ESCO Technologies Inc. reported fourth‑quarter and full‑year 2025 results that surpassed analyst expectations, with revenue rising 28.9% to $353 million and adjusted earnings per share climbing 29.6% to $2.32. The $0.18 per‑share beat—above the consensus range of $2.13 to $2.16—underscores the company’s ability to generate higher top‑line growth while maintaining profitability. The quarter’s performance was driven by a 71.6% jump in Aerospace & Defense sales to $170.4 million, a 9.6% increase in Test segment revenue to $72.1 million, and modest growth in the Utility Solutions Group, all of which benefited from the recent integration of ESCO Maritime Solutions.
The Maritime acquisition has become a key growth engine, contributing record sales, orders, and backlog in the first full quarter of operation. The company also realized an after‑tax gain of $173 million from the July 18, 2025 divestiture of VACCO Industries, and earned $1.1 million from discontinued operations related to that sale. These gains, combined with the strong performance of the new maritime business, helped lift adjusted EPS and support the company’s margin expansion.
Adjusted EBIT margin expanded to 23.9%, up 100 basis points from 22.9% a year earlier. The improvement reflects pricing power in high‑margin defense contracts and operational leverage as the company scales its integrated solutions, while inflationary cost pressures and a mix shift toward lower‑margin segments were partially offset by disciplined cost management.
For fiscal 2026, ESCO guided revenue growth of 16% to 20%, targeting $1.27 billion to $1.31 billion, and adjusted EPS of $7.50 to $7.80—an increase of 24% to 29% from FY2025. The guidance signals management’s confidence in sustained demand across defense and utility markets, as well as continued cost discipline and the ongoing integration of the maritime platform.
CEO Bryan Sayler described the quarter as “truly transformative,” noting the maritime business’s “significant impact” on top and bottom line results and the strategic sharpening of the company’s focus on aerospace and Navy end markets. CFO Christopher Tucker added that the company expects 2026 to continue these positive trends, citing margin expansion and the 30% year‑over‑year rise in adjusted EPS as evidence of operational excellence.
Investors reacted positively after the earnings release, with the company’s guidance and earnings beat driving a surge in after‑hours trading. The market’s initial dip in regular trading was likely a broader market move, but the strong results and forward outlook reinforced confidence in ESCO’s strategic trajectory, despite headwinds in the renewables sector such as declining wind orders.
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