Why is there a large gap between GAAP and adjusted results this quarter?

The adjustments include $17 million of amortization of acquisition-related intangibles, $22 million of restructuring costs for the 2026 Cost Optimization Program, $10 million of other strategic initiative costs, and a $39 million reduction of tax indemnification. Discrete tax adjustments of $38 million reduced GAAP net earnings. The filing states that GAAP operating profit was $298 million versus adjusted operating profit of $386 million.

What drove the growth in the quarter?

Management said demand remained healthy across both segments. Water Quality core sales grew 6.4%, with water treatment solutions growing double digits driven by North American industrial trends, including digital infrastructure investment and water reuse needs. Product Quality and Innovation core sales grew 3.2%, with marking and coding demand steady and an acceleration in packaging and color. Acquisitions contributed 2.3% to total sales growth.

What is the outlook for the fourth quarter and full year 2026?

For the fourth quarter, management expects core sales growth of 5.5% to 6.5% year-over-year, adjusted operating margin of about 24.5%, and adjusted diluted EPS of $1.13 to $1.16. For full-year 2026, it expects core sales growth of 4.2% to 4.5%, adjusted operating margin expansion of about 50 basis points, and adjusted diluted EPS of $4.49 to $4.52.

How is Veralto deploying its capital?

Year to date, Veralto deployed $1.1 billion on four strategic bolt-on acquisitions: In-Situ, GlobalVision, Alfaa UV and Cleanwater1, which closed October 5, 2026. It also repurchased $550 million of shares, equal to 2.4% of shares outstanding as of February 13, 2026. Management said it has ample financial flexibility to keep deploying capital.

How did cash flow compare to the prior year?

Operating cash flow was $323 million in the quarter, compared with $270 million in the prior-year period. Free cash flow, after $19 million of capital expenditures, was $304 million, compared with $258 million a year earlier. Financing activities used $565 million in the quarter, compared with $36 million in the prior-year period.

VLTO 8-K: Earnings & Results

01—Abstract

Summary

Summary of the 8-K filed October 29, 2026. Cited figures are marked; the original filing is the authoritative source.

Veralto Corporation (NYSE: VLTO) reported results for the third quarter ended October 2, 2026, in a press release furnished as Exhibit 99.1 to this Form 8-K under Item 2.02.

Sales rose 7.5% year-over-year to $1,509 million^a, with non-GAAP core sales growth of 5.1%. Operating profit margin was 19.7% on a GAAP basis and 25.6% on a non-GAAP adjusted basis. Net earnings were $253 million, or $1.03 per diluted share, while non-GAAP adjusted net earnings were $290 million, or $1.18 per diluted share.

Operating cash flow was $323 million^b and non-GAAP free cash flow was $304 million. Year to date, the company deployed $1.1 billion on four strategic acquisitions (In-Situ, GlobalVision, Alfaa UV and Cleanwater1, which closed October 5, 2026) and repurchased $550 million of shares, or 2.4% of outstanding shares. Management raised its full-year 2026 guidance: non-GAAP core sales growth is now 4.2% to 4.5%, adjusted operating margin is expected to expand about 50 basis points, and adjusted diluted EPS is now $4.49 to $4.52, up from $4.35 to $4.43.

Free cash flow conversion guidance was raised to greater than 105% of GAAP net earnings. For the fourth quarter, management expects core sales growth of 5.5% to 6.5% and adjusted diluted EPS of $1.13 to $1.16^c.

The quarter's GAAP results included a $39 million^d reduction of tax indemnification tied to a settled tax audit for pre-separation periods, along with $22 million of restructuring costs related to the 2026 Cost Optimization Program. Management attributed the core sales growth to Water Quality, which grew 6.4% in core sales, while Product Quality and Innovation grew 3.2%.

02—Key points

Key Highlights

Third-quarter sales of $1,509 million, up 7.5% year-over-year; core sales grew 5.1%, led by Water Quality at 6.4%
GAAP operating profit margin of 19.7% versus non-GAAP adjusted operating margin of 25.6%; prior-year quarter adjusted margin was 23.9%
GAAP diluted EPS of $1.03 and adjusted diluted EPS of $1.18, compared with $0.95 GAAP and $0.99 adjusted in the prior-year quarter
Year-to-date capital deployment of $1.1 billion on four acquisitions and $550 million of share repurchases (2.4% of outstanding shares)
Full-year 2026 adjusted EPS guidance raised to $4.49 to $4.52 from $4.35 to $4.43; core sales growth guidance raised to 4.2% to 4.5%
Fourth-quarter core sales growth expected at 5.5% to 6.5% and adjusted diluted EPS of $1.13 to $1.16
Free cash flow conversion guidance raised to greater than 105% of GAAP net earnings from greater than 100%

03—Questions

Frequently Asked Questions

Why is there a large gap between GAAP and adjusted results this quarter?
The adjustments include $17 million of amortization of acquisition-related intangibles, $22 million of restructuring costs for the 2026 Cost Optimization Program, $10 million of other strategic initiative costs, and a $39 million reduction of tax indemnification. Discrete tax adjustments of $38 million reduced GAAP net earnings. The filing states that GAAP operating profit was $298 million versus adjusted operating profit of $386 million.
What drove the growth in the quarter?
Management said demand remained healthy across both segments. Water Quality core sales grew 6.4%, with water treatment solutions growing double digits driven by North American industrial trends, including digital infrastructure investment and water reuse needs. Product Quality and Innovation core sales grew 3.2%, with marking and coding demand steady and an acceleration in packaging and color. Acquisitions contributed 2.3% to total sales growth.
What is the outlook for the fourth quarter and full year 2026?
For the fourth quarter, management expects core sales growth of 5.5% to 6.5% year-over-year, adjusted operating margin of about 24.5%, and adjusted diluted EPS of $1.13 to $1.16. For full-year 2026, it expects core sales growth of 4.2% to 4.5%, adjusted operating margin expansion of about 50 basis points, and adjusted diluted EPS of $4.49 to $4.52.
How is Veralto deploying its capital?
Year to date, Veralto deployed $1.1 billion on four strategic bolt-on acquisitions: In-Situ, GlobalVision, Alfaa UV and Cleanwater1, which closed October 5, 2026. It also repurchased $550 million of shares, equal to 2.4% of shares outstanding as of February 13, 2026. Management said it has ample financial flexibility to keep deploying capital.
How did cash flow compare to the prior year?
Operating cash flow was $323 million in the quarter, compared with $270 million in the prior-year period. Free cash flow, after $19 million of capital expenditures, was $304 million, compared with $258 million a year earlier. Financing activities used $565 million in the quarter, compared with $36 million in the prior-year period.

04—Continue

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