Tennant Company (TNC) Q4 2025 earnings summary

Executive summary

• Q4 and full-year 2025 results were significantly impacted by severe operational disruptions from the North America ERP system go-live in November, resulting in lost order entry, shipping, and customer service capabilities for three weeks, with stabilization actions underway and improvements expected in 2026.

• The ERP disruption led to an estimated $30 million reduction in Q4 net sales, with about half unrecoverable and the rest added to backlog; Adjusted EPS for Q4 was $0.48, including an estimated $0.91 negative impact from ERP issues.

• Despite these challenges, international operations (EMEA and APAC) delivered solid growth, and the company maintained its strategic focus on innovation and robotics, launching a dedicated robotics group to accelerate AMR growth.

• Orders grew by 4% and backlog increased by $15 million year-over-year, with four new major products launched in 2025 and strong adoption of X4/X6 platforms.

• Share repurchases totaled approximately $88 million in 2025, representing about 6% of outstanding shares, and the annual dividend was increased for the 54th consecutive year.

Financial highlights

• Q4 2025 GAAP net loss was $4.4 million, compared to $6.6 million net income in Q4 2024; full-year net income was $43.8 million, down from $83.7 million in 2024.

• Q4 consolidated net sales were $291.6 million, down 11.3% year-over-year; full-year net sales were $1,203.5 million, down 6.5%.

• Adjusted EBITDA for Q4 was $25.6 million (8.8% margin, down 46.0% YoY); full-year Adjusted EBITDA was $167.4 million (13.9% margin, down 19.8% YoY).

• Adjusted EPS for Q4 was $0.48 (vs. $1.52 in 2024); full-year Adjusted EPS was $4.57 (vs. $6.57 in 2024).

• Q4 gross margin fell to 34.6% from 41.3% YoY; full-year gross margin was 40.2%, down from 42.7%.

Outlook and guidance

• 2026 net sales projected at $1.24–$1.28 billion, reflecting 3%–6.5% organic growth, with sales weighted toward the second half as ERP recovery progresses.

• Adjusted EBITDA expected at $175–$190 million, with margin between 14.1% and 14.8%.

• Adjusted EPS guidance is $4.70–$5.30 per diluted share, excluding ERP project costs and amortization.

• ERP stabilization in North America targeted for early 2026, with efficiency improvements expected through the first half and normalization anticipated by mid-year.

• Robotics and autonomous solutions are expected to remain a key growth driver, with AMR revenue targeted at $250 million by 2028.