Applied Industrial Technologies said fiscal 2025 was a “meaningful year” as the company delivered solid sales, earnings, and cash generation, CEO Neil Schrimsher noted during the company’s earnings call.
“We executed well in a slower demand environment while positioning the company for long-term success through several acquisitions and internal growth investments,” Schrimsher said.
In the three months ending June 30, sales rose to $1.225 billion from $1.161 billion a year earlier, a 5.5% increase. Net income for the quarter climbed to $107.8 million from $103.5 million last year, up 5.9%, as stronger demand in the Engineered Solutions segment offset softness in the service center business.
For the full year, sales reached $4.56 billion, up 1.9% from $4.48 billion in fiscal 2024. Net income for the year totaled $39 million, compared with $385.8 million last year, an increase of 1.9%.
Applied’s market value now exceeds $10 billion. Applied Industrial’s engineered solutions returned to organic growth, led by technology and automation. “Our ES teams capitalized on recent order strength as well as improving demand and business development efforts across several key growth verticals. This includes double-digit organic growth across our technology vertical and mid-single-digit organic growth across our automation platform during the quarter,” he said.
Looking ahead, Schrimsher expressed cautious optimism for fiscal 2026. “We’re encouraged by recent sales momentum, which could accelerate given the underpinnings of various secular tailwinds and deferred customer spending the past 18 months. That said, we’re taking a prudent approach to our initial outlook pending greater clarity on trade policy, interest rates, and broader macro conditions,” he said.
Schrimsher emphasized the company’s long-term strategy. “Our technical industry position, manufacturing domain expertise, and aligned strategy provide a compelling long-term growth and margin expansion opportunity. We believe this backdrop, combined with our compounding cash generation and balance sheet capacity, supports double-digit compounded earnings and dividend growth long term,” he said.
He also noted that Applied plans to remain active in acquisitions and shareholder returns. “In addition, we expect to remain active in mergers and acquisitions (M&A), share buybacks, and dividend growth,” Schrimsher said.
Despite mixed market conditions, the CEO said he sees early signs of improvement. “While end market visibility remains limited and mixed, we believe the underlying backdrop improved modestly from last quarter. Industrial activity and customer spending behavior are starting to pick up to some degree,” he said.
Applied’s segments are positioned to benefit as market conditions improve. “Our service center segment is favorably positioned to benefit from these positive tailwinds, particularly across heavy manufacturing, machinery, mining, metals, and aggregates. Across Engineered Solutions, underlying demand fundamentals are notable across technology and discrete automation, which combined represent more than 25% of segment sales today,” Schrimsher said.
He concluded with a focus on continuity and long-term growth. “We look forward to building on our performance in fiscal 2026 and beyond as our evolution continues to unfold,” Schrimsher said.
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