AOS SMITH A O CORP

Overview and Growth

In fiscal 2025, SMITH A O CORP recorded $3.83B of revenue, net income of $546.20M, and an operating cash inflow of $616.80M. The $3.83B revenue base provides substantial context for the company’s earnings, cash generation, and capital requirements. Revenue was 0.3% above fiscal 2024 revenue of $3.82B, marking a year-over-year increase. On a per-share basis, diluted EPS was $3.85, which connects the reported earnings outcome with the company’s diluted share count. Diluted EPS increased by 6.1% from $3.63 in fiscal 2024, showing how the earnings change reached shareholders on a per-share basis. Asset turnover was 1.22x, relating the company’s annual revenue directly to the total assets reported at the period end.

Profitability

Gross profit was $1.49B, representing the portion of revenue remaining after the reported cost of revenue and before operating expenses. Gross margin was 38.8%, so that share of each revenue unit remained after the cost of revenue reported for the period. Operating income was $728.60M, the earnings remaining from reported operations after the company’s recognized operating cost structure. Operating margin measured 19.0%, showing the portion of revenue preserved after the full set of operating costs. The bottom-line result was net income of $546.20M, after the operating, financing, tax, and other items recognized for the period. Net margin was 14.3%, meaning that this portion of revenue remained as net income after all recognized expenses. Pretax income was $715.10M, isolating the reported earnings outcome before the income-tax provision recognized for the fiscal year. Pretax income represented 18.7% of revenue, placing earnings before tax in the context of the company’s operating scale. The company recognized $168.90M of income tax for the period, completing the transition from pretax income to net income. The income-tax provision equaled 23.6% of pretax income, showing the tax burden absorbed by the year’s earnings.

Liquidity and Capital Structure

The company held $3.14B of assets against $1.28B of liabilities and $1.86B of equity, revealing how the asset base was financed. At period end, current assets of $1.29B compared with current liabilities of $862.50M, defining the company’s short-term resource position. At 1.5x, the current ratio shows that short-term assets were greater than short-term liabilities at period end. Cash and equivalents totaled $174.50M, identifying the most liquid reported component available within the broader current-asset balance. Cash and equivalents represented 20.2% of current liabilities, showing the portion of near-term obligations matched by reported cash alone. Total debt was $155.00M, establishing the amount of borrowing carried within the company’s capital structure. Debt equaled 0.08x of book equity, describing the relative scale of borrowing and shareholder capital. Relative to total assets, debt measured 4.9%, showing how much of the asset base was matched by borrowing. Liabilities represented 40.9% of total assets, quantifying the liability-funded share of the company’s resource base. The cash-to-assets relationship was 5.6%, comparing reported cash and equivalents with the full positive asset balance.

Cash Flow and Earnings Quality

The company reported $616.80M of operating cash flow, a cash inflow that shows the cash generated by operations. The operating-cash-flow-to-net-income relationship was 1.13x, comparing cash generated by operations with the bottom-line earnings result. Capital expenditures used $70.80M, identifying the reported investment outflow deducted from operating cash flow in the free-cash-flow calculation. Capital expenditures represented 11.5% of operating cash flow, leaving the remainder available as free cash flow. Free cash flow came to $546.00M, leaving a positive amount after capital expenditures. The free-cash-flow margin was 14.3%, measuring cash remaining after capital spending against revenue. Free cash flow equaled 17.4% of total assets, relating post-investment cash generation to the company’s resource base.

Based on the annual report for the fiscal year ending Dec 31, 2025. Analysis generated Oct 21, 2026.