10-Q · April 28, 2026
Pentair reported Q1 2026 revenue of $1,036.7 million, up $26.3 million or 2.6% year-over-year, with gross margin improving to 41.8% (up 1.9 pts) and operating income of $210.0 million (20.3% of sales). Segment strength…
Earnings analysis · 10-Q
PNR earnings analysis
Filed July 28, 2026 · Our reading of the company's report
The latest report
Pentair's Q2 revenue fell 17.0% year over year to $932.6 million, driven by a 42.3% Pool sales decline, and operating margin fell 1.5 points to 17.9%; the filing excerpt does not disclose quarterly GAAP diluted EPS.…
Read full summary
Pentair's Q2 revenue fell 17.0% year over year to $932.6 million, driven by a 42.3% Pool sales decline, and operating margin fell 1.5 points to 17.9%; the filing excerpt does not disclose quarterly GAAP diluted EPS. Gross margin improved 1.7 points to 42.4%, but higher restructuring and transformation costs outweighed this benefit below gross profit. Flow and Water Solutions posted substantial segment-margin gains, while $467.2 million of first-half free cash flow supports liquidity; however, Pool destocking is expected to reduce full-year sales by approximately $250 million and the Taco transaction introduces $1.4 billion of prospective bridge financing.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
Where revenue came from
The business segments reported by the company.
Shares of the segments disclosed in this filing, largest first.
What stood out
-
Gross margin expanded despite sales pressure
Gross margin expanded 1.7 points year over year to 42.4%, and improved 0.6 points from 41.8% in Q1 2026. Pricing, productivity and $34.9 million of IEEPA tariff refunds more than offset raw-material inflation at the gross-profit level.
-
Flow delivered growth and margin expansion
Flow sales rose 5.1% to $263.7 million and segment income increased 27.4% to $69.8 million. Segment margin expanded 4.7 points to 26.5%, supported by Hydra-Stop, pricing, productivity and $5.4 million of tariff refunds.
-
Water Solutions margin strengthened
Water Solutions segment income increased 16.5% to $126.4 million despite a 5.1% revenue decline to $422.0 million. Its segment margin rose 5.6 points to 30.0%, including $18.3 million of tariff refunds.
-
Strong first-half cash conversion
Six-month operating cash flow was $504.4 million and free cash flow was $467.2 million, after $37.4 million of capital expenditures. Capex represented 7.4% of operating cash flow.
-
Material shareholder capital returns
The company repurchased 4.0 million shares for $350.0 million in the first half and retained $650.0 million under its authorization as of June 30, 2026. It also paid $87.5 million of dividends.
What to watch
-
Pool-channel reset sharply impaired Q2
Pool sales fell 42.3% year over year to $246.6 million, while segment income declined 62.3% to $57.6 million and segment margin contracted 12.3 points to 23.4%. Management attributes the volume decline principally to channel destocking and expects this destocking to reduce 2026 sales by approximately $250 million.
-
Revenue and operating profit contracted
Consolidated sales declined 17.0% year over year to $932.6 million; operating income fell 23.5% to $166.5 million and operating margin declined 1.5 points to 17.9%. Revenue also fell 10.3% from Q1 2026 sales of $1.04 billion.
-
Taco deal adds integration and leverage risk
New Taco-acquisition risk factors cite potentially unachieved or delayed synergies and undisclosed liabilities. The planned $1.425 billion acquisition is supported by a committed $1.4 billion bridge facility, on top of $1.606 billion of consolidated debt at June 30, 2026.
-
Transformation spending pressured operating margin
Restructuring costs increased to $34.6 million from $14.3 million year over year, while transformation costs rose to $17.5 million from $12.7 million. These costs helped raise SG&A as a percentage of sales by 3.0 points to 22.0%.
Management's outlook
The 10-Q does not provide numeric EPS or revenue guidance. Management expects Pool-channel destocking to reduce 2026 net sales by approximately $250 million, expects Taco to close in Q4 2026, and expects inflationary and supply-chain pressures to persist through the remainder of 2026.
Earlier filings 1
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.