SMITH A O CORP (AOS)

A. O. Smith manufactures and markets residential and commercial water heating and water treatment products. Its lines include gas and electric water heaters, boilers, heat pumps, tanks and water treatment products. The company reports two segments, North America and Rest of World, each of which manufactures and sells primarily within its own region. It believes it is the largest manufacturer and marketer of water heaters in North America.

The North America segment accounted for about 78 percent of 2025 sales. It sells tank-type (electric, natural gas and liquid propane), tankless, heat pump and solar water heaters from 2.5 to 2,500 gallons; residential and commercial boilers from 45,000 BTUs to 6.0 million BTUs; and water treatment products such as softeners, well water solutions, whole-home filtration, and point-of-use carbon and reverse osmosis systems. It also makes expansion tanks, commercial solar water heating systems, pool and spa heaters and parts. Brands include A. O. Smith, State, Lochinvar, Aquasana, Hague, Water-Right, Master Water, Atlantic Filter, Impact and Water Tec. Rest of World, about 22 percent of sales and mostly China, makes residential water heaters, reverse osmosis water treatment products and commercial dispensing water treatment products. It also designs and markets kitchen products (range hoods, cooktops, steam ovens, dishwashers) and connected product technology in China. In India it makes water heaters and water treatment products, and in 2024 it acquired Pureit, a residential water purification business. It also sells water heaters in Europe, the Middle East and the Far East, and water treatment products in Vietnam.

In North America, much of the demand comes from replacement of existing products. Customers are served through about 800 independent wholesale plumbing distributors, retail chains (including an exclusive A. O. Smith relationship with Lowe's), MRO channels and manufacturer representative firms for commercial boilers. Water treatment products are sold through water quality dealers, contractors, Amazon, direct-to-consumer e-commerce and regional home center chains. Typical end uses include homes, restaurants, hotels, offices, schools, hospitals and other commercial buildings. In China, products are sold at about 8,700 points of sale, plus e-commerce. In India, the company sells through wholesale, e-commerce and retail channels. In the third quarter of 2025 it began assessing strategic opportunities for its China business, including partnerships.

Steel is the primary raw material and is generally available in adequate quantities. Some customers are contractually obligated to accept price changes tied to steel costs, and tariffs have added to input cost volatility. Short-cycle operations mean backlogs are not normally significant. Research and development is conducted at the Corporate Technology Center in Milwaukee, Wisconsin, the Global Engineering Center in Nanjing, China, and operating locations, with spending of $95.0 million in 2025. The company had about 11,500 employees at the end of 2025. Principal North American competitors include Rheem, Bradford White, Rinnai, Aerco and Navien in water heating and boilers, and Culligan, Kinetico, Pentair, Franklin Electric and Ecowater in water treatment. In China the main rivals are Haier/Casarte, Midea/COLMO, Rinnai, Angel and Truliva, and in India they are Racold, Bajaj, Havells, Eureka Forbes and Kent. The company's products are subject to regulation by bodies such as the U.S. Department of Energy.