Flowserve Corporation Reports Third Quarter 2025 Results

DALLAS--( BUSINESS WIRE)--Flowserve Corporation (NYSE: FLS), a leading provider of flow control products and services for the global infrastructure markets, reported its financial results for the third quarter ended September 30, 2025.

Following three consecutive quarters of strong execution and performance, we are increasing our full-year earnings outlook. This revision represents a substantial year-over-year improvement and reinforces our confidence in the trajectory of the business.

Highlights:

Management Commentary:

“Flowserve delivered another quarter of exceptional performance highlighted by strong revenue growth, significant margin and earnings expansion, and robust cash generation. This performance enabled us to repurchase over $140 million shares during the quarter. Consistent execution of our strategy has enabled us to maintain momentum, led by the strength of our aftermarket franchise and a resurgent Power and Nuclear end market fueled by growth of AI, increasing data center development, and broader electrification trends. We remain focused on leveraging the Flowserve Business System and our 80/20 initiatives to accelerate margin expansion, deliver outsized growth, and execute with excellence,” said Scott Rowe, Flowserve’s President and Chief Executive Officer.

Rowe continued, “Following three consecutive quarters of strong execution and performance, we are increasing our full-year earnings outlook. Our revised outlook represents a substantial year-over-year improvement, reinforces our confidence in the trajectory of the business, and marks an important step toward achieving our long-term targets and delivering sustained value for our shareholders.”

Key Figures:

(dollars in millions, except per share)

2025 Q3

2024 Q3

Change

YTD 2025

YTD 2024

Change

Backlog

$2,896.1

$2,783.8

4.0%

$2,896.1

$2,783.8

4.0%

Bookings

$1,213.0

$1,203.6

0.8%

$3,511.2

$3,487.2

0.7%

Original Equipment

$559.9

$589.0

(4.9%)

$1,548.9

$1,682.9

(8.0%)

Aftermarket

$653.1

$614.6

6.3%

$1,962.3

$1,804.3

8.8%

Sales 5

$1,174.4

$1,133.1

3.6%

$3,507.1

$3,377.5

3.8%

Organic

(30 bps)

90 bps

Acquisitions

260 bps

280 bps

Foreign Exchange

130 bps

10 bps

Operating Margin

6.7%

9.1%

(240) bps

10.2%

10.0%

20 bps

Adjusted Operating Margin

14.8%

11.1%

370 bps

14.1%

11.5%

260 bps

Earnings Per Share

$1.67

$0.44

279.5%

$2.85

$1.55

83.9%

Adjusted Earnings Per Share

$0.90

$0.62

45.2%

$2.53

$1.93

31.1%

Cash From Operations

$401.8

$178.5

$223.3

$506.1

$228.0

$278.1

2025 Guidance:

The Company updated its full-year 2025 guidance, including increasing its Adjusted EPS target range. The guidance range reflects tariff rates in place as of today.

Prior Range

Current Range

Organic sales growth

+3% to +4%

~ 2%

Impact from acquisitions

Approx. +200 bps

Impact from foreign exchange translation

Approx. 0 bps

Approx. 50 bps

Total sales growth

+5% to +6%

+4% to +5%

Adjusted EPS

$3.25 to $3.40

$3.40 to $3.50

Net interest expense

Approx. $70 million

Adjusted tax rate

Approx. 20%

Capital expenditures

$80 to $90 million

Approx. $75 million

Divestment of Legacy Asbestos Liabilities:

In a separate press release today, the Company also announced it had reached an agreement to divest of its legacy asbestos liabilities. The transaction allows the Company to focus on allocating capital to growth enhancing opportunities.

Webcast and Conference Call Instructions:

Flowserve will host its conference call to discuss third quarter results on Wednesday, October 29, at 10:00 a.m. Eastern Time. The call can be accessed by shareholders and other interested parties on Flowserve’s Investors page.

Footnotes (pages 1-2)

1 See Consolidated Reconciliation of Non-GAAP Financial Measures to the Most Directly Comparable GAAP Financial Measure (unaudited) and Segment Reconciliation of Non-GAAP Financial Measures to the Most Directly Comparable GAAP Financial Measure (unaudited) tables for a detailed reconciliation of reported results to adjusted measures.

2 Adjusted gross margin is calculated by dividing adjusted gross profit by sales. Adjusted gross profit is derived by excluding the adjusted items.

3 Adjusted operating margin is calculated by dividing adjusted operating income by sales. Adjusted operating income is derived by excluding the adjusted items.

4 Adjusted 2025 EPS excludes potential realignment expenses, below-the-line foreign currency effects, actuarial-determined assessments of certain long-term liabilities and certain other discrete items which may arise during the year and utilizes foreign exchange rates of the prior 30-day period and approximately 131 million fully diluted shares.

5 Organic is defined as the change in Sales, as defined by U.S. GAAP, excluding the impacts of currency translation and acquisitions. The impact of currency translation is calculated by translating current year results on a monthly basis at prior year exchange rates for the same period.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

Three Months Ended September 30,

(Amounts in thousands, except per share data)

2025

2024

Sales

1,174,434

1,133,087

Cost of sales

(794,148

)

(776,020

)

Gross profit

380,286

357,067

Selling, general and administrative expense

(305,152

)

(259,025

)

Net earnings from affiliates

4,138

5,150

Operating income

79,272

103,192

Interest expense

(18,738

)

(16,587

)

Interest income

792

1,403

Other income (expense), net

256,220

(5,920

)

Earnings before income taxes

317,546

82,088

Provision for income taxes

(93,688

)

(18,739

)

Net earnings, including noncontrolling interests

223,858

63,349

Less: Net earnings attributable to noncontrolling interests

(4,276

)

(4,967

)

Net earnings attributable to Flowserve Corporation

219,582

58,382

Net earnings per share attributable to Flowserve Corporation common shareholders:

Basic

1.69

0.44

Diluted

1.67

0.44

Weighted average shares – basic

130,315

131,395

Weighted average shares – diluted

131,235

132,247

Consolidated Reconciliation of Non-GAAP Financial Measures to the Most Directly Comparable GAAP Financial Measure (Unaudited)

(Amounts in thousands, except per share data)

Three Months Ended September 30, 2025

Gross Profit

Selling, General &

Administrative

Expense

Operating

Income

Other

Income

(Expense),

Net

Provision

For

(Benefit

From)

Income

Taxes

Net

Earnings

(Loss)

Effective

Tax Rate

Diluted

EPS

Reported

380,286

305,152

79,272

256,220

93,688

219,582

29.5

1.67

Reported as a percent of sales

32.4

26.0

6.7

21.8

8.0

18.7

Realignment charges (a)

25,481

(4,571

)

30,052

6,907

23,145

23.0

0.18

Acquisition related (b)

(4,243

)

4,252

1,000

3,252

23.5

0.02

Purchase accounting step-up and intangible asset amortization (c)

2,625

(1,300

)

3,925

1,182

2,743

30.1

0.02

Discrete items (d)(e)(f)

(30,351

)

30,382

1,500

7,499

24,383

23.5

0.19

Merger transaction costs (g)

(25,682

)

25,682

5,885

19,797

22.9

0.15

Merger termination payment (h)

(266,000

)

(60,957

)

(205,043

)

22.9

(1.56

)

Discrete tax items (i)

(24,860

)

24,860

0.0

0.19

Below-the-line foreign exchange impacts (j)

5,401

622

4,779

11.5

0.04

Adjusted

408,432

239,005

173,565

(2,879

)

30,966

117,498

20.3

0.90

Adjusted as a percent of sales

34.8

20.4

14.8

-0.2

2.6

10.0

Note: Amounts may not calculate due to rounding

(a) Charges represent realignment costs incurred as a result of realignment programs of which $2,300 is non-cash.

(b) Charge represents acquisition and integration related costs associated with the MOGAS acquisition.

(d) Charge represents non-cash share-based compensation expense associated with a one-time discretionary restricted stock grant, subject to three-year cliff vesting, provided to certain employees in conjunction with the freeze of our US Qualified pension plan.

(e) Charge of $1,500 represents a non-cash pension settlement accounting loss incurred in conjunction with the freeze of our US Qualified pension plan.

(f) Charge of $30,100 represents the Q3 2025 non-cash adjustment to our estimated liability for incurred by not reported asbestos claims based on an annual actuarial study.

(g) Charge represents transaction costs incurred associated with the terminated Chart Industries merger.

(h) Amount represents the Chart Industries merger termination fee paid to Flowserve.

(i) Amount represents a one-time tax charge related to enactment of the One Big Beautiful Bill Act during Q3 2025.

(j) Below-the-line foreign exchange impacts represent the remeasurement of foreign exchange derivative contracts as well as the remeasurement of assets and liabilities that are denominated in a currency other than a site’s respective functional currency.

Three Months Ended September 30, 2024

Gross Profit

Selling, General

& Administrative

Expense

Operating

Income

Other Income

(Expense),

Net

Provision For

(Benefit

From)

Income

Taxes

Net

Earnings

(Loss)

Effective

Tax Rate

Diluted

EPS

Reported

357,067

259,025

103,192

(5,920

)

18,739

58,382

22.8

0.44

Reported as a percent of sales

31.5

22.9

9.1

-0.5

1.7

5.2

Realignment charges (a)

6,813

(2,142

)

8,955

(246

)

9,201

-2.7

0.07

Discrete items (b)(c)

2,700

(9,500

)

12,200

2,869

9,331

23.5

0.07

Acquisition related (d)

(1,694

)

1,694

399

1,295

23.6

0.01

Below-the-line foreign exchange impacts (e)

3,184

(467

)

3,651

-14.8

0.03

Adjusted

366,580

245,689

126,041

(2,736

)

21,294

81,860

19.7

0.62

Adjusted as a percent of sales

32.4

21.7

11.1

-0.2

1.9

7.2

Note: Amounts may not calculate due to rounding

(a) Charges represent realignment costs incurred as a result of realignment programs of which $5,100 is non-cash.

(b) Charge represents a one-time $5,000 discretionary cash transition benefit provided to certain employees in conjunction with the freeze of our US Qualified pension plan.

(c) Charge represents the $7,200 strategic acquisition of intellectual property related to certain liquefied natural gas technology.

(d) Charge represents acquisition-related costs associated with the MOGAS acquisition.

(e) Below-the-line foreign exchange impacts represent the remeasurement of foreign exchange derivative contracts as well as the remeasurement of assets and liabilities that are denominated in a currency other than a site’s respective functional currency.

SEGMENT INFORMATION

(Unaudited)

FLOWSERVE PUMPS DIVISION

Three Months Ended September 30,

(Amounts in millions, except percentages)

2025

2024

Bookings

819.5

886.6

Sales

800.3

782.1

Gross profit

265.8

253.2

Gross profit margin

33.2

32.4

SG&A

135.0

149.1

Segment operating income

134.9

109.3

Segment operating income as a percentage of sales

16.9

14.0

FLOW CONTROL DIVISION

Three Months Ended September 30,

(Amounts in millions, except percentages)

2025

2024

Bookings

396.1

318.4

Sales

377.4

353.1

Gross profit

114.2

106.5

Gross profit margin

30.3

30.2

SG&A

67.8

59.8

Segment operating income

46.4

46.7

Segment operating income as a percentage of sales

12.3

13.2

(Amounts in thousands)

Flowserve Pumps Division

Three Months Ended September 30, 2025

Gross

Profit

Selling, General

& Administrative

Expense

Operating

Income

Three Months Ended

September 30, 2024

Gross

Profit

Selling, General

& Administrative

Expense

Operating

Income

Reported

265,776

135,046

134,869

Reported

253,185

149,060

109,274

Reported as a percent of sales

33.2

16.9

Reported as a percent of sales

32.4

19.1

14.0

Realignment charges (a)

21,628

(88

)

21,716

Realignment charges (a)

8,415

(716

)

9,131

Discrete items (b)

(63

)

Discrete items (b)(c)

1,700

(8,000

)

9,700

Adjusted

287,428

134,895

156,672

Adjusted

263,300

140,344

128,105

Adjusted as a percent of sales

35.9

16.9

19.6

Adjusted as a percent of sales

33.7

17.9

16.4

Flow Control Division

Three Months Ended September 30, 2025

Gross

Profit

Selling, General

& Administrative

Expense

Operating

Income

Three Months Ended

September 30, 2024

Gross

Profit

Selling, General &

Administrative

Expense

Operating

Income

Reported

114,250

67,810

46,440

Reported

106,503

59,790

46,713

Reported as a percent of sales

30.3

18.0

12.3

Reported as a percent of sales

30.2

16.9

13.2

Realignment charges (a)

4,386

(2,395

)

6,781

Realignment charges (a)

(1,590

)

(1,379

)

(211

)

Acquisition related (c)

(4,243

)

4,252

Discrete items (b)

800

(400

)

1,200

Purchase accounting step-up and intangible asset amortization (d)

2,625

(1,300

)

3,925

Acquisition related (d)

(1,694

)

1,694

Discrete items (b)

(45

)

Adjusted

105,713

56,317

49,396

Adjusted

121,275

59,827

61,448

Adjusted as a percent of sales

29.9

15.9

14.0

Adjusted as a percent of sales

32.1

15.9

16.3

Note: Amounts may not calculate due to rounding

(a) Charges represent realignment costs incurred as a result of realignment programs of which $2,300 is non-cash.

(a) Charges represent realignment costs incurred as a result of realignment programs of which $5,100 is non-cash.

(b) Charge represents non-cash share-based compensation expense associated with a one-time discretionary restricted stock grant, subject to three-year cliff vesting, provided to certain employees in conjunction with the freeze of our US Qualified pension plan.

(b) Charge represents a one-time $3,700 discretionary cash transition benefit provided to certain employees in conjunction with the freeze of our US Qualified pension plan.

(c) Charge represents the $7,200 strategic acquisition of intellectual property related to certain liquefied natural gas technology.

(d) Charge represents amortization of acquisition related intangible assets associated with the MOGAS acquisition.

(d) Charge represents acquisition-related costs associated with the MOGAS acquisition.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

Nine Months Ended September 30,

(Amounts in thousands, except per share data)

2025

2024

Sales

3,507,069

3,377,458

Cost of sales

(2,350,867

)

(2,315,326

)

Gross profit

1,156,202

1,062,132

Selling, general and administrative expense

(814,237

)

(726,070

)

Loss on sale of business

(12,981

)

Net earnings from affiliates

15,786

14,494

Operating income

357,751

337,575

Interest expense

(58,166

)

(48,820

)

Interest income

5,063

3,746

Other income (expense), net

213,958

(12,057

)

Earnings before income taxes

518,606

280,444

Provision for income taxes

(127,067

)

(62,728

)

Net earnings, including noncontrolling interests

391,539

217,716

Less: Net earnings attributable to noncontrolling interests

(16,298

)

(12,498

)

Net earnings attributable to Flowserve Corporation

375,241

205,218

Net earnings per share attributable to Flowserve Corporation common shareholders:

Basic

2.87

1.56

Diluted

2.85

1.55

Weighted average shares – basic

130,910

131,520

Weighted average shares – diluted

131,836

132,343

Consolidated Reconciliation of Non-GAAP Financial Measures to the Most Directly Comparable GAAP Financial Measure (Unaudited)

(Amounts in thousands, except per share data)

Nine Months Ended September 30, 2025

Gross

Profit

Selling,

General &

Administrative

Expense

Operating

Income

Other

Income

(Expense),

Net

Provision

For (Benefit

From)

Income

Taxes

Net Earnings

(Loss)

Effective

Tax Rate

Diluted

EPS

Reported

1,156,202

814,237

357,751

213,958

127,067

375,241

24.5

2.85

Reported as a percent of sales

33.0

23.2

10.2

6.1

3.6

10.7

Realignment charges (a)

40,600

(1,481

)

42,081

10,096

31,985

24.0

0.24

Acquisition related (b)

761

(8,714

)

9,475

2,228

7,247

23.5

0.05

Purchase accounting step-up and intangible asset amortization (c)

8,742

(3,900

)

12,642

3,729

8,913

29.5

0.07

Discrete items (d)(e)(f)

106

(31,116

)

31,222

4,500

8,403

27,319

23.5

0.21

Merger transaction costs (g)

(41,197

)

41,197

9,534

31,663

23.1

0.24

Merger termination payment (h)

(266,000

)

(60,957

)

(205,043

)

22.9

(1.56

)

Discrete tax items (i)

(24,860

)

24,860

0.0

0.19

Below-the-line foreign exchange impacts (j)

36,797

5,977

30,820

16.2

0.23

Adjusted

1,206,411

727,829

494,368

(10,745

)

81,217

333,005

18.9

2.53

Adjusted as a percent of sales

34.4

20.8

14.1

-0.3

2.3

9.5

Note: Amounts may not calculate due to rounding

(a) Charges represent realignment costs incurred as a result of realignment programs of which $5,300 is non-cash.

(b) Charge represents acquisition and integration related costs associated with the MOGAS acquisition.

(c) Charge represents amortization of step-up in value of acquired inventories and acquisition related intangible assets associated with the MOGAS acquisition.

(e) Charge of $4,500 represents a non-cash pension settlement accounting loss incurred in conjunction with the freeze of our US Qualified pension plan.

(f) Charge of $30,100 represents the Q3 2025 non-cash adjustment to our estimated liability for incurred by not reported asbestos claims based on an annual actuarial study.

(g) Charge represents transaction costs incurred associated with the terminated Chart Industries merger.

(h) Amount represents the Chart Industries merger termination fee paid to Flowserve.

(i) Amount represents a one-time tax charge related to enactment of the One Big Beautiful Bill Act during Q3 2025.

Nine Months Ended September 30, 2024

Gross

Profit

Selling,

General &

Administrative Expense

Loss on

Sale of

Business

Operating

Income

Other

Income

(Expense),

Net

Provision

For (Benefit

From)

Income

Taxes

Net

Earnings

(Loss)

Effective

Tax Rate

Diluted

EPS

Reported

1,062,132

726,070

12,981

337,575

(12,057

)

62,728

205,218

22.4

1.55

Reported as a percent of sales

31.4

21.5

0.4

10.0

-0.4

1.9

6.1

Realignment charges (a)

20,007

(3,369

)

(12,981

)

36,357

2,035

34,322

5.6

0.26

Discrete items (b)(c)(d)

2,700

(7,500

)

10,200

2,869

7,331

28.1

0.06

Acquisition related (e)

(2,794

)

2,794

658

2,136

23.6

0.02

Discrete asset write-downs (f)(g)

(1,795

)

1,795

3,567

1,342

4,020

25.0

0.03

Below-the-line foreign exchange impacts (h)

2,068

(489

)

2,557

-23.6

0.02

Adjusted

1,084,839

710,612

388,721

(6,422

)

69,143

255,584

20.5

1.93

Adjusted as a percent of sales

32.1

21.0

0.0

11.5

-0.2

2.0

7.6

Note: Amounts may not calculate due to rounding

(a) Charges represent realignment costs incurred as a result of realignment programs of which $25,100 is non-cash.

(b) Charge represents a reduction to reserves of $2,000 associated with our ongoing financial exposure in Russia that were adjusted for Non-GAAP measures when established in 2022.

(c) Charge represents a one-time $5,000 discretionary cash transition benefit provided to certain employees in conjunction with the freeze of our US Qualified pension plan.

(d) Charge represents the $7,200 strategic acquisition of intellectual property related to certain liquefied natural gas technology.

(e) Charge represents acquisition-related costs associated with the MOGAS acquisition.

(f) Charge represents a $1,795 non-cash write-down of a software asset.

(g) Charge represents a $3,567 non-cash write-down of a debt investment.

(h) Below-the-line foreign exchange impacts represent the remeasurement of foreign exchange derivative contracts as well as the remeasurement of assets and liabilities that are denominated in a currency other than a site’s respective functional currency.

SEGMENT INFORMATION

(Unaudited)

FLOWSERVE PUMPS DIVISION

Nine Months Ended September 30,

(Amounts in millions, except percentages)

2025

2024

Bookings

2,394.8

2,488.6

Sales

2,402.4

2,363.7

Gross profit

833.5

761.3

Gross profit margin

34.7

32.2

SG&A

415.1

424.8

Segment operating income

434.1

351.1

Segment operating income as a percentage of sales

18.1

14.9

FLOW CONTROL DIVISION

Nine Months Ended September 30,

(Amounts in millions, except percentages)

2025

2024

Bookings

1,126.1

1,008.3

Sales

1,112.9

1,021.4

Gross profit

322.1

305.5

Gross profit margin

28.9

29.9

SG&A

206.4

178.8

Loss on sale of business

(13.0

)

Segment operating income

115.7

113.7

Segment operating income as a percentage of sales

10.4

11.1

Segment Reconciliation of Non-GAAP Financial Measures to the Most Directly Comparable GAAP Financial Measure (Unaudited)

(Amounts in thousands)

Flowserve Pumps Division

Nine Months Ended September 30, 2025

Gross

Profit

Selling,

General &

Administrative

Expense

Operating

Income

Nine Months Ended

September 30, 2024

Gross

Profit

Selling,

General &

Administrative

Expense

Operating

Income

Reported

833,467

415,126

434,128

Reported

761,338

424,824

351,146

Reported as a percent of sales

34.7

17.3

18.1

Reported as a percent of sales

32.2

18.0

14.9

Realignment charges (a)

26,495

(840

)

27,335

Realignment charges (a)

20,837

(1,037

)

21,874

Discrete items (b)

(287

)

374

Discrete items (b)(c)(d)

1,700

(6,000

)

7,700

Adjusted

860,049

413,999

461,837

Adjusted

783,875

417,787

380,720

Adjusted as a percent of sales

35.8

17.2

19.2

Adjusted as a percent of sales

33.2

17.7

16.1

Flow Control Division

Nine Months Ended September 30, 2025

Gross

Profit

Selling,

General &

Administrative

Expense

Operating

Income

Nine Months Ended

September 30, 2024

Gross

Profit

Selling,

General &

Administrative

Expense

Loss on

Sale of

Business

Operating

Income

Reported

322,131

206,437

115,694

Reported

305,469

178,816

12,981

113,672

Reported as a percent of sales

28.9

18.5

10.4

Reported as a percent of sales

29.9

17.5

1.3

11.1

Realignment charges (a)

14,704

1,230

13,474

Realignment charges (a)

(602

)

(1,440

)

(12,981

)

13,819

Acquisition related (c)

761

(8,714

)

9,475

Discrete item (b)

800

(400

)

1,200

Purchase accounting step-up and intangible asset amortization (d)

8,742

(3,900

)

12,642

Acquisition related (e)

(2,794

)

2,794

Discrete items (b)

(208

)

222

Adjusted

305,667

174,182

131,485

Adjusted

346,352

194,845

151,507

Adjusted as a percent of sales

29.9

17.1

0.0

12.9

Adjusted as a percent of sales

31.1

17.5

13.6

Note: Amounts may not calculate due to rounding

(a) Charges represent realignment costs incurred as a result of realignment programs of which $5,300 is non-cash.

(a) Charges represent realignment costs incurred as a result of realignment programs of which $25,100 is non-cash.

(b) Charge represents a one-time $3,700 discretionary cash transition benefit provided to certain employees in conjunction with the freeze of our US Qualified pension plan.

(c) Charge represents a reduction to reserves of $2,000 associated with our ongoing financial exposure in Russia that were adjusted for Non-GAAP measures when established in 2022.

(d) Charge represents amortization of step-up in value of acquired inventories and acquisition related intangible assets associated with the MOGAS acquisition.

(d) Charge represents the $7,200 strategic acquisition of intellectual property related to certain liquefied natural gas technology.

(e) Charge represents acquisition-related costs associated with the MOGAS acquisition.

Third Quarter and Year-to-Date 2025 - Segment Results

(dollars in millions, comparison vs. 2024 third quarter and year-to-date, unaudited)

FPD

FCD

3rd Qtr

YTD

3rd Qtr

YTD

Bookings

819.5

2,394.8

396.1

1,126.1

- vs. prior year

-67.1

-7.6

-93.8

-3.8

77.8

24.4

117.8

11.7

- on constant currency

-82.8

-9.3

-99.2

-4.0

75.3

23.6

118.4

11.7

Sales

800.3

2,402.4

377.4

1,112.9

- vs. prior year

18.2

2.3

38.7

1.6

24.3

6.9

91.6

9.0

- on constant currency

6.0

0.8

36.3

1.5

21.6

6.1

90.9

8.9

Gross Profit

265.8

833.5

114.3

322.1

- vs. prior year

5.0

9.5

7.3

5.5

Gross Margin (% of sales)

33.2

34.7

30.3

28.9

- vs. prior year (in basis points)

80 bps

250 bps

10 bps

(100) bps

Operating Income

134.9

434.1

46.4

115.7

- vs. prior year

25.6

23.4

83.0

23.6

-0.3

-0.6

2.0

1.8

- on constant currency

22.1

20.2

80.5

22.9

-0.1

-0.2

3.1

2.7

Operating Margin (% of sales)

16.9

18.1

12.3

10.4

- vs. prior year (in basis points)

290 bps

320 bps

(90) bps

(70) bps

Adjusted Operating Income *

156.7

461.8

61.4

151.5

- vs. prior year

28.6

22.3

81.1

21.3

12.1

24.4

20.0

15.2

- on constant currency

25.0

19.5

78.7

20.7

12.2

24.8

21.1

16.0

Adj. Oper. Margin (% of sales)*

19.6

19.2

16.3

13.6

- vs. prior year (in basis points)

320 bps

310 bps

230 bps

70 bps

Backlog

2,006.5

896.4

* Adjusted Operating Income and Adjusted Operating Margin exclude realignment charges and other specific discrete items

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

September 30,

December 31,

(Amounts in thousands, except par value)

2025

2024

ASSETS

Current assets:

Cash and cash equivalents

833,847

675,441

Accounts receivable, net of allowance for expected credit losses of $89,606 and $79,059, respectively

1,049,798

976,739

Contract assets, net of allowance for expected credit losses of $4,915 and $3,404, respectively

344,446

298,906

Inventories

847,732

837,254

Prepaid expenses and other

89,002

116,157

Total current assets

3,164,825

2,904,497

Property, plant and equipment, net of accumulated depreciation of $1,219,158 and $1,142,667, respectively

557,677

539,703

Operating lease right-of-use assets, net

170,075

159,400

Goodwill

1,343,417

1,286,295

Deferred taxes

185,116

221,742

Other intangible assets, net

177,533

188,604

Other assets, net of allowance for expected credit losses of $66,152 and $66,081, respectively

231,671

200,580

Total assets

5,830,314

5,500,821

LIABILITIES AND EQUITY

Current liabilities:

Accounts payable

600,927

545,310

Accrued liabilities

542,705

561,486

Contract liabilities

279,760

283,670

Debt due within one year

46,350

44,059

Operating lease liabilities

35,085

33,559

Total current liabilities

1,504,827

1,468,084

Long-term debt due after one year

1,435,568

1,460,132

Operating lease liabilities

154,148

149,838

Retirement obligations and other liabilities

411,337

371,055

Shareholders’ equity:

Preferred shares, $1.00 par value

Shares authorized – 1,000, no shares issued

Common shares, $1.25 par value

220,991

Shares authorized – 305,000

Shares issued – 176,793 and 176,793, respectively

Capital in excess of par value

496,356

502,045

Retained earnings

4,317,965

4,025,750

Treasury shares, at cost – 48,817 and 45,688 shares, respectively

(2,180,651

)

(2,007,869

)

Deferred compensation obligation

6,526

8,172

Accumulated other comprehensive loss

(596,990

)

(741,424

)

Total Flowserve Corporation shareholders' equity

2,264,197

2,007,665

Noncontrolling interests

60,237

44,047

Total equity

2,324,434

2,051,712

Total liabilities and equity

5,830,314

5,500,821

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

Nine Months Ended September 30,

(Amounts in thousands)

2025

2024

Cash flows – Operating activities:

Net earnings, including noncontrolling interests

391,539

217,716

Adjustments to reconcile net earnings to net cash provided by operating activities:

Depreciation

58,685

56,765

Amortization of intangible and other assets

14,009

6,482

Loss on sale of business

12,981

Stock-based compensation

25,787

24,608

Foreign currency, asset write downs and other non-cash adjustments

(3,326

)

11,580

Change in assets and liabilities:

Accounts receivable, net

(26,081

)

(96,402

)

Inventories

26,727

2,944

Contract assets, net

(35,157

)

(23,293

)

Prepaid expenses and other, net

(7,362

)

3,505

Accounts payable

31,158

24,654

Contract liabilities

(17,857

)

8,466

Accrued liabilities

(30,488

)

(33,850

)

Retirement obligations and other liabilities

31,900

8,696

Net deferred taxes

46,524

3,108

Net cash flows provided by operating activities

506,058

227,960

Cash flows – Investing activities:

Capital expenditures

(45,534

)

(52,169

)

Proceeds from disposal of assets

1,067

612

Payments for disposition of business

(2,555

)

Net cash flows (used) by investing activities

(44,467

)

(54,112

)

Cash flows – Financing activities:

Payments on term loan

(28,125

)

(45,000

)

Proceeds under revolving credit facility

50,000

100,000

Payments under revolving credit facility

(50,000

)

(50,000

)

Proceeds under other financing arrangements

10,562

1,001

Payments under other financing arrangements

(3,310

)

(784

)

Repurchases of common shares

(197,920

)

(20,070

)

Payments related to tax withholding for stock-based compensation

(11,584

)

(9,407

)

Payments of dividends

(82,671

)

(82,848

)

Contingent consideration payment related to acquired business

(15,000

)

Other

(2,899

)

(272

)

Net cash flows (used) by financing activities

(330,947

)

(107,380

)

Effect of exchange rate changes on cash and cash equivalents

27,762

(401

)

Net change in cash and cash equivalents

158,406

66,067

Cash and cash equivalents at beginning of period

675,441

545,678

Cash and cash equivalents at end of period

833,847

611,745

About Flowserve:

Flowserve Corporation is one of the world’s leading providers of fluid motion and control products and services. Operating in more than 50 countries, the Company produces engineered and industrial pumps, seals and valves as well as a range of related flow management services. More information about Flowserve can be obtained by visiting the Company’s website at www.flowserve.com.

Safe Harbor Statement: This news release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, as amended. Words or phrases such as, "may," "should," "expects," "could," "intends," "plans," "anticipates," "estimates," "believes," "forecasts," "predicts" or other similar expressions are intended to identify forward-looking statements, which include, without limitation, earnings forecasts, statements relating to our business strategy and statements of expectations, beliefs, future plans and strategies and anticipated developments concerning our industry, business, operations and financial performance and condition.

The forward-looking statements included in this news release are based on our current expectations, projections, estimates and assumptions. These statements are only predictions, not guarantees. Such forward-looking statements are subject to numerous risks and uncertainties that are difficult to predict. These risks and uncertainties may cause actual results to differ materially from what is forecast in such forward-looking statements, and include, without limitation, the following: global supply chain disruptions and the current inflationary environment could adversely affect the efficiency of our manufacturing and increase the cost of providing our products to customers; a portion of our bookings may not lead to completed sales, and our ability to convert bookings into revenues at acceptable profit margins; changes in global economic conditions and the potential for unexpected cancellations or delays of customer orders in our reported backlog; our dependence on our customers’ ability to make required capital investment and maintenance expenditures; if we are not able to successfully execute and realize the expected financial benefits from any restructuring and realignment initiatives, our business could be adversely affected; the substantial dependence of our sales on the success of the energy, chemical, power generation and general industries; the adverse impact of volatile raw materials prices on our products and operating margins; economic, political and other risks associated with our international operations, including military actions, trade embargoes, epidemics or pandemics and changes to tariffs or trade agreements that could affect customer markets, particularly North African, Latin American, Asian and Middle Eastern markets and global oil and gas producers, and non-compliance with U.S. export/re-export control, foreign corrupt practice laws, economic sanctions and import laws and regulations; the impact of public health emergencies, such as outbreaks of epidemics, pandemics, and contagious diseases, on our business and operations; increased aging and slower collection of receivables, particularly in Latin America and other emerging markets; potential adverse effects resulting from the implementation of new tariffs and related retaliatory actions and changes to or uncertainties related to tariffs and trade agreements; our exposure to fluctuations in foreign currency exchange rates, including in hyperinflationary countries such as Argentina; potential adverse consequences resulting from litigation to which we are a party, such as litigation involving asbestos-containing material claims; expectations regarding acquisitions and the integration of acquired businesses; the potential adverse impact of an impairment in the carrying value of goodwill or other intangible assets; our dependence upon third-party suppliers whose failure to perform timely could adversely affect our business operations; the highly competitive nature of the markets in which we operate; if we are not able to maintain our competitive position by successfully developing and introducing new products and integrate new technologies, including artificial intelligence and machine learning; environmental compliance costs and liabilities; potential work stoppages and other labor matters; access to public and private sources of debt financing; our inability to protect our intellectual property in the United States, as well as in foreign countries; obligations under our defined benefit pension plans; our internal control over financial reporting may not prevent or detect misstatements because of its inherent limitations, including the possibility of human error, the circumvention or overriding of controls, or fraud; the recording of increased deferred tax asset valuation allowances in the future or the impact of tax law changes on such deferred tax assets could affect our operating results; our information technology infrastructure could be subject to service interruptions, data corruption, cyber-based attacks or network security breaches, which could disrupt our business operations and result in the loss of critical and confidential information; ineffective internal controls could impact the accuracy and timely reporting of our business and financial results; and other factors described from time to time in our filings with the Securities and Exchange Commission.

All forward-looking statements included in this news release are based on information available to us on the date hereof, and we assume no obligation to update any forward-looking statement.

The Company reports its financial results in accordance with U.S. generally accepted accounting principles (GAAP). However, management believes that non-GAAP financial measures which exclude certain non-recurring items present additional useful comparisons between current results and results in prior operating periods, providing investors with a clearer view of the underlying trends of the business. Management also uses these non-GAAP financial measures in making financial, operating, planning and compensation decisions and in evaluating the Company's performance. Non-GAAP financial measures, which may be inconsistent with similarly captioned measures presented by other companies, should be viewed in addition to, and not as a substitute for, the Company’s reported results prepared in accordance with GAAP.