PH · Earnings call · 2026Q2T · Full report

Cash Flow and Capital Allocation

Parker-Hannifin Corp · 2026-08-06 · Importance 53 · Surprise 32 · No source text

Fiscal 2026 operating cash flow reached a record $4.4 billion, up 16% year over year and equal to 20.3% of sales. Free cash flow increased 17% to a record $3.9 billion, representing an 18.2% margin and 107% conversion. Parker returned nearly $2 billion to shareholders, consisting of $1 billion in share repurchases and nearly $1 billion in dividends, and invested $500 million of capital expenditures in operations. Fiscal 2027 free cash flow is expected to be $3.4 billion to $3.9 billion with approximately 100% conversion, while capital expenditures are guided at approximately 2.5% of sales with additional capacity expansion already planned.

Key facts

• Committed to a 17% free cash flow margin target over the cycle
• FY '27 free cash flow expected $3.4 billion to $3.9 billion with conversion approximately 100%
• Free cash flow: $3.9 billion, 18.2% of sales, free cash flow up 17% versus prior year; conversion 107%
• Fiscal year '26 cash flow from operations: $4.4 billion (first time over $4 billion)
• Returned nearly $2 billion to shareholders in FY26: $1 billion in share repurchases and nearly $1 billion of dividends paid
• Cash flow from operations as percent of sales: 20.3% (cash flow from operations $4.4B) and up 16% versus prior year
• FY '26 was a very active year when it comes to capital deployment.

Impact estimates