ESCO Technologies Reports 6.6% Revenue Growth and Strong Earnings in Q2 2025

ESCO Technologies Inc. reported a notable increase in financial performance for the second quarter and first half of fiscal 2025, as detailed in its latest 10-Q filing. For the three months ended March 31, 2025, the company achieved net sales of $265.5 million, a 6.6% increase from $249.1 million in the same period of the previous year. Net earnings for the quarter rose to $31.0 million, or $1.20 per diluted share, compared to $23.2 million, or $0.90 per diluted share, in the prior year. For the first six months, net sales reached $512.5 million, up 9.6% from $467.4 million, with net earnings of $54.5 million, or $2.11 per diluted share, compared to $38.4 million, or $1.49 per diluted share, in the first half of 2024.

The company's growth was driven by increases across its three business segments: Aerospace & Defense (A&D), Utility Solutions Group (USG), and RF Test and Measurement (Test). The A&D segment saw a sales increase of $8.7 million in the second quarter, attributed to higher commercial aerospace shipments and navy revenues. The USG segment's sales rose by $3.5 million, primarily due to increased demand for diagnostic testing solutions. The Test segment also contributed with a $4.3 million increase in sales, driven by higher volumes in the U.S. and European markets.

In terms of operational metrics, ESCO Technologies reported a backlog of $932.3 million as of March 31, 2025, an increase from $879.0 million at the end of the previous fiscal year. The company received new orders totaling $290.8 million in the second quarter, compared to $239.1 million in the same quarter of 2024. The increase in orders was spread across all segments, with A&D products accounting for $121.7 million of the new orders. The company also reported a decrease in accounts receivable, reflecting strong cash collections, while inventories increased due to the timing of manufacturing existing orders.

Strategically, ESCO Technologies completed the acquisition of the Signature Management & Power (SM&P) business from Ultra Maritime for approximately $550 million in cash on April 25, 2025. This acquisition is expected to enhance the company's A&D segment by integrating complementary product lines that focus on naval programs. The company continues to maintain a strong liquidity position, with approximately $407 million available under its credit facility and $57.4 million in cash on hand as of March 31, 2025.

Looking ahead, ESCO Technologies anticipates continued growth driven by strong demand across its segments and the successful integration of the SM&P business. The company remains focused on leveraging its operational capabilities and expanding its market presence while managing costs and maintaining profitability. The effective income tax rate for the second quarter of 2025 was reported at 23.4%, reflecting an increase from 20.5% in the prior year, influenced by prior year discrete events. Overall, the company’s outlook remains positive as it navigates market conditions and capitalizes on growth opportunities.