Earnings Recap — Q4 FY2026
CY Q3 2026 · Reported August 10, 2026 · Beat 4 of last 6 quarters
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Ferguson's results reinforce the sustained strength of the AI infrastructure buildout, with commercial mechanical and industrial growth driven by large capital projects including data centers. The FloWorks acquisition expands Ferguson's exposure to high-growth end markets like data centers, semiconductors, and power generation, positioning it to capture more of the physical infrastructure buildout. The raised guidance and strong backlog signal continued momentum in non-residential construction tied to AI-driven data center demand.
Ferguson delivered another quarter of market outperformance with net sales of $8.8B, up 4.6% YoY, driven by organic growth of 3.8% and acquisitions. Non-residential end markets grew 8% (on a 13% prior-year comp) while residential returned to growth at +2%. Commercial mechanical grew 15% and industrial grew 18%, both driven by large capital projects such as data centers, pharma, and power generation. The company announced the FloWorks acquisition for ~$1.6B enterprise value, expected to close in Q3, and completed five acquisitions in the quarter. Operating profit rose 2.9% to $932M, and diluted EPS rose 5.3% to $3.39.
Management raised full-year FY2026 guidance: net sales growth now expected at mid-single-digits (up from low-to-mid single digits) and operating margin guidance raised at the lower end to 9.5%-9.8%. The outlook reflects stronger first-half performance and an expectation of slightly stronger second-half growth, supported by robust open order backlogs in large capital projects and continued HVAC momentum. Management expects non-residential strength to persist, with residential improving modestly. The FloWorks acquisition, expected to close in Q3, is not included in the guidance; it will add ~$1B revenue and expand TAM from $340B to $400B, with leverage expected to rise to ~1.8x net debt-to-EBITDA upon closing.
“We're pleased with our volume growth amid what continues to be a mixed market.”
on Quarterly performance
“We believe FloWorks will enhance our ability to drive market outperformance by playing an even larger part in the build-out happening across North America.”
on FloWorks acquisition
“We are not seeing a change in the market and our market expectations for the full-year.”
on Market outlook
Can you dive into what you're seeing with open order volumes and backlog in large capital projects, and how that's included in the guide?
Bill Brundage noted that large capital projects represent mid-to-high single digits of revenue and backlogs continue to build across commercial mechanical, industrial, and waterworks. Kevin Murphy added that bidding activity remains strong across data centers, power generation, and water infrastructure, with early engagement being key to meeting project timelines.
Is the raised guidance primarily a function of stronger year-to-date results and M&A? How do you expect organic growth in the second half relative to Q2?
Bill Brundage said market expectations are unchanged, but first-half performance was better than expected. He expects second-half revenue growth to be slightly higher than the first half, supported by open orders and continued non-residential strength.
What's driving the expectation of stronger back-half top-line growth? Are end-markets broadening beyond data centers?
Bill Brundage cited continued non-residential strength and improving residential, particularly HVAC. Kevin Murphy highlighted broad-based large capital project growth across power generation, chemical, food and beverage, general manufacturing, and water/wastewater, with data centers still the strongest.