ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") is intended to help the reader understand our results of operations and financial condition for the year ended December 31, 2025. The MD&A should be read in conjunction with our consolidated financial statements and Notes included in Item 8 of this Form 10-K. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those discussed elsewhere in this Form 10-K, particularly in Item 1A. "Risk Factors" and in the "Special Note Regarding Forward-Looking Statements" preceding Part I of this Form 10-K. For more information regarding our consolidated results, segment results, and liquidity and capital resources for the year ended December 31, 2024 as compared to the year ended December 31, 2023 refer to Part II Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Company's 2024 Annual Report on Form 10-K.
Throughout this MD&A, we refer to measures used by management to evaluate performance, including a number of financial measures that are not defined under accounting principles generally accepted in the United States of America ("GAAP"). Please see "Non-GAAP Disclosures" at the end of this Item 7 for further detail on these financial measures. We believe these measures provide investors with important information that is useful in understanding our business results and trends. Reconciliations within this MD&A provide more details on the use and derivation of these measures.
OVERVIEW
Dover Corporation is a diversified global manufacturer and solutions provider delivering innovative equipment and components, consumable supplies, aftermarket parts, software and digital solutions and support services.
For the year ended December 31, 2025, consolidated revenue was $8.1 billion, an increase of $346.7 million or 4.5%, as compared to the prior year. The increase is driven by acquisition-related growth of 2.6%, organic revenue growth of 1.6% and a favorable impact from foreign currency translation of 1.0%, partially offset by a disposition-related decline of 0.7%. The results were primarily driven by robust trends in our secular-growth-exposed end markets, strategic pricing initiatives and acquisitions within the Clean Energy & Fueling and Pumps & Process Solutions segments.
The 1.6%organic revenue growth was driven by increases of 6.7%, 4.6%, and 1.9% in our Pumps & Process Solutions, Clean Energy & Fueling, and Imaging & Identification segments, respectively, partially offset by the Engineered Products and Climate & Sustainability Technologies segments which declined 6.6% and 2.1%, respectively. For further information, see "Segment Results of Operations" within this Item 7.
From a geographic perspective, organic revenue for the U.S., our largest market, grew 3.3% as compared to the prior year, driven by broad-based growth primarily in our Clean Energy & Fueling and Pumps & Process Solutions segments. Organic revenue in Asia grew 3.4%, while organic revenue in Europe and Other Americas declined 0.9% and 4.3%, respectively. All other geographic markets grew 0.7% organically year over year.
Bookings increased 6.0% over the prior year to $8.1 billion for the year ended December 31, 2025. The bookings increase was broad-based across the portfolio, with each segment except Engineered Products posting year-over-year growth.
Restructuring and other costs of $78.0 million included restructuring charges of $56.7 million and other costs of $21.2 million. Restructuring and other costs were primarily related to exit costs and headcount reductions across all segments, most notably within the Climate & Sustainability Technologies and Clean Energy & Fueling segments. Other costs (benefits) include $4.0 million in costs associated with a product line exit and $6.3 million in costs associated with a footprint reduction, both in our Climate & Sustainability Technologies segment. For further discussion related to our restructuring and other costs, see "Restructuring and Other Costs (Benefits)," within this Item 7.
During the year ended December 31, 2025, the Company completed four business acquisitions totaling $665.3 million, net of cash acquired and inclusive of contingent consideration and measurement period adjustments. See Note 3 — Acquisitions in the consolidated financial statements in Item 8 of this Form 10-K for further details regarding the businesses acquired during the year.
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On November 10, 2025, the Company entered into the 2025 ASR Agreement, a $500.0 million accelerated share repurchase agreement with JP Morgan to repurchase its shares under the 2025 ASR Program. The Company funded the 2025 ASR Program with cash on hand. Under the terms of the 2025 ASR Agreement, the Company paid JP Morgan $500.0 million on November 12, 2025, and on that date received initial delivery of 2,334,010 shares, representing a substantial majority of the shares expected to be retired over the course of the 2025 ASR Program. See Note 21 — Stockholders' Equity in the consolidated financial statements in Item 8 of this Form 10-K for further details.
CONSOLIDATED RESULTS OF OPERATIONS
Years Ended December 31, % / Point Change
(Loss) earnings from discontinued operations, net (3,473) 1,297,158 nm*
*nm: not meaningful
Revenue
Revenue for the year ended December 31, 2025 increased $346.7 million, or 4.5%, to $8.1 billion compared with 2024. Organic revenue growth of 1.6% is primarily driven by robust trends in our secular-growth-exposed end markets and above and below-ground retail fueling and pricing actions, partially offset by lower volumes in our vehicle service business and project timing in retail refrigeration equipment and services. The increase in revenue was also driven by acquisition-related growth of 2.6% primarily in our Pumps & Process Solutions and Clean Energy & Fueling segments and a favorable impact from foreign currency translation of 1.0%, partially offset by a disposition-related decline of 0.7% in our Engineered Products segment. Customer pricing favorably impacted revenue in 2025 by approximately 1.9% and by 1.6% in the prior year.
Gross Profit
Gross profit for the year ended December 31, 2025, increased $259.5 million, or 8.8%, to $3.2 billion compared with 2024, primarily driven by favorable price versus cost dynamics, volume growth, product mix, and productivity actions. Gross profit margin increased 160 basis points to 39.8% as compared to the prior year driven by favorable price versus cost dynamics, productivity initiatives, favorable portfolio mix and benefits from restructuring actions.
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Selling, General and Administrative Expenses
Selling, general and administrative expenses for the year ended December 31, 2025 increased $92.5 million, or 5.3% to $1.8 billion compared with 2024, primarily due to increased employee compensation and benefits and acquisition-related amortization. As a percentage of revenue, selling, general and administrative expenses increased 20 basis points to 22.8%.
Research and development costs, including qualifying engineering costs, are expensed when incurred and amounted to $165.3 million and $149.6 million for the years ended December 31, 2025, and 2024, respectively. These costs as a percent of revenue were 2.0% and 1.9% for the years December 31, 2025 and 2024, respectively.
Non-Operating Items
Interest Expense, net
For the year ended December 31, 2025, interest expense, net of interest income, decreased $57.3 million, or 60.9%, to $36.7 million compared with 2024 primarily driven by higher interest income generated by the investment of proceeds from the sale of Environmental Solutions Group ("ESG") held in highly liquid short-term investments and reduced interest expense resulting from a lack of commercial paper borrowings.
Gain on Dispositions
Gain on dispositions for the years ended December 31, 2025 and 2024 were $4.6 million and $597.8 million, respectively. The gain on dispositions for the year ended December 31, 2024 was driven by the sale of the De-Sta-Co business on March 31, 2024 and the sale of a minority owned equity method investment on September 30, 2024. See Note 4 — Discontinued and Disposed Operations in the consolidated financial statements in Item 8 of this Form 10-K for further details.
Other Income, net
Other income, net includes non-service pension benefit, deferred compensation plan investments gain or loss, earnings or charges from equity method investments, foreign exchange gain or loss, and various other items. Other income, net for the years ended December 31, 2025 and 2024 was $33.0 million and $46.9 million, respectively. For the year ended December 31, 2025, other income decreased compared to 2024 primarily due to decreased deferred compensation plan investment gain, decreased earnings from our equity method investments and foreign currency exchange loss.
Income Taxes
Our businesses have a global presence with 38.6% and 35.8% of our pre-tax earnings in 2025 and 2024, respectively, generated in foreign jurisdictions. Foreign earnings are generally subject to local country tax rates that differ from the 21.0% U.S. statutory tax rate.
Our effective tax rate was 20.1% for the year ended December 31, 2025, compared to 20.3% for the year ended December 31, 2024. Our effective tax rate differs from the U.S. statutory tax rate primarily driven by mix of earnings and reorganizations.
On July 4, 2025, the One Big Beautiful Bill was enacted into law, introducing changes to the U.S. tax code, including making permanent certain provisions originally enacted under the Tax Cuts and Jobs Act, such as 100% bonus depreciation and the immediate expensing of domestic research and development costs. The changes do not have a material impact to our consolidated financial statements.
The Company is continuing to monitor the changes in tax laws resulting from the Organization for Economic Cooperation and Development’s multi-jurisdictional plan of action to address base erosion and profit shifting. The changes do not have a material impact on our effective tax rate.
See Note 14 — Income Taxes in the consolidated financial statements in Item 8 of this Form 10-K for additional details.
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Earnings from Continuing Operations
For the year ended December 31, 2025, earnings from continuing operations decreased $302.5 million, or 21.6%, to $1.1 billion, or $7.97 per diluted share, compared with earnings from continuing operations of $1.4 billion, or $10.09 per diluted share, for the year ended December 31, 2024. Earnings from continuing operations decreased primarily due to the after-tax gain on dispositions of De-Sta-Co and a minority owned equity method investment totaling $462.4 million in the prior year, partially offset by higher operating earnings in the current period.
Discontinued Operations
Loss from discontinued operations, net for the year ended December 31, 2025 was $3.5 million. Earnings from discontinued operations, net for the year ended December 31, 2024 was $1.3 billion representing the results of ESG through the date of disposition. Refer to Note 4 — Discontinued and Disposed Operations in Item 8 of this form 10-K for additional information on discontinued and disposed operations.
SEGMENT RESULTS OF OPERATIONS
The summary that follows provides a discussion of the results of operations of each of our five reportable operating segments (Engineered Products, Clean Energy & Fueling, Imaging & Identification, Pumps & Process Solutions and Climate & Sustainability Technologies). Each of these segments is comprised of various product and service offerings that serve multiple markets. We evaluate our operating segment performance based on segment earnings as defined in Note 19 — Segment Information in the consolidated financial statements in Item 8 of this Form 10-K.
We report organic revenue growth, a non-GAAP measure, which excludes the impact of foreign currency exchange rates and the impact of acquisitions and divestitures. We believe that reporting organic revenue growth provides a useful comparison of our revenue performance and trends between periods.
Additionally, we use the following operational metrics in monitoring the performance of the business. We believe the operational metrics are useful to investors and other users of our financial information in assessing the performance of our segments:
•Bookings represent total orders received from customers in the current reporting period and exclude de-bookings related to orders received in prior periods, if any. This metric is an important measure of performance and an indicator of revenue order trends.
•Book-to-bill is a ratio of the amount of bookings received from customers during a period divided by the amount of revenue recorded during that same period. This metric is a useful indicator of demand.
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Engineered Products
Our Engineered Products segment provides a wide range of equipment, components, software, solutions and services to the vehicle aftermarket, aerospace and defense, industrial winch and hoist, precision soldering and fluid dispensing end-markets.
Years Ended December 31, % Change
Operational metric:
Components of revenue decline:
Organic decline (6.6) %
Acquisitions 0.4 %
Dispositions (4.3) %
Foreign currency translation 0.8 %
Total revenue decline (9.7) %
2025 Versus 2024
Engineered Products revenue for the year ended December 31, 2025 decreased $116.6 million, or 9.7%, compared to the prior year due to an organic revenue decline of 6.6% and a disposition-related decline of 4.3%, partially offset by a favorable impact from foreign currency translation of 0.8% and acquisition-related growth of 0.4%. The disposition-related decline was due to the divestiture of De-Sta-Co in the first quarter of 2024. Customer pricing favorably impacted revenue in 2025 by approximately 2.8%.
The organic revenue decline was primarily due to lower volumes in our vehicle service business, partially offset by pricing actions and favorable demand trends in aerospace and defense components and software. We expect improvements in organic growth trends in 2026 driven by favorable demand trends in several of our key end markets, most notably in aerospace and defense, as well as an improving demand outlook in vehicle service.
Engineered Products segment earnings for the year ended December 31, 2025 decreased $14.0 million, or 6.0%, compared to the prior year. The decrease was primarily due to disposition-related impacts and lower volumes in vehicle service, partially offset by favorable price versus cost dynamics, productivity and cost management initiatives and benefits from restructuring actions. Segment margin increased to 20.0% from 19.2% in the prior year.
Overall, bookings for the year ended December 31, 2025 decreased $76.2 million, or 6.5%, compared to the prior year. The bookings decline was due to the above mentioned divestiture and reduced demand in our vehicle service business, partially offset by strength in aerospace and defense. Segment book-to-bill was 1.01.
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Clean Energy & Fueling
Our Clean Energy & Fueling segment provides components, equipment, software solutions and services enabling safe and reliable storage, transport, dispensing, and remote monitoring of traditional and clean fuels (including liquefied natural gas, hydrogen, and electric vehicle charging), cryogenic gases, and other hazardous substances along the supply chain, and safe and efficient operation of convenience retail, retail fueling and vehicle wash establishments.
Years Ended December 31, % Change
Operational metric:
Components of revenue growth:
Organic growth 4.6 %
Acquisitions 5.1 %
Foreign currency translation 0.3 %
Total revenue growth 10.0 %
2025 Versus 2024
Clean Energy & Fueling revenue for the year ended December 31, 2025 increased $193.7 million, or 10.0%, compared to the prior year, attributable to acquisition-related growth of 5.1%, organic growth of 4.6% and a favorable impact from foreign currency translation of 0.3%. Acquisition-related growth was primarily driven by the acquisition of Marshall Excelsior Company in the third quarter of 2024. Customer pricing favorably impacted revenue in 2025 by approximately 1.7%.
The organic revenue growth was primarily driven by pricing actions and favorable demand trends in our above and below-ground retail fueling, fluid transport, and clean energy components businesses. We expect positive demand trends to continue in 2026 driven by a favorable outlook across major end markets.
Clean Energy & Fueling segment earnings for the year ended December 31, 2025 increased $58.1 million, or 16.1%, compared to the prior year. The increase was primarily driven by volume growth, favorable price versus cost dynamics, the positive impact from acquisitions and benefits from restructuring actions. Segment margin increased to 19.6% from 18.6% in the prior year.
Overall bookings for the year ended December 31, 2025 increased 11.8% compared to the prior year. The bookings growth was primarily driven by acquisition-related growth in clean energy platforms and demand in North America above and below-ground retail fueling equipment, partially offset by reduced vehicle wash orders. Segment book-to-bill was 1.02.
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Imaging & Identification
Our Imaging & Identification segment supplies precision marking and coding, product traceability, brand protection and digital textile printing equipment, as well as related consumables, software and services to the global packaged and consumer goods, pharmaceutical, industrial manufacturing, textile and other end-markets.
Years Ended December 31, % Change
Operational metric:
Components of revenue growth:
Organic growth 1.9 %
Acquisitions 0.1 %
Foreign currency translation 1.2 %
Total revenue growth 3.2 %
2025 Versus 2024
Imaging & Identification revenue for the year ended December 31, 2025 increased $36.3 million, or 3.2% compared to the prior year, comprised of organic growth of 1.9%, a favorable impact from foreign currency translation of 1.2% and acquisition-related growth of 0.1%. Customer pricing favorably impacted revenue in 2025 by approximately 3.1%.
The organic revenue growth was primarily driven by pricing, along with volume growth in core marking and coding equipment and serialization software. We expect demand trends to remain favorable in 2026 driven by solid demand trends across the segment.
Imaging & Identification segment earnings for the year ended December 31, 2025 increased $13.0 million, or 4.3%, compared to the prior year. This increase was primarily driven by favorable price versus cost dynamics and productivity initiatives. Segment margin increased to 26.8% from 26.5% in the prior year.
Overall bookings for the year ended December 31, 2025 increased 2.7% compared to the prior year. The bookings increase was primarily driven by our core marking and coding business. Segment book-to-bill was 1.00.
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Pumps & Process Solutions
Our Pumps & Process Solutions segment manufactures specialty pumps and flow meters, fluid transfer connectors, highly engineered precision components, instruments and digital controls for rotating and reciprocating machines, polymer processing equipment, measurement, inspection, and control technologies, serving single-use biopharmaceutical production, diversified industrial manufacturing applications, chemical production, plastics and polymer processing, midstream and downstream oil and gas, clean energy markets, thermal management, wire and cable, food and beverage, semiconductor production and medical applications and other end-markets.
Years Ended December 31, % Change
Operational metric:
Components of revenue growth:
Organic growth 6.7 %
Acquisitions 5.2 %
Foreign currency translation 1.5 %
Total revenue growth 13.4 %
2025 Versus 2024
Pumps & Process Solutions revenue for the year ended December 31, 2025 increased $254.1 million, or 13.4%, compared to the prior year, attributable to organic growth of 6.7%, acquisition-related growth of 5.2% and a favorable impact from foreign currency translation of 1.5%. Acquisition-related growth was driven by the acquisitions of Cryogenic Machinery Corp. ("Cryo-Mach") in the first quarter of 2025 and Sikora AG ("Sikora") and ipp Pump Products GmbH ("ipp") in the second quarter of 2025. Customer pricing favorably impacted revenue by approximately 1.9% in 2025.
The organic revenue growth was primarily driven by single-use biopharma components, thermal connectors used in liquid cooling of data centers, as well as precision components and digital controls for midstream natural gas compression and power generation, partially offset by expected declines in our polymer processing equipment business as customers shift focus to optimizing the significant capacity investments made over the last several years. We expect demand conditions to remain constructive across end markets in 2026.
Pumps & Process Solutions segment earnings for the year ended December 31, 2025 increased $115.0 million, or 21.4%, compared to the prior year. The increase was primarily driven by higher volumes, productivity initiatives, favorable portfolio mix and the impact from acquisitions. Segment margin increased to 30.3% from 28.3% in the prior year.
Overall bookings for the year ended December 31, 2025 increased 9.9% as compared to the prior year. The bookings increase was primarily driven by positive demand trends in biopharmaceutical end markets, growth in high performance computing and data center application demand and the favorable impact from acquisitions. Segment book-to-bill was 0.95.
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Climate & Sustainability Technologies
Our Climate & Sustainability Technologies segment is a provider of innovative and energy-efficient equipment, components, solutions, services and parts for the commercial refrigeration, heating and cooling and beverage can-making equipment end-markets.
Years Ended December 31, % Change
Operational metric:
Components of revenue decline:
Organic decline (2.1) %
Foreign currency translation 0.8 %
Total revenue decline (1.3) %
2025 Versus 2024
Climate & Sustainability Technologies revenue for the year ended December 31, 2025 decreased $19.8 million, or 1.3%, compared to the prior year, reflecting an organic revenue decline of 2.1%, partially offset by a favorable impact from foreign currency translation of 0.8%. Customer pricing favorably impacted revenue in 2025 by approximately 0.6%.
The organic revenue decline was primarily due to project timing in retail refrigeration door cases and services, partially offset by continued strong demand for low-GWP CO2 refrigerant systems and improving demand across beverage can-making and heat exchanger applications. We expect demand conditions to trend favorably in 2026 primarily driven by continued strong demand in CO2 refrigerant systems, expected recovery in refrigerated door cases and services, as well as a favorable outlook for heat exchangers due to accelerating demand in data center cooling applications and continued improvement in European residential heat pumps.
Climate & Sustainability Technologies segment earnings for the year ended December 31, 2025 increased $14.8 million, or 5.9%, compared to the prior year. The segment earnings increase was primarily driven by higher heat exchanger and beverage can-making volumes, productivity and cost management initiatives and the favorable mix impact from CO2 refrigerant systems growth. Segment margin increased to 17.0% from 15.9% in the prior year.
Overall, bookings for the year ended December 31, 2025 increased 6.0% compared to the prior year. The bookings increase was driven by favorable heat exchanger and CO2 refrigerant systems demand trends. Segment book-to-bill was 1.07.
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Reconciliation of Segment Earnings to Earnings from Continuing Operations
Years Ended December 31,
Earnings from Continuing Operations:
Segment earnings:
(1) Purchase accounting expenses are primarily comprised of amortization of intangible assets.
(2) Restructuring and other costs relate to actions taken for headcount reductions, facility consolidations and site closures, product line exits, and other asset charges.
(3)Gain on dispositions includes post-closing adjustments; see Note 4 — Discontinued and Disposed Operations in the consolidated financial statements in Item 8 of this Form 10-K for further details.
(4) Certain expenses are maintained at the corporate level and not allocated to the segments. These expenses include executive and functional compensation costs, non-service pension costs, non-operating insurance expenses, shared business services and digital and IT overhead costs, deal related expenses and various administrative expenses relating to the corporate headquarters.
Restructuring and Other Costs (Benefits)
Restructuring and other costs are not presented in our segment earnings because these costs are excluded from the segment operating performance measure reviewed by management. During the year ended December 31, 2025, restructuring charges of $56.7 million were primarily related to exit costs and headcount reductions across all segments, most notably within the Climate & Sustainability Technologies and Clean Energy & Fueling segments. These restructuring programs were initiated in 2024 and 2025 and the Company will continue to make proactive adjustments to its cost structure to align with current demand trends. Additional programs, beyond the scope of the announced programs, may be implemented during 2026 with related restructuring charges. Other costs, net of $21.2 million for the year ended December 31, 2025, include $4.0 million in costs associated with a product line exit and $6.3 million in costs associated with a footprint reduction, both in our Climate & Sustainability Technologies segment. These restructuring and other charges were primarily recorded in cost of goods and services and selling, general and administrative expenses in the consolidated statement of earnings.
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We recorded the following restructuring and other costs for the year ended December 31, 2025:
During the year ended December 31, 2024, restructuring charges of $69.8 million were primarily related to headcount reductions and product line and other exit costs in the Clean Energy & Fueling and Climate & Sustainability Technologies segments. These restructuring programs were initiated in 2023 and 2024 and were undertaken in light of current market conditions. Other costs, net of $15.2 million were primarily due to non-cash asset impairment charges and reorganization costs in the Climate & Sustainability Technologies and Imaging & Identification segments, respectively. These restructuring and other charges were primarily recorded in cost of goods and services and selling, general and administrative expenses in the consolidated statement of earnings.
We recorded the following restructuring and other costs for the year ended December 31, 2024:
See Note 11 — Restructuring Activities in the consolidated financial statements in Item 8 of this Form 10-K for additional details regarding our recent restructuring activities.
Purchase Accounting Expenses
Purchase accounting expenses are primarily comprised of amortization of intangible assets. These expenses are not presented in our segment earnings because they are excluded from the segment operating performance measure reviewed by management. These expenses are as follows:
Years Ended December 31,
Purchase accounting expenses
Climate & Sustainability Technologies 17,665 19,977
(1) Purchase accounting expenses in our Pumps & Process Solutions segment increased by $26.9 million for the year ended December 31, 2025 from the prior year, primarily due to the acquisition of Sikora in Q2 2025.
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FINANCIAL CONDITION
We assess our liquidity in terms of our ability to generate cash to fund our operating, investing and financing activities. Significant factors affecting liquidity are cash flows generated from operating activities, capital expenditures, acquisitions, dispositions, dividends, repurchase of outstanding shares, adequacy of available commercial paper and bank lines of credit and the ability to attract long-term capital with satisfactory terms. We generate substantial cash from the operations of our businesses and remain in a strong financial position, with sufficient liquidity available for upcoming debt maturities and for reinvestment in existing businesses and strategic acquisitions.
Cash Flow Summary
The following table is derived from our consolidated statements of cash flows:
Years Ended December 31,
Cash Flows from Operations (in thousands) 2025 2024
Net cash flows provided by (used in):
Operating Activities
Cash flow from operating activities for the year ended December 31, 2025 increased by $250.2 million compared to 2024. This increase was primarily driven by higher operating earnings during the year ended December 31, 2025 and timing of tax payments on prior year dispositions.
Adjusted Working Capital: We believe adjusted working capital (a non-GAAP measure calculated as accounts receivable, plus inventory, less accounts payable) provides a meaningful measure of liquidity by showing changes caused by operational results. The following table provides a calculation of adjusted working capital:
Adjusted Working Capital (in thousands) December 31, 2025 December 31, 2024
Adjusted working capital increased by $117.4 million, or 7.1%, to $1.8 billion at December 31, 2025, which reflected an increase in accounts receivable of $17.1 million, an increase in inventory of $127.9 million and an increase in accounts payable of $27.7 million. These amounts include the effects of acquisitions and foreign currency translation. The increase in adjusted working capital versus year-end 2024 is primarily driven by higher inventory purchases to support the increase in order rates.
Investing Activities
Cash flow from investing activities is derived from cash inflows from proceeds from dispositions, offset by cash outflows for acquisitions and capital expenditures. The majority of the activity in investing activities was comprised of the following:
•Proceeds from dispositions: We received net proceeds of $6.0 million and $93.0 million in 2025 and 2024, respectively, related to the sale of a minority owned equity method investment in the third quarter of 2024 within the Climate & Sustainability Technologies segment. In 2024, we also received net proceeds of $675.9 million from the sale of De-Sta-Co, an operating company within the Engineered Products segment. See Note 4 — Discontinued and Disposed Operations in the consolidated financial statements in Item 8 of this Form 10-K for additional information.
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•Acquisitions: In 2025, we deployed approximately $663.3 million, net of cash acquired to acquire three businesses within the Pumps & Process Solutions segment and one business within the Clean Energy & Fueling segment. In comparison, we acquired eight businesses in 2024 for total consideration of $635.3 million, net of cash acquired. See Note 3 — Acquisitions in the consolidated financial statements in Item 8 of this Form 10-K for additional information.
•Capital spending: Capital expenditures increased $52.7 million to $220.3 million in 2025 compared to $167.5 million in 2024, primarily to support growth initiatives, productivity and new product launches.
We anticipate that capital expenditures and any additional acquisitions we make in 2026 will be funded from available cash and internally generated funds and, if necessary, through the issuance of commercial paper, or by accessing the public debt or equity markets. We estimate capital expenditures in 2026 to range from $190.0 million to $210.0 million.
Financing Activities
Cash flow from financing activities generally relates to the use of cash for purchases of our common stock and payment of dividends, offset by net borrowing activity. The majority of financing activity was attributed to the following:
•Repurchase of common stock, including accelerated share repurchase program: During 2025, the Company received initial delivery of 2,334,010 shares, representing a substantial majority of the shares expected to be retired over the course of the 2025 ASR Program for $500.0 million. Exclusive of the 2025 ASR Program, the Company repurchased 200,000 shares of common stock at a total cost of $40.7 million. During the year ended December 31, 2024, the Company received a total of 2,869,282 shares upon completion of the 2024 ASR Program for $500.0 million.
•Long-term debt, commercial paper and other short-term borrowings, net: During 2025, we issued €550.0 million of 3.50% euro-denominated notes due 2033 ("2033 Notes"). The proceeds of €546.6 million from the issuance of the 2033 Notes, net of discounts and issuance costs, were used for general corporate purposes. On November 15, 2025, the outstanding 3.150% notes with a principal value of $400.0 million matured. The repayment of the notes at maturity was funded by the Company's existing cash balances. There were no repayments or issuances of long-term debt in 2024. During 2025, we used $0.6 million to pay off other short-term borrowings. In 2024, we used $467.6 million to pay off primarily commercial paper borrowings.
•Dividend payments: Total dividend payments to common shareholders were $283.0 million in 2025 and $283.1 million in 2024. Our dividends paid per common share increased 1% to $2.07 per share in 2025 compared to $2.05 per share in 2024. The number of common shares outstanding decreased from 2024 to 2025, as share repurchases exceeded share issuances.
Cash Flows from Discontinued Operations
Net cash (used in) provided by discontinued operations for the years end December 31, 2025 and 2024 amounted to $(14.2) million and $1.6 billion, respectively. Cash flows from discontinued operations generated in 2024 primarily relate to cash provided by investing activities of $2.0 billion, which is comprised primarily of proceeds from the sale of ESG and partially offset by cash used in operating activities of $339.5 million, comprised of $439.9 million in tax payments made related to the gain on disposition, partially offset by cash flows from ESG's operating results.
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Liquidity and Capital Resources
Free Cash Flow
In addition to measuring our cash flow generation and usage based upon the operating, investing and financing classifications included in the consolidated statements of cash flows, we also measure free cash flow (a non-GAAP measure) which represents net cash provided by operating activities minus capital expenditures. Free cash flow as a percentage of revenue equals free cash flow divided by revenue. Free cash flow as a percentage of earnings from continuing operations equals free cash flow divided by earnings from continuing operations. We believe that free cash flow is an important measure of liquidity because it provides management and investors a measurement of cash generated from operations that may be available for mandatory payment obligations and investment opportunities, such as funding acquisitions, paying dividends, repaying debt and repurchasing our common stock.
The following table reconciles our free cash flow to cash flow provided by operating activities:
Years Ended December 31,
Free Cash Flow (dollars in thousands) 2025 2024
Cash flow from operating activities as a percentage of revenue 16.5 % 14.0 %
Free cash flow as a percentage of revenue 13.8 % 11.9 %
For the year ended December 31, 2025, we generated free cash flow of $1.1 billion, representing 13.8% of revenue and 101.9% of earnings from continuing operations. Free cash flow increased by $197.4 million compared to 2024, primarily driven by higher operating earnings and the timing of tax payments on prior year dispositions, partially offset by higher capital expenditures. The increases in cash flow from operating activities and free cash flow as percentages of earnings from continuing operations are due primarily to the gain on disposition of De-Sta-Co impacting the prior year. See Note 4 — Discontinued and Disposed Operations in the consolidated financial statements in Item 8 of this Form 10-K for additional information.
Capitalization
We use commercial paper borrowings for general corporate purposes, including the funding of acquisitions and the repurchase of our common stock. As of December 31, 2025, we maintained $1.0 billion five-year and $500.0 million 364-day unsecured revolving credit facilities (together, the "Credit Agreements") with a syndicate of banks which expire April 6, 2028 and April 2, 2026, respectively. The Company may elect to extend the maturity date of any loans under the 364-day credit facility until April 2, 2027, subject to conditions specified therein. The Credit Agreements are designated as a liquidity back-stop for the Company's commercial paper program and also are available for general corporate purposes.
At the Company's election, loans under the Credit Agreements will bear interest at a base rate plus an applicable margin. The Credit Agreements require the Company to pay facility fees and impose various restrictions on the Company such as, among other things, a requirement to maintain an interest coverage ratio of consolidated EBITDA to consolidated net interest expense of not less than 3.0 to 1. The Company was in compliance with all covenants in the Credit Agreements and other long-term debt covenants at December 31, 2025 and had an interest coverage ratio of consolidated EBITDA to consolidated net interest expense of 48.8 to 1. We are not aware of any potential impairment to our liquidity and expect to remain in compliance with all of our debt covenants.
We also have a current shelf registration statement filed with the SEC that allows for the issuance of additional debt securities that may be utilized in one or more offerings on terms to be determined at the time of the offering. Net proceeds of any offering would be used for general corporate purposes, including repayment of existing indebtedness, capital expenditures and acquisitions.
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On November 12, 2025, the Company issued €550.0 million of 3.50% euro-denominated notes due 2033. The proceeds of €546.6 million from the issuance of the 2033 Notes, net of discounts and issuance costs, were used for general corporate purposes.
On November 15, 2025, the outstanding 3.150% notes with a principal value of $400.0 million matured. The repayment of the notes at maturity was funded by the Company's existing cash balances.
At December 31, 2025, our cash and cash equivalents totaled $1.7 billion, of which approximately $447.8 million was held outside the United States. At December 31, 2024, our cash and cash equivalents totaled $1.8 billion, of which $300.5 million was held outside the United States. Cash and cash equivalents are held primarily in bank deposits with highly rated banks. We regularly hold cash in excess of near-term requirements in bank deposits or invest the funds in government money market instruments or short-term investments, which consist of investment grade time deposits with original maturity dates at the time of purchase of no greater than three months.
For the year ended December 31, 2025, the Company completed four business acquisitions for total consideration of $665.3 million, net of cash acquired and inclusive of contingent consideration of $2.0 million and measurement period adjustments. See Note 3 — Acquisitions in the consolidated financial statements in Item 8 of this Form 10-K for additional information.
We utilize the net debt to net capitalization calculation (a non-GAAP measure) to evaluate our capital structure and assess our overall financial leverage and capacity and believe the calculation is useful to investors for the same reasons. Net debt represents total debt minus cash and cash equivalents. Net capitalization represents net debt plus stockholders' equity. The following table provides a calculation of net debt to net capitalization from the most directly comparable GAAP measures:
Short-term borrowings and current portion of long-term debt $ 706,677 $ 400,056
Net debt to net capitalization 18.2 % 13.5 %
Our net debt to net capitalization ratio increased to 18.2% at December 31, 2025 compared to 13.5% at December 31, 2024. Net debt increased $566.6 million during the period primarily due to the issuance of the 2033 Notes and the increase in value of the euro-denominated debt resulting from foreign currency translation adjustments offset by a decrease in cash and cash equivalents from acquisition-related investments and repayment of the current portion of long-term debt. Stockholders' equity increased for the period as a result of current earnings of $1.1 billion, partially offset by share repurchases, including shares repurchased under the ASR Program, and dividends paid during the period.
Our ability to obtain debt financing at comparable risk-based interest rates is partly a function of our existing cash flow-to-debt and debt-to-capitalization levels as well as our current credit standing. Set forth below are our credit ratings, as of December 31, 2025, which were independently developed by the respective credit agencies. The Moody's rating and outlook were issued in December 2018, and the Standard & Poor's rating was issued in December 2017 and the outlook was most recently revised in May 2021. The ratings and outlooks from both agencies were affirmed in 2025.
Short-Term Rating Long-Term Rating Outlook
Moody's P-2 Baa1 Stable
Standard & Poor's A-2 BBB+ Stable
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As of December 31, 2025, we had approximately $230.0 million outstanding in letters of credit, surety bonds, and performance and other guarantees which primarily expire on various dates through 2035. These letters of credit and bonds are primarily issued as security for insurance, warranty and other performance obligations. In general, we would only be liable for the amount of these guarantees in the event of default in the performance of our obligations, the probability of which is believed to be remote.
As of December 31, 2025, our estimate of future interest payments on long-term debt, including the current portion, is $927.1 million.
Operating cash flow and access to capital markets are expected to satisfy our various cash flow requirements, including acquisitions, capital expenditures, purchase obligations, debt maturities and lease obligations. Acquisition spending and/or share repurchases could potentially increase our debt.
We believe that existing sources of liquidity are adequate to meet anticipated funding needs at current risk-based interest rates for the foreseeable future.
Financial Instruments and Risk Management
The diverse nature of our businesses' activities necessitates the management of various financial and market risks, including those related to changes in interest rates, foreign currency exchange rates and commodity prices. We periodically use derivative and non-derivative financial instruments to manage some of these risks. We do not hold or issue derivative instruments for trading or speculative purposes. We are exposed to credit loss in the event of nonperformance by counterparties to our financial instrument contracts; however, nonperformance by these counterparties is considered unlikely as our policy is to contract with highly-rated, diversified counterparties.
Interest Rate Exposure
As of December 31, 2025, and for the years ended December 31, 2025 and 2024, we did not have any open interest rate swap contracts; however, we may in the future enter into interest rate swap agreements to manage our exposure to interest rate changes. We issue commercial paper, which exposes us to changes in variable interest rates; however, maturities are typically three months or less so a change in rates over this period would not have a material impact on our pre-tax earnings.
We consider our current risk related to market fluctuations in interest rates to be minimal since our debt is long-term and fixed rate in nature. Generally, the fair market value of fixed-interest rate debt will increase as interest rates fall and decrease as interest rates rise. A 100 basis point increase in market interest rates would decrease the 2025 year-end fair value of our long-term debt by approximately $156.7 million. However, since we have no plans to repurchase our outstanding fixed-rate instruments before their maturities, the impact of market interest rate fluctuations on our long-term debt does not affect our results of operations or financial position.
Foreign Currency Exposure
We conduct business in various non-U.S. countries, including Canada, substantially all of the European countries, Mexico, Brazil, China, India and other Asian countries. Therefore, we have foreign currency risk relating to receipts from customers, payments to suppliers and intercompany transactions denominated in foreign currencies. We will occasionally use derivative and non-derivative financial instruments to offset such risks, when it is believed that the exposure will not be limited by our normal operating and financing activities. We have formal policies to mitigate risk in this area by using fair value and/or cash flow hedging programs.
Changes in the value of the currencies of the countries in which we operate affect our results of operations, financial position and cash flows when translated into U.S. dollars, our reporting currency. The strengthening of the U.S. dollar could result in unfavorable translation effects as the results of foreign operations are translated into U.S. dollars. We have generally accepted the exposure to exchange rate movements relative to our investment in non-U.S. operations. We may, from time to time, for a specific exposure, enter into fair value hedges.
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Additionally, we have designated the €600 million, €500 million and €550 millionof euro-denominated notes issued November 9, 2016, November 4, 2019 and November 12, 2025, respectively, as a hedge of our net investment in euro-denominated operations. Due to the high degree of effectiveness between the hedging instruments and the exposure being hedged, fluctuations in the value of the euro-denominated debt due to exchange rate changes are offset by changes in the net investment. Accordingly, changes in the value of the euro-denominated debt are recognized in the cumulative translation adjustment section of other comprehensive income to offset changes in the value of the net investment in euro-denominated operations. Due to the fluctuations of the euro relative to the U.S. dollar, the U.S. dollar equivalent of this debt increases or decreases, resulting in the recognition of a pre-tax loss of $154.8 million and a pre-tax gain of $66.8 million in other comprehensive earnings (loss) for the years ended December 31, 2025, and 2024, respectively.
Commodity Price Exposure
Some of our businesses are exposed to volatility in the prices of certain commodities, such as aluminum, steel, copper and various precious metals, among others. Our primary exposure to commodity pricing volatility relates to the use of these materials in purchased component parts or the purchase of raw materials. In some cases, we maintain longer-term index-based contracts on raw materials and component parts and centrally drive an ongoing effort to minimize risk proactively. However, we are prone to exposure as these contracts expire.
Critical Accounting Estimates
Revenue Recognition
Description
The majority of our revenue is generated through the manufacture and sale of a broad range of specialized products and components, with revenue recognized upon transfer of title and risk of loss, which is generally upon shipment. In limited cases, our revenue arrangements with customers require delivery, installation, testing, certification, or other promises to deliver goods or services that may impact the timing or pattern of revenue recognized. The remainder of our revenue is recognized over time, which is primarily related to services performed and specialized goods manufactured.
Judgments and uncertainties involved in the estimate
A significant level of judgment is involved in the identification of performance obligations for contracts with multiple-element arrangements and the allocation of the transaction price based on the relative stand-alone selling price. The identification requires judgment to identify all distinct goods or services and also the appropriate timing of revenue recognition for each distinct good or service based on the transfer of control to the customer. We estimate the relative stand-alone selling price for performance obligations if not directly observable. A significant level of judgment is also involved in the selection of the appropriate method to recognize revenue over time.
Effect if actual results differ from assumptions
To the extent the judgments and estimates used or the method selected to recognize revenue over time differ or change in a future period, a change to revenue and the related assets and liabilities could impact our financial position or results of operations. The judgments, estimates, and methods used have been applied consistently over the last three fiscal years.
Valuation of Acquired Intangible Assets
Description
Intangible assets represent a significant portion of our consolidated balance sheet as a result of current and past acquisitions. Intangible assets primarily include customer intangibles, trademarks, unpatented technologies, and patents. The fair value of acquired intangible assets is determined using widely accepted valuation techniques, and the Company may engage third-party appraisal firms to assist with the determination of fair values of significant intangible assets. The valuation of intangible assets is performed at the time of acquisition and may change during the acquisition measurement period until the valuation is finalized. The fair value of finite-lived intangible assets is subsequently amortized over the estimated useful life.
Judgments and uncertainties involved in the estimate
The significant assumptions used in the valuation of customer intangibles include future cash flows, customer attrition rate, and discount rate. The significant assumptions for the valuation of trademarks include future revenues, royalty rate, and
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discount rate. The significant assumptions for the valuation of unpatented technologies and patents include future revenues, obsolescence rate, royalty rate, and discount rate. The assumptions and estimates used in the valuation of these intangible assets are based on several factors, including historical experience with similar businesses and industries and information obtained from operating company management.
Effect if actual results differ from assumptions
While we believe the assumptions used in our valuation of intangible assets are reasonable and representative of expected results, actual results may differ from these assumptions. While the assumptions used for each acquisition are dependent on the acquired company, the assumptions have been applied using a consistent methodology over the last three fiscal years.
Goodwill Impairment
Description
Goodwill is the difference between the consideration transferred and the fair value of net assets acquired. Goodwill is tested for impairment on an annual basis during the fourth quarter, or more frequently when indicators of impairment exist, or when a change in the composition of reporting units for goodwill occurs for other reasons, such as a disposition or a change in segments. The impairment test involves a comparison of the fair value of each reporting unit with its carrying value. Fair value reflects the price a potential market participant would be willing to pay for the reporting unit in an arms-length transaction.
Judgments and uncertainties involved in the estimate
The significant assumptions in the fair value analysis of goodwill are the estimated future cash flows and the discount rate. The determination of future cash flows involves significant judgment and is primarily driven by forecasted revenue growth rates and EBITDA margins for the reporting unit. These assumptions are developed based on the reporting unit’s expected future performance, which considers historical performance. We use a discount rate commensurate with the inherent risks in our internally developed forecasts of future cash flows. The discount rate may also fluctuate due to market conditions such as rising interest rates.
Effect if actual results differ from assumptions
While we believe the assumptions used in our annual impairment analysis are reasonable and representative of expected results and reflective of a market participant, actual results may differ from these assumptions. The methodology used for the goodwill impairment test has remained consistent over the last three fiscal years.
Valuation of Pension Benefit Obligation
Description
The pension benefit obligation is actuarially determined in accordance with GAAP and is impacted by assumptions used to estimate the obligation, namely the discount rate. Annually, we review the actuarial assumptions used and compare the assumptions to third-party benchmarks to ensure that the selected assumptions accurately account for our future pension benefit obligations.
Judgments and uncertainties involved in the estimate
Our discount rate assumptions are determined by developing a yield curve based on high quality corporate bonds with maturities matching the plans’ expected benefit payment streams. The plans’ expected cash flows are then discounted by the resulting year-by-year discount rates. The 2025 weighted-average discount rate used to measure our pension benefit obligations for non-US plans increased to 2.89% from 2.64% in 2024. The U.S. Plan discount rate decreased to 5.40% from 5.70% in 2024. The change in both the non-US plans and the U.S. Plan were driven by changes in corporate bond yields over the period.
Effect if actual results differ from assumptions
A 25-basis point decrease in the discount rates used for these plans would have increased pension benefit obligations by approximately $15.5 million from the amount recorded at December 31, 2025. The methodology used for the valuation of the pension benefit obligation has remained consistent over the last three fiscal years.
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Recoverability of Deferred Income Tax Assets and Unrecognized Tax Benefits
Description
We operate in and are subject to income taxes in various jurisdictions and are subject to ongoing audits by federal, state, and non-U.S. tax authorities. Significant judgment is required in determining the realizability of deferred tax assets and evaluating unrecognized tax benefits.
We have significant amounts of deferred tax assets that are evaluated for recoverability and valued accordingly. Management evaluates the realizability of deferred income tax assets for each jurisdiction in which the Company operates. We record valuation allowances to reduce the carrying value of deferred tax assets to amounts that we expect are more likely than not to be realized.
The provision for unrecognized tax benefits provides a recognition threshold and measurement attribute for determining the financial statement tax benefits taken or expected to be taken in a tax return and disclosure requirements regarding uncertainties in income tax positions. The tax position is measured at the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement.
Judgments and uncertainties involved in the estimate
In assessing the adequacy of a recorded valuation allowance, we consider all positive and negative evidence, including the scheduled reversal of deferred tax liabilities, historical and projected future taxable income, and tax planning strategies. Additionally, significant judgment is required in the identification and measurement of unrecognized tax benefits. Our liability for unrecognized tax benefits contains uncertainties because management is required to make assumptions and to apply judgment to estimate the exposures associated with our various filing positions.
Effect if actual results differ from assumptions
Although we believe that our judgments and estimates are reasonable, actual results could differ and result in additional tax expense or benefit. If we determine a valuation allowance should be recognized to reduce the carrying value of a deferred tax asset or a liability for an unrecognized tax benefit needs to be recorded, the adjustment would result in a change to tax expense in the period such determination is made. We have not made any material changes in the process we use to assess valuation allowances and unrecognized tax benefits over the last three fiscal years.
Contingencies
Description
Liabilities are established for environmental and legal contingencies at both the business and corporate levels. A significant amount of judgment and the use of estimates are required to quantify our ultimate exposure in these matters.
Judgments and uncertainties involved in the estimate
The valuation of liabilities for these contingencies is reviewed on a quarterly basis to ensure that we have accrued the proper level of expense. The liability balances are adjusted to account for changes in circumstances for ongoing issues and the establishment of additional liabilities for emerging issues. Estimates used in the valuations include the probable outcome of such proceedings, the costs and expenses reasonably expected to be incurred and currently accrued to-date and consider the availability and extent of insurance coverage. Such liability balances contain uncertainties due to new developments regarding the facts and circumstances of each proceeding, changes in applicable laws and regulations, and other future events and decisions by third parties that may impact the ultimate resolution of a proceeding.
Effect if actual results differ from assumptions
Although we believe that the amount accrued to-date is adequate, future changes in circumstances could impact these determinations, and we may be exposed to a material loss. For example, to the extent we prevail in matters for which a liability has been established or are required to pay amounts in excess of our established liability, our contingent liability in a given financial statement period could be materially affected. However, the Company does not believe that it is currently involved in any legal proceedings which, individually or in the aggregate, could have a material effect on its financial position, results of operations, or cash flows.
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Recent Accounting Standards
See Note 1 — Description of Business and Summary of Significant Accounting Policies in the consolidated financial statements in Item 8 of this Form 10-K for a discussion of recent accounting pronouncements and recently adopted accounting standards.
Non-GAAP Disclosures
In an effort to provide investors with additional information regarding our results as determined by GAAP, we also disclose non-GAAP information, which we believe provides useful information to investors. Free cash flow, free cash flow as a percentage of revenue, free cash flow as a percentage of earnings from continuing operations, net debt, net capitalization, net debt to net capitalization ratio, adjusted working capital, and organic revenue growth are not financial measures under GAAP and should not be considered as a substitute for cash flows from operating activities, debt or equity, working capital or revenue as determined in accordance with GAAP, and they may not be comparable to similarly titled measures reported by other companies.
Reconciliations and comparisons to non-GAAP measures can be found above in this Item 7, MD&A.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The information required by this section is incorporated by reference to the section, "Financial Instruments and Risk Management", included within the MD&A in Item 7.
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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Page
50 Management's Report on Internal Control Over Financial Reporting
51 Report of Independent Registered Public Accounting Firm (PCAOB ID 238)
53 Consolidated Statements of Earnings
54 Consolidated Statements of Comprehensive Earnings
55 Consolidated Balance Sheets
56 Consolidated Statements of Stockholders' Equity
57 Consolidated Statements of Cash Flows
58 Notes to Consolidated Financial Statements
63 Note 2 - Revenue
65 Note 3 - Acquisitions
70 Note 4 - Discontinued and Disposed Operations
71 Note 5 - Inventories, net
71 Note 6 - Property, Plant and Equipment, net
72 Note 7 - Leases
73 Note 8 - Credit Losses
74 Note 9 - Goodwill and Other Intangible Assets
75 Note 10 - Other Accrued Expenses and Other Liabilities
76 Note 11 - Restructuring Activities
77 Note 12 - Borrowings
79 Note 13 - Financial Instruments
81 Note 14 - Income Taxes
85 Note 15 - Equity and Cash Incentive Program
88 Note 16 - Commitments and Contingent Liabilities
89 Note 17 - Employee Benefit Plans
95 Note 18 - Accumulated Other Comprehensive Earnings (Loss)
96 Note 19 - Segment Information
100 Note 20 - Earnings per Share
100 Note 21 - Stockholders' Equity
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MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
The management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f).
The Company's management assessed the effectiveness of the Company's internal control over financial reporting as of December 31, 2025. In making this assessment, the Company's management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control — Integrated Framework (2013).
Based on its assessment under the criteria set forth in Internal Control — Integrated Framework (2013), management concluded that, as of December 31, 2025, the Company's internal control over financial reporting was effective to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP.
The effectiveness of the Company's internal control over financial reporting as of December 31, 2025 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which appears herein.
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Report of Independent Registered Public Accounting Firm
To the Board of Directors and Stockholders of Dover Corporation
Opinions on the Financial Statements and Internal Control over Financial Reporting
We have audited the accompanying consolidated balance sheets of Dover Corporation and its subsidiaries (the "Company") as of December 31, 2025 and 2024, and the related consolidated statements of earnings, of comprehensive earnings, of stockholders’ equity and of cash flows for each of the three years in the period ended December 31, 2025, including the related notes (collectively referred to as the "consolidated financial statements"). We also have audited the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.
Basis for Opinions
The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.
Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
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Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Critical Audit Matters
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Goodwill Impairment Test
As described in Notes 1 and 9 to the consolidated financial statements, the Company’s consolidated goodwill balance was $5.43 billion as of December 31, 2025. Management performs a goodwill impairment test annually in the fourth quarter, or more frequently if events or circumstances indicate that goodwill may be impaired, when some portion but not all of a reporting unit is disposed of or classified as assets held for sale, or when a change in the composition of reporting units occurs for other reasons. The quantitative test compares the fair value of a reporting unit with its carrying amount, including goodwill. Management uses an income-based valuation method, determining the present value of estimated future cash flows, to estimate the fair value of a reporting unit. As disclosed by management, the significant assumptions in the fair value analysis of goodwill are the estimated future cash flows, which are primarily driven by forecasted revenue growth rates, EBITDA margins, and the discount rate. These assumptions are developed by management based on the reporting unit’s expected future performance, which considers historical performance.
The principal considerations for our determination that performing procedures relating to the goodwill impairment test is a critical audit matter are (i) the significant judgment by management when developing the fair value estimate of the reporting units and (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumption related to forecasted revenue growth rates for certain reporting units.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to management’s goodwill impairment test, including controls over the valuation of the reporting units. These procedures also included, among others (i) testing management’s process for developing the fair value estimate of the reporting units; (ii) evaluating the appropriateness of the income-based valuation method; (iii) testing the completeness and accuracy of underlying data used in the income-based valuation method; and (iv) evaluating the reasonableness of the significant assumption used by management related to forecasted revenue growth rates for certain reporting units. Evaluating the reasonableness of management’s assumption related to forecasted revenue growth rates for certain reporting units involved considering (i) the current and prior period performance of those reporting units and (ii) the consistency of those forecasted revenue growth rates with external market and/or industry data.
/s/ PricewaterhouseCoopers LLP
Chicago, Illinois
We have served as the Company's auditor since 1995.
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DOVER CORPORATION
CONSOLIDATED STATEMENTS OF EARNINGS
(In thousands, except per share data)
Years Ended December 31,
Earnings per share from continuing operations:
(Loss) earnings per share from discontinued operations:
Net earnings per share:
Weighted average shares outstanding:
See Notes to Consolidated Financial Statements
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DOVER CORPORATION
CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS
(In thousands)
Years Ended December 31,
Other comprehensive earnings (loss), net of tax
Foreign currency translation adjustments:
Pension and other post-retirement benefit plans:
Prior service credits (costs) — 318 (53)
Settlement and curtailment impact (565) 83 2,831
Changes in fair value of cash flow hedges:
Unrealized net (losses) gains arising during period (4,514) 1,572 682
Net losses (gains) reclassified into earnings 2,975 (1,190) 1,954
See Notes to Consolidated Financial Statements
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DOVER CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)
ASSETS
Current assets:
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term borrowings and current portion of long-term debt $ 706,677 $ 400,056
Non-current income tax payable — 6,158
Stockholders' equity:
Preferred stock - $100 par value; 100,000 shares authorized; none issued — —
See Notes to Consolidated Financial Statements
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DOVER CORPORATION
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(In thousands, except per share data)
Stock-based compensation expense — 31,465 — — — 31,465
Other comprehensive earnings, net of tax — — — 28,357 — 28,357
Stock-based compensation expense — 41,032 — — — 41,032
Other comprehensive loss, net of tax — — — (89,910) — (89,910)
Stock-based compensation expense — 43,981 — — — 43,981
Other comprehensive earnings, net of tax — — — 152,822 — 152,822
See Notes to Consolidated Financial Statements
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DOVER CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Years Ended December 31,
Operating Activities:
Adjustments to reconcile net earnings to cash provided by operating activities:
Employee benefit plan (benefit) expense (7,623) (9,946) 5,679
Investing Activities:
Proceeds from dispositions, net of cash transferred 5,998 768,847 —
Financing Activities:
Proceeds from long-term debt 631,186 — —
Repayment of long-term debt (400,000) — —
Cash Flows from Discontinued Operations:
Supplemental information - cash paid during the year for: (2)
(1) Cash held for sale as of December 31, 2023 totaled $17,300. There was no cash held for sale as of December 31, 2025 and 2024.
(2) Supplemental information includes cash paid as part of continuing and discontinued operations.
See Notes to Consolidated Financial Statements
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DOVER CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands except share data and where otherwise indicated)
1. Description of Business and Summary of Significant Accounting Policies
Description of Business
Dover Corporation ("Dover" or "Company") is a diversified global manufacturer and solutions provider delivering innovative equipment and components, consumable supplies, aftermarket parts, software and digital solutions and support services. The Company's businesses are based primarily in the United States and Europe with manufacturing and other operations throughout the world. The Company operates through five business segments that are structured around businesses with similar business models, go-to market strategies, product categories and manufacturing practices: Engineered Products, Clean Energy & Fueling, Imaging & Identification, Pumps & Process Solutions and Climate & Sustainability Technologies. For additional information on the Company's segments, see Note 19 — Segment Information.
Principles of Consolidation
The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. Intercompany accounts and transactions have been eliminated in consolidation. The results of operations of acquired businesses are included from the dates of acquisitions.
The Environmental Solutions Group ("ESG") business, an operating company within the Engineered Products segment, was sold during the fourth quarter of 2024 and reported as discontinued operations. Therefore, the Company has classified the results of operations prior to the sale as discontinued operations in the consolidated statements of earnings and the consolidated statements of cash flows. The discussion in the notes to these consolidated financial statements, unless otherwise noted, relates solely to our continuing operations. See Note 4 — Discontinued and Disposed Operations for further details.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying disclosures. These estimates may be adjusted due to changes in future economic, industry, or customer financial conditions, as well as changes in technology or demand. Estimates are used for, but not limited to, allowances for doubtful accounts receivable, net realizable value of inventories, restructuring reserves, warranty reserves, pension and post-retirement plans, stock-based compensation, useful lives for depreciation and amortization of long-lived assets including finite-lived intangibles, future cash flows associated with impairment testing for goodwill, indefinite-lived intangible assets and other long-lived assets, deferred tax assets, unrecognized tax benefits, contingencies and purchase price allocations. Actual results may differ from these estimates, although management does not believe such differences would materially affect the consolidated financial statements in any individual year. Estimates and assumptions are periodically reviewed and the effects of changes in these estimates and assumptions are reflected in the consolidated financial statements in the period that they are determined.
Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, demand deposits and short-term investments, which are highly liquid in nature and have original maturities at the time of purchase of three months or less. The carrying value of cash and cash equivalents approximates fair value.
Accounts Receivable and Allowance for Credit Losses
Accounts receivable are recorded at face amounts less an allowance for credit losses. The allowance is an estimate based on historical collection experience, current and future economic and market conditions and a review of the current status of each customer's trade accounts receivable. Management evaluates the aging of the accounts receivable balances and the financial condition of its customers and all other forward-looking information that is reasonably available to estimate the amount of accounts receivable that may not be collected in the future and records the appropriate provision. See Note 8 — Credit Losses for additional information.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands except share data and where otherwise indicated)
Inventories
Inventories are stated at the lower of cost, determined on the first-in, first-out ("FIFO") basis, or net realizable value.
Property, Plant and Equipment
Property, plant and equipment includes the historical cost of land, buildings, machinery and equipment, purchased and internally developed software, finance lease assets and significant improvements to existing plant and equipment or, in the case of acquisitions, the fair value of acquired assets. Expenditures for maintenance, repairs and minor renewals are expensed as incurred. When property or equipment is sold or otherwise disposed of, the related cost and accumulated depreciation are removed from the respective accounts and the gain or loss realized on disposition is reflected in earnings. The Company depreciates its assets on a straight-line basis over their estimated useful lives as follows: buildings and improvements 5 to 31.5 years; machinery and equipment 3 to 15 years; furniture and fixtures 3 to 7 years; vehicles 3 to 7 years; and software 3 to 10 years.
Derivative and Non-Derivative Financial Instruments
The Company uses derivative and non-derivative financial instruments to hedge its exposures to various risks, including foreign currency exchange rate risk. The Company may designate certain instruments as net investment hedges to hedge the net assets of certain foreign subsidiaries which are exposed to volatility in foreign currency exchange rates. The Company does not enter into derivative financial instruments for speculative purposes and does not have a material portfolio of derivative financial instruments. Derivative financial instruments used for hedging purposes must be designated and effective as a hedge of the identified risk exposure at inception of the contract. The Company recognizes all derivatives as either assets or liabilities on the consolidated balance sheet and measures those instruments at fair value. For derivatives designated as hedges of the fair value of assets or liabilities, the changes in fair value of both the derivatives and of the hedged items are recorded in current earnings. For derivatives designated as cash flow hedges, the change in the fair value of the derivatives is recorded as a component of other comprehensive earnings and subsequently recognized in net earnings when the hedged items impact earnings. Changes in the value of derivatives and non-derivatives designated as net investment hedges are calculated each period using the spot method and are reported in foreign currency translation adjustments within accumulated other comprehensive earnings (loss). Such amounts will remain in accumulated other comprehensive earnings (loss) until the complete or substantially complete liquidation of our investment in the underlying foreign operations.
Goodwill and Other Intangible Assets
Goodwill represents the excess of purchase price over the fair value of net assets acquired. Goodwill and certain other intangible assets deemed to have indefinite lives (primarily trademarks) are not amortized. For goodwill, impairment tests are required at least annually, or more frequently if events or circumstances indicate that it may be impaired, when some portion but not all of a reporting unit is disposed of or classified as assets held for sale, or when a change in the composition of reporting units occurs for other reasons, such as a change in segments. Based on its current organizational structure, the Company identified reporting units for which cash flows are determinable and to which goodwill was allocated.
The Company performs its goodwill impairment test annually in the fourth quarter. A quantitative test is used to determine existence of goodwill impairment and the amount of the impairment loss at the reporting unit level. The quantitative test compares the fair value of a reporting unit with its carrying amount, including goodwill. The Company uses an income-based valuation method, determining the present value of estimated future cash flows, to estimate the fair value of a reporting unit. If the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is not impaired. If the carrying amount of a reporting unit exceeds its fair value, an impairment loss shall be recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. Factors used in the impairment analysis require significant judgment, and actual results may differ from assumed and estimated amounts. The Company uses its own market assumptions including internal projections of future cash flows, discount rates and other assumptions considered reasonable in the analysis and reflective of market participant assumptions. These forecasts are based on historical performance and future estimated results. The discount rates utilized are based on a capital asset pricing model and published relevant industry rates, which take into consideration the risks and uncertainties inherent to the reporting units and in the internally developed forecasts. See Note 9 — Goodwill and Other Intangible Assets for further discussion of the Company's annual goodwill impairment test and results. No impairment of goodwill was required for the years ended December 31, 2025, 2024, or 2023.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands except share data and where otherwise indicated)
The Company uses an income-based valuation method to annually test its indefinite-lived intangible assets for impairment. The fair value of the intangible asset is compared to its carrying value. This method uses the Company's own market assumptions, which are considered reasonable. Any excess of carrying value over the estimated fair value is recognized as an impairment loss.No impairment of indefinite-lived intangible assets was required for the years ended December 31, 2025, 2024, or 2023.
Other intangible assets with determinable lives primarily consist of customer intangibles, unpatented technologies, patents and trademarks. The other intangible assets are amortized over their estimated useful lives, ranging from 5 to 20 years.
Long-lived assets (including definite-lived intangible assets) are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable, such as a significant sustained change in the business climate. If an indicator of impairment exists for any grouping of assets, an estimate of undiscounted future cash flows is prepared and compared to its carrying value. If an asset group is determined to be impaired, the loss is measured by the excess of the carrying amount of the asset group over its fair value, as determined by an estimate of discounted future cash flows.
Leases
The Company determines if an arrangement is a lease at inception of a contract. The Company has operating and finance leases for corporate offices, manufacturing plants, research and development facilities, shared services facilities, vehicle fleets and certain office and manufacturing equipment. Operating lease right-of-use ("ROU") assets are included in other assets and deferred charges and operating lease liabilities are included in other accrued expenses and other liabilities in the consolidated balance sheet. Finance lease ROU assets are included in property, plant and equipment, and the related lease liabilities are included in other accrued expenses and other liabilities in the consolidated balance sheet. Leases with an initial term of 12 months or less are not recorded in the balance sheet.
The Company accounts for each separate lease component of a contract and its associated non-lease components as a single lease component, thus causing all fixed payments to be capitalized. Variable lease payment amounts that cannot be determined at the commencement of the lease, such as increases in lease payments based on changes in index rates or usage, are not included in the ROU assets or lease liabilities. These are expensed as incurred and recorded as variable lease expense.
ROU assets represent the Company's right to use an underlying asset during the lease term and lease liabilities represent the Company's obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at the commencement date based on the net present value of fixed lease payments over the lease term. The lease term includes options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. ROU assets also include any advance lease payments made and exclude lease incentives. As most of the Company's operating leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. Finance lease agreements include an interest rate that is used to determine the present value of future lease payments. Fixed operating lease expense and finance lease depreciation expense are recognized on a straight-line basis over the lease term.
Supply Chain Financing
The Company facilitates the opportunity for suppliers to participate in a voluntary supply chain financing ("SCF") program with a third-party financial institution. Participating suppliers are paid directly by the SCF financial institution and, in addition, may elect to sell receivables due from the Company to the SCF financial institution for early payment. Thus, participating suppliers have additional potential flexibility in managing their liquidity by accelerating, at their option and cost, the collection of receivables due from the Company.
The Company and its suppliers agree on commercial terms, including payment terms, for the goods and services the Company procures, regardless of whether the supplier participates in SCF. For participating suppliers, the Company’s responsibility is limited to making all payments to the SCF financial institution on the terms originally negotiated with the supplier, irrespective of whether the supplier elects to sell receivables to the SCF financial institution. The Company does not determine the terms or conditions of the arrangement between the SCF financial institution and the Company's suppliers. The SCF financial institution pays the supplier on the invoice due date for any invoices that were not previously sold by the
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands except share data and where otherwise indicated)
supplier. The agreement between the Company and the SCF financial institution does not require the Company to provide assets pledged as security or other forms of guarantees.
Outstanding payments related to the SCF program are recorded within accounts payable in our consolidated balance sheets. Amounts due to the SCF financial institutions as of December 31, 2025 and 2024, and the rollforward of our outstanding obligations under the SCF program for the year ended December 31, 2025 are as follows:
Total
Disposition of business (2,785)
Invoices confirmed during the period 579,481
Confirmed invoices paid during the period (575,968)
Invoices confirmed during the period 535,867
Confirmed invoices paid during the period (574,956)
Restructuring Accruals
The Company takes actions to reduce headcount, close facilities, or otherwise exit operations as considered necessary. Such restructuring activities at an operation are recorded when management has committed to an exit or reorganization plan and when termination benefits are probable and can be reasonably estimated based on circumstances at the time the restructuring plan is approved by management or when termination benefits are communicated. Exit costs may include contractual terminations and asset impairments as a result of an approved restructuring plan. The accrual of both severance and exit costs requires the use of estimates. Though the Company believes that its estimates accurately reflect the anticipated costs, actual results may be different from the original estimated amounts.
Foreign Currency
Assets and liabilities of non-U.S. subsidiaries, where the functional currency is not the U.S. dollar, have been translated at year-end exchange rates and profit and loss accounts have been translated using weighted-average monthly exchange rates. Foreign currency translation gains and losses are included in the consolidated statements of comprehensive earnings as a component of other comprehensive earnings (loss). Assets and liabilities of an entity that are denominated in currencies other than an entity's functional currency are re-measured into the functional currency using end of period exchange rates, where applicable. Gains and losses related to these re-measurements are recorded within the consolidated statements of earnings as a component of other income, net. Gains and losses arising from intercompany foreign currency transactions that are of a long-term investment in nature are reported in the same manner as translation adjustments.
Revenue Recognition
The majority of the Company's revenue is generated through the manufacture and sale of a broad range of specialized products and components, with revenue recognized upon transfer of control, title and risk of loss, which is generally upon shipment. Service revenue represents approximately 5% of total revenue and is recognized as the services are performed. In limited cases, revenue arrangements with customers require delivery, installation, testing, certification, or other acceptance provisions to be satisfied before revenue is recognized. The Company includes shipping costs billed to customers in revenue and the related shipping costs in cost of goods and services.
Stock-Based Compensation
The principal awards issued under the Company's stock-based compensation plans include non-qualified stock appreciation rights ("SARs"), restricted stock units ("RSUs") and performance share awards ("PSAs"). The cost for such awards is measured at the grant date based on the fair value of the award. At the time of grant, the Company estimates forfeitures, based on historical experience, in order to estimate the portion of the award that will ultimately vest. The value of the portion of the award that is expected to ultimately vest is recognized as expense on a straight-line basis, generally over the explicit
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(Amounts in thousands except share data and where otherwise indicated)
service period of three years (except for retirement-eligible employees) and is included in selling, general and administrative expenses in the consolidated statements of earnings. Expense for awards granted to retirement-eligible employees is recorded over the period from the date of grant through the date the employee first becomes eligible to retire and is no longer required to provide service. See Note 15 — Equity and Cash Incentive Program for additional information related to the Company's stock-based compensation.
Income Taxes
The provision for income taxes includes federal, state, local and non-U.S. taxes. Tax credits, primarily for research and experimentation, are recognized as a reduction of the provision for income taxes in the year in which they are available for tax purposes. Deferred taxes are provided using enacted rates on the future tax consequences of temporary differences. Temporary differences include the differences between the financial statement carrying amounts of assets and liabilities and their respective tax basis and the tax benefit of carryforwards. A valuation allowance is established for deferred tax assets for which it is more likely than not that some portion or all of the deferred tax benefit will not be realized. In assessing the need for a valuation allowance, management considers all available evidence, including the future reversal of existing taxable temporary differences, taxable income in carryback periods, prudent and feasible tax planning strategies and estimated future taxable income. The valuation allowance can be affected by changes to tax regulations, interpretations and rulings, changes to enacted statutory tax rates and changes to future taxable income estimates.
Tax benefits are recognized from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position in consideration of applicable tax statutes and related interpretations and precedents. Tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized on ultimate settlement.
Research and Development Costs
Research and development costs, including qualifying engineering costs, are expensed when incurred and amounted to $165,342 in 2025, $149,601 in 2024 and $139,058 in 2023. These costs as a percent of revenue were 2.0% in 2025, 1.9% in 2024 and 1.8% in 2023. Research and development costs are reported within selling, general and administrative expenses in the consolidated statements of earnings.
Advertising Costs
Advertising costs are expensed when incurred and amounted to $23,827 in 2025, $23,166 in 2024 and $22,112 in 2023. Advertising costs are reported within selling, general and administrative expenses in the consolidated statements of earnings.
Risk, Retention, Insurance
The Company's insurance programs contain various deductibles that, based on the Company's experience, are typical and customary for a company of its size and risk profile. The Company does not consider any of the deductibles to represent a material risk to the Company. The Company generally maintains insurance policies with deductibles for claims and liabilities related primarily to workers' compensation, health and welfare claims, general liability, product and automobile liability, cybersecurity risks, property damage and business interruption resulting from certain events. The Company accrues for claim exposures that are probable of occurrence and can be reasonably estimated.
Recent Accounting Pronouncements
Recently Issued Accounting Standards
The following accounting standards updates ("ASU"), issued by the Financial Accounting Standards Board ("FASB"), will, or are expected to, result in a change in practice and/or have a financial impact to the Company's consolidated financial statements:
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands except share data and where otherwise indicated)
In November 2024, the FASB issued ASU No. 2024-03, Income Statement—Reporting Comprehensive Income (Subtopic 220-40): Expense Disaggregation Disclosures, which expands disclosures of specific expense categories at interim and annual reporting periods. The amendments are effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating this ASU to determine its impact on the Company’s disclosures.
In July 2025, the FASB issued ASU No. 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, which provides entities the option of a practical expedient in the estimation of credit losses. The amendments are effective for fiscal years beginning after December 15, 2025, and interim periods within those annual reporting periods. Early adoption is permitted. The Company is currently evaluating this ASU to determine its impact on the Company’s consolidated financial statements. The Company expects to adopt this standard as required beginning first quarter of 2026.
In September 2025, the FASB issued ASU No. 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software which changes the requirements for when entities may begin capitalizing costs for internal-use software. The amendments are effective for fiscal years beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. Early adoption is permitted as of the beginning of an annual reporting period. The Company is currently evaluating this ASU to determine its impact on the Company’s consolidated financial statements.
Recently Adopted Accounting Standards
In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which expands the disclosures required in an entity’s income tax rate reconciliation table and requires disclosure of income taxes paid both in U.S. and foreign jurisdictions. The amendments are effective for fiscal years beginning after December 15, 2024. The Company adopted the guidance during the fourth quarter of 2025. See Note 14 — Income Taxes for further details.
2. Revenue
Revenue from Contracts with Customers
A majority of the Company's revenue is short cycle in nature with shipments within one year from order. A small portion of the Company's revenue derives from contracts extending over one year. The Company's payment terms generally range between 30 to 90 days and vary by the location of businesses, the type of products manufactured to be sold and the volume of products sold, among other factors.
Disaggregation of Revenue
Revenue from contracts with customers is disaggregated by segment and geographic location, as they best depict the nature and amount of the Company's revenue. See Note 19 — Segment Information for further details.
Performance Obligations
A majority of the Company's contracts have a single performance obligation which represents, in most cases, the equipment or product being sold to the customer. Some contracts include multiple performance obligations such as a product and the related installation, extended warranty, software and digital solutions, and/or maintenance services. These contracts require judgment in determining the number of performance obligations.
The Company has elected to use the practical expedient to not adjust the promised amount of consideration for the effects of a significant financing component if it is expected, at contract inception, that the period between when the Company transfers a promised good or service to a customer, and when the customer pays for that good or service, will be one year or less. Thus, the Company may not consider an advance payment to be a significant financing component, if it is received less than one year before product completion.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands except share data and where otherwise indicated)
The majority of the Company's contracts offer assurance-type warranties in connection with the sale of a product to a customer. Assurance-type warranties provide a customer with assurance that the related product will function as the parties intended because it complies with agreed-upon specifications. Such warranties do not represent a separate performance obligation.
The Company may also offer service-type warranties that provide services to the customer, in addition to the assurance that the product complies with agreed-upon specifications. If a warranty is determined to be a service-type warranty, it represents a distinct service and is treated as a separate performance obligation.
Estimates are used to determine the amount of variable consideration in contracts, the standalone selling price among separate performance obligations and the measure of progress for contracts where revenue is recognized over time. The Company reviews and updates these estimates regularly.
Some contracts with customers include variable consideration primarily related to volume rebates. The Company estimates variable consideration at the most likely amount to determine the total consideration which the Company expects to be entitled. Estimated amounts are included in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. The Company's estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of anticipated performance and all information (historical, current and forecasted) that is reasonably available.
For contracts with multiple performance obligations, the Company allocates the total transaction price to each performance obligation in an amount based on the estimated relative standalone selling prices of the promised goods or services underlying each performance obligation. The Company uses an observable price to determine the standalone selling price for separate performance obligations or a cost plus margin approach when one is not available.
Approximately 95% of the Company's revenue is recognized at a point in time, rather than over time, as the Company completes its performance obligations. Specifically, revenue is recognized when control transfers to the customer, typically upon shipment or completion of installation, testing, certification, or other substantive acceptance provisions required under the contract. Approximately 5% of the Company's revenue is recognized over time and relates to the sale of equipment or services, including software solutions and services, in which the Company transfers control of a good or service over time and the customer simultaneously receives and consumes the benefits provided by the Company's performance as the Company performs, or the Company's performance creates or enhances an asset the customer controls as the asset is created or enhanced, or the Company's performance does not create an asset with an alternative use to the Company and the Company has an enforceable right to payment for its performance to date plus a reasonable margin.
For revenue recognized over time, there are two types of methods for measuring progress and both are relevant to the Company: (1) input methods and (2) output methods. Although this may vary by business, input methods generally are based on costs incurred relative to estimated total costs. Output methods generally are based on a measurement of progress, such as milestone achievement. The businesses use the method and measure of progress that best depicts the transfer of control to the customer of the goods or services to date relative to the remaining goods or services promised under the contract.
Transaction Price Allocated to the Remaining Performance Obligations
At December 31, 2025, we estimated that $315,420 in revenue is expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) at the end of the reporting period. We expect to recognize approximately 47.9% of the Company's unsatisfied (or partially unsatisfied) performance obligations as revenue in 2026, 29.0% in 2027, with the remaining balance to be recognized in 2028 and thereafter.
Remaining consideration, including variable consideration, from contracts with customers is included in the amounts presented in the preceding paragraph and pertains to contracts with multiple performance obligations, extended warranties on products and multi-year agreements, which are typically recognized as the performance obligation is satisfied.
The Company applied the standard's practical expedient that permits the omission of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which the Company recognizes revenue at the amount to which the Company has the right to invoice for services performed.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands except share data and where otherwise indicated)
Contract Balances
The following table provides information about contract assets and contract liabilities from contracts with customers:
Contract assets primarily relate to the Company's right to consideration for work completed but not billed at the reporting date and are recorded in prepaid and other current assets in the consolidated balance sheets. Contract assets are transferred to receivables when the right to consideration becomes unconditional. Contract liabilities relate to advance consideration received from customers or advance billings for which revenue has not been recognized. Current contract liabilities are recorded in deferred revenue and non-current contract liabilities are recorded in other liabilities in the consolidated balance sheets. Contract liabilities are reduced when the associated revenue from the contract is recognized.
The revenue recognized during 2025 and 2024 that was included in the contract liabilities at the beginning of the respective periods amounted to $188,849 and $182,846, respectively.
Contract Costs
Costs incurred to obtain a customer contract are not material to the Company. The Company elected to apply the practical expedient to not capitalize contract costs to obtain contracts with a duration of one year or less, which are expensed and included within cost of goods and services in the consolidated statements of earnings.
3. Acquisitions
2025 Acquisitions
During the year ended December 31, 2025, the Company acquired four businesses in separate transactions for total consideration of $665,270, net of cash acquired and inclusive of contingent consideration of $2,000 (a non-cash financing activity) and measurement period adjustments. These businesses were acquired to complement and expand upon existing operations within the Pumps & Process Solutions and Clean Energy & Fueling segments. The goodwill recorded as a result of these acquisitions represents the economic benefits expected to be derived from product line expansions and operational synergies. Goodwill of $16,614 is deductible for income tax purposes and $350,516 is non-deductible for income tax purposes for these acquisitions. The fair values of the assets acquired and liabilities assumed, and the related tax balances, are based on preliminary estimates and assumptions. These preliminary estimates and assumptions could change significantly during the measurement period as the Company finalizes the valuations of the assets acquired and liabilities assumed, and the related tax balances.
Sikora
On June 11, 2025, the Company acquired 99.8% of the equity interest in Sikora AG ("Sikora"), a provider of precision measurement, inspection and control solutions for production processes in the wires and cables, hoses, optical fibers and plastic industries for $608,459, net of cash acquired and inclusive of measurement period adjustments. The Sikora acquisition strengthens the Company's offerings in the Pumps & Process Solutions segment. In connection with this acquisition, the Company recorded preliminary goodwill of $340,478 and intangible assets of $219,058 for customer intangibles, $72,942 for unpatented technology and $17,690 for trademarks. The fair value for customer intangibles at the acquisition date was determined using the multi-period excess earnings method under the income approach. The fair value measurements of intangible assets are based on significant unobservable inputs, and thus represent Level 3 inputs. Significant assumptions used in assessing the fair value of intangible assets include discounted future cash flows, customer attrition rates and discount rates.
The following presents the preliminary allocation of purchase price to the assets acquired and liabilities assumed in the Sikora acquisition, based on their estimated fair values at acquisition date:
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(Amounts in thousands except share data and where otherwise indicated)
Total
Current assets, net of cash acquired $ 65,813
Property, plant and equipment 30,318
Other assets and deferred charges 794
Current liabilities (39,526)
Non-current liabilities (99,108)
Other Acquisitions
On January 17, 2025, the Company acquired 100% of the equity interest in Cryogenic Machinery Corp. ("Cryo-Mach"), a provider of cryogenic centrifugal pumps, mechanical seals and accessories, for total consideration of $28,909, net of cash acquired and inclusive of measurement period adjustments. The Cryo-Mach business was acquired to expand the Company's participation in cryogenic applications within the Pumps & Process Solutions segment. In connection with this acquisition, the Company recorded preliminary tax-deductible goodwill of $9,250 and intangible assets of $21,020, primarily related to customer intangibles.
On June 18, 2025, the Company acquired 100% of the equity interest in ipp Pump Products GmbH ("ipp"), a specialized manufacturer of sanitary pump technologies, including hygienic lobe, progressive, and other processing equipment for $16,523, net of cash acquired and inclusive of measurement period adjustments. ipp's products expand the Company's capabilities in critical hygienic applications within the Pumps & Process Solutions segment. In connection with this acquisition, the Company recorded preliminary goodwill of $10,038 and intangible assets of $5,648 related to customer intangibles.
On August 1, 2025, the Company acquired 100% of the equity interest in Site IQ LLC ("SIQ"), an industrial internet of things company with a focus on remote monitoring of fueling sites, for total consideration of $11,379, net of cash acquired and inclusive of contingent consideration and measurement period adjustments. SIQ's hardware and software products expand the Company's ability to deliver a comprehensive solution that brings actionable intelligence and remote hardware service to retailers and service companies within the Clean Energy & Fueling segment. In connection with this acquisition, the Company recorded preliminary tax-deductible goodwill of $7,364 and intangible assets of $4,600 related to unpatented technology.
The amounts assigned to goodwill and major intangible asset classifications for all 2025 acquisitions were as follows:
Amount allocated Weighted Average Useful Life (in years)
Goodwill - non-deductible 350,516 na
2024 Acquisitions
During the year ended December 31, 2024, the Company acquired eight businesses in separate transactions for total consideration of $674,005, net of cash acquired and inclusive of contingent consideration of $38,736 (a non-cash financing activity) and measurement period adjustments. These businesses were acquired to complement and expand upon existing operations within the Clean Energy & Fueling, Engineered Products, Imaging & Identification and Pumps & Process Solutions segments. The goodwill recorded as a result of these acquisitions represents the economic benefits expected to be derived from product line expansions and operational synergies. Goodwill of $14,188 is deductible for income tax purposes
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and $323,063 is non-deductible for income tax purposes for these acquisitions.
On July 19, 2024, the Company acquired 100% of the equity interests in the Marshall Excelsior Company ("MEC"), a supplier of highly-engineered flow control components for transportation, storage, and use in liquefied petroleum gas and other industrial gases, for $395,809, net of cash acquired and inclusive of measurement period adjustments. The MEC acquisition expands the Company's critical flow control capabilities in the Clean Energy & Fueling segment. In connection with this acquisition, the Company recorded goodwill of $187,923 and intangible assets of $194,100, primarily related to customer intangibles. The fair value for customer intangibles at the acquisition date was determined using the multi-period excess earnings method under the income approach. The fair value measurements of intangible assets are based on significant unobservable inputs, and thus represent Level 3 inputs. Significant assumptions used in assessing the fair values of intangible assets include discounted future cash flows, customer attrition rates and discount rates. During the year ended December 31, 2025, the Company recorded additional measurement period adjustments resulting in an increase to the goodwill disclosed above of $4,839.
The following presents the allocation of purchase price to the assets acquired and liabilities assumed, for the MEC acquisition, based on the estimated fair values at acquisition date:
Total
Current assets, net of cash acquired $ 58,695
Property, plant and equipment 10,300
Other assets and deferred charges 5,602
Current liabilities (15,959)
Non-current liabilities (44,852)
On January 17, 2024, the Company acquired 100% of the equity interests in the Transchem Group ("Transchem"), a supplier of car wash chemicals and associated solutions, for $48,241, net of cash acquired and inclusive of contingent consideration and measurement period adjustments. The Transchem acquisition expands the Company's chemical product offerings in the Clean Energy & Fueling segment, specializing in wash performance and water reclaim technology that reduces water usage and lowers car wash operators' cost. In connection with this acquisition, the Company recorded goodwill of $25,132 and intangible assets of $26,309, primarily related to customer intangibles.
On January 31, 2024, the Company acquired 100% of the equity interests in Bulloch Technologies, Inc. ("Bulloch"), a provider of point-of-sale ("POS"), forecourt controller and electronic payment server solutions to the convenience retail industry, for $121,917, net of cash acquired and inclusive of contingent consideration and measurement period adjustments. The acquisition of Bulloch expands the Company's offering in North America with highly complementary POS and forecourt solutions within the Clean Energy & Fueling segment. In connection with this acquisition, the Company recorded goodwill of $73,850 and intangible assets of $62,417, primarily related to customer intangibles.