Westinghouse Air Brake Technologies Corporation

The multi-year backlog reached a record $27.4 billion at end of FY2025, representing more than twice the prior year's revenue base, with $8.2 billion expected to convert in FY2026. Aftermarket services contribute roughly 57-60% of revenue across both segments, providing non-discretionary recurring demand from the existing installed locomotive fleet.

Freight operations represented approximately 72% of FY2025 net sales, with Transit at 28%, making the Freight segment clearly dominant. The two segments serve meaningfully different customers and geographies, providing some protection, but both remain tied to rail infrastructure spending.

Approximately 55% of revenue comes from outside the United States, with the Transit segment heavily European and international freight operations spanning Asia, Australia, and South America. The Freight segment is approximately 60% U.S.-sourced, keeping North America the single largest region.

Wabtec's expanding adjusted operating margin, reaching 20.3% in FY2025, reflects mix shift toward higher-margin aftermarket services as the installed base grows. The OEM manufacturing base limits full asset-light leverage, but the company targets more than 350 basis points of additional adjusted operating margin expansion in its five-year plan.

Aftermarket parts and maintenance services (roughly 60% of the Freight segment, FY2025) are mission-critical to locomotive operations, creating non-discretionary repeat demand from railroads that cannot defer maintenance without service disruptions. OEM equipment sales are more project-based and cyclically sensitive, moderating overall quality.