Gates Industrial | 8-K: FY2026 Q2 Revenue Beats Estimate at USD 941.6 M

Revenue: As of FY2026 Q2, the actual value is USD 941.6 M, beating the estimate of USD 925.41 M.

EPS: As of FY2026 Q2, the actual value is USD 0.67.

EBIT: As of FY2026 Q2, the actual value is USD 130.2 M.

Gates Industrial Corporation Ltd. announced its financial results for the second quarter and six months ended June 27, 2026.

Second Quarter 2026 Consolidated Financial Summary

For the three months ended June 27, 2026, Gates Industrial Corporation Ltd. reported net sales of $941.6 million, an increase of 6.6% compared to the prior-year period, with core sales increasing by 4.9%. Net income attributable to shareholders was $170.9 million, while net income from continuing operations reached $178.2 million, representing a margin of 18.9%. Adjusted EBITDA was $211.4 million, with a margin of 22.5%.

Consolidated Statements of Operations (Three months ended June 27, 2026 vs June 28, 2025)

• Net sales: $941.6 million (2026) vs $883.7 million (2025)
• Cost of sales: $555.5 million (2026) vs $523.5 million (2025)
• Gross profit: $386.1 million (2026) vs $360.2 million (2025)
• Selling, general and administrative expenses: $250.7 million (2026) vs $231.2 million (2025)
• Transaction-related expenses: $3.1 million (2026) vs $0 million (2025)
• Restructuring expenses: $0.7 million (2026) vs $13.0 million (2025)
• Operating income from continuing operations: $131.6 million (2026) vs $115.8 million (2025)
• Income tax expense: - $78.0 million (2026) vs $16.8 million (2025)
• Net income from continuing operations: $178.2 million (2026) vs $63.4 million (2025)
• Net income attributable to shareholders: $170.9 million (2026) vs $56.5 million (2025)

Consolidated Statements of Operations (Six months ended June 27, 2026 vs June 28, 2025)

• Net sales: $1,792.7 million (2026) vs $1,731.3 million (2025)
• Cost of sales: $1,068.6 million (2026) vs $1,026.5 million (2025)
• Gross profit: $724.1 million (2026) vs $704.8 million (2025)
• Selling, general and administrative expenses: $477.6 million (2026) vs $447.4 million (2025)
• Transaction-related expenses: $3.6 million (2026) vs $0.4 million (2025)
• Restructuring expenses: $1.4 million (2026) vs $14.6 million (2025)
• Operating income from continuing operations: $241.5 million (2026) vs $241.6 million (2025)
• Income tax expense: - $66.5 million (2026) vs $42.0 million (2025)
• Net income from continuing operations: $244.6 million (2026) vs $132.0 million (2025)
• Net income attributable to shareholders: $230.6 million (2026) vs $118.5 million (2025)

Segment Results

Power Transmission Segment

• Three months ended June 27, 2026: Net sales were $588.5 million, a 7.0% increase year-over-year, with core sales up 5.3%. Adjusted EBITDA was $134.8 million, a 9.8% increase, resulting in an Adjusted EBITDA margin of 22.9% (up 60 basis points).
• Six months ended June 27, 2026: Net sales were $1,121.7 million, a 4.1% increase year-over-year, with core sales up 1.5%. Adjusted EBITDA was $246.8 million, a 3.0% increase, resulting in an Adjusted EBITDA margin of 22.0% (down 20 basis points).

Fluid Power Segment

• Three months ended June 27, 2026: Net sales were $353.1 million, a 5.8% increase year-over-year, with core sales up 4.2%. Adjusted EBITDA was $76.6 million, a 0.3% increase, resulting in an Adjusted EBITDA margin of 21.7% (down 120 basis points).
• Six months ended June 27, 2026: Net sales were $671.0 million, a 2.6% increase year-over-year, with core sales up 0.4%. Adjusted EBITDA was $142.0 million, a -3.4% decrease, resulting in an Adjusted EBITDA margin of 21.2% (down 130 basis points).

Cash Flows (Six months ended June 27, 2026 vs June 28, 2025)

• Net cash provided by operating activities: $108.8 million (2026) vs $110.3 million (2025)
• Net cash used in investing activities: - $41.8 million (2026) vs - $62.0 million (2025)
• Net cash used in financing activities: - $50.8 million (2026) vs - $33.4 million (2025)
• Cash and cash equivalents and restricted cash at the end of the period: $826.5 million (2026) vs $722.8 million (2025)
• Interest paid: $52.0 million (2026) vs $56.8 million (2025)
• Income taxes paid: $39.3 million (2026) vs $54.7 million (2025)

Balance Sheet (As of June 27, 2026 vs December 31, 2025)

• Cash and cash equivalents: $823.5 million (2026) vs $812.1 million (2025)
• Total assets: $7,392.8 million (2026) vs $7,151.4 million (2025)
• Total liabilities: $3,498.6 million (2026) vs $3,462.2 million (2025)
• Total shareholders’ equity: $3,521.9 million (2026) vs $3,334.0 million (2025)

2026 Guidance

Gates Industrial Corporation Ltd. is raising its full-year 2026 financial guidance, projecting core sales growth of 2.5% to 4.5% and Adjusted EBITDA of $800 million to $830 million. Capital expenditures are expected to remain at approximately $120 million, with free cash flow conversion at 90%+.