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Sep 27, 2025
Gates Industrial Q3 2025 Earnings Report
Gates Industrial reported its third-quarter 2025 financial results, showing increased net sales and improved profitability.
Key Takeaways
Gates Industrial Corporation plc delivered a solid third quarter in 2025, with net sales increasing by 3.0% to $855.7 million and core sales growing by 1.7%. The company achieved double-digit EPS growth year-over-year and an adjusted EBITDA margin increase of 90 basis points to 22.9%. Net income from continuing operations also saw a significant increase, rising by 370 basis points to a margin of 10.4%.
Net sales for Q3 2025 reached $855.7 million, a 3.0% increase from the prior year, with core sales growth of 1.7%.
Net income attributable to shareholders was $81.6 million, or $0.31 per diluted share, with Adjusted Net Income per diluted share at $0.39.
Adjusted EBITDA improved to $195.8 million, representing a 22.9% margin, up 90 basis points year-over-year.
The company announced a new $300 million share repurchase authorization and raised its 2025 adjusted EPS guidance.
Revenue by Segment
Forward Guidance
Gates Industrial is adjusting its full-year 2025 guidance, anticipating core sales growth between +0.5% and +1.5% and adjusted EBITDA in the range of $770 million to $790 million. Adjusted Earnings Per Share are expected to be between $1.48 and $1.52, with capital expenditures around $120 million and free cash flow conversion of 80-90%.
Positive Outlook
- Anticipated core sales growth in the range of +0.5% to +1.5% year-over-year.
- Adjusted EBITDA projected to be between $770 million and $790 million.
- Adjusted Earnings Per Share guidance raised to $1.48 to $1.52.
- Expected Free Cash Flow conversion of 80-90%.
- Execution of footprint optimization initiatives to reduce structural costs in the first half of next year.
Challenges Ahead
- Guidance for share-based metrics does not include the effect of any potential share repurchases.
- GAAP financial measures on a forward-looking basis are not accessible, and reconciling information is not available without unreasonable effort.
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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