Veralto (VLTO) Q3 2026 earnings summary

Executive summary

• Q3 sales rose 7.5% YoY to $1.509B, with core sales growth of 5.1%; adjusted operating margin expanded 170 bps and adjusted EPS increased 19.2% to $1.18.

• Demand remained healthy across both segments, led by industrial water treatment and supported by steady marking, coding, packaging and color demand.

• FY 2026 adjusted EPS guidance increased to $4.49–$4.52, representing 15%–16% YoY growth.

Financial highlights

• Q3 adjusted gross margin was 60.6%, up 50 bps; adjusted operating profit was $386M, up 14.9%, with a 25.6% margin, up 170 bps YoY.

• Q3 adjusted EBITDA was $397M at a 26.3% margin; adjusted net earnings were $290M. GAAP net earnings were $253M versus $239M, and diluted EPS was $1.03 versus $0.95.

• Q3 free cash flow was $304M, up 17.8%; operating cash flow was $323M. Free cash flow conversion was 120%.

• 9M sales were $4.405B, up 7.3% reported and 3.8% core; net earnings were $748M versus $686M.

• Q3 core sales growth reflected 2.8% volume and 2.3% price; recurring revenue grew high single digits and represented 62% of sales.

Outlook and guidance

• Q4 core sales growth is expected at 5.5%–6.5%, with total growth of 10%–11%, including ~5% acquisition growth and a ~0.5% currency headwind.

• Q4 adjusted EPS guidance is $1.13–$1.16; adjusted operating margin is expected at ~24.5%, including 70 bps of acquisition dilution.

• FY 2026 total sales growth is expected at 7.7%–8.0%, including 4.2%–4.5% core growth; adjusted operating margin expansion is expected at ~50 bps.

• FY adjusted EPS guidance increased to $4.49–$4.52; free cash flow conversion guidance is >105% of GAAP net income, and free cash flow is expected to exceed $1B.

• Cost Optimization Program savings are expected to be $10M–$15M in 2026; savings are net of investment, with full run rate expected in 2028.