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Jun 28, 2025
Gates Industrial Q2 2025 Earnings Report
Gates Industrial reported its second-quarter 2025 results, showing a slight decline in net sales but an increase in net income attributable to shareholders and adjusted EPS.
Key Takeaways
Gates Industrial delivered solid results in the second quarter of 2025, with net sales of $883.7 million, a slight decrease of 0.2% year-over-year. The company reported a net income attributable to shareholders of $56.5 million and an adjusted net income per diluted share of $0.39. Gross margin expanded, and the balance sheet improved, driven by positive core sales growth in Replacement channels and double-digit growth in the Mobility business, alongside the first growth in Agriculture since Q4 2022.
Net sales for Q2 2025 were $883.7 million, a marginal decrease of 0.2% compared to the prior year.
Net income attributable to shareholders reached $56.5 million, with adjusted net income per diluted share at $0.39.
Adjusted EBITDA stood at $199.2 million, representing a margin of 22.5%.
The company raised its full-year 2025 guidance for Adjusted EBITDA and Adjusted EPS, reflecting optimism for future performance.
Revenue by Segment
Forward Guidance
Gates Industrial is raising its full-year 2025 guidance, anticipating core sales growth between 0.5% and 2.5%, Adjusted EBITDA in the range of $765 million to $795 million, and Adjusted Earnings Per Share of $1.44 to $1.52. The company also expects Free Cash Flow conversion to exceed 90%.
Positive Outlook
- Core sales growth projected between +0.5% to +2.5% year-over-year.
- Adjusted EBITDA guidance raised to $765 million to $795 million.
- Adjusted Earnings Per Share guidance raised to $1.44 to $1.52.
- Free Cash Flow conversion expected to exceed 90%.
- Management is optimistic about secular top-line growth potential over the mid-term.
Challenges Ahead
- GAAP financial measures on a forward-looking basis are not accessible, and reconciling information is not available without unreasonable effort.
- The probable significance of unavailable information for forward-looking non-GAAP measures could be material to future results.
- Guidance does not include the effect of any potential share repurchases.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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