10-Q · April 28, 2026
Veralto posted revenues of $1.422 billion and EPS of $1.07 for Q1 2026, surpassing expectations for both metrics, marking a 6.7% increase in revenue year-over-year. Segment-wise, the Water Quality division was a key…
Earnings analysis · 10-Q
VLTO earnings analysis
Filed July 28, 2026 · Our reading of the company's report
The latest report
Veralto delivered a strong Q2 top-line result, with revenue up 7.6% to $1.474 billion and GAAP EPS up to $0.98 from $0.89 a year earlier, led by Water Quality’s 5.7% core-sales growth. Gross margin expanded to 61.2%,…
Read full summary
Veralto delivered a strong Q2 top-line result, with revenue up 7.6% to $1.474 billion and GAAP EPS up to $0.98 from $0.89 a year earlier, led by Water Quality’s 5.7% core-sales growth. Gross margin expanded to 61.2%, but operating margin contracted to 21.4% as restructuring and acquisition-related costs more than offset volume, pricing, and tariff-recovery benefits. Management’s qualitative outlook remains constructive—especially for second-half PQI recovery—while trade-policy uncertainty, weak high-growth-market core sales, and restructuring-related margin pressure remain key watch items.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
Where revenue came from
The business segments reported by the company.
Shares of the segments disclosed in this filing, largest first.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $0.98
What stood out
-
Sales growth accelerated in Q2
Q2 revenue increased 7.6% year over year to $1.474 billion from $1.371 billion; core sales increased 4.2%, with price contributing 3.0 percentage points. Revenue also rose from $1.420 billion in Q1 2026.
-
EPS and earnings rose year over year
GAAP diluted EPS was $0.98, up from $0.89 in Q2 2025 and down from $1.02 in Q1 2026. Net earnings increased 8.6% to $241 million from $222 million year over year.
-
Gross margin expanded 120 bps
Gross margin expanded 120 basis points year over year to 61.2% from 60.0%, and improved from 60.1% in Q1 2026. Pricing, productivity, acquisitions, and IEEPA tariff recoveries more than offset labor and inflation costs.
-
Water Quality drove organic growth
Water Quality delivered 10.1% reported sales growth and 5.7% core growth in Q2. Its chemical-treatment business grew core sales 10.7%, while analytical instrumentation grew 2.8%.
-
Cash supports acquisitions and capital return
Liquidity remained substantial at approximately $2.1 billion of cash and equivalents at July 3, 2026. The company also issued $725 million of senior unsecured notes due January 15, 2032 and spent $620 million on acquisitions during the first six months.
-
Operating cash flow improved with low capex
Six-month operating cash flow increased $26 million, or 5%, year over year, while capex was only $24 million versus $31 million. The low capex level is consistent with the company’s asset-light cash-generation model.
What to watch
-
Restructuring weighed on operating margin
Operating margin declined 140 basis points year over year to 21.4% from 22.8%, and fell 240 basis points sequentially from 23.8% in Q1 2026. Restructuring under the 2026 Cost Optimization Program reduced Q2 consolidated margin by 200 basis points.
-
PQI margins and packaging demand weakened
PQI operating margin fell 350 basis points year over year to 21.0% from 24.5%, including a 380-basis-point restructuring impact and a 50-basis-point GlobalVision transaction-cost impact. Packaging and color solutions core sales declined 1.4% in Q2.
-
High-growth-market organic demand softened
Core sales in Water Quality high-growth markets declined 1.5% in Q2, while total company core sales in high-growth markets declined 0.1%. Management also identifies tariff and trade-policy uncertainty as an ongoing risk.
-
No risk-factor updates in the 10-Q
No material risk-factor changes were reported for the quarter ended July 3, 2026 versus the 2025 Form 10-K and the April 3, 2026 Form 10-Q. Existing risks therefore remain the applicable disclosure baseline.
Management's outlook
The 10-Q provides qualitative outlook rather than numeric guidance: Water Quality is expected to benefit from municipal demand and recurring revenue, while PQI growth is expected to accelerate in the second half of 2026 on digital-workflow adoption and recovery in certain industrial end markets. Management states that tariffs, prospective trade-policy changes, and Middle East conflict remain uncertain.
Earlier filings 4
10-K · February 20, 2026
Veralto presents a stable, recurring-revenue industrial technology business that generated $5.5 billion of sales in 2025 with approximately 61% of sales from consumables, services and software. The company emphasizes…
10-Q · October 29, 2025
Veralto reported Q3 sales of $1,404 million (up $90 million vs. Q3 2024 $1,314 million) and diluted EPS of $0.95 (vs. $0.88 prior-year). Gross profit improved to $844 million (gross margin ~60.1%) and operating profit…
10-Q · April 30, 2025
Veralto reported Q1 sales of $1,332 million (up $86 million vs. prior-year $1,246 million) and diluted EPS of $0.90 (vs. $0.74 prior-year). Gross profit rose to $805 million (gross margin ~60.4%) and operating profit…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.