Twin Disc (TWIN) Q4 2025 earnings summary

Executive summary

• Fiscal 2025 closed with the strongest quarter, driven by consistent execution, resilience amid global uncertainty, and robust demand in Marine & Propulsion and Industrial segments.

• Full-year sales grew 15.5% to $340.7 million, with broad-based demand and strong order activity across the portfolio.

• The business is managed across four product-aligned units, supporting agile manufacturing and seamless integration of acquisitions.

• Strategic acquisitions of Katsa and Kobelt expanded capabilities, customer base, and global footprint, fueling commercial opportunities and growth.

• Well-positioned to capture defense market tailwinds, supported by robust backlog and minimal direct tariff exposure.

Financial highlights

• Q4 sales rose 14.5% year-over-year to $96.7 million; full-year sales reached $340.7 million, up from $295.1 million.

• Q4 gross profit increased 19.7% to $30 million; gross margin improved 130 bps to 31% (28% excluding one-time inventory adjustment).

• Full-year gross profit rose 11.3% to $92.7 million; full-year gross margin was 27.2%.

• Q4 net income was $1.4 million ($0.10/share); full-year net loss was $1.9 million (($0.14)/share).

• EBITDA was $7 million for Q4 and $19 million for the year, both down from prior year due to non-operating and non-cash impacts.

• Free cash flow for the year was $8.8 million; operating cash flow reached $24 million.

Outlook and guidance

• Six-month backlog increased to $150.5 million, reflecting strong demand in government and hybrid marine programs.

• Defense-related orders grew 45% year-over-year, now 15% of total backlog, with $50–$75 million in pipeline.

• Well positioned for growth in defense, marine, and hybrid solutions, with robust end-market demand and ongoing collaboration with major OEMs.

• Reaffirmed 2030 targets: $500 million revenue, 30% gross margins, and 60%+ free cash flow conversion.

• Entering the new fiscal year with a strong operational and strategic position, supported by a healthy backlog and organizational agility.