Flowserve (FLS) Q4 2024 earnings summary

Executive summary

• Delivered strong Q4 and full-year results, with bookings reaching $1.2B in Q4 and robust growth in both original equipment and aftermarket, supported by strong aftermarket activity and project awards.

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

• Achieved margin expansion, with adjusted gross margin up 300 basis points year-over-year to 32.8%, and operating cash flow of $197M in Q4.

• Progressed toward 2027 targets, emphasizing operational excellence, portfolio diversification, and energy transition initiatives.

• Full-year sales grew 5.5% to $4.56B; backlog increased 3.5% to $2.79B.

Financial highlights

• Q4 bookings grew 13% year-over-year to $1.2B, with a book-to-bill ratio of 1.0x and nuclear bookings reaching $110M.

• Q4 revenues grew 1% year-over-year to $1.18B; MOGAS contributed 300 basis points to sales growth, while FX translation was a 100 basis point headwind.

• Adjusted gross margin expanded to 32.8% (+300 bps YoY); adjusted operating margin increased to 12.6% (+210 bps YoY); adjusted EPS for Q4 was $0.70.

• Operating cash flow for Q4 was $197M; full-year operating cash flow was $425M, with free cash flow of $344M and conversion near 100%.

• FY 2024 adjusted EPS was $2.63, up from $2.10 in FY 2023; adjusted operating margin improved to 11.8% from 9.5%.

Outlook and guidance

• 2025 organic sales growth expected at 3–5%, with total sales growth of 5–7% including MOGAS 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, supported by a healthy backlog and strong end markets.

• Margin expansion anticipated through higher volumes, Flowserve Business System, 80/20 program, and MOGAS synergies.

• Capital expenditures for 2025 projected 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.