Shares and Market Context
Veralto Corporation (NYSE: VLTO) released its fourth-quarter 2025 results. Then, shares dropped in early trading. Meanwhile, the stock stayed within its 52-week range. Overall, it followed a steady trend, thanks to strong operations and cash flow.
Fourth-Quarter 2025 Performance
For the quarter ended December 31, 2025, revenue hit $1.40 billion. This marked a 3.8% rise from $1.35 billion last year. Specifically, core sales grew 1.6%, as pricing boosted 2.3% while volume fell 0.7%. Additionally, currency added 2.5%, but acquisitions and divestitures cut sales by 0.3%.
Adjusted operating profit climbed 7.2% to $343 million. Consequently, the adjusted operating margin expanded 80 basis points to 24.6%. However, gross margin dipped 30 basis points to 59.3%, due to mix shifts, higher costs, and forex impacts—though pricing helped offset this. Adjusted diluted EPS rose 9.5% to $1.04. Moreover, free cash flow reached $291 million, or 115% of net earnings.
Segment Results
In the Water Quality segment, sales grew 4.3%. At the same time, adjusted operating margin improved to 25.9%. For Product Quality & Innovation, revenue increased 3.0%. Thus, its adjusted operating margin expanded to 26.5%, fueled by pricing and productivity.
Full-Year 2025 Results
For full-year 2025, revenue totaled $5.50 billion, up 6.0% year over year. Core sales advanced 4.7%, driven by 2.8% volume growth and 1.9% pricing. Adjusted operating profit hit $1.34 billion, with a 24.3% margin, up 20 basis points. Adjusted EBITDA stood at $1.38 billion and adjusted EPS grew 10% to $3.90. Free cash flow came in at $1.01 billion, with 108% conversion.
Balance Sheet and Outlook
At year-end, cash equaled $2.03 billion. Net debt was $642 million, so net leverage sat at 0.5x. For 2026, the company guides low- to mid-single-digit core sales growth. It also targets adjusted EPS of $4.10 to $4.20.
Analyst Activity
No analysts issued upgrades, downgrades, or price-target changes that day.
