Identification solutions manufacturer Brady (NYSE: BRC) reported revenue ahead of Wall Street’s expectations in Q1 CY2026, with sales up 13.8% year on year to $435.2 million. Its non-GAAP profit of $1.50 per share was 11.5% above analysts’ consensus estimates.

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Commentary:“Our investment in research & development resulted in strong organic sales growth globally, along with a record quarter of adjusted earnings per share. New product launches over the last several years as well as data center construction drove our sales growth, which is an end market that is ideal for our high-performance identification solutions,” said Brady’s President and Chief Executive Officer, Russell R. Shaller.

Company Overview

Founded in 1914 and evolving through more than a century of industrial innovation, Brady (NYSE: BRC) manufactures and supplies identification solutions and workplace safety products that help companies identify and protect their premises, products, and people.

Revenue Growth

A company’s long-term performance is an indicator of its overall quality. Any business can have short-term success, but a top-tier one grows for years.

With $1.62 billion in revenue over the past 12 months, Brady is a mid-sized business services company, which sometimes brings disadvantages compared to larger competitors benefiting from better economies of scale. On the bright side, it can still flex high growth rates because it’s working from a smaller revenue base.

As you can see below, Brady’s 8.3% annualized revenue growth over the last five years was solid. This is a good starting point for our analysis because it shows Brady’s demand was higher than many business services companies.

We at StockStory place the most emphasis on long-term growth, but within business services, a half-decade historical view may miss recent innovations or disruptive industry trends. Brady’s annualized revenue growth of 9.9% over the last two years is above its five-year trend, suggesting its demand was strong and recently accelerated.

This quarter, Brady reported year-on-year revenue growth of 13.8%, and its $435.2 million of revenue exceeded Wall Street’s estimates by 7.2%.

Looking ahead, sell-side analysts expect revenue to grow 18.2% over the next 12 months, an improvement versus the last two years. This projection is eye-popping and implies its newer products and services will spur better top-line performance.

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Adjusted Operating Margin

Adjusted operating margin is an important measure of profitability as it shows the portion of revenue left after accounting for all core expenses – everything from the cost of goods sold to advertising and wages. It’s also useful for comparing profitability across companies because it excludes non-recurring expenses, interest on debt, and taxes.

Brady has been an efficient company over the last five years. It was one of the more profitable businesses in the business services sector, boasting an average adjusted operating margin of 17.2%.

Looking at the trend in its profitability, Brady’s adjusted operating margin rose by 3.2 percentage points over the last five years, as its sales growth gave it operating leverage.

This quarter, Brady generated an adjusted operating margin profit margin of 17.4%, down 1.2 percentage points year on year. This reduction is quite minuscule and indicates the company’s overall cost structure has been relatively stable.

Earnings Per Share

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

Brady’s EPS grew at 15.4% compounded annual growth rate over the last five years, higher than its 8.3% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.

Diving into Brady’s quality of earnings can give us a better understanding of its performance. As we mentioned earlier, Brady’s adjusted operating margin declined this quarter but expanded by 3.2 percentage points over the last five years. Its share count also shrank by 8.8%, and these factors together are positive signs for shareholders because improving profitability and share buybacks turbocharge EPS growth relative to revenue growth.

Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business.

For Brady, its two-year annual EPS growth of 11.6% was lower than its five-year trend. This wasn’t great, but at least the company was successful in other measures of financial health.

In Q1, Brady reported adjusted EPS of $1.50, up from $1.22 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects Brady’s full-year EPS to grow 7.4% from $5.06 to $5.44.

Key Takeaways from Brady’s Q1 Results

We were impressed by how significantly Brady blew past analysts’ revenue expectations this quarter. We were also glad its full-year EPS guidance outperformed Wall Street’s estimates. Zooming out, we think this was a solid print. The stock traded up 2.6% to $72.81 immediately after reporting.

Brady may have had a good quarter, but does that mean you should invest right now? If you’re making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here (it’s free).