Brady Revenue Jumps 16% in Fiscal Q4

Key Points

• - Revenue rose 15.7% to $397.3 million, driven primarily by acquisitions, led mostly by acquisitions while organic sales edged up 2.4%.

• - Adjusted diluted earnings per share set a record at $1.26.

• - Margins shrank and cash flow tightened as Europe & Australia posted organic declines.

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Brady (NYSE:BRC), a global manufacturer specializing in identification solutions and workplace safety products, announced its fiscal 2025 fourth quarter results on September 4, 2025. The most noteworthy result was record adjusted diluted earnings per share of $1.26. Revenue (GAAP) grew to $397.3 million, up 15.7% from the prior year, outpacing expectations driven by recent acquisitions. Organic sales, however, increased just 2.4%, signaling reliance on acquired growth. Margins declined compared to the prior year, and operating cash flow was under pressure. Overall, the results showed continued momentum in North America and Asia, but also highlighted regional and cost-related challenges that impacted profitability.

Business Overview and Strategic Focus

Brady produces labeling systems, industrial printers, safety signs, and RFID (radio-frequency identification) tracking equipment that help companies manage their workplaces and assets. Its customers span manufacturing, healthcare, aerospace, and other industries needing compliance, traceability, and safety solutions.

The company’s core strategy centers on innovation, acquiring complementary businesses, and delivering strong customer service. Recent efforts have targeted investments in proprietary technology, geographic diversification, and expanding digital capabilities. Success factors include sustaining organic growth, launching advanced products, and maintaining a disciplined approach to capital allocation and operational efficiency.

Quarter Highlights: Financial Drivers and Segment Detail

Brady’s revenue rose 15.7%, primarily driven by the acquisitions of companies like Gravotech, which bring new direct part marking and laser engraving products into its lineup. Acquisitions contributed 11.3 percentage points to sales growth, while foreign currency effects added 2.0%. Organic sales growth was modest at 2.4%, reflecting limited expansion from existing operations.

By region, the Americas & Asia segment sales increased 14.1%. Organic growth in the Americas & Asia was 4.3%. Segment profit for the Americas & Asia segment fell 3.3% to $51.6 million, as margins declined to 19.8 % from 23.3 % a year ago. This segment benefited from innovation, though higher operational expenses offset some gains.

Europe & Australia recorded a sales jump of 18.8%, largely thanks to the acquisitions. Organic sales actually shrank by 1.3 %, continuing a trend of weak regional demand and economic headwinds affecting industrial markets. Segment profit for Europe & Australia dropped sharply by 21.9% to $15.1 million, reflecting both lower sales in existing lines and restructuring costs. Management stated it is cutting headcount and closing facilities in this region to streamline operations, and facility closure plus other reorganization costs totaled $8.9 million.

Adjusted net income increased 5.1%, as operating expenses increased, including spending on research and development (R&D) and non-recurring cost-cutting actions. R&D expenses hit a record $23.1 million for the quarter, and $79.9 million (GAAP) for the year, as management doubled down on technology for identification and traceability systems. The company’s R&D push is seen in recent product launches like new label printers and marking technologies tailored to industry needs.

Brady’s operating cash flow (GAAP) fell. At the end of the quarter, cash and equivalents (GAAP) dropped to $174.3 million, 30.3% lower than last year. Despite this, the company returned $96.4 million to shareholders via dividends and share buybacks, continuing its long-running practice of rewarding investors.

Looking Ahead: Management Guidance and Investor Focus

Management issued optimistic guidance for the coming year. It expects GAAP (generally accepted accounting principles) diluted earnings per share in the $4.55 to $4.85 range, up as much as 23.1% from the prior year. Adjusted diluted EPS is projected at $4.85 to $5.15, marking an increase of 5.4 % to 12.0 %. The anticipated full-year tax rate is around 21%, with capital expenditures planned at approximately $40 million.

In the quarter ahead, investors should watch for the pace of organic sales growth, the margin trajectory in both regional segments, and the impact of new products. Integration of recent acquisitions will be important for future growth and efficiency. The decline in cash flow and increased inventories signal areas to monitor for future working capital needs.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.

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Motley Fool Markets Team is a Foolish AI, based on a variety of Large Language Models (LLMs) and proprietary Motley Fool systems. The Motley Fool takes ultimate responsibility for the content of these articles. Motley Fool Markets Team cannot own stocks and so it has no positions in any stocks mentioned. The Motley Fool has positions in and recommends Brady. The Motley Fool has a disclosure policy.