Filtration products manufacturer Atmus Filtration Technologies (NYSE: ATMU) reported Q4 CY2025 results beating Wall Street’s revenue expectations, with sales up 9.8% year on year to $446.6 million. Its GAAP profit of $0.58 per share was 4.4% above analysts’ consensus estimates.

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Company Overview

Spun out of Cummins in 2023 after 65 years as part of the engine maker, Atmus Filtration Technologies (NYSE: ATMU) manufactures filters for trucks, construction equipment, and agriculture machinery to reduce emissions and protect engines.

Revenue Growth

A company’s long-term sales performance can indicate its overall quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Over the last four years, Atmus Filtration Technologies grew its sales at a tepid 5.2% compounded annual growth rate. This fell short of our benchmark for the industrials sector and is a poor baseline for our analysis.

Long-term growth is the most important, but within industrials, a stretched historical view may miss new industry trends or demand cycles. Atmus Filtration Technologies’s recent performance shows its demand has slowed as its annualized revenue growth of 4.1% over the last two years was below its four-year trend.

This quarter, Atmus Filtration Technologies reported year-on-year revenue growth of 9.8%, and its $446.6 million of revenue exceeded Wall Street’s estimates by 5.5%.

Looking ahead, sell-side analysts expect revenue to grow 6.3% over the next 12 months. Although this projection indicates its newer products and services will catalyze better top-line performance, it is still below the sector average.

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Operating Margin

Operating margin is one of the best measures of profitability because it tells us how much money a company takes home after procuring and manufacturing its products, marketing and selling those products, and most importantly, keeping them relevant through research and development.

Atmus Filtration Technologies has been an efficient company over the last five years. It was one of the more profitable businesses in the industrials sector, boasting an average operating margin of 15.3%. This result was particularly impressive because of its low gross margin, which is mostly a factor of what it sells and takes huge shifts to move meaningfully. Companies have more control over their operating margins, and it’s a show of well-managed operations if they’re high when gross margins are low.

Looking at the trend in its profitability, Atmus Filtration Technologies’s operating margin rose by 2.1 percentage points over the last five years, as its sales growth gave it operating leverage.

In Q4, Atmus Filtration Technologies generated an operating margin profit margin of 15.8%, up 2.4 percentage points year on year. The increase was encouraging, and because its operating margin rose more than its gross margin, we can infer it was more efficient with expenses such as marketing, R&D, and administrative overhead.

Earnings Per Share

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

Atmus Filtration Technologies’s unimpressive 5.2% annual EPS growth over the last four years aligns with its revenue performance. On the bright side, this tells us its incremental sales were profitable.

Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business.

Atmus Filtration Technologies’s two-year annual EPS growth of 10.3% was good and topped its 4.1% two-year revenue growth.

We can take a deeper look into Atmus Filtration Technologies’s earnings to better understand the drivers of its performance. Atmus Filtration Technologies’s operating margin has expanded over the last two yearswhile its share count has shrunk 1.3%. These are positive signs for shareholders because improving profitability and share buybacks turbocharge EPS growth relative to revenue growth.

In Q4, Atmus Filtration Technologies reported EPS of $0.58, up from $0.48 in the same quarter last year. This print beat analysts’ estimates by 4.4%. We also like to analyze expected EPS growth based on Wall Street analysts’ consensus projections, but there is insufficient data.

Key Takeaways from Atmus Filtration Technologies’s Q4 Results

We were impressed by how significantly Atmus Filtration Technologies blew past analysts’ EBITDA expectations this quarter. We were also excited its revenue outperformed Wall Street’s estimates by a wide margin. Zooming out, we think this was a good print with some key areas of upside. The stock traded up 4.2% to $64.70 immediately following the results.

Atmus Filtration Technologies may have had a good quarter, but does that mean you should invest right now? The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).