Gates Industrial reported second-quarter 2026 net sales of $941.6 million, up 6.6% year-over-year (core sales +4.9%), with net income attributable to shareholders of $170.9 million ($0.67 per diluted share). Adjusted EBITDA was $211.4 million (22.5% margin) and adjusted net income per diluted share was $0.44. The company raised its full-year 2026 guidance for core sales growth, adjusted EBITDA and adjusted EPS.

Financial Highlights

  • Revenue (Q2 2026): $941.6 million, up 6.6% versus prior-year period; core sales increase 4.9%.
  • Gross profit (Q2 2026): $386.1 million; adjusted gross profit (Q2 2026): $393.7 million with adjusted gross profit margin 41.8%.
  • Operating income from continuing operations (Q2 2026): $131.6 million.
  • Net income attributable to shareholders (Q2 2026): $170.9 million; diluted earnings per share $0.67.
  • Adjusted EBITDA (Q2 2026): $211.4 million (22.5% margin); adjusted net income per diluted share $0.44.

Business Highlights

  • Segment performance: Power Transmission net sales $588.5 million (up 7.0% year-over-year; core +5.3%); Fluid Power net sales $353.1 million (up 5.8% year-over-year; core +4.2%).
  • Management cited record sales and EPS in the quarter and improving global order momentum, positioning the company to benefit from strengthening industrial demand.
  • Balance sheet strength: cash and cash equivalents of $823.5 million and total assets of $7.39 billion as of June 27, 2026, supporting capital allocation flexibility.
  • Operational cash generation: net cash provided by operating activities for the six months ended June 27, 2026 was $108.8 million and the company reiterated Free Cash Flow Conversion target of 90%+ for 2026.
  • Company raised 2026 outlook: updated core sales growth to 2.5%–4.5%, adjusted EBITDA range to $800–$830 million, and adjusted EPS to $1.62–$1.70 (midpoint improvements vs. prior guidance).

Original SEC Filing:

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