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- **Revenue Growth**: Q3 sales up 8% YoY to $2.9B, driven by Freight (+32%) and Transit (+8.2%).
- **Backlog Record**: 12-month backlog $8.3B (+8.4%), multiyear backlog $20.9B.
- **Margin Expansion**: Adjusted operating margin 21.0% (+1.3ppt YoY), gross margin 34.7% (+1.7ppt YoY).
- **Tariff Mitigation**: $6M Q3 charges, with 4-pronged strategy to offset costs.
- **Guidance Update**: 2025 EPS raised to $8.85-$9.05, +18% midpoint.

**【CEO Summary Section】**
- **Q3 2025 Performance**: Sales of $2.9 billion (+8% YoY), driven by Freight (+32%) and Transit (+8.2%) segments. Adjusted EPS up 16% to $2.32.
- **Backlog Strength**: 12-month backlog of $8.3 billion (+8.4%), with multiyear backlog at record $20.91 billion.
- **International Growth**: $4.2 billion Kazakhstan locomotive order, $125M mining drive systems deal, and $140M India brake orders.
- **Transit Momentum**: 15.5% operating margin in Transit, targeting mid-teens for full year.
- **2025 Guidance Update**: Adjusted EPS raised to $8.85-$9.05 (+18% midpoint), reflecting strong Q3 and pipeline visibility.

**【CFO Financial Commentary】**
- **Gross Margin Expansion**: 34.7% GAAP gross margin (+1.7ppt YoY), driven by contract escalations and Inspection Technologies.
- **Operating Efficiency**: Adjusted operating margin 21.0% (+1.3ppt YoY), despite higher SG&A from acquisitions.
- **Cash Flow**: $367M operating cash flow, with >90% cash conversion expected for full year.
- **Leverage Management**: Net debt at 2.0x, targeting 2.0-2.5x post-Dellner & Frauscher closings.
- **Tariff Impact**: $6M Q3 charges, with ongoing mitigation efforts (tariff sharing, supply chain shifts).

**【Q&A Highlights】**
- **Pipeline Confidence**: 2026 coverage stronger than 2025, with international outpacing North America.
- **Mod vs. New Locomotives**: Expect combined growth in 2026, with services margin targeting 5-7%.
- **Digital Growth**: Inspection Technologies adds 45.6% Digital Intelligence sales, digital penetration expanding internationally.
- **Acquisition Synergies**: Evident, Frauscher, and Dellner expected to be accretive to margins and EPS in 2026.
- **Tariff Outlook**: Peak gross impact in 2026, with net impact mitigated through pricing and cost management.

Westinghouse Air Brake Technologies Corporation (WAB) Q3 2025 Earnings Call Transcript

Freight Segment

Transit Segment

Corporate Activities and Elimination

WAB

WAB fundamentals

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