Enpro Inc.'s Q2 2025: Navigating Contradictions in FX Headwinds, Revenue Contributions, and Market Growth Expectations

Foreign Exchange (FX) Headwinds Impact, Arizona Facility Revenue Contribution, Sealing Business Growth Expectations, Semiconductor Market Growth Expectations, and Nuclear Demand and Order Timing are the key contradictions discussed in Enpro Inc.'s latest 2025Q2 earnings call.



Sales and Earnings Growth:
- Enpro Inc. delivered an organic sales increase of 6% in Q2 2025, driven by a 14.5% revenue growth in AST and a 2% growth in Sealing Technologies.
- The growth was primarily driven by the resilience of the business, strategic pricing initiatives, and investments in growth with discipline.

Sealing Technologies Performance:
- Sealing Technologies saw sales increase by 2% in Q2 2025, driven by strength in aerospace and food and pharma markets, and strategic pricing initiatives.
- The growth was offset by continued weakness in commercial vehicle OEM demand and timing of nuclear orders compared to the previous year.

Advanced Surface Technologies (AST) Growth:
- AST's sales increased by 14.5% year-over-year in Q2 2025, supported by growth in leading-edge precision cleaning solutions and optical coatings.
- The growth was driven by executed growth and optimization plans, despite transactional foreign exchange headwinds.

Balanced Financial Positioning:
- Enpro's strong balance sheet, with net debt of $364 million, resulted in a net leverage ratio of 1.4x trailing 12-month adjusted EBITDA.
- The company's ability to maintain financial flexibility, execute on growth strategies, and consider strategic acquisitions without excess leverage is attributed to this balanced position.

Amplified Growth Expectations:
- Enpro raised its full-year 2025 guidance, now expecting sales growth between 5% and 7%, with adjusted EBITDA anticipated between $270 million and $280 million.
- The raised expectations are driven by a stronger outlook for aerospace applications, continued strength in food and biopharma markets, and improved orders in general industrial markets.