Adjusted earnings per share rose 25% to $1.60 in Q3 2025.
Adjusted EBIT margins increased from 19.3% to 21.1% year-over-year in Q3, driven by favorable price, mix, and leverage effects.
ESCO Technologies reported strong Q3 2025 financial results with reported sales growth of nearly 27% and organic sales growth of 11%, excluding the Maritime acquisition impact.
Test segment delivered 21% sales growth in Q3 and 15.4% adjusted EBIT growth, though margins declined slightly due to mix and tariff impacts.
The Aerospace & Defense segment showed 56% reported sales growth and 14% organic growth, with a 560 basis point margin increase and record backlog of $832 million.
Utility Solutions Group had flattish sales growth of 2% but strong order growth of 5.5%, with some margin pressure due to timing issues at Doble.
Year-to-date results show double-digit adjusted EBIT margin improvement and over 24% adjusted EPS growth.
EPS for Q4 was $2.80, up 5.9% year-over-year and beating guidance by nearly 5%.
Fiscal 2025 achieved record sales, EBITDA, and EPS with full year EPS growth of 4%, exceeding high-end guidance.
Fourth quarter sales increased 5.5% year-over-year, with organic daily sales up 0.2%, reversing prior declines.
Free cash flow reached a record $465 million, up 34% year-over-year, supporting $560 million in capital deployment including acquisitions and share buybacks.
Gross margins expanded nearly 50 basis points, surpassing 30% for the first time in company history.
Net leverage ended at 0.3x EBITDA, slightly higher than prior year but stable.
Reported EBITDA margin declined 73 basis points year-over-year to 12.5%, impacted by higher AR provisioning and LIFO expense.
Service Center segment sales declined 0.4% organically, while Engineered Solutions segment sales grew 1.8% organically.
Adjusted earnings increased 39% and adjusted EBITDA rose 9%, with adjusted EBITDA margin improving over 400 basis points to 30.1%.
Adjusted gross margin improved by 600 basis points, leading to a 9% increase in adjusted gross profit.
A noncash goodwill impairment charge of $184 million was recorded for the APT segment due to shifts in customer order patterns and higher discount rates.
APT segment sales dropped 10% due to weaker customer demand influenced by tariff uncertainty and competitive pressures, resulting in EBITDA of about $1 million for the quarter.
Free cash flow improved, enabling a reduction in net leverage to 3x, a full turn improvement in less than a year.
Performance Chemicals sales declined about 10% due to repositioning and wet weather impacts, but segment EBITDA more than tripled year-over-year with margins approaching 20%.
Performance Materials delivered EBITDA margins above 50%, though sales declined 2% due to regional variances and tariff-related uncertainty.
Second quarter sales were $365 million, down 7% year-over-year primarily due to repositioning actions in Industrial Specialties, wet weather impacting Road Tech paving activity, and indirect tariff impacts on APT volumes in Europe.
Dafinchi