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Sep 27
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.
Gates Industrial
Gates Industrial
Gates Industrial Revenue by Segment
Revenue by Segment
Power Transmission Revenue
CapyFin.comFluid Power Revenue
CapyFin.com 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.
- Unable to address the probable significance of unavailable information, which could be material to future results.
- Risks and uncertainties include U.S. government policies, economic, political, and other risks associated with international operations.
- Macroeconomic factors beyond the Company's control, such as material and logistics availability, inflation, supply chain, and labor challenges, could impact results.
Revenue & Expenses
Visualization of income flow from segment revenue to net income