Dover Corporation

10/23/2025 | Press release | Distributed by Public on 10/23/2025 04:51

Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations
Refer to the section below entitled "Special Note Regarding Forward-Looking Statements" for a discussion of factors that could cause our actual results to differ from the forward-looking statements contained below and throughout this quarterly report.
Throughout this Management's Discussion and Analysis of Financial Condition and Results of Operations ("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 2 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 is a diversified global manufacturer and solutions provider delivering innovative equipment and components, consumable supplies, aftermarket parts, software and digital solutions, and support services through five operating segments: Engineered Products, Clean Energy & Fueling, Imaging & Identification, Pumps & Process Solutions, and Climate & Sustainability Technologies. The Company's entrepreneurial business model encourages, promotes and fosters deep customer engagement and collaboration, which has led to Dover's well-established and valued reputation for providing superior customer service and industry-leading product innovation. Unless the context indicates otherwise, references herein to "Dover," "the Company," and words such as "we," "us," or "our" include Dover Corporation and its consolidated subsidiaries.
Dover's five operating segments are as follows:
•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, and fluid dispensing end-markets.
•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.
•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.
•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, and 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.
•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.
In the third quarter of 2025, revenue was $2.1 billion, which increased $94.3 million, or 4.8%, as compared to the third quarter of 2024. This increase was driven by acquisition-related revenue growth of 3.0%, a favorable impact from foreign currency translation of 1.3% and organic revenue growth of 0.5%. The acquisition-related growth was driven by our acquisitions in the Pumps & Process Solutions and Clean Energy & Fueling segments.
The 0.5% organic revenue growth for the third quarter of 2025 was driven by our Pumps & Process Solutions, Clean Energy & Fueling, and Imaging & Identification segments which grew 5.6%, 4.8%, and 3.0%, respectively. The growth was partially offset by the Engineered Products and Climate & Sustainability Technologies segments which declined 7.0% and 6.5%, respectively. For further information, see "Segment Results of Operations" within this Item 2.
From a geographic perspective, organic revenue for the U.S., our largest market, increased 1.6% in the third quarter of 2025 compared to the prior year comparable quarter, driven by increased organic revenue in the Pumps & Process Solutions and Clean Energy & Fueling segments. Organic revenue increased for Europe by 1.1%, and decreased for Other Americas and Asia by 6.5%, and 1.5%, respectively.
Bookings were $2.0 billion for the three months ended September 30, 2025, an increase of $146.8 million or 7.9% compared to the prior year comparable quarter. The bookings growth was primarily driven by strong bookings in the Climate & Sustainability Technologies and Pumps & Process Solutions segments.
Restructuring and other costs for the three months ended September 30, 2025 were $15.9 million, which included restructuring charges of $10.6 million and other costs of $5.3 million. Restructuring and other costs were primarily related to exit costs and headcount reductions in the Climate & Sustainability Technologies, Clean Energy & Fueling, and Pumps & Process Solutions segments. For further discussion related to our restructuring and other costs, see "Restructuring and Other Costs (Benefits)," within this Item 2.
During the three months ended September 30, 2025, the Company completed one business acquisition for approximately $11.4 million, subject to post-closing adjustments and inclusive of contingent consideration. See Note 3 - Acquisitions in the condensed consolidated financial statements in Item 1 of this Form 10-Q for further details.
CONSOLIDATED RESULTS OF OPERATIONS
Three Months Ended September 30, Nine Months Ended September 30,
(dollars in thousands, except per share figures) 2025 2024 % / Point Change 2025 2024 % / Point Change
Revenue $ 2,077,841 $ 1,983,542 4.8 % $ 5,993,492 $ 5,816,043 3.1 %
Cost of goods and services 1,244,247 1,220,355 2.0 % 3,596,136 3,603,146 (0.2) %
Gross profit 833,594 763,187 9.2 % 2,397,356 2,212,897 8.3 %
Gross profit margin 40.1 % 38.5 % 1.6 40.0 % 38.0 % 2.0
Selling, general and administrative expenses 456,441 429,570 6.3 % 1,369,297 1,301,606 5.2 %
Selling, general and administrative expenses as a percent of revenue 22.0 % 21.7 % 0.3 22.8 % 22.4 % 0.4
Operating earnings 377,153 333,617 13.0 % 1,028,059 911,291 12.8 %
Interest expense 27,239 34,128 (20.2) % 81,638 102,867 (20.6) %
Interest income (17,804) (5,176) 244.0 % (55,993) (14,013) 299.6 %
Gain on dispositions
- (68,633) nm* (4,644) (597,913) nm*
Other income, net (18,525) (13,032) nm* (26,663) (33,016) nm*
Earnings before provision for income taxes 386,243 386,330 - % 1,033,721 1,453,366 (28.9) %
Provision for income taxes 82,951 73,434 13.0 % 211,058 291,781 (27.7) %
Effective tax rate 21.5 % 19.0 % 2.5 20.4 % 20.1 % 0.3
Earnings from continuing operations 303,292 312,896 (3.1) % 822,663 1,161,585 (29.2) %
(Loss) earnings from discontinued operations, net
(1,296) 34,204 nm* (10,782) 99,558 nm*
Net earnings $ 301,996 $ 347,100 (13.0) % $ 811,881 $ 1,261,143 (35.6) %
Earnings per common share from continuing operations - diluted
$ 2.20 $ 2.26 (2.7) % $ 5.96 $ 8.37 (28.8) %
* nm - not meaningful
Revenue
Revenue for the three months ended September 30, 2025 increased $94.3 million, or 4.8%, from the prior year comparable quarter. The increase in revenue was driven by acquisition-related growth of 3.0%, primarily in our Pumps & Process Solutions and Clean Energy & Fueling segments, a favorable impact from foreign currency translation of 1.3% and organic revenue growth of 0.5%. Customer pricing favorably impacted revenue by approximately 2.1% in the third quarter of 2025 and by 1.6% in the prior year comparable quarter.
Revenue for the nine months ended September 30, 2025 increased $177.4 million, or 3.1%, from the prior year comparable period. The increase in revenue was driven by acquisition-related growth of 2.8%, primarily in our Pumps & Process Solutions and Clean Energy & Fueling segments, organic revenue growth of 0.6% and a favorable impact from foreign currency translation of 0.6%. This increase was partially offset by a disposition-related decline of 0.9%. Customer pricing favorably impacted revenue by approximately 1.8% for the nine months ended September 30, 2025 and by 1.6% in the prior comparable period.
Gross Profit
Gross profit for the three months ended September 30, 2025 increased $70.4 million, or 9.2%, and gross profit margin increased 160 basis points to 40.1%, versus the prior year comparable quarter. The gross profit margin increase was driven by productivity initiatives, favorable portfolio mix, positive price versus cost dynamics, and benefits from restructuring actions.
Gross profit for the nine months ended September 30, 2025 increased $184.5 million, or 8.3%, and gross profit margin increased by 200 basis points to 40.0%, from the prior year comparable period. Gross profit margin increased driven by productivity initiatives, favorable portfolio mix, positive price versus cost dynamics, and benefits from restructuring actions.
Selling, General and Administrative Expenses
Selling, general and administrative expenses for the three months ended September 30, 2025 increased $26.9 million, or 6.3%, from the prior year comparable quarter, primarily due to increases in employee compensation and benefits and acquisition-related amortization expense, partially offset by cost containment and productivity actions. As a percentage of revenue, selling, general and administrative expenses increased 30 basis points as compared to the prior year comparable quarter to 22.0%.
Selling, general and administrative expenses for the nine months ended September 30, 2025 increased $67.7 million, or 5.2%, from the prior year comparable period, primarily due to increased employee compensation and benefits and acquisition-related amortization costs, partially offset by cost containment and productivity actions. Selling, general and administrative expenses as a percentage of revenue increased 40 basis points as compared to the prior year comparable period to 22.8%.
Research and development costs, including qualifying engineering costs, are expensed when incurred and amounted to $43.5 million and $35.6 million for the three months ended September 30, 2025 and 2024, and $121.8 million and $108.0 million for the nine months ended September 30, 2025 and 2024. The costs as a percentage of revenue are 2.1% and 2.0% for the three and nine months ended September 30, 2025 and 1.8% and 1.9% for the three and nine months ended September 30, 2024, respectively.
Non-Operating Items
Interest Expense, net
For the three and nine months ended September 30, 2025, interest expense, net of interest income, decreased $19.5 million, or 67.4%, to $9.4 million and $63.2 million or 71.1%, to $25.6 million, respectively compared to the prior year comparable period. The decreases were primarily driven by higher interest income generated by the investment of proceeds from the sale of 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 amounted to $68.6 million for the three months ended September 30, 2024 and $4.6 million and $597.9 million for the nine months ended September 30, 2025 and 2024, respectively. The gain on dispositions during the three months ended September 30, 2024 was primarily due to the sale of a minority owned equity investment on September 30, 2024. The gain on dispositions during the nine months ended September 30, 2024 was primarily due to the sale of the De-Sta-Co business on March 31, 2024 and the sale of a minority owned equity investment on September 30, 2024. See Note 4 - Discontinued and Disposed Operations in the condensed consolidated financial statements in Item 1 of this Form 10-Q for additional details.
Income Taxes
The effective tax rates for the three months ended September 30, 2025 and 2024 were 21.5% and 19.0%, respectively. The increase in the effective tax rate for the three months ended September 30, 2025 relative to the prior year comparable quarter was primarily due to an internal reorganization in 2024.
The effective tax rates for the nine months ended September 30, 2025 and 2024 were 20.4% and 20.1%, respectively. The increase in the effective tax rate for the nine months ended September 30, 2025 relative to the prior year comparable quarter was primarily due to internal reorganizations in 2024.
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 did not have a material impact to our condensed 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. We do not expect this to have a material impact on our effective tax rate.
See Note 12 - Income Taxes in the condensed consolidated financial statements in Item 1 of this Form 10-Q for additional details.
Earnings from Continuing Operations
Earnings from continuing operations for the three months ended September 30, 2025 decreased 3.1% to $303.3 million, or $2.20 diluted earnings per share from continuing operations, from $312.9 million, or $2.26 diluted earnings per share from continuing operations, in the prior year comparable quarter. The decrease in earnings from continuing operations is primarily due to the after-tax gain on the sale of a minority owned equity investment realized in the prior year comparable quarter, partially offset by earnings growth in our Pumps & Process Solutions, Clean Energy & Fueling, Imaging & Identification, and Engineered Products segments.
Earnings from continuing operations for the nine months ended September 30, 2025 decreased 29.2% to $822.7 million, or $5.96 diluted earnings per share from continuing operations, from $1.2 billion, or $8.37 diluted earnings per share from continuing operations, in the prior year comparable period. The decrease in earnings from continuing operations is primarily due to the after-tax gain on disposition of De-Sta-Co and a minority owned equity method investment totaling $464.2 million in the prior year, partially offset by higher operating earnings in the current period.
Discontinued Operations
Loss from discontinued operations, net for the three and nine months ended September 30, 2025 amounted to $1.3 million and $10.8 million, respectively. Earnings from discontinued operations, net for the three and nine months ended September 30, 2024 amounted to $34.2 million and $99.6 million, respectively. The Company completed the sale of ESG on October 8, 2024. See Note 4 - Discontinued and Disposed Operations in the condensed consolidated financial statements in Item 1 of this Form 10-Q for additional details.
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 16 - Segment Information in the condensed consolidated financial statements in Item 1 of this Form 10-Q.
We report organic revenue growth, which excludes the impact of foreign currency exchange rates and the impact of acquisitions and divestitures. See "Non-GAAP Disclosures" at the end of this Item 2.
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 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.
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, and fluid dispensing end-markets.
Three Months Ended September 30, Nine Months Ended September 30,
(dollars in thousands) 2025 2024 % Change 2025 2024 % Change
Revenue $ 279,705 $ 296,117 (5.5) % $ 810,295 $ 914,234 (11.4) %
Segment earnings $ 57,483 $ 56,621 1.5 % $ 155,108 $ 171,248 (9.4) %
Segment earnings margin
20.6 % 19.1 % 19.1 % 18.7 %
Operational metrics:
Bookings $ 273,278 $ 284,823 (4.1) % $ 814,387 $ 895,290 (9.0) %
Components of revenue decline:
Organic decline
(7.0) % (6.8) %
Acquisitions 0.4 % 0.6 %
Dispositions - % (5.6) %
Foreign currency translation 1.1 % 0.4 %
Total revenue decline
(5.5) % (11.4) %
Third Quarter 2025 Compared to the Third Quarter 2024
Engineered Products revenue for the third quarter of 2025 decreased $16.4 million, or 5.5%, as compared to the third quarter of 2024, due to organic decline of 7.0%, partially offset by a favorable impact from foreign currency translation of 1.1% and acquisition-related growth of 0.4%. Acquisition-related growth was driven by the acquisition of Criteria Labs, Inc. in the third quarter of 2024. Customer pricing favorably impacted revenue by approximately 2.7% in the third quarter of 2025 and 1.1% in the prior year comparable quarter.
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 our aerospace and defense business. We expect year-over-year organic performance to improve in the fourth quarter with solid demand trends in our aerospace and defense business, as well as sequential improvement in vehicle service business demand.
Engineered Products segment earnings increased $0.9 million, or 1.5%, compared to the third quarter of 2024. The increase was primarily driven by favorable price versus cost dynamics, productivity initiatives, and benefits from restructuring actions, partially offset by the negative impact from lower volumes in vehicle service. Segment earnings margin increased to 20.6% from 19.1% as compared to the prior year comparable quarter.
Overall bookings decreased 4.1% as compared to the prior year comparable quarter. The bookings decline was due to reduced demand in our vehicle service business, partially offset by strength in aerospace and defense. Segment book-to-bill was 0.98.
Nine Months Ended September 30, 2025 Compared to the Nine Months Ended September 30, 2024
Engineered Products revenue for the nine months ended September 30, 2025 decreased $103.9 million, or 11.4%, compared to the prior year comparable period. This was comprised of an organic revenue decline of 6.8% and a disposition-related decline of 5.6%, partially offset by acquisition-related growth of 0.6% and a favorable impact from foreign currency translation of 0.4%. The organic revenue decline was primarily due to lower volumes in our vehicle service business. Customer pricing favorably impacted revenue by approximately 2.3% and by 0.8% in the prior year comparable period.
Segment earnings for the nine months ended September 30, 2025 decreased $16.1 million, or 9.4%, as compared to the 2024 comparable period. The decrease was primarily due to the divestiture of De-Sta-Co and lower volumes in vehicle service, partially offset by favorable price versus cost dynamics and the benefit of restructuring actions. Segment earnings margin increased to 19.1% from 18.7% as compared to the prior year comparable period.
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.
Three Months Ended September 30, Nine Months Ended September 30,
(dollars in thousands) 2025 2024 % Change 2025 2024 % Change
Revenue $ 541,368 $ 500,685 8.1 % $ 1,578,613 $ 1,408,752 12.1 %
Segment earnings $ 118,665 $ 99,536 19.2 % $ 312,080 $ 256,747 21.6 %
Segment earnings margin
21.9 % 19.9 % 19.8 % 18.2 %
Operational metrics:
Bookings $ 509,553 $ 507,329 0.4 % $ 1,580,231 $ 1,421,025 11.2 %
Components of revenue growth:
Organic growth
4.8 % 4.9 %
Acquisitions 2.9 % 7.0 %
Foreign currency translation 0.4 % 0.2 %
Total revenue growth
8.1 % 12.1 %
Third Quarter 2025 Compared to the Third Quarter 2024
Clean Energy & Fueling revenue for the third quarter of 2025 increased $40.7 million, or 8.1%, as compared to the third quarter of 2024, driven by organic growth of 4.8%, acquisition-related growth of 2.9% and a favorable foreign currency translation impact of 0.4%. 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 the third quarter of 2025 by approximately 2.3% and by 2.0% in the prior year comparable quarter.
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 year-over-year organic performance to remain positive in the fourth quarter.
Clean Energy & Fueling segment earnings increased $19.1 million, or 19.2%, over the prior year comparable quarter. The increase was primarily driven by higher volumes, favorable price versus cost dynamics, the positive impact from acquisitions and benefits from restructuring actions. Segment earnings margin increased to 21.9% from 19.9% as compared to prior year comparable quarter.
Overall bookings increased 0.4% as compared to the prior year comparable quarter. The bookings growth was primarily driven by acquisition-related growth in clean energy platforms and demand in North America above-ground retail fueling equipment, partially offset by reduced vehicle wash orders. Segment book-to-bill was 0.94.
Nine Months Ended September 30, 2025 Compared to the Nine Months Ended September 30, 2024
Clean Energy & Fueling segment revenue increased $169.9 million, or 12.1%, as compared to the nine months ended September 30, 2024, attributable to acquisition-related growth of 7.0% and organic growth of 4.9%. Organic revenue growth was driven by pricing actions and strong demand in our above and below-ground retail fueling, fluid transport, and clean energy components businesses. Customer pricing favorably impacted revenue by approximately 1.8% and by approximately 2.6% in the prior year comparable period.
Clean Energy & Fueling segment earnings increased $55.3 million or 21.6%, for the nine months ended September 30, 2025. The increase was primarily driven by volume growth, pricing, the favorable impact from acquisitions and benefits from restructuring actions, partially offset by inflationary costs. Segment earnings margin increased to 19.8% from 18.2% in the prior year comparable period.
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.
Three Months Ended September 30, Nine Months Ended September 30,
(dollars in thousands) 2025 2024 % Change 2025 2024 % Change
Revenue $ 299,100 $ 283,966 5.3 % $ 871,199 $ 848,365 2.7 %
Segment earnings $ 81,772 $ 77,247 5.9 % $ 236,284 $ 222,992 6.0 %
Segment earnings margin
27.3 % 27.2 % 27.1 % 26.3 %
Operational metrics:
Bookings $ 292,229 $ 281,289 3.9 % $ 872,490 $ 848,363 2.8 %
Components of revenue growth:
Organic growth
3.0 % 2.2 %
Acquisitions - % 0.1 %
Foreign currency translation 2.3 % 0.4 %
Total revenue growth
5.3 % 2.7 %
Third Quarter 2025 Compared to the Third Quarter 2024
Imaging & Identification revenue for the third quarter of 2025 increased $15.1 million, or 5.3%, as compared to the third quarter of 2024, driven by organic revenue growth of 3.0% and a favorable impact from foreign currency translation of 2.3%. Customer pricing favorably impacted revenue in the third quarter of 2025 by approximately 3.6% and by approximately 2.6% in the prior year comparable quarter.
Organic revenue growth was primarily driven by pricing and growth in core marking and coding equipment and serialization software. We expect organic revenue growth to remain positive in the fourth quarter, driven by pricing and solid demand trends across the segment.
Imaging & Identification segment earnings increased $4.5 million, or 5.9%, over the prior year comparable quarter. The increase was primarily driven by favorable price versus cost dynamics and productivity initiatives. Segment earnings margin increased to 27.3% from 27.2% in the prior year comparable quarter.
Overall bookings increased 3.9% as compared to the prior year comparable quarter. The bookings growth was primarily driven by our core marking and coding business. Segment book-to-bill was 0.98.
Nine Months Ended September 30, 2025 Compared to the Nine Months Ended September 30, 2024
Imaging & Identification segment revenue increased $22.8 million, or 2.7%, as compared to the nine months ended September 30, 2024, attributable to organic growth of 2.2%, a favorable impact from foreign currency translation of 0.4% and acquisition-related growth of 0.1%. The organic revenue growth was primarily driven by pricing actions and increased demand for core marking and coding equipment, partially offset by reduced demand in digital textile printing. Customer pricing favorably impacted revenue by approximately 3.3% and 3.0% in the prior year comparable period.
Imaging & Identification segment earnings increased $13.3 million, or 6.0%, for the nine months ended September 30, 2025 over the prior year comparable period. The increase was primarily driven by favorable price versus cost dynamics and productivity initiatives. Segment earnings margin increased to 27.1% from 26.3% in the prior year comparable period.
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, and 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.
Three Months Ended September 30, Nine Months Ended September 30,
(dollars in thousands) 2025 2024 % Change 2025 2024 % Change
Revenue $ 550,920 $ 472,463 16.6 % $ 1,565,047 $ 1,415,431 10.6 %
Segment earnings $ 168,565 $ 138,277 21.9 % $ 479,344 $ 394,231 21.6 %
Segment earnings margin
30.6 % 29.3 % 30.6 % 27.9 %
Operational metrics:
Bookings $ 510,960 $ 448,074 14.0 % $ 1,540,405 $ 1,383,132 11.4 %
Components of revenue growth:
Organic growth
5.6 % 5.3 %
Acquisitions 9.1 % 4.1 %
Foreign currency translation 1.9 % 1.2 %
Total revenue growth
16.6 % 10.6 %
Third Quarter 2025 Compared to the Third Quarter 2024
Pumps & Process Solutions revenue for the third quarter of 2025 increased $78.5 million, or 16.6%, as compared to the third quarter of 2024, driven by acquisition-related growth of 9.1%, organic growth of 5.6%, and a favorable impact from foreign currency translation of 1.9%. 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 in the third quarter of 2025 by approximately 2.2% and by approximately 1.7% in the prior year comparable quarter.
The organic revenue growth was primarily driven by robust demand for single-use biopharma components, thermal connectors used in liquid cooling of data centers, and precision components for midstream natural gas compression and power generation, partially offset by anticipated revenue declines in our plastics and polymer processing solutions business as customers shift focus to optimizing the significant capacity investments made over the last several years. We expect continued organic growth in the fourth quarter supported by demand trends in several of our businesses and an improving outlook in polymer processing equipment.
Pumps & Process Solutions segment earnings increased $30.3 million, or 21.9%, over the prior year comparable quarter. The increase was driven by the favorable impact from higher volumes, productivity initiatives, favorable portfolio mix and the impact from acquisitions. Segment earnings margin increased to 30.6% from 29.3% in the prior year comparable quarter.
Overall bookings increased 14.0% as compared to the prior year comparable quarter. The bookings growth 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 0.93.
Nine Months Ended September 30, 2025 Compared to the Nine Months Ended September 30, 2024
Pumps & Process Solutions segment revenue increased $149.6 million, or 10.6%, as compared to the nine months ended September 30, 2024, attributable to organic growth of 5.3%, acquisition-related growth of 4.1% for the acquisitions of Cryo-Mach, Sikora, and ipp, and a favorable impact from foreign currency translation of 1.2%.
The organic growth was primarily driven by single-use biopharma components, thermal connectors used in liquid cooling of data centers, and precision components, and digital controls for midstream natural gas compression and power generation, partially offset by expected declines in our polymer processing equipment business. Customer pricing favorably impacted revenue by approximately 1.7% and by approximately 1.6% in the prior year comparable period.
Pumps & Process Solutions segment earnings increased $85.1 million, or 21.6%, for the nine months ended September 30, 2025 over the prior year comparable period. The increase was driven by the impact of higher volumes, favorable portfolio mix, the impact from acquisitions, and productivity initiatives. Segment earnings margin increased to 30.6% from 27.9% from the prior year comparable period.
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.
Three Months Ended September 30, Nine Months Ended September 30,
(dollars in thousands) 2025 2024 % Change 2025 2024 % Change
Revenue $ 408,529 $ 431,127 (5.2) % $ 1,172,568 $ 1,232,125 (4.8) %
Segment earnings $ 76,002 $ 76,015 - % $ 205,383 $ 205,901 (0.3) %
Segment earnings margin
18.6 % 17.6 % 17.5 % 16.7 %
Operational metrics:
Bookings $ 415,099 $ 332,503 24.8 % $ 1,194,968 $ 1,191,858 0.3 %
Components of revenue decline:
Organic decline
(6.5) % (5.4) %
Foreign currency translation 1.3 % 0.6 %
Total revenue decline
(5.2) % (4.8) %
Third Quarter 2025 Compared to the Third Quarter 2024
Climate & Sustainability Technologies revenue decreased $22.6 million, or 5.2%, as compared to the third quarter of 2024, due to an organic revenue decline of 6.5%, partially offset by a favorable impact from foreign currency translation of 1.3%. Customer pricing favorably impacted revenue in the third quarter of 2025 by approximately 0.5% and by approximately 1.0% in the prior year comparable quarter.
The organic revenue decline was primarily due to project timing in retail refrigeration equipment and services, partially offset by demand growth in low-GWP CO2refrigerant systems, beverage can-making equipment, and global heat exchanger applications. We expect organic growth in the fourth quarter as strong demand in CO2refrigerant systems continues, demand for heat exchangers in data center cooling applications accelerates and headwinds in both European residential heat pumps and refrigerated door cases recover.
Climate & Sustainability Technologies segment earnings were flat compared to the third quarter of 2024. The flat segment earnings were primarily due to the unfavorable impact from lower volumes, offset by productivity initiatives and the favorable mix impact from CO2refrigerant systems growth in retail refrigeration. Segment earnings margin increased to 18.6% from 17.6% in the prior year comparable quarter.
Bookings in the third quarter of 2025 increased 24.8% from the prior year comparable quarter. The bookings increase was driven by sequential improvement in retail refrigeration demand, favorable heat exchanger demand trends and beverage can-making orders. Segment book-to-bill was 1.02.
Nine Months Ended September 30, 2025 Compared to the Nine Months Ended September 30, 2024
Climate & Sustainability Technologies segment revenue decreased $59.6 million, or 4.8%, compared to the nine months ended September 30, 2024, reflecting an organic revenue decline of 5.4%, partially offset by a favorable foreign currency translation impact of 0.6%. The organic revenue decline for the nine months ended September 30, 2025 was due to project timing in retail refrigeration equipment and services, partially offset by continued strong demand for low-GWP CO2refrigerant systems, and improving demand across beverage can-making and heat exchanger applications. Customer pricing favorably impacted revenue in the third quarter of 2025 by approximately 0.3% and 0.2% in the prior year comparable period.
Climate & Sustainability Technologies segment earnings decreased $0.5 million, or 0.3%, for the nine months ended September 30, 2025, as compared to the prior year comparable period. Segment earnings margin increased to 17.5% from 16.7% in the prior year comparable period. The earnings decrease was primarily due to lower volumes in retail refrigeration equipment and services, partially offset by increased heat exchanger and beverage can-making volumes, productivity initiatives and the favorable mix impact from CO2 refrigerant systems growth.
Reconciliation of Segment Earnings to Earnings from Continuing Operations
Three Months Ended September 30, Nine Months Ended September 30,
(in thousands)
2025 2024 2025 2024
Earnings from Continuing Operations:
Segment earnings:
Engineered Products $ 57,483 $ 56,621 $ 155,108 $ 171,248
Clean Energy & Fueling 118,665 99,536 312,080 256,747
Imaging & Identification 81,772 77,247 236,284 222,992
Pumps & Process Solutions 168,565 138,277 479,344 394,231
Climate & Sustainability Technologies 76,002 76,015 205,383 205,901
Total segment earnings 502,487 447,696 1,388,199 1,251,119
Purchase accounting expenses (1)
59,381 48,356 159,608 136,875
Restructuring and other costs (2)
15,913 16,581 48,520 52,142
Gain on dispositions (3)
- (68,633) (4,644) (597,913)
Corporate expense / other (4)
31,515 36,110 125,349 117,795
Interest expense 27,239 34,128 81,638 102,867
Interest income (17,804) (5,176) (55,993) (14,013)
Earnings before provision for income taxes 386,243 386,330 1,033,721 1,453,366
Provision for income taxes 82,951 73,434 211,058 291,781
Earnings from continuing operations
$ 303,292 $ 312,896 $ 822,663 $ 1,161,585
(1)Purchase accounting expenses are primarily comprised of amortization of acquired 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, including post-closing adjustments; see Note 4 - Discontinued and Disposed Operations in the condensed consolidated financial statements in Item 1 of this Form 10-Q 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 three and nine months ended September 30, 2025, we incurred restructuring charges of $10.6 million and $32.4 million and other costs, net of $5.3 million and $16.1 million. Restructuring charges for the three and nine months ended September 30, 2025 were primarily related to exit costs and headcount reductions in the Climate & Sustainability Technologies, Clean Energy & Fueling, and Pumps & Process Solutions 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. Other costs, net of $5.3 million for the three months ended September 30, 2025 include $1.8 million in costs associated with a footprint reduction in our Climate & Sustainability Technologies segment. Other costs, net of $16.1 million for the nine months ended September 30, 2025 includes $4.0 million in costs associated with a product line exit and $3.3 million in costs associated with a footprint reduction, both in our Climate & Sustainability Technologies segment. These restructuring and other charges were recorded in cost of goods and services and selling, general and administrative expenses in the condensed consolidated statements of earnings. Additional programs beyond the scope of the announced programs may be implemented during 2025 with related restructuring and other cost charges.
We recorded the following restructuring and other costs for the three and nine months ended September 30, 2025:
Three Months Ended September 30, 2025
(in thousands)
Engineered Products Clean Energy & Fueling Imaging & Identification Pumps & Process Solutions Climate & Sustainability Technologies Corporate Total
Restructuring $ 1,062 $ 2,842 $ 355 $ 1,711 $ 4,500 $ 133 $ 10,603
Other costs, net
91 1,038 530 184 2,895 572 5,310
Restructuring and other costs $ 1,153 $ 3,880 $ 885 $ 1,895 $ 7,395 $ 705 $ 15,913
Nine Months Ended September 30, 2025
(in thousands)
Engineered Products Clean Energy & Fueling Imaging & Identification Pumps & Process Solutions Climate & Sustainability Technologies Corporate Total
Restructuring $ 4,093 $ 7,286 $ 843 $ 6,302 $ 13,310 $ 608 $ 32,442
Other costs, net 147 1,895 1,541 (79) 9,893 2,681 16,078
Restructuring and other costs $ 4,240 $ 9,181 $ 2,384 $ 6,223 $ 23,203 $ 3,289 $ 48,520
Restructuring and other costs for the three and nine months ended September 30, 2024 include restructuring charges of $13.8 million and $41.6 million and other costs, net of $2.7 million and $10.5 million. Restructuring charges for the three months ended September 30, 2024 were primarily related to exit costs and headcount reductions in the Clean Energy & Fueling segment. Restructuring charges for the nine months ended September 30, 2024 were primarily related to product line exit costs and headcount reductions in the Clean Energy & Fueling and the Climate & Sustainability Technologies segments. These restructuring programs were initiated in 2023 and 2024 and the Company will continue to make proactive adjustments to its cost structure to align with current demand trends. Other costs, net of $10.5 million for the nine months ended September 30, 2024, 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 recorded in cost of goods and services and selling, general and administrative expenses in the condensed consolidated statement of earnings.
We recorded the following restructuring and other costs for the three and nine monthsended September 30, 2024:
Three Months Ended September 30, 2024
(in thousands)
Engineered Products Clean Energy & Fueling Imaging & Identification Pumps & Process Solutions Climate & Sustainability Technologies Corporate Total
Restructuring $ 991 $ 8,544 $ 1,804 $ 964 $ 1,238 $ 296 $ 13,837
Other (benefits) costs
(4) 438 1,545 14 320 431 2,744
Restructuring and other costs
$ 987 $ 8,982 $ 3,349 $ 978 $ 1,558 $ 727 $ 16,581
Nine Months Ended September 30, 2024
(in thousands)
Engineered Products Clean Energy & Fueling Imaging & Identification Pumps & Process Solutions Climate & Sustainability Technologies Corporate Total
Restructuring $ 2,969 $ 15,434 $ 4,645 $ 3,929 $ 14,261 $ 391 $ 41,629
Other costs, net
12 1,779 2,773 66 4,208 1,675 10,513
Restructuring and other costs
$ 2,981 $ 17,213 $ 7,418 $ 3,995 $ 18,469 $ 2,066 $ 52,142
Purchase Accounting Expenses
Purchase accounting expenses primarily relate to amortization of acquired 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 reconcile to segment earnings as follows:
Three Months Ended September 30, Nine Months Ended September 30,
(in thousands)
2025 2024 2025 2024
Purchase Accounting Expenses
Engineered Products $ 2,841 $ 2,806 $ 8,283 $ 8,049
Clean Energy & Fueling
25,281 24,928 75,985 67,231
Imaging & Identification 5,951 5,914 17,405 17,320
Pumps & Process Solutions 1
20,887 9,658 44,690 29,131
Climate & Sustainability Technologies 4,421 5,050 13,245 15,144
Total $ 59,381 $ 48,356 $ 159,608 $ 136,875
1The increase of $11.2 millionand $15.6 millionin purchase accounting expenses for the three and nine months ended September 30, 2025, respectively, from the prior year comparable period in our Pumps & Process Solutions segment is primarily due to the acquisition of Sikora in Q2 2025, inclusive of $5.8 millionand $7.7 million, respectively, in charges related to amortization of acquired intangible assets.
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 reinvestment in existing businesses and strategic acquisitions.
Cash Flow Summary
The following table is derived from our condensed consolidated statements of cash flows:
Nine Months Ended September 30,
Cash Flows from Operations (in thousands)
2025 2024
Net cash flows provided by (used in):
Operating activities $ 794,059 $ 648,881
Investing activities (814,627) 63,119
Financing activities (280,347) (818,445)
Operating Activities
Cash flow from operating activities for the nine months ended September 30, 2025 increased by $145.2 million compared to September 30, 2024, primarily driven by higher operating earnings during the period.
Adjusted Working Capital: We believe adjusted working capital (a non-GAAP measure calculated as receivables, 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)
September 30, 2025 December 31, 2024
Receivables, net
$ 1,451,935 $ 1,354,225
Inventories, net
1,321,751 1,144,838
Less: Accounts payable 861,570 848,006
Adjusted working capital $ 1,912,116 $ 1,651,057
Adjusted working capital has increased by $261.1 million, or 15.8%, year-to-date, driven by an increase of $97.7 million in net receivables and an increase of $176.9 million in net inventory, partially offset by an increase in accounts payable of $13.6 million. These amounts include the effects of acquisitions, dispositions and foreign currency translation. The increase in adjusted working capital versus year-end 2024 is primarily a result of timing of cash flows, with the fourth quarter traditionally representing our highest cash flow quarter.
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: During the nine months ended September 30, 2025, we received an additional $6.0 million of net proceeds related to the sale of a minority owned equity method investment in the third quarter of 2024 within the Climate & Sustainability Technologies segment. During the nine months ended September 30, 2024, we received net proceeds of $767.7 million from the disposition of De-Sta-Co. See Note 4 - Discontinued and Disposed Operations in the condensed consolidated financial statements in Item 1 of this Form 10-Q for further details.
•Acquisitions:During the nine months ended September 30, 2025, we deployed approximately $663.2 million, net to acquire three businesses within the Pumps & Process Solutions segment and one business within the Clean Energy & Fueling segment. In comparison, during the nine months ended September 30, 2024, we deployed approximately $602.7 million, net to acquire seven businesses within the Clean Energy & Fueling and Imaging & Identification segments. See Note 3 - Acquisitions in the condensed consolidated financial statements in Item 1 of this Form 10-Q for further details.
•Capital spending:Capital expenditures increased $49.6 million during the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, in line with our planned capital expenditures for the year.
We anticipate that capital expenditures and any additional acquisitions we make through the remainder of 2025 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 2025 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 the nine months ended September 30, 2025, the Company repurchased a total of 200,000 shares for $40.7 million. During the nine months ended September 30, 2024, the Company used $500.0 million to repurchase 2,569,839 shares on March 1, 2024 under an accelerated share repurchase transaction. See Note 17 - Stockholders' Equity in the condensed consolidated financial statements in Item 1 of this Form 10-Q for further details.
•Commercial paper and other short-term borrowings, net:The Company had no commercial paper borrowings during the nine months ended September 30, 2025. During the nine months ended September 30, 2024, we used $89.0 million to pay off commercial paper borrowings, with net proceeds received from the sale of De-Sta-Co.
•Dividend payments: Total dividend payments to common shareholders were $213.2 million during the nine months ended September 30, 2025, as compared to $212.4 million during the same period in 2024. Our dividends paid per common share increased 1.0% to $1.55 during the nine months ended September 30, 2025 compared to $1.54 during the same period in 2024.
Cash Flows from Discontinued Operations
Net cash (used in) provided by discontinued operations for the nine months ended September 30, 2025 and September 30, 2024 amounted to $(11.3) million and $93.9 million, respectively. Cash flows from discontinued operations generated for the nine months ended September 30, 2024, primarily relate to cash provided by operations of approximately $108.3 million, partially offset by cash used in investing activities of $(14.4) million, which comprised capital expenditures partially offset by proceeds from a sale of investment.
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 condensed 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.
The following table reconciles our free cash flow to cash flow provided by operating activities:
Nine Months Ended September 30,
Free Cash Flow(dollars in thousands)
2025 2024
Cash flow provided by operating activities $ 794,059 $ 648,881
Less: Capital expenditures (163,274) (113,626)
Free cash flow $ 630,785 $ 535,255
Cash flow from operating activities as a percentage of revenue 13.2 % 11.2 %
Cash flow from operating activities as a percentage of earnings from continuing operations
96.5 % 55.9 %
Free cash flow as a percentage of revenue 10.5 % 9.2 %
Free cash flow as a percentage of earnings from continuing operations
76.7 % 46.1 %
For the nine months ended September 30, 2025, we generated free cash flow of $630.8 million, representing 10.5% of revenue and 76.7% of earnings from continuing operations. Free cash flow for the nine months ended September 30, 2025 increased $95.5 million, compared to September 30, 2024, primarily driven by higher operating earnings, 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 condensed consolidated financial statements in Item 1 of this Form 10-Q for further details.
Capitalization
We use commercial paper borrowings for general corporate purposes, including the funding of acquisitions and the repurchase of our common stock. As of September 30, 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 1.0. The Company was in compliance with all covenants in the Credit Agreements and other long-term debt covenants at September 30, 2025 and had an interest coverage ratio of consolidated EBITDA to consolidated net interest expense of 109.8 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 Securities and Exchange Commission 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.
At September 30, 2025, our cash and cash equivalents totaled $1.6 billion, of which approximately $567.9 million was held outside the United States. At December 31, 2024, our cash and cash equivalents totaled $1.8 billion, of which approximately $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.
During the nine months ended September 30, 2025, the Company completed four business acquisitions for total consideration of $665.2 million, subject to post-closing adjustments and inclusive of contingent consideration. See Note 3 - Acquisitions in the condensed consolidated financial statements in Item 1 of this Form 10-Q for further details.
We utilize the net debt to net capitalization calculation (a non-GAAP measure) to assess our overall financial leverage and capacity and believe the calculation is useful to investors for the same reason. 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:
Net Debt to Net Capitalization Ratio
(dollars in thousands)
September 30, 2025 December 31, 2024
Current portion of long-term debt and other short-term borrowings
$ 400,646 $ 400,056
Long-term debt 2,670,362 2,529,346
Total debt 3,071,008 2,929,402
Less: Cash and cash equivalents
(1,552,804) (1,844,877)
Net debt 1,518,204 1,084,525
Add: Stockholders' equity 7,662,936 6,953,996
Net capitalization $ 9,181,140 $ 8,038,521
Net debt to net capitalization 16.5 % 13.5 %
Our net debt to net capitalization ratio increased to 16.5% at September 30, 2025 compared to 13.5% at December 31, 2024. Net debt increased $433.7 million during the period primarily due to the increase in value of the euro-denominated debt resulting from foreign currency translation adjustments and a decrease in cash and cash equivalents from acquisition-related investments. Stockholders' equity increased for the period primarily driven by current earnings of $811.9 million.
Operating cash flow and access to capital markets are expected to satisfy our various cash flow requirements, including acquisitions, capital expenditures, purchase obligations, 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.
Critical Accounting Estimates
Our condensed consolidated financial statements and related public financial information are based on the application of GAAP which requires the use of estimates, assumptions, judgments and subjective interpretations of accounting principles that have an impact on the assets, liabilities, revenue and expense amounts reported. These estimates can also affect supplemental information contained in our public disclosures, including information regarding contingencies, risk and our financial condition. We believe our use of estimates and underlying accounting assumptions conform to GAAP and are consistently applied. We review valuations based on estimates for reasonableness on a consistent basis.
Recent Accounting Standards
See Note 19 - Recent Accounting Pronouncements in the condensed consolidated financial statements in Item 1 of this Form 10-Q. The adoption of recent accounting standards as included in Note 19 - Recent Accounting Pronouncements in the condensed consolidated financial statements has not had, and is not expected to have, a significant impact on our revenue, earnings or liquidity.
Special Note Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q, especially MD&A, contains "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. All statements in this document other than statements of historical fact are statements that are, or could be deemed, "forward-looking" statements. Some of these statements may be indicated by words such as "may", "anticipate", "expect", "believe", "intend", "continue", "guidance", "estimates", "suggest", "will", "plan", "should", "would", "could", "forecast" and other words and terms that use the future tense or have a similar meaning. Forward-looking statements are based on current expectations and are subject to numerous important risks, uncertainties, and assumptions, including those described in our Annual Report on Form 10-K for the year ended December 31, 2024. Factors that could cause actual results to differ materially from current expectations include, among other things: general economic conditions and conditions in the particular markets in which we operate; supply chain constraints and labor shortages that could result in production stoppages, inflation in material input costs and freight logistics; the impacts of natural or human induced disasters, acts of war, terrorism, international conflicts, and public health crises or other future pandemics on the global economy and on our customers, suppliers, employees, business and cash flows; changes in customer demand and capital spending; competitive factors and pricing pressures; our ability to develop and launch new products in a cost-effective manner; changes in law, including the effect of tax laws and developments with respect to trade policy and tariffs; our ability to identify and complete acquisitions and integrate and realize synergies from newly acquired businesses; acquisition valuation levels; the impact of interest rate and currency exchange rate fluctuations; capital allocation plans and changes in those plans, including with respect to dividends, share repurchases, investments in research and development, capital expenditures and acquisitions; our ability to effectively deploy capital resulting from dispositions; our ability to derive expected benefits from restructurings, productivity initiatives and other cost reduction actions; the impact of legal compliance risks and litigation, including with respect to product quality and safety, cybersecurity and privacy; and our ability to capture and protect intellectual property rights, and various other factors that are described in our periodic reports filed with or furnished to the Securities and Exchange Commission, including our Annual Report on Form 10-K for the year ended December 31, 2024. The Company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by law. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.
The Company may, from time to time, post financial or other information on its website, www.dovercorporation.com. The website is for informational purposes only and is not intended for use as a hyperlink. The Company is not incorporating any material on its website into this report.
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.
We believe the net debt to net capitalization ratio and free cash flow are important measures of liquidity. Net debt to net capitalization is helpful in evaluating our capital structure and the amount of leverage we employ. Free cash flow and free cash flow ratios provide both management and investors a measurement of cash generated from operations that is available to fund acquisitions, pay dividends, repay debt and repurchase our common stock. We believe that reporting adjusted working capital provides a meaningful measure of liquidity by showing changes caused by operational results. We believe that reporting organic revenue growth provides a useful comparison of our revenue performance and trends between periods.
Reconciliations and comparisons to non-GAAP measures can be found above in this Item 2, Management's Discussion and Analysis of Financial Condition and Results of Operations.
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