ESCO Technologies Reports 15% Revenue Growth and Strategic Acquisitions in Latest Financial Filing

ESCO Technologies Inc. reported significant financial growth in its latest 10-Q filing for the nine months ending June 30, 2025, with net sales reaching $742.7 million, a 15% increase from $645.6 million in the same period last year. The company’s net earnings also rose to $80.6 million, compared to $67.6 million in the prior year, resulting in a diluted earnings per share of $3.11, up from $2.62. The increase in revenue was primarily driven by strong performance in the Aerospace & Defense (A&D) segment, which saw a 27.6% rise in sales, attributed to increased navy revenues and commercial aerospace shipments.

The company experienced notable changes in its operational structure, including the acquisition of the Signature Management & Power (SM&P) business from Ultra Maritime for approximately $472 million, completed on April 25, 2025. This acquisition is expected to enhance ESCO's capabilities in naval programs, with SM&P's product lines complementing existing offerings. Since the acquisition, the Maritime segment contributed $37.1 million in revenue for the quarter ended June 30, 2025. Additionally, ESCO announced the divestiture of VACCO Industries, which was completed on July 18, 2025, for net proceeds of approximately $275 million, marking a strategic shift away from the space business.

Operationally, ESCO reported a backlog of $1.165 billion as of June 30, 2025, a significant increase from $664 million at the end of the previous fiscal year. The company received new orders totaling $749.1 million in the third quarter of 2025, compared to $254.9 million in the same quarter of 2024. The A&D segment accounted for a substantial portion of these new orders, reflecting strong demand in the defense sector. The company’s workforce also expanded, with an increase in employee headcount to support its growing operations.

The filing indicated that selling, general, and administrative expenses rose to $171.3 million for the nine months ended June 30, 2025, compared to $152.6 million in the prior year, largely due to increased costs associated with the Maritime acquisition and inflationary pressures. Interest expenses also increased to $12.4 million, reflecting higher borrowings related to the acquisition. The effective income tax rate from continuing operations rose to 23.4% for the first nine months of 2025, influenced by non-deductible transaction costs associated with the acquisition.

Looking ahead, ESCO Technologies remains optimistic about its growth trajectory, bolstered by the integration of the Maritime business and a strong order backlog. The company anticipates continued revenue growth driven by demand in its A&D and Utility Solutions segments, while also managing the impacts of inflation and market conditions. The strategic divestiture of VACCO is expected to streamline operations and focus resources on core business areas, positioning ESCO for sustained profitability in the coming quarters.