Pentair Q3 2025 Earnings: Pricing Power Drives Profitability Surge

Pentair plc, a key player in the world of water treatment and sustainable solutions, recently released its financial results for the third quarter of 2025. For anyone interested in how companies navigate today's economic landscape, its latest 10-Q filing with the SEC offers a compelling look into its performance. Let's dive into the numbers to see what's driving the company's results.

For the quarter ending September 30, 2025, the following flow chart visualizes how the company's revenue from its different business segments is translated into profit after accounting for various costs and expenses.

Revenue Growth Driven by Pricing Power

Pentair reported net sales of $1.02 billion for the third quarter, a 2.9% increase from the $993.4 million in the same period last year. This growth wasn't uniform across the board. A closer look reveals the story behind the numbers:

• Price: A significant 3.8% increase from higher selling prices was the primary engine of growth.
• Volume: Sales volume saw a slight dip of 0.5%.
• Acquisitions/Divestitures: Business changes had a negative impact of 1.4%.

This highlights Pentair's ability to command higher prices in the market, a crucial lever for offsetting inflationary pressures. For the first nine months of 2025, total sales reached $3.16 billion, up 1.5% from the prior year.

A Mixed Performance Across Segments

Pentair operates through three main segments, each telling a different story this quarter:

• Flow: This segment, focused on fluid transfer and filtration for various industries, delivered strong results. Net sales grew 5.9% to $394.0 million. More impressively, its segment income margin expanded by 2.0 percentage points to 24.2%, driven by pricing and productivity gains.

• Pool: The Pool segment, a major provider of pool and spa equipment, also saw healthy sales growth of 6.9% to $354.3 million, fueled by both higher prices and increased demand. However, its segment income margin contracted slightly to 32.8% from 34.0% a year ago, as inflation and investments in growth initiatives ate into profits.

• Water Solutions: This segment, which offers water treatment products for residential and commercial use, faced headwinds. Sales declined 5.6% to $273.3 million, largely due to lower volumes and the impact of recent business exits. Despite the sales drop, the segment managed to improve its income margin to 25.0% from 22.2%, suggesting successful cost control and efficiency measures.

Profitability Gets a Major Boost

While revenue growth was modest, Pentair's profitability soared. Operating income for the quarter jumped nearly 29% to $231.7 million. The company's operating margin expanded significantly, from 18.1% in Q3 2024 to a robust 22.7% in Q3 2025.

A key factor behind this improvement was a sharp reduction in Selling, General, and Administrative (SG&A) expenses, which fell to $162.2 million from $190.4 million a year ago. The filing attributes this primarily to lower restructuring and transformation costs compared to the prior year, indicating that some of the company's major cost-cutting initiatives may be winding down.

Looking Ahead

Pentair's third-quarter performance demonstrates a company successfully leveraging its pricing power to drive profitability, even as it navigates mixed demand across its business units. The strong performance in the Flow segment and margin improvement in Water Solutions are positive signs of operational discipline. The primary challenge remains stimulating volume growth, particularly in the Water Solutions segment, while continuing to manage inflationary pressures and invest in its high-performing Pool business.