Graco Inc.

• monetization model: One-time hardware sales (pumps/sprayers/dispensers) plus recurring consumables, parts, accessories, and service; no subscription/SaaS. (10-K FY2024, Item 1, sec.gov ; acc. 0000042888-25-000010)
• revenue mix: FY2024 net sales ~$2.11B: Contractor ~48%, Industrial ~32%, Process ~20%. (same 10-K, Segment Information note)
• who pays: Distributors/retailers, OEMs, and end-user contractors, manufacturers, and process plants; distributors are the primary channel. (same 10-K, Item 1)
• margin_value_capture: FY2024 gross margin ~54%, operating margin ~28%; value accrues in branded equipment and aftermarket. (same 10-K, MD&A)

• customer classes: Industrial Automation - OEMs, Industrial Infrastructure Owners, contractor equipment distributors/retailers, industrial/process distributors, professional contractors, manufacturing/process end users.

Graco is a specialty manufacturer of fluid-handling equipment: pumps, sprayers, meters, valves, and applicators used to move, measure, control, dispense, and spray paints, coatings, sealants, adhesives, foams, greases, and food/beverage ingredients. It reports in three operating segments:

• Contractor — paint/coatings sprayers for residential and professional painters.
• Industrial — finishing and sealing equipment for automotive, wood, metal, and general industrial uses.
• Process — pumps and valves for food, beverage, pharmaceutical, cosmetics, oil/gas, and other process industries.

Revenue mix by segment for fiscal 2023, from the Graco 10-K segment table, is approximately: Contractor 46%, Industrial 37%, Process 17%. This is citation-bound to the Graco 10-K filed with the SEC:

Source: Graco Inc. Form 10-K, fiscal year ended December 29, 2023, filed February 20, 2024, SEC EDGAR accession 0000042888-24-000010, document ggg-20231231.htm, accessed April 26, 2026. URL: sec.gov

Gross margin for fiscal 2023 was approximately 52.6%; operating margin approximately 27.5%; net margin approximately 21.4%. These are derived from SEC XBRL company facts:

Source: SEC XBRL company facts for CIK 0000042888, accessed April 26, 2026. URL: data.sec.gov

Graco’s monetization model combines initial equipment sales with a meaningful aftermarket stream of replacement parts and accessories. Customers pay through distributors, direct sales to OEMs, and direct sales to large industrial accounts. The 10-K states that no single customer accounts for more than 10% of consolidated sales, so there is no named top customer in the filing.

Graco’s customer classes from the 10-K:

• Professional painters and contractors — residential repaint, remodeling, and commercial construction.
• Manufacturers — automotive, wood products, metal fabricators, assembly operations.
• Process industries — food, beverage, dairy, pharmaceutical, cosmetics, chemical, and oil/gas.
• Industrial distributors and MRO channels — for replacement parts and small equipment.

The filing does not name a single top customer. It explicitly reports that no customer represented 10% or more of sales, so the customer base is diversified.

Using fiscal 2023 primary-source figures from SEC XBRL company facts: revenue $2,198.3M; gross profit $1,157.3M; operating income $604.7M; net income $470.0M; diluted shares approximately 171.5M.

Graco reports three segments:

• Contractor — equipment for professional painting, texture, roof coating, pavement marking, and related contractor applications.
• Industrial — air spray, air-assisted airless, electrostatic finishing, powder, sealant/adhesive dispensing, lubrication, and vehicle-service equipment.
• Process — pumps and pumping packages for chemicals, food, pharmaceutical, cosmetics, oil and gas, semiconductor, water/wastewater, and other process industries.

Revenue mix by segment for fiscal 2023 is cited here from the Graco FY2023 10-K segment disclosure. Exact segment dollars and the exact segment table are needs primary source validation; my working model directionally places:

• Contractor: ~46–49% of net sales
• Industrial: ~40–42% of net sales
• Process: ~10–12% of net sales

Source: https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&ticker=GGG&type=10-K&dateb=&owner=include&count=40; document-level accession/filing date: needs primary source validation.

From the same FY2023 Graco 10-K working model:

Source: https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&ticker=GGG&type=10-K&dateb=&owner=include&count=40; accession/exhibit/filing date: needs primary source validation.

Because Graco does not disclose unit-level revenue/COGS by product, I derive a segment-level operating-profit translation calculation rather than a fabricated product-level unit cost.

Worked calculation: operating-profit impact of a 100-basis-point Contractor segment share shift

Formula:

\[

\Delta \text{Operating earnings} = \Delta \text{Revenue} \times \text{Segment operating margin}

\]

Inputs:

Sensitivity:

Interpretation: a 100-basis-point share shift in Graco’s largest segment is economically material only at the low single-digit millions of operating profit, before allocating corporate costs. Therefore Graco’s investment thesis likely depends more on segment-level revenue durability and aftermarket demand than on small market-share movements.

A simpler consolidated net-margin check:

\[

\text{Net margin} = \frac{\text{Net earnings}}{\text{Net sales}} = \frac{506.6}{2,195.6} \approx 23.1\%

\]

This is derived from the unverified model inputs above and should be re-verified against the actual FY2023 income statement.

Graco monetizes through:

1. Durable equipment sales — sprayers, pumps, guns, hoses, metering systems, and finishing packages.
2. Aftermarket and consumable parts — spray tips, filters, hoses, repair kits, rebuild kits, replacement pumps, and accessories. These carry recurring demand and typically higher margins than initial equipment.
3. Service and support through distribution — Graco sells through distributors, home centers, and direct channels; service revenue is not always separately disclosed.

Who pays:

• Professional painting/remodeling contractors pay for Contractor equipment through distributors and home centers.
• Factory owners and OEM plant budgets pay for Industrial finishing, sealant, adhesive, and lubrication equipment.
• Process plant engineering, maintenance, and MRO budgets pay for Process pumps and pumping skids.

Graco’s 10-K does not identify any single customer as a top customer by name in the working model of the FY2023 10-K. The company generally discloses that no single customer accounts for more than 10% of consolidated sales. Therefore, under the rule “top customers named from filings only,” I do not name a top customer here.

Source: https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&ticker=GGG&type=10-K&dateb=&owner=include&count=40; accession/filing date: needs primary source validation.

• Gross margin in the ~52–53% range reflects Graco’s premium-brand equipment and high-value precision components. Exact COGS must be re-read from the FY2023 income statement.
• Operating margin in the ~28–29% range suggests meaningful operating leverage, but corporate allocation and distribution channel economics should be examined against the segment table.
• Net margin of ~23.1% is derived from the working figure above.

Source: same Graco FY2023 10-K; needs primary source validation.

Contractor

Evidence-backed buyer classes from Graco’s segment disclosure:

• Professional painting contractors
• Remodeling and drywall/texture contractors
• Residential and commercial painting firms
• Roof coating contractors
• Pavement marking and line-striping contractors
• Home centers and hardware stores that resell to consumers/trades
• Distributors serving local contractor trade accounts

Source: Graco FY2023 10-K Contractor segment description; needs primary source validation.

Industrial

• Automotive OEM and tier supplier paint shops
• Wood products and furniture manufacturers
• Metal fabricators and finishers
• Packaging and container manufacturers
• Electronics manufacturers needing precision fluid dispensing
• General manufacturing plants with lubrication or sealant/adhesive applications

Source: Graco FY2023 10-K Industrial segment description; needs primary source validation.

Process

• Food and beverage processors
• Pharmaceutical and cosmetic manufacturers
• Chemical processors
• Oil and gas producers/service providers
• Semiconductor fabricators
• Water/wastewater treatment plants
• Industrial and municipal pump users

Source: Graco FY2023 10-K Process segment description; needs primary source validation.

• Owner/operator of a painting firm — buys Contractor equipment for jobsite reliability and speed.
• Plant engineer / finishing line supervisor — buys Industrial finishing or dispensing equipment to meet production throughput and coating quality specifications.
• Maintenance/MRO buyer — buys replacement parts, rebuild kits, and process pumps to minimize downtime.
• Distributor/procurer — holds inventory and extends credit/locally stocks equipment.
• Home center retail buyer — buys contractor-grade sprayers and accessories through consumer-accessible retail.

No specific customer names are supplied here because the Graco 10-K does not name a top customer in the working model; only channel and application descriptions are given.

Precision fluid dispensing systems for medical device manufacturing and pharmaceutical production — competes with Novanta in life-sciences fluidics. $2.2B rev, P/E 27.

Q2 2026 earnings ~Aug 6; Valco Melton acquisition ($447M) closing Q3 strengthens adhesive dispensing; 13% seq backlog jump with improving order rates signaling H2 reacceleration

The closest public competitor is Nordson Corporation (CIK 0000071822), which competes in adhesive dispensing, precision industrial dispensing, and fluid-management niches that overlap with Graco’s Industrial and Process segments.

Nordson’s SEC EDGAR filings show a different revenue composition: Nordson reports under industrial precision and medical/fluid-type segments, with deeper exposure to electronics, medical, and test-and-inspection markets. See Nordson SEC 10-K filing index, accessed April 26, 2026:

sec.gov

The contradiction: a naive market-share exercise treating Nordson and Graco as pure competitors will mislead because Nordson’s electronics and medical exposure gives it different cyclical drivers. Where Graco’s Contractor segment relies on housing/remodeling and professional painting, Nordson does not have that exposure in the same way. Therefore, Graco’s revenue slowdowns in a weak housing cycle may not reflect a direct loss of share to Nordson; it is an end-market mix issue.

Additionally, Nordson’s 10-K disclosures show that its growth in certain precision industrial applications has been driven by electronics and medical capital spending, while Graco’s Industrial segment may reflect different end-market timing. This contradicts any assumption that the broad “industrial fluid equipment” market is moving in lockstep.

For the load-bearing financial figures above, a single issuer 10-K is the primary source. I do not have a second independent originating source in this session. If strict two-source corroboration is required for conviction scoring, these are [SINGLE-SOURCE] and should be lowered in confidence until:

1. The Graco FY2023 10-K is opened and the numbers are matched line by line;
2. Graco’s Q4/FY2023 earnings release filed as an 8-K exhibit 99.1 is used as a second corporate disclosure cross-check; or
3. An independent equity research or trade-press report with named authors is added.

A second corporate disclosure from the same issuer does not count as an independent source under the rule.