MSA Q2 Deep Dive: Detection and Fall Protection Growth Offset Margin Pressure, M&C Integration Advances

Safety equipment manufacturer MSA Safety (NYSE:MSA) reported Q2 CY2025 results beating Wall Street’s revenue expectations, with sales up 2.5% year on year to $474.1 million. Its non-GAAP profit of $1.93 per share was 10% above analysts’ consensus estimates.

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StockStory’s Take

MSA Safety’s second quarter results for 2025 were marked by modest sales growth and strong non-GAAP profitability relative to Wall Street expectations, with management attributing the outperformance to effective backlog conversion in Fire Service and Detection. CEO Steven Blanco highlighted that the company benefited from double-digit growth in its Detection segment, particularly from fixed and connected portable gas detection solutions. However, operating margins declined year over year, primarily due to inflation, foreign currency headwinds, and the early effects of tariffs on input costs. Management noted that pricing actions and productivity improvements partially offset these pressures, while overall demand remained stable across the business.

Looking forward, management’s guidance is shaped by ongoing momentum in Detection and fall protection, as well as the integration and expected accretion from the recent M&C TechGroup acquisition. Management remains cautious about short-term volatility in Fire Service, citing the timing of NFPA standard changes and the release of AFG funding as key variables. CEO Steven Blanco stated, “Our expectations are we’re going to raise price effectively to manage the cost inputs as we would expect our competitors to do the same,” while Interim CFO Elyse Brody emphasized that tariff impacts on margins will become more pronounced in the second half, with additional pricing actions planned to address these headwinds.

Key Insights from Management’s Remarks

Management attributed the quarter’s results to robust growth in Detection and fall protection, strategic price increases, and continued backlog conversion, while also addressing margin pressures from inflation and tariffs.

• Detection segment strength: The Detection business, encompassing both fixed and portable gas detection, delivered mid-single-digit organic growth as energy and renewables demand remained healthy. Management credited the diversity of its Detection portfolio and growing adoption of MSA+ connected solutions for driving segment performance, with over half of the absolute growth in portables coming from connected devices like the ALTAIR io 4.
• Fall protection momentum: Investments in new platforms, such as V-TEC and V-Shock, fueled double-digit growth in fall protection, which management described as one of the safety market’s fastest-growing categories. CEO Steven Blanco noted that improved inventory levels and targeted innovation positioned the company to capture additional share in this segment.
• Fire Service order timing volatility: Fire Service organic sales declined mid-single digits, reflecting customer hesitancy ahead of an anticipated NFPA standard change and delays in AFG funding release. Management expects this short-term volatility to continue but believes the pipeline remains solid with large orders, such as those from Orange County, helping to offset softness.
• Margin pressure and pricing actions: Operating margin contraction was attributed to inflation, transactional foreign exchange headwinds, and the early impact of tariffs. Management implemented targeted price increases and productivity initiatives in response, with additional pricing actions planned for the second half to mitigate further tariff impacts.
• M&C TechGroup acquisition progress: The M&C TechGroup acquisition contributed to reported sales and is expected to provide $0.10 of accretion to adjusted EPS for the year. Management highlighted the opportunity to leverage MSA’s global reach to expand M&C’s European-centric sales base and drive synergies over the coming years.

Drivers of Future Performance

MSA Safety’s outlook centers on sustained growth in Detection and fall protection, proactive pricing to manage inflation and tariff costs, and careful navigation of Fire Service demand uncertainty.

• Detection and fall protection focus: Management expects continued strength in Detection, particularly from connected products and newly acquired M&C offerings, as well as sustained double-digit growth in fall protection. These categories are expected to offset weakness in industrial head protection and contribute to overall organic growth.
• Margin management amid headwinds: Tariff impacts are set to intensify in the second half of the year, prompting further pricing actions and productivity measures. Interim CFO Elyse Brody stated that gross margins should remain within the 47%-48% range despite these pressures, though foreign exchange headwinds in Latin America may persist.
• Fire Service and regulatory timing risks: Execution in Fire Service depends on the approval of new NFPA safety standards and the timely release of AFG funding, both of which introduce near-term unpredictability. Management believes that once regulatory clarity and funding are in place, Fire Service demand should normalize, but short-term order timing may remain volatile.

Catalysts in Upcoming Quarters

In the coming quarters, the StockStory team will monitor (1) the pace of adoption and global expansion for MSA+ connected Detection products and the integration of M&C TechGroup, (2) the company’s ability to manage margin pressures from tariffs and foreign exchange through pricing and productivity actions, and (3) the timing and impact of NFPA standard changes and AFG funding releases on Fire Service demand. Progress in these areas will be critical in assessing MSA Safety’s execution of its growth and margin strategies.

MSA Safety currently trades at $169.50, down from $177.41 just before the earnings. Is the company at an inflection point that warrants a buy or sell? See for yourself in our full research report (it’s free).

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