ESCO Technologies (ESE) Q4 2025 earnings summary

Executive summary

• Q4 and FY 2025 delivered record results, with strong growth across all key metrics and segments, driven by the Maritime acquisition and robust organic growth.

• The year was transformative, marked by the acquisition of Maritime and divestiture of VACO/VACCO, sharpening focus on aerospace and Navy markets.

• Record adjusted EPS from continuing operations reached $2.32 in Q4, up 30% year-over-year, and $6.03 for FY 2025, up 26%.

• Record FY 2025 entered orders of $1.6 billion, up 57%, resulting in a year-end backlog of $1.13 billion, up 71%.

Financial highlights

• Q4 2025 sales were $353 million, up 29% year-over-year, with 8% organic growth; adjusted EBIT margin expanded by 100 basis points to 23.9%.

• FY 2025 sales increased 19% to $1.1 billion; adjusted EBIT up 31% to $222.4 million; adjusted EBIT margin improved by 180 basis points to 20.3%.

• Q4 2025 book-to-bill ratio was 0.91x; FY 2025 book-to-bill was 1.43x.

• Operating cash flow from continuing operations was just over $200 million, up from $122 million the prior year.

• FY 2025 consolidated EBITDA was $245 million; Adjusted EBITDA was $256 million.

Outlook and guidance

• FY 2026 guidance projects reported sales growth of 16%-20% to $1.27-$1.31 billion, with 6%-8% organic growth in A&D, Maritime revenue of $230M-$245M, Utility growth of 4%-6%, and Test growth of 3%-5%.

• Adjusted EBIT projected to rise 21%-25% with margins of 20.9%-21.5%; Adjusted EBITDA expected to increase 20%-24% with margins of 23.8%-24.6%.

• Adjusted EPS expected in the range of $7.50-$7.80, representing 24%-29% growth; Q1 2026 Adjusted EPS expected at $1.25-$1.35, up 32%-42% year-over-year.

• Four-year compound annual sales growth through 2025 is 16%, with adjusted EPS CAGR of 27.5%.