Gates Industrial (GTES) Q4 2025 earnings summary

Executive summary

• Achieved record adjusted EBITDA and EPS in 2025, with core growth of nearly 1% and outperforming end markets that remained in contraction.

• Personal Mobility business core revenue grew over 25% year-over-year; Data Center business revenues increased approximately 4x year-over-year.

• Net leverage ratio improved to 1.85x, with over $100 million in share repurchases in Q4 and $100 million in debt repaid.

• Entered 2026 with cautious optimism, supported by a book-to-bill above 1x, positive order trends, and a structurally improved business.

• Full-year 2025 net sales totaled $3,443.2 million, up 1.0% year-over-year, with core sales growth of 0.7%.

Financial highlights

• Adjusted EPS for 2025 was $1.52, up from $1.39 in 2024, at the top end of guidance.

• Q4 2025 net sales were $856 million, with core growth of nearly 1% and total revenue up over 3% due to favorable FX.

• Q4 adjusted EBITDA was $188 million (21.9% margin); full-year adjusted EBITDA was $770 million (22.4% margin).

• Free cash flow conversion for 2025 was 92%, with Q4 conversion at 238% of adjusted net income.

• Ended 2025 with over $800 million in cash and a record low net leverage ratio.

Outlook and guidance

• 2026 core sales expected to grow 1%-4% year-over-year.

• Adjusted EBITDA guidance: $775M-$835M; midpoint implies slight margin improvement.

• Adjusted EPS guidance: $1.52-$1.68, 5% growth at midpoint; assumes no incremental share repurchases.

• Q1 2026 revenue guidance: $845M-$875M, factoring a 2%-2.5% core sales decline due to fewer business days and ERP transition.

• Capital expenditures for 2026 projected at ~$120M; free cash flow conversion expected to exceed 90%.