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Did Ecolab beat or miss consensus estimates last quarter?

- **Revenue Growth**: 4% organic sales growth, with key engines (Pest Elimination +6%, Global High-Tech +25%) driving momentum.
- **Margin Expansion**: Operating margin up 110bps to 18.7%, with 2027 target of 20%.
- **Strategic Acquisitions**: $900M Global High-Tech business post-Ovivo, targeting circular water solutions and direct-to-chip cooling.
- **AI Leadership**: #9 on Fortune AIQ 50 List, enabling 12-15% annual EPS growth.
- **Underperforming Recovery**: Paper and Basic Industries expected to return to growth in 2026 via innovation and One Ecolab cross-selling.

**【CEO Summary Section】**
- Organic sales grew 4% year-over-year, driven by double-digit growth in key growth engines: Pest Elimination (+6%), Life Sciences (+6%), Global High-Tech (+25%), and Ecolab Digital (+25%).
- Breakthrough innovations like Pest Intelligence (400,000+ devices deployed) and 3D TRASAR for AI data centers are delivering 99% pest-free outcomes and 10% power savings for customers.
- Global High-Tech business to expand to $900M post-Ovivo acquisition, targeting circular water solutions for microelectronics and direct-to-chip cooling for AI data centers.
- Operating income margin expanded 110bps to 18.7%, with 2025 full-year OI margin guidance of 18% and 2027 target of 20%.

**【CFO Financial Commentary】**
- Q3 2025 GAAP net income: $420M; Non-GAAP EPS: $1.08 (vs. $0.95 prior year).
- Adjusted diluted EPS midpoint raised to $7.53 for 2025 (from $7.45), reflecting 12-15% EPS growth in 2026.
- Operating income margin expanded 150bps since 2019, with 20-30bps improvement expected in 2025.
- SG&A leverage of 25-50bps annually through 2027, driven by AI/automation and One Ecolab cross-selling.

**【Q&A Key Highlights】**
- **Global High-Tech Expansion**: Ovivo acquisition to create $900M business with 1,000+ data centers and fabs served, targeting 10%+ annual growth. 1M Pest Intelligence devices expected by mid-2026.
- **Underperforming Businesses**: Paper and Basic Industries expected to return to growth in 2026 via innovation (e.g., power build-outs for AI) and One Ecolab cross-selling ($65B total addressable market).
- **Pricing Strategy**: 2-3% value-based pricing sustained through 2026, with 3%+ achieved in Q3 via trade surcharge and value pricing.
- **AI Leadership**: Ranked #9 on Fortune AIQ 50 List, leveraging AI to improve customer retention (90%+), reduce costs, and drive 12-15% annual EPS growth.
- **Life Sciences Recovery**: Bioprocessing growth to moderate in Q4 (vs. 70%+ last year), but still double-digit; China plant expansion to resolve capacity constraints in 2026.

Ecolab Inc. (ECL) Q3 2025 Earnings Call Transcript

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