Executive Summary
RPM International delivered a solid QQ2 2025 with record adjusted EBIT and adjusted EPS across multiple segments, despite a challenging macro backdrop and weather-related headwinds. The quarter featured revenue of $1.846 billion, gross margin of 41.4%, and an adjusted EBIT margin of 13.8% — a Q2 record — supported by MAP 2025 initiatives, including SG&A streamlining and facility consolidations. Management highlighted that a $4.4 million bad-debt charge from a consumer customer weighed on results in the Consumer group, contributing to a GAAP net income of $183.2 million and GAAP EPS of -$1.78, while adjusted EPS reached $1.39, up 13.9% year over year. The company reaffirmed full-year guidance for low-single-digit net sales growth and 6%–10% adjusted EBIT growth, with performance reinforced by MAP 2025 benefits and ongoing cost discipline.
The management team emphasized positive organic volume growth across all four segments, led by Construction Products Group (CPG) and Performance Coatings Group (PCG), with Consumer and Specialty Products Group (SPG) stabilizing after prior weakness. MAP 2025 remains a cornerstone of RPM’s strategy, delivering structural cost reductions, SG&A efficiency, and capital-project-driven savings that have expanded margins and cash flow. The quarter also showcased meaningful progress on capital allocation and balance-sheet strength, including debt reduction of $226 million, dividend increase, and continued opportunistic buybacks, while reiterating a potential for accretive M&A given the balance sheet strength.
Looking ahead, management cautioned that Q3 will still be seasonally weak and weather headwinds (and FX) will weigh on the near term. However, management expects a return to stronger sales and earnings growth in Q4 as the MAP benefits accumulate and new product launches contribute to growth. The investment thesis rests on continued MAP 2025 execution, meaningful line-of-business diversification (with services and higher-margin offerings expanding the mix), and disciplined capital deployment in NA, Europe, and Latin America.
Key Performance Indicators
QoQ: -19.54% | YoY:25.91%
QoQ: -200.00% | YoY:-257.52%
Key Insights
Revenue: $1.845B in QQ2 2025; YoY growth +2.96%, QoQ -6.27% (trailing four quarters).
Gross Profit: $764.5M; Gross Margin 41.43% (0.4143). YoY gross profit +2.18%; QoQ -8.62%.
Operating Income: $234.7M; Operating Margin 12.72% (0.1272). YoY +4.34%; QoQ -24.42%.
EBITDA: $282.7M; EBITDA Margin 15.32% (0.1532).
Net Income: $183.2M; Net Margin 9.93%.
EPS (GAAP): -$1.78 basic; Diluted -$1.77.
Adjusted EPS: $1.39; YoY +13.9%.
Cash Flow: Operating cash flow $279.4M; Free cash flow $229.5M.
Balance Sh...
Financial Highlights
Revenue: $1.845B in QQ2 2025; YoY growth +2.96%, QoQ -6.27% (trailing four quarters).
Gross Profit: $764.5M; Gross Margin 41.43% (0.4143). YoY gross profit +2.18%; QoQ -8.62%.
Operating Income: $234.7M; Operating Margin 12.72% (0.1272). YoY +4.34%; QoQ -24.42%.
EBITDA: $282.7M; EBITDA Margin 15.32% (0.1532).
Net Income: $183.2M; Net Margin 9.93%.
EPS (GAAP): -$1.78 basic; Diluted -$1.77.
Adjusted EPS: $1.39; YoY +13.9%.
Cash Flow: Operating cash flow $279.4M; Free cash flow $229.5M.
Balance Sheet: Cash $268.7M; Total debt $2.330B; Net debt $2.062B; Current ratio 2.23; Cash ratio 0.208. Liquidity approx. $1.5B.
Shareholder Returns: Dividends + buybacks $83.1M; shares outstanding ~127.7M (weighted).
MAP 2025: Structural SG&A reductions; 400+ Green Belts trained; $36M+ verified savings; six Green Belts promoted to plant managers; ongoing pipeline of projects.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
1.85B |
2.96% |
-6.27% |
| Gross Profit |
764.54M |
2.18% |
-8.62% |
| Operating Income |
234.71M |
4.34% |
-24.42% |
| Net Income |
183.20M |
25.91% |
-19.54% |
| EPS |
-1.78 |
-257.52% |
-200.00% |
Key Financial Ratios
operatingProfitMargin
12.7%
operatingCashFlowPerShare
$2.19
freeCashFlowPerShare
$1.8
dividendPayoutRatio
35.8%
Management Commentary
Theme: MAP 2025 progress and ongoing benefits
- Frank Sullivan: MAP 2025 improvements drove adjusted EBIT growth in each of our four segments, with SG&A as a percent of sales declining and ongoing efforts to streamline costs. "MAP 2025 improvements drove adjusted EBIT growth in each of our four segments."
Theme: Weather/macro headwinds and seasonality
- Frank Sullivan: “the real winter” interrupted leverage to the bottom line, explaining why Q3 sales are expected to be flat and why stronger growth returns in Q4 with easier comps.
Theme: Onshoring and growth opportunities
- Frank Sullivan: “we are seeing a continuation in small to medium-sized projects in manufacturing” and an emphasis on a MAP-driven growth pivot with potential longer-cycle opportunities from onshoring and infrastructure (e.g., data centers, manufacturing).
Theme: Balance sheet and capital allocation
- Frank Mits: “balance sheet's in the best condition it's been since I joined RPM 35 years ago” (contextually reflected in the Q&A). Also, debt reduction and opportunistic capital allocation noted by management.
Theme: Greenbelt program and productivity innovations
- Matt Schlarb: Greenbelt program has generated over $36M in verified savings; over 400 associates trained globally; plant-level impact including solvent recovery and throughput improvements.
MAP 2025 improvements drove adjusted EBIT growth in each of our four segments.
— Frank Sullivan
The real winter is interrupting the leverage to the bottom line, but we expect to see strong sales and earnings growth return in the spring.
— Frank Sullivan
Forward Guidance
Outlook and assessment:
- 3Q guidance: flat consolidated sales versus the prior year; low-single-digit growth for Construction Products Group; flat-to-up slightly for PCG; residential end markets (consumer and SPG) expected to decline modestly due to weather and housing dynamics.
- Full-year 2025 guidance: sales growth in the low single digits; adjusted EBIT growth in the 6%–10% range; MAP 2025 benefits driving P&L improvements, tempered by residential weakness and inflation in raw materials and labor.
- Risks: FX headwinds and potential tariffs or port disruptions; commodity price volatility; potential tariff impacts on raw materials; weather variability; geopolitical uncertainty.
- Catalysts: Q4 seasonal uplift, new product launches (e.g., DIY consumer lines, high-performance coatings), and continued MAP 2025 execution; potential accretive M&A leveraged by a strong balance sheet; onshoring tailwinds in NA and select international markets.
- Execution posture: RPM positions itself to deploy capital for growth (organic and targeted bolt-on acquisitions) when value-accretive opportunities arise, balancing buybacks with strategic investments.