Federal Signal Corporation Q4 FY2025 earnings call

Full year 2025 net sales reached $2,180,000,000, up 17% y-o-y. ESG had 27% net sales growth and 31% adjusted EBITDA growth. SSG had 23% sales growth and 43% adjusted EBITDA growth. Strong aftermarket revenue, ongoing acquisition integrations, focus on new product development and capacity expansions, and strategic initiatives like New Way and MEGA acquisitions.

Environmental Solutions Group (ESG) had Q4 2025 net sales of $504,000,000, an increase of 27% y-o-y. Adjusted EBITDA was $109,000,000, up 31% y-o-y, with a margin of 21.6%. Safety and Security Systems Group (SSG) had Q4 sales of $93,000,000, up 23% y-o-y. Adjusted EBITDA was $23,400,000, up 43% y-o-y, with a margin of 25.2%.

2026 net sales expected between $2,550,000,000 and $2,650,000,000. Adjusted EPS between $4.50 and $4.80 per share, considering acquisition-related intangible amortization and tax rate changes.

Potential impact from tariff discussions and market demand fluctuations affecting business operations.

Q: Parsing organic vs acquisition contribution to revenues, A: ~5%-9% organic, rest from acquisitions; Q: Order trends and prebuy, A: No meaningful prebuy baked in, publicly funded customers not major driver; Q: Book-to-bill and rental, A: Book-to-bill around 1.0, rentals reported in orders; Q: Inorganic orders and New Way adoption, A: Acquired backlog included, working on dealer network; Q: Seasonality and production, A: Earnings cadence similar, order seasonality may change; Q: New Way cost synergies and PCB line, A: Working on synergies, fourth PCB line for growth; Q: MEGA and New Way organic growth, A: MEGA had growth, New Way expected lower in 2026; Q: South America expansion and M&A pipeline, A: MEGA supports expansion, pipeline full; Q: Capacity and tariffs, A: Running at ~70% capacity, tariffs nominal impact; Q: Adjusted order organic contribution and municipal markets, A: Vast majority organic, infrastructure projects ongoing.