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- **Record Q3 Performance**: 3% sales growth, 10% adjusted operating income rise, and $1.24 EPS driven by Flow and Pool segments.
- **Strategic Acquisition**: Hydra-Stop acquisition to boost commercial flow capabilities and free cash flow.
- **Guidance Update**: 2025 sales up 2%, EPS $4.85-$4.90, reflecting 12-13% growth.
- **Margin Expansion**: Q3 ROS at 25.7%, with Q4 targeting further expansion in Pool and Flow.
- **Long-Term Focus**: 80/20 strategy for efficiency, Quad 1 customer growth, and digital innovation.

**【CEO Summary Section】**
- Delivered record third-quarter performance with 3% sales growth and 10% adjusted operating income increase, driven by Flow and Pool segments.
- Acquired Hydra-Stop for $292 million, enhancing commercial flow capabilities.
- Emphasized transformation initiatives (80/20 strategy) to drive efficiency and profitability, with $80 million in savings year-to-date.
- Raised 2025 guidance: sales growth of 2%, adjusted EPS of $4.85-$4.90, up 12-13% YoY.
- Highlighted long-term water trends and strategic focus on Quad 1 customers for growth.

**【CFO Financial Commentary】**
- Q3 adjusted EPS of $1.24, up 14% YoY; GAAP net income of $420 million.
- Free cash flow of $719 million year-to-date, up 14%; return on invested capital (ROIC) at 16.7%.
- Transformation savings of $56 million year-to-date, targeting $80 million for 2025.
- Guided Q4 sales up 3-4%, with Flow segment expected to grow high single digits.
- Tariff mitigation strategies in place, with minimal expected impact in 2025.

**【Q&A Highlights】**
- **Pool Segment**: Margins expected to expand in Q4, with 7% full-year sales growth driven by price (5%) and Gulfstream acquisition.
- **Water Solutions**: Core sales flat due to commercial services exit, but filtration business shows strength.
- **Flow Segment**: 3% growth from price and volume, with industrial solutions up 10%.
- **2026 Outlook**: Price carryover of 1-2%, cautious on macroeconomic risks, and focus on transformation for margin expansion.
- **Tariffs**: Mitigation strategies in place, with no immediate material impact expected.
- **Hydra-Stop**: Expected to contribute $50 million in 2026 with 30% ROS, offering cross-selling opportunities.
- **Digital Strategy**: Investment in AI and digital solutions to enhance customer experience and operational efficiency.

Pentair plc (PNR) Q3 2025 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

PNR

PNR fundamentals

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