hGears, the German precision gears manufacturer, reported a 4.1% decline in revenue for 2025, attributing the fall primarily to continued weakness in the e-Bike market and related production cutbacks.
Despite the top-line reduction, the company posted an improvement in operating profitability on an adjusted basis. Adjusted EBITDA rose to 1.6 million euros for the period, equal to an adjusted EBITDA margin of 1.70%. hGears said that the margin uptick reflected structural changes and cost-saving initiatives implemented during the year, including reductions in personnel expenses, which also helped lift gross margins.
Management pointed to persistently high inventory levels and soft end-demand within the e-Bike sector as the main drivers behind lower production volumes and the resulting revenue decline. Those inventory and demand dynamics, the company said, constrained its ability to sustain prior shipment and sales levels to e-Bike customers.
Performance across business lines was mixed. The e-Tools segment recorded revenue gains, supported by healthy demand for components used in gardening tools. Separately, the e-Mobility division also expanded, with the company concentrating on higher-end niches including premium, sports, and luxury vehicle segments.
Looking ahead to 2026, hGears provided forward guidance that signals a cautious outlook. The company expects revenue in a range of 80 million euros to 90 million euros. For adjusted EBITDA it forecasts a range from minus 3 million euros to zero, and it anticipates free cash flow will be between minus 5 million euros and minus 2 million euros.
The combination of a modest adjusted EBITDA improvement in 2025 and a guidance band that allows for negative EBITDA and negative free cash flow in 2026 underscores a period of transition for the business as it responds to inventory pressures and subdued demand in one of its core end markets.
Summary - hGears recorded a 4.1% drop in revenue for 2025 driven by weak e-Bike demand; adjusted EBITDA improved to 1.6 million euros (1.70% margin) due to cost savings. The company reported growth in e-Tools and e-Mobility segments and issued 2026 guidance anticipating revenue of 80-90 million euros, adjusted EBITDA of -3 to 0 million euros, and free cash flow of -5 to -2 million euros.