Pentair(PNR) - 2025 Q3 - Quarterly Results

Third Quarter 2025 Results Overview Pentair reported strong Q3 2025 financial results, driven by sales growth, double-digit earnings, and strategic initiatives across its segments Overall Financial Performance Pentair reported strong third quarter 2025 results with sales up 3% year-over-year to $1,022 million, GAAP EPS increased by 33% to $1.12, and adjusted EPS rose by 14% to $1.24, with operating income seeing a 29% increase to $232 million and significant ROS improvement Overall Financial Performance Metrics | Metric | Q3 2025 | Q3 2024 | Change (YoY) | | :-------------------------------- | :------ | :------ | :----------- | | Sales | $1,022 million | $993.4 million | +3% | | Core Sales (Excl. FX, Acq/Div) | - | - | +3% | | GAAP EPS | $1.12 | $0.84 | +33% | | Adjusted EPS | $1.24 | $1.09 | +14% | | Operating Income | $232 million | $179.9 million | +29% | | ROS (GAAP) | 22.7% | 18.1% | +460 basis points | | Adjusted Operating Income | $263 million | - | +10% | | Adjusted ROS | 25.7% | 24.1% | +160 basis points | CEO Commentary and Strategic Initiatives CEO John L. Stauch highlighted strong execution across the company's water portfolio, driving sales and double-digit earnings growth, while focusing on Transformation initiatives and growth investments - Pentair delivered strong Q3 results with sales growth and double-digit earnings growth exceeding expectations, driven by solid execution across its Move, Improve and Enjoy Water portfolio[3] - The company is implementing and scaling Transformation initiatives to grow profitability long-term and investing in growth across Flow, Water Solutions, and Pool segments[3] - Pentair acquired Hydra-Stop on September 17th for approximately $292 million, adding unique products and technology to its commercial Flow business, with an expected tax benefit of approximately $50 million[3][5] Key Highlights Key financial and operational highlights for Q3 2025 include a 3% sales increase, significant operating income and EPS growth, strong year-to-date cash flow, share repurchases, and an updated full-year 2025 guidance - Sales of $1,022 million, up 3 percent compared to sales for the same period last year[5] - Operating income was $232 million with ROS of 22.7 percent, an increase of 460 basis points compared to the prior year period; on an adjusted basis, ROS expanded 160 basis points to 25.7 percent[5] - GAAP EPS increased 33 percent to $1.12 when compared to the prior year period and adjusted EPS rose 14 percent to $1.24[5] - Net cash provided by operating activities of continuing operations was $764 million year-to-date, an increase of $84 million compared to the same period last year, and free cash flow provided by continuing operations was $719 million year-to-date, an increase of $90 million compared to the same period last year[5] - Repurchased $50 million of ordinary shares in Q3 and $175 million year-to-date[5] - The company updated its full year 2025 GAAP EPS guidance to approximately $3.98 to $4.03, up 6 percent to 8 percent versus the prior year, and increased EPS guidance on an adjusted basis to approximately $4.85 to $4.90, up 12 percent to 13 percent versus the prior year[5] - Acquired Hydra-Stop on September 17th for approximately $292 million with an expected tax benefit of approximately $50 million[5] Segment-Specific Performance Pentair's Flow and Pool segments achieved sales growth and improved profitability, while Water Solutions maintained flat core sales with increased segment income Flow Segment Performance The Flow segment experienced a 6% increase in sales year-over-year, with core sales growing by 4%, segment income rose by 15%, and Return on Sales (ROS) improved by 200 basis points to 24.2% Flow Segment Performance Metrics | Metric | Q3 2025 | Q3 2024 | Change (YoY) | | :---------------- | :------ | :------ | :----------- | | Sales | - | - | +6% | | Core Sales | - | - | +4% | | Segment Income | $95 million | $82.8 million | +15% | | ROS | 24.2% | 22.2% | +200 basis points | Water Solutions Segment Performance The Water Solutions segment saw a 6% decrease in sales year-over-year, with core sales remaining flat, yet segment income increased by 6% and Return on Sales (ROS) improved by 280 basis points to 25.0% Water Solutions Segment Performance Metrics | Metric | Q3 2025 | Q3 2024 | Change (YoY) | | :---------------- | :------ | :------ | :----------- | | Sales | - | - | -6% | | Core Sales | - | - | Flat | | Segment Income | $68 million | $64.4 million | +6% | | ROS | 25.0% | 22.2% | +280 basis points | Pool Segment Performance The Pool segment reported a 7% increase in sales year-over-year, with core sales growing by 6%, segment income rose by 3%, but Return on Sales (ROS) slightly decreased by 120 basis points to 32.8% Pool Segment Performance Metrics | Metric | Q3 2025 | Q3 2024 | Change (YoY) | | :---------------- | :------ | :------ | :----------- | | Sales | - | - | +7% | | Core Sales | - | - | +6% | | Segment Income | $116 million | $112.7 million | +3% | | ROS | 32.8% | 34.0% | -120 basis points | Cash Flow and Capital Deployment The company demonstrated strong year-to-date operating and free cash flow, alongside consistent dividend payments and share repurchases Operating and Free Cash Flow Net cash provided by operating activities of continuing operations for Q3 2025 was $196 million, a decrease from $249 million in Q3 2024, while year-to-date operating cash flow increased to $764 million from $680.4 million, and free cash flow for the quarter was $179 million, down from $234 million in the prior year, but year-to-date free cash flow increased to $719 million from $629.1 million Operating and Free Cash Flow (in millions) | Metric | Q3 2025 | Q3 2024 | Change (YoY) | | :------------------------------------------ | :------ | :------ | :----------- | | Net cash from operating activities (Q3) | $196 million | $249 million | -$53 million | | Free cash flow (Q3) | $179 million | $234 million | -$55 million | | Net cash from operating activities (YTD) | $764 million | $680.4 million | +$83.6 million | | Free cash flow (YTD) | $719 million | $629.1 million | +$89.9 million | Dividends and Share Repurchases Pentair paid a regular cash dividend of $0.25 per share in Q3 2025 and announced another $0.25 per share dividend for November 2025, marking its 49th consecutive year of dividend increases, while repurchasing $50 million of ordinary shares in Q3 and $175 million year-to-date, with $275 million remaining under authorization - Paid a regular cash dividend of $0.25 per share in Q3 2025[9] - Announced a regular quarterly cash dividend of $0.25 per share payable on November 7, 2025, marking the 49th consecutive year of dividend increases[9][10] - Repurchased 0.5 million shares for $50 million in Q3 2025[10] - Repurchased 1.8 million shares for $175 million during the nine months ended September 30, 2025[10] - As of September 30, 2025, $275 million remained available for share repurchases under authorization[10] Financial Outlook Pentair updated its full-year 2025 guidance, projecting increased sales growth and adjusted EPS, while also providing Q4 2025 estimates Full Year 2025 Guidance Update Pentair updated its full-year 2025 guidance, increasing its sales growth outlook and estimated adjusted EPS range, with GAAP EPS projected to be $3.98 to $4.03 (up 6% to 8%) and adjusted EPS $4.85 to $4.90 (up 12% to 13%), alongside approximately 2% reported sales growth Full Year 2025 Guidance | Metric | Full Year 2025 Guidance | YoY Change | | :-------------------------- | :---------------------- | :--------- | | GAAP EPS | $3.98 - $4.03 | +6% to +8% | | Adjusted EPS | $4.85 - $4.90 | +12% to +13% | | Reported Sales | Up approx. 2% | - | Fourth Quarter 2025 Guidance For the fourth quarter of 2025, Pentair introduced guidance expecting GAAP EPS of $1.03 to $1.08 (up 4% to 9%) and adjusted EPS of $1.11 to $1.16 (up 3% to 7%), with sales anticipated to be up approximately 3% to 4% on a reported basis compared to Q4 2024 Fourth Quarter 2025 Guidance | Metric | Q4 2025 Guidance | YoY Change | | :-------------------------- | :--------------------- | :--------- | | GAAP EPS | $1.03 - $1.08 | +4% to +9% | | Adjusted EPS | $1.11 - $1.16 | +3% to +7% | | Reported Sales | Up approx. 3% to 4% | - | Corporate Information This section provides details on the earnings call, forward-looking statement disclaimers, company overview, and investor contacts Earnings Conference Call Details Pentair's President and CEO John L. Stauch and CFO Robert P. Fishman will discuss Q3 2025 results on a conference call at 9:00 a.m. Eastern on October 21, 2025, with a live audio webcast and related presentation available on the Investor Relations section of Pentair's website - Pentair's Q3 2025 results will be discussed by CEO John L. Stauch and CFO Robert P. Fishman on a conference call at 9:00 a.m. Eastern on October 21, 2025[13] - A live audio webcast and presentation will be accessible via the Investor Relations section of www.pentair.com, with archives available post-event[13][14] Caution Concerning Forward-Looking Statements This section serves as a standard disclaimer, indicating that the release contains forward-looking statements subject to various risks and uncertainties, which could cause actual results to differ materially from projections, and Pentair disclaims any obligation to update this information - The release contains forward-looking statements, not guarantees of future performance, subject to risks and uncertainties that could cause actual results to differ materially[15] - Key risk factors include global economic conditions, housing market strength, supply/demand dynamics, competition, restructuring benefits, inflation, currency volatility, new product acceptance, acquisition integration, foreign business operations, seasonality, regulatory compliance, litigation, and achieving strategic goals[15] - Pentair assumes no obligation to update the information contained in this release[15] About Pentair plc Pentair plc is a leader in sustainable water solutions, helping the world move, improve, and enjoy water, operating as a core large-cap value S&P 500 equity stock with approximately $4.1 billion in 2024 revenue and 9,750 global employees serving customers in over 150 countries - Pentair plc is a leader in providing smart, sustainable water solutions, operating as a core large cap value S&P 500 equity stock[16] Pentair plc Key Information | Metric | Value | | :-------------------- | :------------ | | 2024 Revenue | ~$4.1 billion | | Global Employees | ~9,750 | | Countries Served | >150 | | Ticker Symbol | PNR | Pentair Contacts Contact information for Pentair's Vice President of Investor Relations, Shelly Hubbard, and Vice President of Communications, Rebecca Osborn, is provided for inquiries - Shelly Hubbard, Vice President, Investor Relations: Direct: 763-656-5575, Email: shelly.hubbard@pentair.com[18] - Rebecca Osborn, Vice President, Communications: Direct: 763-656-5589, Email: rebecca.osborn@pentair.com[18] Condensed Consolidated Financial Statements (Unaudited) This section presents Pentair's unaudited statements of operations, balance sheets, and cash flows for Q3 and YTD 2025 Statements of Operations The condensed consolidated statements of operations show Pentair's financial performance for the three and nine months ended September 30, 2025, compared to the same periods in 2024, with key improvements including increased net sales, gross profit, and operating income, leading to higher net income and diluted EPS from continuing operations Condensed Consolidated Statements of Operations (Unaudited) | Metric (in millions, except per-share data) | Q3 2025 | Q3 2024 | YTD 2025 | YTD 2024 | | :------------------------------------------ | :------ | :------ | :------- | :------- | | Net sales | $1,022.0 million | $993.4 million | $3,155.5 million | $3,109.9 million | | Gross profit | $418.6 million | $393.2 million | $1,278.5 million | $1,221.2 million | | % of net sales (Gross Profit) | 41.0% | 39.6% | 40.5% | 39.3% | | Operating income | $231.7 million | $179.9 million | $652.5 million | $608.7 million | | % of net sales (Operating Income) | 22.7% | 18.1% | 20.7% | 19.6% | | Net income from continuing operations | $184.3 million | $139.6 million | $487.7 million | $459.2 million | | Diluted EPS (Continuing operations) | $1.12 | $0.84 | $2.94 | $2.75 | | Cash dividends paid per ordinary share | $0.25 | $0.23 | $0.75 | $0.69 | Balance Sheets The condensed consolidated balance sheets as of September 30, 2025, show an increase in total assets to $6,759.6 million from $6,446.5 million at December 31, 2024, primarily driven by increases in goodwill and intangibles, net, reflecting acquisitions, with total liabilities also increasing but equity growing, indicating a stronger financial position Condensed Consolidated Balance Sheets (Unaudited) | Metric (in millions) | Sep 30, 2025 | Dec 31, 2024 | | :-------------------------------- | :----------- | :----------- | | Cash and cash equivalents | $128.4 million | $118.7 million | | Total current assets | $1,445.1 million | $1,436.1 million | | Goodwill | $3,528.8 million | $3,286.6 million | | Intangibles, net | $1,088.0 million | $1,033.8 million | | Total assets | $6,759.6 million | $6,446.5 million | | Total current liabilities | $988.2 million | $895.1 million | | Long-term debt | $1,580.1 million | $1,638.7 million | | Total liabilities | $2,977.2 million | $2,883.6 million | | Equity | $3,782.4 million | $3,562.9 million | | Total liabilities and equity | $6,759.6 million | $6,446.5 million | Statements of Cash Flows For the nine months ended September 30, 2025, net cash provided by operating activities significantly increased to $764.0 million from $680.2 million in the prior year, investing activities resulted in a net cash outflow of $354.3 million, primarily due to acquisitions, compared to $68.2 million outflow in 2024, and financing activities used $370.8 million, including share repurchases and debt repayments Condensed Consolidated Statements of Cash Flows (Unaudited) | Metric (in millions) | YTD 2025 | YTD 2024 | | :------------------------------------------ | :------- | :------- | | Net income | $487.7 million | $459.0 million | | Net cash provided by operating activities | $764.0 million | $680.2 million | | Net cash used for investing activities | ($354.3) million | ($68.2) million | | Acquisitions, net of cash acquired | ($292.2) million | — | | Net cash used for financing activities | ($370.8) million | ($560.0) million | | Repurchases of ordinary shares | ($175.0) million | ($100.0) million | | Dividends paid | ($123.3) million | ($114.3) million | | Cash and cash equivalents, end of period | $128.4 million | $218.1 million | Reconciliations of Non-GAAP Financial Measures (Unaudited) This section provides reconciliations of non-GAAP financial measures, including free cash flow, segment performance, and adjusted operating income/EPS Free Cash Flow Reconciliation The reconciliation shows free cash flow from continuing operations for Q3 2025 was $178.9 million, down from $233.6 million in Q3 2024, while year-to-date free cash flow significantly increased to $719.0 million in 2025 from $629.1 million in 2024, reflecting strong operating cash generation despite capital expenditures Free Cash Flow from Continuing Operations (Unaudited) | Metric (in millions) | Q3 2025 | Q3 2024 | YTD 2025 | YTD 2024 | | :------------------------------------------ | :------ | :------ | :------- | :------- | | Net cash from operating activities (cont. ops) | $196.3 million | $248.6 million | $764.0 million | $680.4 million | | Capital expenditures | ($17.4) million | ($15.4) million | ($45.1) million | ($51.7) million | | Free cash flow | $178.9 million | $233.6 million | $719.0 million | $629.1 million | Supplemental Financial Information by Reportable Segment Supplemental data provides a detailed breakdown of net sales, reportable segment income, and return on sales (ROS) for Flow, Water Solutions, and Pool segments for Q3 and YTD 2025 compared to 2024, with all segments showing improved ROS year-to-date, and Pool maintaining the highest ROS Reportable Segment Net Sales (in millions) | Segment | Q3 2025 | Q3 2024 | YTD 2025 | YTD 2024 | | :-------------- | :------ | :------ | :------- | :------- | | Flow | $394.0 million | $372.2 million | $1,159.2 million | $1,153.3 million | | Water Solutions | $273.3 million | $289.5 million | $829.8 million | $873.1 million | | Pool | $354.3 million | $331.4 million | $1,165.4 million | $1,082.4 million | | Total Net Sales | $1,022.0 million | $993.4 million | $3,155.5 million | $3,109.9 million | Reportable Segment Income (in millions) | Segment | Q3 2025 | Q3 2024 | YTD 2025 | YTD 2024 | | :-------------- | :------ | :------ | :------- | :------- | | Flow | $95.3 million | $82.8 million | $272.0 million | $244.5 million | | Water Solutions | $68.4 million | $64.4 million | $199.3 million | $192.9 million | | Pool | $116.2 million | $112.7 million | $394.9 million | $357.1 million | | Total Segment Income | $279.9 million | $259.9 million | $866.2 million | $794.5 million | Return on Sales (ROS) by Segment | Segment | Q3 2025 | Q3 2024 | YTD 2025 | YTD 2024 | | :-------------- | :------ | :------ | :------- | :------- | | Flow | 24.2% | 22.2% | 23.5% | 21.2% | | Water Solutions | 25.0% | 22.2% | 24.0% | 22.1% | | Pool | 32.8% | 34.0% | 33.9% | 33.0% | | Adjusted ROS | 25.7% | 24.1% | 25.4% | 23.4% | GAAP to Non-GAAP Reconciliation for 2025 (Forecast) This reconciliation provides a detailed breakdown of adjustments made to GAAP figures to arrive at non-GAAP measures for 2025, including actuals for Q1-Q3 and forecasts for Q4 and the full year, with key adjustments significantly impacting adjusted operating income and EPS GAAP to Non-GAAP Reconciliation for 2025 (Forecast) | Metric (in millions, except per-share data) | Q1 2025 | Q2 2025 | Q3 2025 | Q4 2025 (Forecast) | Full Year 2025 (Forecast) | | :------------------------------------------ | :------ | :------ | :------ | :----------------- | :------------------------ | | Operating income (as reported) | $203.1 million | $217.7 million | $231.7 million | Up 15% - 19% | Up 9% - 11% | | Adjustments (total) | $39.0 million | $79.0 million | $30.5 million | $16 million | $164 million | | Adjusted operating income | $242.5 million | $296.7 million | $262.6 million | Up 4% - 8% | Up 9% - 10% | | Diluted EPS (as reported) | $0.93 | $0.90 | $1.12 | $1.03 - $1.08 | $3.98 - $4.03 | | Adjustments (EPS) | $0.18 | $0.49 | $0.12 | $0.08 | $0.87 | | Diluted EPS (as adjusted) | $1.11 | $1.39 | $1.24 | $1.11 - $1.16 | $4.85 - $4.90 | GAAP to Non-GAAP Reconciliation for 2024 (Actual) This section provides the GAAP to non-GAAP reconciliation for the full year 2024, including quarterly breakdowns, with adjustments applied to derive adjusted operating income and EPS, offering a clearer view of underlying business performance GAAP to Non-GAAP Reconciliation for 2024 (Actual) | Metric (in millions, except per-share data) | Q1 2024 | Q2 2024 | Q3 2024 | Q4 2024 | Full Year 2024 | | :------------------------------------------ | :------ | :------ | :------ | :------ | :------------- | | Operating income (as reported) | $180.8 million | $248.0 million | $179.9 million | $195.1 million | $803.8 million | | Adjustments (total) | $35.6 million | $23.2 million | $58.7 million | $36.0 million | $153.5 million | | Adjusted operating income | $217.3 million | $271.4 million | $239.2 million | $231.3 million | $959.2 million | | Diluted EPS (as reported) | $0.80 | $1.11 | $0.84 | $0.99 | $3.74 | | Adjustments (EPS) | $0.14 | $0.11 | $0.25 | $0.09 | $0.59 | | Diluted EPS (as adjusted) | $0.94 | $1.22 | $1.09 | $1.08 | $4.33 | Net Sales Growth to Core Net Sales Growth by Reportable Segment This reconciliation details the components of net sales growth for each reportable segment for Q3 2025, separating core growth from the impacts of currency translation and acquisitions/divestitures, with core sales growth positive across all segments, and Pool leading at 5.6% Q3 2025 Net Sales Growth to Core Net Sales Growth by Reportable Segment | Segment | Core Sales Growth | Currency Impact | Acq. / Div. Impact | Total Net Sales Growth | | :-------------- | :---------------- | :-------------- | :----------------- | :--------------------- | | Total Pentair | 3.3% | 1.0% | (1.4)% | 2.9% | | Flow | 3.6% | 1.9% | 0.4% | 5.9% | | Water Solutions | 0.5% | 0.7% | (6.8)% | (5.6)% | | Pool | 5.6% | —% | 1.3% | 6.9% |