Veralto Reports Strong Second Quarter 2026 Results, Raises Full-Year Guidance
WALTHAM, Mass., July 28, 2026 — Veralto Corporation (NYSE: VLTO), a global leader in water and product quality solutions, has released its financial results for the second quarter ended July 3, 2026. The company delivered robust performance across key metrics, with management raising full-year guidance on the back of strong momentum and capital allocation initiatives.
Key Financial Highlights
- Sales: Increased by 7.6% year-over-year to \$1.474 billion. Non-GAAP core sales grew 4.2%.
- Operating Profit Margin: 21.4% (GAAP), with non-GAAP adjusted margin at 24.6%.
- Net Earnings: \$241 million, or \$0.98 per diluted share (GAAP).
- Adjusted Net Earnings: \$274 million, or \$1.11 per diluted share (non-GAAP), up 19% year-over-year.
- Operating Cash Flow: \$340 million; Free cash flow (non-GAAP) was \$328 million.
- The quarter includes a benefit of approximately \$0.05 per share from tariff recoveries under the International Emergency Economic Powers Act (IEEPA).
Operational and Strategic Developments
- Core sales growth was led by the Water Quality segment at 5.7%, with sequential improvements in both operating segments.
- Strong demand continued in industrial water treatment, water reuse, and environmental water monitoring workflows.
- PQI (Product Quality and Innovation) saw sustained demand in marking and coding solutions, with digital workflow solutions in packaging and color delivering strong underlying growth. PQI core sales are expected to accelerate meaningfully in the second half of the year due to increased adoption of digital workflow solutions and new product launches.
- Veralto advanced its bolt-on acquisition strategy, completing In-Situ, GlobalVision, and most recently Alfaa UV. The company also undertook opportunistic share repurchases, reflecting confidence in its accelerating growth profile and strong capital allocation discipline.
Revised 2026 Guidance — Positive for Shareholders
- Core Sales Growth (non-GAAP):
- Q3 2026: 4.0% to 5.0% year-over-year
- Full Year 2026: 4.0% to 4.5% (raised from prior 3.0% to 4.5%)
- Adjusted Operating Profit Margin: Expected to expand by 25 to 50 basis points year-over-year, including IEEPA benefit.
- Adjusted Diluted EPS: Guidance raised to \$4.35 to \$4.43 (previously \$4.20 to \$4.28), representing 12% to 14% year-over-year growth. The increase includes a \$0.05 per share benefit from IEEPA tariff refunds.
- Free Cash Flow Conversion: Now expected to be greater than 100% of GAAP net earnings.
Segment Performance Details
- Water Quality: Total sales up 10.1%; core sales up 5.7%.
- Product Quality and Innovation: Sales up 3.8%; core sales up 2.0%.
- Company-wide, acquisitions/divestitures and currency translation negatively impacted sales by 2.4% and 1.0% respectively.
Profitability and Non-GAAP Metrics
- Adjusted Operating Profit (Q2 2026): \$363 million (vs. \$325 million in Q2 2025).
- Adjusted Operating Profit Margin (Q2 2026): 24.6% (vs. 23.7% in Q2 2025).
- Free Cash Flow Margin (TTM): 18.4%.
Capital Allocation, Acquisitions, and Share Repurchases
- Veralto continued its disciplined approach to capital allocation, completing several strategic bolt-on acquisitions (In-Situ, GlobalVision, Alfaa UV) to strengthen its portfolio and growth outlook.
- Share repurchases were undertaken opportunistically, reflecting management’s confidence in the company’s growth trajectory and value creation potential.
Shareholder & Price-Sensitive Information
- Guidance Raise: The upward revision of full-year guidance for both core sales growth and adjusted EPS is likely to be viewed positively by investors and could be a catalyst for share price appreciation.
- IEEPA Tariff Refunds: The \$0.05 per share benefit in Q2 and inclusion in full-year guidance is a non-recurring gain that boosts near-term earnings.
- Acquisitions: The successful integration and contribution from recent bolt-on acquisitions are expected to accelerate growth in the second half.
- Strong Free Cash Flow: Conversion guidance above 100% of net earnings signals robust cash generation and balance sheet strength, supporting further investments and potential returns to shareholders.
Conference Call & Further Information
Veralto will host its Q2 2026 earnings conference call on July 29, 2026, at 7:30 a.m. ET. Investors can access the webcast and related materials on the company’s website under the “Investors” section. A replay will be available until the next quarterly release.
About Veralto
With annual sales of approximately \$5.5 billion and a workforce of 17,000, Veralto is a global leader in essential technology solutions for water, food, and product quality. The company is headquartered in Waltham, Massachusetts.
Disclaimer
This article is for informational purposes only and does not constitute investment advice, a recommendation, or an offer to buy or sell any securities. Forward-looking statements contained herein are based on current expectations and are subject to significant risks and uncertainties. Actual results may differ materially. Please review Veralto’s SEC filings and consult your financial advisor before making investment decisions.
