Westinghouse Air Brake Technologies (WAB) Q4 2025 earnings summary

Executive summary

• Achieved strong Q4 and full-year financial performance with double-digit sales and adjusted EPS growth, robust cash flow, and record backlog levels supporting future visibility.

• Q4 sales reached $2.97 billion, up 14.8% year-over-year; full-year sales were $11.17 billion, up 17.5%.

• Adjusted EPS grew 25% in Q4 to $2.10 and 18.7% for the year to $8.97; GAAP EPS for the year was $6.83, up 13%.

• Strategic acquisitions and integration initiatives drove operational efficiencies and value creation.

• Board approved a 24% dividend increase and expanded share buyback authorization to $1.2 billion.

Financial highlights

• Q4 GAAP gross margin: 32.6% (+1.7 pts YoY); adjusted gross margin: 33.7% (+2.1 pts YoY); Q4 GAAP operating margin: 12.0% (down 0.9 pts), adjusted operating margin: 17.7% (up 0.8 pts).

• Full-year adjusted EBITDA: $2.46 billion, up from $2.31 billion in 2024.

• Q4 operating cash flow: $992 million (292% conversion); full-year cash from operations: $1.76 billion (104% conversion).

• Year-end liquidity: $3.21 billion; net debt leverage ratio: 1.9x.

• 12-month backlog: $8.23 billion (up 7.2% YoY); multi-year backlog: $27.41 billion (up 23.1% YoY).

Outlook and guidance

• 2026 sales guidance: $12.19–$12.49 billion; adjusted EPS: $10.05–$10.45 (up 14% at midpoint).

• Adjusted operating margin expected to rise, with more significant growth in the second half due to tariff headwinds and cost initiatives.

• 5-year outlook: mid-single digit organic sales CAGR, 350+ bps adjusted operating margin expansion, double-digit adjusted EPS CAGR, and >90% cash conversion.

• Guidance includes impact from the acquisition of Dellner Couplers, closed February 2026.