Flowserve (FLS) Q1 2026 earnings summary

Executive summary

• Achieved strong adjusted operating margin expansion of 230 basis points and adjusted EPS growth of 18% year-over-year, despite Middle East disruptions and a softer start to the year.

• Revenue for Q1 2026 was $1.07 billion, down 6.7% year-over-year, with bookings at $1.15 billion and backlog rising to $2.95 billion.

• Net earnings attributable to shareholders rose to $81.7 million, up 10.5% from Q1 2025, with reported EPS at $0.64 and adjusted EPS at $0.85, both benefiting from IEEPA tariff recoveries.

• Aftermarket sales increased to 57% of total sales, with $680 million in bookings and eight consecutive quarters above $600 million.

• Continued progress on operational excellence, 80/20 program, and commercial initiatives, supporting long-term growth and margin expansion.

Financial highlights

• Adjusted gross margin increased 370 basis points to 37.2%, marking the 13th consecutive quarter of year-over-year expansion.

• Adjusted operating margin reached 15.1%, up 230 basis points from the prior year; operating margin was 11.2%.

• Adjusted EPS was $0.85, up 18% versus Q1 2025, including a $0.19 benefit from IEEPA tariffs, offset by $0.06 tax and $0.06 Middle East disruption.

• Cash from operations improved to $6.8 million from a negative $49.9 million in Q1 2025.

• Backlog increased 1.5% year-over-year to $2.95 billion.

Outlook and guidance

• Reaffirmed full-year adjusted EPS guidance of $4.00–$4.20 per share, representing 13% growth over 2025.

• Organic sales growth for 2026 expected between -1% and +2%; total sales growth outlook is 3%–6%, including 300 basis points from acquisitions.

• Guidance assumes continued Middle East disruption, with no material escalation and ongoing operational capability.

• Anticipates original equipment bookings to accelerate in the second half, driven by project activity and nuclear investment.

• Expects full-year free cash flow conversion of 90% or more of adjusted net earnings.