Regal Rexnord (RRX) Q3 2026 earnings summary

Executive summary

• Q3 sales were $1,588M, up 6.1% organically; daily orders rose 5.7% YoY. Adjusted EPS was $2.90, or $2.72 excluding $0.18 of IEEPA refund benefits.

• A $119.3M goodwill impairment contributed to a Q3 GAAP net loss of $12.3M; attributable net loss was $12.5M.

• Plant execution challenges constrained shipment conversion and margins, while priorities included operational improvement, organic growth and a comprehensive portfolio review.

Financial highlights

• Adjusted EBITDA was $351.3M, including $14.7M of net IEEPA refund benefits; adjusted EBITDA margin was 22.1%, or 21.2% excluding refunds.

• Adjusted gross margin was 37.7%, or 36.8% excluding IEEPA refunds; GAAP gross margin was 37.2% versus 37.0% YoY.

• Q3 free cash flow was $193.7M versus $174.0M; 9M free cash flow was $345.4M versus $752.5M.

• Q3 operating income was $81.4M versus $174.4M YoY; operating expenses rose 34.0%, mainly due to the goodwill impairment.

Outlook and guidance

• FY26 adjusted EPS guidance is $10.60–$10.90, midpoint $10.75; guidance excluding IEEPA refunds is $10.35–$10.85.

• FY26 sales guidance midpoint is $6.22B; adjusted EBITDA margin midpoint is 22.0%, or 21.2% excluding IEEPA refunds.

• FY26 free cash flow outlook remains ~$600M; adjusted effective tax rate is expected to be ~20.8%.

• No further IEEPA refund benefits are expected in Q4; Q4 results will include an update on operational recovery and 2027 guidance.

• 2026 capital spending is expected to be ~$110M, funded with operating cash flow; expected restructuring charges total $13.0M for the rest of 2026.