Adjusted EPS grew 10% year-over-year, or 16% excluding the Wolverine divestiture, reflecting profitable growth and operational improvements.
Free cash flow increased to $214 million year-to-date, with a free cash flow margin of 14% in Q2, and $500 million of shares repurchased year-to-date.
In Q2 2025, ITT delivered $1 billion in orders, up 16% total and 13% organic, driven by all businesses including acquisitions kSARIA and Svanehøj.
Margins expanded across segments: IP margin grew 100 basis points to nearly 22%, MT margin grew 140 basis points despite 100 basis points FX headwind, and CCT margin grew 270 basis points excluding M&A dilution.
Operating income grew more than twice the organic sales growth rate, with operating margin expanding over 100 basis points excluding M&A impacts.
Operating margin increased 30 basis points to 18.4%, driven by higher volumes, pricing actions, and operational improvements, offsetting FX and temporary acquisition amortization costs.
Revenue reached a record quarterly level of over $970 million, up 7% total and 4% organic, with contributions from all segments.
Segment highlights include Industrial Process growing 5% organically, Svanehøj growing 43%, Connect & Control (CCT) growing 4% organically, and Motion Technologies (MT) friction OE growing 7% organically.
Record Sales, EBITDA, and EPS Achieved in Fiscal 2025
Applied Industrial Technologies achieved new records for sales, EBITDA, and EPS in fiscal 2025, demonstrating strong operational resilience.
Full year EPS growth of 4% exceeded initial guidance, highlighting effective management despite a muted demand environment.
Gross margins expanded nearly 50 basis points, surpassing 30% for the first time in the company's history, indicating margin improvement.
The company generated over $465 million of free cash flow, a 34% increase, enabling significant capital deployment including acquisitions and share buybacks.
The strategic acquisition of Hydradyne, its largest in 6 years, contributed over 400 basis points of inorganic growth and was a key driver of the record performance.
Arcosa remains disciplined in capital deployment, prioritizing deleveraging while maintaining an open M&A pipeline for bolt-on acquisitions.
The company expects to reduce leverage to the target range of 2x-2.5x within 2-3 quarters, with a focus on organic and inorganic growth opportunities.
Management highlighted a robust pipeline of potential acquisitions, with strategic fit and timing considerations, including a planned $20-25 million investment to convert a wind plant to transmission structures.
The company is confident in its financial position to support growth initiatives and capital investments.
Strategic Investment in Innovation and Technology Enhances Operational Productivity
ArcBest leverages AI and predictive analytics to optimize labor planning, routing, and dock operations, resulting in the most productive quarter since 2021.
Implementation of city route optimization and real-time pickup AI tools in Phase 2 and 3 improves resource utilization and service consistency.
Rolling out dock management systems with real-time dashboards streamlines workflows and enhances speed and accuracy.
AI-Driven Marketplace Margin Expansion and Technological Advancements
Marketplace gross margin reached a record 35.4% in Q2, up 190 basis points year-over-year, driven by AI-powered pricing and selection algorithms.
Overall company gross margin hit a record 40.1%, reflecting continuous improvements in AI technology and data utilization.
The company has increased its AI deployment, including new features like automated extraction from technical drawings and natural language search on Thomasnet.
These technological enhancements are central to driving operating leverage and expanding gross margins, with ongoing product rollouts planned for the second half of 2025.
Dafinchi