Fluid power, power transmission and automation products distributor Applied Industrial Technologies reported its 2025 fourth quarter and full-year financial results on Aug. 14, which showed a sales increase and a return to organic growth for the April-June period.

4Q Results

Cleveland-based Applied posted total sales of $1.2 billion, up 5.5% year-over-year. Acquisitions (+6.5%) drove the increase, partially offset by -0.8% from one fewer selling day and a -0.4% impact from foreign currency translation. Applied said that pricing contributed over 100 basis points to 4Q sales growth year-over-year and is expected to slowly increase in its fiscal 2026.

Excluding those factors, organic daily sales increased 0.2% year-over-year, including a 1.8% improvement in the Engineered Solutions segment and a 0.4% decline in the Service Center segment. The overall increase in organic sales followed declines of 3.1% in 3Q, 3.4% in 2Q and 3.0% in 1Q.

MDM’s 2Q25 MarketPulse Report (store link) 

Applied’s 2Q net profit of $107.8 million increased 4.2% year-over-year, while EBITDA of $153 million was flat. Gross margin of 30.6% dipped 10 only basis points year-over-year despite a 21-point LIFO headwind.

“We ended fiscal 2025 on an encouraging note with fourth quarter sales and EPS exceeding our expectations,” Applied President and CEO Neil Schrimsher said in the company’s financial release. “Sales returned to positive organic growth with underlying trends improving as the quarter progressed. This was driven by stronger-than-expected Engineered Solutions segment sales where our teams executed exceptionally well, including capitalizing on recent order strength and firming demand across several verticals. Service Center segment sales held steady against the muted end-market backdrop with sequential trends seasonally strong.”

Full-Year Results

For its full-year financials, Applied reported total sales of $4.6 billion, up 1.9% year-over-year, while sales declined 2.3% on an organic daily basis.

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Gross margin of 30.3% improved 40 basis points annually, while operating profit of $498 million narrowly topped 2024’s $495 million.

EBITDA of $562 million increased from 2024’s $553 million, with margin of 12.3% down 10 bps year-over-year.

2026 Outlook

The company released its 2026 full year outlook, with expectations of total sales up 4-7%, including an organic increase between 1-4%. EBITDA margins are expected to be between 12.2-12.5%.

Schrimsher added: “While we are encouraged by recent sales momentum heading into fiscal 2026, we are taking a prudent approach to our initial outlook pending greater clarity on trade policy, interest rates and broader macro conditions. That said, as our recent results show, we are in a strong position to manage through various macro and trade scenarios as they develop. In addition, we expect another meaningful year of cash generation supporting ongoing M&A, share buybacks and dividend growth. Lastly, our technical industry position, manufacturing domain expertise and aligned strategy provide a compelling long-term growth and margin expansion opportunity as various secular and structural tailwinds continue to develop across the U.S. industrial economy.”

In the Store: MDM’s U.S. MRO Market Trends Report 

Applied was ranked No. 7 on MDM’s 2025 Top Distributors List for Industrial Supplies, No. 11 for MRO, No. 2 for Power Transmission/Bearings, No. 7 for Industrial PVF, No. 1 for Fluid Power and No. 10 for Fasteners.