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Have you evaluated the performance of Watts Water's (WTS) international operations during the quarter that concluded in December 2025? Considering the extensive worldwide presence of this maker of valves for plumbing, heating and water needs, analyzing the patterns in international revenues is crucial for understanding its financial resilience and potential for growth.In today's increasingly interconnected global economy, a company's ability to tap into international markets can be a pivotal factor in shap ...

Watts Water Technologies (NYSE:WTS) Q4 2025 Earnings call February 12, 2026 09:00 AM ET Company ParticipantsBob Pagano - President and CEOBrian Lee - VPDiane McClintock - CFOJames Ko - Equity Research Senior AssociateJeff Hammond - Managing DirectorNathan Jones - Managing DirectorConference Call ParticipantsAndrew Krill - VP and Equity AnalystJeff Reeve - Equity Research AnalystMike Halloran - Associate Director of Research and Senior AnalystRyan Connors - Managing Director and Research AnalystNone - Analys ...

Financial Data and Key Metrics Changes - The company achieved record sales, operating margin, and earnings per share for both Q4 and the full year 2025, with organic sales rising 8% and reported sales up 16% in Q4 [3] - Adjusted operating margin climbed 220 basis points to 19% in Q4, while for the full year, adjusted operating margin improved by 190 basis points to 19.6% [3][14] - Free cash flow reached a record $356 million for 2025, up 7%, with a conversion rate of 105% [4][16] Business Line Data and Key Metrics Changes - In the Americas, organic sales grew by 10% and reported growth was 17%, driven by favorable pricing and volume [11] - Europe saw organic sales rise by 1% and reported sales increase by 10%, benefiting from favorable pricing and positive foreign exchange effects [11] - APMEA experienced organic sales growth of 9%, with acquisitions contributing an additional 6% for a total reported sales growth of 15% [12] Market Data and Key Metrics Changes - The Americas region showed strong performance, while Europe faced challenges with a 5% decline in organic sales for the full year [14] - The company anticipates a mixed outlook for non-residential new construction in the Americas, with indicators suggesting subdued market conditions [7] - In Europe, new residential and non-residential construction is expected to remain sluggish due to uncertainties surrounding inflation and trade policies [7] Company Strategy and Development Direction - The company continues to focus on strategic M&A, high-return organic investments, competitive dividends, and steady share buybacks [4] - The data center initiative is a key growth area, with an addressable market exceeding $1 billion and sales from this sector growing at a double-digit rate [9] - The company plans to phase out underperforming products, identifying $10-15 million of European sales and $25-30 million in the Americas to eliminate during 2026 [6] Management's Comments on Operating Environment and Future Outlook - Management expects reported sales growth of 8%-12% and organic sales growth of 2%-6% for 2026, with pricing and repair/replacement activity driving growth [17] - The company anticipates challenges in Europe, projecting organic sales to range from a 4% decline to flat [18] - Management remains cautious about the operating environment, particularly in Europe, while expressing confidence in the company's ability to leverage its strengths for growth [62] Other Important Information - The company completed two acquisitions, Superior Boiler and Saudi Cast, which are expected to be accretive to adjusted EPS in 2026 [4][5] - The company returned $83 million to shareholders through dividends and share repurchases, increasing the annual dividend payout by approximately 20% [16] Q&A Session Summary Question: M&A Strategy and Revenue Contribution - Management emphasized that M&A is a key part of the strategy, with a focus on targets that fit the company's culture and financial criteria [27][28] Question: Data Center Growth - Management indicated that the data center market is a key focus, with expectations for high growth driven by ongoing construction [30][31] Question: Organic Growth Guidance - Management confirmed that the 80/20 revenue is included in the organic growth guidance, with expectations for price to be low single digits and volume to be muted [39][41] Question: Product Rationalization - Management clarified that the product rationalization efforts are focused on underperforming channels, not divestitures [88][89] Question: Capacity to Meet Data Center Demand - Management stated that they are leveraging global supply chains and facilities to meet demand from the data center market [100]

Watts Water Technologies (NYSE:WTS) Q4 2025 Earnings call February 12, 2026 09:00 AM ET Speaker9Welcome to Watts Water Technologies, Inc. fourth quarter and full year 2025 earnings call. At the end of the presentation, we will open the line for questions. I will now turn the call over to Diane McClintock, Chief Financial Officer. Please go ahead.Speaker3Thank you, and good morning, everyone. Joining me today is Bob Pagano, President and CEO. Before we begin, I'd like to remind everyone that during this call ...

Q4 2025 Earnings Conference Call February 12, 2026 Forward Looking Statements Record Q4 and FY performance exceeded expectations Certain statements in this presentation constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are related to forecasts of sales, margins, earnings, earnings per share, effective tax rate, capital expenditures, cash flow, water market growth, acquisition strategy and integration, construction outlook, infl ...

Watts Water (WTS) reported $625.1 million in revenue for the quarter ended December 2025, representing a year-over-year increase of 15.7%. EPS of $2.62 for the same period compares to $2.05 a year ago.The reported revenue compares to the Zacks Consensus Estimate of $611.3 million, representing a surprise of +2.26%. The company delivered an EPS surprise of +10.89%, with the consensus EPS estimate being $2.36.While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall ...

Core Insights - Watts Water (WTS) reported quarterly earnings of $2.62 per share, exceeding the Zacks Consensus Estimate of $2.36 per share, and up from $2.05 per share a year ago [1][2] - The company achieved a revenue of $625.1 million for the quarter, surpassing the Zacks Consensus Estimate by 2.26%, compared to $540.4 million in the same quarter last year [3] Earnings Performance - The earnings surprise for the quarter was +10.89%, following a previous surprise of +9.17% when actual earnings were $2.5 per share against an expectation of $2.29 per share [2] - Watts Water has consistently outperformed consensus EPS estimates over the last four quarters [2] Revenue Performance - The company has also exceeded consensus revenue estimates in each of the last four quarters [3] - The revenue growth reflects a significant increase from the previous year's figures, indicating strong operational performance [3] Stock Performance - Since the beginning of the year, Watts Water shares have increased by approximately 14.1%, significantly outperforming the S&P 500's gain of 1.4% [4] - The sustainability of this price movement will depend on management's commentary during the earnings call [4] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $2.64, with expected revenues of $615.59 million, and for the current fiscal year, the estimate is $11.37 on $2.61 billion in revenues [8] - The favorable trend in estimate revisions prior to the earnings release has resulted in a Zacks Rank 2 (Buy) for the stock, suggesting expected outperformance in the near future [7] Industry Context - Watts Water operates within the Zacks Manufacturing - General Industrial industry, which is currently ranked in the top 28% of over 250 Zacks industries [9] - The strong industry ranking indicates a favorable environment for the company's performance relative to its peers [9]

Financial Performance - Fourth quarter 2025 sales reached $625 million, a 16% increase on a reported basis and 8% organically[4] - Full year 2025 sales totaled $2.44 billion, up 8% on a reported basis and 5% organically[4] - Net income for 2025 was $340.8 million, up 17.0% from $291.2 million in 2024[23] - Operating income rose to $448.1 million in 2025, a 14.8% increase compared to $390.4 million in 2024[28] - Diluted EPS for Q4 2025 was $2.50, a 24% increase from $2.02 in Q4 2024; adjusted diluted EPS was $2.62, up 28%[4] - Diluted earnings per share increased to $10.17 in 2025 from $8.69 in 2024, marking a growth of 17.0%[28] - Total segment net sales for Q4 2025 reached $652.1 million, a 14.8% increase from $568.6 million in Q4 2024[29] - Net sales from external customers for the year ended December 31, 2025, were $2,438.5 million, up 8.3% from $2,252.2 million in 2024[30] Operating Metrics - Operating margin for Q4 2025 was 18.2%, an increase of 170 basis points compared to Q4 2024; adjusted operating margin was 19.0%, up 220 basis points[4] - The operating margin improved to 18.4% in 2025 from 17.3% in 2024[28] - The operating margin for the year ended December 31, 2025, improved to 18.4%, up from 17.3% in 2024[31] - Adjusted operating income for 2025 was $477.2 million, compared to $399.6 million in 2024, reflecting a 19.4% increase[28] - Segment earnings for Q4 2025 were $133.4 million, compared to $103.8 million in Q4 2024, reflecting a significant increase in profitability[29] Cash Flow and Assets - Operating cash flow for full year 2025 was $402 million, with free cash flow of $356 million, reflecting an 11% and 7% increase respectively[11] - Cash and cash equivalents at the end of 2025 were $405.5 million, an increase from $386.9 million in 2024[23] - Total current assets grew to $1,286.1 million in 2025, up 18.7% from $1,083.5 million in 2024[21] - Free cash flow for the year ended December 31, 2025, was $356.3 million, compared to $331.7 million in 2024, indicating strong cash generation[31] Acquisitions and Growth - The company completed acquisitions of Haws Corporation, Superior Boiler, and Saudi Cast, enhancing product portfolio and geographic presence[3] - Business acquisitions in 2025 amounted to $257.1 million, significantly higher than $96.3 million in 2024[23] - Full year 2026 sales growth is anticipated to range from 8% to 12% on a reported basis and 2% to 6% organically[13] - The company forecasts net sales growth of 8% to 12% for 2026, with organic sales growth projected at 2% to 6%[36] - The adjusted operating margin for 2026 is expected to be between 19.1% and 19.7%, indicating a focus on operational efficiency[36] Balance Sheet and Equity - Total assets increased to $2,881.2 million in 2025 from $2,397.0 million in 2024, representing a growth of 20.2%[21] - Total stockholders' equity reached $2,027.7 million in 2025, up from $1,707.9 million in 2024, indicating a 18.7% increase[21] - The net debt to capitalization ratio improved to (11.4)% as of December 31, 2025, compared to (12.5)% in 2024, reflecting a stronger balance sheet[34] Regional Performance - Americas segment sales were $467 million, a 17% increase on a reported basis and 10% organically, driven by favorable pricing[8] - Europe segment sales increased to $120 million, a 10% rise on a reported basis, with a 1% organic growth[9] - APMEA segment sales reached $39 million, a 15% increase on a reported basis and 9% organically, with growth across major countries[10] Special Items - The corporate operating loss excluding special items for Q4 2025 was $(14.7) million, compared to $(12.9) million in Q4 2024[29] - The dollar change in net sales for Q4 2025 was $84.7 million, with a net sales percentage increase of 15.7% year-over-year[30]

Core Viewpoint - Analysts are increasingly optimistic about Watts Water Technologies, Inc. (WTS), reflected in rising consensus price targets and a recent stock price increase of 3.4% [2][6]. Group 1: Price Target Trends - The average price target for WTS has risen to $400, indicating strong positive sentiment among analysts [2][6]. - Three months ago, the average price target was $332.6, showing growing confidence in the company's performance [3]. - A year ago, the average price target was $323, and the current target reflects a substantial upward trend in analysts' expectations [4]. Group 2: Earnings and Revenue Performance - The company is expected to report earnings next week, with Wall Street anticipating growth, which may further influence analysts' price targets [4]. - Investors are closely monitoring WTS's international revenue performance, as it significantly impacts financial analysts' predictions and the company's growth trajectory [5].