Applied Industrial Technologies Reports Fiscal 2025 Results and Issues Guidance for 2026

What's Happening?

Applied Industrial Technologies has announced its fiscal 2025 fourth quarter and full-year results, reporting a 1.9% increase in sales to $4.6 billion compared to the previous year. Despite this growth, organic daily sales declined by 2.3%. The company achieved a net income of $393.0 million, or $10.12 per share, and an EBITDA of $562.1 million. The results included a LIFO expense of $7.7 million, which was lower than the previous year's $13.0 million. The company also reported strong cash generation, with net cash provided by operating activities reaching $147,048 and free cash flow at $138,156. Looking ahead to fiscal 2026, Applied Industrial Technologies has set an EPS guidance range of $10.00 to $10.75, with expectations of total sales growth between 4% and 7%.

Why It's Important?

The financial performance of Applied Industrial Technologies is significant as it reflects the company's ability to navigate challenging market conditions and maintain profitability. The increase in sales and strong cash flow generation indicate resilience and effective management strategies. The guidance for fiscal 2026 suggests optimism for continued growth, despite uncertainties related to trade policies and interest rates. This performance and outlook are crucial for stakeholders, including investors and industry partners, as they provide insights into the company's strategic direction and potential for future success.

What's Next?

Applied Industrial Technologies plans to focus on accelerating growth and achieving its long-term strategic objectives in fiscal 2026. The company aims to leverage positive momentum and structural mix tailwinds to enhance its market position. However, ongoing trade and interest rate uncertainties may impact broader demand visibility and customer capital expenditure decisions. The company is prepared to manage through various macroeconomic scenarios and anticipates another year of meaningful cash generation to support mergers and acquisitions, share buybacks, and dividend growth.