Wabtec Corporation (WAB) has delivered an impressive performance in its third quarter of 2025, reporting a 16% surge in adjusted earnings per share (EPS) to $2.32, while GAAP EPS saw an 11% rise to $1.81. This growth can be attributed to increased sales, margin expansion, and strategic share buybacks. The company’s revenue also climbed 8.4% year-over-year to $2.89 billion, with cash from operations standing at $367 million.
The strong sales figures were complemented by improved operating margins. Adjusted operating margins enhanced by 1.3 percentage points to 21.0%, showcasing Wabtec’s ability to navigate a competitive landscape effectively. Despite a dip in operating cash flow from the prior year’s $542 million to $367 million, the company maintained a solid operating cash conversion rate of 83%. Management has raised its adjusted EPS guidance for 2025 to a range of $8.85–$9.05, reflecting a midpoint increase of 18.4%.
The Freight segment emerged as a key driver of Wabtec’s growth, with revenues in this area rising by 8.4% to $2.09 billion. This growth was bolstered by a remarkable 32% increase in locomotive equipment sales and a staggering 45.6% rise in digital electronics, aided by the acquisition of Inspection Technologies. However, services revenue dipped by 11.6%, attributed to the timing of modernization deliveries. The adjusted operating margin in the Freight segment improved to 24.5%, while the GAAP operating margin experienced a slight decrease of 0.4 percentage points to 19.8% due to increased operational costs related to acquisitions.
In the Transit segment, Wabtec reported an 8.2% revenue increase, reaching $793 million, driven by higher OEM and aftermarket sales. The adjusted operating margin in this segment rose by 2.7 percentage points to 15.5%, and the GAAP operating margin improved by 3.7 percentage points to 14.5%. The positive performance in Transit reflects strong demand across global transit systems, particularly in aftermarket services, alongside effective cost management and project execution.
Wabtec’s total backlog has expanded significantly, growing 15% year-over-year to $25.6 billion. This substantial backlog underscores sustained global demand and long-term customer contracts, with a 12-month backlog also seeing an 8.4% increase, reaching $8.27 billion. This growth is indicative of robust revenue visibility extending into 2026, with the company’s order book encompassing freight locomotives, transit components, and digital solutions aligned with global infrastructure needs.
Management remains optimistic about future growth opportunities across both core and emerging markets, with increased orders in both transit and freight segments solidifying Wabtec’s market-leading position. The expanding backlog is expected to underpin revenue growth and operational planning for the upcoming years.
