A. O. Smith Reports Record 2025 Diluted Earnings Per Share (EPS) of $3.85 and Introduces 2026 Guidance

Rhea-AI Summary

A. O. Smith (NYSE: AOS) reported 2025 net sales of $3.83 billion, net earnings of $546.2 million and record diluted EPS of $3.85 (up 6% YoY). Free cash flow was $546.0 million, and the company returned $597 million to shareholders.

2026 guidance projects sales of $3.90–4.02 billion and EPS of $3.85–4.15, including Leonard Valve sales of about $70 million.

Positive

• Record diluted EPS of $3.85, up 6% year-over-year
• Free cash flow of $546.0 million, equal to 100% of net earnings
• Returned $597 million to shareholders via dividends and buybacks in 2025
• Operating margin improvement of 80 basis points year-over-year

Negative

• China third-party sales declined 12% in 2025
• Rest of World sales decreased 4%, driven by lower China volumes
• 2026 guidance low-end EPS of $3.85 equals 2025 EPS, implying limited downside cushion

News Market Reaction

+5.30% 2.7x vol

32 alerts

+5.30% News Effect

+2.4% Peak in 3 hr 16 min

+$522M Valuation Impact

$10.36B Market Cap

2.7x Rel. Volume

On the day this news was published, AOS gained 5.30%, reflecting a notable positive market reaction. Argus tracked a peak move of +2.4% during that session. Our momentum scanner triggered 32 alerts that day, indicating elevated trading interest and price volatility. This price movement added approximately $522M to the company's valuation, bringing the market cap to $10.36B at that time. Trading volume was elevated at 2.7x the daily average, suggesting notable buying interest.

Data tracked by StockTitan Argus on the day of publication.

Key Figures

2025 net sales: $3.8 billion 2025 net earnings: $546.2 million 2025 diluted EPS: $3.85 +5 more

8 metrics

2025 net sales $3.8 billion Full year 2025 net sales, essentially flat year-over-year

2025 net earnings $546.2 million Full year 2025 net earnings, up 2% YoY

2025 diluted EPS $3.85 Record full year 2025 diluted EPS, up 6% from $3.63 in 2024

2025 free cash flow $546 million 2025 free cash flow, equal to 100% of net earnings

Capital returned 2025 $597 million Capital returned to shareholders via dividends and repurchases in 2025

Shares repurchased 2025 5.9 million shares Repurchased in 2025 at a cost of $400.8 million

China third-party sales change 12% decrease China third-party sales decline in 2025 within Rest of World segment

2026 EPS guidance range $3.85–$4.15 2026 diluted EPS outlook vs 2025 actual $3.85

Market Reality Check

Price: $73.49 Vol: Volume 2,816,059 vs 20-da...

high vol

$73.49 Last Close

Volume Volume 2,816,059 vs 20-day average 1,236,141 (relative volume 2.28), showing elevated trading ahead of the release. high

Technical Shares at 69.49, trading slightly above the 200-day MA of 68.58, indicating a generally constructive longer-term trend pre-release.

Peers on Argus

AOS was down 1.63% while peers were mixed: CR -1.51%, GGG -1.06%, NDSN -0.22% co...

AOS was down 1.63% while peers were mixed: CR -1.51%, GGG -1.06%, NDSN -0.22% contrasted with GNRC +2.15% and IEX +1.05%. This pattern points to stock-specific dynamics rather than a broad sector move.

Historical Context

5 past events · Latest: Jan 15 (Positive)

Pattern 5 events

Date	Event	Sentiment	Move	Catalyst
Jan 15	Dividend declaration	Positive	+0.7%	Announced regular quarterly cash dividend of $0.36 per share.
Jan 07	Earnings call notice	Neutral	-2.2%	Scheduled fourth quarter 2025 results release and investor conference call.
Jan 06	Portfolio company sale	Positive	-2.2%	Bessemer announced sale of Leonard Valve to A. O. Smith with strategic growth background.
Jan 06	Acquisition close	Positive	-2.2%	Completed $470M all-cash acquisition of Leonard Valve funded via new credit agreement.
Nov 12	Acquisition agreement	Positive	+0.9%	Signed definitive agreement to acquire Leonard Valve, expected EPS accretion in 2026.

Pattern Detected

Recent acquisition headlines around Leonard Valve showed mixed reactions, with one positive move and a notable negative reaction despite strategic framing.

Recent Company History

Over the last few months, A. O. Smith’s news flow has centered on capital returns, strategic M&A, and communications around earnings. A dividend announcement on Jan 15, 2026 coincided with a modest gain. Multiple items on Jan 6, 2026 detailed the completion and background of the Leonard Valve acquisition, yet the stock moved lower on that day. The original acquisition agreement on Nov 12, 2025 saw a small positive reaction. Against this backdrop, the current report of record 2025 EPS and 2026 guidance builds on a theme of earnings growth plus portfolio expansion.

Market Pulse Summary

The stock moved +5.3% in the session following this news. A strong positive reaction aligns with the...

Analysis

The stock moved +5.3% in the session following this news. A strong positive reaction aligns with the company’s report of record $3.85 diluted EPS for 2025, solid free cash flow of $546M, and shareholder returns of $597M. Historical data show generally constructive responses to earnings and acquisition news, though the Leonard Valve closing on Jan 6, 2026 coincided with weakness, underscoring that strategic deals are not always rewarded immediately. Investors could weigh the sustainability of guidance at $3.85–$4.15 EPS and ongoing China softness.

Key Terms

free cash flow, adjusted earnings per share, segment margin, leverage ratio, +1 more

5 terms

free cash flow financial

"Free cash flow (FCF) of $546 million, 100% FCF to net earnings"

Free cash flow is the amount of money a company has left over after paying all its expenses and investing in its business, like buying equipment or updating facilities. It shows how much cash is available to reward shareholders, pay down debt, or save for future growth. This helps investors understand if a company is financially healthy and able to grow.

adjusted earnings per share financial

"Adjusted earnings per share | $ 3.85 | $ 3.73 2 | 3 %"

Adjusted Earnings Per Share shows how much profit a company makes for each share of stock, but it removes unusual or one-time items like big expenses or gains. This helps investors see the company's true ongoing performance, making it easier to compare how well different companies are doing over time.

segment margin financial

"Segment earnings were $727.9 million, and segment margin was 24.4% in 2025"

Segment margin measures how much profit a particular business unit or division keeps from its own sales after the costs directly tied to that unit are taken out, usually expressed as a percentage of that unit’s revenue. Think of each division as a separate shop: segment margin shows which shops are making and keeping more money from their sales. Investors use it to compare divisions’ efficiency, spot stronger or weaker areas, and decide where growth or cuts might improve overall company returns.

leverage ratio financial

"resulting in a leverage ratio of 7.7% as measured by total debt-to-total capitalization"

Leverage ratio measures how much a company relies on borrowed money compared with its own funds or assets, typically expressed as debt relative to equity or total assets. Like a homeowner with a mortgage, higher leverage can amplify returns when business is strong but also raises the chance of big losses or default if revenue falls, so investors use it to judge financial risk and resilience.

capital expenditures financial

"Free cash flow is defined as cash provided by operations less capital expenditures"

Capital expenditures are the money a company spends to buy or improve big assets like buildings, equipment, or machines that will last a long time. These investments matter because they help the company grow and operate more efficiently, similar to how upgrading a home’s appliances or adding a new room can make it better and more valuable.

AI-generated analysis. Not financial advice.

2025 Highlights

(Comparisons are year-over-year ("YoY"), unless otherwise noted)

• Sales of $3.8 billion; net earnings increased 2% to $546.2 million and diluted EPS increased 6% to a record $3.85¹
• Strong execution led to 80 basis points of operating margin improvement
• Free cash flow (FCF) of $546 million, 100% FCF to net earnings
• Returned $597 million of capital to shareholders through dividends and share repurchases
• Leonard Valve acquisition closed in January 2026 and advances a broader water management platform

1	2024 net earnings and EPS included pre-tax restructuring and impairment expenses of $17.6 million, with an EPS impact of $0.10, to right size the businesses in China and North America Water Treatment. See accompanying GAAP to Non-GAAP reconciliations

MILWAUKEE, Jan. 29, 2026 /PRNewswire/ -- Global water technology company A. O. Smith Corporation ("the Company") (NYSE: AOS) today announced its full year and fourth quarter 2025 results.

In 2025, A. O. Smith delivered another year of solid performance, achieving $3.8 billion in sales.

Key Financial Metrics

Full Year

(in millions, except per share amounts)

	2025	2024	% Change YoY
Net sales	$ 3,830	$ 3,818	-
Net earnings	$ 546.2	$ 533.6	2 %
Adjusted earnings	$ 546.2	$ 548.0 2	-
Diluted earnings per share	$   3.85	$   3.63	6 %
Adjusted earnings per share	$   3.85	$   3.732	3 %

Fourth Quarter

(in millions, except per share amounts)

	Q4 2025	Q4 2024	% Change YoY
Net sales	$ 912.5	$ 912.4	-
Net earnings	$ 125.4	$ 109.7	14 %
Adjusted earnings	$  125.4	$ 124.12	1 %
Diluted earnings per share	$   0.90	$   0.75	20 %
Adjusted earnings per share	$   0.90	$   0.85 2	6 %

2	Excludes restructuring and impairment expenses. See accompanying GAAP to Non-GAAP reconciliations

"I am pleased with the resilience and focus our team showed through the fourth quarter. The continued improvement in profitability and strength in the commercial water heater and boiler markets helped contribute to our record EPS in 2025," noted Steve Shafer, chief executive officer. "Our China margins expanded despite continued pressure on our volumes driven by the challenging market conditions, and the assessment of our China business is ongoing. Additionally, I would like to welcome the Leonard Valve team to the A. O. Smith family. We are excited to have the Leonard Valve and Heat-Timer brands as a part of our portfolio. Their addition represents an important step forward for aligning our portfolio to higher growth opportunities."

Segment-level Performance

North America

Full Year 2025

2025 sales of $3.0 billion increased slightly compared to 2024 as water heater pricing benefits and higher boiler and commercial water heater volumes were largely offset by lower wholesale residential water heater volumes.

Segment earnings were $727.9 million, and segment margin was 24.4% in 2025 compared to 2024 segment earnings of $707.5 million and segment margin of 24.0%. 2024 adjusted segment earnings and adjusted segment margin were $713.8 million and 24.2%, respectively and exclude $6.3 million of restructuring and impairment expenses recognized in the water treatment business as part of a profitability improvement strategy. The higher segment earnings and segment margin in 2025 compared to 2024 were primarily driven by pricing benefits, higher boiler and commercial water heater volumes, as well as improved water treatment profitability that more than offset lower residential water heater volumes and higher input costs, including tariffs.

Fourth Quarter 2025

Fourth quarter sales of $713.7 million increased 3% compared to fourth quarter sales in the prior year period primarily due to pricing benefits.

Segment earnings were $164.9 million, and segment margin was 23.1% in fourth quarter of 2025 compared to fourth quarter of 2024 segment earnings of $147.9 million and segment margin of 21.4%. Fourth quarter 2024 adjusted segment earnings were $154.2 million and adjusted segment margin was 22.4%. The year-over-year increase in segment earnings and segment margin was primarily due to the impacts of pricing benefits and improved water treatment profitability that were partially offset by higher input costs.

Rest of World

Full Year 2025

Rest of World sales of $880.4 million decreased 4% year-over-year primarily driven by lower sales in China, partially offset by sales from the acquisition of Pureit and sales growth in the India legacy business. China third-party sales decreased 12% in 2025. Organic sales in India increased 13% in local currency in 2025. Pureit contributed $54 million to sales in 2025.

Segment earnings were $76.4 million, and segment margin was 8.7% in 2025, compared to segment earnings of $64.5 million and segment margin of 7.0% in the prior year. 2024 adjusted segment earnings and adjusted segment margin were $75.8 million and 8.3%, respectively and exclude severance expenses of $11.3 million related to the right sizing of the China business to market conditions. The higher segment earnings and segment margin in 2025 compared to 2024 were primarily driven by the benefits of restructuring actions taken at the end of 2024 and other cost saving measures that more than offset lower sales in China.

Fourth Quarter 2025

Rest of World sales of $205.7 million decreased 13% year-over-year. The decrease in sales in the fourth quarter of 2024 was primarily driven by lower sales in China. Organic sales in India increased 18% in local currency and Pureit sales were $9 million.

Segment earnings were $16.0 million, and segment margin was 7.8% in the fourth quarter of 2025, compared to segment earnings of $7.8 million and segment margin of 3.3% in the same period of 2024. Adjusted segment earnings were $19.1 million and adjusted segment margin was 8.1% in the fourth quarter of 2024. The higher segment earnings and segment margin compared to the prior year were primarily due to the benefits from the 2024 restructuring actions and additional cost saving measures that more than offset the impacts of lower 2025 China sales volumes.

Balance Sheet, Liquidity and Capital Allocation

As of December 31, 2025, cash and marketable securities balances totaled $193.2 million and debt totaled $155.0 million, resulting in a leverage ratio of 7.7% as measured by total debt-to-total capitalization.

Cash provided by operations was $616.8 million and free cash flow was $546.0 million in 2025, both higher than 2024, primarily driven by higher earnings and a one-time tax adjustment related to a tax law change that benefited 2025.

As part of its commitment to return capital to shareholders, the Company repurchased 5.9 million shares at a cost of $400.8 million in 2025. As of December 31, 2025, authority remained to repurchase approximately 0.8 million additional shares. In January 2026, the Company's board of directors increased the number of shares authorized for repurchase by an additional 5 million shares. The Company expects to spend approximately $200 million to repurchase shares in 2026.

On January 15, 2026, the Company's board of directors approved a $0.36 per share dividend for shareholders of record on January 30, payable on February 17, marking 86 consecutive years of dividend payments. For the full release, click here.

Outlook

2026 Outlook

(in millions, except per share amounts)

	2025		2026 Outlook
	Actual		Low End	High End
Net sales	$ 3,830		$ 3,900	$ 4,020
Diluted earnings per share	$    3.85		$   3.85	$   4.15

"Our outlook for 2026, which includes Leonard Valve sales of approximately $70 million, projects our consolidated sales to increase 2% to 5% compared to 2025. We expect our full-year EPS to be between $3.85 and $4.15, a 4% increase over 2025 at the mid-point. In North America, we anticipate residential water heater industry unit volumes to be flat to down year-over-year. In our Rest of World segment, we expect the challenges in the China market to continue and are forecasting a mid-single digit sales decline, although we anticipate improvement as we go through the year due to market recovery and turnaround actions. We project continued double-digit sales growth in India," stated Shafer.

"We believe our strong balance sheet and free cash flow give us the flexibility to support organic growth, dividends and share repurchases while continuing to pursue strategic acquisitions to support our focus on portfolio management."

The Company's guidance excludes the potential impacts from future acquisitions, any potential outcomes of the assessment of its China business and changes to tariffs.

A. O. Smith will host a webcasted conference call at 10:00 a.m. (Eastern Standard Time) today. The call can be heard live on the Company's website click here. An audio replay of the call will be available on the Company's website after the live event. To access the archived audio replay, go to the "Investors" page and select the Fourth Quarter 2025 Earnings Call link.

To provide improved transparency into the operating results of its business, the Company is providing non-GAAP measures. Free cash flow is defined as cash provided by operations less capital expenditures. Adjusted earnings, adjusted EPS and adjusted segment earnings exclude the impact of restructuring and impairment charges. Reconciliations from GAAP measures to non-GAAP measures are provided in the financial information included in this news release.

Forward-looking Statements

This release contains statements that the Company believes are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements generally can be identified by the use of words such as "may," "will," "expect," "intend," "estimate," "anticipate," "believe," "forecast," "continue," "guidance," "outlook" or words of similar meaning. All forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those anticipated as of the date of this release. Important factors that could cause actual results to differ materially from these expectations include, among other things, the following: further weakening in North American residential or commercial construction or instability in the Company's replacement markets; failure to realize the expected benefits of acquisitions or expected synergies; difficulties in predicting results of operations of an acquired business; negative impact to the Company's businesses from international tariffs, including any new or increased tariffs that could also trigger retaliatory responses from other countries, as well as trade disputes and geopolitical differences, including the conflicts in Ukraine and the Middle East; further softening in U.S. residential and commercial water heater demand; negative impacts to the Company, particularly the demand for its products, resulting from global inflationary pressures or a potential recession in one or more of the markets in which the Company participates; the Company's ability to continue to obtain commodities, components, parts and accessories on a timely basis through its supply chain and at expected costs; inability of the Company to implement or maintain pricing actions; inconsistent recovery of the Chinese economy or a further decline in the growth rate of consumer spending or housing sales in China; the availability, timing or effects of China stimulus programs; uncertain outcomes and costs and other potential impacts of the Company's assessment relating to the Company's China business; potential weakening in the high-efficiency gas boiler segment in the U.S.; substantial defaults in payment by, material reduction in purchases by or the loss, bankruptcy or insolvency of a major customer; foreign currency fluctuations; failure to realize the expected benefits, timing and extent of regulatory changes; competitive pressures on the Company's businesses, including new technologies and new competitors; the impact of potential information technology or data security breaches; negative impact of changes in government regulations or regulatory requirements; the inability to respond to secular trends toward decarbonization and energy efficiency; and adverse developments in general economic, political and business conditions in key regions of the world. Additional factors are discussed in the Company's filings with Securities and Exchange Commission, including the Company's Annual Report on Form 10-K for the year ended December 31, 2024, quarterly reports on Form 10-Q and current reports on Form 8-K. Forward-looking statements included in this news release are made only as of the date of this release, and the Company is under no obligation to update these statements to reflect subsequent events or circumstances. All subsequent written and oral forward-looking statements attributed to the Company, or persons acting on its behalf, are qualified entirely by these cautionary statements.

About A. O. Smith

A. O. Smith Corporation, with headquarters in Milwaukee, Wisconsin, is a global leader applying innovative technology and energy-efficient solutions to products manufactured and marketed worldwide. Listed on the New York Stock Exchange (NYSE: AOS), the Company is one of the world's leading manufacturers of residential and commercial water heating equipment and boilers, as well as a manufacturer of water treatment products. For more information, visit www.aosmith.com.

 

A. O. SMITH CORPORATION Statement of Earnings  (condensed consolidated financial statements - dollars in millions, except share data)
	Three Months Ended December 31,						Twelve Months Ended December 31,
	(unaudited)						(unaudited)
	2025			2024			2025			2024
Net sales	$	912.5		$	912.4		$	3,830.2		$	3,818.1
Cost of products sold		562.1			574.3			2,342.8			2,362.0
Gross profit		350.4			338.1			1,487.4			1,456.1
Selling, general and administrative expenses		186.6			182.0			759.4			739.3
Restructuring and impairment expenses		—			17.6			—			17.6
Interest expense		2.4			2.4			13.5			6.7
Other expense (income)		0.8			(9.0)			(0.6)			(8.5)
Earnings before provision for income taxes		160.6			145.1			715.1			701.0
Provision for income taxes		35.2			35.4			168.9			167.4
Net earnings	$	125.4		$	109.7		$	546.2		$	533.6
Diluted earnings per share of common stock(1)	$	0.90		$	0.75		$	3.85		$	3.63
Average common shares outstanding (000's omitted)		139,933			145,758			141,915			147,084

(1) Earnings per share amounts are calculated discretely and, therefore, may not add up to the total due to rounding.

 

A. O. SMITH CORPORATION Balance Sheet (dollars in millions)
	(Unaudited) December 31, 2025			December 31, 2024
ASSETS:
Cash and cash equivalents	$	174.5		$	239.6
Marketable securities		18.7			36.5
Receivables		582.3			541.4
Inventories		479.3			532.1
Other current assets		36.7			43.3
Total Current Assets		1,291.5			1,392.9
Net property, plant and equipment		635.1			628.7
Goodwill and other intangibles		1,072.9			1,082.8
Operating lease assets		46.3			32.8
Other assets		97.0			102.8
Total Assets	$	3,142.8		$	3,240.0
LIABILITIES AND STOCKHOLDERS' EQUITY:
Trade payables	$	504.1		$	588.7
Accrued payroll and benefits		93.6			78.5
Accrued liabilities		147.5			153.0
Product warranties		75.0			67.0
Debt due within one year		42.3			10.0
Total Current Liabilities		862.5			897.2
Long-term debt		112.7			183.2
Pension liabilities		7.4			11.0
Operating lease liabilities		37.1			23.5
Other liabilities		265.1			241.6
Stockholders' equity		1,858.0			1,883.5
Total Liabilities and Stockholders' Equity	$	3,142.8		$	3,240.0

 

A. O. SMITH CORPORATION Statement of Cash Flows (dollars in millions)
	Twelve Months Ended December 31,
	(unaudited)
	2025			2024
Operating Activities
Net earnings	$	546.2		$	533.6
Adjustments to reconcile net earnings to net cash provided by (used in) operating activities:
Depreciation & amortization		85.1			78.8
Stock based compensation expense		13.8			14.9
Deferred income taxes		8.9			(4.6)
Non-cash impairments		—			4.7
Net changes in operating assets and liabilities:
Current assets and liabilities		(55.7)			(22.6)
Noncurrent assets and liabilities		18.5			(23.0)
Cash Provided by Operating Activities		616.8			581.8
Investing Activities
Capital expenditures		(70.8)			(108.0)
Acquisitions		—			(145.9)
Investment in marketable securities		(42.7)			(73.7)
Net proceeds from sale of marketable securities		60.5			60.5
Cash Used in Investing Activities		(53.0)			(267.1)
Financing Activities
Proceeds from debt		1,087.3			1,100.1
Repayments of debt		(1,124.9)			(1,030.4)
Common stock repurchases		(400.8)			(305.8)
Net proceeds from stock option activity		1.0			18.1
Dividends paid		(195.7)			(190.4)
Cash Used In Financing Activities		(633.1)			(408.4)
Effect of exchange rate changes on cash and cash equivalents		4.2			(6.6)
Net decrease in cash and cash equivalents		(65.1)			(100.3)
Cash and cash equivalents - beginning of period		239.6			339.9
Cash and Cash Equivalents - End of Period	$	174.5		$	239.6

 

A. O. SMITH CORPORATION Business Segments (dollars in millions)
	Three Months Ended December 31,						Twelve Months Ended December 31,
	(unaudited)						(unaudited)
	2025			2024			2025			2024
Net sales
North America	$	713.7		$	689.8		$	2,984.2		$	2,950.1
Rest of World		205.7			236.6			880.4			918.6
Inter-segment sales		(6.9)			(14.0)			(34.4)			(50.6)
	$	912.5		$	912.4		$	3,830.2		$	3,818.1
Earnings
North America (1)	$	164.9		$	147.9		$	727.9		$	707.5
Rest of World (2)		16.0			7.8			76.4			64.5
Inter-segment earnings elimination		—			—			(0.2)			(0.4)
		180.9			155.7			804.1			771.6
Corporate expense		(17.9)			(8.2)			(75.5)			(63.9)
Interest expense		(2.4)			(2.4)			(13.5)			(6.7)
Earnings before income taxes		160.6			145.1			715.1			701.0
Provision for income taxes		35.2			35.4			168.9			167.4
Net earnings	$	125.4		$	109.7		$	546.2		$	533.6
Additional Information
(1) North America
includes restructuring and impairment expense of:		—			6.3			—			6.3
(2) Rest of World
includes restructuring and impairment expense of:		—			11.3			—			11.3

 

A. O. SMITH CORPORATION Adjusted Earnings and Adjusted Earnings Per Share (dollars in millions, except per share data) (unaudited)
The following is a reconciliation of net earnings and diluted earnings per share to adjusted earnings (non-GAAP) and adjusted earnings per share (non-GAAP):
	Three Months Ended December 31,						Twelve Months Ended December 31,
	2025			2024			2025			2024
Net Earnings (GAAP)	$	125.4		$	109.7		$	546.2		$	533.6
Restructuring and impairment expenses, before tax		—			17.6			—			17.6
Tax effect on above items		—			(3.2)			—			(3.2)
Adjusted Earnings (non-GAAP)	$	125.4		$	124.1		$	546.2		$	548.0
Diluted Earnings Per Share (GAAP)(1)	$	0.90		$	0.75		$	3.85		$	3.63
Restructuring and impairment expenses, per diluted share, before tax		—			0.12			—			0.12
Tax effect on above items per diluted share		—			(0.02)			—			(0.02)
Adjusted Earnings Per Share (non-GAAP)(1)	$	0.90		$	0.85		$	3.85		$	3.73

(1) Earnings per share amounts are calculated discretely and, therefore, may not add up to the total due to rounding.

 

A. O. SMITH CORPORATION Adjusted Segment Earnings (dollars in millions) (unaudited)
The following is a reconciliation of reported earnings before provision for income taxes to total segment earnings (non-GAAP) and adjusted segment earnings (non-GAAP):
	Three Months Ended December 31,						Twelve Months Ended December 31,
	2025			2024			2025			2024
Earnings Before Provision for Income Taxes (GAAP)	$	160.6		$	145.1		$	715.1		$	701.0
Add: Corporate expense		17.9			8.2			75.5			63.9
Add: Interest expense		2.4			2.4			13.5			6.7
Total Segment Earnings (non-GAAP)	$	180.9		$	155.7		$	804.1		$	771.6
North America(1)	$	164.9		$	147.9		$	727.9		$	707.5
Rest of World(2)		16.0			7.8			76.4			64.5
Inter-segment earnings elimination		—			—			(0.2)			(0.4)
Total Segment Earnings (non-GAAP)	$	180.9		$	155.7		$	804.1		$	771.6
Additional Information
(1)North America	$	164.9		$	147.9		$	727.9		$	707.5
Restructuring and impairment expenses, before tax		—			6.3			—			6.3
Adjusted North America (non-GAAP)	$	164.9		$	154.2		$	727.9		$	713.8
(2)Rest of World	$	16.0		$	7.8		$	76.4		$	64.5
Restructuring and impairment expenses, before tax		—			11.3			—			11.3
Adjusted Rest of World (non-GAAP)	$	16.0		$	19.1		$	76.4		$	75.8

 

A. O. SMITH CORPORATION Free Cash Flow (dollars in millions) (unaudited)
The following is a reconciliation of reported cash flow from operating activities to free cash flow (non-GAAP):
	Twelve Months Ended December 31,
	2025			2024
Cash provided by operating activities (GAAP)	$	616.8		$	581.8
Less: Capital expenditures		(70.8)			(108.0)
Free cash flow (non-GAAP)	$	546.0		$	473.8

 

A. O. SMITH CORPORATION 2026 EPS Guidance and 2025 EPS (unaudited)
	2026 Guidance			2025
Diluted EPS (GAAP)	$	3.85 - 4.15		$	3.85

 

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SOURCE A. O. Smith Corporation

FAQ

What were A. O. Smith (AOS) full-year 2025 results for EPS and sales?

A. O. Smith reported 2025 diluted EPS of $3.85 and net sales of $3.83 billion. According to the company, net earnings were $546.2 million and free cash flow totaled $546.0 million for the year.

How much capital did AOS return to shareholders in 2025 and what buyback remains?

The company returned $597 million to shareholders through dividends and repurchases in 2025. According to the company, it repurchased 5.9 million shares for $400.8 million and had authority to repurchase roughly 0.8 million shares at year-end.

What is A. O. Smith's 2026 sales and EPS guidance (AOS) and what assumptions are included?

Guidance projects $3.90–4.02 billion in sales and EPS of $3.85–4.15 for 2026. According to the company, guidance includes Leonard Valve sales of about $70 million and excludes impacts from future acquisitions or tariff changes.

How did AOS perform in China and Rest of World in 2025 and what was the impact?

China third-party sales fell 12% in 2025, contributing to a 4% decline in Rest of World sales. According to the company, restructuring and cost actions improved margins despite lower China volumes.

What drove A. O. Smith's margin improvement and record EPS in 2025?

Improved pricing, stronger commercial water heater and boiler volumes, and water treatment profitability drove margin gains. According to the company, these factors delivered an 80 basis point operating margin improvement and record EPS.