ESAB (ESAB) Q2 2025 earnings summary

Executive summary

• Achieved record adjusted/core adjusted EBITDA margin of 20.4% and raised full-year 2025 guidance, driven by strong EMEA and APAC growth, robust execution in high-growth markets, and strategic acquisitions, despite tariff-related headwinds and softness in the Americas.

• Completed acquisitions of DeltaP, Aktiv/Active, and Bavaria, and signed an agreement to acquire EWM, expanding the equipment, medical gas, and robotics portfolios.

• Productivity and AI initiatives delivered up to $30M in savings, supporting margin performance and future growth.

• Net income from continuing operations for Q2 2025 was $69.8M, with adjusted EPS at $1.40 and core adjusted EPS at $1.36.

• Balance sheet and liquidity remain strong, supporting ongoing M&A, strategic investments, and capital allocation flexibility.

Financial highlights

• Q2 2025 sales reached up to $716M, up 2% year-over-year, with growth driven by acquisitions and favorable currency, offset by lower Americas volumes.

• Adjusted/core adjusted EBITDA margin reached a record 20.4% for the quarter; EMEA & APAC EBITDA margin was 20.6%.

• Adjusted net income from continuing operations was $86.2M; adjusted EPS was $1.40, core adjusted EPS $1.36.

• Free cash flow for Q2 2025 was $46M, reflecting higher working capital and pre-buys related to tariffs.

• Cash and cash equivalents at quarter-end were $258M, up from year-end 2024.

Outlook and guidance

• Full-year 2025 sales guidance raised to $2.63–$2.68B, with M&A expected to contribute ~2.5% to sales; core organic growth outlook at 0–2%.

• Adjusted/core adjusted EBITDA guidance increased to $525–$535M; adjusted/core adjusted EPS guidance raised to $5.15–$5.30.

• Free cash flow conversion expected at ~100%, with seasonality anticipated in Q3 and Q4.

• Second half of 2025 expected to see low single-digit organic growth overall, with mid single-digit growth in EMEA & APAC, and a low single-digit decline in the Americas.