Veralto (VLTO) Q3 2025 earnings summary

Executive summary

• Achieved 6.9% year-over-year sales growth to $1,404 million in Q3 2025, with core sales up 5.1% driven by both volume and price increases.

• Adjusted EPS grew 11.2% to $0.99, with net earnings at $239 million and free cash flow up 20% to $258 million, reflecting 108% conversion.

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

• Raised full-year adjusted EPS guidance to $3.82–$3.85 and free cash flow conversion guidance to approximately 100%.

• Continued focus on sustainability, with milestones in product innovation and environmental impact, including supporting clean water access for 3.4 billion people and saving 85 billion gallons of water in 2024.

Financial highlights

• Q3 2025 sales grew 6.9% year-over-year to $1.4 billion; core sales up 5.1% with both volume (+2.7%) and price (+2.4%) contributing.

• Gross profit increased 8% to $844 million; gross margin expanded 50 bps to 60.1%.

• Adjusted operating profit margin was 23.9%; adjusted EBITDA margin was 24.7%.

• Free cash flow in Q3 was $258 million, up 20% year-over-year, with 108% conversion of net income.

• Net earnings margin (GAAP) for Q3 2025 was 17.0%.

Outlook and guidance

• Full-year 2025 adjusted EPS guidance raised to $3.82–$3.85, with free cash flow conversion targeted at ~100%.

• Q4 2025 core sales expected to grow low-single-digits year-over-year; adjusted EPS guidance $0.95–$0.98.

• Full-year core sales growth expected mid-single-digits; adjusted operating margin to expand flat to +25 bps.

• FY2025 sales expected to be ~$5.5 billion.

• Guidance reflects current assessment of end market demand, tariffs, and related countermeasures.