Sep 3, 2026 earnings call — PSS acquisition and pivot to industrial technology
Brady closed Honeywell's PSS acquisition, adding approximately $1.15 billion of revenue and reorganizing into IDS and IPS segments.
Revenue $0.4B (est $0.4B) · EPS $1.48 (est $1.47)
Key quotes
"With the PSS acquisition closed as of a month ago, Brady is now pivoting from a classic industrial company to an industrial technology company that is able to put more connected devices software, services, and media to work to solve the most challenging customer problems."
"Printer unit sales were up 25% in the fourth quarter compared to the fourth quarter of last year."
"At July 31, we were in a net cash position of $172.2 million which was more than double our net cash position from 1 year ago."
Analyst Q&A 4
New segments and 2027 guidance
Q (Keith Housum): The analyst signaled he had questions and waited for the Q&A to open.
A: Management said they will report two new segments starting in fiscal 27: Identification Solutions (IDS) and Intelligent Productivity Solutions (IPS). They gave fiscal 27 guidance including IDS organic growth of approximately 5% and IPS contributing approximately $1.15 billion, and adjusted diluted EPS of $6.25 to $6.75.
"For fiscal 27, we expect revenue from IDS to grow approximately 5% organically and we expect IPS to contribute revenue of approximately $1.15 billion." — Ann E. Thornton (CFO)
Regional sales, costs, CapEx, product review
Q (Steve Ferazani · Sidoti): He asked why Europe decelerated and had lower margins versus the U.S., whether inflation is hurting margins (especially in Europe), why CapEx guidance is lower for fiscal 2027, and whether legacy product lines and SKUs will be reviewed.
A: Management said regional results track local GDP and macro trends: Europe has pockets of strength like defense and new regulations, while the Americas benefit from data center CapEx. They noted rising input costs (electronics memory and diesel) but said Europe still executed well. On CapEx, IPS is a CapEx-light business and the Suzhou facility is efficient so no major near-term investment is expected; last year's higher CapEx included a one-time headquarters build, and next year should return to normalized levels around 2% of sales. They also said portfolio optimization will continue and they will review parts that do not fit the strategy.
"Next year, we expect things to return to normalized levels, which generally for Brady and the IPS business just as Vineet has highlighted generally can run around 2% of sales, and that is what you are seeing in our guide." — Ann E. Thornton (CFO)
Asia growth, printers, IPS guide, memory
Q (Keith Housum): He asked why Asia grew strongly and whether that is sustainable; why printer volumes accelerated (25% in Q4) and what drove consumable growth; whether the $1.15 billion IPS guide implies only low single-digit growth versus trailing 12 months; and how memory cost and availability affect IPS.
A: Management said Asia strength was broad across China, India (23% growth), and Southeast Asia, helped by data centers and manufacturing and by prior investments in India. They said printers and consumables remain about 40% of Brady sales and grew nearly 10% organically, helped by data center demand and new printers like the I 51. On IPS, they are 30 days into the acquisition, expect the IPS team to deliver similar cadence, are still learning and investing in product and commercial areas, and Ann confirmed the $1.15 billion guide assumes roughly low single-digit growth. On memory, David said they have worked hard to secure supply, initiated product redesigns, qualified new suppliers, used long-term contracts, implemented price increases, and worked on cost actions.
"We have initiated some product redesigns to be able to use different memory configurations." — David Barker (PRESIDENT)
Competition, software, synergies, deleveraging
Q (Steve Ferazani · Sidoti): He asked how the competitive landscape for PSS/IPS has changed, what Brady brings, and whether deleveraging, synergies, and cross-selling can progress faster given lower CapEx.
A: Management said AIDC has consolidated and technology is a leveler; Brady will focus on innovation, customer service, and product and commercial synergies with IPS. They highlighted software investment and interoperability as a key differentiator that makes solutions stickier. They noted about $25 million of synergies in year 3 and reiterated the plan to deleverage to below 2 times net leverage within the first 2 years after the acquisition.
"We have invested significantly in our software portfolio, and that is where the real differentiator will be in the future." — David Barker (PRESIDENT)