Ralliant Reports Third Quarter 2026 Results and Raises Full Year Guidance
Ralliant Corp (RAL) filed an SEC Form 8-K — Results of Operations and Financial Condition. Exhibit 99.1 Ralliant Reports Third Quarter 2026 Results and Raises Full Year Guidance • Revenue of $620 million, up 17% year-over-year with double-digit revenue growth in both segments • Significant margin expansion year-over-year, resulting in net earnings margin of 13.9%; adju
How this was made
The 30-second read
Why it matters
The raised guidance reflects strong demand in defense, grid modernization, and AI‑related markets, likely prompting a positive price reaction.
Market read
The earnings beat and higher guidance provide a fresh catalyst for RAL, making it a short‑term trade idea.
What to watch
High debt level ($1.15 B) and upcoming interest‑rate environment may temper upside.
Ralliant Reports Third Quarter 2026 Results and Raises Full Year Guidance
Third-quarter revenue grew 17% year-over-year on both a total and organic basis, both segments posted double-digit revenue growth, and reported profitability expanded sharply, including a 630 basis point improvement in net earnings margin and a 310 basis point improvement in adjusted EBITDA margin. The company raised full-year 2026 guidance.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Q3 2026 salesGAAP | $620.1M | – | 17.2% |
| Nine Months 2026 salesGAAP | $1.72B | – | – |
| Q3 2026 cost of salesGAAP | −$290.5M | – | – |
| Nine Months 2026 cost of salesGAAP | −$827.6M | – | – |
| Q3 2026 gross profitGAAP | $329.6M | – | – |
| Nine Months 2026 gross profitGAAP | $894.8M | – | – |
| Q3 2026 selling, general and administrative expensesGAAP | −$169.6M | – | – |
| Nine Months 2026 selling, general and administrative expensesGAAP | −$496.1M | – | – |
| Q3 2026 research and development expensesGAAP | −$42.5M | – | – |
| Nine Months 2026 research and development expensesGAAP | −$130.9M | – | – |
| Q3 2026 operating profitGAAP | $117.5M | – | – |
| Nine Months 2026 operating profitGAAP | $267.8M | – | – |
| Q3 2026 operating profit marginGAAP | 18.9% | – | – |
| Nine Months 2026 operating profit marginGAAP | 15.5% | – | – |
| Q3 2026 interest expense, netGAAP | −$13.5M | – | – |
| Nine Months 2026 interest expense, netGAAP | −$42M | – | – |
| Q3 2026 earnings before income taxesGAAP | $103.5M | – | – |
| Nine Months 2026 earnings before income taxesGAAP | $224.9M | – | – |
| Q3 2026 income tax expenseGAAP | −$17.4M | – | – |
| Nine Months 2026 income tax expenseGAAP | −$37.3M | – | – |
| Q3 2026 net earningsGAAP | $86.1M | – | – |
| Nine Months 2026 net earningsGAAP | $187.6M | – | – |
| Q3 2026 net earnings marginGAAP | 13.9% | – | 630 basis points improvement year-over-year |
| Q3 2026 basic EPSGAAP | $0.78 | – | – |
| Q3 2026 diluted EPSGAAP | $0.77 | – | 117% |
| Nine Months 2026 diluted EPSGAAP | $1.67 | – | – |
| Q3 2026 adjusted net earningsnon-GAAP | $104.5M | – | – |
| Q3 2026 adjusted diluted EPSnon-GAAP | $0.93 | – | 64% year-over-year on a normalized basis |
| Q3 2026 normalized adjusted diluted EPSnon-GAAP | $0.93 | – | – |
| Q3 2026 adjusted EBITDAnon-GAAP | $145.8M | – | – |
| Q3 2026 adjusted EBITDA marginnon-GAAP | 23.5% | – | 310 basis point improvement year-over-year |
| Q3 2026 normalized adjusted EBITDA marginnon-GAAP | 23.5% | – | 400 basis point improvement year-over-year |
| Q3 2026 operating cash flowsGAAP | $111.3M | – | – |
| Q3 2026 purchases of property, plant & equipment (capital expenditures)GAAP | −$9.4M | – | – |
| Q3 2026 free cash flownon-GAAP | $101.9M | – | – |
| Nine Months 2026 net cash provided by operating activitiesGAAP | $235.9M | – | – |
| Nine Months 2026 purchases of property, plant and equipmentGAAP | −$24.5M | – | – |
| Trailing Twelve Months ended October 2, 2026 operating cash flowsGAAP | $337.5M | – | – |
| Trailing Twelve Months ended October 2, 2026 free cash flownon-GAAP | $303M | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Sensors & Safety Systems (S&SS)Defense & Space growth was driven by continued execution against a multi-year backlog. Utilities delivered another record quarter of orders and revenue as customers invested in grid modernization. Industrial Manufacturing and Other end markets accelerated, primarily driven by data center demand. | $376M | – | 15% |
| Test & Measurement (T&M)Growth was broad-based. Diversified Electronics benefited from customer investment across compute and power infrastructure, while Communications was supported primarily by commercial communication demand. Semiconductors declined as customer-investment acceleration was more than offset by the expected headwind from a large customer project completed in Q3 2025. | $244M | – | 20% |
Fourth Quarter 2026 and Full Year 2026 outlook
- RevenueFourth Quarter 2026: $620 to $640 million; Full Year 2026: $2.340 to $2.360 billion
- Tax rateFourth Quarter 2026 adjusted effective tax rate: 16% to 18%; FY 2026 adjusted effective tax rate: 16-18%
- NoteFourth Quarter 2026 adjusted EBITDA margin: 23.5% to 24.5%
- NoteFourth Quarter 2026 adjusted EPS: $0.93 to $0.99
- NoteFourth Quarter 2026 net interest expense: $13 to $15 million
- NoteFourth Quarter 2026 weighted average diluted shares outstanding: approximately 113 million
- NoteFull Year 2026 adjusted EBITDA margin: approximately 21.5%
- NoteFull Year 2026 adjusted EPS: $3.10 to $3.16
- NoteFY 2026 net interest expense: $13 to $15 million per quarter
- NoteQ4 and FY 2026 diluted shares outstanding: approximately 113 million
- NoteCorporate & Other costs of $16 to $20 million in Q4
- NoteGuidance inclusive of cost of sales benefit from IEEPA tariff refunds of $2, $7, $5 million in Q2, Q3, Q4, respectively
- NoteFY 2026 share repurchases to represent approximately 50% of FCF
- NoteExpect to exit 2026 at $30-35 million annualized run-rate savings
- NoteOn path to $50-60 million annualized run-rate savings target by 2028
Capital returns
- On October 30, 2026, the Board of Directors declared a quarterly cash dividend of $0.05 per share of common stock.
- The fourth quarter 2026 dividend is payable on December 23, 2026, to stockholders of record as of the close of business on December 8, 2026.
- Year-to-date, the Company returned $167 million of capital to shareholders.
- Year-to-date share repurchases were $150 million for an aggregate of 2.8 million shares at an average price per share of $54.74.
- Year-to-date dividend payments were $17 million.
- $400 million remained under the Company’s share repurchase authorization at the end of the third quarter.
- FY 2026 share repurchases are expected to represent approximately 50% of FCF.
What drove it
- Total revenue growth was 17% year-over-year on both a total and organic basis.
- Book-to-bill was above 1.1.
- S&SS margin expansion was driven primarily by operating leverage on higher volumes, pricing, higher defense margins and productivity savings.
- T&M profitability benefited from higher volume, pricing and productivity savings.
- The company cited customer investment in mission-critical defense programs, power grid modernization and AI enablement.
- The company is accelerating its RBS-led Enterprise Productivity Program.
Concerns
- Semiconductors declined as acceleration in customer investments was more than offset by the expected headwind from a large customer project completed in Q3 2025.
- Fourth-quarter and full-year assumptions include tariff policy announcements as of October 30, 2026 and IEEPA tariff refunds.
- Guidance assumes the geopolitical environment remains consistent without more severe disruption from Middle East conflict.
- Nine Months 2026 operating cash flow was $235.9 million compared with $296.0 million in the prior-year period, while accounts receivable and inventories increased.
- Long-term debt was $1,148.7 million at October 2, 2026.
What to watch
- Fourth Quarter 2026 revenue guidance of $620 to $640 million.
- Fourth Quarter 2026 adjusted EBITDA margin guidance of 23.5% to 24.5%.
- Full Year 2026 revenue guidance of $2.340 to $2.360 billion and adjusted EPS guidance of $3.10 to $3.16.
- Execution toward $30-35 million annualized run-rate savings exiting 2026 and the $50-60 million target by 2028.
- Continuation of utilities grid-modernization demand, Defense & Space backlog execution, and data-center-driven industrial demand.
- The semiconductor demand trajectory following the large customer project completed in Q3 2025.
Balance sheet and cash flow
- Cash and equivalents were $365.8 million at October 2, 2026, compared with $318.8 million at December 31, 2025.
- Long-term debt was $1,148.7 million at October 2, 2026, compared with $618.4 million at December 31, 2025.
- Current portion of long-term debt was $— at October 2, 2026, compared with $530.4 million at December 31, 2025.
- Accounts receivable were $322.4 million at October 2, 2026, compared with $285.3 million at December 31, 2025.
- Inventories, net were $344.3 million at October 2, 2026, compared with $301.6 million at December 31, 2025.
- Nine Months 2026 net cash used in financing activities was $(161.8) million, including $(151.5) million of repurchases of common shares and $(16.7) million of dividends paid.
- Nine Months 2026 ending cash and equivalents were $365.8 million, compared with $264.2 million at September 26, 2025.
Analysis
Ralliant reported a strong third quarter, with sales of $620.1 million versus $529.1 million in the prior-year quarter. The company said revenue was up 17% year-over-year on both a total and organic basis, while the detailed organic revenue table showed 17.2% total revenue growth and 17.2% organic revenue growth. Management cited book-to-bill above 1.1 and accelerating growth across both reporting segments.
Profitability improved materially. Operating profit was $117.5 million compared with $52.0 million, and operating profit margin was 18.9% compared with 9.8%. Net earnings were $86.1 million compared with $39.9 million, while net earnings margin reached 13.9%, a 630 basis point improvement year-over-year. Adjusted EBITDA was $145.8 million and adjusted EBITDA margin was 23.5%, a 310 basis point improvement year-over-year. Adjusted diluted EPS was $0.93, compared with $0.60, and normalized adjusted diluted EPS was $0.93 compared with $0.57.
Both segments delivered double-digit revenue growth. Sensors & Safety Systems reported $375.9 million of sales, with utilities producing a record quarter of orders and revenue amid grid modernization investment, while Defense & Space benefited from execution against a multi-year backlog. Test & Measurement reported $244.2 million of sales and substantially higher profitability. Diversified Electronics benefited from compute and power infrastructure spending, and Communications was supported by commercial communication demand. The stated offset was a semiconductor decline related to the completion of a large customer project in Q3 2025.
Cash generation remained positive in the quarter, with $111.3 million of operating cash flow and $101.9 million of free cash flow. Trailing twelve-month operating cash flows were $337.5 million and free cash flow was $303.0 million. The balance sheet carried $365.8 million of cash and equivalents and $1,148.7 million of long-term debt at October 2, 2026. The company returned $167 million of capital year-to-date and retained $400 million under its repurchase authorization.
Management raised full-year 2026 guidance to revenue of $2.340 to $2.360 billion, adjusted EBITDA margin of approximately 21.5%, and adjusted EPS of $3.10 to $3.16. Fourth-quarter guidance calls for revenue of $620 to $640 million, adjusted EBITDA margin of 23.5% to 24.5%, and adjusted EPS of $0.93 to $0.99. Guidance incorporates specified tariff-refund benefits and assumes no more severe disruption from Middle East conflict. The company also expects to exit 2026 with $30-35 million of annualized Enterprise Productivity Program savings.
Management, verbatim
We delivered another strong quarter, exceeding the high end of our expectations and contributing to raised full-year 2026 guidance. Our RBS-driven operating rigor is translating into strong growth, expanded margins and strong cash flow.
Tami Newcombe, President and Chief Executive Officer
Our profitable growth strategy is gaining momentum. We are investing organically to strengthen our opportunities across mission-critical defense programs, power grid modernization, and AI enablement, where customer investment continues to accelerate.
Tami Newcombe, President and Chief Executive Officer
Our revenue growth has continued to accelerate across both segments with book-to-bill above 1.1, and we see significant runway ahead. At the same time, productivity and strong cash management give us greater capacity to invest and extend that growth runway, expand margins, and return capital to compound long-term value for shareholders.
Tami Newcombe, President and Chief Executive Officer
Not in the filing
stated, not guessed- Prior outlook guidance was not provided, so no comparison of actual results with prior guidance is available.
- GAAP gross margin was not reported.
- Non-GAAP free cash flow guidance was not reported as a quantified range.
- GAAP operating expenses guidance was not reported.
- Q3 2026 total operating expenses were not reported as a separately labeled total line item.
- A quarterly cash flow statement for Q2 2026 was not reported, so quarter-over-quarter operating cash flow and free cash flow comparisons are unavailable.
- A quantitative full-year 2026 GAAP EPS, GAAP operating income, GAAP cash flow, or GAAP free cash flow outlook was not reported.
Written by an AI language model from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was checked against the filing text, and a metric whose value, prior period and change do not add up is dropped from the metrics. The model can still misread a table, in the metrics or in the text, so check a number in the filing before you rely on it. Consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
Ralliant Corp (NYSE: RAL) filed a Form 8‑K with Q3 2026 results and an updated FY outlook.
Ticker impact
Ralliant reported Q3 2026 results and raised full-year guidance, citing revenue of $2.34‑$2.36 B and adjusted EPS of $3.10‑$3.16.
likely upside as market prices in higher earnings expectations
The company posted 17% YoY revenue growth and expanded margins, then increased its FY EPS guidance, which typically drives buying pressure.
Market effects
Defense and power‑grid segments may see broader investor interest.
U.S. industrial and defense stocks could benefit from the upbeat outlook.
Limited to investors tracking U.S. industrial conglomerates.
Counterpoint
If the guidance assumes continued tariff refunds, any policy reversal could pressure the stock.
Key entities
- companyRalliant Corp
U.S. industrial and defense contractor
