Donaldson Company, Inc. Q2 FY2026 earnings call

• Todd mentioned Donaldson achieved record sales in Q2 with strong customer demand across segments, high backlogs, and announced Facet acquisition. Rich discussed Q2 results with record sales, operating margin decline, and segment details. Brad talked about financials, gross margin challenges, and fiscal 26 outlook including sales guidance, margin revisions, and capital allocation priorities.

Mobile solutions: Sales were 557 million, up 2% driven by currency benefits. Aftermarket sales were $447 million, up 1%, with high single-digit growth in independent channel offset by OE channel declines. Off-road sales of $86 million increased 8%, on-road sales of 23 million decreased 9%. China sales up 18%. Industrial solutions: Sales were 260 million, a 2% increase. IFS sales of 223 million grew 7%, aerospace and defense sales were 37 million, down 19%. Life sciences: Sales of 80 million increased 16% due to robust growth in food and beverage and disk drive.

• Reaffirmed consolidated sales guidance of 1% to 5% growth. Increased mobile solutions growth forecast to 2%-6%, raised aftermarket sales growth to mid-single digits. Industrial solutions sales forecast between -1% and 3%. Life sciences sales forecast 5%-9%. Revised operating margin guidance to 16%-16.4%, EPS between $3.93-$4.01 with midpoint $3.97 (8% growth).

• Short-term execution challenges in industrial segment. Operational inefficiencies related to production shifts, footprint optimization, and supply chain issues in A&D. Uncertainties in macroeconomic conditions affecting IAF orders.

Q: Doubts on A&D orders and Facet impact.

A: Rich explained A&D order timing and supply chain issues, and Facet's market fit.

Q: Industrial footprint changes.

A: Rich discussed plant closure phases and margin improvement timeline.

Q: ISS orders and FACET growth.

A: Rich and Brad provided insights on ISS order trends and FACET growth potential.

Q: Mobile business and margin impact.

A: Rich and Brad talked about independent channel strength, OE inventory, and margin implications.

Q: PowerGen inefficiencies and FACET returns.

A: Rich and Brad addressed PowerGen production challenges and FACET return timeframe.

Q: Life sciences disk drive business.

A: Rich discussed disk drive business drivers, TAM, and liquid cooling exposure.