ESAB (ESAB) Q1 2025 earnings summary

Executive summary

• Achieved record Q1 2025 adjusted EBITDA margin of 19.8%, reflecting disciplined execution, strategic growth investments, and robust margin performance.

• Net sales for Q1 2025 were $678 million, down 1.7% year-over-year, with organic sales nearly flat and a negative impact from currency translation.

• Completed the acquisition of Bavaria Schweisstechnik, strengthening the consumables portfolio and positioning for growth in key sectors.

• Maintained focus on long-term value creation through operational excellence, innovation, and capital deployment, including investments in workforce development and product innovation.

• Recent acquisitions, including Sager S.A., ESAB Bangladesh, SUMIG, and Bavaria, contributed to growth.

Financial highlights

• Adjusted EBITDA margin reached a record 19.8% in Q1 2025, up 100 basis points year-over-year.

• Q1 2025 sales were $678 million, with gross profit at $255 million and operating income at $110 million.

• Adjusted net income from continuing operations was $81 million; core adjusted net income was $77 million.

• Adjusted free cash flow for Q1 2025 was $30 million, down from $41 million in Q1 2024.

• Net leverage improved to 1.5x, providing increased financial flexibility.

Outlook and guidance

• Full-year 2025 sales guidance raised to $2.57–$2.63 billion, reflecting higher M&A contribution and improved FX outlook.

• Core organic growth expected at 0–2%; adjusted EBITDA guidance increased to $520–$530 million.

• Adjusted EPS guidance maintained at $5.10–$5.25; free cash flow conversion remains on track.

• Interest expense guidance increased to $65–$70 million due to acquisition financing.

• Cash flow guidance remains unchanged, with stronger cash flow expected in the second half of 2025.