FLSMEDIUM SIGNALMANAGEMENT10-K

Flowserve has refined its strategic positioning toward energy transition and nuclear markets while reducing R&D spending despite strong financial performance.

The company is strategically repositioning itself from traditional oil and gas toward growth markets like nuclear and energy transition, signaling management's focus on secular growth trends. The formalization of the Flowserve Business System suggests a more structured operational approach, while the share count reduction indicates ongoing capital returns to shareholders.

Comparing 2026-02-17 vs 2025-02-26View on EDGAR →
FINANCIAL ANALYSIS

Flowserve delivered solid financial performance with gross profit growing 10.3% to $1.6B and operating cash flow increasing 18.9% to $505.9M. However, operating income declined 13.5% to $399.9M while net income grew 22.5% to $346.2M, suggesting favorable tax or financing impacts. The company reduced R&D spending by 22.6% to $54.1M, which may warrant monitoring given the strategic pivot to new growth markets.

FINANCIAL STATEMENT CHANGES
R&D Expense
P&L
-22.6%
$69.9M→$54.1M

R&D spending cut 22.6% — could signal cost discipline or concerning reduction in innovation investment.

Net Income
P&L
+22.5%
$282.8M→$346.2M

Net income grew 22.5% — bottom-line growth signals improving overall business health.

Operating Cash Flow
Cash Flow
+18.9%
$425.3M→$505.9M

Operating cash flow grew 18.9% — strong conversion of earnings to cash, healthy business fundamentals.

Operating Income
P&L
-13.5%
$462.3M→$399.9M

Operating profitability softening — costs rising faster than revenue, watch for margin recovery plan.

Cash & Equivalents
Balance Sheet
+12.5%
$675.4M→$760.2M

Cash grew 12.5% — improving liquidity position supports investment and shareholder returns.

Gross Profit
P&L
+10.3%
$1.4B→$1.6B

Gross profit expanding — improving pricing power or product mix shift toward higher-margin offerings.

LANGUAGE CHANGES
NEW — 2026-02-17
PRIOR — 2025-02-26
ADDED
Number of the registrant s common shares outstanding as of February 12, 2026 was 127,260,329 .
Our product portfolio of pumps, valves, seals, automation and aftermarket services supports global infrastructure industries, including energy, chemical, power generation and general, which includes water management and pharmaceuticals, where our products and services enable customers to achieve their goals.
Our overarching strategic objectives are to remain a global leader in the flow control industry and capitalize on growth through our traditional end markets as well as through specifically identified growth areas, such as the nuclear, energy transition and power generation markets.
In addition, the Flowserve Business System helps guide the enterprise on incorporating best in class operational practices within the following categories: People Excellence, Operational Excellence, Portfolio Excellence, Commercial Excellence, and Innovation Excellence (the Flowserve Business System ).
Management's Discussion and Analysis of Financial Condition and Results of Operations" included in this Annual Report on Form 10-K for the year ended December 31, 2025 ("Annual Report ).
Countries and corporations around the world continue to invest in various methods and solutions to help achieve their climate and emission reduction goals.
Innovation Growth Solutions Our investments in Flowserve solutions focus on developing and scaling offerings that improve energy efficiency and uptime, reduce total cost-of-ownership, and enhance safety for our end-users.
Through our Energy Advantage Program, we have invested in a dedicated team, proprietary analysis tools and new business models to identify and implement energy-efficiency improvements across flow control systems.
In addition, we continue to advance our capabilities and technology position in the rapidly developing asset health market.
Over the past several years, we have continued to both invest and partner in this space to expand remote monitoring solutions and advanced equipment diagnostics to provide remote asset management and related services and capabilities for our end-user customers.
REMOVED
Number of the registrant s common shares outstanding as of February 21, 2025 was 131,745,177 .
Our product portfolio of pumps, valves, seals, automation and aftermarket services supports global infrastructure industries, including oil and gas, chemical, power generation, nuclear and water management, as well as certain general industrial markets where our products and services enable customers to achieve their goals.
Our overarching strategic objectives are to remain a global leader in the flow control industry and capitalize on growth through our traditional end markets as well as through energy transition opportunities.
In addition, we recently launched the Flowserve Business System to guide the enterprise on incorporating best in class operational practices within the following categories: People Excellence; Operational Excellence; Portfolio Excellence; Commercial Excellence; and Innovation Excellence (the Flowserve Business System ).
Management's Discussion and Analysis of Financial Condition and Results of Operations" included in this Annual Report.
A number of countries have net-zero targets and corporations around the world are investing to help achieve their climate and emission reduction goals.
BUSINESS SEGMENTS AND PRODUCTS Our Primary Industries We sell our products and services to over 10,000 customers, including some of the world s leading engineering, procurement and construction firms ("EPC"), original equipment manufacturers, distributors and end users.
Our total bookings in 2024, 2023 and 2022 were $4.7 billion , $4.3 billion and $4.4 billion, respectively.
Our bookings mix by industry in 2024, 2023 and 2022 consisted of: 2024 2023 2022 oil and gas 37 % 38 % 40 % general industries(1) 26 % 26 % 22 % chemical(2) 19 % 21 % 22 % power generation 13 % 11 % 12 % water management 5 % 4 % 4 % (1) General industries include mining and ore processing, pulp and paper, food and beverage and other smaller applications, as well as sales to distributors whose end customers typically operate in the other industries we primarily serve as identified above.
(2) Chemical industry is comprised of chemical-based and pharmaceutical products.
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