Financial Data and Key Metrics Changes - In Q4 2025, the company achieved 5% sales growth and marked the 15th consecutive quarter of margin expansion, with adjusted operating profit increasing by 9% to $252 million and adjusted EPS rising by 9% to $1.18 [10][17] - For the full year 2025, sales reached $4.18 billion, a 2% increase, with adjusted operating income growing by 10% and adjusted EPS increasing to a record $4.92, up 14% year-over-year [11][18] Business Line Data and Key Metrics Changes - Flow sales in Q4 increased by 9% to $394 million, with commercial and industrial sales up 12% and residential sales rising 4% [18] - Water Solutions sales decreased by 10% to $232 million in Q4, with commercial sales down 15% due to the impact of the sale of the commercial services business [20] - Pool sales grew by 11% to $393 million in Q4, driven primarily by price increases [21] Market Data and Key Metrics Changes - The North American market for Water Solutions remained relatively strong, although international and China sales experienced volatility [36] - The company expects total sales growth of approximately 3% to 4% in 2026, with flow sales projected to increase by mid-single digits to high single digits [24] Company Strategy and Development Direction - The company has strategically combined its Flow residential business with its Water Solutions residential business to enhance operational efficiencies and customer experiences [8][9] - The focus remains on innovation, sustainability, and operational excellence, with plans to invest in digital and AI-driven solutions [12][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the business model and resilience of end markets, projecting adjusted EPS guidance for 2026 in the range of $5.25 to $5.40, reflecting an 8% increase at the midpoint [12][24] - The company remains vigilant in responding to macro volatility and is taking proactive steps to mitigate risks [12][22] Other Important Information - The company generated record free cash flow of $748 million and returned $225 million to shareholders through share repurchases [11][23] - The leadership transition includes Nick Brazis as the new CFO, emphasizing a commitment to disciplined execution and financial integrity [7][15] Q&A Session Summary Question: Insights on the commercial Water Solutions business - Management indicated that both Manitowoc and Everpure are expected to return to growth in 2026, with the North American market remaining strong despite international volatility [36] Question: Incremental productivity opportunities from the combination of residential flow and water - The combined business is expected to create significant margin improvement over the next several years, leveraging better channel alignment and operational efficiencies [37][39] Question: Pool business dynamics and guidance - Management noted that the guidance reflects no residential recovery in 2026, with a focus on maintaining a pragmatic approach to sales expectations [46][48] Question: Capital allocation priorities - The company plans to continue raising dividends while actively looking for strategic acquisitions and considering share buybacks as part of its capital allocation strategy [49] Question: Impact of 80/20 strategy on organic growth - Management clarified that the 80/20 strategy is expected to drive growth by focusing on high-margin customers, with no anticipated headwinds from walking away from lower-margin revenue [60] Question: Pricing strategy amidst inflation - The company aims to offset inflation through pricing while ensuring that price increases do not exceed necessary levels to maintain competitiveness [62][63]

Pentair (NYSE:PNR) Q4 2025 Earnings call February 03, 2026 09:00 AM ET Company ParticipantsBob Fishman - CFOJohn Stauch - CEONick Brazis - CFOSaree Boroditsky - Senior Vice PresidentShelly Hubbard - VP of Investor RelationsConference Call ParticipantsAndrew Krill - Vice President and Research AnalystAndy Kaplowitz - Managing Director and Senior Research AnalystBrett Linzey - Managing Director and Senior Equity Research AnalystBrian Lee - Managing Director and Senior Clean Energy AnalystDeane Dray - Managing ...

Financial Data and Key Metrics Changes - In Q4 2025, the company achieved 5% sales growth and marked the 15th consecutive quarter of margin expansion, with adjusted operating profit increasing by 9% to $252 million and adjusted EPS rising by 9% to $1.18 [8][16] - For the full year 2025, sales reached $4.18 billion, a 2% increase, with adjusted operating income growing by 10% and adjusted EPS reaching a record $4.92, up 14% year-over-year [9][17] Business Line Data and Key Metrics Changes - Flow segment sales increased by 9% to $394 million in Q4, with commercial and industrial sales up 12% and residential sales rising 4% [17] - Water Solutions segment sales decreased by 10% to $232 million in Q4, with commercial sales down 15% due to the sale of the commercial services business [18] - Pool segment sales grew by 11% to $393 million in Q4, driven primarily by price increases [19] Market Data and Key Metrics Changes - The North American market for Water Solutions remained relatively strong, although international and China sales experienced volatility [36] - The company expects flow sales to increase by mid-single digits to high single digits in 2026, while Water Solutions sales are anticipated to be flat [23] Company Strategy and Development Direction - The company is strategically combining its flow residential business with its residential water solutions business to enhance operational efficiencies and customer experiences [6][11] - The focus remains on innovation, sustainability, and operational excellence, with plans to invest in digital and AI-driven solutions [10][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the business model and resilience of end markets, projecting adjusted EPS guidance for 2026 in the range of $5.25-$5.40, reflecting an 8% increase at the midpoint [10][23] - The company remains vigilant in responding to macro volatility and is taking proactive steps to mitigate risks [10][20] Other Important Information - The company generated record free cash flow of $748 million and returned $225 million to shareholders through share repurchases [9][22] - The leadership transition includes the appointment of Nick Brazis as the new CFO, who is expected to uphold the company's financial integrity and drive shareholder value [5][22] Q&A Session Summary Question: Insights on the commercial Water Solutions business - Management indicated expectations for growth in 2026, particularly in membrane filtration, despite some volatility in international markets [36] Question: Incremental productivity opportunities from the combination of residential flow and water solutions - The combined business is expected to create significant margin improvements and growth synergies over the next several years [37] Question: Pool business dynamics and guidance for Q1 - Management noted a pragmatic approach to guidance, reflecting no residential recovery in 2026, with expectations for a flat pool year [45][46] Question: Impact of 80/20 strategy on organic growth - Management clarified that the 80/20 strategy is expected to be a tailwind for growth, focusing on high-margin customers [60] Question: Pricing strategies in light of inflation - The company aims to offset inflation through pricing while ensuring value for channel partners and customers [62] Question: Tariff impacts and supply chain adjustments - Management confirmed that they successfully mitigated tariff impacts in 2025 and expect a manageable increase in 2026 [73][74]