Flowserve (FLS) Q4 2024 earnings summary

Executive summary

• Delivered strong Q4 and FY 2024 results, with bookings up 13% year-over-year to $1.2B, record backlog of $2.8B, and robust aftermarket and project activity, especially in power and nuclear sectors.

• Expanded adjusted gross margin by 300 bps to 32.8% and adjusted operating margin to 12.6%, marking the eighth consecutive quarter of year-over-year margin expansion.

• Launched Flowserve Business System and 3D growth strategy, introduced 11 new products, and completed the MOGAS and cryogenic pumps R&D acquisitions.

• Continued execution of diversification and decarbonization initiatives, with notable progress in cycle-resilient and energy transition markets.

Financial highlights

• Q4 adjusted EPS was $0.70 (up 3% YoY), with $197M in operating cash flow and $1.2B in bookings; full-year adjusted EPS was $2.63 (up from $2.10 YoY).

• Revenues grew 1% year-over-year in Q4 to $1.18B; full-year sales grew 5.5% to $4.56B.

• Aftermarket revenues grew 4%, original equipment revenues declined 2% in Q4.

• Free cash flow for the year was $344M, with a conversion ratio near 100%; operating cash flow for 2024 was $425M.

• Adjusted operating income rose 22% year-over-year to $149M; full-year net income was $282.8M (up from $186.7M YoY).

Outlook and guidance

• 2025 organic sales growth expected at 3–5%, with total sales growth of 5–7% including acquisitions and FX; adjusted EPS guidance is $3.10–$3.30, a 22% increase at the midpoint.

• Book-to-bill ratio expected to remain above 1.0 in 2025, with strong project funnel and healthy end markets.

• Capital expenditures for 2025 expected at $80–$90M; adjusted tax rate at 21%.

• On track to achieve 2027 targets: revenue of $5.0B, adjusted operating margin of 14–16%, and adjusted EPS above $4.00.

• Quarterly earnings expected to follow historical seasonality, with Q1 lowest and Q4 highest.