Westinghouse Air Brake Technologies (WAB) Q1 2025 earnings summary

Executive summary

• Q1 2025 sales rose 4.5% year-over-year to $2.61 billion, with both Freight and Transit segments contributing and 51% of sales from outside the U.S.

• Adjusted EPS increased 20.6% to $2.28 and GAAP EPS rose 22.9% to $1.88; net income attributable to shareholders was $322 million, up 18.4%.

• International markets outperformed North America in profitability, with robust order pipelines and higher margins.

• Major orders and contracts secured in Kazakhstan ($300M), North America ($140M), APAC ($130M), and transit contracts in Europe and the US.

• Announced acquisitions of Evident Inspection Technologies ($1.78B) and Dellner Couplers ($960M) to expand Digital Intelligence and Transit capabilities.

Financial highlights

• Net sales: $2.61 billion, up 4.5% year-over-year; gross profit $900 million, gross margin 34.5% (up 1.8 pts).

• GAAP operating income: $474 million (up 15%); adjusted operating margin: 21.7% (up 1.9 pts).

• Adjusted EBITDA: $608 million, up from $540 million in Q1 2024.

• Cash flow from operations: $191 million, down from $334 million, mainly due to higher receivables.

• 12-month backlog: $8.2 billion, up 6%; total backlog at $22.3 billion.

Outlook and guidance

• Adjusted EPS guidance raised to $8.35–$8.95, up 14% at midpoint; revenue guidance unchanged at $10.725–$11.025 billion.

• Cash flow conversion expected to exceed 90% for the year.

• Five-year outlook targets mid single-digit organic sales CAGR, 350+ bps adjusted operating margin expansion, and double-digit adjusted EPS CAGR.

• Guidance reflects caution due to economic volatility, supply chain disruptions, inflation, and geopolitical risks.