Donaldson's Q2 2025: Unpacking Contradictions in Mobile Solutions, Life Sciences, and IFS Revenue Projections

These are the key contradictions discussed in Donaldson Company's latest 2025 Q2 earnings call, specifically including: Mobile Solutions segment growth and market share, Life Sciences segment profitability, and IFS segment revenue projections:



Sales and Earnings Performance:
- Donaldson Company reported sales of $870 million for Q2 2025, which decreased 1% year-over-year, driven by a 170 basis point negative impact from currency translation.
- Despite the decline, adjusted EPS rose by roughly 3% compared to the prior year.
- This mixed performance was due to weak end-market conditions and resilient execution in key higher-margin segments.

Mobile Solutions Segment Growth:
- In Mobile Solutions, total sales were $548 million, down 1% year-over-year, but excluding currency, sales grew 1%.
- Aftermarket sales increased by 4%, driven by low double-digit growth in the OE channel, while OE demand was particularly strong.
- The growth in the aftermarket segment was attributed to share gains and strong demand from the OEM channel.

Industrial Solutions and Life Sciences Segment Performance:
- Industrial Solutions sales decreased by 4% to $254 million, while Life Sciences sales grew by 9% to $69 million.
- Aerospace and defense sales within Industrial Solutions saw 19% growth, buoyed by robust end-market conditions.
- The decrease in Industrial Filtration Solutions was due to slower investments in CapEx-based businesses and timing of power generation projects.

Profitability and Margin Improvement:
- Donaldson's gross margin remained flat at 35.2%, with operating margin expanding by 40 basis points to 15.2%.
- The improvement in margins was driven by disciplined expense control, offsetting unfavorable sales mix and input cost inflation.
- The company continues to focus on leveraging higher sales and operational efficiencies for further margin expansion.