Ralliant (RAL) investor relations material

Executive summary

• Q4 2025 revenue reached $555 million, up 1% year-over-year and 5% sequentially, with strong free cash flow conversion at 117% and adjusted EPS of $0.69, both at or above guidance.

• Completed spin-off from Fortive, established as a standalone public company, and launched a cost savings program to offset post-spin costs.

• Net loss was $1.4 billion in Q4, driven by a non-cash goodwill impairment in Test & Measurement; adjusted net earnings were $79 million.

• Board declared a $0.05/share quarterly dividend and authorized a $200 million share repurchase program.

• Entered 2026 with strong secular tailwinds, a healthy balance sheet, and clear strategic priorities.

Financial highlights

• Q4 2025 revenue was $555 million, up 1% year-over-year; Sensors & Safety Systems up 6%, Test & Measurement down 6%.

• Adjusted EBITDA margin was 20.8% in Q4; adjusted EPS was $0.69, up 15% sequentially but down year-over-year.

• Free cash flow for Q4 was $92 million, with a 117% conversion rate over the trailing twelve months.

• Net leverage at 1.9x adjusted EBITDA at year-end.

• Adjusted results exclude a $1.4 billion non-cash goodwill impairment related to the EA Elektro-Automatik/Test & Measurement business.

Outlook and guidance

• Q1 2026 revenue expected at $508–$522 million, with adjusted EBITDA margin of 17–18% and adjusted EPS of $0.46–$0.52.

• Full-year 2026 revenue guidance is $2.1–$2.2 billion (2–6% growth), adjusted EBITDA margin of 18–20%, and adjusted EPS of $2.22–$2.42.

• Free cash flow conversion expected to exceed 95% on a trailing twelve-month basis.

• Sequential quarterly revenue increases expected through 2026, with margin headwinds from higher operating expenses and investments.

• Excluding post-spin cost headwinds, incremental adjusted EBITDA margin expected at 40–45% in 2026.