Timken Company (TKR) Q4 2025 earnings summary

Executive summary

• Fourth quarter 2025 results exceeded expectations, with adjusted EPS of $1.40, sales up 3.5% year-over-year to $1.11 billion, and strong free cash flow growth, driven by Industrial Motion segment performance and higher pricing.

• Ended 2025 with a strong balance sheet, net leverage at 2x, and increased backlog; shares were repurchased and over $100 million in debt was reduced.

• Strategic initiatives included expanding 80/20 discipline, portfolio simplification, targeted leadership appointments, and a CEO transition effective September 1, 2025.

• Progress on auto OEM business pruning, with more significant revenue decline expected in 2027 and margin uplift in 2026-2027.

• Investor Day scheduled for May 20, 2026, to provide a detailed transformation roadmap and multi-year targets.

Financial highlights

• Q4 2025 revenue was $1.11 billion, up 3.5% year-over-year (1.3% organic); adjusted EBITDA margin at 16.0%, with adjusted EBITDA of $177.8 million.

• Free cash flow for Q4 was $140.7 million, up from $125.0 million in Q4 2024; full-year free cash flow reached $406 million.

• Net debt reduced by over $130 million in 2025; net debt/adjusted EBITDA at 2.0x.

• Full-year 2025 net sales were $4.58 billion (+0.2%), adjusted EBITDA $796 million (17.4% margin), and adjusted EPS $5.33.

• Returned $155.7 million to shareholders via dividends and share repurchases.

Outlook and guidance

• 2026 revenue expected to increase 2%-4% year-over-year, with organic growth at 2% midpoint and currency contributing ~1%.

• Adjusted EPS guidance for 2026 is $5.50-$6.00, up 8% at midpoint; adjusted EBITDA margin expected in high 17% range.

• Free cash flow target for 2026 is ~$350 million, with 105% conversion on GAAP net income.

• Q1 2026 organic sales and adjusted EBITDA margins expected to be flat year-over-year.

• 2026 GAAP EPS guidance is $4.50–$5.00.