Regal Rexnord Q1 2025 Earnings Summary

Regal Rexnord reported Q1 2025 net sales of $1.42 billion, down 8.4% year-over-year but up 0.7% on an organic basis. Adjusted diluted EPS was $2.15, a 7.5% increase over Q1 2024, and up 10% excluding the now-divested Industrial Systems segment. GAAP diluted EPS was $0.86. Adjusted EBITDA was $309.5 million (21.8% margin), compared to $317.4 million a year ago. Free cash flow rose 32% to $85.5 million, and the company paid down $164 million in debt during the quarter.

Segment performance highlights:

• Power Efficiency Solutions grew 8.0% organically, driven by strength in North American residential HVAC; adjusted EBITDA margin rose to 14.2%.
• Automation & Motion Control achieved 0.4% organic growth, with strong aerospace and discrete automation demand; margin was 21.8%.
• Industrial Powertrain Solutions declined 3.4% organically, with weakness in metals, mining, and off-highway machinery offset partially by energy market growth; margin rose to 26.9%.

GAAP net income was $57.5 million, up from $20.4 million in Q1 2024. Operating margin rose to 11.3%, and adjusted gross margin improved to 37.9%.

The company reaffirmed its full-year 2025 adjusted EPS guidance of $9.60–$10.40. Tariff mitigation efforts are expected to fully offset cost impacts in 2025.

Regal Rexnord Corporation reported its fourth-quarter financial results for 2024, highlighting several key points. The company posted a diluted EPS of $0.62 and an adjusted diluted EPS of $2.34, marking a 2.6% increase year-over-year. Despite a 9.1% decline in total sales to $1,461.1 million, daily orders rose by 4.4%. They reduced gross debt by $205 million and achieved adjusted free cash flow of $185.3 million, a 8.4% increase.

On the full-year performance, Regal Rexnord surpassed its synergy target by $11 million, delivering $101 million in synergies. Gross margins showed significant improvement, reaching 36.3%, with adjusted gross margins of 37.8%, an increase of 210 basis points from the previous year. The company paid down $938 million in gross debt, exceeding their target, and reported a GAAP net income of $198.4 million, compared to a loss of $54.3 million in the previous year.

For 2025, the company provided guidance, expecting GAAP diluted earnings per share to range from $4.42 to $5.22, and adjusted diluted earnings per share to range from $9.60 to $10.40. CEO Louis Pinkham expressed cautious optimism for 2025, acknowledging market uncertainties but highlighting positive signs like improving orders and the potential of ongoing cost and sales synergies.