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Mar 31
Applied Industrial Technologies Q3 2025 Earnings Report
reported fiscal 2025 third quarter results
Key Takeaways
Applied Industrial Technologies reported strong operational performance in Q3 2025, with EBITDA and EPS exceeding expectations despite ongoing demand weakness. Net sales increased 1.8% year-over-year, driven by acquisitions, while organic daily sales decreased 3.1%. The company announced the acquisition of IRIS Factory Automation and a new share repurchase authorization.
Net Sales of $1.2 billion increased 1.8% year-over-year.
Net Income was $99.8 million, or $2.57 per share.
EBITDA was $144.9 million, up 6.8% year-over-year.
Free Cash Flow was $114.9 million, up 50% year-over-year.
Applied Industrial Technologies
Applied Industrial Technologies
Forward Guidance
For fiscal 2025, the company projects EPS of $9.85 to $10.00 on sales growth of flat to up 1%, with EBITDA margins of 12.3% to 12.4%. The outlook assumes organic average daily sales decline by a mid to low single-digit percent in the fourth quarter.
Positive Outlook
- Focus on internal growth and margin initiatives.
- U.S.-centric position provides resilience with over 70% of sales from MRO and aftermarket support.
- Order and backlog trends remain positive across higher-margin engineered solutions.
- Favorably positioned to manage potential greater inflation.
- Strong balance sheet and exposure to long-term secular tailwinds including reshoring.
Challenges Ahead
- Mindful of greater macro uncertainty and inflation following recent tariff actions.
- Potential demand implications near term as the landscape evolves.
- Assumes end-market weakness and organic sale declines persist near term.
- Customers potentially continue to idle production and defer capital spending.
- Ongoing growth investments considered in the outlook.