Flowserve Corporation

FLS
Financial Analysis · Updated May 29, 2026 · Coverage 2026-Q2
Latest Q Revenue
$1.1B
Q1 2025 · +2% YoY · Beat consensus by 0%
TTM ROIC
28.3%
FY2024 · Adj. NOPAT / Invested Capital (incl. Goodwill); Adj. NOPAT = Adj. EBIT × (1 – Tax Rate); Invested Capital = Total Equity + Net Debt + Pension Liability − Goodwill · WACC ~8.5% · Moat spread +19.8pp
Margin Profile
Gross 32.2%
Operating 15.4%
FCF 9.9%
FY2024
Net Debt
$525M
· FY2024
Diluted Shares
131M
FY2024 · -0.76% (buyback)

Business Overview


source: coverage-next-full ticker: FLS step: "01" title: Business Overview — Segments, Products, End Markets created: 2026-05-29

Step 01 — Business Overview

Company Description

Flowserve Corporation is one of the world's leading manufacturers, distributors, and servicers of flow control products and services. The company designs, manufactures, and services pumps, valves, seals, and related flow control products for critical industrial processes where reliability and precision are paramount. Flowserve has operated for over 220 years (tracing roots to 1790) and is headquartered in Irving, Texas.

The business serves industries where flow control failure can result in catastrophic safety, environmental, or economic consequences — oil refineries, nuclear power plants, chemical processing facilities, water treatment plants, and pharmaceutical manufacturing. This mission-critical positioning is a cornerstone of its competitive moat.

Business Segments

1. Flowserve Pump Division (FPD) — ~55% of Revenue

FPD designs, manufactures, and services customized pumps and pump systems, complementary equipment, and related aftermarket parts and services.

Products:

  • Centrifugal pumps (single-stage, multi-stage, large custom units)
  • Positive displacement pumps (reciprocating, gear, screw)
  • Nuclear pumps (highly specialized, safety-grade)
  • Pump systems and engineered packages

End Markets Served:

  • Oil & gas (exploration, production, refining, pipelines)
  • Power generation (conventional, nuclear)
  • Chemical/petrochemical processing
  • Water and wastewater treatment
  • General industrial
2. Flow Control Division (FCD) — ~45% of Revenue

FCD designs, manufactures, and services a portfolio of isolation and control valves, actuators, controls, and related equipment used in the management and regulation of fluid flow.

Products:

  • Gate, globe, and check valves
  • Ball, butterfly, and plug valves
  • Control valves and regulating valves
  • Actuators (pneumatic, electric, hydraulic)
  • Solenoid valves
  • Seals (mechanical seals, packing, gaskets)
  • Valve automation and control systems

Notable brands under FCD: Valbart, Automax, Limitorque, Argus, Valtek, PMV, NAF, Gestra (industrial steam traps and valves)

Revenue by Type

Revenue Type Approx. % of Total
Original Equipment Manufacturing (OEM) ~50%
Aftermarket / Services ~50%

The aftermarket component (replacement parts, repairs, upgrades, long-term service agreements) is the financial backbone of the business. Aftermarket revenues are:

  • Higher margin than original equipment
  • More recurring and less cyclical
  • Driven by the installed base (100,000+ installed pumps and valves)
  • Sticky due to proprietary parts, certifications, and safety requirements

End Market Exposure (Revenue %)

End Market ~% of Revenue
Oil & Gas ~38–42%
Power Generation ~18–22%
Chemical / Petrochemical ~13–17%
Water / Wastewater ~8–12%
General Industrial ~12–16%

Geographic Footprint

Region ~% of Revenue
Americas ~40–45%
Europe, Middle East, Africa (EMEA) ~35–40%
Asia Pacific ~18–22%

Flowserve operates in 55+ countries with ~55 manufacturing facilities and service/repair centers in over 170 locations. The Middle East (Saudi Aramco, ADNOC, downstream) is a meaningful contributor within EMEA.

Headcount and Scale

  • ~17,000 employees globally
  • ~$4.5B in annual revenue
  • 55+ manufacturing facilities
  • Service & repair centers: 170+ globally

Strategic Transformation: FLS 2.0

Launched in 2020 under CEO Scott Rowe, FLS 2.0 is a multi-year operational transformation program:

  1. Portfolio simplification — exited lower-margin, non-core product lines
  2. Manufacturing footprint optimization — consolidation of facilities, lean manufacturing
  3. Digital and commercial excellence — pricing discipline, CRM, digital service tools
  4. Margin expansion target — 17–18% adjusted EBIT margins (vs. ~13% at launch)

By FY2024, the company had achieved ~15–16% adjusted EBIT margins, demonstrating tangible progress. The final phase of FLS 2.0 targets ~200bps of additional improvement through continued operational leverage and volume growth.

Financial Snapshot


source: coverage-next-full ticker: FLS step: "04" title: Financial Snapshot — 3-Year P&L, Margins, EPS created: 2026-05-29

Step 04 — Financial Snapshot

Income Statement Summary (USD Millions)

Metric FY2022 FY2023 FY2024
Revenue $4,126 $4,375 $4,542
YoY Growth +6.0% +3.8%
Gross Profit $1,247 $1,380 $1,465
Gross Margin 30.2% 31.5% 32.2%
Adj. EBIT ~$545 ~$630 ~$700
Adj. EBIT Margin ~13.2% ~14.4% ~15.4%
GAAP Operating Income ~$370 ~$480 ~$550
GAAP EBIT Margin ~9.0% ~11.0% ~12.1%
Net Interest Expense ~($100) ~($90) ~($85)
Adj. Pre-tax Income ~$445 ~$540 ~$615
Tax Rate (adj.) ~21–23% ~21–22% ~21–22%
Adj. Net Income ~$345 ~$420 ~$480
GAAP Net Income ~$200 ~$310 ~$375
Diluted Shares (M) ~133 ~132 ~131
Adj. Diluted EPS ~$2.59 ~$3.18 ~$3.66
GAAP Diluted EPS ~$1.50 ~$2.35 ~$2.86

Note: Figures are approximations based on public filings and earnings releases. Adjusted metrics exclude restructuring/realignment charges, amortization of acquired intangibles, and certain other items.

Key Margin Analysis

Gross Margin Progression
  • FY2022: 30.2% — Recovering from supply chain disruption and labor cost inflation
  • FY2023: 31.5% — +130bps — Pricing actions, mix shift toward aftermarket, easing input costs
  • FY2024: 32.2% — +70bps — Continued aftermarket mix improvement; higher-margin project completions

Gross margin target under FLS 2.0: 33–35% (full transformation maturity). Pathway requires continued aftermarket growth and volume leverage.

EBIT Margin Bridge FY2022 → FY2024
  • +130bps — Gross margin expansion (pricing + mix)
  • +80bps — SG&A leverage (fixed cost absorption on higher revenue)
  • +30bps — R&D efficiency (rationalized investment)
  • +130bps — One-time restructuring charges declining
  • Net: ~+220bps adj. EBIT margin improvement over 2 years
Adj. EBIT Margin Target
  • FLS 2.0 Phase 1 target (achieved ~2021): 12–13%
  • FLS 2.0 Phase 2 target (achieved ~2023): 14–15%
  • FLS 2.0 Phase 3 target (in progress): 17–18%
  • Current (FY2024): ~15.4%
  • Gap remaining: ~160–260bps to reach target range midpoint

EPS Growth Analysis

Period Adj. EPS YoY Growth
FY2021 ~$1.92
FY2022 ~$2.59 +35%
FY2023 ~$3.18 +23%
FY2024 ~$3.66 +15%

Strong EPS growth was driven by both operational margin expansion and modest share buyback activity. The growth rate is decelerating as the easier restructuring benefits have been captured and organic revenue growth normalizes.

FY2025E Consensus: ~$3.90–4.10 Adj. EPS (11–12% growth)

Restructuring / Non-Recurring Items

The gap between GAAP and Adjusted metrics is meaningful and declining:

Item FY2022 FY2023 FY2024
Restructuring / realignment ~($85) ~($65) ~($45)
Amortization of intangibles ~($75) ~($75) ~($75)
Other (gain/loss on divestitures, etc.) Varies Varies Varies

The declining restructuring charge is itself a sign that FLS 2.0 is maturing — most of the heavy lifting (facility closures, headcount reductions) is done.

EBITDA and Free Cash Flow

Metric FY2022 FY2023 FY2024
Adj. EBITDA ~$680 ~$780 ~$860
Adj. EBITDA Margin ~16.5% ~17.8% ~18.9%
D&A ~$135 ~$150 ~$160
Capex ~($130) ~($120) ~($130)
Free Cash Flow (FCF) ~$280 ~$380 ~$450
FCF Conversion (% of Adj. Net Income) ~81% ~90% ~94%

FCF conversion has been improving as working capital headwinds from revenue growth have partially normalized and restructuring cash costs have declined.

Dividend and Capital Returns

  • Annual dividend: $0.80/share (~$105M total)
  • Dividend yield: ~1.4–1.6% at typical trading prices
  • Dividend payout ratio: ~22% of Adj. Net Income — conservative, well-covered
  • Share buybacks: moderate (~$50–100M/year in FY2023–2024)

Deeper Financial Analysis

The fundamental tier adds 9 additional research dimensions for $FLS.

Revenue Breakdown
Segment revenue, geographic mix, product-line contribution margins, and cohort dynamics.
Financial Trends
Quarter-over-quarter momentum, leading indicators, and inflection point analysis.
Balance Sheet
Debt structure, liquidity runway, dilution risk, and working capital dynamics.
Capital Allocation
Buyback cadence, M&A appetite, dividend policy, and reinvestment priorities.
Returns on Capital (ROIC)
Multi-year ROIC vs. WACC, marginal returns on reinvestment, sales-to-invested-capital efficiency, and moat spread.
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Flowserve Corporation (FLS) — Financial Analysis | Margin of Insight