ESAB 2025 Q2 Earnings Earnings Fall 19% as Net Income Declines

ESAB reported second-quarter earnings that missed expectations, with a 19.3% decline in net income and a 19.1% drop in EPS. The company, however, raised its full-year guidance and highlighted strategic momentum, particularly in EMEA and APAC. Management remains optimistic about long-term growth through acquisitions and AI-driven initiatives.

Revenue
Total revenue rose 1.2% year-over-year to $715.59 million, driven by strong performance in both the Equipment and Consumables segments. The Equipment segment generated $231.94 million in revenue, while the Consumables segment contributed $483.65 million, reflecting the company’s dual-stream business model and diversified revenue base.

Earnings/Net Income
ESAB’s earnings per share fell 19.1% to $1.10 in Q2 2025, compared to $1.36 in the prior-year period. Net income also declined by 19.3% to $68.10 million from $84.37 million. Despite the drop, the company has maintained profitability for five consecutive years, demonstrating resilience in a challenging market.

Price Action
The stock experienced significant downward pressure, dropping 15.75% in a single day, 17.51% for the week, and 12.56% month-to-date. However, post-earnings strategies have historically performed well for ESAB.

Post Earnings Price Action Review
A strategy of buying ESAB following earnings beats and holding for 30 days delivered a 160.09% return over five years, far outperforming the 40.42% benchmark. The approach showed a Sharpe ratio of 0.99, indicating strong risk-adjusted returns, with no maximum drawdown reported. Despite 33.87% volatility, the strategy’s CAGR of 33.53% underscores its long-term compounding potential.

CEO Commentary
Shyam Kambeyanda emphasized the company’s operational discipline and strong EBITDA margins of 20.4%, even in a difficult market. He cited cost control and EBX initiatives as key contributors to resilience, while acknowledging short-term challenges in the Americas. Kambeyanda pointed to growth in EMEA and APAC, supported by acquisitions and AI-driven transformation, as key pillars for future success.

Guidance
ESAB raised its full-year 2025 adjusted EBITDA outlook to between $525 million and $535 million, reflecting confidence in continued momentum. Organic growth is expected to be in the low single digits, with EMEA and APAC outperforming the Americas. The upcoming EWM acquisition, expected to close in Q4, is anticipated to be accretive in Year 1, with improved cash flow expected in Q3 and Q4.

Additional News
On August 7, 2025, ESAB announced strategic shifts and a raised full-year forecast, driven by regional expansion and M&A activity. The company is advancing its global footprint through recent acquisitions, including Bavaria and EWM, with the latter expected to close by the end of 2025. These moves signal ESAB’s commitment to capturing growth in high-potential markets. Additionally, the company is accelerating its investment in AI and EBX technologies to drive future innovation and operational efficiency.