Westinghouse Air Brake Technologies : 2026-04-22 - WAB 1Q'2026 Earnings Presentation - FINAL

Published: 2026-04-22 06:54:12 ET WAB

Published on 04/22/2026 at 06:54 am EDT

FIR S T Q UA RT E R 2 0 2 6

Today's Participants

RAFAEL SANTANA

President & Chief Executive Officer

JOHN

OLIN

Executive Vice President & Chief Financial Officer

KYRA YATES

Vice President, Investor Relations

1 Q 2 0 2 6 H I G H L I G H T S

Sales

$2.95B 13.0%

Increased sales driven by both Freight and

Transit segments (including acquisitions)

Operating

Margin

Earnings Per Share

17.5%

GAAP

$2.12

GAAP

0.7 pts 21.9%

Adjusted

12.8% $2.71

Adjusted

0.2 pts

18.9%

Adj. operating margin up despite tariff headwinds

Adjusted EPS improvement driven by strong revenue growth and modest margin expansion; as well as non-operational benefits

$199M

Cash Flow from Operations

Backlog $9.25B

12-Month

1Q operating cash flow at 40% cash conversion (1)

Backlog continues to provide strong visibility for 2026 and beyond … 12-month up 12.8%; multi-year up 38.1%

Note: Adjusted numbers represent non-GAAP financial measures. See Appendix for additional details and reconciliations

WA B T E C ' S ST R O N G U N D E R LY I N G M O M E N T U M C O N T I N U E S

(1) Cash from Operations conversion % is defined as GAAP Cash from Operations divided by GAAP net income plus depreciation and amortization including deferred debt cost amortization

NA RAILCAR DELIVERIES

44K HISTORICAL

41K 45K 42K 10-YEAR AVERAGE

31K

24K

2022 2023 2024 2025 2026E

Source: Rail Supply Institute & FTR Associates

Source: UIC & Operator Reports (U.S., Europe & India)

2026E

2025

2024

2023

2022

TRANSIT RIDERSHIP

NORTH AMERICA

Industry Freight Traffic

2.5% 1.4% 1.8%

0.0%

2Q25 3Q25 4Q25 1Q26

Source: Association of American Railroads

Industry Active Locomotives

1Q23 1Q24 1Q25 1Q26

Source: Wabtec

INTERNATIONAL

Industry Freight Volumes

8.G% 8.0%

5.3% 3.8%

0.1%

Brazil China India South Kazakhstan

Africa

Sources: Previous 3 months available for Brazil, China, India Ministry of Railways, South Africa, Kazakhstan

Wabtec Installed Base

2022 2023 2024 2025 2026E

Source: Wabtec

RECENT WINS

Accelerate innovation of scalable

technologies

Grow and refresh expansive global installed base

Drive efficiencies through emerging technologies

Expand high-margin recurring revenue streams

Drive continuous operational improvement

Secured a multi-billion-dollar, multi-year mining

contract for drive systems and aftermarket parts

Won $210 million multi-year modernization order with Massachusetts Bay Transit Authority

Executing the first EVO modernization build to support commercial rollout

Signed $54 million Transit Brake and Couplers order with Kawasaki for New York City Transit

P I P E L I N E C O N V E R S I O N R E M A I N S R O B U S T … M U LT I - Y E A R B A C K L O G U P 3 8 % V S P Y 6

~$4.6B of Capital Deployed Since 2020

($'s in Billions)

$2.5

$1.0

$1.1

2020-2024

2025

2026 YTD

# of Acquisitions: 15

PORTFOLIO ENHANCING BOLT-ONS & NEAR-IN ADJACENCIES WITH … ROBUST FINANCIALS, ATTRACTIVE SYNERGIES, & ACCRETIVE ROIC

Disciplined M&A Approach

Executed 20 acquisitions since 2020 with overall IRRs > deal models & first year EPS accretion

Continued focus on high quality assets that build a stronger technology platform

Strong track record of consistent capital deployment that enhances portfolio resilience

I N T E G R AT I O N U P D AT E

Integration Status

Integration

Financial Plan

Synergies

Inspection Tech

Frauscher

Dellner

Early stages

Anticipated Synergy Run Rate Savings

$60M

$3M $14M

2025A 2026E 2027E 2028E 2029E

W A B T E C C O M P O U N D I N G V A L U E T H R O U G H TA R G E T E D , H I G H R O I C M& A …

S U P P O R T E D B Y A R E P E ATA B L E I N T E G R AT I O N M O D E L 7

SALES

OP. INCOME / OP. MARGIN

EARNINGS PER SHARE

$2.61B

13.0% YOY

2 0 2 5

2 0 2 6

2 0 2 5 2 0 2 6

GAAP GAAP

2 0 2 5 2 0 2 6

ADJ(1) ADJ(1)

2 0 2 5 2 0 2 6

GAAP GAAP

2 0 2 5 2 0 2 6

ADJ(1) ADJ(1)

10.4% Ex-Currency

$1.88

$2.28

$2.12

$2.71

$474M

$565M

$517M

$645M

$2.95B

12.8% YOY

18.9% YOY

18.2%

17.5%

0.7

pts YOY

21.7%

21.9%

0.2

pts

YOY

(1) Adjusted numbers represent non-GAAP financial measures. See Appendix for additional details and reconciliations

I N C R E A S E D S A L E S , A D J . O P E R AT I N G M A R G I N A N D E P S G R O W T H

P R O D U C T L I N E 1 Q 2 6 YOY 1 Q K E Y D R I V E R S

(in millions)

Equipment $ 726 52.5% Higher locomotive deliveries & increased mining sales

Services

$ 714

(17.3)%

Components

$ 357

(6.3)%

Digital Intelligence

$ 318

75.7%

Freight segment

$ 2,115

11.3%

Transit segment

$ 835

17.8%

Sales growth in core services offset by lower modernization deliveries as expected

Lower North America rail car build and lower revenue due to portfolio optimization, partially offset by strong industrial demand

Increased sales driven by acquisitions, partially offset by the exit of a

low margin project

Increased sales driven by Dellner acquisition, organic growth, and favorable currency exchange … Sales up 11.0% on constant currency basis

TOTAL SALES $ 2,950 13.0%

($ in millions)

1Q 2026 Consolidated Operating Income

GAAP Adjusted

1 Q O P E R AT IN G IN C O M E K E Y D R IV E RS

2 0 2 5 G R O S S

P R O F I T

$900

$903

% Gross Profit Volume Mix/Pricing

Raw Materials/Tariffs

Currency Manufacturing/Other

34.5%

34.6%

2 0 2 6 G R O S S P R O F I T

$ 1 , 0 6 1

$ 1 , 0 8 7

% Gross Profit

36.0%

36.9%

2 0 2 5 O P I N C O M E

$474

$565

% Operating Margin

18.2%

21.7%

Gross Profit

161

184

SG&A

(94)

Engineering

(10)

Amortization

(14)

2 0 2 6 O P I N C O M E

$517

$645

% Operating Margin

17.5%

21.9%

V O L U M E

Higher sales in Equipment & Transit, and acquisitions

M I X / P R I C I N G

Cost recovery through contract escalation and partial tariff recovery & favorable acquisition mix; partially offset by unfavorable mix within the Freight segment

R A W M AT E R I A L S

Increased tariffs and unfavorable raw material costs

C U R R E N C Y

Foreign exchange increased gross profit $21M

(operating income increased $9M)

M A N U F A C T U R I N G / O T H E R

Integration 3.0 ongoing savings and increased productivity offset by higher general inflation

S G & A / E N G I N E E R I N G

Increase mainly driven by acquisitions

Note: Adjusted numbers represent non-GAAP financial measures. See Appendix for additional details and reconciliations 10

SALES(2)

OP. INCOME / OP. MARGIN

12-MONTH BACKLOG

$550M

$420M $450M

21.3%

0.8

pts YOY

22.1%

+41.0% YoY

(+39.2%, ex-currency)

12-Month Backlog increased 9.8% year-over-year, ex-currency

(2)

2 0 2 6

B a c k l o g

2 0 2 5

M u l t i - Y e a r

$6.07B

$6.68B

2 0 2 5 2 0 2 6

ADJ(1) ADJ(1)

2 0 2 5 2 0 2 6

GAAP GAAP

$488M

10.2% Ex-Currency

2 0 2 6

2 0 2 5

$1.90B

$2.12B

10.1% YOY

25.7%

26.0%

0.3

pts YOY

11.3% YOY

Note: Adjusted numbers represent non-GAAP financial measures. See Appendix for additional details and reconciliations

Freight segment operating income was positively impacted by below-market intangible amortization of $10 million which was flat to1st quarter 2025

Foreign exchange positively impacted Freight sales by $20 million; Foreign exchange rates had a positive $322 million impact on segment multi-year backlog 11

SALES (1)

OP. INCOME / OP. MARGIN

12-MONTH BACKLOG

2 0 2 5

2 0 2 5 2 0 2 6

M u l t i - Y e a r B a c k l o g (1)

+26.4% YoY

(+23.9%, ex-currency)

12-Month Backlog increased 17.7% year-over-year, ex-currency

$2.13B

$2.57B

2 0 2 5 2 0 2 6

ADJ ADJ

2 0 2 5 2 0 2 6

GAAP GAAP

$103M

$G0M

$121M

$138M

11.0% Ex-Currency

2 0 2 6

$70GM

$835M

20.7% YOY

12.7%

14.6%

14.5%

1.8

pts

YOY

16.6%

2.0

pts YOY

17.8% YOY

Note: Adjusted numbers represent non-GAAP financial measures. See Appendix for additional details and reconciliations

(1) Foreign exchange positively impacted Transit sales by $48 million; Foreign exchange rates had a positive $112 million impact on segment multi-year backlog 12

$191M

43% Cash Conv

1st quarter cash from operations of $199M

was up versus prior year despite tariff headwinds

$199M

40% Cash Conv

CASH FROM OPS

FOCUSED ON CASH CONVERSION(1)

DISCIPLINED CAPITAL ALLOCATION

$242M

$53M

$1,059M

$258M

Use of Cash

$1,012M

Net Debt Proceeds

$199M

Cash from

Ops

Share repurchases Dividends

1 Q 2 0 2 6

1 Q 2 0 2 5

Acquisitions/Dispositions

$115M

Debt leverage ratio of 2.3x (2)

$46M Capex/$69M Other

Strong Balance Sheet liquidity of $2.09B(3)

Returning capital to shareholders … $295M returned

through share repurchases and dividends

Note: Adjusted numbers represent non-GAAP financial measures. See Appendix for additional details and reconciliations

Cash from Operations conversion % is defined as GAAP Cash from Operations divided by GAAP net income plus depreciation and amortization including deferred debt cost amortization

Leverage ratio is defined as net debt divided by trailing 12-month adjusted EBITDA. Net debt is defined as total debt minus cash, restricted cash and cash equivalents

S T R O N G F I N A N C I A L P E R F O R M A N C E ; I N V E S T I N G F O R P R O F I TA B L E

G R O W T H A N D M A X I M I Z I N G S H A R E H O L D E R R E T U R N S

At March 31, 2026, the Company's total available liquidity was $2.09 billion, which includes cash and cash equivalents of $0.52 billion, plus $1.57 billion available under current credit facilities

P R IO R G U IDA N CE

REV ENUES

$ 12 .19 B to $ 12 .49 B

U P DAT E D G U IDA N CE

REV ENUES

$ 12 .19 B to $ 12 .49 B

9.2% -

11.8%

9.2% -

11.8%

ADJUST ED DI LUT ED EPS

$ 10 .05 to $ 10 .45

ADJUST ED DI LUT ED EPS

$ 10 .25 to $ 10 .65

12.0% -

16.5%

14.3% -

18.7%

Includes Dellner Couplers acquisition (closed February 10, 2026)

Assumes tariffs in effect as of April 22, 2026

K E Y A S S U M P T I O N S

Adjusted operating margin up YOY

Favorable productivity/absorption

Benefits of Integration 3.0 & Portfolio Optimization

Lower SG&A and Engineering expenses as % of sales, excluding the impact of acquisitions

Tax rate ~24.5%

Capex ~2% of sales

5-YEAR OUTLOOK

ORGANIC SALES CAGR

350+ bps

ADJUSTED OPERATING MARGIN EXPANSION

ADJUSTED EPS CAGR

>90%(1)

CASH FROM OPS CONVERSION

Strong revenue growth, margin expansion,

and increased earnings

Positive productivity driven by continuous cost improvement combined with realization of Integration 3.0 and Portfolio Optimization

Continued momentum across the portfolio driven by strong orders, backlog, and pipeline

M&A model delivering sustained profitable

growth and compounding shareholder value

Wabtec is well-positioned to drive higher returns and create top quartile long-term value for shareholders over time

(1) Cash from Operations conversion % is defined as GAAP Cash from Operations divided by GAAP net income plus

depreciation and amortization including deferred debt cost amortization. Cash conversion to average >90% through 2029 15

Appendix A (1 of 2)

WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF INCOME FOR THE THREE MONTHS ENDED MARCH 31, 2026 AND 2025 (AMOUNTS IN MILLIONS EXCEPT PER SHARE DATA) (UNAUDITED)

Three Months Ended

March 31,

2026

2025

Net sales

2,950

2,610

Cost of sales

(1,889)

(1,710)

Gross profit

1,061

900

Gross profit as a % of Net Sales

36.0%

34.5%

Selling, general and administrative expenses

(401)

(307)

Engineering expenses

(56)

(46)

Amortization expense

(87)

(73)

Total operating expenses

(544)

(426)

Operating expenses as a % of Net Sales

18.4%

16.3%

Income from operations

517

474

Income from operations as a % of Net Sales

17.5%

18.2%

Interest expense, net

(71)

(46)

Other income (expense), net

(2)

Income before income taxes

469

426

Income tax expense

(106)

(99)

Effective tax rate

22.7%

23.2%

Net income

363

327

Less: Net income attributable to noncontrolling interest

(1)

(5)

Net income attributable to Wabtec shareholders

$ 362

$ 322

Earnings Per Common Share

Basic

Net income attributable to Wabtec shareholders

$ 2.12

$ 1.88

Diluted

Net income attributable to Wabtec shareholders

$ 2.12

$ 1.88

Basic

170.0

170.5

Diluted

170.7

171.3

WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF INCOME FOR THE THREE MONTHS ENDED MARCH 31, 2026 AND 2025 (AMOUNTS IN MILLIONS EXCEPT PER SHARE DATA) (UNAUDITED)

Three Months Ended

March 31,

2026 2025

Segment Information

Freight Net Sales

2,115

1,901

Freight Income from Operations

450

420

Freight Operating Margin

21.3%

22.1%

Transit Net Sales

835

709

Transit Income from Operations

121

Transit Operating Margin

14.5%

12.7%

Backlog Information (Note: 12-month is a sub-set of total) March 31, 2026 December 31, 2025 March 31, 2025

Freight Total

$ 25,175 $

22,493

$ 17,851

Transit Total

5,627

4,914

4,451

Wabtec Total

$ 30,802

$ 27,407

$ 22,302

Freight 12-Month

6,679

6,022

$ 6,069

Transit 12-Month

2,568

2,212

2,127

Wabtec 12-Month

$ 9,247

$ 8,234

$ 8,196

Appendix A (2 of 2)

WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

March 31, 2026

December 31, 2025

In millions

Cash, cash equivalents and restricted cash

$ 531

$ 789

Receivables, net

2,252

1,897

Inventories, net

2,850

2,745

Other current assets

340

263

Total current assets

5,973

5,694

Property, plant and equipment, net

1,653

1,616

Goodwill

10,625

10,216

Other intangible assets, net

4,239

3,838

Other noncurrent assets

706

705

Total assets

$ 23,196

$ 22,069

Current liabilities

$ 5,835

$ 5,150

Long-term debt

4,708

4,291

Long-term liabilities - other

1,502

1,438

Total liabilities

12,045

10,879

Shareholders' equity

11,103

11,142

Noncontrolling interest

Total shareholders' equity

11,151

11,190

Total Liabilities and Shareholders' Equity

$ 23,196

$ 22,069

Appendix B

WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

Three Months Ended March 31,

2026

2025

In millions

Operating activities

Net income

363

327

Non-cash expense

151

127

Receivables

(305)

(226)

Inventories

(28)

(29)

Accounts Payable

Other operating activities

(2)

(21)

Net cash provided by operating activities

199

191

Net cash used for investing activities

(1,105)

(44)

Net cash provided by (used for) financing activities

656

(172)

Effect of changes in currency exchange rates

(8)

Decrease in cash

(258)

(17)

Cash, cash equivalents and restricted cash, beginning of period

789

715

Cash, cash equivalents and restricted cash, end of period

$ 531

$ 698

Appendix C

Set forth below is the calculation of the non-GAAP performance measures included in this press release. We believe that these measures provide useful supplemental information to assess our operating performance and to evaluate period-to-period comparisons. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, Wabtec's reported results prepared in accordance with GAAP.

Wabtec Corporation

Reconciliation of Reported Results to Adjusted Results

(in millions) First Quarter Year-to-Date 2026 Actual Results

Net Sales

Gross Profit

$ 1,061

Operating Expenses

$ (544)

-13

Income from Operations

$ 517

Interest & Other Exp

$ (48)

(2)

Tax

Net Income

Noncontrolling Interest

$ (1)

Wabtec Net Income

$ 362

EPS

Reported Results

$ 2,950

$ (106)

$ 363

$ 2.12

Restructuring and Portfolio Optimization costs

(1)

$ 0.02

Inventory Purchase Accounting charge

(5)

$ 0.11

Transaction costs

$ 0.06

Non-cash Amortization expense

(20)

$ 0.40

Adjusted Results

$ 2,950

$ 1,087

$ (442)

$ 645

$ (50)

$ (132)

$ 463

$ (1)

$ 462

$ 2.71

Fully Diluted Shares Outstanding

170.7

Wabtec Corporation

Reconciliation of Reported Results to Adjusted Results

(in millions) First Quarter Year-to-Date 2025 Actual Results

Reported Results

Restructuring and Portfolio Optimization costs Transaction costs

Non-cash Amortization expense

Adjusted Results

Fully Diluted Shares Outstanding

Net Sales

$ 2,610

Gross Profit

$ 900

Operating Expenses

$ (426)

Income from Operations

$ 474

Interest & Other Exp

$ (48)

Tax

$ (99)

(2)

(17)

Net Income

$ 327

Noncontrolling Interest

$ (5)

Wabtec Net Income

$ 322

EPS

$ 1.88

$ 0.04

$ 0.32

$ 2,610

$ 903

$ (338)

$ 565

$ (48)

$ (120)

$ 397

$ (5)

$ 392

$ 2.28

171.3

Appendix D

Disclaimer

Wabtec Corporation - Westinghouse Air Brake Technologies Corporation published this content on April 22, 2026, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on April 22, 2026 at 10:53 UTC.