Q2 FY2026
Filed Jul 29, 2026Flowserve Business System Delivers Strong Q2 Performance; Updates 2026 Guidance
Bookings, reported EPS and operating margins improved, but reported sales declined and the company reduced its organic sales outlook to approximately (1%) because of Middle East conflict and geopolitical instability.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Original Equipment Bookingsother | $652.3 million | – | 43.9% |
| Aftermarket Bookingsother | $695.8 million | – | 12.1% |
| Total Bookingsother | $1,348.1 million | – | 25.5% |
| Organic SalesGAAP | (3.3%) | – | – |
| Acquisition/Divestiture Impactother | 90 bps | – | – |
| Foreign Exchange Impactother | 80 bps | – | – |
| Reported SalesGAAP | $1,169.2 million | – | (1.6%) |
| Gross ProfitGAAP | $384,726 thousand | – | – |
| Gross MarginGAAP | 32.9% | – | – |
| Adjusted Gross Profitnon-GAAP | $419,279 thousand | – | – |
| Adjusted Gross Marginnon-GAAP | 35.9% | – | – |
| Selling, General and Administrative ExpenseGAAP | $266,318 thousand | – | – |
| Net Earnings from AffiliatesGAAP | $33,015 thousand | – | – |
| Operating IncomeGAAP | $151,423 thousand | – | – |
| Operating MarginGAAP | 13.0% | – | 70 bps |
| Adjusted Operating Incomenon-GAAP | $178,661 thousand | – | – |
| Adjusted Operating Marginnon-GAAP | 15.3% | – | 70 bps |
| Interest ExpenseGAAP | $25,696 thousand | – | – |
| Interest IncomeGAAP | $5,023 thousand | – | – |
| Other Expense, NetGAAP | $12,087 thousand | – | – |
| Earnings Before Income TaxesGAAP | $118,663 thousand | – | – |
| Provision for Income TaxesGAAP | $17,078 thousand | – | – |
| Effective Tax RateGAAP | 14.4% | – | – |
| Net Earnings, Including Noncontrolling InterestsGAAP | $101,585 thousand | – | – |
| Net Earnings Attributable to Flowserve CorporationGAAP | $98,998 thousand | – | – |
| Net Earningsnon-GAAP | $121,681 thousand | – | – |
| Adjusted Effective Tax Ratenon-GAAP | 20.0% | – | – |
| Diluted EPSGAAP | $0.77 | – | 24.2% |
| Basic EPSGAAP | $0.78 | – | – |
| Adjusted Diluted EPSnon-GAAP | $0.95 | – | 4.4% |
| Cash From OperationsGAAP | $129.2 million | – | ($24.9 million) |
| Backlogother | $3,336.0 million | – | 16.9% |
| YTD Original Equipment Bookingsother | $1,119.5 million | – | 13.1% |
| YTD Aftermarket Bookingsother | $1,376.2 million | – | 5.1% |
| YTD Total Bookingsother | $2,495.7 million | – | 8.5% |
| YTD Organic SalesGAAP | (6.9%) | – | – |
| YTD Acquisition/Divestiture Impactother | 60 bps | – | – |
| YTD Foreign Exchange Impactother | 220 bps | – | – |
| YTD Reported SalesGAAP | $2,237.4 million | – | (4.1%) |
| YTD Operating MarginGAAP | 12.1% | – | 20 bps |
| YTD Adjusted Operating Marginnon-GAAP | 15.2% | – | 140 bps |
| YTD Diluted EPSGAAP | $1.41 | – | 19.5% |
| YTD Adjusted Diluted EPSnon-GAAP | $1.80 | – | 10.4% |
| YTD Cash From OperationsGAAP | $86.2 million | – | ($18.0 million) |
| Flowserve Pumps Division Bookingsother | $938.1 million | – | – |
| Flowserve Pumps Division Gross Profit MarginGAAP | 36.4% | – | – |
| Flowserve Pumps Division Segment Operating IncomeGAAP | $181.2 million | – | – |
| Flowserve Pumps Division Segment Operating Income as a Percentage of SalesGAAP | 22.3% | – | – |
| Flow Control Division Bookingsother | $417.1 million | – | – |
| Flow Control Division Gross Profit MarginGAAP | 24.8% | – | – |
| Flow Control Division Segment Operating IncomeGAAP | $11.0 million | – | – |
| Flow Control Division Segment Operating Income as a Percentage of SalesGAAP | 3.1% | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Flowserve Pumps DivisionDriver not separately disclosed for the segment in the provided filing text. | $814.1 million | – | – |
| Flow Control DivisionDriver not separately disclosed for the segment in the provided filing text. | $357.3 million | – | – |
Full-year 2026 outlook
- RevenueTotal Sales Growth: Approx. +3%
- Tax rateAdjusted Tax Rate: 21% to 22%
- NoteOrganic Sales Growth: Approx. (1%)
- NoteImpact From Acquisition/Divestiture: Approx. +300 bps
- NoteImpact From Foreign Exchange Translation: Approx. +100 bps
- NoteAdjusted EPS: $4.05 to $4.20
- NoteNet Interest Expense: Approx. $85 million
- NoteCapital Expenditures: Approx. $100 million
- NoteGuidance assumes tariff rates in place as of July 1, 2026, and current business conditions in the Middle East persist for the remainder of the year.
What drove it
- Quarterly bookings were $1.35 billion, including record aftermarket bookings of $696 million.
- Management cited resilient demand across end markets led by power, nuclear, and energy security investments.
- Management cited a healthy project pipeline for continued bookings growth.
- Management stated that its Flowserve Business System and 3D growth strategy supported second-quarter performance.
- Adjusted gross margin expanded year over year for the 14th consecutive quarter, according to management.
Concerns
- Reported sales declined (1.6%) and organic sales were (3.3%).
- The company updated full-year organic sales guidance to approximately (1%) because of the continued impact of Middle East conflict.
- The guidance assumes current Middle East conditions, affected by armed conflict and geopolitical instability, persist for the remainder of the year.
- Flow Control Division gross profit margin was 24.8% versus 29.0%, and segment operating income as a percentage of sales was 3.1% versus 10.2%.
- Q2 cash from operations was $129.2 million versus $154.1 million.
What to watch
- Whether the healthy project pipeline converts into continued bookings growth.
- The impact of Middle East conflict and geopolitical instability on run-rate business during the second half of 2026.
- Delivery of approximately (1%) organic sales growth and approximately +3% total sales growth in the 2026 guidance.
- Adjusted EPS delivery within the raised range of $4.05 to $4.20.
- Further operating-margin expansion and the performance of the Flow Control Division.
Balance sheet and cash flow
- Cash From Operations: $129.2 million in Q2 2026 versus $154.1 million in Q2 2025.
- YTD Cash From Operations: $86.2 million versus $104.2 million.
- Backlog: $3,336.0 million versus $2,853.2 million.
- Q2 and YTD 2026 backlog includes Trillium backlog of $225 million.
Analysis
Flowserve reported a mixed second quarter. Total bookings were $1,348.1 million, up 25.5%, led by Original Equipment Bookings of $652.3 million, up 43.9%, and Aftermarket Bookings of $695.8 million, up 12.1%. Backlog was $3,336.0 million, up 16.9%, and included $225 million of Trillium backlog. Management described demand as resilient in power, nuclear, and energy security investments and cited a healthy project pipeline.
Sales performance remained weaker than orders. Reported Sales were $1,169.2 million, down (1.6%), while Organic Sales were (3.3%). Acquisition/divestiture impact was 90 bps and foreign exchange impact was 80 bps. For the first half, Reported Sales were $2,237.4 million, down (4.1%), and YTD Organic Sales were (6.9%). The Pumps Division reported sales of $814.1 million, while the Flow Control Division reported sales of $357.3 million.
Profitability improved at the consolidated level. GAAP Operating Margin was 13.0%, up 70 bps, and Adjusted Operating Margin was 15.3%, also up 70 bps. Reported Diluted EPS was $0.77, up 24.2%, and Adjusted Diluted EPS was $0.95, up 4.4%. The reconciliation reported adjusted gross margin of 35.9% versus 34.9%. The Pumps Division segment operating income as a percentage of sales was 22.3% versus 19.9%, while the Flow Control Division measure was 3.1% versus 10.2%.
Cash generation was lower than the prior-year period. Cash From Operations was $129.2 million versus $154.1 million, and YTD Cash From Operations was $86.2 million versus $104.2 million. The filing did not report free cash flow, cash balances, debt balances, dividends, or share repurchases.
The full-year outlook now calls for Organic Sales Growth of approximately (1%) and Total Sales Growth of approximately +3%. Flowserve raised the low end of Adjusted EPS guidance to $4.05 to $4.20 from $4.00 to $4.20. The company retained guidance for approximately $85 million of net interest expense and a 21% to 22% adjusted tax rate, while capital expenditures are now expected to be approximately $100 million. The outlook assumes tariff rates in place as of July 1, 2026, and that current Middle East business conditions persist through year-end.
Management, verbatim
Flowserve delivered strong second quarter results, with significant bookings growth, robust operating margin expansion, and adjusted earnings per share above our initial expectations.
Scott Rowe, President and Chief Executive Officer
Demand across our end markets remains resilient, led by power, nuclear, and energy security investments.
Scott Rowe, President and Chief Executive Officer
While our healthy project pipeline positions us for continued bookings growth, we are adjusting our full-year sales guidance to reflect geopolitical uncertainty in the Middle East and its expected impact on our run-rate business in the region during the second half of the year.
Scott Rowe, President and Chief Executive Officer
Not in the filing
stated, not guessed- Previous-release outlook was not provided, so no actual-versus-prior-guidance comparisons are included.
- Prior-quarter comparisons for reported metrics.
- Free cash flow.
- Cash balance.
- Debt balance.
- Share repurchases.
- Dividends.
- Forward gross-margin guidance.
- Forward operating-expense guidance.
- Segment-specific sales drivers.
- The provided filing text is truncated after the beginning of the segment non-GAAP reconciliation tables.
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.