Flowserve Corporation (FLS): Business Model Canvas [Dec-2025 Updated]

If you're trying to figure out how Flowserve Corporation is setting itself up for a strong 2025, look no further than its core strategy: the 3D Growth playbook-Diversification, Decarbonization, and Digitization. Honestly, it's not just about selling big pumps and valves; the real money is in the durable aftermarket services, which is why they're banking on guidance like $3.40 to $3.50 in Adjusted EPS this year. This Business Model Canvas breaks down exactly how they use their massive installed base and 130 Quick Response Centers to lock in recurring revenue while investing $140 million in R&D for future growth. You need to see the whole picture below to understand the mechanics behind their margin expansion.

Flowserve Corporation (FLS) - Canvas Business Model: Key Partnerships

You're looking at the backbone of Flowserve Corporation's operations-the relationships that make the whole machine run. Honestly, these partnerships are where the strategy, especially the 3D strategy (diversify, decarbonize, digitize), really shows up in the real world.

Strategic customer partnerships for decarbonization solutions

Flowserve Corporation is locking in major deals that align directly with global energy transition needs. For instance, the collaboration with Celeros Flow Technology to support Abu Dhabi National Oil Company's (ADNOC) carbon capture initiative is a big one. This project is designed to capture and store 1.5 million tons of carbon dioxide (CO₂) annually. Flowserve supplies the critical Dry Gas Seals and Dry Gas Seal Systems for the high-pressure injection packages. ADNOC has an even bolder goal, aiming for five million tons of annual capture capacity by 2030. This work is a clear example of Flowserve's commitment to decarbonization, building on previous efforts like contributing control valves to a Norway CCS facility expected to conclude in 2024. To give you a sense of scale, Flowserve had achieved 80% of its 2030 carbon emissions reduction goal, backed by nearly $140 million in energy transition bookings as detailed in their 2022 ESG Report.

Global network of independent distributors and sales representatives

The reach of Flowserve Corporation depends heavily on its physical footprint and the partners who help service that base. As of March 31, 2025, the company maintains a global presence with manufacturing facilities and Quick Response Centers (QRCs) in approximately 50 countries. This infrastructure supports 16,000 employees globally. These QRCs are key for delivering aftermarket services like installation and advanced diagnostics, which are vital for maintaining Flowserve's large installed base. The strength of this network is reflected in their Q3 2025 bookings, which hit $1.2 billion, with aftermarket bookings alone exceeding $650 million.

Here's a quick look at the scale of their operational footprint supporting these partnerships:

Metric	Value as of Late 2025 Data	Source Context
Global Employees	16,000	As of March 31, 2025
Countries with Facilities/QRCs	Approx. 50	As of March 31, 2025
Q3 2025 Total Bookings	$1.2 billion	For the quarter ended September 30, 2025
Q3 2025 Aftermarket Bookings	Over $650 million	For the quarter ended September 30, 2025

Key suppliers for specialized raw materials and components

While specific supplier contracts aren't detailed in the latest public filings, the operational success relies on securing specialized materials for their Flowserve Pumps Division (FPD) and Flow Control Division (FCD). The FPD segment, which handles specialty and engineered pumps and mechanical seals, had sales of $2.68 billion for the fiscal year ending December 2024. The FCD segment, dealing with valves and automation, recorded sales of $1.06 billion for the same period. Securing reliable supply chains for these complex components is defintely crucial to meeting backlog expectations, with Flowserve expecting to recognize revenue on approximately 83% of its December 31, 2024 backlog during 2025.

Financial partners for divestiture of legacy asbestos liabilities

Flowserve Corporation took a significant step to simplify its capital structure by divesting its legacy asbestos liabilities. This transaction, announced in October 2025, involves transferring these liabilities to Acorn Investment Partners, a portfolio company of funds managed by Oaktree Capital Management, L.P.. Flowserve is contributing $199 million in cash, alongside $20 million from Acorn, to capitalize the entity assuming the liabilities. The expected impact is a one-time GAAP loss of approximately $135 million in the fourth quarter of 2025. The upside here is an expected annual free cash flow improvement of approximately $15 million to $20 million. Also, the company's 2025 Adjusted EPS guidance explicitly excludes any impact from the annual assessment of these actuarial-determined liabilities, which typically happens in the third quarter.

Technology partners for digitization and smart product development

Digitization is a core pillar of Flowserve's strategy, often involving strategic technology acquisitions. For example, Flowserve acquired the intellectual property and in-process R&D for cryogenic Liquefied Natural Gas (LNG) submerged pump technology from NexGen Cryogenic Solutions, Inc. ("NexGen Cryo") in the third quarter of 2024. This move was aimed at strengthening decarbonization offerings across the LNG value chain. The broader market context shows this focus is timely; the centrifugal pump market, where Flowserve is a major player alongside Grundfos, Xylem, Sulzer, and KSB, had a 2025 market size of USD 39.79 billion and is projected to reach USD 65.38 billion by 2035. This growth is heavily supported by digital transformation, integrated sensors, and AI-enabled diagnostics. Furthermore, shareholders approved the re-election of the Board of Directors in May 2025, which provides oversight as Flowserve executes its strategy toward its 2027 financial targets. The authorized quarterly cash dividend was $0.21 per share in May 2025.

Finance: draft 13-week cash view by Friday.

Flowserve Corporation (FLS) - Canvas Business Model: Key Activities

You're looking at the core actions Flowserve Corporation takes to turn its value proposition into reality, especially as it navigates the late 2025 landscape. Honestly, it's all about disciplined execution across a few key fronts.

Executing the 3D Growth Strategy: Diversification, Decarbonization, Digitization

The 3D Growth Strategy-Diversification, Decarbonization, and Digitization-is the tactical plan for Flowserve Corporation. It's not just talk; the numbers show traction. In 2024, bookings across these three focus areas made up 30% of the total. For the third quarter of 2025, the Decarbonization push, particularly in Power, was evident: Power bookings jumped 23% year-over-year, which included a record $140 million in nuclear awards for that quarter. This focus is long-term, with management highlighting a multi-year nuclear flow-control content opportunity estimated at around $10 billion over the next decade. To be fair, this strategy is about capturing value where the world is heading, like data centers and electrification trends.

Here's a quick look at how Q3 2025 performance ties into these strategic activities:

Key Metric	Q3 2025 Value/Change	Strategic Link
Total Bookings	$1.2 billion	Overall Demand & Strategy Momentum
Aftermarket Bookings Growth	6% increase	Diversification & Cycle Resiliency
Nuclear Awards	$140 million	Decarbonization & High-Margin Growth
Adjusted Operating Margin	14.8% (Expanded 370 bps YoY)	Flowserve Business System Execution

Manufacturing highly-engineered pumps, valves, and seals

Flowserve Corporation's foundation is making complex hardware. They are one of the world's leading providers of engineered and industrial pumps, seals, and valves. This activity supports the entire business, from original equipment sales to the services that follow. While original equipment sales decreased 4.9% year-over-year in Q3 2025, the company is deliberately reducing its exposure to large engineered energy projects, aiming for original equipment to be in the mid-single-digit mix of total revenue. This shift helps manage revenue lumpiness from project delays.

Delivering high-margin aftermarket services and repairs

This is where you see the stability you want in a cyclical industry. The aftermarket business is seen as cycle-resilient and is a major focus for expansion. In Q3 2025, aftermarket bookings grew 6% year-over-year, reaching over $650 million. This momentum is strong; Q1 2025 saw record aftermarket bookings of nearly $690 million. Aftermarket sales specifically increased 6.3% year-over-year in Q3 2025. The goal is to shift the revenue mix toward this more predictable stream. If you look at the combined entity from the proposed Chart merger, aftermarket services were projected to be approximately $3.7 billion, making up about 42% of the total revenue.

Implementing the Flowserve Business System for operational excellence

The Flowserve Business System (FBS) is the operational backbone, defining five critical functional disciplines. You see its impact in the margins. The system, along with the 80/20 complexity reduction program, is driving margin expansion. For instance, in Q3 2025, the adjusted gross margin hit 34.8%, a 240 basis point increase from the prior year period. Similarly, the adjusted operating margin expanded 370 basis points year-over-year to 14.8% in the same quarter. The Operational Excellence pillar is actively improving delivery and increasing shop floor productivity. For example, the Industrial Pumps unit used the 80/20 methodology to reduce its Stock Keeping Units (SKUs) by 45%.

The five pillars of the FBS include:

• People Excellence (talent investment and development).
• Operational Excellence (improving delivery and reducing cost).
• Portfolio Excellence (product management and CORE- 80/20).
• Commercial Excellence (pricing discipline and funnel management).
• Innovation Excellence (developing differentiating solutions).

Pursuing M&A to strengthen the nuclear flow control portfolio

Flowserve Corporation is actively looking at M&A to strengthen its portfolio, especially in nuclear flow control. The focus is on acquiring companies that already possess necessary certifications and an established installed base, which helps lower barriers to entry. This supports the strategy of packaging more content together for new projects. In a major capital allocation move during 2025, Flowserve announced a transaction to divest its legacy asbestos liabilities, freeing up capital to focus on these growth and value-enhancing opportunities. While the proposed merger with Chart Industries was terminated, that deal would have created an entity with an enterprise value of approximately $19 billion. The termination resulted in Flowserve receiving a $266 million payment.

Finance: finalize the Q4 2025 capital allocation plan focusing on organic growth vs. M&A targets by end of January 2026.

Flowserve Corporation (FLS) - Canvas Business Model: Key Resources

You're looking at the core assets Flowserve Corporation relies on to deliver its value proposition. These aren't just assets; they are deep, often hard-to-replicate advantages built over decades in the flow control space. Honestly, this is where their moat is deepest.

Massive global installed base of proprietary flow control equipment

Flowserve Corporation benefits from a vast installed base of its equipment operating across critical global infrastructure. This installed base drives significant, recurring aftermarket revenue, which is a key financial stabilizer. For instance, in the nuclear sector alone, Flowserve equipment is installed in more than 200 nuclear power plants worldwide. More than 300 Flowserve reactor primary pumps are currently providing service reliability in these demanding environments. This installed base represents a persistent demand for genuine parts, maintenance, and upgrades.

Over 130 Quick Response Centers (QRCs) for service and repair

The service network is crucial for rapid response, minimizing customer downtime. Flowserve maintains over 130 Quick Response Centers (QRCs) globally. These centers are strategically placed to ensure proximity to major industrial customers, enabling quick turnaround on repairs and services for flow control products, often regardless of the original equipment manufacturer (OEM).

Proprietary engineering knowledge and nuclear industry N Stamp certification

The specialized knowledge in engineering, particularly for high-stakes environments, is a key resource. Flowserve Corporation holds the necessary domestic and international qualifications for designing and manufacturing pumps and seals for nuclear applications. This includes maintaining a Nuclear Repair (NR) stamp for ASME Section III Code repairs and replacements. Furthermore, Flowserve is fully qualified to provide Class 1, 2, and 3 safety-related equipment, parts, repairs, and service, complying with U.S. Regulation 10CFR50 Appendix B and equivalent international standards like IAEA GS-R-3.

Global manufacturing footprint across more than 50 countries

The physical manufacturing presence supports global delivery and localized service capabilities. Flowserve Corporation operates a global manufacturing footprint spanning more than 50 countries. This extensive network allows the company to leverage economies of scale while serving diverse geographic markets efficiently.

Intellectual property from approximately $140 million in 2024 R&D spend

Innovation is anchored by consistent investment in research and development. Flowserve Corporation dedicated approximately $140 million in 2024 to R&D activities. This spend fuels the development of new solutions and the enhancement of existing product lines, creating valuable intellectual property that differentiates the company in the market.

Here's a quick look at some of the quantitative scale of these key resources:

Resource Metric	Specific Data Point	Context/Scope
Global Manufacturing Presence	More than 50 countries	Manufacturing facilities footprint
Service Network Size	Over 130 centers	Quick Response Centers (QRCs)
2024 R&D Investment	Approximately $140 million	Spend on Innovation Excellence
Nuclear Installed Base (Pumps)	Over 300 reactor primary pumps	Installed in commercial nuclear plants
Nuclear Service Qualification	Maintains NR stamp	For ASME Section III Code repairs
Service Network Size (Alternative Data)	More than 150 centers	Total Quick Response Centers network size

The company structures its operational support, including R&D, marketing, and supply chain, to be shared across its segments, aiming to use the Flowserve Business System to drive value. This shared leadership structure helps maximize the return on these tangible and intangible assets.

Finance: review the 2025 capital expenditure plan against the 2024 R&D spend by end of next week.

Flowserve Corporation (FLS) - Canvas Business Model: Value Propositions

You're looking at the core reasons customers choose Flowserve Corporation over the competition as of late 2025. It's not just about selling a pump or a valve; it's about solving mission-critical problems where failure isn't an option. This value is built on reliability, service, and forward-looking solutions.

Guaranteed uptime and reliable performance in critical infrastructure

Flowserve Corporation's value proposition here centers on the dependability of its equipment in the toughest spots globally. You see this commitment reflected in the strong performance of their core segments, especially where long-term asset integrity matters most.

The focus on the Power and Nuclear end markets shows this clearly. For instance, in the third quarter of 2025, power bookings jumped 23% year-over-year, which included $140 million in nuclear awards just for that quarter. This is equipment that has to work, period. This momentum follows a trend, as Q1 2025 saw power bookings increase more than 45% year-over-year, with over $100 million in nuclear awards for the third straight quarter.

The Flowserve Pumps Division (FPD) is delivering peer-leading profitability, achieving an adjusted operating margin of 20.3% in Q3 2025. That margin performance is a direct reflection of the quality and reliability you're paying for in those critical assets.

High-value, non-discretionary aftermarket parts and services

Honestly, this is the engine of Flowserve Corporation's current profitability and resilience. Aftermarket is high-margin and non-discretionary because when a critical pump goes down, you need the part now, not next month. The company has successfully shifted its mix toward this area.

In the second quarter of 2025, aftermarket bookings hit $621 million, making up 58% of the total bookings mix. By the third quarter, aftermarket bookings continued their strong run, growing 6% year-over-year to exceed $650 million. The Flowserve Business System, specifically the 80/20 program, helps simplify the product lines to better support these high-value offerings.

Here's the quick math on the shift: the focus on this recurring revenue stream helped drive the full-year 2025 Adjusted EPS guidance up to a midpoint of $3.45, representing more than a 30% increase versus last year.

Metric	Period	Value/Amount
Total Bookings	Q3 2025	$1.2 billion
Aftermarket Bookings (Absolute)	Q3 2025	Over $650 million
Aftermarket Bookings Percentage	Q2 2025	58% of total mix
Adjusted Gross Margin	Q2 2025	34.9%
Adjusted Operating Margin	Q3 2025	14.8%

Solutions for customer decarbonization goals (e.g., Energy Advantage Program)

Flowserve Corporation is actively helping infrastructure clients meet their environmental targets, which is becoming a mandatory value proposition, not just a nice-to-have. The Energy Advantage Program is the tangible proof point here.

Through a partnership with Heide Refinery, for example, the program is projected to reduce annual power consumption by over 2,000 Megawatt Hours (MWh) and cut carbon emissions by more than 1,300 metric tons each year. That's real-world impact you can measure. Furthermore, the solutions implemented via this program are designed for rapid return on investment, with an average payback timeline of 18 months or less. This ties decarbonization directly to lowering the total cost of ownership.

Engineered products customized for high-pressure and extreme environments

This speaks to the core engineering capability within the Flow Control Division (FCD) and FPD. These aren't off-the-shelf items; they are designed for specific, demanding process conditions.

The company's 3D growth strategy includes diversification, and the focus on the Nuclear market is a prime example of serving extreme environments. The $140 million in nuclear awards in Q3 2025 shows deep customer trust in their engineered solutions for these complex applications. The FCD segment itself saw bookings increase 24% in Q3 2025, partly driven by integration synergies and the simplification efforts of the 80/20 program, which helps focus engineering resources on the highest-value products.

Digital solutions for predictive maintenance and operational data

Digitization is the third pillar of the 3D strategy, and it's about moving from reactive fixes to proactive management using data. The RedRaven IoT platform is central to this push, using sensors to predict equipment failures.

While Flowserve Corporation doesn't always publish its direct digital revenue figures, the market context is clear: the predictive maintenance segment within the industrial digital transformation market is growing at a 25.2% CAGR. Flowserve's commitment to this area is evident, as digitization represented 30% of their total bookings growth in 2024. This capability helps ensure the uptime you're paying for by flagging issues before they become failures. If onboarding takes 14+ days, churn risk rises, but digital monitoring shortens that response window significantly.

• Digitalization was one of the three key growth areas in the 3D Strategy.
• The company's backlog stood at $2.9 billion at the end of Q3 2025.
• The projected full-year 2025 revenue is between $4.7 billion and $4.8 billion.
• The company reduced its Industrial Pumps SKU count by 45% via the 80/20 program.

Finance: draft 13-week cash view by Friday.

Flowserve Corporation (FLS) - Canvas Business Model: Customer Relationships

You're looking at how Flowserve Corporation (FLS) keeps its industrial customers locked in, which is key since their total revenue for the trailing twelve months (TTM) as of 2025 was around $4.68 Billion USD. The relationship strategy is built on deep integration, moving beyond simple transactions.

Dedicated account management for long-term, large-scale industrial customers

Flowserve Corporation manages relationships with over 10,000 companies globally, spanning oil and gas, chemical, and power generation sectors. This is supported by the Commercial Excellence pillar within the Flowserve Business System, which specifically focuses on disciplined account management. For the biggest accounts, you can expect dedicated teams ensuring long-term service contracts and strategic alignment.

High-touch, consultative engineering partner approach for OE sales

When selling Original Equipment (OE), the approach is heavily consultative. Flowserve Corporation directs its R&D investment toward creating compelling value propositions that enhance the end-user experience. This means the sales process often involves deep engineering collaboration to tailor precision-engineered flow control equipment for critical processes, rather than just selling a catalog item. It's a high-touch engagement, especially for complex systems.

Localized, quick response service through the QRC network

To ensure quick support, Flowserve Corporation leverages its global footprint, positioning service capabilities as near to the customer as possible through its Quick Response Center (QRC) network. This network is designed for fast and reliable repair or replacement of equipment like valves and actuators. Furthermore, this local service capability is digitally enhanced; for example, the RedRaven platform connects to the QRC network to streamline these rapid response activities.

Digital platforms for remote monitoring and predictive maintenance

Digitization is a core part of Flowserve Corporation's 3D growth strategy, with bookings in this area representing 30% of total 2024 bookings. The company is actively integrating digital tools to support customers, particularly in technologically mature markets like North America, which show high adoption of digital monitoring systems and predictive maintenance solutions. This digital layer helps shift the relationship from reactive fixes to proactive asset management.

Relationship-driven model for recurring aftermarket revenue

A major focus is building the recurring revenue base through aftermarket services. This relationship-driven model is showing clear results; in the second quarter of 2025, durable aftermarket bookings hit $621 million, making up 58% of the total bookings mix for that quarter. By the third quarter of 2025, aftermarket bookings continued to grow by 6% year-over-year, reaching over $650 million. This shift towards services is a clear indicator of successful, sticky customer relationships. Honestly, the growth in aftermarket revenue is what really stabilizes the top line.

Here are some key operational and financial metrics related to customer engagement and revenue streams as of mid-2025:

Metric	Value / Percentage	Period / Context
Total Customers Served	Over 10,000 companies	General Customer Base
Aftermarket Bookings (Q3 2025)	Over $650 million	Third Quarter 2025
Aftermarket Share of Bookings (Q2 2025)	58%	Second Quarter 2025
Digitization Bookings Contribution	30%	Total Bookings in 2024
Point-in-Time Revenue Share	Approx. 81%	Three Months Ended March 31, 2025
Total Bookings (Q3 2025)	$1.2 billion	Third Quarter 2025

The structure supporting these relationships involves several key components that Flowserve Corporation actively manages:

• Commercial Excellence pillar driving account management discipline.
• Global network of service centers and sales offices for local support.
• Integration of digital tools like RedRaven with the QRC network.
• Focus on aftermarket bookings, which grew 6% in Q3 2025.
• Strong gross margin performance, reaching 34.8% (adjusted) in Q3 2025.

Finance: draft 13-week cash view by Friday.

Flowserve Corporation (FLS) - Canvas Business Model: Channels

You're looking at how Flowserve Corporation (FLS) gets its flow control products and services into the hands of its global customers as of late 2025. The strategy clearly leans heavily on direct interaction for big projects and a strong service footprint.

Direct global sales force for major original equipment (OE) projects

Flowserve Corporation relies on its direct sales force to land major Original Equipment (OE) projects. This channel is crucial for securing large, complex orders, often in the Power and Nuclear end markets. For the third quarter ending September 30, 2025, Power bookings specifically increased 23% year-over-year, including $140 million in nuclear awards during that quarter, suggesting the direct sales channel is effectively capturing high-value, strategic growth areas. The company competes based on technical expertise and project management, which are best delivered through a direct, high-touch sales team for OE work.

Extensive network of regional Quick Response Centers (QRCs)

The network of Quick Response Centers (QRCs) is the backbone for the aftermarket business, which is a significant revenue driver. Flowserve Corporation offers aftermarket equipment services like installation, advanced diagnostics, and turnkey maintenance programs through this global network. The success of this channel is evident in the Q3 2025 bookings, where aftermarket bookings grew 6% to over $650 million. While the exact number of QRCs isn't public, the strategy emphasizes proximity to service centers as a competitive factor. The strength of this aftermarket franchise is a key component of the overall business model.

The importance of the service/aftermarket component, which flows through channels like the QRCs, can be seen by looking at historical context: in fiscal year 2022, approximately 42% of annual revenue came from the Powerful Aftermarket Franchise, indicating a massive installed base requiring ongoing service and parts delivery via these centers.

Independent distributors and sales representatives for broader market reach

For broader market penetration beyond major OE projects, Flowserve Corporation utilizes independent distributors and sales representatives. This extends their reach into regional and local markets where a direct presence might be less efficient. While the precise number of these partners isn't disclosed, this network supports the overall sales effort, which resulted in total third-quarter bookings of $1.2 billion in Q3 2025. The company competes on timeliness of delivery, which a strong distributor network helps ensure.

Direct sales to other Original Equipment Manufacturers (OEMs)

Direct sales to other Original Equipment Manufacturers (OEMs) represent another key route to market, likely involving the sale of components like pumps or valves that are integrated into the OEM's final product. This is often bundled with the OE project sales efforts. The revenue generated through the Flowserve Pump Division (FPD) was the largest source in the last reported year, amounting to $3.15 billion, a figure supported by both direct OE and OEM channel sales.

Digital channels for product information and service requests

Flowserve Corporation is investing in digital integration to enhance the customer experience across all channels. This includes digital channels for accessing product information and initiating service requests. The company's strategy mentions advancing digitization, and R&D investment focuses on significantly enhancing digital integration. This digital layer supports the efficiency of the QRC network and the sales force by streamlining initial contact and information exchange. For example, the company's full-year 2025 guidance projected organic sales growth of 3% to 5%, which is supported by these operational and digital improvements.

The geographic reach of all these channels combined shows where the revenue is generated, with the United States being the largest contributor in the last reported full year (2024), bringing in $1.82 billion.

Channel Component	Metric/Data Point	Value (Latest Available)	Context/Year
Aftermarket Strength (via QRCs)	Q3 Aftermarket Bookings	Over $650 million	Q3 2025
Major OE/Strategic Sales	Q3 Power Bookings	$140 million in nuclear awards	Q3 2025
Total Channel Output	Total Quarterly Bookings	$1.2 billion	Q3 2025
Geographic Reach Proxy	Revenue from United States	$1.82 billion	Fiscal Year 2024
Product Line Contribution Proxy	Flowserve Pump Division Revenue	$3.15 billion	Last reported year (2024)

You can see the direct impact of the service channel in the Q3 2025 results, where aftermarket bookings grew 6%. Also, the full-year 2025 Adjusted EPS guidance is set between $3.40 and $3.50, reflecting the expected performance across all these sales and service channels.

• Direct sales focus on high-value OE projects.
• QRC network drives robust aftermarket revenue.
• Aftermarket bookings reached over $650 million in Q3 2025.
• Distributors support broader market coverage.
• Digital investment supports operational efficiency.

Finance: draft 13-week cash view by Friday.

Flowserve Corporation (FLS) - Canvas Business Model: Customer Segments

You're looking at how Flowserve Corporation (FLS) divides its customer base to sell its flow control products and services. Honestly, for a company like Flowserve, the customer segments are dictated by the major global process industries that need reliable fluid movement. We see this clearly in their Q3 2025 bookings data, which gives us a snapshot of where the demand is right now.

The Energy industry, which includes oil and gas, is a massive component, though its bookings showed some softness recently. For the three months ended September 30, 2025, the Energy end market accounted for 33% of total bookings, according to the company's outlook. This segment is driven by refining utilization remaining steady at healthy levels.

The Power segment is seeing significant acceleration, which Flowserve attributes to global investments in nuclear and traditional power generation, fueled by the growth of Artificial Intelligence (AI), data center development, and broader electrification trends. Power bookings jumped 23% year-over-year in Q3 2025. Specifically within Power, nuclear awards are a major driver; Flowserve secured over $140 million in nuclear bookings during Q3 2025, including two major European reactor awards.

The Chemical and petrochemical process industries also represent a core segment. Chemical bookings were up 18% year-over-year in Q3 2025, with the specialty chemical build-out remaining healthy. This segment represented 19% of total bookings for the quarter.

For General Industries, which covers diverse industrial capital expenditure (capex) projects, the outlook suggests this is Flowserve's largest segment by current order intake. General Industries represented 34% of total bookings in Q3 2025. This segment benefits from further regionalization influencing government policies to stimulate industrial capex in many countries.

Flowserve Corporation's customer base is clearly segmented by these end markets, but you also need to consider the service component, which is the aftermarket business. This is where the recurring revenue lives. Aftermarket bookings in Q3 2025 grew 6% to over $650 million. This marked the sixth consecutive quarter of aftermarket bookings exceeding $600 million.

Here's a quick look at the Q3 2025 Bookings breakdown by the end-market categories Flowserve reported:

End Market Category	Q3 2025 Bookings Percentage of Total	Q3 2025 Bookings Growth (YoY)
General Industries	34%	+7%
Energy	33%	(19)%
Chemical	19%	+18%
Power (Including Nuclear)	14%	+23%

You should note that the Water management and desalination infrastructure segment isn't explicitly broken out in the latest Q3 2025 bookings data, as Flowserve reclassified its end markets into four primary categories starting in Q1 2025. However, water management was one of the five original categories, suggesting it is now likely embedded within General Industries or Energy.

When looking at large, multinational Engineering, Procurement, and Construction (EPC) firms, they are key channel partners, especially in the Power segment. Flowserve is leveraging deep technical partnerships with reactor/SMR developers, EPCs, and operators to capture new build opportunities, which include an estimated $20-80 million+ per new Small Modular Reactor (SMR).

To give you a sense of the overall scale of business Flowserve is managing, their total backlog at the end of Q3 2025 stood at $2.90 billion. Also, their total revenue for the trailing twelve months ending September 30, 2025, was $4.69 billion.

The customer base is clearly shifting focus, which you can see in the growth rates:

• Nuclear awards are accelerating growth in the Power end market.
• The company is focused on driving aftermarket growth across all segments.
• Less than 10% of total bookings came from greenfield projects in Q3 2025.

Finance: review the Q4 2025 bookings against these Q3 segment percentages by next Tuesday.

Flowserve Corporation (FLS) - Canvas Business Model: Cost Structure

You're looking at the expense side of Flowserve Corporation's operations, which is heavily weighted toward manufacturing and global support infrastructure. Honestly, for a company dealing in precision-engineered flow control, the cost of making the product is always front and center.

Significant Cost of Goods Sold (COGS) due to engineered product manufacturing

The core cost driver here is the material and labor for complex, often custom-engineered pumps, valves, and seals. Since Flowserve Corporation reports a Gross Margin, we can infer the scale of COGS relative to sales. For the fourth quarter ended December 31, 2024, the reported Gross Margin was 31.5%. This means that for every dollar of revenue, roughly 68.5 cents went to the direct costs of producing or servicing that item. The aftermarket business, which saw record activity, also contributes to this cost base, though typically with higher margins than new original equipment.

High fixed costs from the global QRC and manufacturing facility network

Maintaining a global footprint means significant fixed overhead. Flowserve Corporation operates a worldwide network of manufacturing facilities and Quick Response Centers (QRCs) to support its aftermarket services. As of late 2024/early 2025 reporting, the company employs close to 16,000 employees across more than 50 countries. These facilities, machinery, and the associated lease/rental expenses represent substantial, relatively fixed costs that must be covered regardless of short-term sales fluctuations. Rental expense relating to operating leases was $53.7 million in 2018, showing the scale of property commitments, though more recent figures are needed for a precise 2025 view.

Operating expenses tied to the Flowserve Business System implementation

The implementation of the Flowserve Business System, which started in earnest in 2024 to create consistent processes and reduce corporate costs, carries associated expenses. These are often captured as realignment or integration costs. For instance, in the first quarter of 2024, Adjusted EPS excluded realignment charges of approximately $30 million. The second quarter of 2024 included after-tax adjusted expenses of $23.7 million, comprised of realignment charges. The company expected other areas of excellence related to this system to formally launch later in 2025, suggesting ongoing, albeit perhaps decreasing, transformation-related operating costs.

Research and development (R&D) investment for new product innovation

Innovation is funded through R&D, which is a necessary, though variable, cost. For the fiscal year ending December 2024, Flowserve Corporation's Research and Development Expenses totaled $69.9 million. This was the peak for the last five years, representing a 43.5% increase from 2023's $48.7 million. This investment supports the 3D strategy focusing on diversification, decarbonization, and digitization.

Selling, General, and Administrative (SG&A) expenses, including global sales force

SG&A covers everything needed to run the business outside of direct production. For the twelve months ending September 30, 2025, Flowserve Corporation's SG&A expenses were $1,066.2 million. This is up from the full-year 2024 SG&A of $0.978 billion. This line item covers the global sales force, administrative overhead, and marketing efforts required to support sales across their diverse end markets like oil & gas, power, and chemical sectors.

Here's a quick look at the most recent concrete expense and margin data points available:

Financial Metric	Amount / Value	Period / Context
SG&A Expenses (LTM)	$1,066.2 million	Twelve Months ending September 30, 2025
SG&A Expenses (Annual)	$0.978 billion	Fiscal Year 2024
R&D Expenses (Annual)	$69.9 million	Fiscal Year 2024
Gross Margin	31.5%	Fourth Quarter 2024
Realignment/System Costs (Q2 2024)	$23.7 million (after-tax adjusted)	Second Quarter 2024
Global Footprint	~16,000 employees	As of late 2024/early 2025 context

The cost structure is clearly dominated by the direct costs embedded in COGS, followed by the necessary overhead to run a global service and manufacturing operation. You can see the push to improve margins through the Flowserve Business System is aimed directly at controlling these fixed and variable operating costs.

• Direct material and labor for engineered products.
• Fixed costs from the global manufacturing platform.
• Costs associated with the global Quick Response Center (QRC) network.
• Investment in innovation, with R&D hitting $69.9 million in 2024.
• Significant SG&A spend, reaching $1,066.2 million LTM as of September 2025.

Finance: draft 13-week cash view by Friday.

Flowserve Corporation (FLS) - Canvas Business Model: Revenue Streams

You're looking at how Flowserve Corporation (FLS) is bringing in the money as we close out 2025. The revenue picture is clearly split between the steady, high-margin services business and the more cyclical sales of new equipment and large projects. This mix is what's driving the confidence in their outlook, so let's break down the actual numbers we saw through the third quarter.

The durable aftermarket parts and services stream is definitely the star here, acting as a key margin driver for Flowserve Corporation. You saw this reflected in the third quarter of 2025, where aftermarket bookings grew 6% year-over-year, hitting over $650 million. Honestly, this was their sixth consecutive quarter with aftermarket bookings exceeding $600 million. That kind of recurring revenue is gold for stability.

Now, for the Original Equipment (OE) sales of pumps, valves, and seals, things were a bit more mixed, showing the lumpiness you'd expect from project timing. For the third quarter of 2025, total bookings landed at $1.2 billion. However, OE bookings specifically were down about 4.9% year-over-year. To give you a segment view of the sales: the Flowserve Pumps Division (FPD) brought in $800.3 million in sales, up 2.4% from the prior year, while the Flow Control Division (FCD) posted sales of $377.4 million, which was a 7.3% increase year-over-year. Overall Q3 revenue was reported at $1.17 billion.

Large project-based revenue is still a meaningful part of the story, especially with the focus on energy transition. We saw a major win in the Power end market, with Flowserve Corporation securing $140 million in nuclear awards during Q3 2025. Management noted that large-engineered projects now represent a mid-single-digit percentage of bookings, which is a significant shift from being over 20% a decade ago, suggesting a move toward more consistent revenue generation.

The strength across these streams, particularly the margin expansion from aftermarket execution, allowed Flowserve Corporation to raise its full-year outlook. The updated Full-year 2025 Adjusted EPS guidance is a strong $3.40 to $3.50. That's a big signal of management's belief in their operational improvements.

We also have to account for discrete, one-time payments that can hit the financials. A perfect example is the $266 million merger termination fee Flowserve Corporation received in Q2 2025 after terminating the agreement to combine with Chart Industries, Inc.. That cash event certainly helped the cash flow picture for the year.

Here's a quick look at how the key revenue drivers stacked up in Q3 2025 bookings:

Revenue Stream Component	Q3 2025 Bookings (Millions USD)	Year-over-Year Change
Total Bookings	$1,200	+1%
Aftermarket Bookings	$653.1	+6.3%
Power Bookings (Driven by Nuclear)	N/A	+23%
Nuclear Awards (Included in Power)	$140	N/A

You can see the focus on the high-value, less lumpy nuclear work is intentional. The company is clearly prioritizing the areas that support that higher earnings guidance. Finance: draft the Q4 2025 cash flow projection incorporating the asbestos divestiture impact by next Tuesday.