Applied Industrial Technologies 2025 Q4 Earnings Beats Expectations with 4.2% Net Income Growth

Applied Industrial Technologies (AIT) reported fiscal 2025 Q4 earnings on August 15, 2025, surpassing expectations with strong revenue and earnings growth, while the company maintained its long-standing profitability and issued optimistic 2026 guidance.

Revenue
Applied Industrial Technologies reported total revenue of $1.22 billion in fiscal 2025 Q4, representing a 5.5% increase from $1.16 billion in the same period a year earlier. The growth reflects continued demand across core markets and operational efficiency gains.

Earnings/Net Income
The company’s earnings per share (EPS) rose 5.1% year-over-year to $2.83 in 2025 Q4, compared to $2.69 in 2024 Q4. Net income also increased by 4.2% to $107.84 million, up from $103.49 million in the prior-year quarter. The sustained profitability underscores AIT’s operational resilience and effective cost management.

Price Action
Shares of Applied Industrial Technologies experienced a downward trend in the recent trading period, with a 5.54% decline on the latest trading day, a 3.09% drop over the previous full week, and a 0.20% decline month-to-date.

Post Earnings Price Action Review
A strategy of purchasing Applied Industrial Technologies shares following a revenue increase in the quarterly report and holding for 30 days yielded no return over the past three years. This approach produced a compound annual growth rate (CAGR) of 0.00% and an excess return of -3.02%, significantly underperforming the benchmark. The investment exhibited no volatility and no drawdown, suggesting a near-risk-free exposure with no positive returns captured.

CEO Commentary
Neil A. Schrimsher, President, CEO & Director, highlighted the company’s record sales, EBITDA, and EPS performance in fiscal 2025. He noted that the 4% EPS growth exceeded guidance despite a muted demand environment. Schrimsher emphasized a 30% gross margin expansion and robust cash flow generation, which enabled strategic acquisitions and shareholder returns. He also pointed to emerging growth drivers, including a rebound in the Engineered Solutions segment, strength in technology and automation verticals, and the Hydradyne acquisition. Looking ahead, he expressed cautious optimism about policy clarity and reshoring trends as potential growth catalysts while noting ongoing challenges related to trade and interest rates.

Guidance
For fiscal 2026, Applied Industrial Technologies expects total sales growth of 4% to 7% (organic 1% to 4%), with an EPS range of $10 to $10.75 and EBITDA margins between 12.2% and 12.5%. The guidance assumes 150 to 200 basis points of pricing benefits, 300 basis points of inorganic growth from acquisitions, and LIFO expenses between $14 million and $18 million. Free cash flow is expected to remain strong, though lower than the prior year due to higher working capital investment. Capital expenditures are forecasted to range from $30 million to $35 million.

Additional News
A tragic incident occurred in Bokkos Local Government Area of Plateau State, Nigeria, on July 25, 2025, when at least 14 villagers and a mobile police officer were killed in two separate attacks. The victims, primarily from the Chirang community, were ambushed while returning from Bokkos market to Mangor village. The attack followed another incident earlier in the day when a police officer was killed at a checkpoint along Richa Road. Community leaders described the situation as an emergency, with security forces deployed to secure the area. Local residents condemned the violence and called on the federal government to establish state police to enhance security and prevent further loss of life.