Regal Rexnord Corp
NYSE:RRX
Regal Rexnord Corp
Regal Rexnord Corporation is a compelling narrative in the world of manufacturing, embodying the spirit of precision and efficiency that underpins the industrial engine. Born from the union of Regal Beloit Corporation and Rexnord's Process & Motion Control business, this company is woven into the fabric of machines and systems across a wide array of industries. Its extensive portfolio spans motors, bearings, gearing, conveying systems, and electronic drives—integral components that propel everything from factory automation to HVAC systems and beyond. Through these products, Regal Rexnord finds its strength: providing solutions that improve performance and energy efficiency, thereby adding value to clients' operations in almost every industrial sector.
The company thrives on its ability to innovate and customize, aligning perfectly with the dynamic needs of its diverse clientele. It capitalizes on both direct sales and a broad distribution network, ensuring its technology reaches end-users in a seamless manner. Their geographical footprint is extensive, allowing them to harness global market trends and mitigate risks associated with regional economic fluctuations. A crucial element of their business model is their focus on aftermarket services and support, which not only secures customer loyalty but also generates a steady stream of recurring revenue. By emphasizing both product excellence and customer relationships, Regal Rexnord has sculpted a robust business that effectively marries engineering precision with financial acumen.
Regal Rexnord Corporation is a compelling narrative in the world of manufacturing, embodying the spirit of precision and efficiency that underpins the industrial engine. Born from the union of Regal Beloit Corporation and Rexnord's Process & Motion Control business, this company is woven into the fabric of machines and systems across a wide array of industries. Its extensive portfolio spans motors, bearings, gearing, conveying systems, and electronic drives—integral components that propel everything from factory automation to HVAC systems and beyond. Through these products, Regal Rexnord finds its strength: providing solutions that improve performance and energy efficiency, thereby adding value to clients' operations in almost every industrial sector.
The company thrives on its ability to innovate and customize, aligning perfectly with the dynamic needs of its diverse clientele. It capitalizes on both direct sales and a broad distribution network, ensuring its technology reaches end-users in a seamless manner. Their geographical footprint is extensive, allowing them to harness global market trends and mitigate risks associated with regional economic fluctuations. A crucial element of their business model is their focus on aftermarket services and support, which not only secures customer loyalty but also generates a steady stream of recurring revenue. By emphasizing both product excellence and customer relationships, Regal Rexnord has sculpted a robust business that effectively marries engineering precision with financial acumen.
Strong Data Center Orders: Regal Rexnord secured approximately $735 million in new e-Pod orders, significantly exceeding its previously discussed pipeline and boosting backlog by 50% year-over-year.
Solid Q4 Results: Fourth quarter sales rose 2.9% organically and adjusted EPS grew 7.3% to $2.51, aligning with expectations. Adjusted gross margin increased by 50 basis points to 37.6%.
Backlog & Momentum: Company backlog exited 2025 up 50% versus prior year, supporting positive momentum into 2026.
Data Center Growth: e-Pods business is expected to grow rapidly, with a path to $1 billion in sales over two years. Margins for this new business should start at 20%+ adjusted EBITDA.
2026 Guidance Issued: 2026 sales are guided to grow ~3%, with adjusted EPS expected in the range of $10.20 to $11 (midpoint $10.60, ~10% growth). Adjusted EBITDA margin is expected to improve by 50 bps to 22.5%.
Free Cash Flow Outlook: 2026 free cash flow guidance set at $650 million, down from earlier expectations due to working capital investments for data center projects.
Margin Stability Amid Headwinds: Company achieved margin stability in 2025 despite tariff, supply chain, and mix challenges. Tariff and rare earth impacts are expected to be mitigated by end of 2026.
CEO Search Update: The Board’s CEO search process is progressing, with an announcement expected soon.
