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Gates Industrial (76P) Q3 2026 Earnings Report

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DE:76P Q3 2026 EPS Results

Actual EPS
EUR 0.42
Consensus EPS
EUR 0.39
Beat/Miss
Beat by +EUR 0.03
One Year Ago EPS
EUR 0.35

DE:76P Q3 2026 Revenue Results

Actual Revenue
EUR 809.08M
Expected Revenue
EUR 810.13M
Beat/Miss
Missed by -EUR 1.05M
YoY Revenue Growth
+5.60%

Earnings Announcement Details

Quarter
Q3 2026
Date
10/30/2026
Time
Before Open
Conference Call
Friday, October 30, 2026
DE:76P Upcoming Earnings

Gates Industrial's next earnings date is estimated for February 11, 2027, based on past reporting schedules.

Q3 2026 Earnings Call Audio

DE:76P Q3 2026 Earnings Call
0:00 / 0:00

Q3 2026 Earnings Slide Deck

Q3 2026 Earnings Call Summary

Q3 2026
Earnings Call Date:Oct 30, 2026|% Change Since:-1.90%|
Earnings Call Sentiment|Positive

The call was strongly positive. Gates reported record adjusted EBITDA margin and adjusted EPS, broad-based industrial growth, improving North American demand, strong cash generation and raised full-year EBITDA and EPS guidance. The main challenges were normal fourth-quarter seasonality, price-cost and variable-compensation headwinds, continued agriculture and selected regional or automotive weakness, and near-term profitability dilution from the belts acquisition. Management nevertheless expressed confidence in the industrial recovery, strategic investments, 2027 setup and continued margin expansion.

Company Guidance

For 2026, Gates reiterated second half core sales growth of approximately 6% at the midpoint and second half adjusted EBITDA margin of approximately 23.5%, while anticipating double-digit growth in adjusted earnings per share at the midpoint for the year; full year core sales growth is expected in the range of 3.2% to 3.8%, maintaining the 3.5% midpoint, total growth of approximately 5% at the midpoint, adjusted EBITDA in the range of $809 million to $823 million, and adjusted earnings per share in the range of $1.66 per share to $1.72 per share, a $0.03 per share increase relative to the prior guidance midpoint. For the fourth quarter, total sales are estimated in the range of $905 million to $925 million, core revenue growth is expected to be approximately 6.5% at the midpoint, and adjusted EBITDA margin is anticipated to increase about 120 basis points at the midpoint; guidance for capital expenditures and free cash flow conversion is unchanged, with the company still comfortable with its 90-plus percent conversion number and anticipating record second half adjusted EPS of approximately $0.90 per share using the midpoint of its updated guidance.

  • Strong Third-Quarter Sales GrowthThird-quarter sales were approximately $904 million, representing total growth of 5.6% and core growth of 5.5%, driven by continued strength in industrial markets.
  • Record Adjusted EBITDA Margin and EPSAdjusted EBITDA was $215 million, up 10%, while adjusted EBITDA margin increased 90 basis points to a company-record 23.8%. Adjusted EPS increased approximately 21%, from $0.39 to a quarterly-record $0.47.
  • Strong Industrial End-Market GrowthGlobal industrial end markets grew at a high-single-digit rate. Diversified industrial sales increased high single digits, the end market's strongest growth since the fourth quarter of 2022.
  • Broad-Based End-Market PerformanceGrowth was broad-based, with the majority of end markets growing. Commercial on-highway sales expanded more than 20%, and global personal mobility sales increased approximately 35%.
  • Improving Industrial Demand and Book-to-BillIndustrial core growth accelerated to high single digits from mid-single digits in the prior quarter, led by OEM channel strength, while industrial aftermarket growth also improved. Global book-to-bill remained above 1x for the quarter.
  • North America Growth InflectionNorth American growth accelerated exiting the quarter. North American industrial OEM sales grew more than 20%, and industrial aftermarket sales increased high single digits, with industrial aftermarket growth accelerating into the low teens as the quarter progressed.
  • Power Transmission Segment GrowthPower Transmission sales were approximately $560 million and increased 5.2% on a core basis. Industrial OEM grew high teens, personal mobility increased approximately 40% with contributions from all major regions, and commercial on-highway expanded more than 20%.
  • Power Transmission Margin ExpansionPower Transmission adjusted EBITDA margin was 24.5%, an increase of 160 basis points, driven by operating leverage from volume growth and strong operating performance.
  • Fluid Power Segment GrowthFluid Power sales were approximately $343 million and grew over 6% on a core basis. Industrial OEM demand strengthened, commercial on-highway increased more than 20%, construction grew high single digits, and agriculture increased mid-single digits sequentially.
  • Data Center Revenue ExpansionData center revenues increased about 2.5x compared with the prior year's third quarter. Gates continued expanding its product offering and customer base and expects material growth as liquid-cooling adoption accelerates.
  • Segment Gross-Margin ImprovementFluid Power segment gross margins improved 130 basis points year over year, driven by volume growth and execution on enterprise initiatives.
  • Solid Regional GrowthAll three regions posted core growth: Americas increased 5.2%, EMEA grew 4.6%, and APAC grew 7.5%. APAC was fueled by double-digit growth across industrial channels, while EMEA benefited from double-digit automotive aftermarket growth.
  • Operating Performance Drove EPS GrowthImproved operating performance contributed approximately $0.08 to the year-over-year adjusted EPS increase. A lower tax rate, favorable interest expense and other items contributed another $0.01.
  • Strong Cash Generation and Balance SheetTrailing 12-month free cash flow conversion was 82%, and management expects it to increase nicely in the fourth quarter in line with historical seasonality. Net leverage improved approximately 0.2 turns to 1.8x.
  • Share Repurchases and Capital OptionalityGates repurchased approximately $57 million of its shares in the third quarter. Management described the capital structure as strong, with significant optionality to deploy capital.
  • High Return on Invested CapitalTrailing 12-month return on invested capital was 21.5%. Management said business investments are beginning to pay dividends and anticipates higher returns on capital over the midterm.
  • Raised Full-Year Earnings GuidanceFull-year adjusted EBITDA guidance was increased to $809 million-$823 million, and adjusted EPS guidance was raised to $1.66-$1.72, a $0.03 increase relative to the prior guidance midpoint. The company now anticipates double-digit adjusted EPS growth at the midpoint.
  • Maintained Core Sales OutlookFull-year core sales growth guidance was narrowed to 3.2%-3.8% while maintaining the 3.5% midpoint. Total growth is estimated at approximately 5% at the midpoint.
  • Positive Fourth-Quarter OutlookFourth-quarter sales are expected to be $905 million-$925 million, with core revenue growth of approximately 6.5% at the midpoint and adjusted EBITDA margin expected to increase about 120 basis points at the midpoint.
  • Record Second-Half Earnings ExpectedManagement reiterated second-half adjusted EBITDA margin of approximately 23.5% and expects record second-half adjusted EPS of approximately $0.90 per share using the midpoint of updated guidance.
  • Strategic Growth Investments ContinuingGates is continuing to invest in data center capabilities, including R&D, production scale-up and additional capacity across fluid conveyance, hoses, couplings and pumps. R&D and sales investments increased during the quarter.
  • Personal Mobility Growth OpportunityPersonal mobility growth was broad-based across major regions. Gates has broadened its product portfolio and expects a 20%-30% growth trajectory over a long period, while noting that individual quarters will vary.
  • Product Development PipelineManagement expects NPI vitality to reach the low 20s and cited new products across fluid conveyance, pumps, couplings, data center applications, personal mobility and industrial markets.
  • Data Center Customer EngagementGates is ramping production of e-water pumps with a large North American server manufacturer and has exposure to several hyperscalers and infrastructure builders.
  • Improving Agriculture SetupManagement said agriculture activity is gradually improving and expects the agriculture end market could experience a steady recovery during 2027.
  • Enterprise Initiatives Supporting ProfitabilityManagement expects enterprise initiatives 2.0 to support continued profitability improvement while shifting greater focus toward above-market growth. Gross margin has steadily improved over the past several years.
  • Disciplined M&A ApproachManagement plans to lean more toward strategic inorganic investments over the midterm but emphasized that transactions must offer appropriate returns and be accretive, with no intention of overpaying on multiples.
  • Positive Transition of Belts AcquisitionThe belts acquisition closed at the beginning of the fourth quarter. Management said the Timken and Gates teams executed the transition well and expects more meaningful revenue contribution in 2027, estimated at approximately 100 basis points of company revenue.
  • Supply PreparednessGates added raw-material safety stock to support customer supply assurance and plans to convert it into finished-goods inventory through the third and fourth quarters, positioning the company for an expected uptick in 2027.
  • Upcoming Capital Markets DayGates will hold its first Capital Markets Day in more than 2.5 years on November 19 at the New York Stock Exchange, where it plans to present its strategic vision, recent accomplishments, new products and demonstrations.

DE:76P Earnings History

DE:76P earnings history
Report DateFiscal QuarterForecast / EPSLast Year's EPSEPS YoY ChangePress Release
Feb 11, 20272026 (Q4)―-0.34――
Oct 30, 20262026 (Q3)0.390.420.3520.51% (+0.07)
Jul 31, 20262026 (Q2)0.370.600.3571.79% (+0.25)
May 01, 20262026 (Q1)0.290.310.32-2.78% (-0.01)
Feb 12, 20262025 (Q4)0.330.340.325.56% (+0.02)
Oct 29, 20252025 (Q3)0.330.350.318.18% (+0.05)
Jul 30, 20252025 (Q2)0.340.350.328.33% (+0.03)
Apr 30, 20252025 (Q1)0.300.320.2816.13% (+0.04)
Feb 06, 20252024 (Q4)0.300.320.35-7.69% (-0.03)
Oct 30, 20242024 (Q3)0.270.300.31-5.71% (-0.02)

The table shows recent earnings report dates and whether the forecast was beat or missed. See the change in forecast and EPS from the previous year.

Beat Missed