offset by improvements in U.S. and U.K. indoor appliance markets |
| Food Processing revenue | over $216 million | large sequential increase from Q1, with strong snack-food acquisition performance |
| Total company adjusted EBITDA | $200 million, down year over year | tariffs were the primary driver of the year-over-year decrease |
| Adjusted EPS | $2.35 | sequential revenue improvement and buybacks offset by tariff-driven EBITDA pressure |
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| Tariffs | an emerging cost pressure | estimated at approximately $150 million annualized incremental cost, the driver of the year-over-year EBITDA decline, with an offset expected by the start of 2026 through pricing and supply chain actions | — |
| Large QSR demand | softening traffic and cost pressures | worsened, with traffic down double digits, new-store pipelines pushed further into 2026, and deferred replacement orders | — |
| Ice, beverage, IoT and automation | early-stage new market adjacencies | transformational growth opportunities with game-changing dispensing from Newton and L2F and the Open Kitchen and OneTouch control platform expected to drive 2026 and 2027 revenue | — |
| Food Processing | slow order conversion in Q1 | modestly improving with book-to-bill above one, growing backlog, and the strategic Frigomeccanica acquisition ahead of the planned first-half 2026 spin | — |