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• Bookings: Increased 18% to $1.2 billion.

• Revenue: Grew 5% to $1.1 billion.

• Adjusted Gross Margin: Expanded 180 basis points to 33.5%.

• Adjusted Operating Margin: Reached 12.8%, a 190 basis point increase.

• Adjusted Earnings Per Share (EPS): $0.72, up nearly 25% from the prior year.

• Book-to-Bill Ratio: 1.07 times.

• Aftermarket Bookings: Record of almost $690 million.

• Nuclear Bookings: Exceeded $100 million for the third consecutive quarter.

• Backlog: Stands at $2.9 billion.

• Cash from Operations: $50 million use of cash due to higher temporary working capital requirements.

• Share Repurchases: $53 million year-to-date at an average cost of $45 per share.

• 2025 Guidance: Reaffirmed with organic growth of 3% to 5% and adjusted EPS of $3.10 to $3.30.

• Warning! GuruFocus has detected 4 Warning Signs with LANC.

Release Date: April 30, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Flowserve Corp (NYSE:FLS) reported an 18% increase in bookings, reaching $1.2 billion, demonstrating strong demand for its products.

• The company achieved a 5% revenue growth and expanded adjusted gross margins by 180 basis points to 33.5%.

• Adjusted operating margins improved to 12.8%, with adjusted earnings per share increasing by nearly 25% to $0.72.

• Record aftermarket bookings of almost $690 million, marking the fourth consecutive quarter above $600 million, highlight the success of Flowserve's aftermarket business strategy.

• Flowserve's nuclear bookings exceeded $100 million for the third consecutive quarter, with power bookings up more than 45% year-over-year, indicating robust demand in critical industries.

Negative Points

• The current tariff environment introduces uncertainty, with an estimated annualized gross impact of $90 million to $100 million before mitigation.

• Macroeconomic uncertainties pose potential risks to Flowserve Corp (NYSE:FLS)'s outlook, particularly in the second half of 2025.

• The company faces challenges in managing the impact of tariffs on imported materials, such as castings and forgings, which are sourced from China, India, and Mexico.

• Flowserve Corp (NYSE:FLS) is experiencing limited project deferrals in select industries like mining and renewables, which could impact future bookings.

• The timing of tariff impacts and mitigating actions may lead to mismatched margins, particularly affecting the flow control side of the business more than pumps.

Q & A Highlights

Q: Can you discuss the sustainability of bookings and how you see the second half of the year shaping up? A: Scott Rowe, President & CEO, noted that Q1 bookings were strong, with $690 million in aftermarket bookings, the highest since his tenure. While a $50 million nuclear award won't repeat, the $600 million run rate is expected to continue. The project funnel remains healthy, with power, energy, and chemical sectors showing sequential growth. However, if the tariff environment persists, there could be a slowdown in the second half of 2025. Currently, the market remains stable, but uncertainty could impact future bookings.