Snapshot
DOVER Corp reported $2.05B of revenue in Q1 2026, up 10.1% year over year, with diluted EPS of $1.75 and an operating margin of 14.9%.
- Revenue
- $2.05B
- YoY growth
- +10.1%
- Diluted EPS
- $1.75
- Operating margin
- 14.9%
What management said
- •Revenue grew double digits in the quarter, driven by continued strength in our secular growth-exposed end markets, acquired company performance, and constructive demand conditions across the portfolio.
- •During the quarter, we continued to return capital to shareholders through opportunistic share repurchases, while also investing behind high-return capacity expansions and productivity projects.
- •Our acquisition pipeline remains active as industrial M&A begins to pick up.
- •All in, adjusted EPS of $2.28 per share was up 11% year-over-year.
- •We remain committed to delivering double-digit adjusted EPS growth for the full year, consistent with Dover's long-term performance trajectory.
- •We have chosen to reaffirm full guidance for the year for the time being, but clearly, based on order rates, we are driving to the top end of the range.
- •Engineered Products revenue increased modestly in the quarter, supported by strong underlying demand and healthy bookings in aerospace and defense components and industrial winches, along with improving trends in the global vehicle aftermarket business.
- •Clean Energy & Fueling grew 11% organically, led by strong shipments and new orders in clean energy components, fluid transport, and retail fueling.
- •Margin performance was driven by volume leverage and operational execution, with recent pricing actions expected to further bolster margin performance over the balance of the year.
- •Imaging & Identification delivered stable performance across core marking and coding equipment, consumables, and in serialization software.
- •Segment margins remained strong with some foreign currency translation headwinds in the quarter that should abate as the year progresses.
- •Revenue in Pumps & Process Solutions declined modestly in the quarter as solid performance in artificial intelligence, energy infrastructure components, and industrial pumps allowed us to lap a tough comp in biopharma.
What went well
- •Revenue grew double digits in the quarter, driven by secular growth-exposed end markets, acquired company performance, and constructive demand conditions across the portfolio.
- •First quarter bookings totaled $2.5 billion, up 24% year-over-year, with a healthy book-to-bill of 1.2 and each of the five segments well above one, improving visibility and confidence in the forecast.
- •Adjusted EPS of $2.28 was up 11% year-over-year.
- •Climate & Sustainability Technologies was a standout, delivering 15% organic growth, with heat exchangers performing especially well in North America on liquid cooling demand in data centers.
- •Clean Energy & Fueling grew 11% organically, led by clean energy components, fluid transport, and retail fueling amid aggressive national retailer build-outs in North America.
- •Free cash flow was $131 million, or 6% of revenue, a $22 million increase versus the first quarter of last year.
What went wrong
- •Revenue in Pumps & Process Solutions declined modestly as the company lapped a tough biopharma comp from the prior year.
- •Ramping production to meet strong bookings cost the company margin dollars in Q1, particularly as a refrigeration facility consolidation was delayed by high order volumes, keeping redundant fixed costs in place.
- •Imaging & Identification faced foreign currency translation headwinds in the quarter, with roughly 30 basis points of margin compression attributed to FX in its most global business.
- •Demand is outstripping supply in certain growth markets such as brazed plate heat exchangers, CO2 systems, and refrigeration cases, extending lead times and constraining near-term deliveries.
Guidance changes
| Metric | Period | Previous | Current | Change |
|---|---|---|---|---|
| Adjusted EPS growth | FY2026 | Double-digit | Double-digit (reaffirmed, driving to top end of range) | Reaffirmed |
| Organic revenue growth | FY2026 | 3%-5% | 3%-5% (driving to top end) | Reaffirmed |
| Capital expenditures | FY2026 | $190M-$210M | $190M-$210M | Unchanged |
| Free cash flow (% of revenue) | FY2026 | 14%-16% | 14%-16% | Unchanged |
| Price | FY2026 | 1.5%-2% | 1.5%-2% | Unchanged |
| Rightsizing / fixed cost reduction savings | FY2026 | — | More than $40 million, with incremental carryover into 2027 | New |
| Revenue from AI and power generation infrastructure applications | FY2026 | — | Over $1 billion | New |
Performance breakdown
| Metric | YoY change | Reason |
|---|---|---|
| First quarter bookings | +24% | Broad-based acceleration across most end markets, with customers ordering for later delivery periods to reserve constrained capacity. |
| Adjusted EPS | +11% | Volume leverage and operational execution across the portfolio. |
| Climate & Sustainability Technologies (organic) | +15% | Strength in CO2 refrigeration systems and heat exchangers, particularly North American liquid cooling for data centers, plus recovery in refrigerated door cases and services. |
| Clean Energy & Fueling (organic) | +11% | Strong shipments and new orders in clean energy components, fluid transport, and retail fueling amid national retailer build-outs. |
| Engineered Products revenue | Increased modestly | Strong demand and bookings in aerospace and defense components and industrial winches, plus improving global vehicle aftermarket trends. |
| Pumps & Process Solutions revenue | Declined modestly | Lapping a tough biopharma comp, partly offset by AI, energy infrastructure components, and industrial pumps; margins expanded on favorable mix and productivity. |
| Free cash flow | +$22 million | Cash conversion on higher year-over-year earnings, partially offset by higher capital expenditures tied to growth and productivity investments. |
Earnings call themes & trends
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| Bookings strength and longer-dated orders to reserve capacity | — | $2.5B bookings up 24%, book-to-bill 1.2; customers ordering into Q2/Q3 because demand outstrips supply, no pre-buy detected | rising |
| Data center liquid cooling and AI/power infrastructure | — | Over $1B expected from AI and power generation applications; heat exchanger and connector demand driving capacity additions, much for 2027 | rising |
| CO2 refrigeration adoption | — | Double-digit growth; North America penetration still below 10%, transitioning from regulatory mandate to performance-driven adoption | rising |
| Tariffs and Section 232 impact | — | Net impact roughly neutral after extensive analysis; build-in-region model and short supply chains seen as potential advantage | steady |
| M&A pipeline | — | Pipeline active as industrial M&A picks up; multiples frustratingly high but more product becoming available; several deals in process | rising |
| Climate segment margin inflection from facility consolidation | — | Redundant refrigeration fixed costs carried due to high orders; consolidation on track for mid-year, with material H2 margin inflection expected | rising |
Q&A summary
Was the record order quarter driven by anything unusual such as pre-buying or supply chain concerns, and did strength continue into April?
Tobin said there was no pre-buy; customers are ordering for later delivery periods because demand is outstripping supply, especially in brazed plate heat exchangers, CO2 systems, and refrigeration cases. The pace sustained through April.
With ~5% organic growth, mid-20s bookings growth, and comps not getting tough until Q4, isn't the 3%-5% organic guide conservative?
Tobin reaffirmed guidance for now but said they are clearly driving to the top end; if bookings trends remain consistent through Q2, they will have to revisit top-line expectations, and April bookings are so far so good.
Are the supply constraints internal to Dover rather than supply chain inputs, given the company held back investment during slower growth?
Tobin said it is mainly internal capacity, particularly on data center projects where Dover has few competitors so customers order ahead to reserve capacity. Dover has not removed production capacity in markets it wants to participate in; ramping cost margin dollars in Q1.
On the climate strength, how level-loaded is it between CO2 and heat exchanger/heat pump pieces, and what about capacity?
Tobin said growth is broad-based except Belvac; heat exchanger capacity is being added, and a new CO2 production line is being installed in Conyers. Refrigeration consolidation is delayed by strong orders, costing margin, but should be done by mid-year with robust H2 incremental margin.
On Pumps & Process Solutions, with tough comps overcome and biopharma not owned, is the business outlook stronger and is gas compression picking up?
Tobin was pleased with margin performance despite tough comps; turbine side continues to do well, and the key inflection being watched is compression, where early signs are present and any second-half upside would come from compression once orders arrive.
On the $2.5B orders versus ~$2.2B Q2 consensus sales, how much was unusually longer-dated, and how should conversion be modeled?
Tobin cautioned against stuffing Q1 bookings into Q2 given capacity limits; revenue will rise seasonally in Q2 but some orders extend into Q3. He declined to quantify the longer-dated portion.