Federal Signal (FSS) Q4 2025 earnings summary

Executive summary

• Achieved record Q4 and full-year net sales of $2.18 billion, up 17% year-over-year, with organic growth of 11%.

• Q4 net sales reached $597 million, up 27% year-over-year; both ESG and SSG delivered robust performance, supported by organic growth and acquisitions.

• Q4 adjusted EPS was $1.16, up 33% year-over-year; full-year adjusted EPS was $4.23, up 27%.

• Orders and backlog reached record levels, with Q4 orders up 45% to $647 million and year-end backlog at $1.04 billion.

• Strong operating cash flow and new credit facility provide financial flexibility for growth and shareholder returns.

Financial highlights

• Full-year adjusted EBITDA was $438.9 million, up 25% year-over-year, with a margin of 20.1%; Q4 adjusted EBITDA was $119.4 million, up 34%, margin 20%.

• Full-year operating income rose 21% to $340.9 million; Q4 operating income grew 19% to $83.5 million.

• Q4 net income was $60.8 million, up 22%; full-year net income was $246.6 million, up 14%.

• Q4 gross margin improved to 28.4%; Q4 SG&A expenses were 11.3% of net sales, down from 12.4% YoY.

• Full-year operating cash flow was $255 million, up 10% year-over-year.

Outlook and guidance

• 2026 net sales expected between $2.55 billion and $2.65 billion; adjusted EPS guidance of $4.50–$4.80, representing continued double-digit growth.

• Organic growth for 2026 projected at 5%-9%, with ESG outpacing SSG.

• Capital expenditures projected at $45 million to $55 million; effective tax rate expected at ~25%.

• Guidance incorporates a $0.16 per share headwind from higher amortization and tax normalization.

• Q1 2026 expected to be seasonally lower in sales and earnings.