Tennant Company Q3 2025 Earnings: Resilience Amid Challenges

Tennant Company ((TNC)) has held its Q3 earnings call. Read on for the main highlights of the call.

Tennant Company, in its third-quarter earnings call for 2025, presented a mixed bag of results. While the company grappled with challenges in net sales and North American industrial demand, largely due to tariff uncertainties, it also showcased resilience through strategic advancements. The sentiment conveyed during the call was one of cautious optimism, underscored by strong adjusted EBITDA margin improvements, successful ERP modernization, and notable growth in both AMR robotics and EMEA orders.

Adjusted EBITDA Margin Improvement

Tennant Company reported a significant improvement in its adjusted EBITDA margin, achieving a 120 basis points increase. This was attributed to effective margin expansion strategies and disciplined expense management, highlighting the company’s focus on financial efficiency and operational excellence.

Shareholder Returns

The company demonstrated its commitment to shareholder value by returning $28 million through dividends and share repurchases. This included a notable 5.1% increase in the annual dividend, reflecting confidence in its financial health and future prospects.

EMEA Order Growth

Orders in the EMEA region saw an 8% year-over-year increase, driven by successful new product launches and optimized go-to-market strategies. This growth underscores Tennant’s ability to adapt and thrive in diverse markets.

ERP Modernization Success

Tennant successfully implemented its ERP system in the APAC region, enhancing its digital infrastructure. This modernization is expected to improve customer experiences and decision-making capabilities, positioning the company for future growth.

AMR Robotics Business Growth

The AMR robotics segment experienced a 9% sales increase and a 25% growth in unit volume, fueled by strategic customer wins and innovative product launches. This sector continues to be a bright spot for Tennant, indicating robust demand and technological advancement.

Net Sales Decline

Despite these successes, Tennant faced a 4% decline in net sales, totaling $303 million. This was primarily due to an 8.2% reduction in sales volumes across various geographies, highlighting ongoing market challenges.

North America Industrial Weakness

The industrial equipment sales in North America were adversely affected as customers delayed purchases amid tariff uncertainties. This sector remains a challenge for Tennant, requiring strategic navigation.

Net Income Decrease

The company’s GAAP net income decreased to $14.9 million from $20.8 million in the previous year. This decline was influenced by reduced sales volumes and increased costs related to ERP implementation and legal matters.

APAC Challenges

Sales in the APAC region dropped by 6.4%, with significant declines in commercial equipment volumes in China and industrial equipment volumes in South Korea. These challenges underscore the need for strategic adjustments in these markets.

Forward-Looking Guidance

Looking ahead, Tennant Company remains focused on achieving its full-year targets for net sales, EBITDA, and EPS, despite macroeconomic volatility and tariff challenges. The company projects organic growth slightly below its initial guidance range due to the euro’s impact on EMEA results. Tennant continues to address tariff-related cost pressures through supply chain adjustments and pricing actions, while also capitalizing on new product launches and ERP advancements.

In conclusion, Tennant Company’s third-quarter earnings call for 2025 highlighted a blend of challenges and strategic progress. While facing headwinds in sales and regional markets, the company demonstrated resilience through financial discipline, technological advancements, and shareholder returns. The overall sentiment was cautiously optimistic, with a focus on navigating current challenges while leveraging growth opportunities.