Adjusted EBITDA margin increased by 80 basis points to 26.4%, and adjusted EPS grew by 7%.
Adjusted net income for Q4 was $992 million with an 18.9% return on sales, and adjusted EPS was $7.69, up 14%.
Backlog finished at a record $11 billion, driven by strong Aerospace orders and backlog growth.
Fiscal year 2025 was a record year for Parker Hannifin with sales reaching $19.9 billion and adjusted segment operating margin expanding to 26.1%, up 120 basis points from prior year.
Fourth quarter 2025 saw record sales growth of 1%, organic growth of 2%, and adjusted segment operating margin of 26.9%, up 160 basis points year-over-year.
Record cash flow from operations was $3.8 billion, free cash flow was $3.3 billion, with conversion at 109%, both up 12% from prior year.
Adjusted operating income increased approximately 10% to $195 million with margin up 50 basis points to 17.9%, reflecting a 26% incremental margin.
Capital allocation included $57 million invested in growth and $169 million returned to shareholders via dividends and $127 million in share repurchases.
Gross profit dollars increased approximately 6% to $406 million with gross profit margin steady at 37.3%, down 30 basis points versus prior year.
Reported diluted EPS was $2.56; adjusted EPS increased 11% to $2.60, including $0.03 from favorable foreign exchange and $0.06 from share repurchases.
Savings actions and cost management offset lower volumes and an $8.5 million LIFO charge; year-to-date LIFO charges total approximately $10 million.
Second quarter sales increased 6.6% to $1.089 billion, driven by 5.2% higher price, 3% benefit from acquisitions, and 70 basis points from favorable foreign exchange translation, partially offset by 2.3% lower volumes.
Segment performance: Americas Welding sales up 7% with adjusted EBIT margin at 18.6%, International Welding sales down 2.5% with margin improving to 12.7%, and Harris Products Group sales up 19% with record margin of 19.4%.
SG&A expenses increased 1% primarily from acquisitions, with savings actions offsetting incremental employee costs including reinstated merit increases.
Year-to-date cash flow generation strong with over 100% free cash flow conversion and adjusted ROIC at 21.7%.
C&I operating income margin was 5.6% compared to 0.4% last year, helped by absence of prior contingent compensation expense and better project margins.
C&I revenues were $394 million, up 6% year-over-year, driven primarily by fixed price contracts.
EBITDA was $56 million compared to negative $5 million in the prior year quarter.
Funded debt-to-EBITDA leverage ratio remained strong at 0.46x.
Gross margin improved to 11.5% from 4.9% in the prior year quarter, due to better productivity and favorable job closeouts, partially offset by labor and project inefficiencies.
Net income was $27 million versus a net loss of $15 million last year; diluted EPS was $1.70 versus negative $0.91.
Operating cash flow was $33 million, up from $23 million last year; free cash flow was $12 million versus $3 million last year.
Second quarter 2025 revenues were $900 million, an increase of $71 million or 8.6% compared to the same period last year.
SG&A expenses increased by $2 million to $63 million, mainly due to higher employee incentive compensation and support for growth.
T&D operating income margin was 8% compared to an operating loss margin of 1.8% last year.
T&D revenues were $506 million, up 10% year-over-year, with $305 million from Transmission and $201 million from Distribution.
Total backlog as of June 30, 2025, was $2.64 billion, 4% higher than a year ago, with $927 million in T&D and $1.72 billion in C&I.
Working capital was $251 million, funded debt $86 million, and borrowing availability $383 million as of June 30, 2025.
Dafinchi