What is the market's earnings forecast for Ralliant next quarter?

What is the revenue and EPS growth rate for Ralliant year over year?

What factors drove the changes in Ralliant's revenue and profit?

What guidance did Ralliant's management provide for the next earnings period?

What does Ralliant do and what are its main business segments?

What were the key takeaways from Ralliant’s earnings call?

What were the key takeaways from Ralliant's earnings call?

What is Ralliant's gross profit margin?

- **Defense Super Cycle**: 18% YoY Defense growth, backlog >2x revenue, with $3T global defense spending by 2030.
- **Test & Measurement Recovery**: Sequential +6% growth, new MP5000 platform targets automated validation workflows.
- **Utilities Expansion**: 11% YoY Utilities growth from grid modernization, Industrial Manufacturing +9% YoY.
- **Free Cash Flow Excellence**: Q3 185% conversion, trailing 12-month 124%, exceeding 95%+ target.
- **Cost Savings Program**: $9-11M annualized savings by end-2026, supporting margin expansion.

**【Management Opening Remarks】**
- Ralliant reported Q3 2025 revenue of $529 million, flat year-over-year, with sequential growth of 5% driven by Defense and Test & Measurement. 
- Adjusted EBITDA margin expanded 60 bps sequentially to 20.4%, near the low end of the long-term target range.
- Free cash flow conversion rate of 185% in Q3, trailing 12-month average of 124%, exceeding the 95%+ target.

**【CEO Commentary】**
- **Defense Growth**: Sensors & Safety Systems revenue up 11% YoY, driven by 18% Defense & Space growth. Backlog over 2x annual revenue, with production scaling for safety systems.
- **Utilities Expansion**: Utilities revenue +11% YoY from grid modernization. Industrial Manufacturing grew 9% YoY with data center sensor wins.
- **Test & Measurement Recovery**: Sequential +6% growth, with Q3 orders at highest level of the year. New DPO7000 and MP5000 platforms target AI, robotics, and automated testing.
- **China Restructuring**: Test & Measurement China revenue down 30% YoY, but India/Southeast Asia investments showing early momentum.

**【CFO Financial Commentary】**
- Q3 GAAP net income $420M, Non-GAAP EPS $0.60 (inline with $0.54-0.60 guidance). Free cash flow $127M (185% conversion).
- Q4 Outlook: Revenue $535-550M, EBITDA margin 20-21%, EPS $0.62-0.68. FY25 free cash flow >95% conversion.
- **Cost Savings Program**: $9-11M annualized savings by end-2026, with $35M remaining Fortive payments due in Q4.

**【Q&A Highlights】**
- **Defense Visibility**: 12-year defense budget growth (~$3T by 2030) driving PacSci EMC safety systems backlog expansion.
- **Test & Measurement Recovery**: North America orders stable at 1:1 book-to-bill, with sequential improvement in Industrial and Test & Measurement.
- **Semiconductor Shift**: Customers deferring R&D to AI, but DPO7000 low-noise architecture positions for next-gen electronics.
- **Margin Dynamics**: Test & Measurement EBITDA margin expansion on volume, Sensors margin tempered by Defense mix.
- **M&A Strategy**: 1-2% long-term growth from tuck-ins focused on Utility and Defense adjacencies.

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