Waltham, Massachusetts, October 29th / PRNewswire / -- Veralto (New York Stock Exchange ticker: VLTO) ("The Company") announced its third-quarter results as of October 2, 2026. Veralto is a global leader in providing critical water and product quality solutions, dedicated to "protecting the world's most important resources."

Key Performance in the Third Quarter of 2026

• Sales volume increased by 7.5% year-on-year to $1.509 billion; non-GAAP core sales grew by 5.1%.
• Operating profit margin is 19.7%, and the non-GAAP adjusted operating profit margin is 25.6%.
• Net profit was $253 million, with earnings per diluted common share amounting to $1.03.
• Non-GAAP adjusted net profit is $290 million, with earnings per diluted common share of $1.18.
• Operating cash flow was $323 million, and non-GAAP free cash flow was $304 million.

Capital allocation and strategic actions from the beginning of 2026 to the present

• Invested $1.1 billion in four strategic acquisitions: In-Situ, GlobalVision, Alfaa UV, and Cleanwater1.
• Repurchased $550 million in shares, accounting for 2.4% of the outstanding shares.
• Cost optimization plan shows initial results – estimated savings for the entire year of 2026 now range from $10 million to $15 million.

CEO Jennifer L stated: "We have delivered outstanding third-quarter results, with our entire business portfolio experiencing broad sales growth and demonstrating strong operational leverage. Total sales increased by 7.5%, and the adjusted operating margin expanded by 170 basis points. Adjusted earnings per share grew by 19.2% year-over-year. Core sales grew by 5.1%, with the water quality business leading the way with a 6.4% increase, while acquisitions contributed 2.3% to the total sales growth."

Honeycutt continued, "Since the beginning of the year to date, we have completed four strategic strengthening acquisitions and repurchased 2.4% of the outstanding shares, which reflects our discipline in capital allocation as well as our determination to advance our long-term value creation strategy."

She also stated, "The demand for our two business segments remains strong. In the water quality business, core sales of water treatment solutions achieved double-digit growth in the third quarter, driven by favorable industrial trends in North America, including increased investment in digital infrastructure, higher industrial production, and rising demand for water recycling solutions. We also continue to see stable demand for water quality analysis products and services that support the daily operations of municipal, environmental, and industrial customers. As expected, the core sales growth rate of PQI improved quarter-over-quarter, thanks to the stable demand in the identification and coding business, as well as the accelerated year-over-year core sales growth rate in the packaging and color business."

"In the fourth quarter, we expect the core sales growth rate to further accelerate to 5.5% to 6.5% year-on-year. Considering this growth outlook, the early benefits of our cost optimization plan, and the strong performance in the third quarter, we have raised our full-year 2026 adjusted earnings per share guidance to $4.49 to $4.52, representing a growth of 15% to 16% over the previous year. Our strict implementation driven by VES and our strategic investments for 2026 have laid a solid foundation for maintaining growth momentum in 2027. We have sufficient financial flexibility to continue to allocate capital, further enhance our growth profile, optimize our cost structure, and continuously improve long-term shareholder value," summarized Honeycutt.

2026 Guidelines

Due to the difficulty in estimating other components of GAAP's sales, such as exchange rate conversions, acquisitions, and divestitures, the company provides sales guidance using a non-GAAP metric.

For the fourth quarter of 2026, the company expects non-GAAP core sales to grow by 5.5% to 6.5% year-over-year. The adjusted operating margin is expected to be around 24.5%, which is roughly consistent with the same period last year after excluding the impact of growth investments and acquisitions. The company's adjusted earnings per share guidance for the fourth quarter is $1.13 to $1.16.

For the entire year of 2026, the company has raised its non-GAAP core sales growth guidance to a year-over-year range of 4.2% to 4.5%, from the previous range of 4.0% to 4.5%. After the adjustment, the operating margin is now expected to expand by about 50 basis points year-over-year, which is higher than the previous guidance range of 25 to 50 basis points. The company has also raised its adjusted earnings per share guidance to $4.49 to $4.52, up from the previous range of $4.35 to $4.43. In addition, the company has increased its free cash flow conversion rate guidance to over 105% of GAAP net profit, from the previous target of over 100%.

Teleconference and live webcast information

Veralto will hold a live teleconference for its third-quarter 2026 financial report at 7:30 a.m. Eastern Time tomorrow. The webcast, slide presentation, and prepared remarks can be found under the “News & Events” subsection of “Investors” on the Veralto website at www.veralto.com. Additional materials will also be published in the same section. A replay of the webcast will be available shortly after the teleconference ends and will be available until the next quarterly financial report teleconference.

The teleconference can be accessed by calling +1 (800) 445-7795 (in the United States) or +1 (785) 424-1699 (internationally). The conference ID is VLTO3Q26. A call-back recording of the meeting will be available shortly after the meeting concludes and will be available until November 7, 2026. Information on how to access the recording can be found at the Veralto website, under the section “Investors”, in the sub-section “News & Events”.

About Veralto

In Veralto, the annual sales amount is approximately 5.5 billion US dollars, making it a global leader in providing cutting-edge technical solutions. The company has proven track records in addressing some of the most complex challenges faced by society. Its industry-leading enterprises and globally renowned brands help billions of people around the world access clean water, safe food, and essential goods they can trust. Headquartered in Waltham, Massachusetts, the company employs about 17,000 people worldwide and is committed to having a lasting positive impact on the world, with the shared mission of "protecting the world's most important resources."

Non-GAAP indicators and supplementary materials

In addition to the financial indicators prepared in accordance with generally recognized accounting standards ( GAAP ), this performance announcement also includes non- GAAP financial indicators. The calculation methods for these indicators, the reasons we believe are useful to investors, the adjustment tables compared to the most directly comparable GAAP indicators (if applicable), and other information related to these non- GAAP indicators are all contained in the attached supplementary adjustment tables.

In addition, this performance announcement, the slide presentations for the related financial report teleconferences, the non-GAAP adjustment tables, and the explanations containing details of historical and projected future financial performance have all been published on the Veralto website ( www.veralto.com ) under the “ Investors ” section and within the “ Quarterly Earnings ” sub-section.

Forward-looking Statements

Certain statements in this announcement, including the company's expectations for financial performance in the fourth quarter and for the full year of 2026, the company's differentiated advantages, and its positioning to continue to create sustainable long-term shareholder value, as well as any other events or developments that we believe may occur in the future, are considered "forward-looking" statements as defined by the U.S. Federal Securities Laws. Except for historical fact information, all statements are forward-looking and include, but are not limited to: revenues, expenses, profits, profit margins, asset values, pricing, tax rates, tax provisions, cash flows, pension and benefit obligations and funding requirements, the liquidity of Veralto, or other projected financial indicators; the plans and strategies of Veralto's management for future operations, including statements regarding expected operating performance, customer needs, cost reductions, restructuring activities, development of new products and services, competitive advantages or market position, acquisitions and their integration, divestitures, spin-offs, initial public offerings, other securities issuances or distributions, strategic opportunities, stock repurchases, dividends, and executive compensation; the growth, decline, and other trends in the markets served by Veralto, the impact of global trade policies, tariffs, import restrictions, related countermeasures, and reciprocal tariffs; future new or revised laws, regulations, accounting standards, or changes in public policy; regulatory approvals and their timing and conditions; outstanding claims, legal proceedings, tax audits and assessments, and other contingent liabilities; future foreign exchange rates and their fluctuations; operating results and/or financial conditions; general economic and capital market conditions; the timing of the aforementioned matters; assumptions on which the aforementioned matters depend; and any other statements regarding events or developments that Veralto intends or believes may occur in the future. For more information regarding factors that could cause actual results to differ significantly from these forward-looking statements, please refer to our SEC document.These forward-looking statements are only valid as of the date of this announcement. Except as required by applicable laws, the company assumes no obligation to update or revise any such forward-looking statements, whether due to new information, future events and developments, or other reasons.

Explanation regarding indicators that are not GAAP

Each of the above indicators that are not GAAP should be considered a supplement to the corresponding GAAP indicator, rather than a substitute or superior to the GAAP indicator, and may not be comparable to indicators with the same name reported by other companies. Management believes that these indicators provide investors with useful information by offering additional ways to observe the performance of Veralto Corporation (“Veralto” or “the company”); after adjustment with the corresponding GAAP indicators, they will assist investors in:

• In terms of non-GAAP indicators related to profitability, it is important to understand the long-term profit trend of the company's business and compare the company's profitability with that of previous and subsequent periods as well as with peers;
• In terms of core sales and related sales indicators, identify the underlying growth trends of the company's business, and compare sales performance with that of previous and subsequent periods as well as with peers;
• In terms of free cash flow and related cash flow indicators (“FCF indicators”), it is important to understand Veralto’s ability to generate cash, strengthen its balance sheet, invest in its business, and develop its operations through acquisitions and other strategic opportunities without the need for external financing. However, the limitation of free cash flow is that it does not take into account non-discretionary expenses of the company; therefore, not all of the free cash flow is necessarily available for discretionary spending.

Management uses these non-GAAP indicators to measure the company's operational and financial performance.

• The reasons why the items that were excluded from the aforementioned indicators (other than those marked with GAAP) were removed are as follows:
• Amortization of intangible assets: We exclude the amortization of intangible assets related to acquisitions, as the amount and timing of such expenses are significantly affected by the timing, scale, quantity, and nature of our acquisitions. Although we have a history of numerous acquisitions, we do not acquire businesses on a predictable cycle. Moreover, the amount allocated to intangible assets from the acquisition price and the related amortization periods are unique for each acquisition and can vary significantly depending on the acquisition. Excluding this amortization expense helps to compare the operating results of newly acquired businesses more consistently with those of businesses held for a longer period, as well as with those of existing acquired and non-acquired peer companies. However, we also believe it is important for investors to understand that these intangible assets contribute to generating sales, and that the amortization of intangible assets related to past acquisitions will continue in future periods until these intangible assets are fully amortized.
• Reorganization costs: We have excluded the costs incurred under independent reorganization plans, as these plans differ significantly in terms of scale, strategic nature, and planning requirements from the continuous productivity improvements brought about by the Veralto enterprise system. Moreover, the frequency of such reorganization plans is not consistent. Since these reorganization plans are additional to our core daily business activities, we believe they do not reflect the ongoing operating costs of Veralto over a certain period. Therefore, excluding these costs helps to compare operating results across different periods more consistently.
• Other adjustments: For the other items that were removed from the profitability-related indicators not marked with GAAP, we made this decision because the nature and/or scale of these items were inconsistent. The reasons for their occurrence may have nothing to do with Veralto's business performance during that period, and/or we believe that these items could obscure the underlying business trends, making it difficult to compare long-term performance.
• In terms of changes in core operating profit margin, in addition to the explanations regarding 'restructuring costs' and 'other adjustments' mentioned above, we have also excluded the impact of businesses held for less than one year (or those that were disposed of during that period and not treated as discontinued operations). This is because the timing, scale, volume, and nature of such transactions can vary significantly across different periods, which may obscure the underlying business trends and make it difficult to compare long-term performance.
• In terms of core sales-related indicators, (1) we exclude the impact of exchange rate conversions, as this is beyond management's control and can be volatile, potentially obscuring the underlying business trends; (2) we also exclude the impact of acquisitions and divestitures of product lines, as the timing, scale, volume, and nature of such transactions can vary significantly across different periods and among our peers. We believe that this may obscure the underlying business trends, making it difficult to compare long-term performance.
• Regarding the FCF indicator, we exclude new expenditures on property, plants, and equipment (after deducting proceeds from asset disposal) to show the remaining operating cash flow for the period after accounting for the company's capital expenditure requirements.