Ralliant (RAL) Q4 2025 earnings summary

Executive summary

• Q4 2025 revenue reached $555 million, up 1% year-over-year and 5% sequentially, with strong free cash flow conversion above long-term targets.

• Adjusted EBITDA margin was 20.8% and adjusted EPS was $0.69, both at or above the high end of guidance.

• Completed separation as a standalone public company in June 2025, launched a cost savings program, and established a quarterly dividend and $200 million share repurchase authorization.

• Net loss of $1.4 billion in Q4 was driven by a $1.4 billion non-cash goodwill impairment in the Test & Measurement segment.

• Entered 2026 with strong secular growth drivers, a healthy balance sheet, and clear strategic priorities for investment.

Financial highlights

• Q4 2025 revenue: $555 million (+1% year-over-year, +5% sequentially); full-year 2025 revenue: $2.07 billion.

• Adjusted EBITDA margin: 20.8% in Q4; full-year adjusted EBITDA margin: 20.5%.

• Adjusted EPS: $0.69 in Q4; full-year adjusted EPS: $2.69.

• Free cash flow: $92 million in Q4; trailing twelve months conversion rate: 117%.

• Net leverage at 1.9x adjusted EBITDA at year-end.

Outlook and guidance

• Q1 2026 revenue expected at $508–$522 million, with adjusted EBITDA margin of 17–18% and adjusted EPS of $0.46–$0.52.

• Full-year 2026 revenue guidance: $2.1–$2.2 billion (2–6% year-over-year growth), adjusted EBITDA margin of 18–20%, and adjusted EPS of $2.22–$2.42.

• Free cash flow conversion expected to remain above 95%, with CapEx at 2–3% of revenue.

• Expect sequential quarterly revenue increases throughout 2026, with margin headwinds from higher operating expenses and investments.