Wabtec (WAB) investor relations material

Executive summary

• Q2 2025 sales reached $2.71B, up 2.3% year-over-year, driven by Transit segment growth and supported by a 12-month backlog of $8.2B, up 11.9%.

• GAAP EPS increased 19.5% to $1.96, adjusted EPS rose 15.8% to $2.27, and margin expansion was achieved despite lower locomotive deliveries.

• Major acquisitions included the closed $1.78B Inspection Technologies deal and announced agreements for Frauscher Sensor Technology and Dellner Couplers, totaling $3.5B in M&A investments expected to add $850M in annualized revenue.

• Operating cash flow for Q2 was $209M, with liquidity at $4.09B and a strong balance sheet.

• Returned $94M to shareholders via dividends and share repurchases in Q2.

Financial highlights

• Q2 adjusted EPS was $2.27 (+15.8%), GAAP EPS $1.96 (+19.5%), and GAAP operating income $472M, driven by higher sales and improved margins.

• Q2 gross margin improved to 34.7% (+1.7 pts), adjusted gross margin to 34.8% (+1.5 pts); operating margin rose to 17.4% GAAP and 21.1% adjusted.

• EBITDA for Q2 was $611M, with adjusted EBITDA at $608M.

• Operating cash flow for Q2 was $209M, and for the first half $400M, with cash conversion at 46% in Q2.

• Shareholder returns included $235M through dividends and share repurchases in the first half.

Outlook and guidance

• 2025 sales guidance raised to $10.925B–$11.225B, with adjusted EPS guidance increased to $8.55–$9.15, up $0.20 at the midpoint.

• Full-year 2025 operating cash flow conversion expected to exceed 90%; guidance includes the Evident Inspection Technologies acquisition.

• Five-year outlook targets mid-single-digit organic sales CAGR, 350+ bps adjusted operating margin expansion, and double-digit adjusted EPS CAGR.

• Second half organic revenue growth expected to accelerate, with Q3 and Q4 revenues similar and Q4 showing higher year-over-year growth.

• Adjusted operating margin to increase robustly in the second half, though less than the 1.8 percentage point gain in the first half.