Applied Industrial Technologies, Inc. · NYSE:AIT
Applied Industrial Technologies — Q3 2026 Earnings Presentation
20 slides from Applied Industrial Technologies's earnings presentation, Apr 28, 2026
Slide 1: Fiscal Q3 2026 Recap
Fiscal Q3 2026 Recap April 28, 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 • Reported solid F3Q26 results underscored by strengthening organic sales growth, as well as steady gross margin performance that drove record quarterly EBITDA at the high end of our expectations. • F3Q26 YoY organic sales growth of 6.0% was the strongest in over two
Slide 4: Fiscal Q3 2026 Key Financial Highlights
Fiscal Q3 2026 Key Financial Highlights • Sales up 7.3% YoY Sales, $ in millions o Up 6.0% on an organic basis; acquisitions +0.5%, currency +0.8% $1,251 7.3% 6.0% Organic $1,167 • Net Income of $99.8M and EPS of $2.65 o EPS up 3.1% YoY o Includes $5.6M pre-tax ($0.11/sh) of LIFO expense Q3 2025 Q3
Slide 5: Organic Sales Growth Trend
Organic Sales Growth Trend Year-over-Year Organic % Change in Sales Per Day F3Q26 Sales Growth Detail Fiscal Quarters • Up 6.0% YoY on an organic basis vs. +2.2% YoY in F2Q26 and 21.1% F3Q26 guidance of a low to mid-single digit percent increase YoY 19.4% 18.7% 16.4% • 2-Yr STACK trend improved over
Slide 6: Investor Topic Update & Details
Investor Discussion Points Investor Topic Update & Details Trends continuing to gradually improve with demand strengthening as F3Q26 progressed; Underlying Demand sentiment across sales teams more favorable; customer capital spending backdrop improving Price contributed ~250 bps YoY in F3Q26 (in lin
Slide 7: Applied Industry Position and Growth Considerations
Applied Industry Position and Growth Considerations A Differentiated & Leading Industry Position … With Secular Tailwinds & Customer Requirements Focused on Mission Critical Industrial Solutions… Presenting Distinct Growth Opportunities • End-market demand in the early stages of recovery with greate
Slide 8: Growth Vertical Highlight – Technology
Growth Vertical Highlight – Technology • The expansion of our Engineered Solutions segment has increased our Technology vertical exposure including providing fluid power, flow control, and automation solutions across semiconductor and data center value chains • Sales from the Technology vertical rep
Slide 9: Fiscal Q3 2026 Margin and Expense Highlights
Fiscal Q3 2026 Margin and Expense Highlights Gross Profit, SD&A, and EBITDA Metrics • Gross margin unchanged YoY LIFO Impact o Includes an unfavorable 27 bps YoY impact from higher LIFO expense $ in millions Q3 26 Q3 25 Chg YoY YoY o YoY improvement excluding LIFO impact primarily reflects pricing &
Slide 10: Segment Results – Service Center
Segment Results – Service Center Service Center Segment Sales, in Millions Segment Overview: Representing 66% of fiscal 2025 sales - the segment includes our core distribution operations including ~400 local service centers across North America, Australia, and New Zealand, primarily focused on our $
Slide 11: 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 12: Cash Flow and Balance Sheet
Cash Flow and Balance Sheet Free Cash Flow (in Millions) - Fiscal YTD Period • F3Q26 cash from operations of $100.1M; free cash of $95.4M $327.0 $300.8 o Free cash at 95.6% of net income in F3Q26 o YTD free cash of $300.8M down 8% YoY reflecting greater working capital $234.8 investment compared to
Slide 13: Capital Allocation
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 14: Fiscal 2026 Guidance and Outlook Assumptions
Fiscal 2026 Guidance and Outlook Assumptions Fiscal 2026 Guidance Updated Considerations: Prior Current • Tightening FY26 guidance toward the high end of previous range (1/27/26) (4/28/26) following F3Q26 results Total Sales - YoY % chg 5.5% - 7.0% 7.2% - 7.7% • F4Q26 sales outlook takes into consid
Slide 15: 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 15
Slide 16: 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 FY25 Q3 FY26 Service Center Segment: Net sales $ 761,602 $ 804,937 Operating income 106,386 109,410 Depreciation and amortization of property 4,477 4,412 Amortization o
Slide 17: Appendix: Reconciliation of EBITDA
Appendix: Reconciliation of EBITDA Three Months Ended Mar 31 (dollar amount in thousands) Q3 FY25 Q3 FY26 Net Income $ 99,799 $ 99,769 Interest (income) expense, net 853 2,447 Income tax expense 27,483 35,359 Depreciation and amortization of property 6,583 6,396 Amortization of intangibles 10,218 9,
Slide 18: Appendix: Reconciliation of EBITDA Margin
Appendix: Reconciliation of EBITDA Margin Three Months Ended Mar 31 (dollar amount in thousands) Q3 FY25 Q3 FY26 Net Sales $ 1,166,749 $ 1,251,453 EBITDA 144,936 153,855 EBITDA Margin 12.4% 12.3% 18
Slide 19: 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 20: Appendix: Reconciliation of Net Leverage Ratio
Appendix: Reconciliation of Net Leverage Ratio (dollar amount in thousands) Q3 FY24 Q4 FY24 Q1 FY25 Q2 FY25 Q3 FY25 Q4 FY25 Q1 FY26 Q2 FY26 Q3 FY26 Net Income $ 97,217 $ 103,491 $ 92,063 $ 93,290 $ 99,799 $ 107,836 $ 100,807 $ 95,349 $ 99,769 Interest expense (income), net 265 (671) (627) (936) 853
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