Q4 2025 Regal Rexnord Corp Earnings Call Transcript
Key Points
- Regal Rexnord Corp (RRX) delivered a strong fourth quarter performance, with adjusted earnings per share up 7.3% year-over-year.
- The company reported a significant increase in orders, with a 53.8% rise on a daily basis compared to the previous year, and a book-to-bill ratio of 1.48.
- RRX's data center business is performing exceptionally well, with a $735 million order for their new ePod solution, contributing to a 50% increase in backlog exiting 2025.
- The Automation and Motion Control (AMC) segment saw organic sales growth of over 15%, driven by strong execution and secular market demand.
- RRX achieved a 37.6% adjusted gross margin in the fourth quarter, up 50 basis points from the prior year, due to strong execution on synergies and price realization.
- The Power Efficiency Solutions (PES) segment experienced a 10.7% decline in sales on an organic basis, primarily due to headwinds in the residential HVAC market.
- AMC's adjusted EBITDA margin was 20.5%, below expectations and down roughly 1 point year-over-year, impacted by product and channel mix issues.
- The company faced continued pressure from rare earth magnet availability, affecting margins in the AMC segment.
- Free cash flow guidance for 2026 is set at $650 million, lower than previous expectations due to increased working capital investments, particularly in the data center business.
- RRX's guidance assumes modest sales growth of roughly 3% for 2026, with a cautious outlook on industrial market recovery despite positive signs in January's ISM index.
Good day and welcome to the Regal Rexnord 4th quarter, 2025 earnings conference call.
All participants will be in a listen-only mode.
Should you need assistance, please signal a conference specialist by pressing the star key followed by 0.
After today's presentation, there will be an opportunity to ask questions, to ask a question, you may press star, then one on your touch and phone.
To withdraw your question, please press star, then 2.
Please note this event is being recorded
I would now like to turn the conference over to Rob Barry, Vice President, Investor Relations.
Please go ahead.
Great, thank you, operator.
Good morning and welcome to Reggo Rexnord's 4th quarter, 2025 earnings conference call.
Joining me today are Liz Pinkham, our Chief Executive Officer, and Rob Rahart, our Chief Financial Officer.
I would like to remind you that during today's call you may hear forward-looking statements related to
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