Parker-Hannifin (PH) investor relations material

Executive summary

• Q1 FY2027 sales reached a record $5.992B, up 17.9% YoY; organic growth was 11.5%, with acquisitions contributing 7%.

• Adjusted EPS rose 23% to a record $8.90, and adjusted segment operating margin reached a record 28.6%, up 120 bps.

• Rolling 12-month orders increased 13% and backlog reached a record $13.7B; FY2027 growth, EPS, margin and free cash flow guidance increased.

• Filtration Group was acquired in Q1; FY2027 assumptions include $1.85B in sales, $40M in cost synergies and $0.50 adjusted EPS accretion.

Financial highlights

• Adjusted net income was $1.138B vs. $927M; reported net income was $884M vs. $808M, and reported diluted EPS was $6.92 vs. $6.29.

• Segment operating income increased $237M to $1.469B; reported segment margin was 24.4%, while adjusted margin was 28.6%.

• Adjusted EBITDA margin was 28.5% vs. 27.3% YoY; reported EBITDA margin was 26.2% vs. 27.0%.

• Cash from operations was $752M, or 12.6% of sales; free cash flow was $643M, or 10.7% of sales, vs. $693M a year earlier.

• Interest expense rose to $146M from $101M, primarily due to higher average debt following the acquisition.

Outlook and guidance

• FY2027 reported sales growth guidance is 16%–19%; organic growth is 7.5%–10.5%, with a 9% midpoint.

• Adjusted segment margin guidance is 27.7%–28.1%; adjusted diluted EPS guidance is $36.45–$37.25, and free cash flow guidance is $3.5B–$4.0B.

• FY2027 assumptions include ~10% Aerospace organic growth, ~8% Industrial North America growth, ~9.5% Industrial International growth and a ~22.5% tax rate.

• Q2 sales are forecast at $6.2B, with ~10% organic growth, 27.6% adjusted segment margin and $8.82 adjusted EPS.

• FY2027 free cash flow guidance assumes operating cash flow of $4.125B–$4.625B and capital expenditures of ~$625M; capital spending target is 2.5% of sales.