What happened

Ceco Environmental (CECO 0.24%) delivered a top-line beat in the quarter and raised its full-year revenue guidance. Investors are rallying to the environmental engineering company as a result, sending shares up more than 20% on Tuesday afternoon.

So what

Ceco is an engineering and consulting company focused on the environment, providing solutions to improve air and water quality and optimize emissions management as well as wastewater treatment to a broad range of industries, including energy and transportation.

It is a much-needed service, and Ceco is seeing strong demand. The company earned $0.15 per share in the second quarter, matching analyst expectations, on revenue that at $129.2 million came in about $12 million ahead of expectations.

Orders hit $162.9 million in the quarter, up 44% year over year, leaving the company with a backlog of $391 million in future business at quarter's end. That's a book-to-bill of 1.26, meaning the company is taking in significantly more future business than what it is doing today.

"Our second-quarter results continue to demonstrate the sustainable growth programs and market leadership positions we have been steadily building over the past few years, and bolsters our position as we enter the back half of the year," CEO Todd Gleason said in a statement. "I am pleased that we set new records across a broad set of core financial metrics, which were driven by great execution from our entire team."

Now what

Ceco now expects to generate full-year 2023 sales of $500 million to $525 million, well above the previous guidance for $460 million to $485 million in sales and Wall Street's $487 million consensus estimate. At the midpoint, that would represent 21% growth from a year ago.

Similarly, Ceco said it should generate earnings before interest, taxes, depreciation, and amortization (EBITDA) of between $50 million and $55 million for the year, which would mark 25% growth.

Investors are understandably excited about the boost, and it is good to see profitability growing at a higher rate than revenue.

Shares of Ceco are up nearly 80% over the past year, and trading at nearly 30 times earnings, it is not inexpensive for an industrial company. But Ceco is on a trajectory that would allow it to grow into that multiple, and investors are understandably excited about that path.