NYSE:AIT
APPLIED INDUSTRIAL TECHNOLOGIES INC
A global leader in precision-engineered components serving aerospace, automotive, and industrial sectors with a focus on thermal management solutions.
Key Metrics
Investment Thesis
Bull Case
Investors should consider AIT for its consistent revenue growth trajectory and robust profitability, evidenced by the expansion from $4.41B in 2023 revenue to $4.56B in 2025. The company's diversified customer base across multiple high-barrier industries provides stability, while strong free cash flow generation supports a history of returning capital to shareholders through dividends and buybacks.
Bear Case
Potential concerns include the cyclical nature of the aerospace and automotive industries which could lead to sharp revenue contractions if global travel or car sales decline. Additionally, the company carries significant debt obligations with $572.3M in long-term debt and a large retained earnings deficit of $2.45B, which may limit financial flexibility during economic downturns.
About APPLIED INDUSTRIAL TECHNOLOGIES INC
Applied Industrial Technologies is a leading global supplier of precision engineered products to the aerospace, automotive, and industrial markets. The company manufactures high-performance components such as heat exchangers, air conditioning units, and specialized fasteners for major original equipment manufacturers. With operations spanning North America, Europe, Asia, and South America, AIT delivers critical solutions that enable thermal management in diverse industrial applications.
Analysis
Management Discussion
Applied Industrial Technologies demonstrated resilient financial performance in 2025, generating $4.56B in revenue and $393M in net income, representing steady year-over-year growth despite macroeconomic headwinds. The company's strong operating cash flow of $492.4M highlights its ability to convert sales into liquidity effectively, while strategic investments totaling $293.4M in acquisitions suggest a continued commitment to expanding its product portfolio and market reach.
Industry Overview
The industrial thermal management sector is critical for modern transportation and manufacturing, driven by increasing demands for energy efficiency and electrification. Companies in this space must navigate complex supply chains and strict regulatory standards while competing on precision engineering capabilities to secure long-term contracts with major global manufacturers.
Financial Statements
Income Statement
Balance Sheet
Cash Flow
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Revenue | $4.41B | $4.48B | $4.56B |
| Cost of Revenue | $3.13B | $3.14B | $3.18B |
| Gross Profit | $1.29B | $1.34B | $1.38B |
| Operating Expenses | $813.8M | $840.8M | $884.6M |
| Operating Income | $473.2M | $495.8M | $498.5M |
| G&A | $813.8M | $840.8M | $884.6M |
| Stock-Based Comp | $12.4M | $12.9M | $12.0M |
| Depreciation | $22.3M | $23.4M | $24.9M |
| Amortization | $30.8M | $28.9M | $35.6M |
| Other OpEx | $0 | $0 | $0 |
| Non-Operating Income | $-23.3M | $2.3M | $2.4M |
| Interest Expense | $24.8M | $20.5M | $18.2M |
| Pre-Tax Income | $449.8M | $498.1M | $501.0M |
| Income Tax | $103.1M | $112.4M | $108.0M |
| Continuing Ops | $346.7M | $385.8M | $393.0M |
| Discontinued Ops | $0 | $0 | $0 |
| Net Income | $346.7M | $385.8M | $393.0M |
| Minority Interest | $0 | $0 | $0 |
| Net to Common | $346.7M | $385.8M | $393.0M |
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Current Assets | $1.65B | $1.77B | $1.75B |
| Accounts Receivable | $708.4M | $724.9M | $769.7M |
| Inventory | $501.2M | $488.3M | $505.3M |
| Other Current Assets | $437.2M | $556.8M | $472.4M |
| Long-Term Assets | $1.10B | $1.18B | $1.43B |
| PP&E (Net) | $115.0M | $118.5M | $128.2M |
| Intangibles | $235.5M | $245.9M | $348.6M |
| Goodwill | $578.4M | $619.4M | $699.4M |
| Operating Leases | $100.7M | $133.3M | $188.7M |
| Other LT Assets | $66.8M | $64.9M | $63.3M |
| Total Assets | $2.74B | $2.95B | $3.18B |
| Current Liabilities | $540.3M | $501.1M | $526.2M |
| Accounts Payable | $301.7M | $266.9M | $280.1M |
| Current Debt | $25.2M | $25.1M | $0 |
| Other Current Liab | $213.5M | $209.1M | $246.0M |
| Long-Term Liabilities | $744.6M | $762.0M | $804.9M |
| Long-Term Debt | $596.9M | $572.3M | $572.3M |
| Other LT Liab | $147.6M | $189.8M | $232.6M |
| Total Liabilities | $1.28B | $1.26B | $1.33B |
| Shareholders' Equity | $1.46B | $1.69B | $1.84B |
| Retained Earnings | $1.79B | $2.12B | $2.45B |
| AOCI | $-55.3M | $-77.6M | $-91.7M |
| Treasury Stock | $477.5M | $559.3M | $720.7M |
| Total L&E | $2.74B | $2.95B | $3.18B |
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Net Income (CFO) | $346.7M | $385.8M | $393.0M |
| Non-Cash Adjustments | $-172.0M | $49.1M | $85.6M |
| Working Capital Changes | $169.2M | $-63.5M | $13.8M |
| Cash from Operations | $344.0M | $371.4M | $492.4M |
| Cash from Investing | $-60.8M | $-95.4M | $-318.8M |
| Share Buybacks | $716.0K | $73.4M | $152.8M |
| Dividends Paid | $53.4M | $55.9M | $63.7M |
| Cash from Financing | $-126.9M | $-156.5M | $-245.6M |
| FX Effect | $3.3M | $-2.9M | $-226.0K |
| Net Change in Cash | $159.6M | $116.6M | $-72.2M |
| Beginning Cash | $184.5M | $344.0M | $460.6M |
| Ending Cash | $344.0M | $460.6M | $388.4M |
Frequently Asked Questions
How does APPLIED INDUSTRIAL TECHNOLOGIES INC make money?
Aerospace (including commercial aviation and defense), Automotive (passenger cars, light trucks, and heavy-duty vehicles), Industrial (serving HVACR, medical, and other general industry markets), and Marine.
What are the main risks for AIT?
Cyclical demand from the aerospace and automotive sectors leading to revenue volatility, exposure to fluctuating raw material costs such as aluminum and copper, potential supply chain disruptions affecting global logistics, and foreign exchange rate fluctuations impacting international earnings.
What is AIT's competitive advantage?
Deeply embedded relationships with top-tier global OEMs requiring long-term contracts for critical thermal management parts, significant barriers to entry in high-precision manufacturing, and a diversified geographic footprint that mitigates regional economic downturns.
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Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.