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July 23, 2025 • 3 min read
When a company releases its quarterly report, it provides a crucial snapshot of its financial health. Today, we're diving into the latest 10-Q filing from Pentair plc (PNR), a global company focused on smart, sustainable water solutions—from the pump in your backyard pool to industrial water treatment systems.
For the second quarter of 2025, Pentair served up a mixed set of results. While a powerful performance in its Pool segment and strong pricing helped lift sales, weakening demand in other areas and rising costs squeezed profitability, revealing a complex story beneath the surface.
To see how Pentair's revenue flows through its business to generate profit, take a look at this breakdown of their Q2 income statement.
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At first glance, Pentair's top line looks healthy. Net sales for the quarter grew by 2.2% to $1.12 billion compared to the same period last year. However, this growth wasn't driven by selling more products. In fact, the company's sales volumes actually decreased by 3.1%. This decline was more than offset by a 4.4% boost from higher prices, demonstrating the company's ability to pass on costs to customers.
The real drama unfolds when we look at Pentair's three business segments, each telling a different story:
Pool (The Star Performer): This segment, which includes everything from pool pumps to automation systems, had a fantastic quarter. Sales surged 9.1% to $427.2 million. This growth was fueled by a healthy mix of higher volumes (+1.4%), strong price increases (+5.9%), and a boost from a recent acquisition. The pool business is clearly making a splash.
Flow (Holding Steady): The Flow segment, serving residential, commercial, and industrial markets, saw its sales remain almost flat at $397.3 million. A significant 4.7% drop in sales volume was not fully offset by a 3.4% price increase. The segment was kept from declining primarily by a 1.4% favorable currency impact, highlighting softer underlying demand.
Water Solutions (Facing Headwinds): This segment, which provides water treatment and filtration products, experienced a 3.9% decline in sales to $298.3 million. The drop was driven by a steep 6.7% fall in volume and the impact of recent business exits, signaling challenges in this part of the market.
While pricing helped the top line, rising costs put a damper on the bottom line. The company's gross profit margin improved to 40.7% from 39.8%, showing its price increases are successfully outpacing direct production costs.
However, operating income—a key measure of core profitability—fell by 12.2% to $217.7 million. The primary driver was a sharp increase in Selling, General, and Administrative (SG&A) expenses, which jumped from 15.0% to 19.0% of net sales. This significant rise in overhead costs squeezed operating margins.
Furthermore, a one-time $26.3 million loss on the sale of a business pushed net income down to $148.5 million, a substantial drop from $186.1 million in the prior year's quarter. This translated to diluted earnings per share of $0.90, down from $1.11.
Pentair's latest report paints a picture of a company navigating a complex environment. It's successfully leveraging its brand strength to command higher prices, especially in its booming Pool segment. However, it's also facing weaker volumes in other key areas while battling higher operating costs that are weighing on profits. The key challenge ahead will be to manage these costs effectively and translate its strategic initiatives into reignited volume growth across all its businesses.
Last updated: July 23, 2025