DONALDSON Co INC has recently released its 10-K report for the year ended July 31, 2025. Donaldson Company, Inc., founded in 1915 and headquartered in Bloomington, Minnesota, manufactures and sells filtration systems and replacement parts worldwide. Its business is organized into Mobile Solutions, Industrial Solutions, and Life Sciences, with products sold to OEMs, distributors, dealer networks, and end users across construction, mining, agriculture, transportation, industrial, aerospace, defense, food and beverage, microelectronics, and bioprocessing markets.
In Item 7, management says the MD&A should be read alongside the consolidated financial statements and notes in Item 8, and it frames the discussion around risks from foreign currency, tariffs, and geopolitical disruptions. The company also highlights that it uses non-GAAP measures such as constant currency to assess performance and compare periods, with reconciliations provided in the MD&A.
For fiscal 2026, net sales rose to $3.886 billion from $3.691 billion, an increase of $194.7 million, or 5.3%. Mobile Solutions contributed $2.420 billion of sales, up $128.7 million; Industrial Solutions rose to $1.133 billion, up $28.3 million; and Life Sciences increased to $333.2 million, up $37.7 million. Foreign currency translation added $67.6 million to sales, including $42.0 million in Mobile Solutions, $15.5 million in Industrial Solutions, and $10.1 million in Life Sciences.
Gross profit increased to $1.346 billion from $1.286 billion, while gross margin edged down to 34.6% from 34.8%. The margin decline was tied mainly to operational inefficiencies from shifting Power Generation equipment production to a new manufacturing location and to footprint optimization costs, partly offset by favorable mix, pricing, and volume leverage.
Selling, general and administrative expense increased to $679.2 million from $642.2 million. The company pointed to $8.9 million of additional amortization from the Facet acquisition, a $4.0 million prior-year benefit from reducing Purilogics contingent consideration that did not recur, and normal inflation, partly offset by expense discipline. Research and development fell to $76.1 million from $87.8 million as projects were prioritized more tightly.
Operating income climbed to $599.9 million from $495.4 million, and operating margin improved to 15.4% from 13.4%. The prior year included a $62.0 million impairment charge, with $46.6 million tied to Univercells Technologies and $15.4 million tied to Solaris; there was no impairment charge in fiscal 2026. The company also recorded a $9.3 million gain on sale of fixed assets, compared with $1.2 million a year earlier, reflecting land and building sales tied to footprint optimization.
Interest expense rose to $36.0 million from $24.2 million because of higher debt associated with the Facet acquisition. Other income, net was $21.9 million, slightly above $21.0 million in the prior year, helped by higher income from equity investments and joint ventures. The effective tax rate declined to 22.5% from 25.4%, and net earnings increased to $453.8 million from $367.0 million, with diluted EPS rising to $3.85 from $3.05.
By geography, U.S. and Canada sales were $1.652 billion, or 42.5% of total sales; EMEA was $1.136 billion, or 29.2%; APAC was $689.5 million, or 17.7%; and LATAM was $408.1 million, or 10.6%. As a result of these announcements, the company's shares have moved -0.16% on the market, and are now trading at a price of $86.60. Check out the company's full 10-K submission here.
