Core Insights - Veralto announced the appointment of Kimberly Y. (Kim) Chainey as Senior Vice President and Chief Legal Officer, effective December 1, 2025, reporting to President and CEO Jennifer L. Honeycutt [1][2] Company Overview - Veralto is a global leader in essential technology solutions with annual sales exceeding $5 billion, focusing on clean water, safe food, and trusted essential goods [5] - The company is headquartered in Waltham, Massachusetts, and employs nearly 17,000 associates dedicated to making a positive impact on the world [5] Leadership Background - Chainey has over 20 years of experience advising C-suite executives and boards at Global 100 and Fortune 500 companies, leading legal, regulatory, compliance, and government relations functions [2] - Prior to joining Veralto, Chainey held legal leadership roles at Aptar Group, Panasonic Aviation Corporation, Avis Budget Group, the Hershey Company, and Morgan Lewis [2] Chainey's Vision and Contributions - Chainey expressed admiration for Veralto's impact on public safety and emphasized her commitment to guiding organizations through complex legal and strategic challenges [3] - She holds a bachelor's degree in environmental science and public policy from Harvard University, along with a Juris Doctor and MBA from the University of Pennsylvania [3] Recognition and Awards - Chainey has received multiple accolades, including being named a 2025 Legends in Law by the Burton Awards and recognized as one of the Most Influential Women in Corporate America by Savoy Magazine [4]

Core Viewpoint - The investment outlook for Veralto (VLTO) remains positive due to intact structural tailwinds and reasonable valuation, leading to a bullish stance on the stock [1]. Group 1: Investment Strategy - The investment approach focuses on long-term investments while also incorporating short-term shorts to identify alpha opportunities [1]. - The analysis is based on a bottom-up approach, examining the fundamental strengths and weaknesses of individual companies [1]. - The investment duration is medium to long-term, targeting companies with solid fundamentals, sustainable competitive advantages, and growth potential [1].

Core Insights - Emerald Technology Ventures has announced the first close of its Global Water Fund II at €60 million, aiming to advance water innovation globally [1][5] - The fund is targeting a total size of €150–180 million and will invest in early to growth stage companies across the water value chain [2] Investment Focus - The fund will focus on solutions in infrastructure and business resilience, advanced treatment, reuse, digitally enhanced monitoring, prediction, decision making, automation, and technologies addressing emerging contaminants [2][3] - The strong backing from industry leaders such as Veralto Corporation and Ecolab highlights a cross-sector commitment to solving global water challenges [1][3] Historical Context - The new fund builds on the success of Emerald's inaugural Global Water Fund, which closed in 2020 with $100 million in commitments from top-tier investors [4] - The first fund has facilitated key collaborations and successful exits of portfolio companies to major industry players like SUEZ, Xylem, and BASF [4] Market Response - There has been strong interest in the fund, indicating that water innovation is both a pressing global need and an attractive investment opportunity [5]

Core Insights - Veralto Corporation (VLTO) reported strong third-quarter 2025 results, with earnings and revenues exceeding the Zacks Consensus Estimate [1][6] - Adjusted earnings per share (EPS) reached 99 cents, surpassing estimates by 4.2% and increasing 11.2% year over year [1][6] - Total revenues amounted to $1.4 billion, beating the consensus estimate by 0.6% and rising 6.9% from the previous year [1][6] Financial Performance - The Water Quality segment generated revenues of $856 million, reflecting a 6.9% year-over-year growth [3] - The Product, Quality & Innovation segment saw revenues increase by 6.8% year over year to $548 million [3] - Adjusted EBITDA was reported at $347 million, marking a 6.12% increase from the year-ago quarter, although the adjusted operating EBITDA margin decreased by 20 basis points to 24.7% [3] Cash Flow and Debt - At the end of Q3, Veralto had cash and cash equivalents of $1.78 billion, up from $1.1 billion at the end of the previous year [4] - Long-term debt stood at $2.67 million, a slight increase from $2.60 billion at the end of Q4 2024 [4] - The company generated $270 million in cash from operating activities during the quarter, with capital expenditures of $12 million [4] Guidance - For Q4 2025, Veralto anticipates low single-digit revenue growth year over year and adjusted diluted EPS between 95 cents and 98 cents, aligning with the Zacks Consensus Estimate of 95 cents [7] - The full-year 2025 adjusted EPS guidance has been raised to $3.82-$3.85, up from the previous range of $3.72-$3.80, with the current Zacks Consensus Estimate at $3.80 [8] - The company also expects approximately 100% cash flow conversion for the full year, with mid-single-digit core sales growth and adjusted operating profit margin expansion projected [8]

Financial Data and Key Metrics Changes - Total sales grew 6.9% year-over-year to $1.4 billion, with core sales growth of 5.1% driven by a 2.7% increase in volume and a 2.4% increase in price [16][17] - Adjusted EPS grew 11% year-over-year to $0.99, exceeding the high end of guidance by $0.04 [12][17] - Free cash flow generation was strong, with $258 million generated in the third quarter, a 20% increase year-over-year [17][23] Business Line Data and Key Metrics Changes - Water Quality segment sales were $856 million, up 7% year-over-year, with core sales growth of 5.3% driven by strong demand for water analytics and treatment solutions [18][19] - PQI segment sales grew 6.9% year-over-year to $548 million, with core sales growth of 4.6% supported by pricing adjustments and strong demand for marking and coding equipment [19][20] Market Data and Key Metrics Changes - North America, accounting for 50% of total business, saw core sales grow 6.9%, with high single-digit growth in PQI and mid-single-digit growth in Water Quality [12][16] - High growth markets experienced a core sales increase of 4.3%, with notable growth in the Middle East, Latin America, and India [15] Company Strategy and Development Direction - The company raised its full-year Adjusted EPS guidance to a range of $3.82 - $3.85 per share, indicating confidence in continued growth [8][24] - Capital allocation is focused on acquisitions, with a pipeline of opportunities in both water quality and product quality innovation [8][24] - The company emphasizes sustainability, having published its annual sustainability report and achieved significant milestones in environmental contributions [9][28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating a dynamic macro environment, highlighting the essential need for their technology solutions [27][28] - The company expects continued mid-single-digit core sales growth for the full year, with favorable currency rates contributing positively [25][26] Other Important Information - Recurring revenue grew high single digits year-over-year, comprising 62% of total sales, indicating a strong and sticky business model [16][19] - The company is actively pursuing M&A opportunities and remains disciplined in capital allocation to create long-term shareholder value [24][66] Q&A Session Summary Question: Clarification on tariffs and government shutdown impacts - Management indicated that pricing strategies have effectively offset tariff impacts, and no material effects from the government shutdown have been observed [34][36] Question: Demand pace in China - Management noted that demand in China is performing as expected, with no significant changes in total sales [38] Question: Durability of water quality business strength - Management highlighted strong double-digit growth in data center-related sales, indicating a strategic priority in this area [44][45] Question: Margin guidance and tariff impacts - Management acknowledged that tariff impacts will continue to affect margins into 2026, but they expect to see improvements as they lap these effects [97][100] Question: Growth in high-growth markets - Management reported strong growth in high-growth markets, particularly in India and the Middle East, driven by infrastructure development and water management needs [105]

Financial Data and Key Metrics Changes - Total sales grew 6.9% year over year to $1.4 billion, with core sales growth of 5.1% driven by a 2.7% increase in volume and a 2.4% increase in price [16][17] - Adjusted EPS grew 11% year over year to $0.99, exceeding the high end of guidance by $0.04 [12][17] - Free cash flow generation was strong at $258 million, a 20% increase year over year [17][23] Business Line Data and Key Metrics Changes - Water Quality segment sales were $856 million, up 7% year over year, with core sales growth of 5.3% driven by strong demand for water analytics and treatment solutions [18][19] - PQI segment sales grew 6.9% year over year to $548 million, with core sales growth of 4.6% driven by pricing and volume increases [19][20] Market Data and Key Metrics Changes - North America, accounting for 50% of total business, saw core sales grow 6.9%, with high single-digit growth in PQI and mid-single-digit growth in Water Quality [12][16] - High growth markets experienced a core sales increase of 4.3%, with notable growth in the Middle East, Latin America, and India [15] Company Strategy and Development Direction - The company raised its full-year adjusted EPS guidance to a range of $3.82 to $3.85 per share, indicating confidence in ongoing growth [8][24] - The capital allocation strategy is focused on acquisitions, with a pipeline of opportunities in water quality and product quality innovation [8][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating a dynamic macro environment, highlighting the importance of their technologies in supporting customer operations [6][28] - The company anticipates continued mid-single-digit core sales growth and double-digit adjusted EPS growth for the remainder of the year [27][28] Other Important Information - The company published its annual sustainability report, emphasizing its commitment to reducing carbon footprint and supporting environmental health [9] - Recurring revenue grew high single digits year over year, comprising 62% of total sales, indicating a strong and sticky business model [16][20] Q&A Session Summary Question: Clarification on tariffs and government shutdown impacts - Management indicated that pricing actions have effectively offset tariff impacts, and there has been no material impact from the government shutdown [34][36] Question: Comments on demand pace in China - Management noted that demand in China is performing as expected, with no significant changes in total sales [38] Question: Durability of strength in the water quality business - Management highlighted strong double-digit growth in data center-related sales, indicating a strategic priority in this area [44][45] Question: Insights on M&A opportunities - Management confirmed an active pipeline for M&A opportunities, emphasizing a disciplined approach to capital allocation [66] Question: Trends in water quality pricing - Management stated that pricing has been strategically executed, with expectations for continued price contributions in the future [63][111]

Financial Data and Key Metrics Changes - Total sales grew 6.9% year over year to $1.4 billion, with core sales increasing by 5.1% driven by both volume and price increases [13][14] - Adjusted EPS grew 11% year over year to $0.99, exceeding the high end of guidance by $0.04 [15][24] - Free cash flow generation was strong, with $258 million generated in the third quarter, a 20% increase year over year [15][20] Business Line Data and Key Metrics Changes - Water Quality segment sales were $856 million, up 7% year over year, with core sales growing 5.3% [16][17] - PQI segment sales grew 6.9% year over year to $548 million, with core sales increasing by 4.6% [17][18] - Recurring revenue grew high single digits year over year, comprising 62% of total sales [14][15] Market Data and Key Metrics Changes - In North America, which accounts for 50% of total business, core sales grew 6.9%, led by high single-digit growth in PQI and mid-single-digit growth in Water Quality [9][10] - Core sales in high growth markets increased by 4.3%, with notable growth in the Middle East, Latin America, and India [12] - Core sales into China grew low single digits in both segments, performing as expected [34] Company Strategy and Development Direction - The company raised its full year adjusted EPS guidance to a range of $3.82 to $3.85 per share, indicating confidence in continued growth [5][24] - The capital allocation strategy is focused on acquisitions, with a pipeline of opportunities in both water quality and product quality innovation [5][22] - The company emphasizes sustainability, having published its annual sustainability report and achieved significant milestones in environmental contributions [6] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating a dynamic macro environment, highlighting the essential need for technology solutions in clean water and safe food [25] - The company expects continued mid-single-digit core sales growth for the full year, with favorable currency rates contributing positively [22][23] - Management noted that the pricing strategy has effectively offset tariff impacts, and they remain vigilant in monitoring the operating environment [31][32] Other Important Information - The company achieved over 100% free cash flow conversion, reflecting strong operational execution [5][15] - The water quality segment saw strong demand for water analytics and treatment solutions, particularly in industrial markets [11][17] Q&A Session Summary Question: Clarification on tariffs and government shutdown impacts - Management indicated that pricing actions have effectively offset tariff impacts, and there has been no material impact from the government shutdown [30][32] Question: Comments on demand pace in China - Management noted that demand in China is performing as expected, with no significant changes in total sales [34] Question: Durability of strength in water quality business - Management highlighted strong double-digit growth in data center-related sales, indicating a strategic priority for the company [41][42] Question: Expectations for PQI margins and pricing - Management acknowledged that while tariffs have impacted margins, they expect to see improvements as they lap the tariff effects in 2026 [45][46] Question: Growth in high-growth markets - Management reported strong growth in high-growth markets, particularly in Latin America and India, driven by infrastructure development [89][90] Question: Recurring revenue growth drivers - Management stated that both equipment and consumables are growing strongly, with software-based businesses also contributing to recurring revenue [91][92]

Q3 2025 Financial Performance - Sales increased by 6.9% year-over-year, reaching $1.404 billion[18] - Core sales growth was +5.1%, driven by volume (+2.7%) and price (+2.4%)[8] - Adjusted EPS increased by 11.2% year-over-year to $0.99[8, 18] - Free cash flow reached $258 million, representing a 108% free cash flow conversion[8, 20] - Adjusted EBITDA margin was 24.7%[8] - Adjusted operating profit margin was 23.9%, a decrease of 20 basis points year-over-year[8, 18] Segment Performance - Water Quality sales increased to $856 million, with core growth of +5.3%[23] and adjusted operating profit increased by 13.1%[26] - Product Quality & Innovation sales increased to $548 million, with core growth of +4.6%[31] and adjusted operating profit decreased by 2.1%[34] Geographic Performance - North America core sales grew by +6.9% in Q3 2025[11] - Western Europe core sales grew by +2.5% in Q3 2025[11] - High Growth Markets core sales grew by +4.3% in Q3 2025[11] FY2025 Guidance - The company expects mid-single-digit core sales growth for the full year 2025[40, 41] - Adjusted EPS is projected to be between $3.82 and $3.85[40] - Free cash flow conversion is expected to be approximately 100%[40]

分组1 - Veralto (VLTO) reported quarterly earnings of $0.99 per share, exceeding the Zacks Consensus Estimate of $0.95 per share, and up from $0.89 per share a year ago, representing an earnings surprise of +4.21% [1] - The company achieved revenues of $1.4 billion for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 0.58%, and an increase from $1.31 billion year-over-year [2] - Over the last four quarters, Veralto has consistently surpassed consensus EPS and revenue estimates [2] 分组2 - The stock has underperformed the market with a gain of about 2.2% since the beginning of the year, compared to the S&P 500's gain of 16.9% [3] - The current consensus EPS estimate for the upcoming quarter is $0.97 on revenues of $1.4 billion, and for the current fiscal year, it is $3.80 on revenues of $5.5 billion [7] - The Waste Removal Services industry, to which Veralto belongs, is currently ranked in the bottom 35% of over 250 Zacks industries, indicating potential challenges for stock performance [8]

Core Insights - Veralto reported mid-single digit core sales growth and double-digit earnings per share growth for Q3 2025, demonstrating strong commercial performance and effective operational execution [2][3] - The company anticipates low-single-digit core sales growth for Q4 2025, with adjusted diluted earnings per share projected between $0.95 and $0.98 [4][19] - For the full year 2025, Veralto raised its adjusted earnings per share guidance to a range of $3.82 to $3.85, reflecting a positive outlook on sales growth and operating profit margin [5][20] Financial Performance - Total sales for Q3 2025 increased by 6.9% year-over-year to $1,404 million, with non-GAAP core sales growth of 5.1% [10][17] - Operating profit margin was reported at 23.2%, while the non-GAAP adjusted operating profit margin was 23.9% [10][17] - Net earnings for the quarter were $239 million, translating to $0.95 per diluted common share, with non-GAAP adjusted net earnings at $247 million or $0.99 per diluted common share [10][17] Cash Flow and Investment - Operating cash flow for Q3 2025 was $270 million, with non-GAAP free cash flow reported at $258 million, indicating a strong cash generation capability [10][20] - The company has raised its full-year free cash flow conversion guidance to approximately 100%, reflecting effective capital allocation strategies [5][20] Market Position and Strategy - Veralto's consistent growth is attributed to its durable business model and the essential role its technologies play in supporting customer operations [2][3] - The company maintains a strong financial position, allowing for flexibility in pursuing both organic and inorganic growth opportunities [3][5]