Record Quarterly and Annual Financial Results
Q4 sales reached a record $2.0B, up 13% year-over-year; full-year 2025 sales were $7.4B, up 7% versus 2024. The company established records for sales, orders, operating income, EBITDA, diluted EPS, operating cash flow and free cash flow in the quarter and set annual records for sales, operating income, operating margin, EBITDA and diluted EPS.
Strong Orders, Backlog and Organic Momentum
Q4 orders were a record $2.0B, up 18% year-over-year (organic orders +7%), producing a record backlog of $3.58B. Management reported improving sales and orders growth throughout 2025 with the strongest quarter in Q4 and continued solid order activity into January.
Profitability and Margin Expansion
Q4 operating income was a record $523M, up 12% year-over-year. Q4 operating margin was 26.2% and core operating margin 27.6% (core margins +100 bps in the quarter). Full-year core margins were up ~80 bps and EBITDA for the quarter was $618M (+10% YoY) with a 30.9% EBITDA margin.
Record Cash Generation and Strong Cash Conversion
Q4 free cash flow was a record $527M, up 6% YoY, with quarterly free cash flow to net income conversion of 132%. Full-year 2025 free cash flow was $1.7B with conversion of 113% of net income; 2026 conversion is guided at 110–115%.
Earnings Per Share Execution
Q4 diluted EPS was a record $2.01, up 7% YoY and above guidance; adjusted for an abnormally low prior-year tax rate, EPS grew ~11% on a 5% organic sales increase. Full-year 2025 diluted EPS was $7.43, up 9% versus the prior year.
Segment-Level Strength — EMG
Electromechanical Group (EMG) Q4 sales were $629M (+15% YoY) with organic sales +14%. EMG operating income was $142.5M (+28% YoY) and operating margins expanded to 22.7% (+240 bps YoY). Management noted broad-based double-digit organic growth across EMG divisions in Q4.
Segment-Level Strength — EIG Improvements
Electronic Instruments Group (EIG) Q4 sales were $1.37B (+13% YoY); organic sales were positive at +2% in Q4 (improvement through the year). EIG operating income was a record $413.7M (+7% YoY) and core operating margins improved to 32.3% (+50 bps).
Geographic and End‑market Diversification
Geographic growth: Asia up 10% (China low double-digits), US and international up mid-single digits. Aerospace & defense delivered low double-digit growth in the quarter and is expected to produce high single-digit organic growth in 2026. Process, power and automation businesses showed improving trends.
Active, Disciplined Capital Deployment
2025 capital deployment included acquisitions (Ferro, Kern), $443M of share repurchases, and dividends; the firm deployed >$1.8B and retains capacity to deploy >$5B while preserving an investment-grade rating. Management reiterated M&A as top priority and a strong pipeline.
Innovation Investment and Product Vitality
Incremental R&D/engineering/sales investments of $90M in 2025 (guiding $100M incremental in 2026). Vitality index (sales from new products over last 3 years) was 30% in Q4, highlighting strong new-product contribution and commercial traction (e.g., Spectro new product family).