Preliminary brief— based on press release only. Full analysis including management tone and Q&A will be added when the transcript is available.

PNR · Q1 2026 Earnings

Pentair

Reported April 28, 2026

30-second summary

Pentair beat its Q1 guide on both adjusted EPS ($1.22 vs $1.15–$1.18) and revenue growth (+2.6% vs +1–2%), then widened the FY26 sales range to 2–4% from 3–4% (cutting the low end 1pt to reflect pool sell-in uncertainty), moved GAAP EPS guidance down $0.135 at the midpoint (still +23–25% YoY), tightened the adjusted operating income growth band to +6–8% from +5–8%, and guided Q2 revenue to just +1% YoY. The non-GAAP EPS midpoint was nudged up $0.025 — with the low end raised $0.05 — and management framed Q1 as "strong." But the substance underneath is a more defensive 2026 setup where management is explicitly mitigating risk, residential recovery is still excluded, and Q2 sales decelerate sequentially from Q1's print.

Headline numbers

EPS

Q1 FY2026

$1.22

Revenue

Q1 FY2026

$1.04B

+2.6% YoY

Gross margin

Q1 FY2026

41.8%

Free cash flow

Q1 FY2026

$-0.09B

Operating margin

Q1 FY2026

20.3%

Key financials

Q1 FY2026

Metric	Q1 FY2026	YoY	Q4 FY2025	QoQ
Revenue	$1.04B	+2.6%	$1.02B	+1.6%
EPS	$1.22	—	$1.18	+3.4%
Gross margin	41.8%	—	40.4%	+140bps
Operating margin	20.3%	—	20.1%	+20bps
Free cash flow	$-0.09B	—	—	—

Guidance

Pentair raised full-year non-GAAP EPS guidance midpoint but lowered GAAP EPS and cut full-year sales growth guidance from 3–4% to 2–4%; Q1 beat on both non-GAAP EPS and revenue growth, but Q2 guidance signals sequential deceleration.

Guidance is issued for the full year only, refreshed each quarter. Prior and new below are the same FY updated this quarter.

Actuals vs prior guidance

Metric	Period	Prior guide	Actual	Δ	Result
Non-GAAP EPS	Q1 FY2026	$1.15 to $1.18	$1.22	+$0.04 above guide	Beat
Revenue (Sales growth YoY %)	Q1 FY2026	approximately 1% to 2% YoY	2.6% YoY	+0.6-1.6 pts above guide	Beat

New guidance

Metric	Period	Guide	YoY
Non-GAAP EPS	Q2 FY2026	$1.47 to $1.50	+31-34% YoY
Revenue (Sales growth YoY %)	Q2 FY2026	approximately 1% on reported basis	-1% YoY

Changes to prior guidance

Metric	Period	Prior guide	New guide	Δ	Result
Non-GAAP EPS	FY2026	$5.25 to $5.40	$5.30 to $5.40	-$0.05 at low end	Lowered
GAAP EPS	FY2026	$4.94 to $5.09	$4.83 to $4.93	-$0.11 at low end, -$0.16 at high end	Lowered
Sales growth	FY2026	approximately 3% to 4%	approximately 2% to 4%	-1.0 pt at low end	Lowered
Adjusted Operating Income growth	FY2026	approximately 5% to 8%	Withdrawn — no replacement	—	Withdrawn

Segment KPIs

Q1 FY2026

Segment	Q1 FY2026	YoY
Flow	$0.258B	+11.0%
Water Solutions	$0.391B	-0.6%
Pool	$0.387B	+0.8%
Flow Segment ROS	23.7%	—
Water Solutions Segment ROS	25.5%	—
Pool Segment ROS	33.1%	—

Other KPIs

Q1 FY2026

Segment	Q1 FY2026
Adjusted Operating Income	$259.1 million
Adjusted ROS	25.0%
Core Sales Growth (organic)	1.0%
Share Repurchases	$200 million
Dividend per Share	$0.27

Management tone

The 2026 algorithm has shifted toward more defensive framing. Management's posture — "We expect to control what we can and continue to mitigate risk... We are taking actions to manage risk and support consistent execution" — leans more defensive than Q3 2025's flywheel language or Q4's "deliver another year of sales and earnings growth and margin expansion." The adjusted operating income growth band was tightened (low end raised to +6% from +5%) rather than withdrawn, and the non-GAAP EPS low-end raise of $0.05 was the explicit message Nick anchored on the call.

Pool has moved from growth engine to channel-normalization story in two quarters. Q3 2025 Pool was +6.9% with 32.8% ROS; Q4 was +11.2% at 33.6% ROS; Q1 is +0.8% at 33.1% ROS (+30bps YoY). Management is now framing Q2–Q3 as lower shipments for channel partners with the payoff in 2027: "we're expecting that to work its way out through Q2 and Q3 with lower shipments for us and then ultimately better long-term dynamics as we head into 2027 pool season." Two quarters ago Pool was carrying the print; now it's the segment to be patient through.

Volume has been quietly written off as the growth lever for 2026. Q3 2025 narrated 80/20 as a top-line unlock with Quad 1 customer expansion. This quarter management said: "flatish volume sell-through for the industry. Plus price... we're looking at overall volume flat on the sell-through side and taking a lot of activity and energy to achieve that." The admission that flat volume is the outcome despite heavy effort is a notable retreat from the Q3 flywheel narrative — the 2026 algorithm is now explicitly price + transformation, with volume neutralised.

Tariffs and inflation are framed as net neutral over the year. Management said "tariffs are net-net slightly more than we currently expected, not by a lot... we are seeing some commodities running hotter right now than they were initially expected. And again, we have taken price actions to neutralize those in our full year guidance forecast," and explicitly "We expect tariffs and inflation to have a net neutral impact over the year." The slight uptick in tariffs and commodities has been offset by incremental price; this is not a deterioration in the cost narrative, but it does keep price in a more visible defensive role than the Q3 2025 framing.

Capital allocation shifted decisively toward buybacks. Q4 2025 framed deployment as "selective bolt-on M&A... nibble at stock if acquisitions unavailable." This quarter's $200M of buybacks against zero M&A signals management is finding limited acquisition value at current multiples. The supporting language — "A lot of sponsor-based deals are waiting for a better backdrop and climate... we're active but we want to make sure that we're always looking at long-term value creation and comparing that against our own organic growth opportunities" — confirms the pipeline is paused, not the appetite. Additional repurchases are planned in 2026 but not in the current guide.

Recurring themes management leaned on this quarter:

Pentair Business System productivity driving 100bps margin expansion despite sales headwindsPool segment destocking management in Q2-Q3 with expectation of recovery in 2027Geographic mix pressure from Europe/Asia offset by North America strengthCommercial water solutions and flow greenfield wins through targeted selling effortsTariff and commodity inflation passed through via pricing; expecting net neutral impactCapital discipline: $200M Q1 buyback, additional repurchases planned but unmodeled in guidance

Risks management surfaced:

Housing and non-residential investment pace uncertainty requiring close monitoringPool channel destocking in Q2-Q3 creating revenue pressure despite flat to up 1% segment guidanceTariff regime changes and incremental commodity inflation requiring continued price actionsRegional revenue headwinds in Europe and Asia related to Middle East supply chain challengesConsumer discretionary pressure and high interest rates impacting pool remodeling and new builds

Answers to last quarter's watch list

Water Solutions Q1 inflection toward flat / core low single digits up — Confirmed. Q1 Water Solutions came in at -0.6% reported with core +0.9%, a sharp inflection from Q4's -9.9% and consistent with the FY guide. Segment ROS expanded 160bps YoY to 25.5%, with Pro Channel mid-teens growth a standout.

Resolved positively

Whether metals inflation persists and forces a mid-cycle pricing action — Persisting but neutralized. Management explicitly stated commodities are running hotter than expected and tariffs are net-net slightly more than expected, but price actions taken to date are expected to neutralize both, with tariffs and inflation framed as net neutral over the year. Status: Resolved neutrally.

Pool ROS in Q1 — whether it continues expanding or flattens — Modest expansion. Pool ROS at 33.1% is +30bps YoY (press release), in line with the "modest Pool margin expansion" framing given at Investor Day. The company posted its 16th consecutive quarter of margin expansion. Status: Resolved in line with guidance.

Q1 volume vs the "slightly negative YoY" framing — Q1 revenue grew +2.6% on +1.1% core sales, implying volume was roughly flat to slightly positive — better than the "slightly negative" framing management offered Julian Mitchell on the Q4 call. However, Q2 guidance of +1% reported with management framing volume as flat sell-through across the year suggests the back-half acceleration that the 2026 algorithm requires has not materialised.

Continue monitoring

Residential recovery signals — No improvement. Management's quoted guidance assumption is "limited to no U.S. residential recovery and continued expansion across our commercial, industrial and municipal verticals." The portfolio is being repositioned around CIM verticals, not residential. The residential clock has been pushed further out, with Pool recovery now framed for 2027.

Resolved negatively

Capital deployment posture — Resolved toward buybacks. $200M of Q1 share repurchases vs zero announced M&A, with management acknowledging sponsor-based deals are paused waiting for a better backdrop, and additional buybacks planned in 2026 outside the current guide. Status: Resolved positively for shareholder yield, but signals limited internal conviction in acquisition value at current multiples.

What to watch into next quarter

Q2 Pool revenue vs the flat-to-+1% destocking framing — management has now twice told investors to look through Q2–Q3 to 2027; any further Pool deterioration below flat would force a third pool reset and could pressure the ~26% FY26 ROS target.

Whether Water Solutions sustains the Q1 inflection — Q1's -0.6% reported with core +0.9% was the cleanest segment positive surprise; a back-slide in Q2 would invalidate the FY flat guide and put the 26% ROS target under pressure.

Q2 GAAP EPS print against the $1.39–$1.42 guide and the $4.83–$4.93 FY range — the composition of the GAAP/non-GAAP gap (now ~$0.47 of adjustments for the year) matters, particularly the run-rate of restructuring and transformation charges.

Whether buybacks sustain at the $200M/quarter pace, given management flagged additional repurchases in 2026 outside the current guide — sustained pace implies management sees the stock as the best risk-adjusted return.

First sign of residential dealer commentary turning — management has now excluded residential recovery from three consecutive guides; the first sign of activity would re-rate the conservatism in the FY 2–4% sales range.

Whether tariffs and incremental commodity inflation remain net neutral as the year progresses, or whether pricing actions need to be re-opened a third time.

Sources

Pentair Q1 2026 Press Release, filed April 28, 2026 — https://www.sec.gov/Archives/edgar/data/77360/000007736026000023/q12026pressrelease.htm

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