Business
Allient Inc. Delivers Double-Digit Revenue Growth and Record 33.3% Gross Margin in Q3 2025, Driving Profitability and Balance Sheet Strength
Revenue up 11% to $138.7 million, with 9% organic growth on a constant currency basis Gross margin expanded 190 basis points year-over-year to a record
About this update from Allient Inc.
Revenue up 11% to $138.7 million , with 9% organic growth on a constant currency basis Gross margin expanded 190 basis points year-over-year to a record 33.3%, driven by favorable mix, higher volumes, and operational efficiency; on a sequential basis, gross margin improved 10 basis points Operating income rose 84% to $12.2 million and operating margin expanded 350 basis points year-over-year to 8.8%, driven by continued execution of Simplify to Accelerate NOW; sequentially, operating margin improved 40 basis points Delivered diluted earnings per share (EPS) of $0.39 and adjusted EPS of $0.59 . Adjusted EBITDA increased 41% to $20.3 million , with margin up 310 basis points year-over-year to 14.6%, including a 20 basis point sequential improvement On a year-to-date basis, generated $43.1 million of cash from operations and reduced debt balance by $33.9 million , lowering the leverage ratio to 2.1x at quarter end, as described in the reconciliation of non-GAAP financial measures BUFFALO, N.Y. --(BUSINESS WIRE)-- Allient Inc. (Nasdaq: ALNT) (“Allient” or the “Company”), a global designer and manufacturer of precision and specialty Motion, Controls and Power products and solutions for targeted industries and applications, today reported financial results for its third quarter ended September 30, 2025 . “Our results underscore the strong progress we are making. We delivered record gross margin of 33.3% and expanded operating margin by 350 basis points year-over-year on 11% revenue growth, while achieving robust cash generation and deleveraging year-to-date. Demand remained healthy across Industrial applications, particularly power quality solutions for data center infrastructure, and we continued to execute on key defense and medical applications,” commented Dick Warzala , Chairman and CEO. “At the same time, the macro backdrop remains fluid, including ongoing challenges in supply chains for components that use heavy rare earth materials. We have been proactive, broadening suppliers, qualifying alternative materials, managing inventory more dynamically, and working closely with customers, to mitigate these risks. With our Simplify to Accelerate NOW actions gaining traction, a balanced backlog, and focused investments in high-value Motion, Controls and Power solutions, we believe Allient is well positioned to drive resilient performance and profitability through varying market conditions.” Third Quarter 2025 Results (Narrative compares with prior-year period unless otherwise noted) Revenue increased 11%, or $13.5 million , to $138.7 million , reflecting strong Industrial market demand along with solid performance in the Company’s other target markets. Foreign currency provided a favorable impact of $2.3 million , resulting in 9% organic growth on a constant currency basis. See the attached table for a description of non-GAAP financial measures and reconciliation of revenue excluding foreign currency exchange rate fluctuations. Sequentially, revenue was down less than one percent, as second quarter results benefited from $3 million to $4 million in customer pull-ins, as customers accelerated purchases ahead of anticipated supply constraints related to components containing heavy rare earth materials. Sales to U.S. customers were 57% of total sales compared with 56% in the third quarter last year, with the balance of sales to customers primarily in Europe , Canada and Asia-Pacific . Market Performance: Industrial market revenue rose 20%, driven by strong demand for power quality solutions in HVAC/data center applications, and industrial automation, which more than offset weaker demand in oil and gas. Medical market revenue advanced 6%, as solid demand for surgical instruments was partially offset by softness in medical mobility solutions. Vehicle market sales improved 6%, largely attributable to higher commercial automotive and construction demand. Aerospace & Defense revenue increased 2%, supported by scheduled defense and space program deliveries. Demand trends remain intact, while increased design and activities in the drone space positions the business for improved cadence as validations are completed. Distribution channel sales, while representing a smaller portion of total revenue, were down 6%. Gross margin expanded by 190 basis points year-over-year to 33.3%, driven primarily by a favorable product mix, increased volume, and operational efficiencies achieved through the Company’s Simplify to Accelerate NOW strategy. On a sequential basis, gross margin improved by 10 basis points. Operating costs and expenses were 24.5% of revenue, representing a 160 basis point reduction compared with the same period last year. This year-over-year improvement reflects strong operating leverage and continued benefits from the Simplify to Accelerate NOW initiatives. Sequentially, operating costs and expenses as a percentage of revenue improved by 30 basis points. As a result of the gross margin expansion and disciplined cost management, operating income increased 84% to $12.2 million , or 8.8% of revenue, compared with $6.6 million , or 5.3% of revenue, in the prior-year period. On a sequential basis, operating income grew 4%, with operating margin expanding by 40 basis points. The effective income tax rate was 22.2% and 22.6% for the third quarter of 2025 and 2024, respectively. The Company expects its income tax rate for the full year 2025 to be approximately 21% to 23%. Net income increased to $6.5 million , or $0.39 per diluted share, compared with $2.1 million , or $0.13 per diluted share, in the prior-year period. Sequentially, net income improved from $5.6 million , or $0.34 per diluted share. Adjusted net income, which excludes amortization of intangible assets related to acquisitions, acquisition and integration-related costs, restructuring and business realignment costs, and other non-recurring items, was $9.9 million , or $0.59 per diluted share. This compared with $5.1 million , or $0.31 per diluted share, in the third quarter of 2024 and $9.5 million , or $0.57 per diluted share, in the second quarter of 2025. See the attached tables for a description of non-GAAP financial measures and reconciliation table for Adjusted Net Income and Diluted Earnings per Share. Earnings before interest, taxes, depreciation, amortization, stock-based compensation expense, acquisition and integration-related costs, restructuring and business realignment costs, and foreign currency gains/losses (“Adjusted EBITDA”) was $20.3 million , or 14.6% of revenue, compared with $14.4 million , or 11.5% of revenue, in the prior-year period. Sequentially, Adjusted EBITDA as a percentage of revenue was up 20 basis points. The Company believes that, when used in conjunction with measures prepared in accordance with U.S. generally accepted accounting principles, Adjusted EBITDA, which is a non-GAAP measure, helps in the understanding of its operating performance. See the attached table for a description of non-GAAP financial measures and reconciliation table for Adjusted EBITDA. Balance Sheet and Cash Flow Review Cash and cash equivalents were up 9% to $39.5 million compared with $36.1 million at year-end 2024. Year-to-date cash provided by operating activities increased 46% to $43.1 million from $29.5 million in the prior-year period, driven by higher net income and improved working capital. Capital expenditures totaled $5.1 million for the first nine months, primarily supporting new customer projects. This compared with $6.9 million of capital expenditures in the same period last year. The Company expects 2025 capital expenditures to range between $6.5 million to $8.5 million . Total debt declined to $190.3 million , a reduction of $12.0 million from the second quarter and $33.9 million since year-end 2024. Debt, net of cash, decreased to $150.8 million , representing a net debt to capitalization ratio of 33.9%. The Company’s leverage ratio, calculated as total net debt divided by trailing twelve months of Adjusted EBITDA, improved to 2.10x from 3.01x at December 31, 2024 . The bank leverage ratio, as defined in the Company’s credit agreement and which excludes foreign cash among other adjustments, was 2.59x at quarter-end, well within covenant compliance. See the attached table for a description of non-GAAP financial measures and reconciliation table for Total Net Debt and Leverage Ratio. Orders and Backlog Summary ($ in thousands) Q3 2025 Q2 2025 Q1 2025 Q4 2024 Q3 2024 Orders $ 133,119 $ 135,032 $ 137,622 $ 117,900 $ 102,631 Backlog $ 230,984 $ 236,586 $ 237,323 $ 230,788 $ 238,492 Third quarter orders represented a book-to-bill ratio of 0.96, reflecting steady demand across Industrial market applications, and ongoing strength in Aerospace & Defense, despite the cancellation of the M10 Booker Tank program by the U.S. Army , which had a direct impact on Allient. Foreign currency translation favorably impacted orders by $2.5 million compared with the prior-year period. The majority of the backlog is expected to convert to revenue within three to nine months, consistent with the Company’s historical conversion patterns. Conference Call and Webcast The Company will host a conference call and webcast on Thursday, November 6, 2025 , at 10:00 am ET . During the conference call, management will review the financial and operating results and discuss Allient’s corporate strategy and outlook. A question-and-answer session will follow. To listen to the live call, dial (412) 634-6879. In addition, the webcast and slide presentation may be found at: www.allient.com/investors . A telephonic replay will be available from 2:00 pm ET on the day of the call through Thursday, November 20, 2025 . To listen to the archived call, dial (412) 317-6671 and enter replay pin number 10202880 or access the webcast replay via the Company’s website. A transcript will also be posted to the website once available. About Allient Inc. Allient (Nasdaq: ALNT) is a global engineering and manufacturing enterprise that develops solutions to drive the future of market-moving industries, including medical, life sciences, aerospace and defense, industrial automation, robotics, semi-conductor, transportation, agriculture, construction and facility infrastructure. A family of globally responsible companies, Allient takes a One-Team approach to “Connect What Matters” and provides the most robust, reliable, and high-value products and systems by utilizing its core Motion, Controls, and Power technologies and platforms. Headquartered in Buffalo, N.Y. , Allient employs more than 2,500 team members around the world. To learn more, visit www.allient.com . Safe Harbor Statement The statements in this news release that relate to future plans, events or performance are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, without limitation, any statement that may predict, forecast, indicate, or imply future results, performance, or achievements. Examples of forward-looking statements include, among others, statements the Company makes regarding expected savings from restructuring and simplifying actions, the cost of implementing such actions, operating results, expectations for the level of sales, the Company’s belief that it has sufficient liquidity to fund its business operations, and expectations with respect to the conversion of backlog to sales. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on the Company’s current beliefs, expectations and assumptions regarding the future of the Company’s business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of the Company’s control. The Company’s actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, general economic and business conditions, conditions affecting the industries served by the Company and its subsidiaries, conditions affecting the Company's customers and suppliers, competitor responses to the Company's products and services, the overall market acceptance of such products and services, the pace of bookings relative to shipments, the ability to expand into new markets and geographic regions, the success in acquiring new business, the impact of changes in income tax rates or policies, commercial activity and demand across our and our customers’ businesses, global supply chains, the prices of our securities and the achievement of our strategic objectives, the ability to attract and retain qualified personnel, the ability to successfully integrate an acquired business into our business model without substantial costs, delays, or problems, and other factors disclosed in the Company's periodic reports filed with the Securities and Exchange Commission. Any forward-looking statement speaks only as of the date on which it is made. New risks and uncertainties arise over time, and it is not possible for us to predict the occurrence of those matters or the manner in which they may affect us. The Company has no obligation or intent to release publicly any revisions to any forward looking statements, whether as a result of new information, future events, or otherwise. FINANCIAL TABLES FOLLOW ALLIENT INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share data) (Unaudited) For the three months ended For the nine months ended September 30 , September 30 , 2025 2024 2025 2024 Revenue $ 138,743 $ 125,213 $ 411,124 $ 407,958 Cost of goods sold 92,562 85,949 275,835 280,641 Gross profit 46,181 39,264 135,289 127,317 Operating costs and expenses: Selling 6,217 6,323 18,257 19,283 General and administrative 14,112 13,856 42,364 42,438 Engineering and development 9,687 9,056 29,185 30,416 Acquisition and integration-related costs 17 (201) 40 256 Restructuring and business realignment costs 836 479 3,457 1,948 Amortization of intangible assets 3,132 3,135 9,350 9,381 Total operating costs and expenses 34,001 32,648 102,653 103,722 Operating income 12,180 6,616 32,636 23,595 Other expense, net: Interest expense 3,401 3,435 10,588 10,207 Other expense, net 457 468 1,964 405 Total other expense, net 3,858 3,903 12,552 10,612 Income before income taxes 8,322 2,713 20,084 12,983 Income tax provision (1,845) (612) (4,433) (2,830) Net income $ 6,477 $ 2,101 $ 15,651 $ 10,153 Basic earnings per share: Earnings per share $ 0.39 $ 0.13 $ 0.94 $ 0.61 Basic weighted average common shares 16,695 16,574 16,658 16,513 Diluted earnings per share: Earnings per share $ 0.39 $ 0.13 $ 0.94 $ 0.61 Diluted weighted average common shares 16,780 16,605 16,708 16,581 ALLIENT INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except per share data) (Unaudited) September 30 , December 31 , 2025 2024 Assets Current assets: Cash and cash equivalents $ 39,476 $ 36,102 Trade receivables, net of provision for credit losses of $1,177 and $1,628 at September 30, 2025 and December 31, 2024 , respectively 91,718 78,774 Inventories 111,360 111,517 Prepaid expenses and other assets 15,502 11,187 Total current assets 258,056 237,580 Property, plant, and equipment, net 62,599 65,685 Deferred income taxes 8,277 9,116 Intangible assets, net 91,296 99,671 Goodwill 134,142 131,789 Operating lease assets 21,996 23,748 Other long-term assets 8,717 8,192 Total Assets $ 585,083 $ 575,781 Liabilities and Stockholders’ Equity Current liabilities: Accounts payable $ 33,724 $ 27,156 Accrued liabilities 39,302 30,221 Total current liabilities 73,026 57,377 Long-term debt 190,259 224,177 Deferred income taxes 3,338 3,642 Pension and post-retirement obligations 1,549 1,667 Operating lease liabilities 17,474 19,417 Other long-term liabilities 5,265 4,647 Total liabilities 290,911 310,927 Stockholders’ Equity: Common stock, no par value, authorized 50,000 shares; 16,936 and 16,810 shares issued and outstanding at September 30, 2025 and December 31, 2024 , respectively 113,325 111,024 Preferred stock, par value $1.00 per share, authorized 5,000 shares; no shares issued or outstanding — — Retained earnings 191,163 177,013 Accumulated other comprehensive loss (10,316) (23,183) Total stockholders’ equity 294,172 264,854 Total Liabilities and Stockholders’ Equity $ 585,083 $ 575,781 ALLIENT INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited) For the nine months ended September 30 , 2025 2024 Cash Flows From Operating Activities: Net income $ 15,651 $ 10,153 Adjustments to reconcile net income to net cash provided by operating activities Depreciation and amortization 19,105 19,248 Deferred income taxes 287 (45) Stock-based compensation expense 2,590 3,382 Debt issue cost amortization recorded in interest expense 485 379 Other 3,729 3,248 Changes in operating assets and liabilities, net of acquisitions: Trade receivables (10,679) 6,012 Inventories 1,863 5,500 Prepaid expenses and other assets (3,372) 142 Accounts payable 5,583 (12,259) Accrued liabilities 7,874 (6,302) Net cash provided by operating activities 43,116 29,458 Cash Flows From Investing Activities: Consideration paid for acquisitions, net of cash acquired — (25,231) Purchase of property and equipment (5,090) (6,903) Net cash used in investing activities (5,090) (32,134) Cash Flows From Financing Activities: Proceeds from issuance of long-term debt — 76,898 Principal payments of long-term debt and finance lease obligations (34,334) (61,333) Payment of contingent consideration — (2,450) Payment of debt issuance costs (41) (2,329) Dividends paid to stockholders (1,500) (1,505) Tax withholdings related to net share settlements of restricted stock (1,121) (1,596) Net cash (used in) provided by financing activities (36,997) 7,685 Effect of foreign exchange rate changes on cash 2,345 208 Net increase in cash and cash equivalents 3,374 5,217 Cash and cash equivalents at beginning of period 36,102 31,901 Cash and cash equivalents at end of period $ 39,476 $ 37,118 ALLIENT INC. Reconciliation of Non-GAAP Financial Measures (In thousands, Unaudited) In addition to reporting revenue and net income, which are U.S. generally accepted accounting principle (“GAAP”) measures, the Company presents Revenue excluding foreign currency exchange rate impacts, Organic revenue, EBITDA and Adjusted EBITDA (earnings before interest, income taxes, depreciation and amortization, stock-based compensation expense, acquisition and integration-related costs, restructuring and business realignment costs, and foreign currency gains/losses), total net debt, and leverage ratio, which are non-GAAP measures. The Company believes that Revenue excluding foreign currency exchange rate impacts is a useful measure in analyzing organic sales results. The Company excludes the effect of currency translation from revenue for this measure because currency translation is not fully under management’s control, is subject to volatility and can obscure underlying business trends. The portion of revenue attributable to currency translation is calculated as the difference between the current period revenue and the current period revenue after applying foreign exchange rates from the prior period. Organic revenue is reported revenues adjusted for the impact of foreign currency and the revenue contribution from acquisitions. The Company believes EBITDA and Adjusted EBITDA are often a useful measure of a Company’s operating performance and are a significant basis used by the Company’s management to evaluate and compare the core operating performance of its business from period to period by removing the impact of the capital structure (interest), tangible and intangible asset base (depreciation and amortization), taxes, stock-based compensation expense, acquisition and integration-related costs, restructuring and business realignment costs, foreign currency gains/losses on short-term assets and liabilities, and other items that are not indicative of the Company’s core operating performance. EBITDA and Adjusted EBITDA do not represent and should not be considered as an alternative to net income, operating income, net cash provided by operating activities or any other measure for determining operating performance or liquidity that is calculated in accordance with GAAP. In addition to the performance measures identified above, we believe that total net debt and leverage ratio provide meaningful measures of liquidity and a useful basis for assessing our ability to fund our activities, including the financing of acquisitions and debt repayments. Total net debt is calculated as total debt less cash and cash equivalents. Leverage ratio is total net debt divided by adjusted EBITDA for the trailing twelve months. The Company’s calculation of Revenue excluding foreign currency exchange impacts for the three and nine months ended September 30, 2025 is as follows: Three months ended Nine months ended September 30, 2025 September 30, 2025 Revenue as reported $ 138,743 $ 411,124 Foreign currency impact (2,259) (2,822) Revenue excluding foreign currency exchange impacts $ 136,484 $ 408,302 The Company’s calculation of organic revenue for the three and nine months ended September 30, 2025 is as follows: Three months ended Nine months ended September 30, 2025 September 30, 2025 Revenue change over prior year 10.8 % 0.8 % Less: Impact of acquisitions and foreign currency 1.8 1.0 Organic revenue 9.0 % (0.2) % ALLIENT INC. Reconciliation of Non-GAAP Financial Measures (In thousands, Unaudited) The Company’s calculation of Adjusted EBITDA for the three and nine months ended September 30, 2025 and 2024 is as follows: Three months ended Nine months ended September 30 , September 30 , 2025 2024 2025 2024 Net income as reported $ 6,477 $ 2,101 $ 15,651 $ 10,153 Interest expense 3,401 3,435 10,588 10,207 Provision for income tax 1,845 612 4,433 2,830 Depreciation and amortization 6,423 6,447 19,105 19,248 EBITDA 18,146 12,595 49,777 42,438 Stock-based compensation expense 835 1,098 2,590 3,382 Acquisition and integration-related costs (1) 17 (201) 40 256 Restructuring and business realignment costs 836 479 3457 1,948 Foreign currency loss/(gain) 465 461 1,974 380 Adjusted EBITDA $ 20,299 $ 14,432 $ 57,838 $ 48,404 (1) Includes a Q3 2024 fair value measurement reduction of $270 due to acquisition-related contingent consideration. The Company’s calculation of Total Net Debt and Leverage Ratio as of September 30, 2025 and December 31, 2024 is as follows: September 30, 2025 December 31, 2024 Total debt $ 190,259 $ 224,177 Less: cash and cash equivalents $ 39,476 $ 36,102 Total net debt (Non-GAAP) $ 150,783 $ 188,075 TTM Adjusted EBITDA (Non-GAAP) $ 71,958 $ 62,525 Leverage Ratio (Non-GAAP) 2.10 3.01 ALLIENT INC. Reconciliation of GAAP Net Income and Diluted Earnings per Share to Non-GAAP Adjusted Net Income and Adjusted Diluted Earnings per Share (In thousands, except per share data) (Unaudited) The Company’s calculation of Adjusted net income and Adjusted diluted earnings per share for the three and nine months ended September 30, 2025 and 2024 is as follows: For the three months ended September 30 , Per diluted Per diluted 2025 share 2024 share Net income as reported $ 6,477 $ 0.39 $ 2,101 $ 0.13 Non-GAAP adjustments, net of tax (1) Amortization of intangible assets – net 2,399 0.14 2,401 0.14 Foreign currency loss – net 356 0.02 353 0.02 Acquisition and integration-related costs – net (2) 13 — (154) (0.01) Restructuring and business realignment costs – net 640 0.04 367 0.02 Non-GAAP adjusted net income and adjusted diluted earnings per share $ 9,885 $ 0.59 $ 5,068 $ 0.31 Weighted average diluted shares outstanding 16,780 16,605 (1) Applies a blended federal, state, and foreign tax rate of 23% applicable to the non-GAAP adjustments. (2) Includes a Q3 2024 fair value measurement gross reduction of $270 due to acquisition-related contingent consideration. For the nine months ended September 30 , Per diluted Per diluted 2025 share 2024 share Net income as reported $ 15,651 $ 0.94 $ 10,153 $ 0.61 Non-GAAP adjustments, net of tax (1) Amortization of intangible assets – net 7,162 0.43 7,339 0.44 Foreign currency loss / (gain) – net 1,512 0.09 291 0.02 Acquisition and integration-related costs – net (2) 31 — 196 0.01 Restructuring and business realignment costs – net 2,647 0.16 1,492 0.09 Non-GAAP adjusted net income and adjusted diluted earnings per share $ 27,003 $ 1.62 $ 19,471 $ 1.17 Weighted average diluted shares outstanding 16,708 16,581 (1) Applies a blended federal, state, and foreign tax rate of 23% applicable to the non-GAAP adjustments. (2) Includes a Q3 2024 fair value measurement gross reduction of $270 due to acquisition-related contingent consideration. Adjusted net income and diluted EPS are defined as net income as reported, adjusted for certain items, including amortization of intangible assets and unusual non-recurring items. Adjusted net income and diluted EPS are not a measure determined in accordance with GAAP in the United States , and may not be comparable to the measure as used by other companies. Nevertheless, the Company believes that providing non-GAAP information, such as adjusted net income and diluted EPS are important for investors and other readers of the Company’s financial statements and assists in understanding the comparison of the current quarter’s and current year’s net income and diluted EPS to the historical periods’ net income and diluted EPS. View source version on businesswire.com : https://www.businesswire.com/news/home/20251105971255/en/ Investor Contacts: Craig P. Mychajluk / Deborah K. Pawlowski Alliance Advisors IR 716-843-3832 / 716-843-3908 [email protected] / [email protected] Source: Allient Inc.