Flowserve Corporation Reports Second Quarter 2026 Results

Flowserve Corporation Reports Second Quarter 2026 Results July 29, 2026 Flowserve Business System Delivers Strong Q2 Performance; Updates 2026 Guidance Flowserve Corporation (NYSE: FLS), a leading provider of flow control products and services for the global infrastructure markets, reported its financial results for the second quarter ended June 30, 2026. Highlights: Quarterly bookings of $1.35 billion, up 26% versus the prior year period, including record aftermarket bookings of $696 millionOperating margin of 13.0% expanded 70 basis points and adjusted 1 operating margin 2 of 15.3% expanded 70 basis points compared to the prior year periodReported EPS of $0.77 and adjusted EPS 3 of $0.95Updated full-year 2026 organic sales guidance to down approximately 1% reflecting the continued impact of Middle East conflictRaised the low end of adjusted EPS guidance 3 to $4.05 to $4.20 Management Commentary: "Flowserve delivered strong second quarter results, with significant bookings growth, robust operating margin expansion, and adjusted earnings per share above our initial expectations," said Scott Rowe, Flowserve's President and Chief Executive Officer. "Importantly, this marks our 14th consecutive quarter of year-over-year adjusted gross margin expansion, a reflection of the structural, durable progress we're making. These results, delivered against a dynamic market backdrop, underscore the strength of the Flowserve Business System and the power of the 3D growth strategy coupled with the commitment of our teams around the world." Rowe continued, "Demand across our end markets remains resilient, led by power, nuclear, and energy security investments. 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. At the same time, our strong earnings performance year to date and continued confidence in our ability to expand margins enable us to raise the low end of our full-year adjusted EPS guidance range. We remain firmly on track to deliver on our 2030 financial targets and create value for shareholders." Key Figures (unaudited): (dollars in millions, except per share) Q2 2026 Q2 2025 Change YTD 2026 YTD 2025 Change Original Equipment Bookings $652.3 $453.3 43.9% $1,119.5 $990.2 13.1% Aftermarket Bookings $695.8 $620.6 12.1% $1,376.2 $1,309.2 5.1% Total Bookings $1,348.1 $1,073.9 25.5% $2,495.7 $2,299.4 8.5% Organic Sales4 (3.3%) (6.9%) Acquisition/Divestiture Impact 90 bps 60 bps Foreign Exchange Impact 80 bps 220 bps Reported Sales $1,169.2 $1,188.1 (1.6%) $2,237.4 $2,332.6 (4.1%) Operating Margin 13.0% 12.3% 70 bps 12.1% 11.9% 20 bps Adjusted Operating Margin 15.3% 14.6% 70 bps 15.2% 13.8% 140 bps Earnings Per Share (EPS) $0.77 $0.62 24.2% $1.41 $1.18 19.5% Adjusted Earnings Per Share (EPS) $0.95 $0.91 4.4% $1.80 $1.63 10.4% Cash From Operations $129.2 $154.1 ($24.9) $86.2 $104.2 ($18.0) Backlog5 $3,336.0 $2,853.2 16.9% $3,336.0 $2,853.2 16.9% 2026 Guidance3: The Company updated 2026 guidance: Prior Current Organic Sales Growth (1%) to +2% Approx. (1%) Impact From Acquisition/Divestiture Approx. +300 bps Approx. +300 bps Impact From Foreign Exchange Translation Approx. +100 bps Approx. +100 bps Total Sales Growth +3% to +6% Approx. +3% Adjusted EPS $4.00 to $4.20 $4.05 to $4.20 Net Interest Expense Approx. $85 million Approx. $85 million Adjusted Tax Rate 21% to 22% 21% to 22% Capital Expenditures $90 million to $100 million Approx. $100 million The guidance assumes tariff rates in place as of July 1, 2026, and assumes current business conditions in the Middle East, which have been impacted by armed conflict and geopolitical instability, persist for the remainder of the year. Webcast and Conference Call Instructions: Flowserve will host its conference call to discuss second quarter results on Thursday, July 30, 2026, at 8:30 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 earnings per share (EPS) excludes realignment expenses, the impact from other specific discrete and below-the-line foreign currency effects and utilizes the then-applicable foreign exchange rates and fully diluted shares. Adjusted full-year 2026 EPS guidance excludes certain other discrete items which may arise during the year. 4 Organic is defined as the change in sales, as defined by U.S. GAAP, excluding the impacts of currency translation and acquisitions and divestitures. 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. 5 Q2 and YTD 2026 backlog includes Trillium backlog of $225 million. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) Three Months Ended June 30, (Amounts in thousands) 2026 2025 Sales $ 1,169,175 $ 1,188,092 Cost of sales (784,449 ) (781,510 ) Gross profit 384,726 406,582 Selling, general and administrative expense (266,318 ) (265,908 ) Net earnings from affiliates 33,015 5,916 Operating income 151,423 146,590 Interest expense (25,696 ) (20,253 ) Interest income 5,023 2,526 Other expense, net (12,087 ) (25,003 ) Earnings before income taxes 118,663 103,860 Provision for income taxes (17,078 ) (15,636 ) Net earnings, including noncontrolling interests 101,585 88,224 Less: net earnings attributable to noncontrolling interests (2,587 ) (6,470 ) Net earnings attributable to Flowserve Corporation $ 98,998 $ 81,754 Net earnings per share attributable to Flowserve Corporation common shareholders: Basic $ 0.78 $ 0.62 Diluted 0.77 0.62 Weighted average shares - basic 127,644 130,846 Weighted average shares - diluted 128,358 131,599 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 June 30, 2026 Gross Profit Selling, General & Administrative Expense Net Earnings from Affiliates Operating Income Other Income (Expense), Net Provision For (Benefit From) Income Taxes Net Earnings (Loss) Effective Tax Rate Diluted EPS Reported $ 384,726 $ 266,318 $ 33,015 $ 151,423 $ (12,087 ) $ 17,078 $ 98,998 14.4 % 0.77 Reported as a percent of sales 32.9 % 22.8 % 2.8 % 13.0 % -1.0 % 1.5 % 8.5 % Realignment charges (a) 32,979 (7,751 ) - 40,730 - 8,590 32,140 21.1 % 0.25 Acquisition and divestiture related (b)(c) - (9,316 ) (27,700 ) (18,384 ) - 2,163 (20,547 ) -11.8 % (0.16 ) Amortization of intangible assets (d) 1,543 (3,103 ) - 4,646 - 997 3,649 21.5 % 0.03 Discrete items (e)(f) 31 (215 ) - 246 3,076 782 2,540 23.5 % 0.02 Below-the-line foreign exchange impacts (g) - - - - 6,315 1,414 4,901 22.4 % 0.04 Adjusted $ 419,279 $ 245,933 $ 5,315 $ 178,661 $ (2,696 ) $ 31,024 $ 121,681 20.0 % 0.95 Adjusted as a percent of sales 35.9 % 21.0 % 0.5 % 15.3 % -0.2 % 2.7 % 10.4 % Note: Amounts may not calculate due to rounding (a) Charges represent realignment costs incurred as a result of realignment programs of which $5,003 is non-cash. (b) Charges represent $9,316 of costs associated with strategic acquisition and divestiture activities including the acquisitions of Trillium Valves and Flowserve Al Mansoori Services Company (FAMCO). (c) Adjustment represents a $27,700 gain recognized in Net earnings from affiliates on the remeasurement of our previously held equity interest in FAMCO. (d) Charges represent non-cash amortization of intangible assets. (e) Charges represent $246 of 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) Charges include $3,076 for non-cash pension settlement accounting losses incurred in conjunction with pension plans in the United States and Canada. (g) 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 June 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 $ 406,582 $ 265,908 $ 146,590 $ (25,003 ) $ 15,636 $ 81,754 15.1 % 0.62 Reported as a percent of sales 34.2 % 22.4 % 12.3 % -2.1 % 1.3 % 6.9 % Realignment charges (a) 5,106 1,787 3,319 - 1,318 2,001 39.7 % 0.02 Acquisition related (b) 752 (3,190 ) 3,942 - 927 3,015 23.5 % 0.02 Purchase accounting step-up and intangible asset amortization (c) 2,642 (1,300 ) 3,942 - 1,186 2,756 30.1 % 0.02 Discrete items (d)(e) 42 (382 ) 424 1,500 453 1,471 23.5 % 0.01 Merger transaction costs (f) - (15,515 ) 15,515 - 3,649 11,866 23.5 % 0.09 Below-the-line foreign exchange impacts (g) - - - 20,023 2,910 17,113 14.5 % 0.13 Adjusted $ 415,124 $ 247,308 $ 173,732 $ (3,480 ) $ 26,079 $ 119,976 17.1 % 0.91 Adjusted as a percent of sales 34.9 % 20.8 % 14.6 % -0.3 % 2.2 % 10.1 % Note: Amounts may not calculate due to rounding (a) Charges represent realignment costs incurred as a result of realignment programs of which $1,500 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) Charge represents 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 pension settlement accounting loss incurred in conjunction with the freeze of our US Qualified pension plan. (f) Charge represents transaction costs incurred associated with the Chart Industries merger. (g) 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) Three Months Ended June 30, FLOWSERVE PUMPS DIVISION 2026 2025 (Amounts in millions, except percentages) Bookings $ 938.1 $ 723.8 Sales 814.1 818.9 Gross profit 296.1 299.2 Gross profit margin 36.4 % 36.5 % SG&A 148.0 142.4 Segment operating income 181.2 162.7 Segment operating income as a percentage of sales 22.3 % 19.9 % Three Months Ended June 30, FLOW CONTROL DIVISION 2026 2025 (Amounts in millions, except percentages) Bookings $ 417.1 $ 354.7 Sales 357.3 371.5 Gross profit 88.5 107.7 Gross profit margin 24.8 % 29.0 % SG&A 77.5 69.9 Segment operating income 11.0 37.8 Segment operating income as a percentage of sales 3.1 % 10.2 % 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 June 30, 2026 Gross Profit Selling, General & Administrative Expense Net Earnings from Affiliates Operating Income Three Months Ended June 30, 2025 Gross Profit Selling, General & Administrative Expense Operating Income Reported $ 296,141 $ 148,003 $ 33,014 $ 181,151 Reported $ 299,229 $ 142,400 $ 162,745 Reported as a percent of sales 36.4 % 18.2 % 4.1 % 22.3 % Reported as a percent of sales 36.5 % 17.4 % 19.9 % Realignment charges (a) 10,521 (5,392 ) - 15,913 Realignment charges (a) 1,888 (1,749 ) 3,637 Discrete items (b) 24 (48 ) - 72 Discrete items (b) 35 (99 ) 134 Acquisition and divestiture related (c)(e) - (774 ) (27,700 ) (26,926 ) Adjusted $ 301,152 $ 140,552 $ 166,516 Amortization of intangible assets (d) 1,443 (1,801 ) - 3,244 Adjusted as a percent of sales 36.8 % 17.2 % 20.3 % Adjusted $ 308,129 $ 139,988 $ 5,314 $ 173,454 Adjusted as a percent of sales 37.8 % 17.2 % 0.7 % 21.3 % Flow Control Division Three Months Ended June 30, 2026 Gross Profit Selling, General & Administrative Expense Operating Income Three Months Ended June 30, 2025 Gross Profit Selling, General & Administrative Expense Operating Income Reported $ 88,546 $ 77,528 $ 11,018 Reported $ 107,694 $ 69,922 $ 37,772 Reported as a percent of sales 24.8 % 21.7 % 3.1 % Reported as a percent of sales 29.0 % 18.8 % 10.2 % Realignment charges (a) 22,458 (1,735 ) 24,193 Realignment charges (a) 3,217 3,504 (287 ) Discrete items (b) 5 (20 ) 25 Acquisition related (c) 752 (3,190 ) 3,942 Acquisition and divestiture related (c) - (8,427 ) 8,427 Purchase accounting step-up and intangible asset amortization (d) 2,642 (1,300 ) 3,942 Amortization of intangible assets (d) 100 (1,302 ) 1,402 Discrete items (b) 5 (99 ) 104 Adjusted $ 111,109 $ 66,044 $ 45,065 Adjusted $ 114,310 $ 68,838 $ 45,472 Adjusted as a percent of sales 31.1 % 18.5 % 12.6 % Adjusted as a percent of sales 30.8 % 18.5 % 12.2 % Note: Amounts may not calculate due to rounding Note: Amounts may not calculate due to rounding (a) Charges represent realignment costs incurred as a result of realignment programs of which $5,003 is non-cash. (a) Charges represent realignment costs incurred as a result of realignment programs of which $1,500 is non-cash. (b) Charges represent $97 of 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 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. (c) Charges represent $9,201 of costs associated with strategic acquisition and divestiture activities including the acquisitions of Flowserve Al Mansoori Services Company (FAMCO) and Trillium Valves within FPD and FCD, respectively. (c) Charge represents acquisition and integration-related costs associated with the MOGAS acquisition. (d) Charges represent non-cash amortization of intangible assets. (d) Charge represents amortization of step-up in value of acquired inventories and acquisition related intangible assets associated with the MOGAS acquisition. (e) Adjustment represents a $27,700 gain recognized in Net earnings from affiliates on the remeasurement of our previously held equity interest in FAMCO. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (Amounts in thousands, except per share data) Six Months Ended June 30, 2026 2025 Sales $ 2,237,444 $ 2,332,635 Cost of sales (1,472,877 ) (1,556,719 ) Gross profit 764,567 775,916 Selling, general and administrative expense (529,718 ) (509,085 ) Net earnings from affiliates 36,006 11,648 Operating income 270,855 278,479 Interest expense (46,127 ) (39,428 ) Interest income 6,523 4,271 Other expense, net (5,088 ) (42,262 ) Earnings before income taxes 226,163 201,060 Provision for income taxes (38,209 ) (33,379 ) Net earnings, including noncontrolling interests 187,954 167,681 Less: Net earnings attributable to noncontrolling interests (7,275 ) (12,022 ) Net earnings attributable to Flowserve Corporation $ 180,679 $ 155,659 Net earnings per share attributable to Flowserve Corporation common shareholders: Basic $ 1.42 $ 1.19 Diluted 1.41 1.18 Weighted average shares - basic 127,569 131,206 Weighted average shares - diluted 128,489 132,135 Consolidated Reconciliation of Non-GAAP Financial Measures to the Most Directly Comparable GAAP Financial Measure (Unaudited) (Amounts in thousands, except per share data) Six Months Ended June 30, 2026 Gross Profit Selling, General & Administrative Expense Net Earnings from Affiliates Operating Income Other Income (Expense), Net Provision For (Benefit From) Income Taxes Net Earnings (Loss) Effective Tax Rate Diluted EPS Reported $ 764,567 $ 529,718 $ 36,006 $ 270,855 $ (5,088 ) $ 38,209 $ 180,679 16.9 % 1.41 Reported as a percent of sales 34.2 % 23.7 % 1.6 % 12.1 % -0.2 % 1.7 % 8.1 % Realignment charges (a) 49,481 (20,216 ) - 69,697 - 13,033 56,664 18.7 % 0.44 Acquisition and divestiture related (b)(c) - (17,904 ) (27,700 ) (9,796 ) - 4,313 (14,109 ) -44.0 % (0.11 ) Amortization of intangible assets (d) 2,556 (5,347 ) - 7,903 - 1,520 6,383 19.2 % 0.05 Discrete items (e)(f) 62 (889 ) - 951 4,576 1,301 4,226 23.5 % 0.03 Below-the-line foreign exchange impacts (g) - - - - (2,723 ) (187 ) (2,536 ) 6.9 % (0.02 ) Adjusted $ 816,666 $ 485,362 $ 8,306 $ 339,610 $ (3,235 ) $ 58,189 $ 231,307 19.6 % 1.80 Adjusted as a percent of sales 36.5 % 21.7 % 0.4 % 15.2 % -0.1 % 2.6 % 10.3 % Note: Amounts may not calculate due to rounding (a) Charges represent realignment costs incurred as a result of realignment programs, net of a $5,300 gain associated with a sale-leaseback transaction related to a FCD facility, and of which $5,234 is non-cash. (b) Charges represent $17,904 of costs associated with strategic acquisition and divestiture activities including the acquisitions of Greenray, Trillium Valves and Flowserve Al Mansoori Services Company (FAMCO). (c) Adjustment represents a $27,700 gain recognized in Net earnings from affiliates on the remeasurement of our previously held equity interest in FAMCO. (d) Charges represent non-cash amortization of intangible assets. (e) Charges represent discrete items including $523 of 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 and $428 of transaction costs related to the divestiture of our asbestos-related assets and liabilities. (f) Charges include $4,576 for non-cash pension settlement accounting losses incurred in conjunction with pension plans in the United States and Canada. (g) 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. Six Months Ended June 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 $ 775,916 $ 509,085 $ 278,479 $ (42,262 ) $ 33,379 $ 155,659 16.6 % 1.18 Reported as a percent of sales 33.3 % 21.8 % 11.9 % -1.8 % 1.4 % 6.7 % Realignment charges (a) 15,121 3,091 12,030 - 3,189 8,841 26.5 % 0.07 Acquisition related (b) 752 (4,471 ) 5,223 - 1,228 3,995 23.5 % 0.03 Purchase accounting step-up and intangible asset amortization (c) 6,117 (2,600 ) 8,717 - 2,547 6,170 29.2 % 0.05 Discrete items (d)(e) 75 (765 ) 840 3,000 903 2,937 23.5 % 0.02 Merger transaction costs (f) - (15,515 ) 15,515 - 3,649 11,866 23.5 % 0.09 Below-the-line foreign exchange impacts (g) - - - 31,396 5,355 26,041 17.1 % 0.20 Adjusted $ 797,981 $ 488,825 $ 320,804 $ (7,866 ) $ 50,250 $ 215,509 18.1 % 1.63 Adjusted as a percent of sales 34.2 % 21.0 % 13.8 % -0.3 % 2.2 % 9.2 % Note: Amounts may not calculate due to rounding (a) Charges represent realignment costs incurred as a result of realignment programs of which $3,000 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) Charge represents 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 $3,000 represents a pension settlement accounting loss incurred in conjunction with the freeze of our US Qualified pension plan. (f) Charge represents transaction costs incurred associated with the Chart Industries merger. (g) 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 Six Months Ended June 30, (Amounts in millions, except percentages) 2026 2025 Bookings $ 1,711.4 $ 1,576.1 Sales 1,558.6 1,602.1 Gross profit 566.1 567.7 Gross profit margin 36.3 % 35.4 % SG&A 295.2 280.1 Segment operating income 306.9 299.3 Segment operating income as a percentage of sales 19.7 % 18.7 % FLOW CONTROL DIVISION Six Months Ended June 30, (Amounts in millions, except percentages) 2026 2025 Bookings $ 791.3 $ 730.4 Sales 684.9 735.6 Gross profit 197.5 207.9 Gross profit margin 28.9 % 28.3 % SG&A 144.8 138.6 Segment operating income 52.7 69.3 Segment operating income as a percentage of sales 7.7 % 9.4 % Segment Reconciliation of Non-GAAP Financial Measures to the Most Directly Comparable GAAP Financial Measure (Unaudited) (Amounts in thousands) Flowserve Pumps Division Six Months Ended June 30, 2026 Gross Profit Selling, General & Administrative Expense Net Earnings from Affiliates Operating Income Six Months Ended June 30, 2025 Gross Profit Selling, General & Administrative Expense Operating Income Reported $ 566,068 $ 295,171 $ 36,006 $ 306,902 Reported $ 567,691 $ 280,080 $ 299,259 Reported as a percent of sales 36.3 % 18.9 % 2.3 % 19.7 % Reported as a percent of sales 35.4 % 17.5 % 18.7 % Realignment charges (a) 20,609 (9,533 ) - 30,142 Realignment charges (a) 4,867 (751 ) 5,618 Discrete items (b) 48 (96 ) - 144 Discrete items (b) 63 (224 ) 287 Acquisition and divestiture related (c)(e) - (813 ) (27,700 ) (26,887 ) Adjusted $ 572,621 $ 279,105 $ 305,164 Amortization of intangible assets (d) 2,456 (2,746 ) - 5,202 Adjusted as a percent of sales 35.7 % 17.4 % 19.0 % Adjusted $ 589,181 $ 281,983 $ 8,306 $ 315,503 Adjusted as a percent of sales 37.8 % 18.1 % 0.5 % 20.2 % Flow Control Division Six Months Ended June 30, 2026 Gross Profit Selling, General & Administrative Expense Operating Income Six Months Ended June 30, 2025 Gross Profit Selling, General & Administrative Expense Operating Income Reported $ 197,493 $ 144,759 $ 52,734 Reported $ 207,881 $ 138,627 $ 69,254 Reported as a percent of sales 28.8 % 21.1 % 7.7 % Reported as a percent of sales 28.3 % 18.8 % 9.4 % Realignment charges (a) 28,872 3,286 25,586 Realignment charges (a) 10,319 3,625 6,694 Discrete items (b) 10 (75 ) 85 Acquisition related (c) 752 (4,471 ) 5,223 Acquisition and divestiture related (c) - (16,165 ) 16,165 Purchase accounting step-up and intangible asset amortization (d) 6,117 (2,600 ) 8,717 Amortization of intangible assets (d) 100 (2,601 ) 2,701 Discrete items (b) 9 (163 ) 172 Adjusted $ 226,475 $ 129,204 $ 97,271 Adjusted $ 225,078 $ 135,018 $ 90,060 Adjusted as a percent of sales 33.1 % 18.9 % 14.2 % Adjusted as a percent of sales 30.6 % 18.4 % 12.2 % Note: Amounts may not calculate due to rounding Note: Amounts may not calculate due to rounding (a) Charges represent realignment costs incurred as a result of realignment programs, net of a $5,300 gain associated with a sale-leaseback transaction related to a FCD facility, and of which $5,234 is non-cash. (a) Charges represent realignment costs incurred as a result of realignment programs of which $3,000 is non-cash. (b) Charges represent $229 of 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 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. (c) Charges represent $16,978 of costs associated with strategic acquisition and divestiture activities including the acquisitions of Greenray and Flowserve Al Mansoori Services Company (FAMCO) within FPD and Trillium Valves within FCD. (c) Charge represents acquisition and integration-related costs associated with the MOGAS acquisition. (d) Charges represent non-cash amortization of intangible assets. (d) Charge represents amortization of step-up in value of acquired inventories and acquisition related intangible assets associated with the MOGAS acquisition. (e) Adjustment represents a $27,700 gain recognized in Net earnings from affiliates on the remeasurement of our previously held equity interest in FAMCO. Segment Results (Unaudited) Flowserve Pumps Division (dollars in millions) Q2 2026 Q2 2025 Change YTD 2026 YTD 2025 Change Organic Bookings 26.8% 5.0% Acquisition / Divestiture Impact 1.1% 0.7% FX Impact (a) 1.7% 2.9% Total Bookings (b) $938 $724 29.6% $1,711 $1,576 8.6% Organic Sales (3.2%) (6.3%) Acquisition / Divestiture Impact 1.4% 0.9% FX Impact (a) 1.2% 2.7% Reported Sales (b) $814 $819 (0.6%) $1,559 $1,602 (2.7%) Gross Margin 36.4% 36.5% (10 bps) 36.3% 35.4% 90 bps Adjusted Gross Margin (c) 37.8% 36.8% 100 bps 37.8% 35.7% 210 bps Operating Margin 22.3% 19.9% 240 bps 19.7% 18.7% 100 bps Adjusted Operating Margin (d) 21.3% 20.3% 100 bps 20.2% 19.0% 120 bps Backlog (b) $2,204 $1,981 11.3% $2,204 $1,981 11.3% Flowserve Control Division (dollars in millions) Q2 2026 Q2 2025 Change YTD 2026 YTD 2025 Change Organic Bookings 17.3% 6.9% Acquisition / Divestiture Impact 0.0% 0.0% FX Impact (a) 0.3% 1.4% Total Bookings (b) $417 $355 17.6% $791 $730 8.3% Organic Sales (3.8%) (7.9%) Acquisition / Divestiture Impact 0.0% 0.0% FX Impact (a) 0.0% 1.0% Reported Sales (b) $357 $371 (3.8%) $685 $736 (6.9%) Gross Margin 24.8% 29.0% (420 bps) 28.8% 28.3% 50 bps Adjusted Gross Margin (c) 31.1% 30.8% 30 bps 33.1% 30.6% 250 bps Operating Margin 3.1% 10.2% (710 bps) 7.7% 9.4% (170 bps) Adjusted Operating Margin (d) 12.6% 12.2% 40 bps 14.2% 12.2% 200 bps Backlog (b) $1,154 $881 30.9% $1,154 $881 30.9% (a) Constant foreign exchange (FX) represents the year-over-year variance assuming 2026 results at 2025 FX rates (b) Bookings, sales, and backlog do not include interdivision eliminations (c) Adjusted gross margin is a non‑GAAP financial measure. Adjusted gross margin is calculated by dividing adjusted gross profit by sales. Adjusted gross profit is derived by excluding realignment charges and other specific discrete items. See the Segment Reconciliation of Non‑GAAP Financial Measures to the Most Directly Comparable GAAP Financial Measure (unaudited) (d) Adjusted operating margin excludes realignment charges and other specific discrete items CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) June 30, December 31, (Amounts in thousands, except par value) 2026 2025 ASSETS Current assets: Cash and cash equivalents $ 731,007 $ 760,183 Accounts receivable, net of allowance for expected credit losses of $89,364 and $83,094, respectively 1,056,706 1,029,095 Contract assets, net of allowance for expected credit losses of $5,871 and $6,028, respectively 340,234 322,472 Inventories 832,537 789,898 Prepaid expenses and other 158,642 141,237 Total current assets 3,119,126 3,042,885 Property, plant, and equipment, net of accumulated depreciation of $1,233,503 and $1,224,912, respectively 595,446 566,751 Operating lease right-of-use asset, net 170,716 166,031 Goodwill 1,744,877 1,391,988 Deferred taxes 160,395 156,250 Other intangible assets, net 345,231 198,475 Other assets, net of allowance for expected credit losses of $66,209 and $66,047, respectively 184,497 185,820 Total assets $ 6,320,288 $ 5,708,200 LIABILITIES AND EQUITY Current liabilities: Accounts payable $ 543,323 $ 554,243 Accrued liabilities 561,747 587,475 Contract liabilities 293,864 274,669 Debt due within one year 12,741 49,868 Operating lease liabilities 37,330 35,630 Total current liabilities 1,449,005 1,501,885 Long-term debt due after one year 2,122,423 1,525,210 Operating lease liabilities 145,851 149,565 Retirement obligations and other liabilities 275,552 277,216 Contingencies (See Note 12) Shareholders’ equity: Preferred shares, $1.00 par value — — Shares authorized — 1,000, no shares issued Common shares, $1.25 par value 220,991 220,991 Shares authorized — 305,000 Shares issued — 176,793 and 176,793, respectively Capital in excess of par value 494,925 508,890 Retained earnings 4,385,914 4,261,977 Treasury shares, at cost — 49,532 and 49,763 shares, respectively (2,241,970 ) (2,231,685 ) Deferred compensation obligation 7,015 6,629 Accumulated other comprehensive loss (607,263 ) (575,405 ) Total Flowserve Corporation shareholders' equity 2,259,612 2,191,397 Noncontrolling interests 67,845 62,927 Total equity 2,327,457 2,254,324 Total liabilities and equity $ 6,320,288 $ 5,708,200 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Six Months Ended June 30, (Amounts in thousands) 2026 2025 Cash flows — Operating activities: Net earnings, including noncontrolling interests $ 187,954 $ 167,681 Adjustments to reconcile net earnings to net cash provided by operating activities Depreciation 40,414 38,695 Amortization of intangible and other assets 7,903 9,589 (Gain) on remeasurement of previously held equity interest (27,700 ) — Stock-based compensation 20,595 18,822 Foreign currency, asset write downs and other non-cash adjustments (17,314 ) (6,211 ) Change in assets and liabilities: Accounts receivable, net 6,859 (22,631 ) Inventories (4,294 ) 14,208 Contract assets, net (11,161 ) (28,930 ) Prepaid expenses and other assets, net 17,984 13,589 Accounts payable (52,347 ) (10,414 ) Contract liabilities (10,439 ) (15,254 ) Accrued liabilities (80,798 ) (84,466 ) Retirement obligations and other liabilities 9,801 2,196 Net deferred taxes (1,291 ) 7,338 Net cash flows provided by operating activities 86,166 104,212 Cash flows — Investing activities: Capital expenditures (33,807 ) (28,340 ) Payments for acquisitions, net of cash acquired (517,735 ) — Proceeds from disposal of assets 9,865 867 Affiliate investment activity (2,000 ) — Net cash flows (used) by investing activities (543,677 ) (27,473 ) Cash flows — Financing activities: Proceeds from issuance of senior notes 499,320 — Payments on term loan (77,875 ) (18,750 ) Proceeds from long-term debt 74,750 — Payment of deferred loan costs (4,893 ) — Proceeds under revolving credit facility 150,000 50,000 Payments under revolving credit facility (100,000 ) (50,000 ) Proceeds under other financing arrangements 998 3,072 Payments under other financing arrangements (5,266 ) (1,231 ) Repurchases of common shares (25,000 ) (52,797 ) Payments related to tax withholding for stock-based compensation (23,011 ) (11,337 ) Payments of dividends (54,838 ) (55,209 ) Contingent consideration payment related to acquired business — (15,000 ) Other 529 (3,192 ) Net cash flows (used) provided by financing activities 434,714 (154,444 ) Effect of exchange rate changes on cash and cash equivalents (6,379 ) 31,467 Net change in cash and cash equivalents (29,176 ) (46,238 ) Cash and cash equivalents at beginning of period 760,183 675,441 Cash and cash equivalents at end of period $ 731,007 $ 629,203 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: economic, political and other risks associated with our international operations, including military actions, trade embargoes, blockades or other closures of major trade lanes, 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; 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; 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; 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. Source: Flowserve Corporation