Regal Rexnord (RRX) Q3 2025 earnings summary

Executive summary

• Net sales for Q3 2025 increased 1.3% year-over-year to $1,497.0 million, with organic sales up 0.7% and positive foreign currency impact, partially offset by divestitures.

• Adjusted diluted EPS was $2.51, up 0.8% year-over-year; GAAP diluted EPS was $1.20, up 10.1% year-over-year.

• Data center orders totaled $135 million in Q3, with an additional $60 million in October, driving order momentum and a bid pipeline approaching $1 billion.

• Cash from operating activities was $197.5 million in Q3, with adjusted free cash flow at $174 million.

• Paid down $74.5 million in gross debt, ending the quarter with no variable rate debt and net debt/adjusted EBITDA (including synergies) at ~3.2x.

Financial highlights

• Q3 2025 gross profit was $554.2 million (37.0% of net sales), with adjusted gross margin at 37.6%.

• Adjusted EBITDA was $339.4 million, with a margin of 22.7%.

• Adjusted diluted EPS was $2.51, compared to $2.49 in the prior year.

• Adjusted free cash flow for Q3 was $174 million, up from $125.5 million year-over-year.

• Cash and cash equivalents at quarter-end were $400.0 million.

Outlook and guidance

• Annual GAAP diluted EPS guidance narrowed and lowered to $4.26–$4.56; adjusted diluted EPS guidance to $9.50–$9.80, reflecting unfavorable tariff and China trade policy impacts.

• Sales guidance for 2025 raised modestly to $5.96 billion, with low single-digit organic growth expected.

• Free cash flow for 2025 expected at ~$625 million; 2026 projected at nearly $900 million.

• Margin neutrality on tariffs anticipated by end of 2026, with cost neutrality by mid-2026.

• Projecting mid-single digit organic growth in Q4 and low- to mid-single digit growth in 2026.