ph-20250930

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2025


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File number 1-4982

PARKER-HANNIFIN CORPORATION

(Exact name of registrant as specified in its charter)


Ohio			34-0451060
(State or other jurisdiction of Incorporation or Organization)			(I.R.S. Employer Identification No.)

6035 Parkland Boulevard,	Cleveland,	Ohio	44124-4141
(Address of Principal Executive Offices)			(Zip Code)

Registrant’s telephone number, including area code: (216) 896-3000

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class

Trading Symbol

Name of Each Exchange on which Registered

Common Shares, $.50 par value

New York Stock Exchange

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act:

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

Number of Common Shares outstanding at September 30, 2025: 126,186,699

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

PARKER-HANNIFIN CORPORATION

CONSOLIDATED STATEMENTS OF INCOME

(In millions, except per share amounts)

(Unaudited)


	Three Months Ended
	September 30,
	2025		2024
Net sales	$	5,084	$	4,904
Cost of sales	3,177		3,098
Selling, general and administrative expenses	873		849

Interest expense	101		113
Other income, net	(107)		(31)
Income before income taxes	1,040		875
Income taxes	232		177
Net income	$	808	$	698



Earnings per share:
Basic	$	6.39	$	5.43
Diluted	$	6.29	$	5.34

See accompanying notes to consolidated financial statements.

- 2 -

PARKER-HANNIFIN CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In millions)

(Unaudited)


	Three Months Ended
	September 30,
	2025		2024
Net income	$	808	$	698



Other comprehensive (loss) income, net of tax
Foreign currency translation adjustment and other	(45)		345
Retirement benefits plan activity	4		3
Other comprehensive (loss) income	(41)		348


Total comprehensive income	$	767	$	1,046

See accompanying notes to consolidated financial statements.

- 3 -

PARKER-HANNIFIN CORPORATION

CONSOLIDATED BALANCE SHEETS

(In millions, except par value)

(Unaudited)


	September 30, 2025		June 30, 2025
Assets
Current assets:
Cash and cash equivalents	$	473	$	467
Trade accounts receivable, net of allowances of $9 and $10	2,873		2,910
Non-trade and notes receivable	331		318
Inventories	3,081		2,839
Prepaid expenses	296		263
Other current assets	173		153
Total current assets	7,227		6,950
Property, plant and equipment, net of accumulated depreciation of $4,528 and $4,480	2,972		2,937
Deferred income taxes	271		270
Other long-term assets	1,306		1,269
Intangible assets, net	7,760		7,374
Goodwill	11,141		10,694
Total assets	$	30,677	$	29,494

Liabilities and Equity
Current liabilities:
Notes payable and long-term debt payable within one year	$	2,848	$	1,791
Accounts payable, trade	2,150		2,126
Accrued payrolls and other compensation	432		587
Accrued domestic and foreign taxes	411		382
Other current liabilities	938		933
Total current liabilities	6,779		5,819
Long-term debt	7,485		7,494
Pensions and other postretirement benefits	253		267
Deferred income taxes	1,621		1,490
Other long-term liabilities	753		733
Total liabilities	16,891		15,803
Shareholders’ equity:
Serial preferred stock, $.50 par value; authorized 3.0 shares; none issued	—		—
Common stock, $.50 par value; authorized 600.0 shares; issued 181.0 shares	91		91
Additional paid-in capital	823		194
Retained earnings	22,355		21,775
Accumulated other comprehensive loss	(924)		(883)
Treasury shares, at cost; 54.9 shares and 54.4 shares	(8,568)		(7,495)
Total shareholders’ equity	13,777		13,682
Noncontrolling interests	9		9
Total equity	13,786		13,691
Total liabilities and equity	$	30,677	$	29,494

See accompanying notes to consolidated financial statements.

- 4 -

PARKER-HANNIFIN CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

(Unaudited)


	Three Months Ended
	September 30,
	2025		2024
Cash flows from operating activities
Net income	$	808	$	698
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	92		89
Amortization	140		140

Stock-based compensation expense	80		76
Deferred income taxes	3		(27)
Foreign currency transaction (gain) loss	(7)		37
Loss (gain) on property, plant and equipment	1		(8)

Other, net	(16)		3
Changes in assets and liabilities, net of effect of acquisitions and divestitures:
Accounts receivable, net	76		138
Inventories	(163)		(136)
Prepaid expenses	(29)		4
Other current assets	(20)		(13)
Other long-term assets	(22)		(51)
Accounts payable, trade	(6)		(42)
Accrued payrolls and other compensation	(168)		(172)
Accrued domestic and foreign taxes	28		93
Other current liabilities	(10)		(46)
Pensions and other postretirement benefits	(13)		(8)
Other long-term liabilities	8		(31)
Net cash provided by operating activities	782		744
Cash flows from investing activities
Acquisitions, net of cash acquired	(1,013)		—
Capital expenditures	(89)		(95)
Proceeds from sale of property, plant and equipment	6		13

Other, net	18		(5)
Net cash used in investing activities	(1,078)		(87)
Cash flows from financing activities

Payments for common shares	(522)		(94)

Proceeds from (payments for) notes payable, net	1,057		(367)

Payments for long-term borrowings	(1)		(42)

Dividends paid	(228)		(210)
Other, net	—		2
Net cash provided by (used in) financing activities	306		(711)
Effect of exchange rate changes on cash	(4)		3
Net increase (decrease) in cash and cash equivalents	6		(51)
Cash and cash equivalents at beginning of year	467		422
Cash and cash equivalents at end of period	$	473	$	371

See accompanying notes to consolidated financial statements.

- 5 -

PARKER-HANNIFIN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except per share amounts or as otherwise noted)

1. Basis of presentation

In the opinion of the management of the Company, the accompanying unaudited consolidated financial statements contain all adjustments (consisting of only normal recurring adjustments) necessary to present fairly the Company's financial position as of September 30, 2025, the results of operations for the three months ended September 30, 2025 and 2024 and cash flows for the three months then ended. These financial statements should be read in conjunction with the consolidated financial statements and related notes included in the Company’s 2025 Annual Report on Form 10-K.

As used in this Quarterly Report on Form 10-Q, unless the context otherwise requires, the terms "Company", "Parker", "we" or "us" refer to Parker-Hannifin Corporation and its subsidiaries.

The Company has changed its presentation from thousands to millions and, as a result, any necessary rounding adjustments have been made to prior period disclosed amounts.

2. New accounting pronouncements

In September 2025, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2025-06, “Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software," which modernizes the accounting for costs related to internal-use software by removing all references to prescriptive and sequential software development stages. The amendments are effective for fiscal years beginning after December 15, 2027, and interim reporting periods within those annual reporting periods, with early adoption permitted. The Company is currently evaluating the ASU to determine its impact on the Company's disclosures and financial statements.

In November 2024, the FASB issued ASU 2024-03, “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses,” which requires expanded interim and annual disclosures of expense information, including the amounts of inventory purchases, employee compensation, depreciation, amortization and depletion within commonly presented expense captions during the period. The amendments are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The amendments should be applied either (1) prospectively to financial statements issued for reporting periods after the effective date or (2) retrospectively to any or all prior periods presented in the financial statements. The Company is currently evaluating the ASU to determine its impact on the Company's disclosures.

In December 2023, the FASB issued ASU 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures," which enhances the disclosure requirements for income taxes primarily related to the rate reconciliation and income taxes paid information. The amendments are effective for fiscal years beginning after December 15, 2024. Early adoption is permitted. The amendment should be applied on a prospective basis. Retrospective application is permitted. The Company is currently evaluating the impact this guidance will have on the Company's disclosures.

In November 2023, the FASB issued ASU 2023-07, "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures," which updates reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses. The amendments should be applied retrospectively to all prior periods presented in the financial statements. The Company adopted the standard for annual disclosures in the fourth quarter of fiscal 2025, and interim disclosures for the first quarter of 2026. Refer to Note 16 for further discussion.

3. Revenue recognition

Revenue is derived primarily from the sale of products in the aerospace and defense, in-plant and industrial equipment, transportation, off-highway, energy and HVAC and refrigeration markets. A majority of the Company’s revenues are recognized at a point in time. However, a portion of the Company’s revenues are recognized over time.

- 6 -

Diversified Industrial Segment revenues by technology platform:


	Three Months Ended
	September 30,
	2025		2024
Motion Systems	$	824	$	849
Flow and Process Control	1,158		1,126
Filtration and Engineered Materials	1,461		1,481
Total	$	3,443	$	3,456

Aerospace Systems Segment revenues by market segment:


	Three Months Ended
	September 30,
	2025		2024
Commercial original equipment manufacturer ("OEM")	$	539	$	434
Commercial aftermarket	594		521
Defense OEM	294		262
Defense aftermarket	214		231
Total	$	1,641	$	1,448

Total Company revenues by geographic region based on the Company's selling operation's location:


	Three Months Ended
	September 30,
	2025		2024
North America	$	3,450	$	3,333
Europe	960		935
Asia Pacific	616		580
Latin America	58		56
Total	$	5,084	$	4,904

The majority of revenues from the Aerospace Systems Segment are generated from sales within North America.

Contract balances

Contract assets and contract liabilities are reported on a contract-by-contract basis. Contract assets reflect revenue recognized and performance obligations satisfied in advance of customer billing. Contract liabilities relate to payments received in advance of the satisfaction of performance under the contract. Payments from customers are received based on the terms established in the contract with the customer.

Total contract assets and contract liabilities are as follows:


	September 30, 2025		June 30, 2025
Contract assets, current (included within Other current assets)	$	168	$	149
Contract assets, noncurrent (included within Other long-term assets)	16		16
Total contract assets	184		165
Contract liabilities, current (included within Other current liabilities)	(211)		(211)
Contract liabilities, noncurrent (included within Other long-term liabilities)	(67)		(71)
Total contract liabilities	(278)		(282)
Net contract liabilities	$	(94)	$	(117)

Net contract liabilities at September 30, 2025 decreased from the June 30, 2025 amount primarily due to timing differences between when revenue was recognized and the receipt of advance payments. During the three months ended September 30, 2025, approximately $75 million of revenue was recognized that was included in the contract liabilities at June 30, 2025.

- 7 -

Remaining performance obligations

Our backlog represents written firm orders from a customer to deliver products and, in the case of blanket purchase orders, only includes the portion of the order for which a schedule or release has been agreed to with the customer. We believe our backlog represents our unsatisfied or partially unsatisfied performance obligations. Backlog at September 30, 2025 was $11.3 billion, of which approximately 70 percent is expected to be recognized as revenue within the next 12 months and the balance thereafter.

4. Acquisitions and divestitures

Acquisitions

On September 18, 2025, we acquired all outstanding stock of Curtis Instruments, Inc. ("Curtis") from Rehlko, for approximately $1.0 billion, net of cash acquired. Curtis designs and manufactures motor speed controllers, instrumentation, power conversion and input devices that complement Parker’s capabilities in electric and hybrid vehicle motors and controls, as well as hydraulic and pneumatic technologies for the mobile machinery market. For segment reporting purposes, Curtis is included within the Diversified Industrial Segment.

The acquisition of Curtis has been accounted for using the acquisition method of accounting, which requires the assets acquired and liabilities assumed to be recognized at their respective fair values as of the acquisition date. The following table presents the preliminary estimated fair values of Curtis's assets acquired and liabilities assumed on the acquisition date. These preliminary estimates are subject to revision during the measurement period, not to exceed 12 months from the date of the acquisition, as third-party valuations are finalized, additional information becomes available and as additional analysis is performed. Such revisions may have a material impact on the preliminary purchase price allocation.


	September 18, 2025
Cash and cash equivalents	$	53
Accounts receivable	38
Inventories	82
Prepaid expenses	5
Intangible assets	551
Property, plant and equipment	54
Other long-term assets	20
Accounts payable, trade	(32)
Other current liabilities	(19)
Deferred income taxes	(139)
Other long-term liabilities	(20)
Net assets acquired	$	593
Goodwill	472
Total purchase price	$	1,065

Goodwill is calculated as the excess of the purchase price over the net assets acquired and represents cost synergies and enhancements to our existing technologies. For tax purposes, Curtis's goodwill is not deductible. The intangible assets primarily include $275 million of customer relationships, $220 million of patents and technology and $56 million of trademarks, with weighted-average estimated useful lives of 18, 10 and 13 years, respectively. These intangible assets were valued using the income approach, which includes significant assumptions around future revenue growth, earnings before interest, taxes, depreciation and amortization, royalty rates and discount rates. Such assumptions are classified as level 3 inputs within the fair value hierarchy.

Our Consolidated Statements of Income for the first three months of fiscal 2026 include the results of operations of Curtis from the date of acquisition. Net sales attributable to Curtis during this period were $11 million and segment operating results were immaterial.

Acquisition-related transaction costs totaled $13 million for the current-year quarter. These costs are included in selling, general and administrative expenses in the Consolidated Statements of Income.

Unaudited pro forma financial information is not provided, as the impact of the acquisition did not have a material effect on the Company's consolidated financial statements.

- 8 -

Divestitures

We continually assess our existing businesses and may divest those that are not considered to be a good long-term strategic fit for the Company. There were no significant divestitures completed during the three months ended September 30, 2025 and 2024.

5. Earnings per share

The following table presents a reconciliation of the numerator and denominator of basic and diluted earnings per share.


	Three Months Ended
	September 30,
	2025		2024
Numerator:
Net income	$	808	$	698
Denominator:
Basic - weighted average common shares	126.5		128.7
Dilutive effect of equity-based awards	1.9		2.0
Diluted - weighted-average common shares	128.4		130.7

Basic earnings per share(1)	$	6.39	$	5.43
Diluted earnings per share(1)	$	6.29	$	5.34

(1) Figures in the table may not recalculate exactly due to rounding. Earnings per share is calculated using unrounded numbers.

For the three months ended September 30, 2025 and 2024, 0.1 million and 0.2 million common shares subject to equity-based awards, respectively, were excluded from the computation of diluted earnings per share because the effect of their exercise would be anti-dilutive.

6. Non-trade and notes receivable

The non-trade and notes receivable caption in the Consolidated Balance Sheets is comprised of the following components:


	September 30, 2025		June 30, 2025
Notes receivable	$	80	$	84


Accounts receivable, other	251		234
Total	$	331	$	318

7. Inventories

The inventories caption in the Consolidated Balance Sheets is comprised of the following components:


	September 30, 2025		June 30, 2025
Finished products	$	843	$	778
Work in process	1,585		1,485
Raw materials	653		576
Total	$	3,081	$	2,839

8. Supply chain financing

We have supply chain financing ("SCF") programs with financial intermediaries, which provide certain suppliers the option to be paid by the financial intermediaries earlier than the due date on the applicable invoice. We are not a party to the agreements between the participating financial intermediaries and the suppliers in connection with the programs. The range of payment terms we negotiate with our suppliers is consistent, irrespective of whether a supplier participates in the SCF programs. We do not reimburse suppliers for any costs they incur for participation in the SCF programs and their participation is voluntary.

Amounts due to our suppliers that elected to participate in the SCF programs are included in accounts payable, trade on the Consolidated Balance Sheets and payments made under the SCF programs are included within operating activities on the Consolidated Statements of Cash Flows. Accounts payable, trade included approximately $190 million and $175 million

- 9 -

payable to suppliers who have elected to participate in the SCF programs as of September 30, 2025 and June 30, 2025, respectively. The amounts settled through the SCF programs and paid to the participating financial intermediaries totaled $147 million and $107 million during the first three months of fiscal 2026 and 2025, respectively.

9. Business realignment

We incurred business realignment charges in the first three months of fiscal 2026 and 2025, which included severance costs related to actions taken under the Company's simplification initiative aimed at reducing organizational and process complexity, as well as plant closures. In both fiscal 2026 and 2025, a majority of the business realignment charges were incurred in Europe. We believe the realignment actions will positively impact future results of operations, but will not have a material effect on liquidity and sources and uses of capital.

Business realignment charges by business segment are as follows:


	Three Months Ended
	September 30,
	2025		2024
Diversified Industrial	$	14	$	9
Aerospace Systems	1		—

Other expense, net	—		1

Reductions to our workforce made in connection with such business realignment charges by business segment are as follows:


	Three Months Ended
	September 30,
(Headcount in single units)	2025	2024
Diversified Industrial	190	327
Aerospace Systems	25	—

The business realignment charges are presented in the Consolidated Statements of Income as follows:


	Three Months Ended
	September 30,
	2025		2024
Cost of sales	$	9	$	5
Selling, general and administrative expenses	6		4
Other income, net	—		1

During the first three months of fiscal 2026, approximately $15 million in payments were made relating to business realignment charges. Remaining payments related to business realignment actions of approximately $27 million, a majority of which are expected to be paid by March 31, 2026, are primarily reflected within the accrued payrolls and other compensation and other current liabilities captions in the Consolidated Balance Sheets. Additional charges may be recognized in future periods related to the business realignment actions described above, the timing and amount of which are not known at this time.

- 10 -

10. Equity

Changes in equity for the three months ended September 30, 2025 and 2024 are as follows:


	Common Stock		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Treasury Shares		Noncontrolling Interests		Total Equity
Balance at June 30, 2025	$	91	$	194	$	21,775	$	(883)	$	(7,495)	$	9	$	13,691
Net income	—		—		808		—		—		—		808

Other comprehensive income	—		—		—		(41)		—		—		(41)
Dividends paid ($1.80 per share)	—		—		(228)		—		—		—		(228)
Stock incentive plan activity(1)	—		629		—		—		(594)		—		35

Shares purchased at cost, including excise tax	—		—		—		—		(479)		—		(479)
Balance at September 30, 2025	$	91	$	823	$	22,355	$	(924)	$	(8,568)	$	9	$	13,786

(1) During the three months ended September 30, 2025, the Company recorded a $578 million reclassification between Treasury Shares and Additional Paid-in Capital to correct the historical accounting for shares withheld for taxes related to equity compensation issuances. The Company concluded the out-of-period adjustment was not material to the current period or any prior periods.


	Common Stock		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Treasury Shares		Noncontrolling Interests		Total Equity
Balance at June 30, 2024	$	91	$	264	$	19,105	$	(1,438)	$	(5,950)	$	9	$	12,081
Net income	—		—		698		—		—		—		698
Other comprehensive income	—		—		—		348		—		—		348
Dividends paid ($1.63 per share)	—		—		(210)		—		—		—		(210)
Stock incentive plan activity	—		11		—		—		23		—		34

Shares purchased at cost	—		—		—		—		(50)		—		(50)
Balance at September 30, 2024	$	91	$	275	$	19,593	$	(1,090)	$	(5,977)	$	9	$	12,901

- 11 -

Changes in accumulated other comprehensive loss in shareholders' equity by component are as follows:


	Three Months Ended
	September 30,
	2025		2024
Foreign Currency Translation Adjustment and Other
Beginning balance	$	(717)	$	(1,130)
Other comprehensive income (loss) before reclassifications	(49)		339
Income tax	4		6
Other comprehensive income (loss), net of tax	(45)		345
Ending balance	$	(762)	$	(785)
Retirement Benefit Plans
Beginning balance	$	(166)	$	(308)
Other comprehensive income (loss) before reclassifications	2		(1)

Reclassified from accumulated other comprehensive loss:
Amortization of net actuarial loss and other(1)	3		5
Tax benefit	(1)		(1)
Other comprehensive income (loss), net of tax	4		3
Ending balance	$	(162)	$	(305)
Total accumulated other comprehensive loss ending balance	$	(924)	$	(1,090)

(1) The amounts reclassified include the amortization of net actuarial loss and amortization of prior service cost. These costs are included in the computation of net periodic benefit cost (income) which is recorded in other income, net. Refer to Note 12 for additional information.

Share repurchase program

On October 22, 2014, the Board of Directors approved a share repurchase program authorizing the repurchase of up to 35.0 million of the Company's common shares. On August 21, 2025, the Board of Directors approved an update to the number of shares available under the Company's existing share repurchase authorization so that the aggregate number of shares available for repurchase as of such date was 20.0 million. There is no limitation on the number of shares that can be repurchased in a fiscal year and there is no expiration date for the program. Repurchases may be funded primarily from operating cash flows and commercial paper borrowings and the shares are initially held as treasury shares.

Under our share repurchase programs, the Company repurchased 0.6 million and 0.1 million shares for $475 million and $50 million during the three months ended September 30, 2025 and 2024, respectively. As of September 30, 2025, 19.4 million shares remained available under the repurchase authorization.

11. Goodwill and intangible assets

The changes in the carrying amount of goodwill for the three months ended September 30, 2025 are as follows:


	Diversified Industrial Segment		Aerospace Systems Segment		Total
Balance at June 30, 2025	$	7,728	$	2,966	$	10,694
Acquisition	472		—		472



Foreign currency translation	(19)		(6)		(25)
Balance at September 30, 2025	$	8,181	$	2,960

SEC Form 10-Q filed by Parker-Hannifin Corporation