Donaldson Company (DCI) investor relations material

Executive summary

• Achieved record Q1 sales of $935.4 million, up 3.9%–4% year-over-year, driven by growth in replacement parts, new equipment, and key businesses including mobile aftermarket, power generation, and Life Sciences.

• Operating profit margin reached a record 15.5%–16.0%, supported by higher sales and cost optimization initiatives.

• Adjusted earnings per share rose 13% to $0.94; GAAP EPS increased 19% to $0.97.

• Returned $127 million to shareholders via dividends and share repurchases in Q1.

• Continued execution of cost reduction, footprint optimization, and strategic investments for long-term growth.

Financial highlights

• Sales increased 3.9%–4% year-over-year to $935.4 million, with a 2% benefit from pricing.

• Adjusted operating margin rose 60 basis points to 15.5%; gross margin was 35.2%–35.4%.

• Adjusted EPS was $0.94, up 13% year-over-year.

• Free cash flow for the quarter was $122 million, up from $47.9 million a year ago; cash conversion was 101%–107.1%.

• Operating expenses as a percent of sales improved by 80–180 basis points year-over-year.

Outlook and guidance

• Full-year sales guidance raised to $3.8 billion, with expected growth of 1%–5% and pricing contributing about 1%.

• Adjusted operating margin guidance increased to 16.2%–16.8% for FY26.

• Adjusted EPS guidance raised to $3.95–$4.11.

• Capital expenditures projected at $65–$85 million; free cash flow conversion expected at 85%–95%.

• Share repurchases forecast at 2%–3% of shares outstanding in FY26.