Gates Industrial (GTES) Q4 2025 earnings summary

Executive summary

• Achieved record adjusted EBITDA and adjusted EPS in 2025, outperforming end markets and offsetting macro and trade policy volatility.

• Net leverage ratio improved to 1.85x, with $100M debt repaid and over $100M in share repurchases in Q4.

• Entered 2026 with cautious optimism for industrial demand recovery, supported by a book-to-bill above 1x and positive order trends.

• Personal mobility business grew over 25% and data center business expanded 4x year-over-year.

• Full-year 2025 net sales totaled $3,443.2 million, up 1.0% year-over-year, with core sales growth of 0.7%.

Financial highlights

• Adjusted EPS for 2025 was $1.52, up from $1.39 in 2024, at the top end of guidance.

• Q4 2025 net sales were $856M, with core growth of nearly 1% and total revenue up over 3% due to favorable FX.

• Q4 adjusted EBITDA was $188M, with a margin of 21.9%, up 10 bps year-over-year.

• Free cash flow conversion was 238% in Q4 and 92% for full year 2025.

• Ended 2025 with over $800 million in cash and a record low net leverage ratio.

Outlook and guidance

• 2026 core sales expected to grow 1%-4% year-over-year.

• Adjusted EBITDA guidance: $775M-$835M, with margin rate up slightly at midpoint.

• Adjusted EPS guidance: $1.52-$1.68, 5% growth at midpoint, assuming no further share repurchases.

• Q1 2026 revenue guidance: $845M-$875M, with a 2%-2.5% core sales decline due to fewer business days and ERP transition.

• 2026 capital expenditures projected at ~$120M; free cash flow conversion target above 90%.