01—Abstract
Summary
Summary of the 10-K filed February 25, 2025. Cited figures are marked; the original filing is the authoritative source.
Veralto Corporation (NYSE: VLTO) reported 2024 sales of $5.19 billiona, up 3.4% from $5.02 billion in 2023, with core sales growth of 3.7%.
Gross profit margin rose to 59.8% from 57.8%, and operating profit reached $1.21 billionb, or a 23.3% operating margin versus 22.7% in 2023. Net earnings were $833 million, or $3.34 per diluted share, compared with $839 million, or $3.40 per diluted share, in 2023. Management attributed the earnings decline to higher operating expenses, standalone public company costs and post-separation interest expense, which rose to $113 million from $30 million.
The company operates through two segments: Water Quality (sales of $3.14 billionc, operating profit margin of 24.5%) and Product Quality & Innovation (sales of $2.06 billion, operating profit margin of 25.7%). Recurring revenue was $3.15 billion, or about 61% of sales according to the Business section. Balance sheet and cash flow highlights: cash and equivalents rose to $1.10 billion, long-term debt was $2.60 billion, and operating cash flow was $875 million, down $88 million from 2023.
Cash paid for acquisitions was $363 milliond, mainly for TraceGains, acquired in October 2024 for approximately $349 million net of cash acquired. The company paid $89 million in dividends in 2024.
In December 2024 the Board raised the quarterly dividend to $0.11 per share from $0.09. For 2025, management expects continued growth in Water Quality, led by industrial water treatment in North America and partly offset by weakness in China, and continued growth in Product Quality & Innovation, driven by improved consumer packaged goods demand.
02—Key points
Key Highlights
- Sales of $5.19 billion in 2024, up 3.4% year over year; core sales grew 3.7%, with price increases contributing 1.8%.
- Gross profit margin expanded to 59.8% from 57.8%, and operating profit margin rose to 23.3% from 22.7%.
- Net earnings declined slightly to $833 million ($3.34 diluted EPS) from $839 million ($3.40), reflecting higher operating expenses, standalone public company costs and higher interest expense.
- Water Quality segment sales were $3.14 billion with a 24.5% operating margin; Product Quality & Innovation sales were $2.06 billion with a 25.7% operating margin.
- Operating cash flow was $875 million, down $88 million from 2023, and cash and equivalents increased to $1.10 billion.
- The company spent $363 million on acquisitions, mainly TraceGains, and raised its quarterly dividend to $0.11 per share from $0.09.
- Long-term debt was $2.60 billion at year-end 2024, and the Credit Facility ($1.5 billion revolver) remained undrawn.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2024, Veralto kept $0.16.
- Revenue$5.19B100.0%
- Cost of revenue−$2.09B40.2%
- Gross profit$3.10B59.8%
- Operating costs−$1.90B36.5%
- Operating income$1.21B23.3%
- Interest, other & tax−$375.0M7.2%
- Net income$833.0M16.0%
Where FY2024 revenue went
$5.19B- Cost of revenue: $2.09B, 40% of revenue
- SG&A: $1.64B, 32% of revenue
- Net income: $833.0M, 16% of revenue
- R&D: $253.0M, 4.9% of revenue
- Interest, other & tax: $375.0M, 7.2% of revenue
Kept 16% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2024filed February 25, 2025Financial Statements
FY2024 against FY2023
| Line item | FY2024FY2023 | Change |
|---|---|---|
| Revenue | $5.19B$5.02B | +3.4% |
| Cost of Revenue | $2.09B$2.12B | −1.5% |
| Gross Profit | $3.10B$2.90B | +7.0% |
| R&D Expenses | $253.00M$225.00M | +12.4% |
| SG&A Expenses | $1.64B$1.54B | +7.0% |
| Operating Income | $1.21B$1.14B | +6.0% |
| Net Income | $833.00M$839.00M | −0.7% |
| EPS (Basic) | $3.37$3.41 | −1.2% |
| EPS (Diluted) | $3.34$3.40 | −1.8% |
| Shares Outstanding (Basic) | 247.30M246.40M | +0.4% |
| Shares Outstanding (Diluted) | 249.60M246.80M | +1.1% |
05—Questions
Frequently Asked Questions
What drove the decline in net earnings in 2024?
Net earnings fell to $833 million from $839 million, and diluted EPS fell to $3.34 from $3.40. Management attributed the decline to higher operating expenses, standalone public company costs and interest expense after the separation from Danaher. Net interest expense rose to $113 million from $30 million, and SG&A expenses increased to 31.7% of sales from 30.6%.
How is Veralto's revenue mix and segment performance?
Water Quality generated $3.14 billion in sales, up 3.2%, with a 24.5% operating margin, led by chemical treatment solutions and North American growth. Product Quality & Innovation generated $2.06 billion, up 3.7%, with a 25.7% operating margin. Approximately 61% of sales came from recurring sources such as consumables, services, spare parts and software.
What is the company's debt and liquidity position?
Long-term debt was $2.60 billion at December 31, 2024, consisting of senior unsecured notes due 2026 through 2033. The company held $1.10 billion in cash and equivalents, and a $1.5 billion revolving Credit Facility was undrawn. The filing says the Credit Facility requires a maximum consolidated net leverage ratio of 3.75 to 1.0, which rises to 4.25 to 1.0 after a material acquisition.
What are the company's expectations and capital return plans for 2025?
For 2025, management expects continued year-over-year growth in Water Quality, driven by industrial water treatment demand in North America and steady municipal demand, partly offset by weakness in China. It also expects Product Quality & Innovation to grow on improved consumer packaged goods demand. The Board raised the quarterly dividend to $0.11 per share, and the company paid $89 million in dividends in 2024.
06—Continue