Applied Industrial Technologies Earnings Call Transcripts
Fiscal Year 2026
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Third quarter saw 6% organic sales growth, record EBITDA, and strong momentum across both segments. Guidance for fiscal 2026 was raised to the high end, with continued focus on M&A, share buybacks, and navigating macro and geopolitical uncertainties.
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Q2 results met guidance with 2.2% organic sales growth and strong margin management despite higher LIFO expense. Full-year EPS guidance was raised, supported by robust cash flow, active capital deployment, and positive early Q3 sales trends.
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EBITDA and EPS grew 13% and 11% year-over-year, with strong service center performance and positive order momentum in engineered solutions. Full-year EPS guidance was raised, and the Hydradyne acquisition continues to drive margin and synergy gains.
Fiscal Year 2025
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Record sales, EBITDA, and EPS were achieved in fiscal 2025, with strong cash generation and significant capital deployment. Fiscal 2026 guidance anticipates 4%-7% sales growth, margin expansion, and continued M&A activity, despite ongoing macro and trade policy uncertainty.
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Gross margin, EBITDA, and EPS exceeded expectations in Q3, driven by cost controls and M&A, despite a 3% organic sales decline. Free cash flow hit record levels, supporting acquisitions and buybacks, while guidance reflects ongoing macro uncertainty and cautious customer spending.
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Second quarter results showed margin and earnings growth despite a slight sales decline, supported by strong execution, cost controls, and the Hydradyne acquisition. Guidance for fiscal 2025 was raised, with continued focus on M&A, capital deployment, and operational enhancements.
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Organic daily sales declined 3% year-over-year, but strong September trends and record free cash flow nearly doubled from the prior year. Full-year EPS guidance was raised, while sales and margin outlooks remain cautious amid mixed end market demand and macro uncertainty.
Fiscal Year 2024
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Q4 saw double-digit earnings growth and record margins despite softer end market demand. FY25 guidance anticipates a slow first half with recovery in the second, supported by strong cash flow, active M&A, and ongoing investments.