Veralto Reports Third Quarter
– 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 third quarter ended October 2, 2026.
• Sales increased 7.5% year-over-year to $1,509 million, with non-GAAP core sales growth of 5.1%
• Operating profit margin was 19.7%, and non-GAAP adjusted operating profit margin was 25.6%
• Non-GAAP, adjusted net earnings were $290 million, or $1.18 per diluted common share
• Operating cash flow was $323 million and non-GAAP free cash flow was $304 million
• Deployed $1.1 billion on four strategic acquisitions: In-Situ, GlobalVision, Alfaa UV and Cleanwater1 (2)
• Early gains from Cost Optimization Program - expected full year 2026 savings now $10-$15 million
“We delivered outstanding third-quarter results, with broad-based sales growth and strong operating leverage across the portfolio. Total sales grew 7.5%, adjusted operating margin expanded 170 basis points and adjusted earnings per share increased 19.2% year over year. Core sales grew 5.1%, led by Water Quality at 6.4%, while acquisitions contributed 2.3% to total sales growth,” said Jennifer L. Honeycutt, President and Chief Executive Officer. “Year-to-date, we have completed four strategic bolt-on acquisitions and repurchased 2.4% of our outstanding shares, reflecting our disciplined approach to capital allocation and advancing our long-term value creation strategy.”
Honeycutt continued, “Demand remains healthy across both segments. In Water Quality, core sales of our water treatment solutions grew double-digits in the third quarter driven by favorable industrial trends in North America including digital infrastructure investments, higher industrial production and increasing need for water reuse solutions. We also continue to see steady demand for our water analytics products and services which support the daily operations of municipal, environmental and industrial customers. As expected, PQI’s core sales growth rate increased sequentially, supported by steady demand in marking and coding and an acceleration in the year-over-year core sales growth rate in packaging and color.”
“In the fourth quarter, we expect our core sales growth rate to further accelerate to between 5.5% to 6.5% year-over-year. Reflecting this growth outlook, early gains from our cost optimization program and our strong third- quarter performance, we raised our full year 2026 adjusted earnings per share guidance to $4.49 to $4.52, representing 15% to 16% growth over the prior year. Our rigorous VES-driven execution and strategic investments in 2026 provide a strong foundation for sustained momentum into 2027. We have ample financial flexibility to continue to deploy capital and further enhance our growth profile, optimize our cost position and compound long-term shareholder value,” concluded Honeycutt.
(1) Year-to-date 2026 capital allocation and strategic actions are as of October 28, 2026
(3) Year-to-date share repurchases as of October 28, 2026. 2.4% is calculated off the Company’s outstanding shares as of February 13, 2026 1
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 fourth quarter of 2026, the Company anticipates non-GAAP core sales growth in the range of 5.5% to 6.5% year-over-year. Adjusted operating profit margin is expected to be approximately 24.5%, broadly in line with the prior year period, net of growth investments and the impact from acquisitions. The Company’s fourth quarter adjusted diluted earnings per share guidance is in the range of $1.13 to $1.16 per share.
For the full year 2026, the Company raised its non-GAAP core sales growth to a range of 4.2% to 4.5% year-over-year, up from the prior guidance range of 4.0% to 4.5%. Adjusted operating profit margin is now expected to expand approximately 50 basis points year-over-year, up from the prior guidance range of 25-50 basis points. The Company raised its guidance for adjusted diluted earnings to a range of $4.49 to $4.52 per share, up from the prior guidance range of $4.35 to $4.43 per share. The Company also raised its free cash flow conversion guidance to greater than 105% of GAAP net earnings, up from the prior guidance of greater than 100% conversion.
Veralto will webcast its third 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 (800) 445-7795 (U.S.) or +1 (785) 424-1699 (INTL) (Conference ID: VLTO3Q26). A replay of the conference call will be available shortly after the conclusion of the call and until November 7, 2026. You can access the replay dial-in information on the “Investors” section of Veralto’s website under the subheading “News & Events.”
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 ™.
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.”
Certain statements in this release, including the statement regarding the Company's anticipated fourth 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 2 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 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.
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):
B Costs incurred during the three-month period ended October 2, 2026 related to the 2026 Cost Optimization Program ($22 million pretax as reported in this line item, $17 million after-tax).
C Costs incurred during the three-month periods ended October 2, 2026 and October 3, 2025 related to certain strategic initiatives ($10 million and $1 million pretax as reported in this line item, $7 million and $1 million, respectively).
D During the separation from Danaher, indemnification agreements were established to protect the Company against certain pre-separation tax exposures. As a result of the settlement of a tax audit pertaining to pre-separation periods, a reduction to the related indemnification asset was recorded during three-month period ended October 2, 2026 ($39 million pretax as reported in this line item, $37 million after-tax). A corresponding reduction to the related tax liability of $39 million was recorded during the three and nine-month periods ended October 2, 2026, which is reflected as a discrete tax adjustment (refer to Note F).
E 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.
F Discrete tax matters relate to changes in estimates associated with prior period uncertain tax positions, reduction of tax liabilities in connection with the reduction of the tax indemnification related to the separation from Danaher, audit settlements and excess tax benefits from stock-based compensation. 6
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 December 31, 2026 vs. Comparable 2025 Period ────────────────────────────────────────────────────────────────────────────── Core sales growth +5.5% to 6.5% (non-GAAP) Three-Month Period Ending December 31, 2026 Adjusted Operating Profit Margin ~24.5% (non-GAAP) Adjusted Diluted Net Earnings per Share $1.13 to $1.16 (non-GAAP)
% Change Year Ending December 31, 2026 vs. Comparable 2025 Period ────────────────────────────────────────────────────────────────────────────── Core sales growth +4.2% to 4.5% (non-GAAP) Year Ending December 31, 2026 Adjusted Operating Profit Margin ~+50 basis points (non-GAAP) Adjusted Diluted Net Earnings per Share $4.49 to $4.52 (non-GAAP) Free cash flow to net earnings >105% conversion ratio (non-GAAP)
Three-Mon… Period October 2, October Year-over… Ended 2026 3, 2025 Change ────────────────────────────────────────────────────────────────────────────── Total Cash Flows (GAAP): Net cash provided by $ 323 $ 270 operating activiti… (GAAP) Total cash used in $ -84 $ -12 investing activiti… (GAAP) Total cash used in $ -565 $ -36 financing activiti… (GAAP) Free Cash Flow (non-GAA… Total cash provided by $ 323 $ 270 ~ 19.5 % operating activiti… (GAAP) Less: payments for additions to property, -19 -12 plant & equipment (capital expendit… (GAAP) Free cash flow $ 304 $ 258 ~ 18.0 % (non-GAA…
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”). 9
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 10 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. 11
Full text with the tables
Exhibit 99.1
Veralto Reports Third Quarter
2026 Results
WALTHAM, Mass., (October 29, 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 third quarter ended October 2, 2026.
Key Third Quarter 2026 Results:
• Sales increased 7.5% year-over-year to $1,509 million, with non-GAAP core
sales growth of 5.1%
• Operating profit margin was 19.7%, and non-GAAP adjusted operating profit
margin was 25.6%
• Net earnings were $253 million, or $1.03 per diluted common share
• Non-GAAP, adjusted net earnings were $290 million, or $1.18 per diluted common
share
• Operating cash flow was $323 million and non-GAAP free cash flow was $304
million
Key Year-to-Date
(1) 2026 Capital Allocation and Strategic Actions:
• Deployed $1.1 billion on four strategic acquisitions: In-Situ, GlobalVision,
Alfaa UV and Cleanwater1 (2)
• Repurchased $550 million of shares, or 2.4% of outstanding shares (3)
• Early gains from Cost Optimization Program - expected full year 2026 savings
now $10-$15 million
“We delivered outstanding third-quarter results, with broad-based sales growth
and strong operating leverage across the portfolio. Total sales grew 7.5%,
adjusted operating margin expanded 170 basis points and adjusted earnings per
share increased 19.2% year over year. Core sales grew 5.1%, led by Water Quality
at 6.4%, while acquisitions contributed 2.3% to total sales growth,” said
Jennifer L. Honeycutt, President and Chief Executive Officer. “Year-to-date, we
have completed four strategic bolt-on acquisitions and repurchased 2.4% of our
outstanding shares, reflecting our disciplined approach to capital allocation
and advancing our long-term value creation strategy.”
Honeycutt continued, “Demand remains healthy across both segments. In Water
Quality, core sales of our water treatment solutions grew double-digits in the
third quarter driven by favorable industrial trends in North America including
digital infrastructure investments, higher industrial production and increasing
need for water reuse solutions. We also continue to see steady demand for our
water analytics products and services which support the daily operations of
municipal, environmental and industrial customers. As expected, PQI’s core sales
growth rate increased sequentially, supported by steady demand in marking and
coding and an acceleration in the year-over-year core sales growth rate in
packaging and color.”
“In the fourth quarter, we expect our core sales growth rate to further
accelerate to between 5.5% to 6.5% year-over-year. Reflecting this growth
outlook, early gains from our cost optimization program and our strong third-
quarter performance, we raised our full year 2026 adjusted earnings per share
guidance to $4.49 to $4.52, representing 15% to 16% growth over the prior year.
Our rigorous VES-driven execution and strategic investments in 2026 provide a
strong foundation for sustained momentum into 2027. We have ample financial
flexibility to continue to deploy capital and further enhance our growth
profile, optimize our cost position and compound long-term shareholder value,”
concluded Honeycutt.
(1) Year-to-date 2026 capital allocation and strategic actions are as of October
28, 2026
(2) The acquisition of Cleanwater1 closed on October 5, 2026
(3) Year-to-date share repurchases as of October 28, 2026. 2.4% is calculated
off the Company’s outstanding shares as of February 13, 2026
1
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 fourth quarter of 2026, the Company anticipates non-GAAP core sales
growth in the range of 5.5% to 6.5% year-over-year. Adjusted operating profit
margin is expected to be approximately 24.5%, broadly in line with the prior
year period, net of growth investments and the impact from acquisitions. The
Company’s fourth quarter adjusted diluted earnings per share guidance is in the
range of $1.13 to $1.16 per share.
For the full year 2026, the Company raised its non-GAAP core sales growth to a
range of 4.2% to 4.5% year-over-year, up from the prior guidance range of 4.0%
to 4.5%. Adjusted operating profit margin is now expected to expand
approximately 50 basis points year-over-year, up from the prior guidance range
of 25-50 basis points. The Company raised its guidance for adjusted diluted
earnings to a range of $4.49 to $4.52 per share, up from the prior guidance
range of $4.35 to $4.43 per share. The Company also raised its free cash flow
conversion guidance to greater than 105% of GAAP net earnings, up from the prior
guidance of greater than 100% conversion.
Conference Call and Webcast Information
Veralto will webcast its third 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 (800) 445-7795 (U.S.) or +1
(785) 424-1699 (INTL) (Conference ID: VLTO3Q26). A replay of the conference call
will be available shortly after the conclusion of the call and until November 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 fourth 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
2
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
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-… Nine-Mo…
Period October October Period October October
Ended 2, 2026 3, 2025 Ended 2, 2026 3, 2025
──────────────────────────────────────────────────────────────────────────────
Sales $ 1,509 $ 1,404 $ 4,405 $ 4,107
Cost
of -601 -560 -1,741 -1,636
sales
Gross 908 844 2,664 2,471
profit
Opera…
costs:
Selli…
gener…
and -541 -451 -1,503 -1,312
admin…
expen…
Resea…
and -69 -67 -210 -198
devel…
expen…
Opera… 298 326 951 961
profit
Nonop…
income
(expe…
Other
income — 1 8 -5
(expe…
net
Inter…
expen… -25 -21 -76 -76
net
Earni…
before 273 306 883 880
income
taxes
Income -20 -67 -135 -194
taxes
Net $ 253 $ 239 $ 748 $ 686
earni…
Net
earni…
per
common
share:
Basic $ 1.04 $ 0.96 $ 3.05 $ 2.76
Dilut… $ 1.03 $ 0.95 $ 3.03 $ 2.74
Avera…
common
stock
and
common
equiv…
shares
outst…
Basic 243.8 248.5 245.6 248.2
Dilut… 245.3 250.6 246.8 250.2
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)
Thr…
Per…
End…
Oct…
2,
2026
──────────────────────────────────────────────────────────────────────────────
Net
ear…
for Dilu…
cal… net
Ope… Oper… of earn…
Sal… pro… prof… dil… per
marg… net comm…
ear… share
per
com…
sha…
Re… $ 1,5… $ 298 19.7 % $ 253 $ 1.03
(G…
Am…
of
ac… — 17 1.1 17 0.07
in…
as…
Re… — 22 1.5 22 0.09
Ot… — 10 0.7 10 0.04
it…
Re…
of — 39 2.6 39 0.16
tax
in…
Tax
ef…
of — — — -13 -0.…
the
ab…
ad…
Di…
tax — — — -38 -0.…
ad…
Ro… — — — — -0.…
Ad… $ 1,5… $ 386 25.6 % $ 290 $ 1.18
(N…
Thr…
Per…
End…
Oct…
3,
2025
──────────────────────────────────────────────────────────────────────────────
Net
ear…
for Dilu…
cal… net
Ope… Oper… of earn…
Sal… pro… prof… dil… per
marg… net comm…
ear… share
per
com…
sha…
Re… $ 1,4… $ 326 23.2 % $ 239 $ 0.95
(G…
Am…
of
ac… — 9 0.6 9 0.04
in…
as…
Ot… — 1 0.1 1 —
it…
Tax
ef…
of — — — -2 -0.…
the
ab…
ad…
Ro… — — — — 0.01
Ad… $ 1,4… $ 336 23.9 % $ 247 $ 0.99
(N…
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 October 2, 2026 October 3, 2025
────────────────────────────────────────────────────────────────────────
Pretax $ 17 $ 9
After-tax 14 7
B Costs incurred during the three-month period ended October 2, 2026 related to
the 2026 Cost Optimization Program ($22 million pretax as reported in this line
item, $17 million after-tax).
C Costs incurred during the three-month periods ended October 2, 2026 and
October 3, 2025 related to certain strategic initiatives ($10 million and $1
million pretax as reported in this line item, $7 million and $1 million,
respectively).
D During the separation from Danaher, indemnification agreements were
established to protect the Company against certain pre-separation tax exposures.
As a result of the settlement of a tax audit pertaining to pre-separation
periods, a reduction to the related indemnification asset was recorded during
three-month period ended October 2, 2026 ($39 million pretax as reported in this
line item, $37 million after-tax). A corresponding reduction to the related tax
liability of $39 million was recorded during the three and nine-month periods
ended October 2, 2026, which is reflected as a discrete tax adjustment (refer to
Note F).
E 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.
F Discrete tax matters relate to changes in estimates associated with prior
period uncertain tax positions, reduction of tax liabilities in connection with
the reduction of the tax indemnification related to the separation from Danaher,
audit settlements and excess tax benefits from stock-based compensation.
6
VERALTO CORPORATION
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
Sales Growth by Segment, Core Sales Growth by Segment
% Change
Three-Mon…
Period
Ended
October 2,
2026 vs.
Comparable
2025
Period
──────────────────────────────────────────────────────────────────────────────
Segments
Product
Total Water Quality
Company Quality and
Innovation
Total
sales 7.5 % 9.8 % 3.9 %
growth
(GAAP)
Impact
of:
Acquisi… -2.3 % -3.0 % -1.1 %
Currency
exchange -0.1 % -0.4 % 0.4 %
rates
Core
sales 5.1 % 6.4 % 3.2 %
growth
(non-GA…
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 December 31, 2026
vs.
Comparable 2025 Period
──────────────────────────────────────────────────────────────────────────────
Core sales growth +5.5% to 6.5%
(non-GAAP)
Three-Month Period Ending
December 31, 2026
Adjusted Operating Profit
Margin ~24.5%
(non-GAAP)
Adjusted Diluted Net
Earnings per Share $1.13 to $1.16
(non-GAAP)
% Change Year Ending
December 31, 2026 vs.
Comparable 2025 Period
──────────────────────────────────────────────────────────────────────────────
Core sales growth +4.2% to 4.5%
(non-GAAP)
Year Ending December 31,
2026
Adjusted Operating Profit
Margin ~+50 basis points
(non-GAAP)
Adjusted Diluted Net
Earnings per Share $4.49 to $4.52
(non-GAAP)
Free cash flow to net
earnings >105%
conversion ratio
(non-GAAP)
8
VERALTO CORPORATION
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
Cash Flow and Free Cash Flow
($ in millions)
Three-Mon…
Period October 2, October Year-over…
Ended 2026 3, 2025 Change
──────────────────────────────────────────────────────────────────────────────
Total
Cash
Flows
(GAAP):
Net cash
provided
by $ 323 $ 270
operating
activiti…
(GAAP)
Total
cash used
in $ -84 $ -12
investing
activiti…
(GAAP)
Total
cash used
in $ -565 $ -36
financing
activiti…
(GAAP)
Free Cash
Flow
(non-GAA…
Total
cash
provided
by $ 323 $ 270 ~ 19.5 %
operating
activiti…
(GAAP)
Less:
payments
for
additions
to
property, -19 -12
plant &
equipment
(capital
expendit…
(GAAP)
Free cash
flow $ 304 $ 258 ~ 18.0 %
(non-GAA…
Free Cash Flow Margin
($ in millions)
Three…
Period
Ended
Octob… July April Dece…
2, 3, 3, 31,
2026 2026 2026 2025
──────────────────────────────────────────────────────────────────────────────
Free
Cash
Flow
Mar…
(no…
Free
Cash $ 304 $ 328 $ 170 $ 291
Flow
(no…
Sal… $ 1,509 $ 1,474 $ 1,422 $ 1,396
(GA…
Last
Twe…
Mon…
Free $ 1,093
Cash
Flow
(no…
Last
Twe…
Mon… $ 5,801
Sal…
(GA…
Free
Cash
Flow 18.8 %
Mar…
(no…
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”).
9
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
10
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.
11