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Sep 30, 2025
Regal Rexnord Q3 2025 Earnings Report
Regal Rexnord reported strong third quarter 2025 financial results, with increased diluted EPS, net income, and cash from operating activities, driven by significant data center project orders.
Key Takeaways
Regal Rexnord delivered a strong third quarter in 2025, exceeding expectations with robust daily orders, particularly in the data center market. The company achieved positive organic sales growth and improved its financial position by paying down debt. Despite some market headwinds and tariff challenges, operational execution remained solid, with key segments like Industrial Powertrain Solutions and Power Efficiency Solutions showing strong performance.
Diluted EPS increased by 10.1% to $1.20, and Adjusted Diluted EPS rose by 0.8% to $2.51 compared to the prior year.
Daily orders grew by 9.8%, significantly boosted by $135 million in data center project orders within the Automation & Motion Control and Power Efficiency Solutions segments.
Net sales reached $1,497.0 million, a 1.3% increase year-over-year, with organic sales growth of 0.7%.
GAAP Net Income improved by $7.0 million to $80.0 million, and Adjusted EBITDA increased by $2.4 million to $339.4 million.
Cash from operating activities was strong at $197.5 million, and the company paid down $74.5 million of gross debt, reducing Net Debt/Adjusted EBITDA (including synergies) to approximately 3.2x.
Revenue by Segment
Forward Guidance
Regal Rexnord has narrowed and lowered its annual guidance for GAAP diluted earnings per share to a range of $4.26 to $4.56 and for Adjusted Diluted Earnings per Share to a range of $9.50 to $9.80, primarily due to net unfavorable impacts from recently announced tariffs and China trade policies related to rare earth magnets.
Positive Outlook
- Order trends demonstrate progress and raise confidence for accelerating organic growth.
- Expect mid-single digit organic growth in Q4 2025.
- Anticipate low- to mid-single digit organic growth in 2026.
- Achieving dollar cost neutrality for tariff impacts by mid-2026.
- Achieving margin neutrality for tariff impacts by the end of 2026.
Challenges Ahead
- Annual guidance for GAAP diluted EPS lowered to $4.26 - $4.56.
- Annual guidance for Adjusted Diluted EPS lowered to $9.50 - $9.80.
- Net unfavorable impacts from recently announced tariffs.
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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