Dover Corporation’s latest filing reveals a divergence between its reported earnings and its cash generation. Revenue for the twelve months to Q3 2026 reached $8.58 billion, an 8.2% increase over the prior year. This growth rate accelerated by 0.7 percentage points compared to the previous quarter.

What stands out

Reported profit and cash are moving at different speeds. Net income fell 48.1% over the year, while free cash flow rose 17.1%. This gap highlights that the company is generating more cash from operations than it is reporting as net profit.

Growth and profit

Dover’s revenue grew 8.2% to $8.58 billion over the trailing twelve months. The trailing gross margin stood at 39.7%. Operating margin improved by 0.3 percentage points to 17.0% from a year earlier. Despite these margin improvements, net income over the twelve months was $1.17 billion, which fell 48.1% on the year before. The trailing net margin was 13.6%.

Cash flow

Operating cash flow over the twelve months was $1.41 billion, up 14.3% on the year before. Capital spending was $220.0 million, representing 2.6% of revenue. Free cash flow, calculated as operating cash flow less capital spending, was $1.19 billion, up 17.1% on the year before. The free-cash-flow margin was 13.9% of revenue, up 1.1 percentage points from a year earlier. The average diluted share count fell 1.7% over the year.

In context

Today’s free-cash-flow margin of 13.9% is higher than 91% of the company’s own past quarterly readings, which have ranged from 6.5% to 15.2%. Today’s operating margin of 17.0% is higher than 100% of the company’s own past quarterly readings, which have ranged from 10.2% to 17.0%. Today’s twelve-month revenue growth rate of 8.2% is higher than 76% of the company’s own past quarterly readings, which have ranged from −17.0% to 18.3%.

Guidance

The company gave its 2026 guidance for GAAP EPS: $8.93 to $9.08. The company gave its 2026 guidance for full year revenue growth: 7% to 8%.

What it means for value

In our model, growth 5 percentage points lower would lower the value by 26.8%, and 5 percentage points higher would raise it by 34.8%. A free-cash-flow margin 1 percentage point lower would lower it by 7.2%.

What to watch

The next filing will show whether the divergence between net income and free cash flow persists. It will also reveal if the operating margin holds at its current level or reverts toward historical averages. Investors should look for changes in capital spending relative to revenue to see if the free-cash-flow margin remains elevated.