Kennametal (KMT) Q4 2025 earnings summary

Executive summary

• Fiscal 2025 sales declined 4% organically to $1.97 billion, with Q4 sales down 5% to $516 million; adjusted EPS was $1.34, down from $1.50 year-over-year.

• Market softness, lower volumes, and supply chain disruptions impacted results, partially offset by restructuring, pricing actions, and $65 million in annualized run-rate pre-tax savings.

• Returned $122 million to shareholders via $60 million in share repurchases and $62 million in dividends.

• Executed cost restructuring, facility closures, and divestiture of Goshen, IN subsidiary as part of portfolio optimization.

• Advanced plant consolidations and strengthened executive team and board with new appointments.

Financial highlights

• Q4 FY25 sales were $516 million, down 5% organically; adjusted EPS $0.34 vs. $0.49 prior year.

• FY25 adjusted EBITDA was $299 million (15.2% margin), down 10 bps year-over-year.

• Free operating cash flow for FY25 was $121 million, down from $175 million.

• Adjusted ROIC was 6.8%, down from 7.6% in FY24.

• Q4 gross profit was $146 million (28.2% margin), down from $171 million (31.6%) prior year.

Outlook and guidance

• FY26 sales expected between $1.95–$2.05 billion, with volume -5% to flat, 4% price/tariff surcharge, and 2% FX tailwind.

• Adjusted EPS guidance for FY26 is $0.90–$1.30; Q1 sales expected at $465–$485 million, EPS $0.20–$0.30.

• Restructuring savings of ~$35 million included in FY26, weighted 40/60 first to second half.

• Capital expenditures projected at ~$90 million; free operating cash flow at 120% of adjusted net income.

• Aerospace and defense expected to grow low double digits; transportation, Earthworks, and general engineering to decline.