Veralto (VLTO) Q1 2026 earnings summary

Executive summary

• Sales grew 6.7% year-over-year to $1.42 billion, with adjusted EPS up 13% to $1.07, driven by strong Water Quality segment performance and positive pricing actions.

• Raised full-year 2026 adjusted EPS guidance to $4.20–$4.28 per share, reflecting confidence in accelerating core sales and margin expansion.

• Deployed approximately $1 billion in capital for strategic acquisitions (In-Situ and GlobalVision) and share repurchases.

• Initiated a cost optimization and restructuring program expected to yield $65–$75 million in annual savings by 2028, with charges of $85–$105 million.

• Recurring revenue accounted for 62% of total sales, supporting a resilient business model.

Financial highlights

• Q1 2026 sales reached $1,422 million, up 6.7% year-over-year, with core sales growth of 1.9%.

• Adjusted operating profit was $357 million, with a 25.1% margin; adjusted EBITDA margin improved to 25.9%.

• Free cash flow was $170 million, representing a 67% conversion rate and an 18.6% trailing twelve-month margin.

• Gross profit margin was 60.1%, down 30 basis points year-over-year due to higher labor costs.

• Net earnings rose to $254 million, with basic EPS up to $1.03 from $0.91 year-over-year.

Outlook and guidance

• Full-year 2026 adjusted EPS guidance raised to $4.20–$4.28 per share, with core sales growth expected at 3.0%–4.5%.

• Adjusted operating profit margin expected to expand by ~25 basis points for 2026.

• Free cash flow conversion expected to remain near 100% for the year.

• Q2 2026 guidance: core sales growth of 3.0%–4.0%, adjusted EPS of $0.96–$1.00.

• Guidance includes 25 basis points of margin dilution from the In-Situ acquisition.