FLOWSERVE CORPFLS
FLOWSERVE CORP Revenue Disclosure
REVENUE RECOGNITION
The majority of our revenues relate to customer orders that typically contain a single commitment of goods or services which have lead times under a year. More complex contracts with our customers typically have longer lead times and multiple commitments of goods and services, including any combination of designing, developing, manufacturing, modifying, installing and commissioning of flow management equipment and providing services and parts related to the performance of such products. Control transfers over time when the customer is able to direct the use of and obtain substantially all of the benefits of our work as we perform. Service-related revenues do not typically represent a significant portion contracts with our customers and do not meet the thresholds requiring separate disclosure.
Revenue from products and services transferred to customers over time accounted for approximately 18%, 17%, and 16% of total revenue for the years ended December 31, 2025, 2024 and 2023, respectively. Our primary method for recognizing revenue over time is the POC method. If control does not transfer over time, then control transfers at a point in time. For both POC and point-in-time methods, we recognize revenue at the level of each performance obligation based on the evaluation of certain indicators of control transfer, such as title transfer, risk of loss transfer, customer acceptance and physical possession. Revenue from products and services transferred to customers at a point in time accounted for approximately 82%, 83%, and 84% of total revenue for the years ended December 31, 2025, 2024, and 2023, respectively.
Disaggregated Revenue
We conduct our operations through two business segments based on the type of product and how we manage the business:
•FPD designs, manufactures, pretests, distributes, and services highly custom engineered pumps, pre-configured industrial pumps, pump systems, mechanical seals, auxiliary systems and replacement parts and related services; and
•FCD designs, manufactures, and distributes a broad portfolio of engineered-to-order and configured-to-order isolation valves, control valves, valve automation products and related equipment.
Our revenue sources are derived from our original equipment manufacturing and our aftermarket sales and services. Our original equipment revenues are generally related to originally designed, manufactured, distributed and installed equipment that can range from pre-configured, short-cycle products to more customized, highly-engineered equipment ("Original Equipment"). Our aftermarket sales and services are derived from sales of replacement equipment, as well as maintenance, advanced diagnostic, repair and retrofitting services ("Aftermarket"). Each of our two business segments generates Original Equipment and Aftermarket revenues.
The following table presents our customer revenues disaggregated by revenue source:
| December 31, 2025 | |||||||||||||||||
| (Amounts in thousands) | FPD | FCD | Total | ||||||||||||||
| Original Equipment | $ | 1,110,805 | $ | 1,108,777 | $ | 2,219,582 | |||||||||||
| Aftermarket | 2,119,431 | 390,247 | 2,509,678 | ||||||||||||||
| $ | 3,230,236 | $ | 1,499,024 | $ | 4,729,260 | ||||||||||||
| December 31, 2024 | |||||||||||||||||
| (Amounts in thousands) | FPD | FCD | Total | ||||||||||||||
| Original Equipment | $ | 1,152,643 | $ | 1,065,408 | $ | 2,218,051 | |||||||||||
| Aftermarket | 2,001,508 | 338,247 | 2,339,755 | ||||||||||||||
| $ | 3,154,151 | $ | 1,403,655 | $ | 4,557,806 | ||||||||||||
| December 31, 2023 | |||||||||||||||||
| (Amounts in thousands) | FPD | FCD | Total | ||||||||||||||
| Original Equipment | $ | 1,147,906 | $ | 938,790 | $ | 2,086,696 | |||||||||||
| Aftermarket | 1,913,087 | 320,794 | 2,233,881 | ||||||||||||||
| $ | 3,060,993 | $ | 1,259,584 | $ | 4,320,577 | ||||||||||||
Our customer sales are diversified geographically. The following table presents our revenues disaggregated by geography, based on the shipping addresses of our customers:
| December 31, 2025 | |||||||||||||||||
| (Amounts in thousands) | FPD | FCD | Total | ||||||||||||||
North America(1) | $ | 1,391,199 | $ | 606,091 | $ | 1,997,290 | |||||||||||
Latin America(1) | 273,131 | 44,005 | 317,136 | ||||||||||||||
| Middle East and Africa | 601,509 | 234,300 | 835,809 | ||||||||||||||
| Asia Pacific | 384,568 | 360,782 | 745,350 | ||||||||||||||
| Europe | 579,829 | 253,846 | 833,675 | ||||||||||||||
| $ | 3,230,236 | $ | 1,499,024 | $ | 4,729,260 | ||||||||||||
| December 31, 2024 | |||||||||||||||||
| (Amounts in thousands) | FPD | FCD | Total | ||||||||||||||
North America(1) | $ | 1,291,273 | $ | 551,101 | $ | 1,842,374 | |||||||||||
Latin America(1) | 296,474 | 29,847 | 326,321 | ||||||||||||||
| Middle East and Africa | 542,399 | 223,440 | 765,839 | ||||||||||||||
| Asia Pacific | 425,743 | 363,868 | 789,611 | ||||||||||||||
| Europe | 598,262 | 235,399 | 833,661 | ||||||||||||||
| $ | 3,154,151 | $ | 1,403,655 | $ | 4,557,806 | ||||||||||||
| December 31, 2023 | |||||||||||||||||
| (Amounts in thousands) | FPD | FCD | Total | ||||||||||||||
North America(1) | $ | 1,264,673 | $ | 556,208 | $ | 1,820,881 | |||||||||||
Latin America(1) | 273,126 | 30,126 | 303,252 | ||||||||||||||
| Middle East and Africa | 538,037 | 146,552 | 684,589 | ||||||||||||||
| Asia Pacific | 436,813 | 302,700 | 739,513 | ||||||||||||||
| Europe | 548,344 | 223,998 | 772,342 | ||||||||||||||
| $ | 3,060,993 | $ | 1,259,584 | $ | 4,320,577 | ||||||||||||
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(1) North America represents United States and Canada; Latin America includes Mexico.
On December 31, 2025, the aggregate transaction price allocated to unsatisfied (or partially unsatisfied) performance obligations related to contracts having an original expected duration in excess of one year was approximately $1,046 million. We estimate recognition of approximately $622 million of this amount as revenue in 2026 and an additional $424 million in 2027 and thereafter.
Contract Balances
We receive payment from customers based on a contractual billing schedule and specific performance requirements as established in our contracts. We record billings as accounts receivable when an unconditional right to consideration exists. A contract asset represents revenue recognized in advance of our right to bill the customer under the terms of a contract. A contract liability represents our contractual billings in advance of revenue recognized for a contract.
The following table presents opening and closing balances of contract assets and contract liabilities, current and long-term, for the years ended December 31, 2025 and 2024:
| (Amounts in thousands) | Contract Assets, net (Current) | Long-term Contract Assets, net(1) | Contract Liabilities (Current) | Long-term Contract Liabilities(2) | |||||||||||||||||||
| Balance — January 1, 2024 | $ | 280,228 | $ | 1,034 | $ | 287,697 | $ | 1,543 | |||||||||||||||
| Revenue recognized that was included in the contract liabilities at the beginning of the period | — | — | (217,470) | (740) | |||||||||||||||||||
| Increase due to revenue recognized in the period in excess of billings | 958,388 | — | — | — | |||||||||||||||||||
| Increase due to billings arising during the period in excess of revenue recognized | — | — | 214,163 | — | |||||||||||||||||||
| Amounts transferred from contract assets to receivables | (920,793) | (656) | — | — | |||||||||||||||||||
| Currency effects and other, net | (18,917) | 545 | (720) | (130) | |||||||||||||||||||
| Balance — December 31, 2024 | $ | 298,906 | $ | 923 | $ | 283,670 | $ | 673 | |||||||||||||||
| Revenue recognized that was included in the contract liabilities at the beginning of the period | — | — | (232,410) | — | |||||||||||||||||||
| Increase due to revenue recognized in the period in excess of billings | 956,423 | — | — | — | |||||||||||||||||||
| Increase due to billings arising during the period in excess of revenue recognized | — | — | 211,082 | 5,010 | |||||||||||||||||||
| Amounts transferred from contract assets to receivables | (931,135) | (937) | — | — | |||||||||||||||||||
| Currency effects and other, net | (1,722) | 261 | 12,327 | ` | 91 | ||||||||||||||||||
| Balance — December 31, 2025 | $ | 322,472 | $ | 247 | $ | 274,669 | $ | 5,774 | |||||||||||||||
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(1) Included in other assets, net.
(2) Included in retirement obligations and other liabilities.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 17, 2026 | Showing above |
| 2024 | Feb 26, 2025 | |
| 2023 | Feb 20, 2024 | |
| 2022 | Mar 7, 2023 | |
| 2021 | Feb 23, 2022 | |
| 2020 | Feb 23, 2021 | |
| 2019 | Feb 18, 2020 | |
| 2018 | Feb 20, 2019 | |
About Revenue Disclosures
Revenue disclosures under ASC 606 explain how a company identifies performance obligations, allocates transaction prices, and determines when revenue is recognized. This section is essential for understanding whether reported revenue reflects genuine economic activity or aggressive accounting choices. Analysts examine the mix of point-in-time versus over-time recognition, which directly affects revenue timing and comparability.
Key signals: rising contract liabilities (deferred revenue) suggest strong future revenue visibility, while declining contract assets may indicate slowing project milestones. Watch for variable consideration estimates — rebates, returns, and performance bonuses that require management judgment. Significant changes in disaggregated revenue by geography or product line can reveal shifting business mix before it appears in headline numbers. Compare revenue growth against contract liability growth to assess sustainability, and scrutinize any changes in the timing of recognition that coincide with earnings pressure.