Q2 2026 Regal Rexnord Corp Earnings Call Transcript
Key Points
- Regal Rexnord Corp (RRX) reported strong order growth, with daily orders up 8.8% year-over-year in Q2, and July orders up 7%, indicating robust demand across most end markets.
- The AMC segment delivered standout performance, with organic sales up 15.6% and orders up 17.1%, driven by strength in data center, discrete automation, and aerospace and defense.
- The company is making significant progress on deleveraging, expecting net debt leverage to fall below 3 times in the second half of 2026.
- IPS shippable backlog for 2027 is up over 20% versus the prior year, providing strong visibility into future revenue growth.
- The company is gaining traction in the data center market, with EPOD sales expected to contribute $15 million in 2026 and a strong pipeline for future growth.
- Regal Rexnord Corp (RRX) lowered its full-year adjusted EBITDA margin guidance to 21.3% (excluding refunds), citing higher inflation, slower productivity gains, and unfavorable mix.
- The PES segment experienced a 6.6% organic sales decline due to weakness in residential HVAC and pool markets, with ongoing channel inventory issues and tariff-related disruptions.
- The company faces persistent price-cost headwinds, with inflation outpacing price realization, particularly in the second half of 2026.
- IPS sales growth guidance was reduced to low single digits due to a weaker large projects outlook, with metals and mining projects rolling off.
- Free cash flow guidance was cut by $50 million to $600 million, reflecting increased working capital needs from higher growth and a more cautious approach to working capital initiatives.
Good morning and welcome to the Regal Rexnord second quarter 2026 earnings conference call.
All participants will be in listen-only mode.
Should you need assistance, please signal a conference specialist by pressing the star key followed by zero.
After today's presentation, there will be an opportunity to ask questions.
To ask a question, you may press star then one on your telephone keypad.
To withdraw your question, please press then 2.
Please note, this event is being recorded.
I would now like to turn the conference over to Robert Berry, Vice President of Investor Relations. Please go ahead.
Thank you, operator. Good morning and welcome to Regal Rexnord's second quarter 2026 earnings conference call. Joining me today are Amr Paul, our Chief Executive Officer and Rob Rayhard, our Chief Financial Officer.
I'd like to remind you that during today's call, you may hear forward-looking statements related to our
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