RBC Bearings (RBC 2.87%), a major supplier of precision bearings and engineered components for industrial and aerospace markets, reported Q1 FY2026 results on August 1, 2025. The report showed rising revenue and earnings compared to Q1 FY2025, but both key figures—GAAP revenue and non-GAAP EPS—missed Wall Street forecasts. Non-GAAP earnings per share came in at $2.84 versus the $2.88 estimate, and GAAP revenue was $436.0 million, below the $480.6 million consensus projection. Despite the miss, both segments grew, and Free cash flow was $104.3 million, compared to $88.4 million in Q1 FY2025, an increase of 18.0%. The period highlighted solid demand in core markets, especially aerospace and defense, but also showed some capacity bottlenecks and lag in converting backlog to revenue. Management’s Q2 FY2026 guidance anticipates a return to double-digit sales growth.
| Metric | Q1 FY26(Quarter Ended June 28, 2025) | Q1 FY26 Estimate | Q1 FY25(Quarter Ended June 29, 2024) | Y/Y Change |
|---|---|---|---|---|
| EPS (Non-GAAP) | $2.84 | $2.88 | $2.54 | 11.8 % |
| Revenue | $436.0 million | $480.58 million | $406.3 million | 7.3% |
| Adjusted EBITDA | $141.5 million | $134.0 million | 5.6% | |
| Gross Margin % (Non-GAAP) | 45.4 % | 45.3 % | 0.1 pp | |
| Free Cash Flow | $104.3 million | $88.4 million | 18.0 % |
Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q4 2025 earnings report.
Business Overview and Recent Strategic Focus
RBC Bearings is a leading provider of precision bearings and engineered components. Its products support critical systems in industries that include aerospace, defense, mining, and heavy machinery. The company's broad product range comprises ball bearings, roller bearings, and other components, all tailored to demanding performance and reliability requirements.
The company’s recent strategy highlights market diversification across industrial and aerospace sectors, with a focus on technological innovation and disciplined capacity management. It has invested in new product development and maintained compliance with regulatory standards. Managing production resources to match strong demand and mitigate supply constraints has become increasingly important as orders climb in aerospace and defense.
Quarterly Highlights: Growth, Segments, and Key Financials
In Q1 FY2026, GAAP revenue increased 7.3% from the prior year, yet ended well below company and analyst targets, with GAAP revenue of $436.0 million and non-GAAP EPS of $2.84 both missing analyst estimates. Management reported that, as of Q4 FY2025, plants responsible for about 70% of revenue are running at or above planned capacity, which limited the pace of new revenue realization. The company's order backlog was $1,017.3 million as of June 28, 2025, up 23.2% from $825.8 million a year earlier, underlining strong long-term demand, particularly in commercial aerospace and defense.
The Aerospace/Defense segment stood out, with GAAP sales up 10.4% year over year to $164.6 million. The segment benefited from a rebound in commercial aerospace builds and continuing strong defense orders. Company leadership cited guided munitions and aircraft production as areas of expanding demand. The Industrial segment, contributing 62.3% of company revenue, grew 5.5%, with growth concentrated in mining, aggregates, and logistics. End markets such as oil and gas and semiconductors remained soft, offset by strength in mining and warehousing components.
Gross margin (GAAP) was 44.8%, compared to 45.3% last year. Non-GAAP gross margin was 45.4%, remaining nearly steady at 45.4%. Operating income increased, but the operating margin compressed by 0.8 percentage points to 23.2% on a GAAP basis. This reflected higher selling, general, and administrative (SG&A) spending, which rose 9.3%.
Free cash flow was $104.3 million, compared to $88.4 million in Q1 FY2025, an increase of 18.0%. driving the company’s free cash flow conversion ratio above 150%. This performance supported ongoing debt reduction initiatives, focusing on both capacity expansion and operational efficiency.
Understanding Products and Performance Drivers
RBC Bearings’ core products include ball bearings, cylindrical and needle roller bearings, and specialized engineered components used in both heavy industrial machinery and advanced aerospace platforms. The precision components supplied to aerospace customers meet stringent standards, often requiring multi-year development cycles and regulatory approvals. In defense, the company provides highly specialized bearings used in guided missiles, aircraft engines, and military vehicles.
The company’s industrial line includes bearings and motion-control components used in mining, construction machinery, and food processing.
Look Ahead: Management Outlook and Investor Considerations
Management issued upbeat guidance for Q2 FY2026, projecting net sales of $445–$455 million, indicating growth of 11.8–14.4% over the prior year’s Q2 figure. The company aims for a gross margin of 44.0–44.25% in Q2 FY2026 and expects SG&A expenses at 17.0–17.25% of net sales in Q2 FY2026. Achieving it will depend on successfully expanding production capacity and overcoming supply bottlenecks.
The report did not mention any declared dividend. RBC does not currently pay a dividend. As the company works through operational “ceilings” in its Aerospace/Defense plants, investors may focus on the pace of backlog conversion, cost trends, and execution of growth plans—especially in the context of persistent capacity challenges and variable demand in industrial end-markets. Management continues to monitor tariff impacts and supply chain factors but views these as manageable in the near term.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
