Executive Summary
- RPM reported Q3 2025 revenue of $1.477 billion, a 3.0% year-over-year decline, with gross margin of 38.4% and EBITDA margin of 7.54% (adjusted EBITDA of $111.3 million). Net income was $52.0 million, with EPS (diluted) of $0.40. The quarter was characterized by unfavorable weather in North America and currency headwinds, amplifying the seasonally weak third quarter. Management framed the results within the MAP 2025 program, noting improving working capital efficiency and record operating cash flow (OCF) for a third quarter, despite margin pressure from under-absorption and plant-startup costs.
- Management remains optimistic about a return to profitable growth in Q4 (guidance: flat consolidated sales with modest EBITDA growth) driven by Performance Coatings and Construction Products, ongoing MAP 2025 benefits, and improved collaboration across segments. The firm anticipates tariff-driven raw material inflation to moderate through mitigations (pricing, alternative sourcing, SKU rationalization) and expects MAP 2025 to deliver material savings in 2026 (roughly $100 million). The Pink Stuff acquisition, expected to close late Q4 2025 or early Q1 2026, is viewed as a meaningful strategic expansion into grocery, drugstore, and e-commerce channels, broadening RPMās consumer cleaning footprint.
- The near-term outlook remains tempered by macro uncertainty (GDP-no-growth environment), tariff dynamics, and weather-driven variability, but RPMās diversified portfolio, backlog strength in PCG/CPG, and ongoing European MAP execution position the company to outperform in a challenging cycle. Investors should monitor raw-material costs, tariff developments, and the pace of integration and cost savings from MAP 2025 and Pink Stuff synergies.
Key Performance Indicators
QoQ: -19.98% | YoY:-3.05%
QoQ: -25.77% | YoY:-6.53%
QoQ: -71.97% | YoY:-30.84%
QoQ: -71.60% | YoY:-14.98%
QoQ: 123.03% | YoY:-14.58%
Key Insights
Revenue: $1.4766B, YoY -3.05%, QoQ -19.98% | Gross Profit: $567.49M, YoY -6.53%, QoQ -25.77% | EBITDA: $111.29M, EBITDA Margin 7.54% | Operating Income: $65.78M, Operating Margin 4.45% | Net Income: $52.03M, Net Margin 3.52% | Diluted EPS: $0.40 (GAAP), $0.41 (reported) | Weighted Avg Shares: 127.5M (GAAP) | Free Cash Flow: $33.31M | Operating Cash Flow: $91.50M | Cash at End of Period: $241.90M | Total Debt: $2.394B; Net Debt: $2.152B | Current Ratio: 2.22; Quick Ratio: 1.38; Cash Ratio: 0.20 |...
Financial Highlights
Revenue: $1.4766B, YoY -3.05%, QoQ -19.98% | Gross Profit: $567.49M, YoY -6.53%, QoQ -25.77% | EBITDA: $111.29M, EBITDA Margin 7.54% | Operating Income: $65.78M, Operating Margin 4.45% | Net Income: $52.03M, Net Margin 3.52% | Diluted EPS: $0.40 (GAAP), $0.41 (reported) | Weighted Avg Shares: 127.5M (GAAP) | Free Cash Flow: $33.31M | Operating Cash Flow: $91.50M | Cash at End of Period: $241.90M | Total Debt: $2.394B; Net Debt: $2.152B | Current Ratio: 2.22; Quick Ratio: 1.38; Cash Ratio: 0.20 | Days Sales Outstanding (DSO): 67.36; Days Inventory Outstanding (DIO): 103.44; Operating Cycle: 170.79 days; Days Payables Outstanding: 63.41; Cash Conversion Cycle: 107.39 | Gross Margin: 38.4%; Operating Margin: 4.45%; Pretax Margin: 2.77%; Net Margin: 3.52% | Debt/Capitalization: 0.472; Debt/Equity: 0.895 | Interest Coverage: 2.86 | Payout Ratio: 126%
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
1.48B |
-3.05% |
-19.98% |
| Gross Profit |
567.49M |
-6.53% |
-25.77% |
| Operating Income |
65.78M |
-30.84% |
-71.97% |
| Net Income |
52.03M |
-14.98% |
-71.60% |
| EPS |
0.41 |
-14.58% |
123.03% |
Key Financial Ratios
operatingProfitMargin
4.45%
operatingCashFlowPerShare
$0.72
freeCashFlowPerShare
$0.26
Management Commentary
Key strategy themes from RPMās management comments: MAP 2025 progress, European integration, and targeted acquisitions are driving efficiency and growth potential even in a soft demand environment. - MAP 2025 execution and SG&A reductions continue to lift profitability: Frank Sullivan highlighted ongoing SG&A streamlining and plant consolidations that, while pressuring near-term margins, are intended to yield higher fixed-cost absorption and cash flow in coming quarters. Quote: āwe are returning to profitable growth in Q4ā and āMAP 2025 initiativesā¦will continue into our fiscal 2026 new yearā (Frank Sullivan). - Tariffs and raw material costs remain manageable with a disciplined response plan: Sullivan noted a measured impact from tariffs (~3.2% unmitigated, ~4.3% US spend) and outlined mitigants (annex exemptions, alternative sourcing, price increases) with an expectation to offset most of the impact. Quote: āthe unmitigated impact as we sit here today is about 3.2%ā¦we will offset most of that impactā (Frank Sullivan). - Pink Stuff acquisition adds scale, distribution breadth, and channel diversification: Management underscored the strategic rationale of Pink Stuff to expand RPMās cleaning category exposure, including grocery/drugstore and e-commerce, with an estimated total addressable market of roughly $12 billion in North America. Quote: āPink Stuff will broaden our product offerings and strengthen our position in several sales channels, including e-commerce, grocery, and drug storesā (Michael LaRoche). - Mixed end-market dynamics with resilience in data-center, roofing, and asset-life services: The call emphasized ongoing strength in data-center related coatings and passive fire protection, with lessons on how RPMās products extend asset life in uncertain budgets. Frank Sullivan: āour products and services to extend asset life to deliver value to customers and outgrow our marketsā and ādata centers is a good example where stone hard flooring, carboline coatingsā¦ā (transcript). - European MAP execution and integration progress: Matt Schlarb described Europe MAP-driven consolidations, administrative convergence, and the opening of a Resin Center of Excellence, with expected $100M of MAP savings in fiscal 2026. Quote: āMAP savings in Q3ā¦about $28 million across all of RPMā (Matt Schlarb).
"We are returning to profitable growth in Q4."
ā Frank Sullivan
"The unmitigated impact as we sit here today is about 3.2%. Itāll be larger in the United States at about 4.3%... we will offset most of that impact."
ā Frank Sullivan
Forward Guidance
RPM maintains a cautious-but-constructive view for Q4 and a constructive longer-term trajectory anchored in MAP 2025 and selective M&A. Key points: - Q4 guidance: Consolidated sales expected to be flat, with adjusted EBITDA up in the low single digits; currency headwinds expected to ease modestly versus Q3. Pink Stuff integration not included in the guidance. - MAP 2025 benefits to flow through into 2026: Management projects roughly $100 million of MAP-related savings in fiscal 2026, implying meaningful margin expansion potential as fixed-cost absorption improves and plant-network optimization completes. - Growth drivers and risks: PCG remains a core growth engine with data-center and high-performance building demand; CPG benefits from roof-repair/maintenance demand and ongoing PMA-like improvements; SPG faces softness in specialty OEM markets but benefits from food coatings and additive platforms; consumer growth relies on new products and share gains. - Key risk factors: tariffs and raw material inflation could reprice cost input lines; macro demand remains modest in a GDP-no-growth environment; weather volatility can shift timing of demand; near-term earnings are sensitive to under-absorption from plant consolidations. - Critical monitoring: tariff evolution, raw-material price trajectories, progress on Pink Stuff synergies, MAP 2025 execution in Europe, and backlog conversion in PCG/CPG. Overall view: RPMās diversified portfolio and ongoing MAP 2025 program support a potential for gradual margin expansion and earnings growth as headwinds abate and volumes recover. Investors should watch commodity-cost pass-through, cross-border tariff dynamics, and the pace of Pink Stuff integration.