Atmus Filtration Technologies (NYSE:ATMU) reported fourth-quarter and full-year 2025 results that management said reflected “disciplined execution despite challenging global markets,” while also outlining a re-segmented reporting structure and a 2026 outlook that incorporates the recently closed Koch Filter acquisition.
Acquisition closes and reporting segments change in 2026
Chief Executive Officer Steph Disher highlighted the acquisition of Koch Filter, which was announced in the fourth quarter and closed in early January. Disher said the deal establishes Atmus’ “industrial air filtration platform” and creates a new Industrial Solutions segment led by Rakesh Gangwani, Senior Vice President, Strategy, and President of Industrial Solutions.
- Power Solutions, serving global on-highway and off-highway equipment markets
- Industrial Solutions, which will include Koch Filter
In the Q&A, Disher noted the company’s 2026 Industrial Solutions guidance includes Koch Filter revenue from the closing date and referenced a “stub period” of roughly one week that management said equates to about $3 million of sales not included in the full-year view. Disher described the Industrial Solutions outlook as built on approximately 1% pricing, 1%–2% share gains, and end-market demand that “pulses largely around GDP,” with the majority of the business tied to commercial and industrial HVAC.
Four-pillar strategy: product, aftermarket, supply chain, and industrial expansion
Disher reiterated Atmus’ “four-pillar growth strategy” and cited progress during 2025. Under its first-fit share pillar, the company launched NanoNet N3 media, which Disher said enables compact filter designs while delivering service life in harsh environments across a variety of fuels. The product received the World Filtration Institute’s Product of the Year award in December, according to Disher.
For aftermarket growth, Disher said Atmus is expanding in independent and retail channels with new distributors to broaden coverage for Fleetguard and Koch Filter branded products. She also said the company is working with global OEM partners that are expanding their own aftermarket businesses.
On supply chain transformation, Disher said Atmus completed its transition to a global distribution network in 2025, allowing it to “directly control our customer experience” and improve on-shelf availability.
The fourth pillar—expansion into industrial filtration—was advanced by the Koch Filter acquisition. Disher said Atmus will evaluate opportunities across industrial air, industrial liquids excluding water, and industrial water, but expects the near-term focus to be integrating Koch Filter.
Fourth-quarter and full-year 2025 financial performance
For the fourth quarter, Atmus reported sales of $447 million, up from $407 million in the prior-year period, an increase of 9.8%. CFO Jack Kienzler said the increase was driven primarily by 5% pricing, 4% higher volumes, and 1% favorable foreign exchange.
Gross margin was $127 million versus $107 million a year earlier, which Kienzler attributed to higher pricing and volumes, partially offset by higher logistics, duties, and other manufacturing costs. Selling, administrative, and research expenses were $57 million, down $2 million year over year. Joint venture income was $9 million, up $1 million.
Other income was an expense of $10 million, compared with income of $5 million in the fourth quarter of 2024. Kienzler said the change was primarily due to unfavorable foreign exchange translation and an $8 million one-time asset impairment charge related to idled equipment, which he said was excluded from adjusted results.
Adjusted EBITDA was $85 million, or 19.1% margin, unchanged on a margin basis from the prior-year quarter. Adjusted EPS was $0.66 versus $0.58 last year, and adjusted free cash flow was $31 million, up from $28 million.
For the full year, sales rose to $1.764 billion from $1.67 billion, up 5.7%. Adjusted EBITDA increased to $354 million from $330 million, with adjusted EBITDA margin of 20%. Adjusted EPS was $2.73 compared with $2.50 in 2024, and adjusted free cash flow was $158 million compared with $115 million, which Kienzler said was driven by improved working capital and partially offset by higher non-trade receivables tied to the timing of VAT recoveries from the Mexican government.
Kienzler said one-time separation costs totaled $16 million in 2025. The effective tax rate was 22.1%, up from 21% in 2024, driven by changes in the mix of earnings.
Capital allocation, liquidity, and leverage after Koch Filter
Disher said Atmus returned $78 million to shareholders in 2025, including $61 million of share repurchases and $17 million of dividends. The company had $69 million remaining under its share repurchase authorization and expects $20 million to $40 million of repurchases in 2026.
Kienzler said that in connection with the Koch Filter acquisition, Atmus entered into an amended and restated five-year credit agreement that includes a $1 billion term loan and a $500 million revolving credit facility. The term loan was fully drawn at closing, and the company had full availability under the revolver. He said that after the acquisition, Atmus had an estimated $201 million of cash on hand and total estimated liquidity of $701 million.
After financing the transaction, Kienzler said the company’s leverage ratio was approximately 2.1x and that management expects “ongoing deleveraging during 2026” supported by EBITDA and cash flow generation.
2026 outlook: modest Power Solutions growth, added Industrial Solutions revenue
Disher said Atmus has not seen sustained improvement in freight activity and expects the Power Solutions aftermarket to remain “relatively flat year-over-year.” In first-fit markets, she said customers anticipate a weaker first half and recovery in the second half. For U.S. heavy- and medium-duty markets, management expects a range of flat to up 10% compared to 2025, while Disher told analysts off-highway markets are expected to be “flat year-over-year.”
For Industrial Solutions, Disher said market conditions are expected to be favorable, contributing 1%–4% of 2026 growth, while the company expects to add 1%–2% of incremental share growth building on share gains achieved in 2025.
Pricing is expected to provide approximately 1% of revenue growth. Disher said Atmus is lapping strong aftermarket pricing in 2025 that was “largely associated with tariffs,” and that some tariff pricing will not carry into 2026 due to changes in trade agreements, offsets, and mitigation actions. Based on tariffs in effect as of Feb. 1, management does not expect additional tariff pricing in 2026, but said the company will remain “price cost neutral on tariffs” and adjust as needed if conditions change. The U.S. dollar is expected to weaken and provide about a 1% revenue tailwind.
For 2026, Atmus guided to:
- Power Solutions revenue: $1.79 billion to $1.85 billion
- Industrial Solutions revenue: $155 million to $165 million (including Koch Filter revenue from the closing date)
- Total company revenue: $1.945 billion to $2.015 billion
- Adjusted EBITDA margin: 19.5% to 20.5%
- Adjusted EPS: $2.75 to $3.00
In response to a question about EBITDA margin appearing roughly flat at the midpoint, Kienzler said the outlook reflects “strong incrementals” alongside planned investments to fuel growth, with profitability expected to be influenced by manufacturing volume leverage through the year. He also said the company continues to evaluate cost-out opportunities, noting progress from supply chain transformation work and additional efficiency efforts under review.
During the Q&A, Disher also addressed Koch Filter’s exposure to data centers, saying about 8% of the business supports that market and is growing at a “high-teens” rate, supported by customer relationships with “the top 10 players” in those markets, with potential investment under evaluation to support product development.
Disher also discussed regulatory developments, noting that while changes could have broad implications for greenhouse gas standards, the company does not believe criteria pollutant standards such as NOx are repealed. She said Atmus still expects NOx standards to hold for the 2027 engine launch at the 35 milligram level based on customer feedback, and that the company’s guidance includes an element of 2026 pre-buy tied to expected truck and engine cost impacts associated with the 2027 NOx standards.
About Atmus Filtration Technologies (NYSE:ATMU)
Atmus Filtration Technologies is a global developer and manufacturer of high-performance filter media and filtration solutions. The company designs and produces advanced materials that capture airborne particles across a range of applications, from heating, ventilation and air-conditioning (HVAC) systems to industrial and cleanroom environments. By focusing on proprietary meltblown and nanofiber technologies, Atmus delivers media that balances efficiency, airflow and durability for both original equipment manufacturers (OEMs) and aftermarket customers.
The company’s product portfolio encompasses pleated and panel filter media, depth filtration products and specialty laminates used in industries such as commercial buildings, healthcare, transportation and power generation.
