Regal Rexnord (RRX) Q2 2026 earnings summary

Executive summary

• Q2 2026 delivered solid results with net sales up 4.2% to $1,558.4M, driven by strong order growth, especially in Automation & Motion Control (AMC), and robust performance in data center, automation, and aerospace markets.

• CEO transition completed, with new leadership focused on customer engagement, integration, and leveraging channel strengths.

• Adjusted EBITDA rose to $366.6M (23.5% margin, 21.5% excluding IEEPA refunds), and adjusted EPS was $2.99 ($2.60 excluding refunds), both up year-over-year.

• Free cash flow for Q2 was $154.1M, supporting ongoing deleveraging and growth investments.

• Broad exposure to attractive end markets, including data centers, automation, aerospace, robotics, and eVTOL.

Financial highlights

• Q2 2026 net sales: $1,558.4M (+4.2% YoY); organic growth 3.3%; adjusted gross margin 39.8% (37.8% ex. IEEPA); adjusted EBITDA margin 23.5% (21.5% ex. IEEPA).

• Adjusted EPS $2.99 ($2.60 ex. IEEPA), up 21% YoY; GAAP net income $116.8M, up 46.7% YoY.

• Free cash flow $154.1M for the quarter; adjusted effective tax rate 20.8%.

• Interest expense for six months: $158.0M, down 10% YoY; net debt to adjusted EBITDA (including synergies) at 3.06x.

• Working capital as of June 30, 2026: $1,582.1M; current ratio 2.3:1.

Outlook and guidance

• 2026 sales guidance unchanged at $6.2B (4.5% growth); adjusted EBITDA margin forecast at 22.1% (21.3% ex. IEEPA); adjusted EPS midpoint $10.60, range $10.35–$10.85.

• Free cash flow guidance for 2026 at ~$600M; net debt leverage expected below 3x in the second half.

• AMC annual sales growth guidance raised to low double digits; IPS to low single digits; PES to flat/low single-digit decline.

• 2026 GAAP EPS guidance narrowed to $5.42–$5.92; additional $13.6M in restructuring charges expected in 2026.

• Capital spending for 2026 anticipated at ~$120M, funded by operating cash flows.