Flowserve (NYSE:FLS) Misses Q4 CY2025 Revenue Estimates

Flow control equipment manufacturer Flowserve (NYSE:FLS) missed Wall Street’s revenue expectations in Q4 CY2025 as sales rose 3.5% year on year to $1.22 billion. Its non-GAAP profit of $1.11 per share was 18.4% above analysts’ consensus estimates.

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“We delivered outstanding financial results in the fourth quarter and for the full year 2025,” said Scott Rowe, Flowserve’s President and Chief Executive Officer.

Company Overview

Manufacturing the largest pump ever built for nuclear power generation, Flowserve (NYSE:FLS) manufactures and sells flow control equipment for various industries.

Revenue Growth

A company’s long-term performance is an indicator of its overall quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Unfortunately, Flowserve’s 4.9% annualized revenue growth over the last five years was tepid. This wasn’t a great result compared to the rest of the industrials sector, but there are still things to like about Flowserve.

We at StockStory place the most emphasis on long-term growth, but within industrials, a half-decade historical view may miss cycles, industry trends, or a company capitalizing on catalysts such as a new contract win or a successful product line. Flowserve’s annualized revenue growth of 4.6% over the last two years aligns with its five-year trend, suggesting its demand was consistently weak.

We can better understand the company’s revenue dynamics by analyzing its backlog, or the value of its outstanding orders that have not yet been executed or delivered. Flowserve’s backlog reached $2.87 billion in the latest quarter and averaged 1.8% year-on-year growth over the last two years. Because this number is lower than its revenue growth, we can see the company hasn’t secured enough new orders to maintain its growth rate in the future.

This quarter, Flowserve’s revenue grew by 3.5% year on year to $1.22 billion, falling short of Wall Street’s estimates.

Looking ahead, sell-side analysts expect revenue to grow 5.2% over the next 12 months, similar to its two-year rate. This projection doesn't excite us and suggests its newer products and services will not accelerate its top-line performance yet. At least the company is tracking well in other measures of financial health.

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Operating Margin

Flowserve’s operating margin might fluctuated slightly over the last 12 months but has generally stayed the same, averaging 8% over the last five years. This profitability was higher than the broader industrials sector, showing it did a decent job managing its expenses.

Analyzing the trend in its profitability, Flowserve’s operating margin might fluctuated slightly but has generally stayed the same over the last five years. This raises questions about the company’s expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability.

This quarter, Flowserve generated an operating margin profit margin of 3.5%, down 7.1 percentage points year on year. Conversely, its revenue and gross margin actually rose, so we can assume it was less efficient because its operating expenses like marketing, R&D, and administrative overhead grew faster than its revenue.

Earnings Per Share

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

Flowserve’s EPS grew at a spectacular 14.9% compounded annual growth rate over the last five years, higher than its 4.9% annualized revenue growth. However, this alone doesn’t tell us much about its business quality because its operating margin didn’t improve.

We can take a deeper look into Flowserve’s earnings quality to better understand the drivers of its performance. A five-year view shows that Flowserve has repurchased its stock, shrinking its share count by 2%. This tells us its EPS outperformed its revenue not because of increased operational efficiency but financial engineering, as buybacks boost per share earnings.

Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business.

For Flowserve, its two-year annual EPS growth of 29.8% was higher than its five-year trend. We love it when earnings growth accelerates, especially when it accelerates off an already high base.

In Q4, Flowserve reported adjusted EPS of $1.11, up from $0.70 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects Flowserve’s full-year EPS of $3.54 to grow 14%.

Key Takeaways from Flowserve’s Q4 Results

We were impressed by how significantly Flowserve blew past analysts’ backlog expectations this quarter. We were also glad its full-year EPS guidance exceeded Wall Street’s estimates. On the other hand, its revenue missed. Overall, we think this was a solid quarter with some key areas of upside. The stock traded up 2.4% to $80.87 immediately following the results.

Flowserve put up rock-solid earnings, but one quarter doesn’t necessarily make the stock a buy. Let’s see if this is a good investment. When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here (it’s free).