Fluid power, power transmission and automation products distributor Applied Industrial Technologies reported its 2026 fiscal first quarter results on Oct. 28 for the three months ended Sept. 30, which showed an acceleration in sales and profitability that was boosted by pricing actions.

The Cleveland-based company posted total 1Q sales of $1.2 billion that increased 9.2% year-over-year, powered by a +6.3% impact from acquisitions alongside 3.0% organic growth. 1Q gross margin of 30.1% improved 55 basis points year-over-year and trailed 4Q’s 30.6%, while EBITDA of $146 million jumped 13.4% year-over-year on a 12.2% margin that improved 46 bps. Net profit of $101 million likewise increased 9.5% year-over-year.

Applied said 1Q’s pricing contribution was about 200 bps, doubling that of 4Q and running at the high end of the company’s 2026 full year guidance (150-200 bps), adding that the pricing outlook remains fluid given the evolving tariff backdrop.

Meanwhile, on the greater demand environment: “End market demand remains choppy and bifurcated given ongoing macro/tariff uncertainty, though customer sentiment and demand indications continue to gradually improve.”

Applied said 16 of its top 30 industry verticals grew year-over-year in 1Q26 compared to 15 in 4Q25. It saw the strongest growth across machinery, food & beverage, refining, pulp & paper, metals, oil & gas and aggregates, with weakness primarily in lumber & wood, mining, transportation, chemicals and utilities & energy.

On MDM’s 2025 Top Distributors Lists, Applied ranked No. 7 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.

By business segment in 1Q26

• Service Center (66% of revenue) — sales of $783 million increased 4.4% year-over-year, with organic sales up by that same amount. Applied said the increase was driven by ongoing internal initiatives, firming technical MRO demand, stronger pricing and favorable national accounts growth. Segment EBITDA of $109 million improved 10.1%.
• Engineered Solutions (34% of revenue) — sales of $417 million jumped 19.4%, essentially entirely driven by acquisitions led by Applied’s purchase of Hydradyne at the end of 2024 that added 33 locations across the southern/southeast United States. At the time, Applied said it was expecting Hydradyne to add around $260 million in sales and $30 million in EBITDA within the first 12 months.

Looking ahead, Applied is maintaining the guidance it issued in mid-August that call for full-year 2026 sales to improve 4-7%, including 1-4% organic growth and EBITDA margins of 12.2-12.5%.

“We remain constructive on our set-up and positive indications that continue to develop,” Applied President and CEO Neil Schrimsher said in the company’s 1Q report. “Customer sentiment continues to gradually improve, and we are making solid progress on various initiatives that are expanding new business funnels and growth opportunities.”

For its fiscal 2025 that ended June 30, Applied posted sales of $4.6 billion that improved 1.9% annually (-2.3% organic), gross margin of 30.3% that improved 40 bps and EBITDA margin of 12.3% that dipped 10 bps.