Westinghouse Air Brake Technologies(WAB) - 2025 Q4 - Annual Results

Financial Performance - Fourth quarter 2025 sales reached $2.97 billion, representing a 14.8% year-over-year increase[1] - Adjusted earnings per diluted share for Q4 2025 were $2.10, up 25.0% compared to the same quarter last year[4] - Full year 2025 sales totaled $11.17 billion, an increase of 7.5% year-over-year[4] - Net income attributable to Wabtec shareholders for 2025 was $1,170 million, a 10.8% increase from $1,056 million in 2024[29] - The adjusted net income for Q4 2025 was $358 million, translating to an adjusted EPS of $2.10, compared to the reported EPS of $1.18[37] - The adjusted net income for the year-to-date 2025 was $1,537 million, resulting in an adjusted EPS of $8.97, compared to the reported EPS of $6.83[37] - Wabtec Corporation reported Q4 2025 consolidated results with an EBITDA of $590 million, up from $486 million in Q4 2024, reflecting a 21.4% increase[43] - Wabtec's total EBITDA for the year 2025 was $2,464 million, compared to $2,148 million in 2024, marking a 14.7% increase[43] Backlog and Future Growth - The multi-year backlog reached a record $27 billion, up 23% from the previous year, providing strong visibility for future growth[5] - Total backlog as of December 31, 2025, was $27,407 million, an increase from $25,577 million at the end of 2024[30] - The company announced 2026 financial guidance with adjusted earnings per share expected to be between $10.05 and $10.45, a 14% increase at the midpoint[5] Cash Flow and Liquidity - Full year cash from operations was $1.76 billion, with a cash conversion rate of 104%[5] - Cash, cash equivalents, and restricted cash at the end of Q4 2025 totaled $0.79 billion, with total available liquidity of $3.21 billion[14] - In Q4 2025, Wabtec Corporation reported cash from operations of $992 million, resulting in a cash conversion rate of 292%[51] - For the year-to-date (YTD) in Q4 2025, cash from operations totaled $1,759 million, with a cash conversion rate of 104%[51] - The cash conversion metrics indicate a strong operational efficiency trend for Wabtec Corporation over the reported periods[51] - The consistent cash conversion rates above 100% highlight the company's ability to convert net income into cash effectively[51] Segment Performance - Freight segment sales increased by 18.3% in Q4 2025, driven by higher locomotive deliveries and digital sales growth of 74.4%[9] - The transit segment reported a 6.7% increase in sales for Q4 2025, attributed to strong original equipment and aftermarket sales[13] - Freight segment net sales for Q4 2025 were $2,123 million, up 18.3% from $1,794 million in Q4 2024[30] - Transit segment net sales for Q4 2025 were $842 million, a 6.7% increase from $789 million in Q4 2024[30] - The Freight Segment's adjusted gross profit margin improved to 34.5% in Q4 2025, compared to 31.0% in Q4 2024[46] - The Transit Segment's adjusted gross profit margin was 31.6% in Q4 2025, up from 30.6% in Q4 2024[46] - Digital Intelligence revenue in the Freight Segment grew to $361 million in Q4 2025, a significant increase from $207 million in Q4 2024[45] Shareholder Returns - The board increased the quarterly dividend by 24% to $0.31 per share and raised the share buyback authorization to $1.2 billion[5] Operational Efficiency - Wabtec's operating expenses for Q4 2025 were $610 million, reflecting ongoing investments in operational efficiency[37] - The company continues to demonstrate robust cash generation capabilities, as evidenced by the high cash conversion rates across both years[51] - Wabtec Corporation's financial performance reflects effective management of operational cash flows, supporting future growth initiatives[51]