Brady (BRC) Q4 2026 earnings summary

Executive summary

• Achieved record-high revenue and adjusted EPS for fiscal 2026, marking the sixth consecutive year of record earnings, driven by strong organic growth and contributions from acquisitions and FX.

• Completed the acquisition of Honeywell's Productivity Solutions and Services (PSS) business, now called Intelligent Productivity Solutions (IPS), expanding the addressable market to $14 billion and pivoting toward an industrial technology model.

• Reorganized into two reportable segments: Identification Solutions (IDS) and IPS, effective fiscal 2027, with IPS expected to drive significant accretion and operational synergies.

• Returned $88.3 million to shareholders in 2026 via dividends and share buybacks.

• Strong organic growth in core business, with Americas & Asia leading at 11.6% organic growth and Europe & Australia at 2.1%.

Financial highlights

• Fiscal 2026 sales rose 9.8% year-over-year to $1.66 billion, with Q4 organic sales up 8.4% and total sales growth of 10%.

• Gross profit margin improved to 52.9% from 50.4% year-over-year; adjusted for one-time items, margin increased by 110 basis points.

• Adjusted diluted EPS reached a record $5.29 for the year (up 15% YoY), with Q4 adjusted EPS at $1.48 (up 17.5% YoY); GAAP diluted EPS was $4.30 for the year and $0.96 for Q4.

• Operating cash flow increased nearly 35% to $244.1 million for the year and 35.8% to $79.2 million in Q4; free cash flow up 22.9% to $60.7 million in Q4.

• Net cash position at fiscal year-end was $172.2 million, more than double the prior year.

Outlook and guidance

• Fiscal 2027 guidance: IDS organic revenue growth of ~5%; IPS revenue of ~$1.15 billion; adjusted diluted EPS guidance of $6.25–$6.75, including ~$0.80 accretion from IPS, representing 18.1%–27.6% growth.

• Majority of IPS accretion expected in the second half of fiscal 2027 due to integration timing.

• Depreciation expense expected at ~$45 million, CapEx at ~$40 million, and income tax rate at ~21%.

• Americas & Asia expected to see mid-single digit organic sales growth; Europe & Australia low-single digit growth.

• Guidance assumes stable foreign exchange rates and continued economic growth.