Applied Industrial Tech | 10-Q: FY2026 Q1 Revenue Beats Estimate at USD 1.2 B

Revenue: As of FY2026 Q1, the actual value is USD 1.2 B, beating the estimate of USD 1.188 B.

EPS: As of FY2026 Q1, the actual value is USD 2.63, beating the estimate of USD 2.4814.

EBIT: As of FY2026 Q1, the actual value is USD 129.58 M.

Service Center Segment

• Net Sales: $782.4 million for the three months ended September 30, 2025, compared to $749.7 million for the same period in 2024, representing a 4.4% increase.
• Operating Income: $104.1 million for the three months ended September 30, 2025, compared to $93.8 million for the same period in 2024, representing a 10.9% increase.
• Operating Margin: Increased to 13.3% in the current year quarter from 12.5% in the prior year quarter.

Engineered Solutions Segment

• Net Sales: $417.0 million for the three months ended September 30, 2025, compared to $349.2 million for the same period in 2024, representing a 19.4% increase.
• Operating Income: $45.9 million for the three months ended September 30, 2025, compared to $41.3 million for the same period in 2024, representing an 11.0% increase.
• Operating Margin: Decreased to 11.0% in the current year quarter from 11.8% in the prior year quarter.

Cash Flow

• Net Cash Provided by Operating Activities: $119.3 million for the three months ended September 30, 2025, compared to $127.7 million for the same period in 2024.
• Net Cash Used in Investing Activities: -$9.5 million for the three months ended September 30, 2025, compared to -$15.2 million for the same period in 2024.
• Net Cash Used in Financing Activities: -$78.6 million for the three months ended September 30, 2025, compared to -$34.0 million for the same period in 2024.

Unique Metrics

• Gross Profit Margin: Increased to 30.1% in the quarter ended September 30, 2025, compared to 29.6% in the prior period.
• Selling, Distribution & Administrative Expense: $232.4 million for the three months ended September 30, 2025, compared to $211.9 million for the same period in 2024, representing a 9.7% increase.

Future Outlook and Strategy

• Core Business Focus: The company expects its full-year tax rate for fiscal 2026 to be in the 23.0% to 24.0% range.
• Non-Core Business: The company completed the acquisition of Hydradyne, LLC, which is included in the Engineered Solutions segment, and expects the provisions of the One Big Beautiful Bill Act to result in a reduction to cash tax payments for the fiscal year ended June 30, 2026.