Vontier(VNT) - 2025 Q2 - Quarterly Results

Vontier Second Quarter 2025 Earnings Release Financial Highlights Vontier reported strong Q2 2025 results with sales up 11.1% to $773.5 million, driven by robust demand in retail and fueling solutions, leading to raised full-year guidance Q2 2025 Key Financial Metrics | Metric | Value | YoY Change | | :--- | :--- | :--- | | Reported Sales | $773.5 million | +11.1% | | Core Sales | - | +10.8% | | Operating Profit | $136.4 million | +19.5% | | Operating Profit Margin | 17.6% | +120 bps | | Adjusted Operating Profit | $163.4 million | +15.4% | | Adjusted Operating Profit Margin | 21.1% | +80 bps | | GAAP Diluted Net EPS | $0.62 | - | | Adjusted Diluted Net EPS | $0.79 | - | | Operating Cash Flow | $100 million | - | | Adjusted Free Cash Flow | $89 million | - | - Growth was fueled by strong demand for convenience retail payment, enterprise productivity solutions, and retail fueling equipment, which compensated for ongoing macroeconomic challenges affecting the repair solutions segment[3] - Due to strong first-half performance, the company has increased its full-year 2025 adjusted diluted net EPS guidance to a range of $3.10 to $3.20[5] Segment Performance Q2 2025 segment performance was mixed, with strong growth in Environmental & Fueling Solutions and Mobility Technologies, while Repair Solutions remained flat with margin contraction Environmental & Fueling Solutions Environmental & Fueling Solutions sales grew 16.2% to $361.6 million, with operating profit margin expanding 50 bps to 29.2% due to strong volume and cost optimization Environmental & Fueling Solutions Q2 Performance | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Sales ($M) | $361.6 | $311.2 | +16.2% | | Segment Operating Profit ($M) | $105.7 | $89.3 | +18.4% | | Segment Operating Profit Margin | 29.2% | 28.7% | +50 bps | - Growth was primarily driven by strong demand for above-ground fuel dispensing equipment and environmental solutions[6] Mobility Technologies Mobility Technologies sales increased 17.9% to $280.2 million, with operating profit margin improving 180 bps to 19.1% due to favorable volume and cost savings Mobility Technologies Q2 Performance | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Sales ($M) | $280.2 | $237.6 | +17.9% | | Segment Operating Profit ($M) | $53.5 | $41.2 | +29.9% | | Segment Operating Profit Margin | 19.1% | 17.3% | +180 bps | - The strong performance was attributed to high demand for convenience retail payment and enterprise productivity solutions, which was partially offset by anticipated lower demand for car wash technologies[7] Repair Solutions Repair Solutions sales were flat at $150.8 million, with operating profit margin declining 50 bps to 20.8% due to macroeconomic pressures on discretionary spending Repair Solutions Q2 Performance | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Sales ($M) | $150.8 | $150.8 | 0% | | Segment Operating Profit ($M) | $31.4 | $32.1 | -2.2% | | Segment Operating Profit Margin | 20.8% | 21.3% | -50 bps | - Performance was impacted by macroeconomic pressures affecting service technicians' discretionary spending, which was not fully offset by the 2025 Matco Expo performance[8] 2025 Outlook Vontier raised full-year 2025 adjusted diluted EPS guidance to $3.10-$3.20 and total sales to $3,020-$3,070 million, with Q3 adjusted diluted EPS projected at $0.74-$0.78 Full Year 2025 Outlook | Metric | Guidance | | :--- | :--- | | Total Sales | $3,020 to $3,070 million | | Core Sales Midpoint | Approx. +2% | | Adjusted Operating Profit Margin | Expansion of 20 to 40 bps YoY | | Adjusted Diluted Net EPS | $3.10 to $3.20 | | Adjusted Free Cash Flow Conversion | Approx. 100% | Q3 2025 Outlook | Metric | Guidance | | :--- | :--- | | Total Sales | $745 to $755 million | | Core Sales Midpoint | Approx. flat | | Adjusted Operating Profit Margin | Flat to down 50 bps YoY | | Adjusted Diluted Net EPS | $0.74 to $0.78 | Other Corporate Items Vontier repurchased 1.4 million shares for $50 million in Q2, maintained a 2.5x net leverage ratio, and completed the Sergeant Sudz acquisition - Share Repurchase: The company bought back ~1.4 million shares for ~$50 million during Q2, with a year-to-date total of $105 million[12] - Financial Position: Ended Q2 with a net leverage ratio of 2.5x[12] - Acquisition: Completed the acquisition of Sergeant Sudz[12] Consolidated Financial Statements Consolidated financial statements show Vontier's total assets at $4.38 billion, with Q2 net earnings of $91.9 million and six-month operating cash flow of $210.4 million Consolidated Balance Sheets As of June 27, 2025, Vontier's total assets were $4.38 billion, total liabilities $3.17 billion, and stockholders' equity increased to $1.20 billion Key Balance Sheet Items (in millions) | Account | June 27, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Current Assets | $1,418.0 | $1,370.0 | | Total Assets | $4,375.8 | $4,310.5 | | Total Current Liabilities | $1,311.3 | $909.2 | | Total Liabilities | $3,167.0 | $3,250.6 | | Total Vontier Stockholders' Equity | $1,201.6 | $1,051.1 | Consolidated Statements of Earnings Q2 2025 sales increased to $773.5 million, with net earnings rising to $91.9 million, or $0.62 per diluted share, compared to Q2 2024 Q2 Earnings Summary (in millions, except per share) | Account | Three Months Ended June 27, 2025 | Three Months Ended June 28, 2024 | | :--- | :--- | :--- | | Sales | $773.5 | $696.4 | | Operating Profit | $136.4 | $114.1 | | Net Earnings | $91.9 | $70.1 | | Diluted EPS | $0.62 | $0.45 | Consolidated Statements of Cash Flows Six-month operating cash flow was $210.4 million, with $44.7 million used in investing and $174.6 million used in financing activities Six-Month Cash Flow Summary (in millions) | Account | Six Months Ended June 27, 2025 | Six Months Ended June 28, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $210.4 | $137.6 | | Net cash (used in) provided by investing activities | $(44.7) | $23.9 | | Net cash used in financing activities | $(174.6) | $(167.5) | | Ending balance of cash and cash equivalents | $364.2 | $331.3 | Reconciliation of GAAP to Non-GAAP Financial Measures This section reconciles GAAP to non-GAAP financial measures, detailing adjustments for amortization, restructuring, and currency impacts to provide a clearer view of underlying business performance Components of Sales Growth Q2 2025 total sales growth of 11.1% was primarily driven by 10.8% core sales growth, with minor positive impacts from currency and acquisitions Components of Sales Growth (% Change Q2 2025 vs. Q2 2024) | Component | Mobility Technologies | Repair Solutions | Environmental & Fueling Solutions | Total | | :--- | :--- | :--- | :--- | :--- | | Total Sales Growth (GAAP) | 17.9% | —% | 16.2% | 11.1% | | Core sales growth (Non-GAAP) | 17.8% | —% | 15.7% | 10.8% | Reconciliation of Operating Profit to Adjusted Operating Profit Q2 2025 GAAP Operating Profit of $136.4 million was adjusted to $163.4 million Non-GAAP Adjusted Operating Profit, primarily due to $19.2 million in amortization Operating Profit Reconciliation (Q2 2025, in millions) | Line Item | Amount | | :--- | :--- | | Operating Profit (GAAP) | $136.4 | | Amortization of acquisition-related intangible assets | $19.2 | | Restructuring- and divestiture-related adjustments | $2.6 | | Asbestos-related adjustments | $4.0 | | Other adjustments | $1.2 | | Adjusted Operating Profit (Non-GAAP) | $163.4 | Reconciliation of Net Earnings to Adjusted Net Earnings Q2 2025 GAAP Net Earnings of $91.9 million ($0.62/share) were reconciled to Non-GAAP Adjusted Net Earnings of $116.7 million ($0.79/share) after pre-tax adjustments Net Earnings Reconciliation (Q2 2025, in millions) | Line Item | Amount | | :--- | :--- | | Net Earnings (GAAP) | $91.9 | | Pre-tax Non-GAAP adjustments | $27.0 | | Tax effect of adjustments | $(2.2) | | Adjusted Net Earnings (Non-GAAP) | $116.7 | Reconciliation of Operating Cash Flow to Free Cash Flow Q2 2025 GAAP Operating Cash Flow of $100.0 million converted to $88.5 million Adjusted Free Cash Flow, resulting in a 75.8% conversion rate Free Cash Flow Reconciliation (Q2 2025, in millions) | Line Item | Amount | | :--- | :--- | | Operating Cash Flow (GAAP) | $100.0 | | Less: Capital expenditures | $(16.7) | | Free Cash Flow (Non-GAAP) | $83.3 | | Adjustments (Restructuring, etc.) | $5.2 | | Adjusted Free Cash Flow (Non-GAAP) | $88.5 | Net Leverage Ratio and Reconciliation to Adjusted EBITDA As of Q2 2025, Vontier's net leverage ratio was 2.5x, based on net debt of $1,736.8 million and LTM Adjusted EBITDA of $704.6 million Net Leverage Ratio Calculation (as of June 27, 2025) | Metric | Value (in millions) | | :--- | :--- | | Total Debt | $2,101.0 | | Less: Cash | $(364.2) | | Net Debt | $1,736.8 | | Adjusted EBITDA (LTM) | $704.6 | | Net Leverage Ratio | 2.5x |