RRX

Regal Rexnord is working through the digestion of its large acquisitions, and FY2025 shows a margin-and-deleveraging recovery story. Net income jumped 42.5% to $280M (EPS $4.20, +42.9%) and operating income rose 8.1% to $681M even as revenue slipped 1.6% to $5.93B — so the earnings gain came from mix and cost discipline, not volume. The standout is cash: operating cash flow surged 62.6% to $991M, which the company used to cut long-term debt 12.6% to $4.76B while lifting cash 32.6% to $522M. That deleveraging is the right priority for a company that took on heavy debt to build out its industrial-machinery portfolio.

The quality picture is still mid-recovery. A 37.4% gross margin and 11.5% operating margin are respectable, but net margin is only 4.7% and ROE just 4.1% — the latter weighed down by a large equity base ($6.84B) and the amortization burden from past deals. The five-year history is choppy (a $57.4M loss in FY2023, $196M in FY2024), so FY2025's $280M is encouraging but not yet proof of a durable trend, especially with revenue still declining.