Hillenbrand reported Q2 2025 revenue of $716 million, down 9% year over year, as macro uncertainty and tariff-driven delays weighed on orders and backlog conversion. Adjusted EBITDA totaled $99 million (margin 13.8%), while GAAP net loss was $41 million and adjusted EPS was $0.60, down 21% versus the prior year. Backlog declined to approximately $1.6 billion, a 15% drop YoY, reflecting tariff-related postponements and weaker demand in semiconductor- and plastics-related capex cycles. The quarter benefited from improved capital orders in the Advanced Process Solutions (APS) FHN segment and stable orders in Molding Technology Solutions (MTS), but management underscored macro uncertainty that could persist near term.
Strategically, Hillenbrand completed the Milacron divestiture (approximately 51% stake) on March 31, 2025, and unveiled a reconstituted MTS portfolio anchored by Mold-Masters and DME brands. Management emphasized in-region, region-for-region supply strategy to reduce tariff exposure (domestic supplier exposure ~5% of COGS; China-US spend ~1% of COGS) and launched a multi-pronged tariff mitigation plan, including dual sourcing, surcharge pricing, and contract terms adjustments. The company announced a tariff-related ~ $15 million direct cost embedded in the updated guidance for the remainder of 2025. TerraSource Global is being sold for $245 million, with net proceeds of about $100 million expected to be used to reduce debt, contributing a roughly 0.2x deleveraging effect. As a result, Hillenbrand updated full-year guidance: revenue of $2.56-$2.62 billion, Adjusted EBITDA of $363-$395 million, Adjusted EPS of $2.10-$2.45, and operating cash flow around $120 million with capex near $40 million. While near-term visibility remains constrained, management believes long-term end-market demand remains intact and that synergies are tracking ahead of schedule. Investors should monitor tariff policy developments, the pace of backlog conversion, and the TerraSource/Milacron deleverage trajectory as primary catalysts for an earnings improvement path.