On this page of StockholderLetter.com we present the latest annual shareholder letter from PARKER HANNIFIN CORP — ticker symbol PH. Reading current and past PH letters to shareholders can bring important insights into the investment thesis.
• 
9/19/2025 Letter Continued (Full PDF)
•
9/22/2023 PH Stockholder Letter
• 9/20/2024 PH Stockholder Letter
• More "Industrial Machinery & Equipment" Category Stockholder Letters
•
PH Benford's Law Stock Score = 81
9/19/2025 Letter Continued (Full PDF)
•
9/22/2023 PH Stockholder Letter•
9/20/2024 PH Stockholder Letter•
More "Industrial Machinery & Equipment" Category Stockholder Letters•
PH Benford's Law Stock Score = 81PH Shareholder/Stockholder Letter Transcript:
PARKER HANNIFIN ANNUAL REPORT 2025 Enabling Engineering Breakthroughs that Lead to a Better Tomorrow Letter to Shareholders Parker delivered another year of outstanding performance in fiscal 2025, building on a consistent record of strong results and overcoming dynamic changes in our global markets. Our ability to make continued progress toward our fiscal 2029 financial targets is a testament to the resilience of our business. The transformation of our portfolio through strategic acquisitions over several years, the commitment of our global team to make continuous improvements, and the power of our business system, The Win Strategy , have combined to create a company capable of delivering shareholder value consistently through business cycles. Looking ahead, we have strategically aligned our people, products and processes to best fit the growth trajectories of our key markets. Parker s interconnected technology portfolio is aligned to the needs of our customers across six market verticals with opportunities for accelerated growth fueled by secular trends. As we take a moment to celebrate what we have accomplished, we also look forward to a bright future. THROUGH-CYCLE RESILIENCE The outstanding performance we delivered in a challenging macro environment during fiscal 2025 reflects Parker s ongoing transformation. Net sales were $19.85 billion, representing organic sales growth of 1.3% from fiscal 2024. Segment operating margin increased 150 basis points to 23.0% as reported, or a record 26.1% adjusted, a 120-basis point improvement from the prior year. EBITDA margin was 27.3% as reported, a 210-basis point improvement year-over-year, or 26.4% on an adjusted basis, an increase of 80 basis points. Net income increased 24% to $3.5 billion, or $3.6 billion adjusted, an increase of 7%. Earnings per share were $27.12 as reported, an increase of 24%. Adjusted earnings per share increased 7% to a record $27.33. Cash flow from operations increased 12% to a record $3.8 billion, or 19.0% of sales. Through balanced capital deployment, we increased our quarterly cash dividend 10%, reduced debt by $1.3 billion, repurchased $1.6 billion of shares and announced an agreement to buy Curtis Instruments, Inc. for approximately $1.0 billion, expanding our electrification offering. In fiscal 2025, we also completed non-core divestitures for proceeds of approximately $0.6 billion. This year we built on our already strong track record as great generators and deployers of cash to compound returns and drive significant shareholder value. In fiscal 2026, we look forward to another excellent year powered by our people and our business system, The Win Strategy. Todd Leombruno, Executive Vice President and Chief Financial Officer Jenny Parmentier, Chairman of the Board and Chief Executive Officer Andy Ross, President and Chief Operating Officer This Annual Report contains non-GAAP financial information that has been reconciled to comparable GAAP measures immediately following the Form 10-K. NEXT LEVEL OF PERFORMANCE Our technology portfolio is designed to create growth through a combination of incremental upgrades to our proven solutions, focused innovation, and acquisitions that add complementary products for a more complete offering. In parallel, our commitment to operational excellence and continuous improvement enables us to provide a premier experience for our customers. The convergence of these factors creates opportunities to take Parker s performance to a new level. Accelerating Growth The doubling of Parker s aerospace, engineered materials and filtration businesses through acquisitions has boosted our long-cycle exposure and allowed us to deliver record performance and exceptional shareholder returns. As softness in industrial markets continued to weigh on organic growth, our fiscal 2025 results demonstrate the impacts of Parker s ongoing transformation during a year that would likely have yielded a very different outcome in the past. Building on that momentum, we expect to continue Parker s positive growth trajectory on the strength of our business system and unmatched technology portfolio. Trusted Roadmap For decades, The Win Strategy has been key to our continued success. It unlocks the benefits of a decentralized structure by enabling our businesses and people to utilize proven strategies and resources to improve performance, while maintaining the advantages of a premier global operation. At our business system s core, tools such as Strategic Positioning help our divisions better define their path to success in competitive markets, while linking their individual strategies to enterprise-wide objectives. The Win Strategy also creates opportunities to spur growth and improve customer experience. Our distribution network allows us to serve small and mid-size OEMs and the aftermarket. This network gives our customers access to the full breadth of our interconnected technology portfolio and technical expertise from thousands of Parker distributor locations worldwide. We expect our reshaped incentive plans to focus our team members on profitable growth. Our Annual Cash Incentive Plan (ACIP) is now anchored in performance metrics that align with creating shareholder value by incentivizing growth in earnings, revenue and cash flow. Strengthening the connection between individual contributions and short-term business targets has helped our team members better appreciate the impact they can have on Parker s overall performance. Market-Driven Innovation With roughly two-thirds of our revenue coming from customers who buy four or more Parker technologies, the interconnectivity of our products and systems is a key competitive advantage. The ability to support our customers with comprehensive solutions stems from a highly focused and marketdriven approach to innovation. We form deep relationships with our customers and collaborate by listening and leaning on our application engineering and technical expertise to address their most pressing challenges. Our Simple by Design framework then reduces design and manufacturing complexity so we can provide valuable solutions more efficiently. Technology Integration Strategic acquisitions have further strengthened our technology portfolio. Just as the addition of Meggitt helped elevate us as a critical supplier to OEMs building nextgeneration aircraft, our filtration and engineered materials businesses demonstrated growth following successful integrations that have led to a more complete offering. These experiences have sharpened our skills as a successful integrator and underlined the viability of strategic acquisitions as a key to accelerate growth. We have found success in taking a disciplined approach that balances cultural alignment and technology with the creation of shareholder value. In June 2025, we announced an agreement to acquire Curtis Instruments, Inc. The addition of Curtis will add a full suite of control solutions to complement our technologies for heavy-duty electric and hybrid mobile equipment. The deal will also expand Parker s electrification capabilities in our key in-plant and industrial equipment, and off-highway market verticals. Portfolio reshaping will continue to play an important role in creating opportunities for margin-accretive performance and growth in key market verticals. From actions we have taken to strategically shape our technology portfolio over recent years, Parker is better equipped to support our customers as they make ongoing investments in aerospace and defense, infrastructure, electrification, digitalization and clean technologies, creating growth opportunities that Parker is ideally positioned to capture. Margin Expansion The outstanding margin performance we delivered this year is a testament to our business system and the team members who focus on its execution. All our reported businesses achieved substantial margin growth in fiscal 2025. We continue to see opportunities to expand margins and expect to achieve our fiscal 2029 financial targets. We are focused on continuously improving our operations and driving a better experience for our customers. Operational Excellence A commitment to operational excellence is deeply embedded in Parker s culture and always starts with safety. We have reduced our recordable incident rate by more than 50% since fiscal 2019, ranking Parker s safety performance in the top quartile among peer companies. From Parker leaders to the newest members of our team, we all share responsibility for protecting one another. Our aspiration is to be the safest industrial company in the world. Parker has been fortunate to collaborate with suppliers that share our commitment to exceptional quality and reliability. Our local-for-local approach, where we manufacture in the region, for the region, and dual source critical components, reflects Parker s commitment to help our customers grow with service that meets their expectations no matter where or when they need it. We are building an even more agile and secure supply chain with digital tools such as AI forecasting and predictive analytics. We are also integrating advanced robotics to improve productivity through the automation of processes. The data flowing through our operations enables more insightful decisions about purchasing and inventory, helping us better align our manufacturing capacity and output with changes in global demand. Executing our Zero Defects strategy is also among our chief operational priorities. Team member-led Kaizen workshops designed to enact rapid process improvements, in tandem with the adoption of new manufacturing technologies that support consistency at scale, have become part of Parker s culture. operating like never before. Our priority is continued growth and with our global teams in alignment, we are taking clear action to take Parker s performance to the next level. We expect Aerospace will remain our fastest growing business in the years ahead, and a return to a positive growth environment in our Industrial businesses will continue to generate value for our shareholders. Parker s strong cash flow also provides substantial capital deployment optionality to drive shareholder returns. We will continue to prioritize our long running dividend increase record, investing in the business through capital expenditures, M&A to strengthen our portfolio and drive growth and margin expansion, and maintaining a strong balance sheet. We are grateful for the backing of our dedicated team members and the steady confidence of our shareholders, and we thank you for being part of the journey. Sincerely, Supporting our customers with world-class solutions and service is foundational to our continued growth. The ongoing enhancement of our supply chain and operations is an investment in Parker s future success. Jennifer A. Parmentier Chairman of the Board and Chief Executive Officer TRANSFORMING OUR FUTURE Parker s strong performance in fiscal 2025 closes the year with great momentum. We are forecasting another excellent year ahead, which would keep us on track to achieving our fiscal 2029 financial targets. Todd M. Leombruno Executive Vice President and Chief Financial Officer Our transformation has created a leaner, more efficient Parker that is Andrew D. Ross President and Chief Operating Officer September 2025