Ralliant (RAL) Q2 2025 earnings summary

Executive summary

• Completed separation from Fortive on June 28, 2025, becoming a standalone public company focused on profitable growth and operational rigor.

• Q2 2025 revenue was $503 million, down 6% year-over-year but up 4% sequentially, with strong demand in Utilities and Defense and stabilization in Test & Measurement.

• Initiated a cost savings program targeting $9–$11 million in annualized savings to address spin-related dis-synergies.

• Strong free cash flow generation and high conversion rates, consistent with long-term targets.

• Board authorized up to $200 million in share repurchases and declared a quarterly dividend of $0.05 per share.

Financial highlights

• Q2 2025 revenue: $503 million, down 6% year-over-year, up 4% sequentially.

• Adjusted EBITDA margin: 19.8%, down 530 basis points year-over-year.

• Adjusted EPS: $0.67, down from $0.86 year-over-year.

• Free cash flow: $74 million; cash and equivalents at quarter-end were $199 million; debt stood at $1.15 billion.

• Net leverage: 1.9x, within target range of 1.5x–2.0x.

Outlook and guidance

• Q3 2025 revenue expected between $513 million and $527 million; adjusted EBITDA margin guidance is 18%–20%; adjusted EPS expected between $0.54 and $0.60.

• Anticipates gradual sequential improvement in Test & Measurement, with margin recovery supported by new products and cost actions.

• Tariff impacts expected to be fully offset by Q4 2025, with ongoing gross margin impact of ~100–120 basis points.

• Full-year 2025 guidance not provided; policy to be revisited for 2026.

• Sufficient liquidity expected to meet cash needs for at least the next 12 months.