Veralto (US:VLTO)2025-04-29 20:30First Quarter 2025 Performance Highlights Veralto delivered strong Q1 2025 results with broad core sales growth, solid margin expansion, and double-digit adjusted EPS growth across PQI and Water Quality segments Q1 2025 Key Financial Results | Metric | Value ($ million) | Growth/Note | | :--- | :--- | :--- | | Sales | $1,332 | +6.9% YoY | | Non-GAAP Core Sales Growth | 7.8% | - | | Operating Profit Margin | 24.2% | - | | Non-GAAP Adjusted Operating Profit Margin | 25.0% | - | | Net Earnings (Diluted) | $225 ($0.90/share) | - | | Non-GAAP Adjusted Net Earnings (Diluted) | $237 ($0.95/share) | - | | Operating Cash Flow | $157 | - | | Non-GAAP Free Cash Flow | $142 | - | - Core sales growth was strong across both major segments, with Product Quality and Innovation benefiting from positive trends in consumer-packaged goods and Water Quality seeing robust growth in North American water treatment and double-digit growth in European water analytics4 - Management expressed confidence that the Veralto Enterprise System will enable the company to navigate macroeconomic changes and reaffirmed its full-year 2025 adjusted EPS guidance based on current assessments and implemented countermeasures against tariffs5 2025 Financial Guidance Veralto reaffirmed full-year 2025 adjusted EPS guidance of $3.60-$3.70 and projected Q2 2025 low-to-mid single-digit core sales growth with adjusted diluted EPS of $0.84-$0.88 Q2 and Full Year 2025 Guidance | Period | Metric | Guidance | | :--- | :--- | :--- | | Q2 2025 | Non-GAAP Core Sales Growth | Low-to-mid single-digits YoY | | | Adjusted Diluted EPS | $0.84 to $0.88 | | Full Year 2025 | Core Sales Growth | Low-to-mid single digits | | | Adjusted Operating Profit Margin | Flat to +50 bps YoY | | | Adjusted Diluted EPS | $3.60 to $3.70 (Reaffirmed) | | | Free Cash Flow Conversion | 90% to 100% | Consolidated Financial Statements This section presents Veralto's unaudited consolidated financial results for Q1 2025 compared to Q1 2024 Consolidated Condensed Statements of Earnings Veralto's Q1 2025 sales increased 6.9% to $1,332 million, with operating profit rising to $322 million and net earnings to $225 million ($0.90 per diluted share) Q1 2025 vs. Q1 2024 Statement of Earnings Highlights ($ in millions) | Account | Q1 2025 (ended Apr 4) | Q1 2024 (ended Mar 29) | | :--- | :--- | :--- | | Sales | $1,332 | $1,246 | | Gross Profit | $805 | $747 | | Operating Profit | $322 | $293 | | Net Earnings | $225 | $184 | | Diluted EPS | $0.90 | $0.74 | Reconciliation of GAAP to Non-GAAP Financial Measures This section details reconciliations of GAAP to non-GAAP financial measures, adjusting for items like amortization, dispositions, and currency effects to derive core sales growth, adjusted operating profit, EPS, and free cash flow Reconciliation of Net Earnings and EPS Veralto's Q1 2025 GAAP diluted EPS of $0.90 was adjusted to a non-GAAP figure of $0.95, primarily due to amortization of acquisition-related intangibles and disposition losses Q1 2025 GAAP to Non-GAAP EPS Reconciliation | Description | Per Share Amount | | :--- | :--- | | Reported Diluted EPS (GAAP) | $0.90 | | Amortization of acquisition-related intangible assets | $0.04 | | Loss on disposition of certain product lines | $0.02 | | Other items | $0.01 | | Tax effects and discrete adjustments | ($0.02) | | Adjusted Diluted EPS (Non-GAAP) | $0.95 | Sales Growth by Segment Total sales grew 6.9% in Q1, with non-GAAP core sales growth of 7.8% after adjustments, led by 8.3% core growth in Product Quality and Innovation and 7.4% in Water Quality Q1 2025 Year-over-Year Sales Growth (%) | Growth Metric | Total Company | Water Quality | Product Quality and Innovation | | :--- | :--- | :--- | :--- | | Total Sales Growth (GAAP) | 6.9% | 6.0% | 8.3% | | Core Sales Growth (Non-GAAP) | 7.8% | 7.4% | 8.3% | Cash Flow Reconciliation Non-GAAP free cash flow for Q1 increased approximately 39.0% year-over-year to $142 million, driven by a 36.5% increase in net cash from operating activities to $157 million Free Cash Flow Calculation ($ in millions) | Line Item | Q1 2025 | Q1 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Net cash provided by operating activities (GAAP) | $157 | $115 | ~36.5% | | Less: Capital expenditures (GAAP) | ($15) | ($13) | - | | Free cash flow (Non-GAAP) | $142 | $102 | ~39.0% | Statement Regarding Non-GAAP Measures Veralto utilizes non-GAAP financial measures to provide investors with additional performance insights, aiding in understanding long-term profitability, underlying growth trends, and cash generation for strategic use - Management uses non-GAAP measures to understand long-term profitability trends, identify underlying business growth, and assess the ability to generate cash for investment and strategic opportunities3334 - Key exclusions from non-GAAP measures include amortization of acquisition-related intangible assets, certain restructuring charges, and the effects of currency translation and recent acquisitions/divestitures to allow for more consistent period-over-period comparisons3536