Applied Industrial Technologies Inc (AIT) Q4 Earnings Exceed Estimates: EPS $2.80, Revenue Hits $1.2 Billion

Applied Industrial Technologies Inc (AIT) reported Q4 net sales of $1.2 bln, a 5.5% YoY increase, beating estimates. Net income was $107.8 mln, or $2.80 per share, surpassing the analyst estimate of $2.65 per share. For the full fiscal year, net sales reached $4.6 bln, a 1.9% increase from the previous year, with a net income of $393.0 mln, or $10.12 per share. The company also achieved a record free cash flow for fiscal 2025.

Applied Industrial Technologies Inc. (AIT) has reported strong financial results for the fourth quarter and the full fiscal year 2025. The company's net sales for the fourth quarter reached $1.2 billion, marking a 5.5% year-over-year (YoY) increase, which exceeded analysts' estimates. Net income for the quarter was $107.8 million, or $2.80 per share, surpassing the analyst estimate of $2.65 per share [1].

For the full fiscal year 2025, AIT's net sales totaled $4.6 billion, representing a 1.9% YoY increase from the previous year. The company's net income for the year was $393.0 million, or $10.12 per share, up 3.8% YoY from the previous year's $10.12 per share. Notably, AIT achieved a record free cash flow for fiscal 2025 [1].

The company's net sales growth was driven by a 6.5% increase from acquisitions, partially offset by a negative 0.8% impact from selling days and a negative 0.4% impact from foreign currency translation. Excluding these factors, sales increased 0.2% on an organic daily basis, reflecting a 1.8% increase in the Engineered Solutions segment, partially offset by a 0.4% decrease in the Service Center segment [1].

Neil A. Schrimsher, Applied's President & Chief Executive Officer, commented on the results, stating, "We ended fiscal 2025 on an encouraging note with fourth quarter sales and EPS exceeding our expectations. Sales returned to positive organic growth with underlying trends improving as the quarter progressed. This was driven by stronger than expected Engineered Solutions segment sales where our teams executed exceptionally well, including capitalizing on recent order strength and firming demand across several verticals. Service Center segment sales held steady against the muted end-market backdrop with sequential trends seasonally strong. M&A contribution was also encouraging with solid progress continuing to develop at Hydradyne. Lastly, we delivered another solid quarter of cash generation, culminating in record free cash flow in fiscal 2025 that enabled meaningful capital deployment throughout the year. Overall, I am extremely proud of what we accomplished within a challenging demand landscape. Our consistent outperformance reflects our commitment to excellence and ability to create value for all stakeholders in any environment" [1].

Looking ahead to fiscal 2026, AIT has established guidance for total sales growth of +4% to +7%, with an organic daily basis increase of +1% to +4%. The company expects EPS to be in the range of $10.00 to $10.75, assuming ongoing economic, interest rate, and tariff-related uncertainty continues to impact broader end-market demand through the first half of the year. The guidance also assumes incremental sales contribution from pricing compared to fiscal 2025, as well as ongoing inflationary headwinds and growth investments [1].

References:
[1] https://finance.yahoo.com/news/applied-industrial-technologies-reports-fiscal-103000622.html
[2] https://finance.yahoo.com/news/applied-industrial-q4-earnings-revenues-170500409.html