Tennant's Q2 2025 Earnings Call: Navigating Tariffs, Industrial Performance, and AMR Growth Contradictions

Tariff impact and economic uncertainty, industrial segment performance, ERP project status and benefits, AMR growth and sales, pricing strategy and market share are the key contradictions discussed in Tennant's latest 2025Q2 earnings call.



Sales and Order Trends:
- Tennant reported net sales of $319 million for Q2 2025, representing an organic sales decline of 4.5%.
- The decline was attributed to lapping a prior year quarter that benefited from a $26 million backlog reduction in North America.
- Despite the decline in organic sales, enterprise-level order rates increased by 4% compared to the prior year quarter, reflecting strong demand strength in North America.

Pricing and Margin Management:
- Pricing initiatives contributed a 1.8% impact at the enterprise level in Q2, driven by early-year price increases and tariff-related improvements.
- The gross margin was impacted by product mix and ongoing cost pressures, but pricing actions and disciplined cost management supported EBITDA performance.

Regional Performance Differences:
- In North America, orders increased by 9%, led by double-digit growth in the region, while organic net sales declined 5.5% due to lapping a significant backlog reduction.
- In EMEA, organic sales declined 1.4%, with orders down 7.4%, reflecting varied results by country and a competitive environment.
- APAC saw a 5% decline in organic sales, with orders down 3.5%, impacted by ongoing demand softness in China despite volume growth in Australia.

AMR Product and Strategic Growth:
- AMR sales accelerated to 6% of enterprise net sales in Q2 2025, contributing to long-term growth with cumulative deployed units exceeding 10,000.
- The launch of the new outdoor sweeper, the Z50 Citadel, expanded Tennant's total addressable market by entering the industrial and municipal outdoor sweeping market.