On this page of StockholderLetter.com we present the latest annual shareholder letter from ESCO TECHNOLOGIES INC — ticker symbol ESE. Reading current and past ESE letters to shareholders can bring important insights into the investment thesis.

 •  12/3/2025 Letter Continued (Full PDF)
 •  11/30/2023 ESE Stockholder Letter
 •  12/4/2024 ESE Stockholder Letter
 •  More "Industrial Machinery & Equipment" Category Stockholder Letters
 •  ESE Benford's Law Stock Score = 80

ESE Shareholder/Stockholder Letter Transcript:

ESCO Technologies Inc. E
ANNUAL REPORT
ESCO TECHNOLOGIES INC.
2025

Driving
Long-Term
Growth
ESCO is a well-established provider of highly-engineered products
and solutions. 2025 was a transformative year during which we
meaningfully simplified and strengthened our portfolio of businesses
serving industrial markets with durable long-term growth drivers.
2023
Cover photo of submarine courtesy of navy.mil
2021
Ending Backlog2
IN MILLIONS
2022
2023
2024
2025
2021
2022
2023
$664
$583
$531
$436
$1,134
$6.03
$4.77
2025
$3.97
2024
$2.28
$856
$1,095
2022
$919
2021
$746
$605
IN MILLIONS
$3.09
Earnings Per Share   
As Adjusted1,2
Net Sales2
2024
2025

FINANCIAL HIGHLIGHTS FROM CONTINUING OPERATIONS 2
DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS
2021
2022
2023
2024
2025
$ 605
$ 746
$ 856
$ 919
$ 1,095
Entered Orders
679
841
908
1,000
1,565
Earnings Per Share     GAAP
1.69
2.49
3.31
3.97
4.49
Earnings Per Share     As Adjusted1
2.28
3.09
3.97
4.77
6.03
2021
2022
2023
2024
2025
$ 98
$ 55
$ 60
$ 56
$ 85
1.03
0.78
0.54
0.45
0.56
97
114
81
122
200
Net Sales
Capital Performance
(AS OF SEPTEMBER 30)
Net Debt
Leverage Ratio
Cash Flow from Operating Activities
1 EPS     As Adjusted excludes $1.54 per share of charges associated with Corporate acquisition costs, Maritime inventory step-up and stamp duties,
restructuring within the Test and USG segments, and acquisition related amortization in 2025, $0.80 per share of charges associated with debt
financing and costs related to the SM&P acquisition, restructuring (primarily severance), MPE backlog and inventory step-up, and acquisition related
amortization in 2024, $0.66 per share of charges associated with executive management transition costs at Corporate, CMT acquisition inventory
step-up, restructuring within A&D, Corporate acquisition related costs, and acquisition related amortization in 2023, $0.60 per share of charges
associated with the Altanova and NEco acquisition inventory step-ups, severance at NRG, Corporate acquisition and management transition costs,
and acquisition related amortization in 2022, and $0.59 per share mainly consisting of management transition and acquisition costs at Corporate,
restructuring costs primarily within the USG segment, purchase accounting adjustments related to the Phenix and Altanova acquisitions, and
acquisition related amortization, partially offset by the final settlement from the sale of the Doble Watertown facility in 2021.
2 Excludes Discontinued Operations     VACCO Industries sale was completed 7/18/25.
Notice of 2026 Annual Meeting & Proxy Statement
ESCO Technologies Inc. 1

Letter to
Shareholders
ESCO
Maritime Solutions
2025 was a transformative year for ESCO, marked by record operating
performance and two key portfolio actions     the acquisition of Signature
Management & Power (SM&P), now rebranded as ESCO Maritime Solutions
(Maritime) and the divestiture of VACCO Industries.
YOUR MISSION
CRITICAL PARTNER
These moves reflect our ongoing portfolio review, aimed at sharpening
our strategic focus and increasing exposure to high-growth, higher-margin
markets. With these transactions, ESCO has exited the space sector and
expanded our Navy presence - a meaningful step in our continued evolution.
Across our portfolio, ESCO is well positioned to serve markets with durable
long-term growth potential.
ESCO Maritime Solutions (Maritime),
acquired in 2025, is now part of ESCO   s
Aerospace & Defense (A&D) segment.
Maritime is a long-standing sole-source
provider of mission-critical signature and
power management solutions that enhance
the stealth capabilities of submarines and
surface ships.
The addition of Maritime significantly
expands our Navy business, where we have
meaningful content on critical US, UK, and
AUKUS platforms.
Maritime   s signature management
solutions provide magnetic and electric
field countermeasures to reduce detection
by underwater mines and sensors. Their
power management systems feature highly
engineered, ultra-quiet motors that drive
ship propulsion while minimizing vibration.
ESCO TECHNOLOGIES
EXECUTIVE TEAM
Chris Tucker
Senior Vice President & Chief Financial Officer
Bryan Sayler
Chief Executive Officer & President
David Schatz
Senior Vice President,
Secretary & General Counsel
Photo above courtesy of navy.mil
In Navy, both the U.S. and U.K. remain deeply committed to submarine
programs, recognizing their role in national security. Boosting build
rates and advancing new platforms are key to fleet modernization and
maintaining nuclear deterrence in a volatile geopolitical environment.
In Aerospace, long-term demand drivers are in place. Over the next 20
years, passenger traffic and the commercial aircraft fleet are expected
to nearly double, requiring OEMs to ramp up production to meet growing
demand and the natural replacement cycle of aging aircraft.
In Utilities, electricity demand is rising sharply - driven by economic growth
and industrial expansion, the rise of data centers and AI, and adoption of
EVs and heat pumps. Utilities must maintain, expand, and modernize the
electric grid, and our diagnostic measurement and monitoring solutions are
essential to ensuring the reliability and performance of both new and aging
utility assets.
Strong end-market demand and the acquisition of Maritime drove record
sales and Adjusted EPS in 2025. With record backlog and leading market
positions, we remain well-positioned to deliver above-market growth and
long-term value for our stakeholders.

2025 SEGMENT RESULTS
FROM CONTINUING OPERATIONS
Sales1
DOLLARS IN MILLIONS
$1,095m
Aerospace & Defense
$478.2
Utility Solutions Group
35%
44%
$380.0
RF Test & Measurement
$237.2
21%
EBITDA   As Adjusted1,2
DOLLARS IN MILLIONS
$293m
Aerospace & Defense
$141.4
Utility Solutions Group
38%
48%
$111.3
RF Test & Measurement
$40.3
14%
FINANCIALS RESULTS
In 2025, we delivered strong operating results from continuing operations, driven by a more focused portfolio, leverage on
revenue growth, and operational improvements.
Entered orders rose 57 percent year-over-year to $1.6 billion as demand remained robust across our key end markets. With
a book-to-bill ratio of 1.43, we closed the year with record backlog of $1.1 billion   an increase of 71 percent over the
prior year.
Sales increased 19 percent, driven by organic growth of 9 percent and an additional 10 percent contribution from Maritime.
Our A&D segment delivered double-digit revenue growth for the fourth consecutive year. USG   s revenue grew 3 percent over
the prior year, with Doble growth of 6 percent partially offset by lower renewables revenue after several years of double-digit
growth. In addition, our Test segment saw strong orders drive 13 percent revenue growth over the prior year.
Margin performance improved across all three segments and our Adjusted EBITDA margin expanded by 150 basis points to
23.4 percent in 2025. The combination of strong revenue growth and enhanced profitability drove a 26 percent increase in
Adjusted EPS to $6.03 per share.
Our 2025 financial results demonstrate the positive impact of our portfolio initiatives and underscore the strength of our end
markets, our disciplined execution, and our ability to deliver value through both organic growth and strategic acquisitions.
1 Excludes Discontinued Operations - VACCO Industries sale was completed 7/18/25.
2 Excludes $36.7 million of Corporate costs and $10.9 million of charges related to Corporate acquisition costs, Maritime inventory step-up and stamp
duties, and restructuring within the Test and USG segments.



 12/3/2025 Letter Continued (Full PDF)