Executive Summary
ParkerHannifin reported QQ2 2025 revenue of $4.7426 billion, down 1.63% year over year and 3.29% quarter over quarter. Despite near-term top-line pressure, the company delivered margin stability and strong cash generation. Gross margin remained robust at approximately 36.5%, supporting an operating margin of roughly 19.8% and a net margin near 20.0%, underscoring effective cost controls and mix resilience within its two-segment portfolio (Diversified Industrial and Aerospace Systems). Net income of $948.5 million and diluted EPS of $7.25–$7.37 for the period reflect leverage from operating performance and tax effects, with substantial free cash flow generation of about $813.6 million and operating cash flow of $934.8 million. Free cash flow per share stood at $6.32, while cash conversion from reported net income remained healthy, aided by working-capital management and disciplined capital allocation.
The balance sheet shows total assets of ~$28.27 billion against liabilities of ~$15.14 billion and equity of ~$13.12 billion. Net debt stood at approximately $8.65 billion, with interest coverage around 9.6x, signaling a comfortable cushion to service debt even if rates or volumes move unfavorably. The company returned capital to shareholders via dividends (~$210 million) and repurchased shares (~$98.5 million) while continuing to fund investments and acquisitions as part of a growth strategy. Management commentary—where available—emphasizes ongoing focus on higher-margin product mix, aftermarket opportunities, and selective bolt-on acquisitions to augment scale and technology breadth. Investors should monitor demand cycles in aerospace and heavy-drawn industrials, pricing discipline, and the pace of deleveraging given the sizable leverage profile.
Key Performance Indicators
Key Insights
Revenue: $4,742.6m, YoY -1.63%, QoQ -3.29%. Gross Profit: $1,730.95m, Margin ~36.50%, YoY +0.15%, QoQ -4.46%. Operating Income: $937.94m, Margin ~19.78%, YoY +0.28%, QoQ -2.04%. Net Income: $948.54m, Margin ~20.00%, YoY +39.11%, QoQ +35.81%. EPS: $7.37 (GAAP), Diluted $7.25, YoY +38.79%, QoQ +35.73%. EBITDA: $1,492.48m, Margin ~31.47%. Operating cash flow: $934.76m. Free cash flow: $813.57m. Capex: -$121.19m. Net debt: ~$8,645.73m. Cash balances: $395.51m. Interest coverage: ~9.57x. Dividend pay...
Financial Highlights
Revenue: $4,742.6m, YoY -1.63%, QoQ -3.29%. Gross Profit: $1,730.95m, Margin ~36.50%, YoY +0.15%, QoQ -4.46%. Operating Income: $937.94m, Margin ~19.78%, YoY +0.28%, QoQ -2.04%. Net Income: $948.54m, Margin ~20.00%, YoY +39.11%, QoQ +35.81%. EPS: $7.37 (GAAP), Diluted $7.25, YoY +38.79%, QoQ +35.73%. EBITDA: $1,492.48m, Margin ~31.47%. Operating cash flow: $934.76m. Free cash flow: $813.57m. Capex: -$121.19m. Net debt: ~$8,645.73m. Cash balances: $395.51m. Interest coverage: ~9.57x. Dividend payout: $210.12m (dividends). Debt to capitalization: ~40.8%. P/BV: 6.25x, P/S: 17.30x, P/E: 21.62x. 2Q25 net debt to EBITDA not disclosed in the provided data; coverage ratios indicate solid liquidity relative to reported earnings.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
4.74B |
-1.63% |
-3.29% |
| Gross Profit |
1.73B |
0.15% |
-4.46% |
| Operating Income |
937.94M |
0.28% |
-2.04% |
| Net Income |
948.54M |
39.11% |
35.81% |
| EPS |
7.37 |
38.79% |
35.73% |
Key Financial Ratios
operatingProfitMargin
20.4%
operatingCashFlowPerShare
$7.26
freeCashFlowPerShare
$6.32
dividendPayoutRatio
22.2%
Management Commentary
No QQ2 2025 earnings call transcript was provided in the data set. Consequently, there are no management quotes or theme-by-theme extracts to cite within this report.
No QQ2 2025 earnings call transcript content was provided.
— Management
No QQ2 2025 earnings call transcript content was provided.
— Management
Forward Guidance
There is no formal forward guidance published for QQ2 2025 in the supplied data. Based on the ratios and quarterly trends, the near-term outlook hinges on a modest revenue recovery in aerospace and diversified industrials, continued execution on cost containment, and meaningful capital allocation. If demand improves in aerospace programs and end-market equipment cycles stabilize, ParkerHannifin could see margin stability or modest expansion as pricing actions and mix shifts take hold. Key factors to monitor include: (i) aerospace program activity and defense budgets, (ii) aftermarket service growth and pricing trends, (iii) supply chain resilience and commodity costs, (iv) deleveraging progress and ability to sustain organic FCF growth, and (v) any incremental acquisitions or integration risk that could affect near-term returns.