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 grew over 25% and data center business expanded 4x year-over-year.

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

• Entered 2026 with cautious optimism, supported by a book-to-bill above 1x, positive order trends, and 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 and at the top end of guidance.

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

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

• Free cash flow conversion was 238% in Q4 and 92% for the full year, with free cash flow at $364M.

• Ended 2025 with over $800M 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; margin rate up slightly at midpoint.

• Adjusted EPS guidance: $1.52-$1.68, 5% growth at midpoint, assuming no further share repurchases.

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

• Free cash flow conversion expected to exceed 90%, with capital expenditures projected at ~$120M.