Veralto (VLTO) Q4 2024 earnings summary

Executive summary

• Achieved full-year 2024 sales of $5,193 million, with 3.7% core sales growth driven by balanced volume and price contributions, and strong execution in both business segments.

• Q4 2024 sales reached $1,345 million, up 4.4% year-over-year, with core sales growth of 4.6% and robust free cash flow conversion.

• Adjusted EPS for 2024 increased 11% to $3.54, exceeding initial guidance, with double-digit growth and margin expansion.

• Strengthened portfolio through the acquisition of TraceGains, a minority investment in Axine Water Technologies, and the divestiture of AVT, enhancing digital and recurring revenue streams.

• Disciplined capital allocation included a 22% dividend increase and strategic M&A activity.

Financial highlights

• FY 2024 total sales grew 3.4% year-over-year to $5,193 million, with 3.7% core sales growth and 80 basis points of adjusted operating profit margin expansion.

• Adjusted operating profit for 2024 was $1,251 million (24.1% margin); adjusted EPS was $3.54, up 11% year-over-year.

• Free cash flow for 2024 was $820 million, with 98% conversion and $1,101 million cash on hand at year-end.

• Q4 2024 adjusted EPS was $0.95, up 9% year-over-year; free cash flow was $263 million.

• Q4 2024 gross profit margin improved 170 basis points year-over-year to 59.6%.

Outlook and guidance

• FY 2025 guidance targets low- to mid-single-digit core sales growth, 25–50 basis points of adjusted operating profit margin improvement, and adjusted EPS of $3.60–$3.70 per share.

• Free cash flow conversion for 2025 is expected at 90%–100% of GAAP net income, with CapEx at 1%–1.5% of sales.

• Q1 2025 guidance: core sales growth in low- to mid-single digits, adjusted EPS of $0.84–$0.88, and operating margin of 24%–24.5%.

• Currency is expected to be a 2% headwind to sales and $0.08 headwind to adjusted EPS.