Industrial filtration company Donaldson Company reported a record fourth quarter and fiscal 2026 on Wednesday, with quarterly sales exceeding $1 billion for the first time and adjusted operating margins hitting a new high.
The company posted Q4 FY26 revenue of $1.059 billion, surpassing analyst expectations of $1.04 billion. Adjusted earnings per share reached $1.15, up 12% from $1.03 in the same period a year ago. Adjusted operating margin expanded to 17.5%, an 110-basis-point improvement year-over-year, while adjusted gross margin rose 190 basis points to 36.7%. Sales grew 8% year-over-year, with pricing contributing approximately 2 percentage points and the Facet acquisition adding about 3 percentage points.
Full-year FY26 sales totaled $3.886 billion, a 5% increase from the prior year, with adjusted operating margin reaching a record 16.0%. Adjusted diluted EPS grew 8% to $3.98. Segment performance varied, with Mobile Solutions up 6%, Industrial Solutions advancing 3%, and Life Sciences delivering 13% growth. Cash from operations rose 18% to $494 million, while the company returned $250 million to shareholders through dividends and buybacks.
Donaldson’s stock rose 2.31% to $95.41 following the announcement. The company also provided guidance for FY27, projecting sales growth of 5.5% to 9.5% to approximately $4.2 billion, with adjusted operating margins expected between 16.6% and 17.2%. Adjusted diluted EPS is forecast at $4.22 to $4.38, representing roughly 8% growth from FY26. Segment growth expectations include mid-teens for Industrial Solutions, 7% to 11% for Life Sciences, and 2% to 6% for Mobile Solutions.
The company’s net debt position increased to $1.074 billion due to the Facet acquisition, with a net debt to adjusted EBITDA ratio of 1.4x at fiscal year-end. Free cash flow conversion stood at 136% for the quarter, while capital expenditures totaled $57 million for the year.
