Flowserve (NYSE:FLS) reported fourth-quarter and full-year 2025 results that management said reflected “outstanding financial performance” and marked the achievement of its long-term margin targets two years ahead of plan. On the call, executives pointed to continued strength in the company’s aftermarket business, expanding margins driven by operational initiatives, and an active approach to capital allocation that included share repurchases and acquisitions.
Bookings led by aftermarket strength; nuclear awards highlighted
For the fourth quarter, Flowserve reported bookings of $1.2 billion, up roughly 3% from the prior-year period. Aftermarket bookings grew 10% to $682 million, representing Flowserve’s seventh consecutive quarter with bookings above $600 million in aftermarket, according to management.
For the full year, Rowe said Flowserve delivered $4.7 billion in bookings, including $400 million in nuclear awards. He added that the company’s four largest awards in 2025 were global nuclear projects totaling more than $150 million.
Q4 revenue up 4%; margins and EPS rose sharply
CFO Amy Schwetz said fourth-quarter revenue increased 4% year-over-year to $1.2 billion, including roughly 1% organic sales growth and a 240-basis-point benefit from foreign currency translation. Aftermarket sales rose 8% while original equipment revenue declined 2%.
Schwetz attributed the original equipment shortfall versus expectations to customer delays and the timing of receiving materials on percentage-of-completion projects. She said Flowserve expects these “modest short-term impacts” to abate in the first half of 2026.
Profitability improved materially in the quarter. Adjusted gross margin reached 36%, up 320 basis points year-over-year, marking the 12th consecutive quarter of year-over-year margin expansion. Adjusted operating margin expanded 420 basis points to 16.8%, exceeding the company’s stated 2027 long-term target range of 14% to 16%. Adjusted EPS for the quarter was $1.11, a 59% increase from the prior year.
Segment results: FPD and FCD margins above long-term targets
In the Flowserve Pump Division (FPD), Schwetz said adjusted gross margin increased 370 basis points to 37.1% and adjusted operating margin expanded 350 basis points to 21%. FPD bookings rose 8%, led by 12% aftermarket growth, while original equipment bookings were up 1% amid muted large engineered energy projects offset by other areas. FPD sales grew 5% to $833 million, and the segment posted a fourth-quarter book-to-bill of 1.06.
In the Flowserve Control Division (FCD), Schwetz said adjusted gross margin expanded 220 basis points to 34% and adjusted operating margin increased 440 basis points to 19.7%. She said MOGAS delivered accretive operating margins in the quarter, consistent with expectations at acquisition. FCD bookings declined year-over-year, which management attributed to headwinds from the company’s 80/20 program focus and lower original equipment awards tied to project delays; aftermarket bookings were roughly flat. FCD’s book-to-bill was 0.84, with management noting strength in the power end-market.
Schwetz said both FPD and FCD posted adjusted operating margins “well above” the company’s 2027 segment target ranges of 16% to 18%.
Cash flow, capital returns, and balance sheet
Flowserve generated $199 million of cash from operations in the fourth quarter excluding the impact of divesting its legacy asbestos liabilities, which management said resulted in 121% free cash flow conversion. The company returned $84 million to shareholders in the quarter, including $57 million of share repurchases.
For the full year, Flowserve delivered $506 million in operating cash flow, up 19% versus 2024. Schwetz said that, excluding the net impact of a merger termination payment and the asbestos divestiture, full-year cash flow conversion was 97%. The company returned $365 million to shareholders in 2025, including $255 million in share repurchases at an average price of $53 per share, and ended the year with $200 million remaining on its repurchase authorization. Schwetz said net leverage was 1x.
Acquisitions, outlook for 2026, and updated long-term targets
Rowe said Flowserve continues to view M&A as an important part of its capital allocation strategy. He highlighted an aftermarket-focused bolt-on acquisition announced in December and said Flowserve signed a definitive agreement to acquire the valve and actuation business from Trillium Flow Technologies. Rowe described Trillium Valves as serving nuclear, traditional power, industrial, and infrastructure markets, and said the business has an installed base of more than 200,000 units, including assets in 115 operating nuclear reactors, which management expects to support recurring aftermarket demand.
Rowe also said a large new nuclear reactor has historically represented about $100 million of content opportunity for Flowserve and that the expanded Trillium Valves offering could increase that amount by 15% to 20% (to roughly $115 million to $120 million per reactor). In Q&A, management said it did not publish a specific cost-synergy figure for the Trillium deal, noting it is a carve-out, but said it expects to apply the Flowserve Business System playbook, including operational excellence initiatives, supply chain actions, 80/20 portfolio work, and roofline consolidation over time.
For 2026, Schwetz guided to reported sales growth of 5% to 7%, including organic sales growth of 1% to 3%. The company expects foreign currency translation to contribute about 100 basis points, with roughly 300 basis points of benefit from the Greenray and Trillium Valves acquisitions, assuming Trillium closes mid-year. Schwetz said Trillium is expected to benefit adjusted operating income and be neutral to adjusted EPS due to incremental financing costs, and Flowserve expects adjusted operating margin to expand by about 100 basis points in 2026.
Flowserve guided to adjusted EPS of $4.00 to $4.20, implying a midpoint increase of 13% versus 2025, and assumed an adjusted tax rate of 21% to 22%. Schwetz said the company expects a typical seasonal cadence, with first-quarter revenue and earnings the lowest of the year, and said first-half earnings are expected to represent roughly 40% of full-year earnings. Management also noted that as it enters 2026 it expects to convert roughly 76% of existing backlog into revenue over the next 12 months, a lower conversion factor than in recent years due to a higher mix of longer-tenure nuclear projects and fewer original equipment energy projects.
Looking longer term, management introduced 2030 targets that include a mid-single-digit organic sales CAGR from 2025 to 2030, 20% adjusted operating margins by 2030 (about 100 basis points of expansion per year on average), and a double-digit adjusted EPS CAGR from 2025 to 2030.
In closing remarks, Rowe said Flowserve’s business system, diversification strategy, and early progress in commercial excellence position the company for continued growth and margin improvement. Investor relations said Flowserve plans to host an Investor Day later in the year.
About Flowserve (NYSE:FLS)
Flowserve Corporation (NYSE: FLS) is a leading provider of fluid motion and control products and services. The company designs, manufactures and services engineered and industrial pumps, mechanical seals, valves and related flow management equipment. Flowserve’s offerings are utilized across a broad spectrum of end markets, including oil and gas, power generation, chemical processing, water management, pharmaceutical and semiconductor manufacturing, as well as mining and general industrial applications.
Flowserve’s product portfolio encompasses a wide range of centrifugal and positive displacement pumps, high-performance control valves, butterfly and ball valves, as well as mechanical seals and seal support systems.
