Regal Rexnord’s fourth quarter drew a positive market response, despite missing Wall Street’s revenue expectations. Management pointed to robust order growth across its data center, automation, and aerospace segments as key drivers behind the quarter’s performance. CEO Louis Pinkham credited the company’s large e-Pod solution wins in the data center market and a backlog up 50% year over year for the strong finish, stating, "Our team delivered solid fourth quarter performance, ending the year on a high note." The company also cited disciplined execution and ongoing synergy realization as supporting factors.
Is now the time to buy RRX? Find out in our full research report (it’s free for active Edge members).
Regal Rexnord (RRX) Q4 CY2025 Highlights:
- Revenue: $1.52 billion vs analyst estimates of $1.54 billion (4.3% year-on-year growth, 1.2% miss)
- Adjusted EPS: $2.51 vs analyst estimates of $2.48 (1.1% beat)
- Adjusted EBITDA: $328.5 million vs analyst estimates of $332.4 million (21.6% margin, 1.2% miss)
- Adjusted EPS guidance for the upcoming financial year 2026 is $10.60 at the midpoint, missing analyst estimates by 1.4%
- Operating Margin: 10.8%, up from 8.8% in the same quarter last year
- Organic Revenue rose 2.9% year on year (miss)
- Market Capitalization: $14.79 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Regal Rexnord’s Q4 Earnings Call
- Michael Halloran (Baird) asked about the profitability and long-term opportunity of the e-Pod data center business. CEO Louis Pinkham explained expected adjusted EBITDA margins above 20% and highlighted ongoing investments to scale the offering.
- Julian Mitchell (Barclays) questioned margin improvement in AMC and IPS segments amid flat performance. CFO Rob Rehard detailed the impact of rare earth magnet shortages and mix, noting expectations for margin recovery as supply normalizes.
- Jeffrey Hammond (KeyBanc Capital Markets) inquired about the potential shipping timeline for the large e-Pod orders and the mix of secular growth markets. Pinkham clarified that shipments could begin as early as late 2026 and that secular markets now comprise 40–50% of the business.
- Nigel Coe (Wolfe Research) sought clarity on e-Pod margin trajectory and raw material inflation protections. Pinkham confirmed hedging for copper and aluminum and said margins should start at 20% and improve as scale is achieved.
- Joseph Ritchie (Goldman Sachs) probed the customer base for e-Pods and content per megawatt. Pinkham stated the orders span multiple customers and projects, mainly among co-location and hyperscale operators, but declined to share specific content metrics.
Catalysts in Upcoming Quarters
In the months ahead, our analysts will monitor (1) execution and shipment timing for large data center e-Pod orders as capacity ramps; (2) progress on mitigating rare earth magnet and tariff impacts, tracking when margin neutrality is achieved; and (3) sustained growth and customer adoption in automation, robotics, and aerospace verticals. Success in managing working capital for data center projects will also be a key indicator of execution.
Regal Rexnord currently trades at $219.37, up from $178.30 just before the earnings. At this price, is it a buy or sell? The answer lies in our full research report (it’s free).
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