RRX: Data Center and Automation Growth Outperforms Q4 Despite Revenue Miss

Regal Rexnord (NYSE:RRX) reported Q4 CY2025 revenue of $1.52 billion, 4.3% YoY, and non-GAAP profit of $2.51 per share, 1.1% above consensus, despite missing revenue guidance. Management attributed the results to strong order growth in data center, automation, and aerospace, with a 50% year-over-year backlog increase and e-Pod solutions winning major contracts. The company trades at $200.15, up from $178.30 pre-earnings. Looking ahead, guidance for 2026 reflects a measured approach amid secular growth in data center and automation, with ongoing mitigation of rare earth magnet and tariff headwinds. Key watchpoints include execution and shipment timing for data center capacity, margin neutrality from supply chain impacts, and sustained adoption in automation and aerospace. CFO Rob Rehard emphasized flexibility in light of evolving supply chain and market dynamics.