RBC Bearings (RBC) Q3 2025 earnings summary

Executive summary

• Net sales for Q3 FY2025 reached $394.4 million, up 5.5% year-over-year, led by 10.7% growth in Aerospace/Defense and 2.7% in Industrial segments.

• Commercial aerospace sales grew 14.6% year-over-year, and defense sales increased 3.0%.

• Gross margin improved to 44.3% of sales, a 205 basis point increase year-over-year.

• Net income attributable to common stockholders rose 39.6% year-over-year to $56.9 million; adjusted net income up 34.7%.

• Diluted EPS increased 30.9% to $1.82; adjusted diluted EPS up 26.5% to $2.34.

Financial highlights

• Adjusted EBITDA for Q3 was $122.6 million, up 12% year-over-year, with a margin of 31.1%.

• Free cash flow was $73.6 million for Q3, with a conversion rate of 127%.

• Interest expense declined 26.4% year-over-year to $14.2 million due to debt repayment and hedging.

• Operating cash flow for the nine months ended December 28, 2024 was $224.4 million, up from $195.2 million in the prior year.

• Trailing net leverage reduced to 1.8x, with $100 million debt repaid in the quarter.

Outlook and guidance

• Q4 FY2025 net sales expected between $434 million and $444 million, a 4.9%–7.3% increase year-over-year.

• Gross margin for Q4 projected at 44%–44.5%, up ~115 basis points year-over-year.

• Aerospace and defense expected to achieve mid-teens growth for the full year.

• Industrial business projected to finish the year roughly flat, with a strong second half.

• Fiscal 2026 could see all end markets growing in unison if current trends persist.