Full-Year Revenue and Segment Gains
Full-year revenues of $15.1 billion; DEWALT delivered low single-digit organic growth for the full year and aerospace fasteners/aerospace business grew strongly (aerospace fasteners +25% year; aerospace within engineered fastening +35% organic in Q4).
Adjusted Gross Margin Expansion
Full-year adjusted gross margin expanded 70 basis points to 30.7% in 2025; fourth-quarter adjusted gross margin was 33.3% (up ~210 bps year-over-year) and management expects ~150 bps year-over-year gross margin expansion in 2026.
Significant Cost Savings Realized
Completed global cost reduction program capturing $2.1 billion of run-rate pretax cost savings since mid-2022, including approximately $120 million of incremental savings in Q4.
Improved Profitability and Cash Generation
Full-year adjusted EBITDA grew ~5% with adjusted EBITDA margin up ~70 bps year-over-year; adjusted EPS grew 7% to $4.67 for 2025; free cash flow of $883 million in Q4 and $688 million for the year (above $600M plan).
Balance Sheet Deleveraging and Portfolio Simplification
Reduced debt by $240 million in 2025 and by $1.3 billion over two years; announced CAM/aerospace fastener sale for $1.8 billion (expected net proceeds $1.525–$1.6B) to materially reduce leverage (expected 1.0–1.25 turns reduction) and reach target leverage at/under 2.5x.
Q4 Price, FX and Margin Drivers
Fourth quarter pricing actions contributed +4% to revenue, a +2% currency tailwind, and management attributes margin gains to pricing, tariff mitigation and supply-chain cost reductions; Tools & Outdoor adjusted segment margin expanded 340 bps to 13.6% in Q4.
2026 Guidance and Strategic Targets
Management provided 2026 adjusted EPS guidance of $4.90–$5.70 (midpoint ~+13%), free cash flow target $700–$900M, revenue growth planned in low single digits, and reiterated objective to exceed 35% adjusted gross margin by 2026/2028 roadmap (35–37% by 2028).