Key Highlights

  • Sales rose 7.5% to $1,509 million, with core sales growth of 5.1%.
  • Diluted EPS was $1.03, compared with $0.95 a year earlier.
  • Operating profit fell to $298 million from $326 million, a Margin of 19.7% versus 23.2%.
  • Water Quality sales grew 9.8% to $939 million, with core sales up 6.4%.
  • The company repurchased about $89 million of stock in the quarter and $523 million over nine months.

Sales climb 7.5% on pricing, Volume and acquisitions

Veralto (NYSE:VLTO) is a Waltham, Massachusetts company that was separated from Danaher (NYSE:DHR) on September 30, 2023. It provides water analytics, water treatment, marking and coding, and packaging and color technology to municipal utilities and to food, beverage, pharmaceutical and industrial customers. It filed its third quarter 2026 report for the period ended October 2, 2026 on October 30, 2026.

Sales were $1,509 million, up 7.5% from $1,404 million. Core sales rose 5.1%, with acquisitions adding 2.3% and currency 0.1%, and price increases contributed 2.3% to growth. Gross Profit was $908 million, a margin of 60.2% compared with 60.1%.

Water Quality drives the growth

Water Quality sales increased 9.8% to $939 million, and core sales rose 6.4%. Core sales of the chemical treatment solutions Business rose 11.6%, ultraviolet water disinfection and filtration rose 9.9%, and analytical instrumentation rose 4.0%. North America core sales in the segment grew 8.8%, while high-growth markets declined 1.1%.

Segment operating profit was $226 million, up from $222 million, and the margin was 24.1% against 25.9%. The company attributed the margin decline to Acquisition transaction costs, restructuring charges and the dilutive effect of acquisitions.

Product Quality & Innovation grows more slowly

Product Quality & Innovation sales rose to $570 million from $548 million, with core sales up 3.2%. Marking and coding core sales rose 3.0%, and packaging and color solutions core sales rose 3.5%, which the company tied to pricing and higher volume.

Operating profit was $136 million versus $133 million, a margin of 23.9%. Restructuring charges tied to the 2026 Cost Optimization Program weighed on the segment's margin by 280 basis points.

Operating profit slips while net Earnings rise

Operating profit fell to $298 million from $326 million. Selling, general and administrative expenses rose to $541 million from $451 million, or 35.9% of sales versus 32.1%, driven by restructuring costs, a reduction of a tax indemnification related to the Danaher separation, higher labor costs and growth initiatives. Research and Development expenses were $69 million.

Net earnings still increased to $253 million from $239 million because income taxes fell to $20 million from $67 million, helped by a net discrete tax benefit of $47 million. Diluted EPS rose to $1.03 from $0.95, with diluted shares down to 245.3 million from 250.6 million. For the nine months, net earnings were $748 million, or $3.03 per diluted share, against $686 million, or $2.74.

Acquisitions, Debt and Capital returns

Veralto completed the Cleanwater1 acquisition on October 5, 2026 for $465 million. Cleanwater1 provides on-site hypochlorite disinfection, solids management and odor control technologies with an installed base of about 25,000 units. Earlier in 2026 the company bought In-Situ for approximately $426 million and GlobalVision for approximately $195 million.

Operating cash flow for the nine months was $845 million, up from $766 million. Cash and cash equivalents were $1,785 million at October 2, 2026, and total debt was $2,920 million. During the quarter the company repaid $700 million of notes due September 2026 and issued $250 million of Commercial Paper to fund Cleanwater1. A quarterly Dividend of $0.13 per share was declared, payable October 30, 2026.

Readers may watch how integration costs and restructuring affect margins and whether chemical treatment growth carries into the Cleanwater1 era.