RBC Bearings (RBC) Q3 2025 earnings summary

Executive summary

• Net sales for Q3 FY2025 reached $394.4 million, up 5.5% year-over-year, led by 10.7% growth in Aerospace/Defense and 2.7% in Industrial segments.

• Commercial aerospace sales grew 14.6% and defense sales increased 3.0% year-over-year.

• Gross margin improved to 44.3% of sales, up from 42.3% last year.

• Net income attributable to common stockholders rose 39.6% year-over-year to $56.9 million; adjusted net income up 34.7%.

• Diluted EPS increased 30.9% to $1.82; adjusted EPS up 26.5% to $2.34.

Financial highlights

• Adjusted EBITDA for Q3 was $122.6 million, up 12% year-over-year, with a margin of 31.1%.

• Free cash flow was $73.6 million for Q3, with a conversion rate of 127%.

• Interest expense declined to $14.2 million, down from $19.3 million, due to debt reduction and hedging.

• Operating cash flow for the nine months ended December 28, 2024, was $224.4 million, up from $195.2 million.

• Trailing net leverage finished the quarter at 1.8x, with $100 million debt repaid in Q3.

Outlook and guidance

• Q4 FY2025 net sales expected between $434 million and $444 million, a 4.9%–7.3% increase year-over-year.

• Gross margin forecasted at 44.0%–44.5%, up 115 basis points year-over-year.

• SG&A as a percentage of sales guided to 16.0%–16.5% for Q4.

• Management anticipates continued growth in commercial aerospace and defense, supported by a robust backlog.

• Operating cash flows and available credit expected to fund internal growth initiatives for at least the next 12 months.