Q4 2025 Flowserve Corp Earnings Call Transcript
Key Points
- Flowserve Corp (FLS) achieved its long-term margin targets two years ahead of schedule, demonstrating strong financial performance.
- Bookings for the quarter reached $1.2 billion, with aftermarket bookings growing 10% to $682 million, marking the seventh consecutive quarter of bookings over $600 million.
- Adjusted gross margin improved by 320 basis points to 36%, marking the 12th consecutive quarter of year-over-year margin expansion.
- The company returned $365 million to shareholders in 2025, including $255 million in share repurchases, reflecting a disciplined capital allocation strategy.
- Flowserve Corp (FLS) is well-positioned for growth in the nuclear and traditional power markets, with significant bookings and strategic acquisitions like Trillium Flow Technologies.
- Original equipment revenues declined by 2% in the quarter, impacted by customer delays and timing issues with material receipts.
- The book-to-bill ratio for the FCD segment was 0.84, indicating a decline in bookings due to project delays and a focus on the 80/20 program.
- Organic sales growth was modest at 1%, with the company facing headwinds from engineered projects and backlog conversion challenges.
- The chemical sector remains the lowest growth end market, with only a moderate recovery expected in 2026.
- Flowserve Corp (FLS) anticipates muted revenue growth in the first half of 2026 due to backlog composition and ongoing 80/20 efforts.
Good day, and welcome to the Flowserve fourth-quarter 2025 earnings call. Today's call is being recorded.
At this time, I'd like to turn the call over to Brian Ezzell, VP of Investor Relations. Please go ahead.
Thank you, and good morning, everyone. Welcome to Flowserve's fourth quarter and full-year 2025 business update. I'm joined by Scott Rowe, Flowserve's President and Chief Executive Officer; and Flowserve Chief Financial Officer, Amy Schwetz. Following Scott and Amy's prepared remarks, we'll open the call for questions.
Turning to slide 2. Our discussion will contain forward-looking statements that are based upon information available as of today. Actual results may differ due to risks and uncertainties, refer to additional information, including our note on non-GAAP measures in our press release, earnings presentation, and SEC filings, which are available on our website.
With that, I'll turn it over to Scott.
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