Veralto Raises 2026 Adjusted Earnings Outlook

The Tip Desk · October 31, 2026 · 3 min read

The water-and-product-quality company lifted full-year adjusted EPS to $4.49–$4.52 after 5.1% core sales growth and a 170-basis-point adjusted-margin expansion.

Veralto (VLTO), a global provider of water and product quality solutions, reported third-quarter sales of $1,509 million, up 7.5% from a year earlier, as non-GAAP core sales growth accelerated to 5.1% from 4.2% in the second quarter.

The company said acquisitions contributed 2.3 percentage points to the year-over-year sales increase and currency was a 0.1% drag. Adjusted diluted earnings were $1.18 a share, up 19.2% from $0.99. GAAP net earnings were $253 million, or $1.03 a share.

Adjusted operating profit margin expanded to 25.6% from 23.9% a year earlier, a 170-basis-point increase the company highlighted. GAAP operating profit margin was 19.7%, including $22 million of pretax costs from the 2026 Cost Optimization Program.

Water Quality core sales grew 6.4%, versus 3.2% core growth at Product Quality and Innovation. GAAP sales in Water Quality rose 9.8% and in PQI 3.9%. Chief Executive Officer Jennifer L. Honeycutt said core sales of water treatment solutions grew double digits in the quarter, citing favorable industrial trends in North America including digital infrastructure investments, higher industrial production and increasing need for water reuse solutions. She said demand for water analytics remained steady and that PQI’s core sales growth rate increased sequentially, supported by steady demand in marking and coding and an acceleration in year-over-year core growth in packaging and color.

Operating cash flow was $323 million. Non-GAAP free cash flow was $304 million, up about 18% from $258 million a year earlier.

Year-to-date through October 28, the company deployed $1.1 billion on four strategic acquisitions — In-Situ, GlobalVision, Alfaa UV and Cleanwater1, the last of which closed October 5 — and repurchased $550 million of shares, or 2.4% of outstanding shares. Expected full-year 2026 savings from the cost optimization program are now $10 million to $15 million.

For the fourth quarter, Veralto anticipates non-GAAP core sales growth of 5.5% to 6.5% year-over-year, versus the 4.0% to 5.0% range it had given for the third quarter. Adjusted operating profit margin is expected to be approximately 24.5%, broadly in line with the prior-year period, net of growth investments and the impact from acquisitions. Fourth-quarter adjusted diluted earnings are guided at $1.13 to $1.16 a share.

For the full year, the company raised non-GAAP core sales growth to 4.2% to 4.5% from 4.0% to 4.5%. Adjusted operating profit margin is now expected to expand approximately 50 basis points year-over-year, up from a prior range of 25 to 50 basis points. Adjusted diluted earnings guidance moved to $4.49 to $4.52 a share from $4.35 to $4.43, which the company said represents 15% to 16% growth over the prior year. Free cash flow conversion guidance was raised to greater than 105% of GAAP net earnings from greater than 100%.

Honeycutt said demand remains healthy across both segments and that the company has ample financial flexibility to continue to deploy capital.