Flowserve Corporation Reports Fourth Quarter and Full Year 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 fourth quarter and full year ended December 31, 2025.

Q4 and FY 2025 Highlights:

2026 and Strategic Highlights:

Management Commentary:

“We delivered outstanding financial results in the fourth quarter and for the full year 2025,” said Scott Rowe, Flowserve’s President and Chief Executive Officer. “I am incredibly proud of our global team’s dedication and strong execution of the Flowserve Business System, which has been instrumental in reaching our 2027 adjusted operating margin target two years ahead of schedule.”

Rowe continued, “With healthy end markets, a focus on expanding power generation opportunities, and the continued progress of the Flowserve Business System, we are confident in our 2026 guidance and updated long-term financial targets. We have significant operational momentum and are executing with discipline to drive greater value for our associates, customers, and shareholders.”

Acquisition of Trillium Flow Technologies’ Valves Division 4:

In a separate press release issued today, the Company also announced it had signed a definitive agreement to acquire Trillium Flow Technologies’ Valves Division, a market leading provider of highly engineered mission-critical valves and actuators used in nuclear, traditional power, industrial, and critical infrastructure applications. The press release can be viewed on Flowserve’s Investors page.

Key Figures (unaudited):

(dollars in millions, except per share)

2025 Q4

2024 Q4

Change

2025

2024

Change

Original Equipment Bookings

$526.6

$557.2

(5.5%)

$2,068.5

$2,238.4

(7.6%)

Aftermarket Bookings

$682.3

$618.1

10.4%

$2,644.5

$2,422.4

9.2%

Total Bookings

$1,208.9

$1,175.3

2.9%

$4,713.0

$4,660.8

1.1%

Organic Sales 5

0.8%

0.9%

Acquisitions Impact

30 bps

220 bps

Foreign Exchange Impact

240 bps

70 bps

Reported Sales

$1,222.2

$1,180.3

3.5%

$4,729.3

$4,557.8

3.8%

Operating Margin

3.5%

10.6%

(710 bps)

8.5%

10.1%

(160 bps)

Adjusted Operating Margin

16.8%

12.6%

420 bps

14.8%

11.8%

300 bps

Earnings Per Share

($0.23)

$0.59

(139.0%)

$2.64

$2.14

23.4%

Adjusted Earnings Per Share

$1.11

$0.70

58.6%

$3.64

$2.63

38.4%

Cash From Operations 6

($0.2)

$197.3

($197.5)

$505.9

$425.3

$80.6

Backlog

$2,867.8

$2,789.6

2.8%

$2,867.8

$2,789.6

2.8%

2026 Guidance 3:

The Company initiated 2026 guidance:

Organic Sales Growth

+1% to +3%

Impact From Acquisitions

Approx. +300 bps

Impact From Foreign Exchange Translation

Approx. +100 bps

Total Sales Growth

+5% to +7%

Adjusted EPS

$4.00 to $4.20

Net Interest Expense

Approx. $80 million

Adjusted Tax Rate

21% to 22%

Capital Expenditures

$90 million to $100 million

Full-year 2026 guidance assumes the acquisition of Trillium Flow Technologies’ Valves Division closes mid-year 2026 and, including incremental interest expense related to financing the acquisition, the acquisition will be roughly neutral to 2026 adjusted EPS. The guidance also assumes tariff rates in place as of February 1, 2026.

2030 Financial Targets:

The Company introduced 2030 financial targets, which include expectations for:

Organic Sales CAGR (2025-2030)

Mid-Single Digit Growth

Adjusted Operating Margin (by 2030)

~20%

Adjusted EPS CAGR (2025-2030)

Double-Digit Growth

Webcast and Conference Call Instructions:

Flowserve will host its conference call to discuss fourth quarter and full year results on Friday, February 6, at 10:00 a.m. Eastern Time. The call can be accessed by shareholders and other interested parties on Flowserve’s Investors page.

Footnotes

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

3 Adjusted EPS excludes realignment expenses, the impact from other specific discrete and below-the-line foreign currency effects and utilizes the then-applicable FX rates and fully diluted shares. Adjusted 2026 EPS excludes certain other discrete items which may arise during the year.

4 Transaction excludes Trillium Valves’ French operations.

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.

6 Cash from Operations for the fourth quarter 2025 includes a ($199) million one-time impact from legacy asbestos liabilities divestiture. Cash from Operations for the full year 2025 includes the impact of a $173 million one-time merger termination fee paid to Flowserve (net of incurred transaction costs and taxes) and a ($199) million one-time impact from legacy asbestos liabilities divestiture.

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

Three Months Ended December 31,

(Amounts in thousands, except per share data)

2025

2024

Sales

1,222,191

1,180,348

Cost of sales

(796,956

)

(808,234

)

Gross profit

425,235

372,114

Selling, general and administrative expense

(247,863

)

(251,966

)

Loss on divestiture of asbestos-related assets and liabilities

(140,092

)

Net earnings from affiliates

4,893

4,557

Operating income

42,173

124,705

Interest expense

(19,574

)

(20,481

)

Interest income

2,488

1,625

Other income (expense), net

(18,294

)

(137

)

Earnings before income taxes

6,793

105,712

Provision for income taxes

(28,529

)

(22,202

)

Net earnings, including noncontrolling interests

(21,736

)

83,510

Less: Net earnings attributable to noncontrolling interests

(7,259

)

(5,969

)

Net (loss) earnings attributable to Flowserve Corporation

(28,995

)

77,541

Net earnings per share attributable to Flowserve Corporation common shareholders:

Basic

(0.23

)

0.59

Diluted

(0.23

)

0.59

Weighted average shares – basic

127,294

131,393

Weighted average shares – diluted

128,411

132,395

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 December 31, 2025

Gross Profit

Selling, General & Administrative Expense

Loss on Divestiture of Asbestos-Related Assets and Liabilities

Operating Income

Other Income (Expense), Net

Provision For (Benefit From) Income Taxes

Net Earnings (Loss)

Effective Tax Rate

Diluted EPS

Reported

425,235

247,863

140,092

42,173

(18,294

)

28,529

(28,995

)

420.1

(0.23

)

Reported as a percent of sales

34.8

20.3

11.5

3.5

-1.5

2.3

-2.4

Realignment charges (a)

14,061

(2,115

)

16,176

3,591

12,585

22.2

0.10

Acquisition related (b)(c)

(126

)

(5,181

)

5,055

1,189

3,866

23.5

0.03

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

438

(1,300

)

1,738

409

1,329

23.5

0.01

Discrete items (e)(f)

(296

)

311

8,564

206

8,669

2.3

0.07

Loss on asbestos divestiture (g)

(140,092

)

140,092

2,644

137,448

1.9

1.07

Below-the-line foreign exchange impacts (h)

7,096

(1,156

)

8,252

-16.3

0.06

Adjusted

439,623

238,971

205,543

(2,634

)

35,411

143,154

19.1

1.11

Adjusted as a percent of sales

36.0

19.6

0.0

16.8

-0.2

2.9

11.7

Note: Amounts may not calculate due to rounding

(a) Charges represent realignment costs incurred as a result of realignment programs, net of a $6,888 gain associated with the divestiture of a pump product line.

(b) Charge represents $3,315 of acquisition and integration related costs associated with the MOGAS acquisition.

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

(e) 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.

(f) Charge includes $641 for a non-cash pension settlement accounting loss incurred in conjunction with the freeze of our US Qualified pension plan and $7,923 for a non-cash pension settlement accounting loss incurred in conjunction with a United Kingdom based pension plan.

(g) Charge represents the one-time loss associated with the divestiture of our asbestos-related assets and liabilities including $199,000 of cash funded to the divested entity and $8,335 of transaction costs incurred.

(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.

Three Months Ended December 31, 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

372,114

251,966

124,705

(138

)

22,202

77,541

21.0

0.59

Reported as a percent of sales

31.5

21.3

10.6

0.0

1.9

6.6

Realignment charges (a)

11,569

(1,570

)

13,139

2,849

10,290

21.7

0.08

Acquisition related (b)

(7,150

)

7,150

1,682

5,468

23.5

0.04

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

3,067

(1,033

)

4,100

1,300

2,800

31.7

0.02

Below-the-line foreign exchange impacts (d)

(4,370

)

(1,423

)

(2,947

)

32.6

(0.02

)

Adjusted

386,750

242,213

149,094

(4,508

)

26,610

93,152

21.2

0.70

Adjusted as a percent of sales

32.8

20.5

12.6

-0.4

2.3

7.9

Note: Amounts may not calculate due to rounding

(a) Charges represent realignment costs incurred as a result of realignment programs of which $8,600 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.

(d) 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 December 31,

(Amounts in millions, except percentages)

2025

2024

Bookings

883.6

816.4

Sales

833.0

794.9

Gross profit

305.2

255.7

Gross profit margin

36.6

32.2

SG&A

143.4

131.4

Segment operating income

166.8

129.1

Segment operating income as a percentage of sales

20.0

16.2

FLOW CONTROL DIVISION

Three Months Ended December 31,

(Amounts in millions, except percentages)

2025

2024

Bookings

330.3

363.4

Sales

391.5

387.9

Gross profit

123.5

118.5

Gross profit margin

31.5

30.5

SG&A

59.5

73.9

Segment operating income

64.0

44.6

Segment operating income as a percentage of sales

16.3

11.5

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

(Amounts in thousands)

Flowserve Pumps Division

Three Months Ended December 31, 2025

Gross Profit

Selling, General & Administrative Expense

Operating Income

Three Months Ended December 31, 2024

Gross Profit

Selling, General & Administrative Expense

Operating Income

Reported

305,245

143,380

166,757

Reported

255,710

131,402

129,069

Reported as a percent of sales

36.6

17.2

20.0

Reported as a percent of sales

32.2

16.5

16.2

Realignment charges (a)

4,120

(3,092

)

7,212

Realignment charges (a)

9,890

(41

)

9,931

Discrete items (b)

(36

)

Adjusted

265,600

131,361

139,000

Acquisition related (c)

(740

)

740

Adjusted as a percent of sales

33.4

16.5

17.5

Adjusted

309,374

139,512

174,754

Adjusted as a percent of sales

37.1

16.7

21.0

Flow Control Division

Three Months Ended December 31, 2025

Gross Profit

Selling, General & Administrative Expense

Operating Income

Three Months Ended December 31, 2024

Gross Profit

Selling, General & Administrative Expense

Operating Income

Reported

123,529

59,537

63,992

Reported

118,503

73,859

44,592

Reported as a percent of sales

31.5

15.2

16.3

Reported as a percent of sales

30.5

19.0

11.5

Realignment charges (a)

9,417

1,313

8,104

Realignment charges (a)

1,679

(1,655

)

3,334

Acquisition related (d)

(126

)

(3,441

)

3,315

Acquisition related (b)

(7,150

)

7,150

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

438

(1,300

)

1,738

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

3,067

(1,033

)

4,100

Discrete items (b)

(86

)

Adjusted

123,249

64,021

59,176

Adjusted

133,263

56,023

77,240

Adjusted as a percent of sales

31.8

16.5

15.3

Adjusted as a percent of sales

34.0

14.3

19.7

Note: Amounts may not calculate due to rounding

(a) Charges represent realignment costs incurred as a result of realignment programs, net of a $6,888 gain associated with the divestiture of a pump product line.

(a) Charges represent realignment costs incurred as a result of realignment programs of which $8,600 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 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.

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

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

(Unaudited)

Year Ended December 31,

(Amounts in thousands, except per share data)

2025

2024

2023

Sales

4,729,260

4,557,806

4,320,577

Cost of sales

(3,147,823

)

(3,123,560

)

(3,043,749

)

Gross profit

1,581,437

1,434,246

1,276,828

Selling, general and administrative expense

(1,062,100

)

(978,037

)

(961,169

)

Loss on sale of business

(12,981

)

Loss on divestiture of asbestos-related assets and liabilities

(140,092

)

Net earnings from affiliates

20,679

19,051

17,894

Operating income

399,924

462,279

333,553

Interest expense

(77,740

)

(69,301

)

(66,924

)

Interest income

7,551

5,371

6,991

Other income (expense), net

195,663

(12,194

)

(49,870

)

Earnings before income taxes

525,398

386,155

223,750

Provision for income taxes

(155,596

)

(84,929

)

(18,562

)

Net earnings, including noncontrolling interests

369,802

301,226

205,188

Less: Net earnings attributable to noncontrolling interests

(23,555

)

(18,467

)

(18,445

)

Net earnings attributable to Flowserve Corporation

346,247

282,759

186,743

Net earnings per share attributable to Flowserve Corporation common shareholders:

Basic

2.66

2.15

1.42

Diluted

2.64

2.14

1.42

Weighted average shares – basic

130,005

131,488

131,117

Weighted average shares – diluted

130,979

132,356

131,931

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

(Amounts in thousands, except per share data)

Twelve Months Ended December 31, 2025

Gross Profit

Selling, General & Administrative Expense

Loss on Divestiture of Asbestos-Related Assets and Liabilities

Operating Income

Other Income (Expense), Net

Provision For (Benefit From) Income Taxes

Net Earnings (Loss)

Effective Tax Rate

Diluted EPS

Reported

1,581,437

1,062,100

140,092

399,924

195,663

155,596

346,247

29.6

2.64

Reported as a percent of sales

33.4

22.5

3.0

8.5

4.1

3.3

7.3

Realignment charges (a)

54,660

(3,595

)

58,255

13,687

44,568

23.5

0.34

Acquisition related (b)(c)

635

(13,895

)

14,530

3,417

11,113

23.5

0.08

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

9,180

(5,200

)

14,380

4,138

10,242

28.8

0.08

Discrete items (e)(f)(g)

121

(31,412

)

31,533

13,064

8,609

35,988

19.3

0.27

Merger transaction costs (h)

(41,197

)

41,197

9,534

31,663

23.1

0.24

Merger termination payment (i)

(266,000

)

(60,957

)

(205,043

)

22.9

(1.57

)

Discrete tax items (j)

(24,860

)

24,860

0.0

0.19

Loss on asbestos divestiture (k)

(140,092

)

140,092

2,644

137,448

1.9

1.05

Below-the-line foreign exchange impacts (l)

43,893

4,821

39,072

11.0

0.30

Adjusted

1,646,033

966,801

699,911

(13,380

)

116,629

476,158

18.9

3.64

Adjusted as a percent of sales

34.8

20.4

0.0

14.8

-0.3

2.5

10.1

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 and net of a $6,888 gain associated with the divestiture of a pump product line.

(b) Charge represents $12,790 of acquisition and integration related costs associated with the MOGAS acquisition.

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

(f) Charge includes $5,141 for a non-cash pension settlement accounting loss incurred in conjunction with the freeze of our US Qualified pension plan and $7,923 for a non-cash pension settlement accounting loss incurred in conjunction with a United Kingdom based pension plan.

(g) 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.

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

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

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

(k) Charge represents the one-time loss associated with the divestiture of our asbestos-related assets and liabilities including $199,000 of cash funded to the divested entity and $8,335 of transaction costs incurred.

(l) 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.

Twelve Months Ended December 31, 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

1,434,246

978,037

12,981

462,279

(12,194

)

84,929

282,759

22.0

2.14

Reported as a percent of sales

31.5

21.5

0.3

10.1

-0.3

1.9

6.2

Realignment charges (a)

31,576

(4,939

)

(12,981

)

49,496

4,884

44,612

9.9

0.34

Discrete items (b)(c)(d)

2,700

(7,500

)

10,200

2,869

7,331

28.1

0.06

Acquisition related (e)

(9,944

)

9,944

2,340

7,604

23.5

0.06

Discrete asset write-downs (f)(g)

(1,795

)

1,795

3,567

1,342

4,020

25.0

0.03

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

3,067

(1,033

)

4,100

1,300

2,800

31.7

0.02

Below-the-line foreign exchange impacts (i)

(2,302

)

(1,912

)

(390

)

83.1

(0.00

)

Adjusted

1,471,589

952,826

537,814

(10,929

)

95,752

348,736

20.7

2.63

Adjusted as a percent of sales

32.3

20.9

0.0

11.8

-0.2

2.1

7.7

Note: Amounts may not calculate due to rounding

(a) Charges represent realignment costs incurred as a result of realignment programs of which $33,700 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 and integration 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) Charge represents amortization of step-up in value of acquired inventories and acquisition related intangible assets associated with the MOGAS acquisition.

(i) 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

Year Ended December 31,

(Amounts in millions, except percentages)

2025

2024

Bookings

3,273.3

3,304.3

Sales

3,235.3

3,158.6

Gross profit

1,138.7

1,017.0

Gross profit margin

35.2

32.2

SG&A

558.5

556.2

Segment operating income

600.9

480.2

Segment operating income as a percentage of sales

18.6

15.2

FLOW CONTROL DIVISION

Year Ended December 31,

(Amounts in millions, except percentages)

2025

2024

Bookings

1,454.3

1,370.7

Sales

1,504.5

1,409.3

Gross profit

445.7

424.0

Gross profit margin

29.6

30.1

SG&A

266.0

252.7

Loss on sale of business

(13.0

)

Segment operating income

179.7

158.3

Segment operating income as a percentage of sales

11.9

11.2

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

(Amounts in thousands)

Flowserve Pumps Division

Twelve Months Ended December 31, 2025

Gross Profit

Selling, General & Administrative Expense

Operating Income

Twelve Months Ended December 31, 2024

Gross Profit

Selling, General & Administrative Expense

Operating Income

Reported

1,138,712

558,507

600,884

Reported

1,017,048

556,225

480,216

Reported as a percent of sales

35.2

17.3

18.6

Reported as a percent of sales

32.2

17.6

15.2

Realignment charges (a)

30,614

(3,932

)

34,546

Realignment charges (a)

30,727

(1,078

)

31,805

Discrete items (b)

(323

)

419

Discrete items (b)(c)(d)

1,700

(6,000

)

7,700

Acquisition related (c)

(740

)

740

Adjusted

1,049,475

549,147

519,721

Adjusted

1,169,422

553,512

636,589

Adjusted as a percent of sales

33.2

17.4

16.5

Adjusted as a percent of sales

36.1

17.1

19.7

Flow Control Division

Twelve Months Ended December 31, 2025

Gross Profit

Selling, General & Administrative Expense

Operating Income

Twelve Months Ended December 31, 2024

Gross Profit

Selling, General & Administrative Expense

Loss on Sale of Business

Operating Income

Reported

445,660

265,973

179,687

Reported

423,973

252,675

12,981

158,265

Reported as a percent of sales

29.6

17.7

11.9

Reported as a percent of sales

30.1

17.9

0.9

11.2

Realignment charges (a)

24,121

2,544

21,577

Realignment charges (a)

1,077

(3,095

)

(12,981

)

17,153

Acquisition related (d)

635

(12,155

)

12,790

Discrete item (b)

800

(400

)

1,200

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

9,180

(5,200

)

14,380

Acquisition related (e)

(9,944

)

9,944

Discrete items (b)

(294

)

313

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

3,067

(1,033

)

4,100

Adjusted

479,615

250,868

228,747

Adjusted

428,917

238,203

190,662

Adjusted as a percent of sales

31.9

16.7

15.2

Adjusted as a percent of sales

30.4

16.9

0.0

13.5

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 and net of a $6,888 gain associated with the divestiture of a pump product line.

(a) Charges represent realignment costs incurred as a result of realignment programs of which $33,700 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 acquisition and integration-related costs 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 amortization of step-up in value of acquired inventories and acquisition related intangible assets associated with the MOGAS acquisition.

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

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

Fourth Quarter and Full Year 2025 - Segment Results

(dollars in millions, comparison vs. 2024 fourth quarter and full year, unaudited)

FPD

FCD

4th Qtr

Full Year

4th Qtr

Full Year

Bookings

883.6

3,273.3

330.3

1,454.3

- vs. prior year

67.2

8.2

-31.0

-0.9

-33.2

-9.1

83.6

6.1

- on constant currency

43.6

5.3

-60.0

-1.8

-36.5

-10.0

80.9

5.9

Sales

833.0

3,235.3

391.5

1,504.5

- vs. prior year

38.1

4.8

76.8

2.4

3.6

0.9

95.2

6.8

- on constant currency

14.4

1.8

50.7

1.6

-0.9

-0.2

90.0

6.4

Gross Profit

305.2

1,138.7

123.5

445.7

- vs. prior year

19.4

12.0

4.2

5.1

Gross Margin (% of sales)

36.6

35.2

31.5

29.6

- vs. prior year (in basis points)

440 bps

300 bps

100 bps

(50) bps

Operating Income

166.8

600.9

64.0

179.7

- vs. prior year

37.7

29.2

120.7

25.1

19.4

43.5

21.4

13.5

- on constant currency

31.2

24.2

111.7

23.3

19.5

43.8

22.6

14.3

Operating Margin (% of sales)

20.0

18.6

16.3

11.9

- vs. prior year (in basis points)

380 bps

340 bps

480 bps

70 bps

Adjusted Operating Income *

174.8

636.6

77.2

228.7

- vs. prior year

35.8

25.7

116.9

22.5

18.1

30.5

38.1

20.0

- on constant currency

29.3

21.1

107.9

20.8

18.2

30.7

39.3

20.6

Adj. Oper. Margin (% of sales)*

21.0

19.7

15.2

- vs. prior year (in basis points)

350 bps

320 bps

440 bps

170 bps

Backlog

2,044.8

828.6

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

CONSOLIDATED BALANCE SHEETS

(Unaudited)

December 31,

(Amounts in thousands, except par value)

2025

2024

ASSETS

Current assets:

Cash and cash equivalents

760,183

675,441

Accounts receivable, net of allowance for expected credit losses of $83,094 and $79,059, respectively

1,029,095

976,739

Contract assets, net

322,472

298,906

Inventories

789,898

837,254

Prepaid expenses and other

141,237

116,157

Total current assets

3,042,885

2,904,497

Property, plant and equipment, net

566,751

539,703

Operating lease right-of-use assets, net

166,031

159,400

Goodwill

1,391,988

1,286,295

Deferred taxes

156,250

221,742

Other intangible assets, net

198,475

188,604

Other assets, net

185,820

200,580

Total assets

5,708,200

5,500,821

LIABILITIES AND EQUITY

Current liabilities:

Accounts payable

554,243

545,310

Accrued liabilities

587,475

561,486

Contract liabilities

274,669

283,670

Debt due within one year

49,868

44,059

Operating lease liabilities

35,630

33,559

Total current liabilities

1,501,885

1,468,084

Long-term debt due after one year

1,525,210

1,460,132

Operating lease liabilities

149,565

149,838

Retirement obligations and other liabilities

277,216

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

508,890

502,045

Retained earnings

4,261,977

4,025,750

Treasury shares, at cost – 49,763 and 45,688 shares, respectively

(2,231,685

)

(2,007,869

)

Deferred compensation obligation

6,629

8,172

Accumulated other comprehensive loss

(575,405

)

(741,424

)

Total Flowserve Corporation shareholders' equity

2,191,397

2,007,665

Noncontrolling interests

62,927

44,047

Total equity

2,254,324

2,051,712

Total liabilities and equity

5,708,200

5,500,821

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

Year Ended December 31,

(Amounts in thousands)

2025

2024

2023

Cash flows – Operating activities:

Net earnings, including noncontrolling interests

369,802

301,226

205,188

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

Depreciation

79,236

75,849

73,464

Amortization of intangible and other assets

16,218

9,749

10,283

Loss on sale of business

12,981

Loss on sale of asbestos-related assets and liabilities

140,092

Contribution to divest asbestos-related assets and liabilities

(199,000

)

Stock-based compensation

38,263

30,474

27,808

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

(15,226

)

24,172

(17,331

)

Change in assets and liabilities, net of businesses acquired:

Accounts receivable, net

691

(82,188

)

4,744

Inventories

86,678

38,872

(59,831

)

Contract assets, net

(13,279

)

(18,513

)

(41,149

)

Prepaid expenses and other assets, net

(56,489

)

15,116

7,825

Accounts payable

(28,852

)

(12,336

)

53,065

Contract liabilities

(23,502

)

(6,070

)

26,837

Accrued liabilities

25,210

49,578

59,213

Retirement obligations and other

38,088

1,456

38,497

Net deferred taxes

47,954

(15,058

)

(62,841

)

Net cash flows provided by operating activities

505,884

425,308

325,772

Cash flows – Investing activities:

Capital expenditures

(70,927

)

(81,019

)

(67,359

)

Payments for acquisitions, net of cash acquired

(65,881

)

(305,924

)

Proceeds from disposal of assets

11,551

2,244

2,057

Payments for disposition of business

(2,555

)

Net affiliate investment activity

(3,278

)

Net cash flows used by investing activities

(125,161

)

(387,214

)

(68,580

)

Cash flows – Financing activities:

Payments on term loan

(37,500

)

(95,375

)

(40,000

)

Proceeds from term loan

366,000

Proceeds under revolving credit facility

200,000

100,000

280,000

Payments under revolving credit facility

(100,000

)

(100,000

)

(280,000

)

Proceeds under other financing arrangements

15,309

1,437

1,114

Payments under other financing arrangements

(5,888

)

(1,455

)

(2,604

)

Payments related to tax withholding for stock-based compensation

(11,754

)

(9,581

)

(6,245

)

Repurchases of common shares

(254,860

)

(20,070

)

Payments of dividends

(109,639

)

(110,440

)

(104,955

)

Contingent consideration payment related to acquired business

(15,000

)

Other

(7,596

)

(13,021

)

(324

)

Net cash flows provided (used) provided by financing activities

(326,928

)

117,495

(153,014

)

Effect of exchange rate changes on cash

30,947

(25,826

)

6,529

Net change in cash and cash equivalents

84,742

129,763

110,707

Cash and cash equivalents at beginning of period

675,441

545,678

434,971

Cash and cash equivalents at end of period

760,183

675,441

545,678

Supplemental Cash Flow Information:

Income taxes paid (net of refunds)

92,327

81,172

119,275

Interest paid

75,472

66,809

64,865

Non-Cash Investing and Financing Activities:

Contingent liabilities incurred related to acquired business, but not paid

674

15,000

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.