10-KPeriod: FY2025

Parker-Hannifin Corp Annual Report, Year Ended Jun 30, 2025

Filed August 22, 2025For Securities:PH

Summary

Parker-Hannifin Corporation's 10-K filing for the fiscal year ended June 29, 2025, highlights a robust performance in its Aerospace Systems segment, which saw increased sales driven by strength in both commercial and defense markets. While the Diversified Industrial segment experienced a slight decrease in net sales primarily due to divestitures and lower demand in certain sectors, overall gross profit margin improved year-over-year, attributed to effective pricing strategies, favorable product mix, and ongoing cost containment efforts aligned with "The Win Strategy 3.0." The company demonstrated strong cash generation from operations, supporting its commitment to returning capital to shareholders through dividends and share repurchases. The company is strategically positioning itself for future growth, underscored by the announced acquisition of Curtis Instruments, Inc. Parker-Hannifin continues to emphasize its core values of safety, customer experience, and operational excellence, while navigating global economic uncertainties and supply chain complexities. Investments in organic growth and potential strategic acquisitions remain key priorities, alongside disciplined capital deployment. The company's diversified end markets and global footprint provide resilience, though it remains vigilant regarding macroeconomic factors and geopolitical risks.

Financial Highlights

55 data points
Beta

Revenue

$19.85B

36.9% Gross Margin

Net Income

$3.53B

17.8% Net Margin

EPS (Diluted)

$27.12

Total Assets

$29.49B

Cash & Equivalents

$467.00M

Free Cash Flow

$3.34B

Financial Statements
Beta
Revenue$19.85B
Cost of Revenue$12.54B
Gross Profit$7.32B
R&D Expenses$240.00M
SG&A Expenses$3.25B
Operating Income$4.35B
Net Income$3.53B
EPS (Basic)$27.52
EPS (Diluted)$27.12
Shares Outstanding (Basic)128.30M
Shares Outstanding (Diluted)130.20M

Key Highlights

  • 1Aerospace Systems Segment saw increased sales due to strong commercial and defense market performance.
  • 2Improved gross profit margin driven by price increases, favorable product mix, and cost containment.
  • 3Significant share repurchases totaling $1.6 billion in fiscal year 2025.
  • 4Announced acquisition of Curtis Instruments, Inc. for approximately $1.0 billion, set to close by year-end 2025.
  • 5Generated $3.8 billion in cash flow from operating activities, demonstrating strong cash generation.
  • 6Maintaining a consistent dividend payout with a current annual rate of $7.20 per common share, marking 69 consecutive years of annual increases.
  • 7Backlog at June 30, 2025, stood at $11.0 billion, with approximately 71% scheduled for delivery within the next twelve months.

Frequently Asked Questions

The Aerospace Systems Segment experienced increased net sales driven by higher volume across all market segments, particularly in the commercial and defense aftermarkets. Conversely, the Diversified Industrial Segment saw a decrease in net sales, mainly due to divestiture activity and lower demand in specific markets like off-highway and transportation, although strength was noted in HVAC & refrigeration and aerospace & defense markets.

Parker-Hannifin's strategy focuses on profitable growth through serving customers, executing "The Win Strategy 3.0," maintaining a decentralized structure, fostering an entrepreneurial culture, and developing innovative products. Key capital deployment priorities include increasing dividends, investing in organic growth and productivity, pursuing strategic acquisitions, and executing share repurchases. The pending acquisition of Curtis Instruments, Inc. is a prime example of their strategic acquisition approach.

Key risks include global economic and geopolitical uncertainties affecting demand and supply chains, cybersecurity threats to information technology systems, price and supply fluctuations of raw materials, potential for natural disasters or other unexpected events disrupting operations, challenges in developing and introducing new products, intense competition, environmental regulations, and the ability to attract and retain key personnel. The company also faces risks associated with its ongoing acquisition strategy, including integration challenges and potential for unforeseen liabilities.

Parker-Hannifin demonstrates strong liquidity, supported by robust operating cash flows. The company has a revolving credit agreement totaling $3.75 billion and maintains a commercial paper program. It is committed to its dividend policy and share repurchases, while also managing its debt levels to maintain an investment-grade credit profile, as evidenced by its current credit ratings from Fitch, Moody's, and S&P.