About A. O. Smith
A. O. Smith Corporation (NYSE: AOS), 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. Operations and sales in more than 60 countries with plants and offices in North America, China, India, Europe and beyond.
2025 Results
Net sales were $3,830 million in 2025, compared with $3,818 million in 2024, essentially flat year-over-year. Net earnings increased to $546.2 million in 2025 from $533.6 million in 2024, representing a 2% rise.
Adjusted earnings were $546.2 million in 2025, slightly lower than $548.0 million in 2024, indicating a marginal decline year-over-year. Diluted earnings per share (EPS) improved to $3.85 in 2025 from $3.63 in 2024, a 6% increase. Adjusted diluted EPS reached $3.85 in 2025, up from $3.73 in 2024, reflecting approximately a 3% year-over-year gain.
4Q 2025 Results
Net sales were $912.5 million in Q4 2025, essentially unchanged compared with $912.4 million in Q4 2024. Net earnings rose to $125.4 million from $109.7 million, representing a 14% year-over-year increase. Adjusted earnings totaled $125.4 million in Q4 2025, slightly up from $124.1 million in Q4 2024, a 1% improvement. Diluted earnings per share (EPS) increased to $0.90 from $0.75, marking a 20% year-over-year gain. Adjusted diluted EPS reached $0.90, compared with $0.85 in the prior year quarter, reflecting a 6% increase.
Segment-Level Performance Summary
North America
For full year 2025 sales were $3.0 billion, slightly up vs. 2024. Drivers of the results were price increases, higher boiler and commercial water-heater volumes. Earnings were $727.9 million and margin was 24.4% (vs. 24.0% in 2024; 24.2% adjusted). Key Factors were pricing benefits, stronger boiler/commercial demand, and improved water-treatment profitability outweighed weaker residential volumes and higher input costs (including tariffs).
For Q4 2025 sales were $713.7 million, up 3% YoY, mainly from pricing. Earnings were $164.9 million. Margin was 23.1% (vs. 21.4% in Q4 2024; 22.4% adjusted). Drivers were pricing gains and better water-treatment profitability, partly offset by higher input costs.
Rest of World
For full year 2025 sales were $880.4 million, down 4% YoY. China third-party sales were down 12%. India organic sales were up 13% (local currency). Pureit acquisition contributed $54 million. Earnings were $76.4 million. Margin was 8.7% (vs. 7.0% in 2024; 8.3% adjusted). Key factors were restructuring actions and cost savings improved profitability despite weaker China volumes.
For Q4 2025 sales were $205.7 million, down 13% YoY, primarily due to China weakness. India organic sales were up 18% (local currency). Pureit sales were $9 million. Earnings were $16.0 million. Margin was 7.8% (vs. 3.3% in Q4 2024; 8.1% adjusted). Drivers were benefits from 2024 restructuring and ongoing cost controls more than offset lower China sales.
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.
2026 Outlook
For 2026, the company expects net sales to be in the range of $3,900 million to $4,020 million, indicating projected growth year-over-year. For 2026, diluted EPS is forecast to be between $3.85 and $4.15, suggesting results could range from flat performance at the low end to moderate improvement at the high end.
