Sign in

You're signed outSign in or to get full access.

HI

Hillenbrand, Inc. (HI)·Q4 2025 Earnings Summary

Executive Summary

  • Q4 revenue and adjusted EPS beat S&P Global consensus: $652.1M vs $594.1M* and $0.83 vs $0.61*, while pro forma revenue fell 5% YoY and adjusted EBITDA declined 12% YoY on a pro forma basis . Q4 adjusted EBITDA reported by the company was $107.9M; note definitional differences vs consensus EBITDA* .
  • Execution positives: APS margin resilient at 18.6% despite lower volumes and tariffs; MTS pro forma revenue grew 3% with 22.3% margin (down 30 bps) .
  • No Q4 call and no FY26 guidance due to pending $32.00 per-share all-cash acquisition by Lone Star (enterprise value ≈ $3.8B); near‑term stock likely anchored to merger spread/closing risk .
  • Backlog and cash dynamics remain key watch items: consolidated pro forma backlog down to $1.57B (−9% YoY), and FY25 operating cash flow fell to $56M on lower earnings and working capital timing .

Estimates marked with * are retrieved from S&P Global.

What Went Well and What Went Wrong

What Went Well

  • Revenue/EPS beat: Q4 revenue $652.1M and adjusted EPS $0.83 outperformed S&P Global consensus of $594.1M* and $0.61* respectively .
  • APS resilience: APS delivered $557.3M revenue (−6% YoY) with 18.6% adj. EBITDA margin (−120 bps) despite volume/mix/tariffs; management highlighted productivity and pricing as offsets .
  • Strategic momentum and portfolio simplification: “Over the past several years, Hillenbrand has transformed into a pure‑play global industrial company… We are excited about the pending acquisition by Lone Star” — CEO Kim Ryan . Also achieved $30M FHN cost synergies ahead of plan earlier in the year .

What Went Wrong

  • Softer demand and tariffs pressured profitability: Q4 adjusted EBITDA fell 25% (pro forma −12%) on lower volume, cost inflation, mix, and increased tariffs .
  • Backlog declined: APS backlog $1.52B (−10% YoY, −3% sequential), consolidated pro forma backlog $1.57B (−9% YoY), indicating continued slow order conversion .
  • Cash flow weaker: Q4 CFO $67.7M (−59% YoY) and FY25 CFO $56.2M (−71% YoY) due to lower earnings and working capital timing; leverage remained 3.7x on TTM adjusted EBITDA .

Financial Results

Consolidated performance by quarter

MetricQ2 FY25Q3 FY25Q4 FY25
Revenue ($M)$715.9 $598.9 $652.1
GAAP EPS$(0.58) $0.03 $1.07
Adjusted EPS$0.60 $0.51 $0.83
Adjusted EBITDA ($M)$98.8 $84.3 $107.9
Cash from Operations ($M)$1.3 (Q2) $(1.5) (Q3) $67.7 (Q4)

Segment breakdown

SegmentMetricQ2 FY25Q3 FY25Q4 FY25
APSRevenue ($M)$494.0 $507.0 $557.3
APSAdjusted EBITDA ($M)$78.9 $80.1 $103.8
APSAdjusted EBITDA Margin16.0% 15.8% 18.6%
MTSRevenue ($M)$221.9 (includes MIME) $91.9 (ex-MIME); $91.9 pro forma $94.8 (ex-MIME); $94.8 pro forma
MTSAdjusted EBITDA ($M)$32.2 $18.3 (adj); $18.3 pro forma $21.1 (adj); $21.1 pro forma
MTSAdjusted EBITDA Margin14.5% 19.9% (21.6% pro forma LY −170 bps) 22.3% (pro forma −30 bps YoY)

Note: Q2 includes the MIME business; Q3 and Q4 consolidated/MTS figures exclude MIME per company reporting .

Backlog and leverage KPIs

KPIQ2 FY25Q3 FY25Q4 FY25
APS Backlog ($M)$1,594.9 $1,569.6 $1,522.4
MTS Backlog ($M)$54.7 (organic) $54.6 (pro forma) $51.8 (pro forma)
Consolidated Pro Forma Backlog ($M)$1,653.1 $1,624.2 $1,574.2
Net Debt ($M)$1,458.3 $1,513.4 $1,360.0
Net Debt / TTM (Pro Forma) Adj. EBITDA3.4x 3.9x 3.7x

Q4 vs S&P Global consensus (headline beats/misses)

MetricConsensus*ActualResult
Revenue$594.1M*$652.1M Beat
Primary EPS$0.61*$0.83 Beat

Estimates marked with * are retrieved from S&P Global.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent (as of Q3)Change
Total RevenueFY2025$2.555B–$2.620B (Q2) $2.595B–$2.630B (Q3) Raised range
APS RevenueFY2025$1.980B–$2.030B (Q2) $2.005B–$2.030B (Q3) Raised low end
MTS RevenueFY2025$575M–$614M (Q2) $590M–$600M (Q3) Narrowed/raised low end
Adjusted EBITDAFY2025$363M–$395M (Q2) $370M–$385M (Q3) Tightened around mid
Adjusted EPSFY2025$2.10–$2.45 (Q2) $2.20–$2.35 (Q3) Tightened; midpoint maintained
Operating Cash FlowFY2025≈$120M (Q2) ≈$60M (Q3) Lowered
CapExFY2025≈$40M (Q2) ≈$40M (Q3) Maintained
FY2026 GuidanceFY2026n/aNot issuing FY2026 guidance (Q4) Withheld due to merger

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 FY25)Previous Mentions (Q3 FY25)Current Period (Q4 FY25)Trend
Tariffs & mitigationBuilt multi‑pronged plan (alt sourcing, surcharge pricing, contract terms); estimated ~$15M direct EBITDA impact for FY25; in‑region‑for‑region footprint reduces direct exposure Continued delays in large orders; implemented surcharges; early Q4 order uptick post quarter‑end Cited increased tariffs impacting mix/margins; no guidance; merger focus Stabilizing actions; ongoing headwind
Order intake/backlogOrder cadence weakened from March; APS backlog −15% YoY; cautious second‑half outlook APS book‑to‑bill dipped; some large plastics orders closed post Q3; MTS quoting up in India/China APS backlog $1.52B (−10% YoY, −3% seq); consolidated pro forma backlog −9% YoY Signs of stabilization, still below prior year
FHN (Food, Health & Nutrition)Achieved $30M cost synergies ahead of plan; strong quoting; parts/service stable Focus shifting to commercial/cross‑sell; ~$40M sold to date; leverage Coperion footprint Consolidated narrative only; portfolio transformation emphasized From cost synergy to commercial synergy
Pricing & marginsAPS pricing power under long‑term contracts; MTS pricing pressured in low‑demand environment APS margin 15.8% (−340 bps); MTS margin 19.9% (−170 bps pro forma) APS margin 18.6% (−120 bps); MTS pro forma margin 22.3% (−30 bps) Mixed: APS improving QoQ; MTS holding
Regional strategyIn‑region‑for‑region footprint to reduce exposure; exploring India as alternative hub Increased quoting in India/China; local‑for‑local product launches No call; reiterated transformation in release Execution continues; fewer disclosures due to merger

Management Commentary

  • “Our teams delivered strong results in the fourth quarter… [We] transformed into a pure‑play global industrial company… We are excited about the pending acquisition by Lone Star” — Kim Ryan, CEO .
  • On APS order dynamics (Q3 call): “Since the end of the third quarter, we've seen an uptick in market activity and have won several key orders… primarily on the plastics side” — CEO .
  • On tariff mitigation (Q2 call): “We have built a comprehensive multipronged strategy… including alternative sourcing… surcharge pricing… adjusting contract terms… in‑region, for‑region demand has greatly reduced our direct exposure” — CEO .
  • On FHN commercialization (Q3 call): “We sold about $40 million to date in cross selling… now… escalating the cross selling initiative and the systems selling initiative” — CEO .

Q&A Highlights

  • Order trends and backlog trajectory: Management cited a small dip in APS book‑to‑bill in Q3 with post‑quarter order wins in plastics; MTS backlog stable with improved quoting in India/China .
  • Tariff mitigation and pricing: Near‑term impact addressed via dual sourcing and targeted surcharges; APS contracts allow pass‑through over longer horizons, while MTS pricing remains competitive in low‑demand conditions .
  • Cash flow and leverage: Expect leverage to hover near current levels until orders/EBITDA recover; progress payments on large projects should normalize cash conversion as orders return .
  • FHN synergy and commercial traction: $30M run‑rate cost synergies achieved; management turning to system selling and cross‑selling through Coperion’s global footprint .

Estimates Context

  • S&P Global consensus (Q4 FY25): Revenue $594.1M*, Primary EPS $0.61*, each beaten by reported results (Revenue $652.1M; adj. EPS $0.83). Consensus EBITDA $96.8M* may not be directly comparable to company’s adjusted EBITDA of $107.9M due to definitional differences; S&P “actual” basis shows $91.2M*, underscoring the importance of measure alignment .
  • Estimate depth: EPS and Revenue each based on 3 estimates*.

Estimates marked with * are retrieved from S&P Global.

Key Takeaways for Investors

  • Fundamentals vs merger: Near‑term trading likely anchored to the $32.00 cash offer; fundamental beats in Q4 (revenue/EPS) matter less than merger timing/approvals .
  • APS resilience: Sequential rebound in APS with 18.6% margin despite headwinds suggests operating discipline and pricing/productivity levers are working .
  • Watch backlog/ordering cadence: Consolidated pro forma backlog drifted lower; confirmation of sustained order momentum (noted post‑Q3) would be a key catalyst for FY26 trajectory if the transaction were not to close .
  • Cash/leverage: FY25 CFO of $56M and 3.7x leverage underscore sensitivity to order timing; improvement hinges on order advances and progress payments .
  • MTS steadying: Pro forma revenue up 3% YoY in Q4 with 22.3% margin; continued local‑for‑local and product launches in Asia/India could support recovery as volumes return .
  • Tariff impact manageable: Mitigation playbook (dual sourcing, contract terms, surcharges) is in place; monitor for incremental policy shocks .
  • No FY26 guide and no Q4 call: Communication constrained by merger; investors should track regulatory milestones and shareholder vote timing .

Appendix: Additional Detail and Sources

  • Q4 2025 8‑K and press release (Exhibit 99.1): results, segment detail, backlog, leverage, non‑GAAP reconciliations .
  • Q4 2025 press release duplicating key figures and merger details .
  • Lone Star acquisition press release (Oct 15): $32.00 per share all‑cash, ~$3.8B EV; expected closing by end of Q1 CY2026 .
  • Prior quarters for trend analysis: Q3 2025 8‑K/PR/call ; Q2 2025 8‑K/PR/call .

Notes:

  • Hillenbrand did not conduct a Q4 FY25 earnings call and did not issue FY26 guidance given the pending acquisition .
  • All company performance figures are as reported by Hillenbrand; non‑GAAP items (adjusted EBITDA/EPS) exclude acquisition/divestiture/integration costs, restructuring, intangible amortization, pension, divestiture gains/losses, and specified tax items (see reconciliations) .
  • Estimates marked with * are retrieved from S&P Global.