The Gorman-Rupp Company (GRC) | The Buildout — AI Infrastructure
The Verdict
Gorman-Rupp designs and manufactures a comprehensive range of pumps — from self-priming centrifugal to submersible — serving municipal, industrial, and commercial needs. While the company does not break out data-center revenue, its HVAC and fire suppression pumps are used in cooling and life safety systems that underpin large-scale computing facilities. The diversified customer base and broad product portfolio provide defensive stability, but the link to AI infrastructure remains indirect and unconfirmed.
| Market Cap | — |
| Revenue (TTM) | $702M |
| Revenue Growth | +4.2% |
| EBITDA Margin (TTM) | 18.8% |
| Net Debt | $231M |
| Earnings Beats | 4 of 7 |
| P/E (TTM) | — |
| EV/EBITDA (TTM) | — |
What We Like
- Highly diversified customer base: no single customer exceeded 10% of net sales in each of the last three years.
- Capacity headroom: all 14 global facilities operate at partial utilization, enabling volume growth without major capex.
- Extensive pump portfolio covering nearly all major rotary and reciprocating types supports broad end-market exposure.
- TTM revenue of $695 million with 18.5% EBITDA margin provides a stable financial foundation.
What We’re Watching
- Confirmation of AI/data-center demand would shift the growth profile if management discloses meaningful revenue from those end markets.
- Motor supplier concentration: a disruption at the limited number of motor suppliers could hurt production, as flagged in the 10-K.
- Rising plant utilization would signal demand strength and potential operating leverage.
- A shift in customer concentration — any customer exceeding 10% — would alter the diversification character.
The AI-linked thesis for Gorman-Rupp is largely speculative at this stage. The company has not disclosed any AI-specific revenue, and management has not acknowledged data-center demand as a driver. While its pumps are used in HVAC and fire suppression, which are critical to data centers, the direct connection is unsupported by company commentary. The criticality assessment indicates that if GRC disappeared, the AI buildout would not slow down. The key open question is whether the company can capture and report material AI-linked growth.
Earnings Beat
In the fiscal first quarter of 2026 (ended March 31, 2026), revenue was $176.6 million, up 7.7% year-over-year from $163.9 million. Gross margin was 30.7%, and EBITDA reached $34.5 million (19.5% margin). Net income was $17.8 million.
| Metric | Q2 FY2026 | Q1 FY2026 | Q2 FY2025 | YoY |
|---|---|---|---|---|
| Revenue | $186M | $177M | $179M | +4.0% |
| Gross margin | 34.2% | 30.7% | 31.3% | +290bps |
| EBITDA | $37M | $34M | $34M | +10.3% |
| EPS | $0.73 | $0.68 | $0.60 | +22.3% |
Management tone: No earnings call on record for the latest period.
Management Guidance
No guidance was issued.
Trajectory
Trailing twelve-month revenue reached $695 million, a 4.6% increase year-over-year. Revenue growth has been gradual, with quarterly revenue ranging from $162.7 million to $179.0 million over the past eight quarters. Gross margins have fluctuated between 27.4% and 31.9%, with the most recent quarter at 30.7%. EBITDA margins improved modestly in Q4 FY2025 and Q1 FY2026 after a dip in Q3, standing at 19.5% in the latest period. The company’s diversified end markets and partial plant utilization suggest the potential for operating leverage if demand strengthens, but no order or backlog data is available to gauge near-term momentum.
The Model
The model projects FY+1 revenue of $730 million with EBITDA of $145 million (19.8% margin), and FY+2 revenue of $770 million with EBITDA of $155 million (20.1% margin). Near-term growth is anchored by steady demand from municipal and industrial end markets, while the FY+2 outlook incorporates modest volume growth from capacity headroom and potential AI-linked orders, though that contribution remains unconfirmed.
| Metric | FY2025 | Next FY (E) | Following FY (E) |
|---|---|---|---|
| Revenue | $682M | $730M | $770M |
| YoY Growth | — | +7.0% | +5.5% |
| EBITDA | $123M | $145M | $155M |
| EBITDA Margin | 18.0% | 19.8% | 20.1% |
Projections are the median of 5 independent model runs. The model’s revenue sits 1.4% above analyst consensus.
No guidance was issued.
What Could Go Right — and Wrong
- Data-center and semiconductor pump orders materialize, lifting revenue above the base-case projection.
- Operating leverage drives EBITDA margin above 21% as volumes increase and fixed costs are spread.
- Supply chain risks are mitigated by qualifying alternate motor suppliers, reducing production disruption risk.
- Management begins providing forward guidance, improving visibility and investor confidence.
- Large, multi-year contract wins enhance revenue predictability.
- AI-linked demand fails to materialize, and revenue growth stalls at low-single digits.
- A motor supplier disruption leads to production delays and margin pressure.
- Raw material cost escalation erodes gross margins without offsetting price actions.
- Lack of management communication keeps the company under the radar, limiting market interest.
- A broader industrial downturn reduces demand from core municipal and industrial markets.
Looking Ahead
The outlook for the next twelve months is opaque. With no management commentary or disclosed forward indicators, the main signposts are any future earnings releases or investor presentations that could reveal segment-level detail or address data-center demand. The company’s 14 plants at partial utilization provide flexibility to respond if demand accelerates, but the immediate trajectory is unclear.
Financials
Annual Summary
| Metric | FY2025 | TTM |
|---|---|---|
| Revenue | $682M | $702M |
| Gross Margin | 29.8% | 30.6% |
| EBITDA | $123M | $254M |
| EBITDA Margin | 18.0% | 18.8% |
| Net Income | $53M | $62M |
| Free Cash Flow | $89M | $180M |
| Net Cash | — | — |
Key Ratios (Trailing)
- P/E TTM—
- EV/EBITDA TTM—
- EV/Revenue TTM—
- Price/FCF TTM—
- Gross Margin (TTM)30.6%
- EBITDA Margin (TTM)18.8%
- Net Margin (TTM)8.9%
- ROIC12.2%
- FCF Conversion82.1%
- SBC / Revenue0.7%
The Company
Gorman-Rupp designs and manufactures a comprehensive range of pumps — self-priming centrifugal, submersible, rotary gear, diaphragm, and many others — covering almost all major rotary and reciprocating technologies. Its products serve water and wastewater, construction, industrial, petroleum, agriculture, fire suppression, HVAC, and military applications. The company operates as a single segment: pumps and pump systems, with a focus on engineered, application-specific solutions.
The company maintains 14 manufacturing facilities across the U.S., Europe, and South Africa, all operating at partial utilization. Its Mansfield, Ohio complex houses headquarters, manufacturing, and R&D. Gorman-Rupp’s customer base is intentionally diversified: in each of the past three years, no single customer accounted for more than 10% of net sales, and no single foreign country exceeded 10%. The business relies on a limited number of suppliers for critical motor components, a dependency it acknowledges as a risk factor.
Business Segments
Competitive Landscape
Gorman-Rupp competes in a fragmented pump industry alongside large, diversified manufacturers. The externally generated supply-chain mapping names Flowserve, Grundfos, IDEX, ITT, Pentair, and Xylem as key peers, though the company's own filings provide no competitive commentary. Gorman-Rupp’s extensive product range and global footprint suggest it competes on engineering breadth rather than scale alone.
- FlowserveNamed in external supply-chain mapping; not discussed in company filings.
- GrundfosNamed in external supply-chain mapping; not discussed in company filings.
- IDEXNamed in external supply-chain mapping; not discussed in company filings.
- ITTNamed in external supply-chain mapping; not discussed in company filings.
- PentairNamed in external supply-chain mapping; not discussed in company filings.
- XylemNamed in external supply-chain mapping; not discussed in company filings.
Supply Chain
Gorman-Rupp sits in the middle of the industrial pump supply chain, sourcing motors, castings, seals, and electronic components, then selling to a broad base of municipal, industrial, and commercial customers. No supply chain neighbor mentioned it by name in their own filings.