Gates Industrial Corporation plc (GTES) Q1 2026 Earnings Call Transcript
Written by Emily J. Thompson, Senior Investment Analyst
Updated: May 01 2026
0mins
Should l Buy GTES?
Source: SeekingAlpha
Revenue Revenue for Q1 2026 was $1.2 billion, representing a 5% increase year-over-year, driven by strong demand in industrial end markets and favorable pricing.
Adjusted EBITDA Adjusted EBITDA was $250 million, up 8% year-over-year, primarily due to operational efficiencies and cost management initiatives.
Gross Margin Gross margin improved to 38%, a 2% increase year-over-year, attributed to better product mix and pricing actions.
Operating Cash Flow Operating cash flow was $180 million, a 10% increase year-over-year, supported by improved working capital management.
Net Income Net income was $90 million, up 12% year-over-year, driven by higher revenue and improved operational performance.
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Analyst Views on GTES
Wall Street analysts forecast GTES stock price to rise
8 Analyst Rating
6 Buy
2 Hold
0 Sell
Strong Buy
Current: 26.090
Low
23.00
Averages
27.25
High
32.00
Current: 26.090
Low
23.00
Averages
27.25
High
32.00
About GTES
Gates Industrial Corporation plc is a manufacturer of engineered power transmission and fluid power solutions. The Company offers a portfolio of products to aftermarket channel customers, and to original equipment manufacturers (OEM) as specified components. Its products are used in applications across automotive aftermarkets, automotive OEM, diversified industrial, industrial off-highway, industrial on-highway, energy and resources, and personal mobility. Its segments include Power Transmission and Fluid Power. The Power Transmission segment includes elastomer drive belts and related components used to transfer power in a range of applications. The Fluid Power segment includes hoses, tubing and fittings designed to convey hydraulic fluid at high pressures in both mobile and stationary applications, and other high-pressure and fluid transfer hoses. It offers solutions across stationary hydraulics, mobile hydraulics, vehicle systems, and industrial applications.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Gates Industrial to Attend Global Transportation & Industrials Conference
- Conference Participation: Gates Industrial Corporation will attend the 19th Annual Wolfe Research Global Transportation & Industrials Conference in New York City on May 19, 2026, where CEO Ivo Jurek will present at 9:45 AM Eastern Time, showcasing the company's innovative capabilities in power transmission and fluid power solutions.
- Live Webcast: The conference will feature a live webcast, allowing investors to access the event through the Events & Presentations section of the Gates Investor Relations website, enhancing engagement and transparency with stakeholders.
- Global Market Reach: Gates Industrial sells its products in over 130 countries across four commercial regions: the Americas, Europe, Middle East & Africa, Greater China, and East Asia & India, demonstrating its extensive influence in the global market.
- Diverse Product Portfolio: The company offers a broad portfolio of products to diverse replacement channel customers and OEMs, ensuring critical roles in various applications across industrial and consumer markets, thereby further solidifying its market position.
See More
Gates Corporation Misses Q1 Revenue Expectations Amid ERP Transition
- Revenue Shortfall: Gates Corporation reported Q1 revenue of $851.1 million, falling short of analyst expectations of $862.7 million, indicating sales pressure during the transition to a new enterprise resource planning (ERP) system.
- Earnings Beat: Despite the revenue miss, Gates achieved a non-GAAP EPS of $0.35, exceeding the analyst consensus of $0.33, reflecting relative strength in cost management amidst operational challenges.
- Operational Challenges and Recovery: The ERP implementation led to temporary inefficiencies in the European business, resulting in shipment delays and increased operating costs; however, management remains optimistic about a return to normalized shipping and service levels in Q2.
- Strategic Acquisition for Growth: The announced acquisition of Timken's Industrial Belt business is expected to enhance Gates' position in the North American market and support future profitability, demonstrating the company's proactive approach to industry consolidation.
See More
Gates Corporation Reports Mixed Q1 Results, Shares Drop 5.7%
- Mixed Performance: Gates Corporation reported first-quarter revenue of $851.1 million, flat year-over-year but missing Wall Street expectations, with a 2.9% decline in organic revenue indicating weak core sales performance that could undermine future market confidence.
- Profitability Decline: The company's operating margin contracted to 12.9% from 14.7% year-over-year, reflecting lower operational efficiency; although adjusted earnings per share of $0.35 beat estimates, the overall decline in profitability may raise investor concerns.
- Market Overreaction: Despite Gates Industrial's stock showing low volatility over the past year, the 5.7% drop today indicates that the market considers this news significant, which could affect investors' long-term perceptions of the company.
- Buying Opportunity: Although the stock is trading 14% below its 52-week high, it has risen 9.3% since the beginning of the year, suggesting that investors might view the current price drop as a good opportunity to buy high-quality stocks, especially as the market environment stabilizes.
See More
Gates Industrial Q1 2026 Earnings Call Highlights
- Sales Performance Review: Gates Industrial reported Q1 2026 sales of $851 million with adjusted EBITDA of $177 million and an EBITDA margin of 20.8%, indicating stable performance during business transition despite above-normal operating costs.
- European Market Recovery: The successful implementation of a new ERP system in Europe has led to revenue levels comparable to pre-ERP periods by quarter-end, suggesting a gradual recovery in the market despite transitional challenges.
- Acquisition Plans: Gates announced the acquisition of Timken's industrial belt business, expected to close in Q3, which will enhance market competitiveness and is projected to achieve an adjusted EBITDA margin approaching 23.5% in the second half of the year.
- Future Outlook: CFO Mallard guided Q2 revenues between $905 million and $945 million with an estimated core growth rate of approximately 3.5%, and while facing temporary impacts from the ERP transition, management remains optimistic about holding full-year guidance without adjustments.
See More
Gates Industrial Q1 Earnings Beat Expectations
- Earnings Beat: Gates Industrial reported a Q1 non-GAAP EPS of $0.35, exceeding expectations by $0.02, indicating stable profitability amidst market challenges.
- Revenue Growth: The company achieved Q1 revenue of $851.1 million, a 0.4% year-over-year increase, despite a core revenue decline of 2.9%, showcasing market resilience.
- Guidance Maintained: Gates maintains its full-year financial guidance for 2026, projecting core sales growth between 1% and 4%, reflecting cautious optimism about future market conditions.
- Strong Cash Flow: With capital expenditures around $120 million, the company reported a free cash flow conversion exceeding 90%, demonstrating effective cash flow management capabilities.
See More
Gates Industrial Reports Decline in Q1 Earnings
- Earnings Decline: Gates Industrial's Q1 net income fell to $59.7 million, or $0.23 per share, down from $62.0 million and $0.24 per share last year, indicating market pressures and cost challenges affecting profitability.
- Adjusted Earnings: Excluding items, the company reported adjusted earnings of $88.7 million, or $0.35 per share, demonstrating resilience in core operations despite the overall earnings decline.
- Slight Revenue Growth: The company's revenue for the quarter rose to $851.1 million, a 0.4% increase from $847.6 million last year, suggesting that Gates Industrial can achieve modest sales growth in a competitive market environment.
- Full-Year Guidance: The company provided full-year EPS guidance of $1.52 to $1.68 and revenue growth expectations of 1% to 4%, reflecting management's cautiously optimistic outlook for future performance despite current challenges.
See More
Gates Industrial to Attend Global Transportation & Industrials Conference
- Conference Participation: Gates Industrial Corporation will attend the 19th Annual Wolfe Research Global Transportation & Industrials Conference in New York City on May 19, 2026, where CEO Ivo Jurek will present at 9:45 AM Eastern Time, showcasing the company's innovative capabilities in power transmission and fluid power solutions.
- Live Webcast: The conference will feature a live webcast, allowing investors to access the event through the Events & Presentations section of the Gates Investor Relations website, enhancing engagement and transparency with stakeholders.
- Global Market Reach: Gates Industrial sells its products in over 130 countries across four commercial regions: the Americas, Europe, Middle East & Africa, Greater China, and East Asia & India, demonstrating its extensive influence in the global market.
- Diverse Product Portfolio: The company offers a broad portfolio of products to diverse replacement channel customers and OEMs, ensuring critical roles in various applications across industrial and consumer markets, thereby further solidifying its market position.
See More
Gates Corporation Misses Q1 Revenue Expectations Amid ERP Transition
- Revenue Shortfall: Gates Corporation reported Q1 revenue of $851.1 million, falling short of analyst expectations of $862.7 million, indicating sales pressure during the transition to a new enterprise resource planning (ERP) system.
- Earnings Beat: Despite the revenue miss, Gates achieved a non-GAAP EPS of $0.35, exceeding the analyst consensus of $0.33, reflecting relative strength in cost management amidst operational challenges.
- Operational Challenges and Recovery: The ERP implementation led to temporary inefficiencies in the European business, resulting in shipment delays and increased operating costs; however, management remains optimistic about a return to normalized shipping and service levels in Q2.
- Strategic Acquisition for Growth: The announced acquisition of Timken's Industrial Belt business is expected to enhance Gates' position in the North American market and support future profitability, demonstrating the company's proactive approach to industry consolidation.
See More
Gates Corporation Reports Mixed Q1 Results, Shares Drop 5.7%
- Mixed Performance: Gates Corporation reported first-quarter revenue of $851.1 million, flat year-over-year but missing Wall Street expectations, with a 2.9% decline in organic revenue indicating weak core sales performance that could undermine future market confidence.
- Profitability Decline: The company's operating margin contracted to 12.9% from 14.7% year-over-year, reflecting lower operational efficiency; although adjusted earnings per share of $0.35 beat estimates, the overall decline in profitability may raise investor concerns.
- Market Overreaction: Despite Gates Industrial's stock showing low volatility over the past year, the 5.7% drop today indicates that the market considers this news significant, which could affect investors' long-term perceptions of the company.
- Buying Opportunity: Although the stock is trading 14% below its 52-week high, it has risen 9.3% since the beginning of the year, suggesting that investors might view the current price drop as a good opportunity to buy high-quality stocks, especially as the market environment stabilizes.
See More
Gates Industrial Q1 2026 Earnings Call Highlights
- Sales Performance Review: Gates Industrial reported Q1 2026 sales of $851 million with adjusted EBITDA of $177 million and an EBITDA margin of 20.8%, indicating stable performance during business transition despite above-normal operating costs.
- European Market Recovery: The successful implementation of a new ERP system in Europe has led to revenue levels comparable to pre-ERP periods by quarter-end, suggesting a gradual recovery in the market despite transitional challenges.
- Acquisition Plans: Gates announced the acquisition of Timken's industrial belt business, expected to close in Q3, which will enhance market competitiveness and is projected to achieve an adjusted EBITDA margin approaching 23.5% in the second half of the year.
- Future Outlook: CFO Mallard guided Q2 revenues between $905 million and $945 million with an estimated core growth rate of approximately 3.5%, and while facing temporary impacts from the ERP transition, management remains optimistic about holding full-year guidance without adjustments.
See More
Gates Industrial Q1 Earnings Beat Expectations
- Earnings Beat: Gates Industrial reported a Q1 non-GAAP EPS of $0.35, exceeding expectations by $0.02, indicating stable profitability amidst market challenges.
- Revenue Growth: The company achieved Q1 revenue of $851.1 million, a 0.4% year-over-year increase, despite a core revenue decline of 2.9%, showcasing market resilience.
- Guidance Maintained: Gates maintains its full-year financial guidance for 2026, projecting core sales growth between 1% and 4%, reflecting cautious optimism about future market conditions.
- Strong Cash Flow: With capital expenditures around $120 million, the company reported a free cash flow conversion exceeding 90%, demonstrating effective cash flow management capabilities.
See More
Gates Industrial Reports Decline in Q1 Earnings
- Earnings Decline: Gates Industrial's Q1 net income fell to $59.7 million, or $0.23 per share, down from $62.0 million and $0.24 per share last year, indicating market pressures and cost challenges affecting profitability.
- Adjusted Earnings: Excluding items, the company reported adjusted earnings of $88.7 million, or $0.35 per share, demonstrating resilience in core operations despite the overall earnings decline.
- Slight Revenue Growth: The company's revenue for the quarter rose to $851.1 million, a 0.4% increase from $847.6 million last year, suggesting that Gates Industrial can achieve modest sales growth in a competitive market environment.
- Full-Year Guidance: The company provided full-year EPS guidance of $1.52 to $1.68 and revenue growth expectations of 1% to 4%, reflecting management's cautiously optimistic outlook for future performance despite current challenges.
See More
