Atmus Filtration Technologies Inc.

Q3 sales were $510 million, up 14% from $448 million a year ago. Adjusted EBITDA was $104 million, or 20.4%, versus $92 million, or 20.4%, last year. Adjusted EPS was $0.77 versus $0.69 a year ago. Gross margin was $154 million, or 30.3%, versus $129 million, or 28.9% in the prior-year quarter. Adjusted free cash flow was $88 million, versus $72 million last year. For 2026, management raised total company revenue guidance to $2.01 billion-$2.035 billion, adjusted EBITDA margin guidance to 19.75%-20.25%, and adjusted EPS guidance to $2.90-$3.05. Power Solutions revenue is expected at $1.85 billion-$1.87 billion, and Industrial Solutions revenue at $160 million-$165 million.

Stephanie Disher said the company is building momentum through its 4-pillar strategy: growing first-fit share, accelerating aftermarket growth, transforming the supply chain, and expanding into new filtration markets. She emphasized that the business is generating strong cash flow, is well positioned to support customers through the U.S. first-fit upturn, and has room to invest in growth while also returning capital to shareholders. Her tone was confident and constructive, but she acknowledged uncertainty around EPA 2027, the broader macro backdrop, and pickup-truck demand.

Jack Kienzler highlighted the financial bridge behind the quarter: Power Solutions sales were $468 million, up 5%, with higher volumes of 5%, pricing of 1%, and favorable FX of 1%, partly offset by tariff-refund-related pricing of 2%. Gross margin improved on incremental Cook Filter margin, higher volume, and favorable manufacturing costs, while SG&A and R&D rose due to Cook Filter costs, incentive compensation, and people-related expenses. He said adjusted free cash flow was $88 million, net debt to adjusted EBITDA was 1.7x, and the company repaid $50 million of gross debt in the quarter plus another $50 million in early October. He also noted approximately $3 million of one-time Cook Filter integration costs for 2026 and about $12 million of intangible amortization.

Analysts focused on first-fit demand into 2027, share repurchases, price-cost dynamics, aftermarket trends, and the Florida/HEPA investment. Management said first-fit momentum has continued from the second quarter through the third and is expected to remain strong through year-end and into the first half of 2027, though they are watching the upcoming 2027 regulation closely. On buybacks, management said the stronger balance sheet and 1.7x leverage level mean the majority of cash flow can now go toward repurchases, subject to M&A opportunities. On price-cost, Jack said the company expects to be price-cost positive, will pass tariff refunds through to customers in Q4, and will take further pricing actions if input costs keep rising. On aftermarket, Stephanie described North America as relatively flat with no clear inflection yet, while Latin America is stronger and other regions remain challenged.