Westinghouse Air Brake Technologies’ third quarter results for 2025 met Wall Street’s revenue expectations, but the market responded negatively. Management attributed performance to robust growth in both Freight and Transit segments, the integration of Inspection Technologies, and a record-high backlog. CEO Rafael Ottoni Santana highlighted strong international demand, particularly in Asia and Kazakhstan, and acknowledged ongoing tariff-related cost pressures. CFO John A. Olin also noted that operating margins benefited from cost recovery and integration initiatives, but were partially offset by unfavorable service mix and higher material costs.
Is now the time to buy WAB? Find out in our full research report (it’s free for active Edge members).
Wabtec (WAB) Q3 CY2025 Highlights:
- Revenue: $2.89 billion vs analyst estimates of $2.88 billion (8.4% year-on-year growth, in line)
- Adjusted EPS: $2.32 vs analyst estimates of $2.28 (2% beat)
- Adjusted EBITDA: $658 million vs analyst estimates of $644.5 million (22.8% margin, 2.1% beat)
- The company reconfirmed its revenue guidance for the full year of $11.08 billion at the midpoint
- Management raised its full-year Adjusted EPS guidance to $8.95 at the midpoint, a 1.1% increase
- Operating Margin: 17%, in line with the same quarter last year
- Backlog: $25.58 billion at quarter end
- Organic Revenue rose 3% year on year vs analyst estimates of 5.4% growth (242.2 basis point miss)
- Market Capitalization: $33.85 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Wabtec’s Q3 Earnings Call
- Angel Castillo (Morgan Stanley) asked about the sustainability of organic growth and the strength of the backlog. CEO Rafael Ottoni Santana pointed to robust international opportunities and a growing active fleet as key drivers.
- Ken Hoexter (Bank of America) questioned the impact of recent acquisitions on backlog and organic growth. CFO John A. Olin affirmed that acquisitions are performing as expected and should be margin-accretive as integration progresses.
- Bascome Majors (Susquehanna) inquired about the timing and full impact of tariffs on cash flow and profitability. Olin detailed mitigation efforts but stated the largest tariff impacts are still to come.
- Scott Group (Wolfe Research) asked whether Transit segment margins could rise further. Santana described continuous improvement as a goal, citing ongoing business optimization and acquisition strategies.
- Tami Zakaria (JPMorgan) sought clarification on the future growth trajectory of the components segment, particularly given headwinds in North American railcar builds. Santana noted that industrial and international demand, especially in mining and power generation, may offset domestic softness.
Catalysts in Upcoming Quarters
Over the next few quarters, our analysts will watch (1) the pace at which international orders, especially the Kazakhstan contract, begin to convert to revenue, (2) the integration progress and margin impact from recent and pending acquisitions, and (3) the company’s ability to mitigate ongoing tariff and material cost pressures. We will also track whether modernization services rebound and how the mix shift affects overall profitability.
Wabtec currently trades at $198, in line with $198.02 just before the earnings. Is the company at an inflection point that warrants a buy or sell? Find out in our full research report (it’s free for active Edge members).
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