Flowserve (FLS) Q4 2025 earnings summary

Executive summary

• Achieved strong financial and operational performance in 2025, surpassing long-term margin targets two years ahead of plan, with sales up 4% year-over-year and significant margin expansion driven by aftermarket growth and operational excellence.

• Completed the divestiture of legacy asbestos liabilities and integrated the 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 enhancing recurring aftermarket opportunities.

• 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 $1.2B, up 4% year-over-year, with adjusted gross margin at 36% (+320 bps) and adjusted operating margin at 16.8% (+420 bps); full-year sales were $4.73B (+3.8%), adjusted operating margin 14.8% (+300 bps), and adjusted EPS $3.64 (+38%).

• Q4 adjusted EPS was $1.11, a 59% increase year-over-year; full-year reported EPS was $2.64, impacted by asbestos divestiture.

• Generated $506 million in operating cash flow and returned $365 million to shareholders in 2025.

• Free cash flow conversion for 2025 was 97% (excluding one-time items).

Outlook and guidance

• 2026 guidance: total sales growth of 5–7%, adjusted EPS of $4.00–$4.20 (midpoint up 13% vs. 2025), and ~100 bps operating margin expansion; guidance assumes Trillium acquisition closes mid-year and is EPS neutral for 2026.

• Bookings expected to grow mid-single digits in 2026, with acceleration in original equipment bookings in H2, especially in the Middle East and nuclear.

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