stockrowWhat it does
Donaldson Company makes filtration products and systems that remove contaminants from air, liquids and gases. Its customers use them to protect engines and machinery, keep industrial processes running and maintain controlled environments for applications such as food production and semiconductor manufacturing. Founded in 1915, the company is led by President and Chief Executive Officer Richard B. Lewis.
The Mobile Solutions business supplies filters and related equipment for vehicles and machinery used in construction, mining, agriculture and transportation. It sells filters for new equipment as well as replacements for machines already in use. Its products also include exhaust and emissions systems, sensors and monitoring equipment.
Industrial Solutions serves factories, power generation and aerospace and defense customers. Its products range from equipment that collects dust and fumes in manufacturing plants to air inlet filters for gas turbines and filtration systems for aircraft and defense vehicles. It also supplies replacement parts, monitoring and services.
Life Sciences serves food and beverage producers, disk drive makers, microelectronics customers and bioprocessing users. Its offerings include filters, membranes, bioreactors and consumables used to grow, separate or purify materials. Customers include original equipment manufacturers, distributors and end users, ranging from small businesses to large equipment makers.
Donaldson operates at more than 150 locations on six continents, including 79 manufacturing and/or distribution centers. It had 15,500 employees as of July 31, 2026.
How it makes money
Fiscal 2026 sales were $3.9 billion; fourth-quarter sales surpassed $1 billion.
Donaldson earns revenue by selling filtration equipment, components and replacement filters, along with monitoring and services. Its sales include products installed on new equipment and parts purchased later to maintain equipment already in service. It sells through equipment manufacturers, their dealer networks, independent distributors and, in some markets, directly to end users.
Mobile Solutions accounted for 62.3% of fiscal 2026 revenue. Its new-equipment products include filtration housings and exhaust and emissions systems, while its Aftermarket business supplies replacement air and liquid filters. Aftermarket sales increased in fiscal 2026 as Donaldson gained market share and vehicle utilization rose across regions. The company also began realizing sales from a major North American fleet customer.
Industrial Solutions sells dust and mist collectors, gas purification equipment, hydraulic filters and power generation systems, as well as replacement parts and services. Industrial project-based equipment sales can be uneven. In the fourth quarter of fiscal 2026, replacement parts accounted for 51% of Industrial Filtration Solutions sales. Facet, acquired during fiscal 2026, adds jet fuel filtration products used from refineries through the end fueling point.
Life Sciences sells filtration and processing equipment and consumables for food and beverage, disk drives, microelectronics and bioprocessing. Its products include filters and chromatography devices used in production and purification.
Pricing contributes to revenue alongside changes in volume and currency. In fiscal 2026, net pricing benefits helped increase sales; Mobile Solutions also benefited from higher volume. Donaldson seeks to offset material cost increases through selective customer price increases and cost-reduction initiatives.
| Segment | Revenue, FY2026 | Share | Change on the year |
|---|---|---|---|
| Mobile Solutions Segment | $2.4 billion | 62.3% | 5.62% |
| Industrial Solutions Segment | $1.1 billion | 29.2% | 2.56% |
| Life Sciences Segment | $333.2 million | 8.58% | 12.8% |
Customers and how it sells
Donaldson serves customers from small business owners to large original equipment manufacturers. Mobile Solutions sells to equipment makers in construction, mining, agriculture and transportation, as well as independent distributors and equipment manufacturers’ dealer networks. These channels reach both new-equipment buyers and users who need replacement filters.
Industrial customers include manufacturers, power generation operators and aerospace and defense users. Industrial Solutions sells through equipment manufacturers and distributors and directly to consumers in some markets. Its industrial air filtration customers use collectors and filters in industries including metals, mining, chemicals, food and beverage, pharmaceuticals and transportation.
Life Sciences primarily sells to large equipment manufacturers and directly to end users. Its customers require filtration or equipment for uses such as food and beverage production, device protection and bioprocessing. Donaldson also supplies filtration for disk drives and semiconductor manufacturing.
In fiscal 2026, the U.S. and Canada generated $1.7 billion of revenue, or 42.5%. Europe, the Middle East and Africa generated $1.1 billion, or 29.2%; Asia Pacific generated $689.5 million, or 17.7%; and Latin America generated $408.1 million, or 10.5%. These geographic sales are generally assigned according to where the legal entity receiving the customer’s order is located.
| Region | Revenue, FY2026 | Share | Change on the year |
|---|---|---|---|
| U.S. and Canada | $1.7 billion | 42.5% | 1.21% |
| EMEA | $1.1 billion | 29.2% | 10.6% |
| APAC | $689.5 million | 17.7% | 8.46% |
| LATAM | $408.1 million | 10.5% | 3.13% |
Suppliers and costs
Donaldson’s principal raw materials are steel, filter media and petrochemical-based products, including plastics, rubber and adhesives. Purchased raw materials represent approximately 67% of cost of sales. The company uses selective supply arrangements with some suppliers to reduce cost volatility, and seeks to recover or offset material cost increases through price increases, material substitution, process improvements and product redesigns.
Manufacturing and distribution are spread across its regional operations. Facet has research, product development and manufacturing facilities in Oklahoma and Spain. Donaldson also shifted power generation equipment production to a new manufacturing location to meet customer-specific requirements.
Cost of sales for fiscal 2026 was $2,539.7 million. Gross margin was 34.6% in fiscal 2026. The decrease was driven primarily by inefficiencies associated with the power generation production shift and footprint optimization costs, partly offset by favorable product mix, pricing and volume. Selling, general and administrative expenses were $679.2 million in fiscal 2026. Research and development expenses were $76.1 million, and substantially all of that work is performed in-house.
- Revenue$3.9B
- Cost of revenue−$2.5B
- Research and development−$76.1M
- Selling, general and administrative−$679.2M
- Other operating costs−−$9.3M
- Operating income$599.9M
Competitive position
Donaldson competes on technology, innovation, product performance, service, price and geographic coverage. Its filtration markets include large global companies and regional or specialized participants. No competing companies are named in the supplied business information.
In Mobile Solutions, competitors include large global and regional businesses, particularly in replacement filters. Industrial competitors vary by country and include companies focused on a particular region or a limited set of applications. Life Sciences faces large global competitors and niche companies in its individual markets. Donaldson believes it is a market leader in many product lines, particularly mobile equipment products for original equipment manufacturers and replacement filters.
The company owns over 3,100 issued patents, and no single intellectual property right protects its products. It also develops filtration technology in-house and supplies customers whose products have technical and performance requirements.
Our reading: Patents and in-house development provide a source of protection, although competition remains broad and intellectual property can be copied or infringed.
Our reading: Equipment relationships and the need for replacement filters support continuing customer contact, but the presence of regional aftermarket competitors limits the protection those relationships provide.
Our reading: Manufacturing and distribution across regions help Donaldson serve global customers, while competitors also range from global businesses to local specialists.
Growth opportunities
Donaldson’s growth priorities are to extend its access to adjacent markets, expand filtration technologies and services, and pursue acquisitions. In Mobile Solutions, it targets customer needs for higher performance and improved efficiency, as well as demand from construction, transportation, agriculture and mining equipment production and activity.
For Industrial Solutions, Donaldson identifies connected applications and services, maintenance efficiency and equipment designed to reduce energy consumption as growth drivers. In Life Sciences, it points to demand for data storage, changing product and regulatory requirements, and applications for cell and gene therapy and membranes.
Donaldson acquired Facet Filtration in fiscal 2026, adding products used in jet fuel filtration. The company says its teams are collaborating on product development and testing for newer Facet target markets and have identified cross-selling opportunities. Facet contributed $30.3 million to fiscal 2026 Industrial Solutions sales.
The company also plans to operate its food and beverage and microelectronics businesses together as Process Filtration beginning in the first quarter of fiscal 2027. Donaldson says the businesses share underlying filtration, engineering, manufacturing and regulatory capabilities. It also says newer disk drive technology provides more content per drive and that data center and AI buildout supports its microelectronics business.
For fiscal 2027, Donaldson expects total sales growth of between 5.5% and 9.5%, with increases across all three segments. It expects Facet and pricing benefits each to contribute approximately 2 percentage points of growth, with currency and organic volume contributing the remainder.
- $3.3BFY2022
- $3.4BFY2023
- $3.6BFY2024
- $3.7BFY2025
- $3.9BFY2026
Structural risks
-
Global operations and trade: Donaldson operates across the world and faces local economic and political conditions, tariffs, trade barriers, regulatory requirements and foreign exchange restrictions. Additional or sustained tariffs could adversely affect the company and its supply chain.
-
Materials and supply: Unavailable raw materials, demand fluctuations and changes in material costs can affect sales and cost of sales. Aerospace and defense supply constraints persisted in the fourth quarter of fiscal 2026, although some areas were improving.
-
Production changes: Shifting power generation production contributed to fiscal 2026 operational inefficiencies. Donaldson was still stabilizing its Mexico plant after the shift and must ramp production at the Illinois facility receiving aerospace and defense work.
-
Competition and intellectual property: Donaldson participates in competitive filtration markets. New entrants that copy products or infringe intellectual property could affect demand for its products.
-
Technology and regulation: Vulnerabilities in information and operational technology systems create cybersecurity risk. Manufacturing also entails environmental, safety and health risks, and changing regulatory requirements could result in unanticipated costs or liabilities.
-
Currency and customer demand: Unfavorable exchange-rate movements could affect results. Economic conditions, including inflation affecting customers and suppliers, can also affect the company’s global operations.
Bottom line
Our reading
Our reading: Donaldson combines filtration equipment sales with replacement parts and services across mobile, industrial and life sciences markets. Its equipment relationships, technology and geographic reach support the business, though competitors operate in each segment. Exposure to industrial production, material costs and execution during manufacturing changes remains important; the Facet acquisition adds markets and replacement-part sales while bringing integration work.