Veralto (NYSE: VLTO) lifts 2026 EPS guidance after $1,474 million Q2 sales
Rhea-AI Filing Summary
Veralto Corporation reported second quarter 2026 results with sales of $1,474 million, up 7.6% year-over-year, and non-GAAP core sales growth of 4.2%. GAAP net earnings were $241 million, or $0.98 per diluted share, while adjusted net earnings were $274 million, or $1.11 per diluted share, including about $0.05 per share of benefit from IEEPA tariff recoveries.
Operating profit margin was 21.4%, or 24.6% on an adjusted basis. Water Quality delivered 5.7% core sales growth and Product Quality and Innovation 2.0%. Veralto generated $340 million of operating cash flow and $328 million of free cash flow, supported by recent bolt-on acquisitions and share repurchases.
Management guides third quarter 2026 non-GAAP core sales growth to 4.0%–5.0% with adjusted EPS of $1.06–$1.09. For full year 2026, guidance was raised to core sales growth of 4.0%–4.5% and adjusted EPS of $4.35–$4.43, implying 12%–14% year-over-year growth and free cash flow conversion above 100% of GAAP net earnings.
Positive
- Raised 2026 adjusted EPS guidance to $4.35–$4.43, up from $4.20–$4.28, implying 12%–14% year-over-year growth and indicating confidence in earnings momentum.
- Second quarter adjusted diluted EPS of $1.11 increased 19% year-over-year, alongside 7.6% sales growth and free cash flow of $328 million.
Negative
- None.
Filing Explained
The July 28 Form 8-K furnishes Veralto’s second-quarter results under Item 2.02, rather than reporting a new securities transaction; the release is not deemed “filed” for Section 18 purposes or incorporated by reference unless separately specified.
8-K Event Classification
2 items: 2.02, 9.01
2 items
Item 2.02
Results of Operations and Financial Condition
Financial
Disclosure of earnings results, typically an earnings press release or preliminary financials.
Item 9.01
Financial Statements and Exhibits
Exhibits
Financial statements, pro forma financial information, and exhibit attachments filed with this report.
Key Figures
Q2 2026 Sales: $1,474 million
Q2 2026 Net Earnings: $241 million
Q2 2026 GAAP Diluted EPS: $0.98
+5 more
8 metrics
Q2 2026 Sales
$1,474 million
Sales for the three-month period ended July 3, 2026
Q2 2026 Net Earnings
$241 million
GAAP net earnings for the three-month period ended July 3, 2026
Q2 2026 GAAP Diluted EPS
$0.98
Diluted net earnings per common share for Q2 2026
Q2 2026 Adjusted Diluted EPS
$1.11
Non-GAAP adjusted diluted EPS for the three-month period ended July 3, 2026
Q2 2026 Operating Cash Flow
$340 million
Net cash provided by operating activities in Q2 2026
Q2 2026 Free Cash Flow
$328 million
Non-GAAP free cash flow in the three-month period ended July 3, 2026
2026 Adjusted EPS Guidance
$4.35–$4.43
Full-year 2026 adjusted diluted EPS guidance range
Free Cash Flow Margin
18.4%
Trailing twelve month free cash flow margin as of July 3, 2026
Key Terms
core sales growth, International Emergency Economic Powers Act, free cash flow, adjusted operating profit margin, +1 more
5 terms
core sales growth financial
"Core sales growth (non-GAAP) was 4.2% year-over-year."
Core sales growth measures how a company’s regular, ongoing revenue changes over time after removing one-off or temporary effects such as large acquisitions, divestitures, major currency swings, or discontinued product lines. Think of it as the temperature of the business itself rather than the weather — it shows whether underlying customer demand is rising or falling, which helps investors judge the durability of revenue and compare performance across periods or peers.
International Emergency Economic Powers Act regulatory
"Includes benefits from recoveries of tariffs under the International Emergency Economic Powers Act."
A U.S. law that gives the president broad authority to control trade, financial transactions, and assets during a declared national emergency, such as by imposing sanctions, freezing property, or restricting exports and imports. For investors it matters because those powers can suddenly block deals, cut off access to markets or funds, and change the value of companies or securities much like an emergency brake that can stop or reroute economic activity overnight.
free cash flow financial
"Operating cash flow was $340 million and non-GAAP free cash flow was $328 million."
Free cash flow is the amount of money a company has left over after paying all its expenses and investing in its business, like buying equipment or updating facilities. It shows how much cash is available to reward shareholders, pay down debt, or save for future growth. This helps investors understand if a company is financially healthy and able to grow.
adjusted operating profit margin financial
"Adjusted operating profit margin was 24.6% in the second quarter."
Adjusted operating profit margin measures the share of each dollar of sales a company keeps from its core business after removing the effects of one-time or non-recurring items (for example, unusual charges or gains). It matters to investors because it shows the underlying efficiency and profitability of ongoing operations—like checking a car’s fuel efficiency after excluding rare detours—making results easier to compare across periods and companies.
discrete tax adjustments financial
"Discrete tax adjustments relate to changes in estimates for prior period uncertain tax positions."
Earnings Snapshot
Sales: $1,474 million · Guidance included
Second quarter ended July 3, 2026
Sales
$1,474 million
Sales increased 7.6% year-over-year.
GAAP diluted EPS
$0.98
Diluted EPS was $0.98 compared to $0.89 in the prior-year quarter.
Adjusted diluted EPS
$1.11
Management stated adjusted earnings per share increased 19% year-over-year.
Free cash flow
$328 million
Free cash flow grew by approximately 1.5% year-over-year.
2026 adjusted EPS guidance
$4.35–$4.43
Raised from the prior guidance range of $4.20–$4.28 per share.
Guidance
For Q3 2026, Veralto expects non-GAAP core sales growth of 4.0%–5.0% year-over-year, adjusted operating profit margin expansion of about 25 basis points, and adjusted diluted EPS of $1.06–$1.09 per share. For full year 2026, the company guides to non-GAAP core sales growth of 4.0%–4.5%, adjusted operating profit margin expansion of 25–50 basis points including IEEPA tariff refunds, adjusted diluted EPS of $4.35–$4.43, and free cash flow conversion greater than 100% of GAAP net earnings.
AI-generated analysis. How Rhea-AI works. Not financial advice.
FAQ
What were Veralto (VLTO)'s second quarter 2026 sales and earnings?
Veralto reported Q2 2026 sales of $1,474 million and net earnings of $241 million, or $0.98 per diluted share. Adjusted net earnings were $274 million, equal to $1.11 per diluted share, reflecting tariff refund benefits and operating improvements.
How fast did Veralto (VLTO)'s sales and adjusted EPS grow in Q2 2026?
Total sales grew 7.6% year-over-year to $1,474 million, with non-GAAP core sales up 4.2%. Adjusted diluted EPS reached $1.11, which management stated represented a 19% year-over-year increase driven by growth in both operating segments.
What guidance did Veralto (VLTO) give for third quarter 2026?
For Q3 2026, Veralto expects non-GAAP core sales growth of 4.0%–5.0% year-over-year and adjusted operating margin expansion of about 25 basis points. Adjusted diluted EPS guidance is $1.06 to $1.09 per share for the quarter.
How did Veralto (VLTO) change its full-year 2026 outlook?
Veralto raised full-year 2026 guidance to non-GAAP core sales growth of 4.0%–4.5% and adjusted diluted EPS of $4.35–$4.43. The prior adjusted EPS range was $4.20–$4.28, and the new range implies 12%–14% year-over-year earnings growth.
What were Veralto (VLTO)'s Q2 2026 cash flow and free cash flow figures?
In Q2 2026, Veralto generated $340 million of operating cash flow and $328 million of free cash flow. Free cash flow increased by roughly 1.5% year-over-year, and management targets free cash flow conversion above 100% of GAAP net earnings for 2026.
How did Veralto (VLTO)'s segments perform in Q2 2026?
Non-GAAP core sales grew 5.7% in Water Quality and 2.0% in Product Quality and Innovation. Management cited strong demand in industrial water treatment, water reuse and environmental monitoring, and steady demand for marking, coding and digital workflow solutions.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________________________________________
FORM 8-K
______________________________________________________
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D)
PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported):
______________________________________________________
(Exact Name of Registrant as Specified in Its Charter)
______________________________________________________
(State or Other Jurisdiction of Incorporation)
(Commission File Number) | (IRS Employer Identification No.) | |||||||
(Address of Principal Executive Offices) | (Registrant’s Telephone Number, Including Area Code) | |||||||
Not applicable
(Former Name or Former Address, if Changed Since Last Report)
(Former Name or Former Address, if Changed Since Last Report)
______________________________________________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
ITEM 2.02 | RESULTS OF OPERATIONS AND FINANCIAL CONDITION | ||||
On July 28, 2026, Veralto Corporation (“Veralto”) issued a press release announcing financial results for the quarter ended July 3, 2026. A copy of the release is furnished herewith as Exhibit 99.1 and incorporated by reference herein. This Current Report on Form 8-K and the press release attached hereto are being furnished by Veralto pursuant to Item 2.02 of Form 8-K.
This information shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
Item 9.01. Financial Statements and Exhibits.
(d) | Exhibits | ||||
Exhibit No. | Description | ||||
99.1 | Press release — “Veralto Reports Second Quarter 2026 Results” | ||||
104 | Cover Page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibit 101) | ||||
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
VERALTO CORPORATION | ||||||||
Date: July 28, 2026 | By: | /s/ James A. Tanaka | ||||||
Name: James A. Tanaka | ||||||||
Title: Corporate Secretary and Vice President, M&A, Securities & Governance | ||||||||
Exhibit 99.1
Veralto Reports Second Quarter 2026 Results
WALTHAM, Mass., (July 28, 2026) – Veralto (NYSE: VLTO) (the “Company”), a global leader in essential water and product quality solutions dedicated to Safeguarding the World's Most Vital Resources™, announced results for the second quarter ended July 3, 2026.
Key Second Quarter 2026 Results:
•Sales increased 7.6% year-over-year to $1,474 million, with non-GAAP core sales growth of 4.2%
•Operating profit margin was 21.4% and non-GAAP adjusted operating profit margin was 24.6%
•Net earnings were $241 million, or $0.98 per diluted common share
•Non-GAAP, adjusted net earnings were $274 million, or $1.11 per diluted common share
•Operating cash flow was $340 million and non-GAAP free cash flow was $328 million
•These second quarter results include benefits from recoveries of tariffs previously collected under the International Emergency Economic Powers Act (“IEEPA”) of approximately $0.05 per share
"In the second quarter, total sales grew approximately 8%, adjusted earnings per share increased 19%, and we generated robust free cash flow. We delivered 4.2% core sales growth year-over-year, led by Water Quality at 5.7%, with sequential acceleration in both segments. We continue to advance long-term value creation through strategic bolt-on acquisitions - including In-Situ, GlobalVision and, most recently, Alfaa UV - as well as opportunistic share repurchases. These actions reflect the accelerating growth profile of our portfolio, our VES-driven execution and commitment to disciplined capital allocation," said Jennifer L. Honeycutt, President and Chief Executive Officer.
Honeycutt continued, "In Water Quality, we continue to benefit from strong demand across industrial water treatment, water reuse initiatives and environmental water monitoring workflows. Demand for water analytics supporting the daily operations of our municipal customers remains steady. In PQI, demand also remains steady for our marking and coding solutions, while our digital workflow solutions in packaging and color continue to deliver strong underlying growth. We expect PQI core sales growth to accelerate meaningfully in the second half, driven by increasing adoption of digital workflow solutions and contributions from recent product launches.”
"Looking ahead, we expect total year-over-year core sales growth to accelerate to approximately 5% to 6% in the second half of the year. Reflecting this momentum and our strong first half performance, we increased our full-year adjusted earnings per share guidance to $4.35 to $4.43, representing 12% to 14% year-over-year growth. Supported by a strong balance sheet and robust cash generation, we remain focused on compounding long-term shareholder value through high-quality growth, VES-driven execution and disciplined capital allocation," concluded Honeycutt.
2026 Guidance
The Company provides forecasted sales guidance on a non-GAAP basis because of the difficulty in estimating the other components of GAAP sales, such as currency translation, acquisitions, and divestitures.
For the third quarter of 2026, the Company anticipates non-GAAP core sales growth in the range of 4.0% to 5.0% year-over-year with adjusted operating profit margin expansion of approximately 25 basis points year-over-year. The Company’s third quarter adjusted diluted earnings per share guidance is in the range of $1.06 to $1.09 per share.
For the full year 2026, the Company raised its non-GAAP core sales growth to a range of 4.0% to 4.5% year-over-year, up from the prior guidance range of 3.0% to 4.5%. Adjusted operating profit margin is expected to expand 25 to 50 basis points year-over-year, including the benefit of IEEPA tariff refunds received in the second quarter. The Company raised its guidance for adjusted diluted earnings to a range of $4.35 to $4.43 per share, up from the prior
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guidance range of $4.20 to $4.28 per share. This includes a $0.05 per share benefit related to IEEPA tariff refunds received in the second quarter. Free cash flow conversion guidance has been increased to greater than 100% of GAAP net earnings.
Conference Call and Webcast Information
Veralto will webcast its second quarter 2026 earnings conference call tomorrow starting at 7:30 a.m. (ET). Access to the webcast, slide presentation and prepared remarks will be available on the “Investors” section of Veralto’s website, www.veralto.com, under the subheading “News & Events” and additional materials will be posted to the same section of Veralto’s website. A replay of the webcast will be available in the same section of Veralto’s website shortly after the conclusion of the call and will remain available until the next quarterly earnings call.
The conference call can be accessed by dialing +1 (833) 309-3473 (U.S.) or +1 (785) 838-9251 (INTL) (Conference ID: VLTO2Q26). A replay of the conference call will be available shortly after the conclusion of the call and until August 7, 2026. You can access the replay dial-in information on the “Investors” section of Veralto’s website under the subheading “News & Events.”
ABOUT VERALTO
With annual sales of approximately $5.5 billion, Veralto is a global leader in essential technology solutions with a proven track record of solving some of the most complex challenges we face as a society. Our industry-leading companies with globally recognized brands help billions of people around the world access clean water, safe food and trusted essential goods. Headquartered in Waltham, Massachusetts, our global team of approximately 17,000 associates is committed to making an enduring positive impact on our world and united by a powerful purpose: Safeguarding the World's Most Vital Resources™.
NON-GAAP MEASURES AND SUPPLEMENTAL MATERIALS
In addition to the financial measures prepared in accordance with generally accepted accounting principles (GAAP), this earnings release also contains non-GAAP financial measures. Calculations of these measures, the reasons why we believe these measures provide useful information to investors, a reconciliation of these measures to the most directly comparable GAAP measures, as applicable, and other information relating to these non-GAAP measures are included in the supplemental reconciliation schedule attached.
In addition, this earnings release, the slide presentation accompanying the related earnings call, non-GAAP reconciliations and a note containing details of historical and anticipated, future financial performance have been posted to the “Investors” section of Veralto’s website (www.veralto.com) under the subheading “Quarterly Earnings.”
FORWARD-LOOKING STATEMENTS
Certain statements in this release, including the statement regarding the Company's anticipated third quarter and full year 2026 financial performance, the Company’s differentiation and positioning to continue delivering sustainable, long-term shareholder value and any other statements regarding events or developments that we believe or anticipate will or may occur in the future are "forward-looking" statements within the meaning of the federal securities laws. All statements other than historical factual information are forward-looking statements, including, without limitation, statements regarding: projections of revenue, expenses, profit, profit margins, asset values, pricing, tax rates, tax provisions, cash flows, pension and benefit obligations and funding requirements, Veralto’s liquidity position or other projected financial measures; Veralto’s management’s plans and strategies for future operations, including statements relating to anticipated operating performance, customer demand, cost reductions, restructuring activities, new product and service developments, competitive strengths or market position, acquisitions and the integration thereof, divestitures, spin-offs, split-offs, initial public offerings, other securities offerings or other distributions, strategic opportunities, stock repurchases, dividends and executive compensation; growth, declines and other trends in markets Veralto sells into, the impact of global trade policies, tariffs, restrictions on imports, related countermeasures and reciprocal tariffs; future new or modified laws, regulations, accounting pronouncements or public policy changes; regulatory approvals and the timing and conditionality thereof; outstanding claims, legal proceedings, tax audits and assessments and other contingent liabilities; future foreign currency exchange rates and fluctuations in those rates; results of operations and/or financial condition; general economic and capital markets conditions; the anticipated timing of any of the foregoing; assumptions underlying any of the foregoing; and any other statements that address events or developments that Veralto intends or believes will or may occur in the future. Additional information regarding the factors that may cause actual results to differ materially from these forward-looking statements is available in our SEC filings. These forward-looking statements
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speak only as of the date of this release and except to the extent required by applicable law, the Company does not assume any obligation to update or revise any forward-looking statement, whether as a result of new information, future events and developments or otherwise.
Investor Relations Contact:
Ryan Taylor
Vice President, Investor Relations
investors@veralto.com
Media Relations Contact:
Steve Field
Vice President, Communications
steve.field@veralto.com
3
VERALTO CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS
($ and shares in millions, except per share amounts)
(unaudited)
Three-Month Period Ended | Six-Month Period Ended | ||||||||||||||||||||||
July 3, 2026 | July 4, 2025 | July 3, 2026 | July 4, 2025 | ||||||||||||||||||||
Sales | $ | 1,474 | $ | 1,371 | $ | 2,896 | $ | 2,703 | |||||||||||||||
Cost of sales | (572) | (549) | (1,140) | (1,076) | |||||||||||||||||||
Gross profit | 902 | 822 | 1,756 | 1,627 | |||||||||||||||||||
Operating costs: | |||||||||||||||||||||||
Selling, general and administrative expenses | (514) | (442) | (962) | (861) | |||||||||||||||||||
Research and development expenses | (73) | (67) | (141) | (131) | |||||||||||||||||||
Operating profit | 315 | 313 | 653 | 635 | |||||||||||||||||||
Nonoperating income (expense): | |||||||||||||||||||||||
Other income (expense), net | 1 | — | 8 | (6) | |||||||||||||||||||
Interest expense, net | (27) | (28) | (51) | (55) | |||||||||||||||||||
Earnings before income taxes | 289 | 285 | 610 | 574 | |||||||||||||||||||
Income taxes | (48) | (63) | (115) | (127) | |||||||||||||||||||
Net earnings | $ | 241 | $ | 222 | $ | 495 | $ | 447 | |||||||||||||||
Net earnings per common share: | |||||||||||||||||||||||
Basic | $ | 0.98 | $ | 0.89 | $ | 2.01 | $ | 1.80 | |||||||||||||||
Diluted | $ | 0.98 | $ | 0.89 | $ | 2.00 | $ | 1.79 | |||||||||||||||
Average common stock and common equivalent shares outstanding: | |||||||||||||||||||||||
Basic | 245.2 | 248.2 | 246.4 | 248.0 | |||||||||||||||||||
Diluted | 245.8 | 249.9 | 247.5 | 250.0 | |||||||||||||||||||
This information is presented for reference only.
4
VERALTO CORPORATION
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
Reconciliation of GAAP to Non-GAAP Financial Measures
($ in millions)
Three-Month Period Ended July 3, 2026 | |||||||||||||||||||||||||||||
Sales | Operating profit | Operating profit margin | Net earnings for calculation of diluted net earnings per common share | Diluted net earnings per common share | |||||||||||||||||||||||||
Reported (GAAP) | $ | 1,474 | $ | 315 | 21.4 | % | $ | 241 | $ | 0.98 | |||||||||||||||||||
Amortization of acquisition-related intangible assets A | — | 17 | 1.2 | 17 | 0.07 | ||||||||||||||||||||||||
Restructuring B | — | 29 | 2.0 | 29 | 0.12 | ||||||||||||||||||||||||
Other items C | — | 2 | 0.1 | 2 | 0.01 | ||||||||||||||||||||||||
Tax effect of the above adjustments D | — | — | — | (11) | (0.04) | ||||||||||||||||||||||||
Discrete tax adjustments E | — | — | — | (4) | (0.02) | ||||||||||||||||||||||||
Rounding | — | — | (0.1) | — | (0.01) | ||||||||||||||||||||||||
Adjusted (Non-GAAP) | $ | 1,474 | $ | 363 | 24.6 | % | $ | 274 | $ | 1.11 | |||||||||||||||||||
Three-Month Period Ended July 4, 2025 | |||||||||||||||||||||||||||||
Sales | Operating profit | Operating profit margin | Net earnings for calculation of diluted net earnings per common share | Diluted net earnings per common share | |||||||||||||||||||||||||
Reported (GAAP) | $ | 1,371 | $ | 313 | 22.8 | % | $ | 222 | $ | 0.89 | |||||||||||||||||||
Amortization of acquisition-related intangible assets A | — | 9 | 0.7 | 9 | 0.04 | ||||||||||||||||||||||||
Other items C | — | 3 | 0.2 | 3 | 0.01 | ||||||||||||||||||||||||
Tax effect of the above adjustments D | — | — | — | (2) | (0.01) | ||||||||||||||||||||||||
Adjusted (Non-GAAP) | $ | 1,371 | $ | 325 | 23.7 | % | $ | 232 | $ | 0.93 | |||||||||||||||||||
5
VERALTO CORPORATION
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
Notes to Reconciliation of GAAP to Non-GAAP Financial Measures
($ in millions)
A Amortization of acquisition-related intangible assets in the following historical periods (only the pretax amounts set forth below are reflected in the amortization line item above):
Three-Month Period Ended | |||||||||||
July 3, 2026 | July 4, 2025 | ||||||||||
Pretax | $ | 17 | $ | 9 | |||||||
After-tax | 14 | 7 | |||||||||
B Costs incurred during the three-month period ended July 3, 2026 related to the 2026 Cost Optimization Program ($29 million pretax as reported in this line item, $21 million after-tax).
C Costs incurred during the three-month periods ended July 3, 2026 and July 4, 2025 related to certain strategic initiatives ($2 million pretax and after-tax, and $3 million pretax and after-tax as reported in this line item, respectively).
D This line item reflects the aggregate tax effect of all nontax adjustments reflected in the preceding line items of the table. In addition, the footnotes above indicate the after-tax amount of each individual adjustment item. Veralto estimates the tax effect of each adjustment item by applying Veralto’s overall estimated effective tax rate to the pretax amount, unless the nature of the item and/or the tax jurisdiction in which the item has been recorded requires application of a specific tax rate or tax treatment, in which case the tax effect of such item is estimated by applying such specific tax rate or tax treatment.
E Discrete tax matters relate to changes in estimates associated with prior period uncertain tax positions, audit settlements and excess tax benefits from stock-based compensation.
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VERALTO CORPORATION
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
Sales Growth by Segment, Core Sales Growth by Segment
% Change Three-Month Period Ended July 3, 2026 vs. Comparable 2025 Period | |||||||||||||||||
Segments | |||||||||||||||||
Total Company | Water Quality | Product Quality and Innovation | |||||||||||||||
Total sales growth (GAAP) | 7.6 | % | 10.1 | % | 3.8 | % | |||||||||||
Impact of: | |||||||||||||||||
Acquisitions/divestitures | (2.4) | % | (3.2) | % | (1.2) | % | |||||||||||
Currency exchange rates | (1.0) | % | (1.2) | % | (0.6) | % | |||||||||||
Core sales growth (non-GAAP) | 4.2 | % | 5.7 | % | 2.0 | % | |||||||||||
7
VERALTO CORPORATION
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
Forecasted Core Sales Growth, Adjusted Operating Profit Margin, Adjusted Diluted Net Earnings per Share and Free Cash Flow to Net Earnings Conversion Ratio
The Company provides forecasted sales only on a non-GAAP basis because of the difficulty in estimating the other components of GAAP revenue, such as currency translation, acquisitions and divested product lines. Additionally, we do not reconcile adjusted operating profit margin (or components thereof), adjusted diluted earnings per share or free cash flow to net earnings conversion ratio to the comparable GAAP measures because of the difficulty in estimating the other unknown components such as investment gains and losses, impairments and separation costs, which would be reflected in any forecasted GAAP operating profit, forecasted diluted earnings per share or forecasted net earnings ratio.
% Change Three-Month Period Ending October 2, 2026 vs. Comparable 2025 Period | |||||
Core sales growth (non-GAAP) | +4.0% to 5.0% | ||||
Three-Month Period Ending October 2, 2026 | |||||
Adjusted Operating Profit Margin (non-GAAP) | +25 basis points | ||||
Adjusted Diluted Net Earnings per Share (non-GAAP) | $1.06 to $1.09 | ||||
% Change Year Ending December 31, 2026 vs. Comparable 2025 Period | |||||
Core sales growth (non-GAAP) | +4.0% to 4.5% | ||||
Year Ending December 31, 2026 | |||||
Adjusted Operating Profit Margin (non-GAAP) | +25 to 50 basis points | ||||
Adjusted Diluted Net Earnings per Share (non-GAAP) | $4.35 to $4.43 | ||||
Free cash flow to net earnings conversion ratio (non-GAAP) | >100% | ||||
8
VERALTO CORPORATION
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
Cash Flow and Free Cash Flow
($ in millions)
Three-Month Period Ended | Year-over-Year Change | ||||||||||||||||
July 3, 2026 | July 4, 2025 | ||||||||||||||||
Total Cash Flows (GAAP): | |||||||||||||||||
Net cash provided by operating activities (GAAP) | $ | 340 | $ | 339 | |||||||||||||
Total cash used in investing activities (GAAP) | $ | (206) | $ | (40) | |||||||||||||
Total cash used in financing activities (GAAP) | $ | 558 | $ | (15) | |||||||||||||
Free Cash Flow (non-GAAP): | |||||||||||||||||
Total cash provided by operating activities (GAAP) | $ | 340 | $ | 339 | ~ 0.5 | % | |||||||||||
Less: payments for additions to property, plant & equipment (capital expenditures) (GAAP) | (12) | (16) | |||||||||||||||
Free cash flow (non-GAAP) | $ | 328 | $ | 323 | ~ 1.5 | % | |||||||||||
Free Cash Flow Margin
($ in millions)
Three-Month Period Ended | |||||||||||||||||||||||
July 3, 2026 | April 3, 2026 | December 31, 2025 | October 3, 2025 | ||||||||||||||||||||
Free Cash Flow Margin (non-GAAP) | |||||||||||||||||||||||
Free Cash Flow (non-GAAP) | $ | 328 | $ | 170 | $ | 291 | $ | 258 | |||||||||||||||
Sales (GAAP) | $ | 1,474 | $ | 1,422 | $ | 1,396 | $ | 1,404 | |||||||||||||||
Trailing Twelve Month Free Cash Flow (non-GAAP) | $ | 1,047 | |||||||||||||||||||||
Trailing Twelve Month Sales (GAAP) | $ | 5,696 | |||||||||||||||||||||
Free Cash Flow Margin (non-GAAP) | 18.4 | % | |||||||||||||||||||||
We define free cash flow as operating cash flows, less payments for additions to property, plant and equipment (“capital expenditures”) plus the proceeds from sales of property, plant and equipment (“capital disposals”).
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Statement Regarding Non-GAAP Measures
Each of the non-GAAP measures set forth above should be considered in addition to, and not as a replacement for or superior to, the comparable GAAP measure, and may not be comparable to similarly titled measures reported by other companies. Management believes that these measures provide useful information to investors by offering additional ways of viewing Veralto Corporation’s (“Veralto” or the “Company”) results that, when reconciled to the corresponding GAAP measure, help our investors:
•with respect to the profitability-related non-GAAP measures, understand the long-term profitability trends of our business and compare our profitability to prior and future periods and to our peers;
•with respect to core sales and related sales measures, identify underlying growth trends in our business and compare our sales performance with prior and future periods and to our peers; and
•with respect to free cash flow and related cash flow measures (the “FCF Measure”), understand Veralto’s ability to generate cash without external financings, strengthen its balance sheet, invest in its business and grow its business through acquisitions and other strategic opportunities (although a limitation of free cash flow is that it does not take into account the Company’s non-discretionary expenditures, and as a result the entire free cash flow amount is not necessarily available for discretionary expenditures).
Management uses these non-GAAP measures to measure the Company’s operating and financial performance.
•The items excluded from the non-GAAP measures set forth above have been excluded for the following reasons:
◦Amortization of Intangible Assets: We exclude the amortization of acquisition-related intangible assets because the amount and timing of such charges are significantly impacted by the timing, size, number and nature of the acquisitions we consummate. While we have a history of significant acquisition activity, we do not acquire businesses on a predictable cycle, and the amount of an acquisition’s purchase price allocated to intangible assets and related amortization term are unique to each acquisition and can vary significantly from acquisition to acquisition. Exclusion of this amortization expense facilitates more consistent comparisons of operating results over time between our newly acquired and long-held businesses, and with both acquisitive and non-acquisitive peer companies. We believe however that it is important for investors to understand that such intangible assets contribute to sales generation and that intangible asset amortization related to past acquisitions will recur in future periods until such intangible assets have been fully amortized.
◦Restructuring Charges: We exclude costs incurred pursuant to discrete restructuring plans that are fundamentally different (in terms of the size, strategic nature and planning requirements, as well as the inconsistent frequency, of such plans) from the ongoing productivity improvements that result from application of the Veralto Enterprise System. Because these restructuring plans are incremental to the core activities that arise in the ordinary course of our business and we believe are not indicative of Veralto’s ongoing operating costs in a given period, we exclude these costs to facilitate a more consistent comparison of operating results over time.
◦Other Adjustments: With respect to the other items excluded from the profitability-related non-GAAP measures, we exclude these items because they are of a nature and/or size that occur with inconsistent frequency, occur for reasons that may be unrelated to Veralto’s commercial performance during the period and/or we believe that such items may obscure underlying business trends and make comparisons of long-term performance difficult.
◦With respect to core operating profit margin changes, in addition to the explanation set forth in the bullets above relating to “restructuring charges” and “other adjustments”, we exclude the impact of businesses owned for less than one year (or disposed of during such period and not treated as discontinued operations) because the timing, size, number and nature of such transactions can vary significantly from period to period and may obscure underlying business trends and make comparisons of long-term performance difficult.
•With respect to core sales related measures, (1) we exclude the impact of currency translation because it is not under management’s control, is subject to volatility and can obscure underlying business trends, and (2) we exclude the effect of acquisitions and divested product lines because the timing, size, number and
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nature of such transactions can vary significantly from period-to-period and between us and our peers, which we believe may obscure underlying business trends and make comparisons of long-term performance difficult.
•With respect to the FCF Measure, we exclude payments for additions to property, plant and equipment (net of the proceeds from capital disposals) to demonstrate the amount of operating cash flow for the period that remains after accounting for the Company’s capital expenditure requirements.
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