Alamo Group (ALG) Q4 2025 earnings summary

Executive summary

• Q4 2025 net sales were $373.7 million, down 3% year-over-year, with gross profit and margin declining due to lower Vegetation Management volumes and inventory charges.

• Industrial Equipment Division delivered strong results, offsetting Vegetation Management weakness, and benefited from acquisitions and market share gains.

• Fiscal year 2025 marked a transition with restructuring, manufacturing consolidation, and a focus on long-term growth, including the acquisition of Petersen Industries, which closed in January 2026.

• Strategic initiatives include facility expansions, manufacturing consolidations, supply chain optimization, and product innovation, with a focus on long-term growth and margin improvement.

• Despite a challenging environment, strong cash flow and a solid balance sheet enabled increased investment and a 13.3% dividend hike.

Financial highlights

• Q4 2025 net sales were $373.7M, down 3.0% year-over-year; full-year net sales were $1,603.7M, down 1.5%.

• Q4 gross margin was 22.7%, down 110 basis points year-over-year; full-year gross margin was 24.8%.

• Q4 adjusted EBITDA was $44.8M (12.0% margin); full-year adjusted EBITDA was $216.9M (13.5% margin).

• Q4 adjusted EPS was $1.70, compared to $2.39 in Q4 2024; full-year adjusted EPS was $9.37.

• Operating cash flow for FY 2025 was $177.5M, with cash exceeding total debt by $103.9M at year-end.

Outlook and guidance

• Industrial Equipment Division expected to see flattish to low- to mid-single digit growth in 2026, excluding acquisitions.

• Petersen Industries acquisition expected to be accretive, with above-average margins and long-term growth potential.

• Vegetation Management Division margins expected to improve sequentially in 2026, with a goal to return to 8% adjusted operating margin and eventually 15% through the cycle.

• Long-term targets: 10% sales growth (including M&A), 15% adjusted operating margin, 18-20% adjusted EBITDA margin, and 100% free cash flow conversion.

• Management expects continued investment in growth, leveraging strong cash generation and a robust acquisition pipeline.