Applied Industrial Technologies, Inc. · NYSE:AIT
Applied Industrial Technologies — Q2 2026 Earnings Presentation
18 slides from Applied Industrial Technologies's earnings presentation, Jan 27, 2026
Slide 1: Fiscal Q2 2026 Recap
Fiscal Q2 2026 Recap January 27, 2026 - 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 • F2Q26 results highlight ongoing execution in an evolving operating environment; sales and EBITDA margins in line with guidance inclusive of greater than expected LIFO expense and muted Dec sales. • Demand backdrop remains choppy but trending in the right direction
Slide 4: Fiscal Q2 2026 Key Financial Highlights
Fiscal Q2 2026 Key Financial Highlights • Sales up 8.4% YoY Sales, $ in millions o Up 2.2% on an organic basis 8.4% $1,163 o Acquisitions +6.0%, currency +0.2% $1,073 2.2% Organic • Net Income of $95.3M and EPS of $2.51 o EPS up 4.6% YoY Q2 2025 Q2 2026 o Includes $6.9M pre-tax ($0.14/sh) of LIFO ex
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 F2Q26 Sales Growth Detail Fiscal Quarters • Up 2.2% YoY on an organic basis vs. +3.0% YoY in F1Q26; 21.1% F2Q26 impacted by muted Dec sales activity • Dec sales below normal seasonality and neg
Slide 6: Other Investor Discussion Points
Other Investor Discussion Points Investor Topic Update & Details End-market demand remains mixed given ongoing macro uncertainty and near-term seasonal Underlying Demand factors though customer sentiment and demand indications continue to gradually improve Price contributed nearly 250 bps to organic
Slide 7: Fiscal Q2 2026 Margin and Expense Highlights
Fiscal Q2 2026 Margin and Expense Highlights Gross Profit, SD&A, and EBITDA Metrics • Gross margin down 19 bps YoY Chg LIFO $ in millions Q2 26 Q2 25 YoY Impact YoY o Includes an unfavorable 54 bps YoY impact from higher LIFO expense o YoY improvement excluding LIFO impact primarily reflects positiv
Slide 8: Segment Results – Service Center
Segment Results – Service Center Segment Overview: Representing 66% of fiscal 2025 sales - the segment Service Center Segment Sales, in Millions includes our core distribution operations including ~400 local service centers across North America, Australia, and New Zealand, primarily focused on our t
Slide 9: Segment Results – Engineered Solutions
Segment Results – Engineered Solutions Segment Overview: Representing 34% of fiscal 2025 sales - the segment Engineered Solutions Segment Sales, in Millions consists of 1) our Fluid Power network specializing in distributing, engineering, designing, integrating, and repairing hydraulic and pneumatic
Slide 10: Cash Flow and Balance Sheet
Cash Flow and Balance Sheet Free Cash Flow (in Millions) - Fiscal 1H Period • F2Q26 cash from operations of $99.7M; free cash of $93.4M $212.1 $205.4 o Free cash at 97.9% of net income in F2Q26 o YTD free cash of $205.4M down ~3% YoY reflecting greater working capital $158.1 $150.9 investment compar
Slide 11: Capital Allocation ~$1.1 Billion
Capital Allocation Capital Allocation Priorities & Strategy Capital Deployed Last 5 Years (Capex, M&A, Share Repurchases, & Dividends) Pursue greenfield expansion while optimizing customer service Organic Growth capabilities and operating efficiencies through technology, working capital, and system
Slide 12: Fiscal 2026 Guidance and Outlook Assumptions
Fiscal 2026 Guidance and Outlook Assumptions Fiscal 2026 Guidance Updated Considerations: Prior Current • LSD to MSD percent YoY organic sales increase in F2H26 (10/28/25) (1/27/26) • Assumes ongoing macro uncertainty and choppy sales trends near term; comparisons slightly more difficult in Feb & Ma
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 2027 64.0 62.0 62.5 64.0 252.5 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 Dec 31 (dollar amount in thousands) Q2 FY25 Q2 FY26 Service Center Segment: Net sales $ 723,827 $ 747,323 Operating income 91,972 94,270 Depreciation and amortization of property 4,383 4,306 Amortization of
Slide 15: Appendix: Reconciliation of EBITDA
Appendix: Reconciliation of EBITDA Three Months Ended Dec 31 (dollar amount in thousands) Q2 FY25 Q2 FY26 Net Income $ 93,290 $ 95,349 Interest (income) expense, net (936) 942 Income tax expense 29,271 27,423 Depreciation and amortization of property 5,926 6,590 Amortization of intangibles 7,567 10,
Slide 16: Appendix: Reconciliation of EBITDA Margin
Appendix: Reconciliation of EBITDA Margin Three Months Ended Dec 31 (dollar amount in thousands) Q2 FY25 Q2 FY26 Net Sales $ 1,073,001 $ 1,163,023 EBITDA 135,118 140,430 EBITDA Margin 12.6% 12.1% 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 FY21 Q1 FY22 Q1 FY23 Q1 FY24 Q1 FY25 Q1 FY26 Cash provided by Operating Activities $ 81,842 $ 48,642 $ 25,943 $ 66,209 $ 127,747 $ 119,317 Capital Expenditures (3,597) (3,621) (5,554) (4,340) (
Slide 18: Appendix: Reconciliation of Net Leverage Ratio
Appendix: Reconciliation of Net Leverage Ratio (dollar amount in thousands) Q2 FY24 Q3 FY24 Q4 FY24 Q1 FY25 Q2 FY25 Q3 FY25 Q4 FY25 Q1 FY26 Q2 FY26 Net Income $ 91,228 $ 97,217 $ 103,491 $ 92,063 $ 93,290 $ 99,799 $ 107,836 $ 100,807 $ 95,349 Interest expense (income), net 1,917 265 (671) (627) (936
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