Veralto (US:VLTO)2026-02-03 21:30Sales Performance - Fourth quarter 2025 sales increased by 3.8% year-over-year to $1,396 million, with non-GAAP core sales growth of 1.6%[7] - Full year 2025 sales reached $5,503 million, reflecting a 6.0% year-over-year increase, with non-GAAP core sales growth of 4.7%[7] - Total sales for the three-month period ended December 31, 2025, reached $1,396 million, a 3.8% increase compared to $1,345 million in the same period of 2024[24] - For the year ended December 31, 2025, total sales were $5,503 million, representing a 6.0% growth compared to $5,193 million in 2024[29] - Water Quality segment sales increased to $846 million, while Product Quality & Innovation segment sales rose to $550 million, reflecting growth rates of 4.3% and 3.0% respectively[35] - Core sales growth for the three-month period was 1.6%, with Water Quality at 1.4% and Product Quality & Innovation at 1.8%[35] - The impact of currency exchange rates negatively affected total sales growth by 2.5% for the three-month period ended December 31, 2025[35] Earnings and Profitability - Adjusted diluted earnings per share for the full year 2025 were $3.90, up from $3.34 in 2024, representing a growth of 16.7%[7] - Operating profit for the same period was $316 million, with an operating profit margin of 22.6%, slightly down from 22.9% in the previous year[26] - Adjusted operating profit for the year was $1,337 million, with an adjusted operating profit margin of 24.3%[29] - The company reported a diluted net earnings per share of $1.01 for the three-month period ended December 31, 2025, up from $0.91 in the same period of 2024[26] - The adjusted (non-GAAP) diluted net earnings per share for the year ended December 31, 2025, was $3.90, compared to $3.54 in 2024[29] - Adjusted diluted net earnings per share for the three-month period is estimated to be between $0.97 and $1.01[42] - For the year ending December 31, 2026, adjusted diluted net earnings per share is expected to range from $4.10 to $4.20[42] Cash Flow and Financial Management - The company generated over $1 billion in free cash flow for the full year 2025[4] - Operating cash flow for 2025 was $1,077 million, with non-GAAP free cash flow at $1,014 million[7] - Net cash provided by operating activities for the three-month period ended December 31, 2025, was $311 million, a year-over-year increase of ~9.0%[44] - Free cash flow for the same period was $291 million, reflecting a year-over-year increase of ~10.5%[44] - The operating cash flow to net earnings conversion ratio for the year ended December 31, 2025, was 1.22[44] - Free cash flow to net earnings conversion ratio for the year ended December 31, 2025, was 1.15[44] - The company expects adjusted diluted earnings per share in the range of $4.10 to $4.20 for 2026, with free cash flow conversion of approximately 100% of GAAP net earnings[9] - Free cash flow to net earnings conversion ratio is projected to be approximately 100%[42] Future Guidance and Strategic Initiatives - For Q1 2026, the company anticipates non-GAAP core sales growth to be flat to low-single digits year-over-year, with adjusted operating profit margin around 24.5%[5] - Full year 2026 guidance projects non-GAAP core sales growth in the low-to-mid-single digits and an adjusted operating profit margin expansion of approximately 25 basis points[6] - Forecasted core sales growth for the three-month period ending April 3, 2026, is expected to be approximately flat to low-single digits compared to the comparable 2025 period[42] - For the year ending December 31, 2026, core sales growth is anticipated to be in the low-to-mid-single digits compared to the 2025 period[42] - The company completed the acquisition of In-Situ in January 2026, enhancing its water analytics portfolio[4] - A $750 million share repurchase program was established, alongside an 18% increase in the dividend[4] - The company incurred $4 million in costs related to strategic initiatives during the three-month period ended December 31, 2025[32]