Graco — Financial Results
Revenue Grew 6% to $2.24 Billion, Driven Largely by Acquisitions
| Metric | 2025 | 2024 |
|---|---|---|
| Net Sales | $2,236.6M | $2,113.3M |
| Net Earnings | $521.8M | $486.1M |
| Diluted EPS | $3.08 | $2.82 |
Graco grew revenue by $123 million, but only about 1% of that came from selling more products at better prices — the rest came from acquisitions and favorable currency moves. The Americas held relatively steady, EMEA jumped 16%, and Asia Pacific grew 8%. Construction markets stayed soft globally, while industrial and semiconductor end markets were brighter spots.
Gross Margin Slipped as Tariff Costs Bite
The gross profit margin (revenue left after manufacturing costs) dipped from 53.1% to 52.5%. Tariffs added $14 million in product costs in 2025, and newly acquired businesses tend to carry lower margins, both of which price increases couldn't fully offset. This is a modest but worth-watching trend, especially if tariff pressures persist.
Expansion Markets Segment Had a Standout Year on Profitability
| Segment | 2025 Operating Margin | 2024 Operating Margin |
|---|---|---|
| Contractor | 25% | 27% |
| Industrial | 34% | 33% |
| Expansion Markets | 25% | 19% |
The Expansion Markets segment — which covers areas like semiconductors, electric motors, and environmental applications — saw its operating margin jump 6 percentage points. This was driven by upfront license fees in the electric motor product line, which are high-margin by nature. It's a small segment ($168M in sales) but its profitability improvement stands out.
Graco Returned $606 Million to Shareholders in 2025
The company paid $183 million in dividends and spent $423 million buying back 5.2 million of its own shares — a sharp increase from just 0.4 million shares repurchased in 2024. The board also approved a new 15 million share buyback authorization in December 2025 and raised the quarterly dividend 7%, from $0.275 to $0.295 per share. This signals management's confidence in the business generating consistent cash.
Operating Cash Flow Hit $684 Million, Up $62 Million Year-Over-Year
Strong earnings and a deliberate inventory reduction program helped push operating cash flow higher. The company ended the year with $624 million in cash and $777 million in available credit, giving it $1.4 billion in total liquidity. Graco self-funds its operations, dividends, and acquisitions without relying on external financing — a sign of a financially resilient business.