Applied Industrial Technologies, Inc. · NYSE:AIT
Applied Industrial Technologies — Q3 2025 Earnings Presentation
18 slides from Applied Industrial Technologies's earnings presentation, May 1, 2025
Slide 1: Fiscal Q3 2025 Recap
Fiscal Q3 2025 Recap May 1, 2025 - The Premier Provider of Advanced Motion, Power, Control, & Automation Solutions to Critical Industrial Infrastructure -
Slide 2: Safe Harbor Statement
Safe Harbor Statement This presentation contains statements that are forward-looking, as that term is defined by the Securities and Exchange Commission in its rules, regulations and releases. Applied intends that such forward-looking statements be subject to the safe harbors created thereby. Forward
Slide 3: Primary Messages from Management
Primary Messages from Management • F3Q25 EBITDA, EPS, and cash generation exceeded our expectations on strong execution, cost control, and solid gross margin performance (+95 bps YoY) within an ongoing muted demand backdrop. • EBITDA increased 7% YoY (organic +2%) and EBITDA margins expanded 59 bps
Slide 4: Fiscal Q3 2025 Key Financial Highlights
Fiscal Q3 2025 Key Financial Highlights • Sales up 1.8% YoY Sales, $ in millions o Down 3.1% on an organic daily basis 1.8% $1,167 o Acquisitions +6.6%, currency -0.9%, selling days -0.8% $1,146 -3.1% Org/Day • Net Income of $99.8M and EPS of $2.57 o EPS up 3.7% YoY Q3 2024 Q3 2025 o Includes $2.2M
Slide 5: Organic Sales Growth Trend and Investor Discussion Points
Organic Sales Growth Trend and Investor Discussion Points Year-over-Year Organic % Change in Sales Per Day F3Q25 Sales Growth Detail Fiscal Quarters • Down 3.1% YoY on an organic daily basis; down 2.4% on a 2-year stack basis and up 12.6% on a 3-year stack basis 15.0% • 2-year stack trend improved s
Slide 6: Other Investor Discussion Points
Other Investor Discussion Points Discussion Point Update Detail End-market demand remains mixed with customers Organic daily sales down 3.1% YoY in F3Q25 but up over 2% measured with production and spending; SC segment sales sequentially; SC segment daily sales up 4% sequentially and Underlying Dema
Slide 7: Segment Results – Service Center Based Distribution
Segment Results – Service Center Based Distribution Segment Overview: Representing 68% of fiscal 2024 sales - the segment Service Center Distribution Segment Sales, in Millions includes our core distribution operations including ~400 local service centers across North America, Australia, and New Zea
Slide 8: Segment Results – Engineered Solutions
Segment Results – Engineered Solutions Engineered Solutions Segment Sales, in Millions Segment Overview: Representing 32% of fiscal 2024 sales - the segment consists of 1) our Fluid Power network specializing in distributing, engineering, designing, integrating, and repairing hydraulic and pneumatic
Slide 9: Fiscal Q3 2025 Margin and Expense Highlights
Fiscal Q3 2025 Margin and Expense Highlights Gross Profit, SD&A, and EBITDA Metrics • Gross margin up 95 bps YoY Chg LIFO o Includes a 22 bps YoY tailwind from LIFO expense $ in millions Q3 25 Q3 24 YoY Impact YoY o Primarily reflects positive acquisition mix, channel execution, and ongoing margin i
Slide 10: Cash Flow and Balance Sheet
Cash Flow and Balance Sheet Free Cash Flow (in Millions) - Fiscal YTD Period • F3Q25 cash from operations of $122.5M; free cash of $114.9M $327.0 o Free cash at 115% of net income in the quarter o YTD free cash of $327M up 39% and 115% of net income $234.8 o YoY cash flow growth primarily reflects m
Slide 11: Capital Allocation ~$1 Billion
Capital Allocation Capital Allocation Priorities & Strategy Pursue greenfield expansion while optimizing customer service Organic Growth capabilities and operating efficiencies through technology, working Dividends capital, and system investments $261 M Debt Reduction $362 M Scale Engineered Solutio
Slide 12: Fiscal 2025 Guidance and Outlook Assumptions
Fiscal 2025 Guidance and Outlook Assumptions Fiscal 2025 Guidance Updated Considerations: Prior Current • Updating F4Q25 sales assumptions to reflect greater macro uncertainty and potential demand implications near term from the (1/29/25) (5/1/25) evolving tariff and trade backdrop Total Sales - YoY
Slide 13: Appendix: Number of Selling Days by Fiscal Quarter and Full Year
Appendix: Number of Selling Days by Fiscal Quarter and Full Year Fiscal Period Q1 Q2 Q3 Q4 Year 2024 63.0 61.0 63.5 64.0 251.5 2025 64.0 62.0 63.0 63.5 252.5 2026 64.0 62.0 63.0 63.5 252.5 13
Slide 14: Appendix: Net Sales, Operating Income, EBITDA, & EBITDA Margin by Segment
Appendix: Net Sales, Operating Income, EBITDA, & EBITDA Margin by Segment Three Months Ended Mar 31 (dollar amount in thousands) Q3 FY24 Q3 FY25 Service Center Based Distribution Segment: Net sales $ 789,356 $ 761,602 Operating income $ 100,470 $ 107,164 Depreciation and amortization of property $ 4
Slide 15: Appendix: Reconciliation of EBITDA
Appendix: Reconciliation of EBITDA Three Months Ended Mar 31 (dollar amount in thousands) Q3 FY24 Q3 FY25 Net Income $ 97,217 $ 99,799 Interest expense (income), net 265 853 Income tax expense 25,448 27,483 Depreciation and amortization of property 5,802 6,583 Amortization of intangibles 6,951 10,21
Slide 16: Appendix: Reconciliation of EBITDA Margin
Appendix: Reconciliation of EBITDA Margin Three Months Ended Mar 31 (dollar amount in thousands) Q3 FY24 Q3 FY25 Net Sales $ 1,146,390 $ 1,166,749 EBITDA 135,683 144,936 EBITDA Margin 11.8% 12.4% 16
Slide 17: Appendix: Reconciliation of Free Cash Flow
Appendix: Reconciliation of Free Cash Flow Three Months Ended September 30 (dollar amount in thousands) Q1 FY19 Q1 FY20 Q1 FY21 Q1 FY22 Q1 FY23 Q1 FY24 Q1 FY25 Cash provided by Operating Activities $ 11,797 $ 50,018 $ 81,842 $ 48,642 $ 25,943 $ 66,209 $127,747 Capital Expenditures (3,173) (4,946) (3
Slide 18: Appendix: Reconciliation of Net Leverage Ratio
Appendix: Reconciliation of Net Leverage Ratio (dollar amount in thousands) Q3 FY23 Q4 FY23 Q1 FY24 Q2 FY24 Q3 FY24 Q4 FY24 Q1 FY25 Q2 FY25 Q3 FY25 Net Income $ 97,187 $ 92,215 $ 93,826 $ 91,228 $ 97,217 $ 103,491 $ 92,063 $ 93,290 $ 99,799 Interest expense (income), net 4,773 4,201 1,320 1,917 265
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