10-Q · May 7, 2026
Regal Rexnord reported better-than-expected Q1 2026 earnings with revenues of $1.479 billion and EPS of $2.17, surpassing estimates. The Automation & Motion Control segment showed significant growth, driving overall…
Earnings analysis · 10-Q
RRX earnings analysis
Filed November 3, 2026 · Our reading of the company's report
The latest report
Regal Rexnord delivered strong 6.1% revenue growth to $1,588.0 million, led by 24.5% AMC growth and data center demand, while IPS declined and PES remained nearly flat organically. Gross margin was broadly stable at…
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Regal Rexnord delivered strong 6.1% revenue growth to $1,588.0 million, led by 24.5% AMC growth and data center demand, while IPS declined and PES remained nearly flat organically. Gross margin was broadly stable at 37.2%, but operating margin fell to 5.1% and the company reported a $12.5 million attributable net loss because of $119.3 million of AMC goodwill impairment. Balance-sheet liquidity remains adequate, although cash declined to $449.6 million and inventories rose to $1,392.7 million. Overall sentiment is neutral: operating momentum in AMC and lower interest expense are offset by impairment-driven GAAP losses, uneven end-market demand, and working-capital usage.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
Where revenue came from
The business segments reported by the company.
Shares of the segments disclosed in this filing, largest first.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
What stood out
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Revenue growth accelerated on AMC strength
Third-quarter revenue increased 6.1% year over year to $1,588.0 million, including 24.5% growth in AMC to $500.6 million. Revenue was approximately $28.0 million above the $1.56 billion 2026 Q2 level.
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AMC and data center demand remained strong
AMC organic sales increased 25.2%, driven by data center and discrete automation demand; data center included $25.0 million of E-Pod sales. Nine-month AMC sales rose 18.7% to $1,435.4 million.
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Gross profit benefited from tariff refunds
Consolidated gross profit increased 6.5% year over year to $590.2 million, and gross margin improved to 37.2% from 37.0%, helped by $17.8 million of IEEPA tariff refunds.
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IPS and PES operating income improved
IPS generated $88.6 million of operating income, up from $86.1 million, while PES operating income increased to $74.1 million from $65.6 million. PES gross margin improved to 32.5% from 30.4%.
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Lower debt reduced interest expense
Interest expense declined 11.5% year over year to $77.0 million in the quarter, and nine-month interest expense declined 10.5% to $234.9 million, primarily due to lower outstanding debt.
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Liquidity supports planned capital spending
Operating cash flow was $411.4 million for the first nine months of 2026, while management expects approximately $110.0 million of full-year 2026 capital spending and believes existing facilities provide sufficient capacity for the remainder of the year.
What to watch
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Goodwill impairment drove GAAP deterioration
Consolidated operating margin fell to 5.1% from 11.6% year over year and from 13.8% in 2026 Q2. AMC recorded an $81.3 million operating loss versus $22.7 million of operating income, largely because of a $119.3 million goodwill impairment.
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Quarterly GAAP earnings turned negative
The company recorded a $12.3 million consolidated net loss and a $12.5 million loss attributable to Regal Rexnord, versus $80.0 million and $79.6 million of profit, respectively, in the prior-year quarter. The effective tax rate rose to 216.0% from 12.9%.
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Industrial and residential demand remain uneven
IPS sales declined 1.9% to $649.5 million in the quarter, with management citing weakness in metals and mining. PES organic sales increased only 0.4% in the quarter, while nine-month organic sales declined 5.4% amid residential HVAC and pool weakness.
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Working capital absorbed cash
Cash and equivalents declined to $449.6 million from $521.7 million at December 31, 2025, while trade receivables increased to $584.7 million and inventories increased to $1,392.7 million from $1,321.7 million.
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Variable-rate and currency exposure persists
The company had $768.8 million of variable-rate debt and no outstanding interest-rate swaps at September 30, 2026. It also had $268.8 million drawn on the 2025 Revolving Facility, including $260.9 million of euro-denominated borrowings.
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AMS sale increases impairment risk
Management stated that risk factors had not changed materially from the 2025 Form 10-K. However, the quarter included $95.5 million of goodwill impairment testing charge plus an additional $23.8 million impairment for AMS, which was classified as held for sale.
Management's outlook
The 10-Q does not provide numeric revenue or EPS guidance. Management anticipates approximately $110.0 million of 2026 capital spending and expects to fund the remaining spending with operating cash flow.
Earlier filings 4
10-K · February 20, 2026
Regal Rexnord reported FY2025 net sales of $5,934.5 million (down 1.6% vs. 2024) with expanding gross margin to 37.4% and operating margin to 11.5%, driving GAAP diluted EPS of $4.22 and operating cash flow of $990.8…
10-Q · October 30, 2025
Regal Rexnord reported Q3 net sales of $1,497.0 million, up $19.6 million (+1.3%) versus Q3 2024, with gross profit of $554.2 million (37.0% gross margin) and income from operations of $174.4 million (≈11.7% operating…
10-K · February 21, 2025
Regal Rexnord positions itself around three operating segments (IPS, PES, AMC) and pursues profitable growth via 80/20 initiatives, the Regal Rexnord Business System (RBS), product innovation (aiming to double new…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.