Flowserve (FLS) Q4 2025 earnings summary

Executive summary

• Achieved strong financial and operational performance in 2025, surpassing long-term margin targets ahead of schedule, with sales up 4% year-over-year and robust growth in bookings and aftermarket sales.

• Advanced operational excellence and complexity reduction, driving significant margin expansion and improved cash flow.

• Completed divestiture of legacy asbestos liabilities and integrated MOGAS acquisition, realizing cost synergies and margin improvements.

• Announced acquisition of Trillium Flow Technologies' Valves Division, expected to close mid-2026, expanding nuclear and power market presence and increasing content per new reactor by 15%-20%.

• Initiated 2026 guidance and set 2030 financial targets, including mid-single digit organic sales CAGR and ~20% adjusted operating margin.

Financial highlights

• Q4 2025 sales reached $1.22 billion, up 4% year-over-year, with organic sales up 1% and positive FX impact; full year sales were $4.73 billion, up 3.8%.

• Adjusted gross margin for Q4 was 36% (up 320 bps), and adjusted operating margin expanded 420 bps to 16.8%.

• Adjusted EPS for Q4 was $1.11, a 59% increase year-over-year; full year adjusted EPS was $3.64, up 38.4%.

• Full-year operating cash flow was $506 million, up from $425 million in 2024; free cash flow conversion was 97%.

• Returned $365 million to shareholders in 2025 through dividends and share repurchases.

Outlook and guidance

• 2026 guidance: total sales growth of 5%-7% (1%-3% organic), with 100 bps FX benefit and 300 bps from acquisitions.

• Adjusted operating margin to expand ~100 bps; adjusted EPS guidance of $4.00-$4.20 (midpoint up 13% vs. 2025).

• 76% of backlog expected to convert to revenue in 2026, with first half earnings representing ~40% of full-year.

• 2030 targets: mid-single digit organic sales CAGR, ~20% adjusted operating margin, double-digit adjusted EPS CAGR.

• 2026 guidance assumes Trillium acquisition closes mid-year and is EPS neutral for 2026.