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Did Veralto beat or miss consensus estimates last quarter?

What were the key takeaways from Veralto's earnings call?

- **Revenue & Profit Growth**: Q3 core sales +5.1%, adjusted EPS +11% to $0.99, with full-year EPS guidance raised to $3.82-$3.85.
- **Segment Strength**: Water Quality up 5.3% YoY, PQI up 4.6% YoY, with North America leading at 6.9% growth.
- **AI & Data Center Expansion**: Double-digit revenue growth from hyperscalers, driven by water treatment solutions for AI infrastructure.
- **Free Cash Flow Excellence**: Q3 free cash flow of $258 million (108% of net income), with 100% conversion guidance for 2025.
- **Sustainability Impact**: Provided clean water access for 3.4 billion people and saved 85 billion gallons of water annually.
- **M&A Pipeline**: Active deals in Water Quality and PQI, with disciplined capital allocation framework.


**【CEO Summary Section】**
- Delivered 5.1% core sales growth and 11% adjusted EPS growth in Q3, driven by strong execution in both Water Quality and PQI segments.
- Water Quality segment grew 5.3% year-over-year, with North America leading at 6.9% due to AI-driven infrastructure demand and municipal water analytics.
- PQI segment grew 4.6% year-over-year, with Videojet marking and coding solutions outperforming expectations in North America.
- Raised full-year adjusted EPS guidance to $3.82-$3.85 and free cash flow conversion to 100% of GAAP net income.
- Emphasized sustainability efforts, including providing clean water access for 3.4 billion people and reducing 85 billion gallons of water waste annually.

**【CFO Financial Commentary】**
- Total revenue of $1.4 billion (+6.9% YoY), with Water Quality at $856 million (+7% YoY) and PQI at $548 million (+6.9% YoY).
- Adjusted EPS of $0.99 (+11% YoY), exceeding high end of guidance by $0.04.
- Free cash flow of $258 million (108% of net income), with $1.8 billion cash on hand and net leverage of 0.7x.
- Q4 guidance: total sales growth in mid-single digits, adjusted EPS of $0.95-$0.98, and 30bps margin expansion YoY.
- Full-year core sales growth expected at mid-single digits, with 23.9% operating margin and 100% free cash flow conversion.

**【Q&A Key Highlights】**
- **Tariffs & Pricing**: Teams offset tariff impacts through strategic pricing, supply chain shifts, and product line localization, with no material pull-forward effects.
- **Data Center Growth**: Double-digit revenue growth from hyperscalers, driven by water treatment solutions for AI infrastructure and chip manufacturing.
- **M&A Pipeline**: Active pipeline in Water Quality and PQI, with focus on market company valuations and long-term value creation.
- **China Performance**: Sequential stability in China sales, with team execution maintaining mid-single-digit growth despite macro challenges.
- **Recurring Revenue**: High single-digit growth in consumables and software, driven by Esko-TraceGains integration and digital workflow adoption.
- **Sustainability Momentum**: Expansion of UV laser marking systems for sustainable packaging and AI-driven water conservation solutions.


Veralto Corporation (VLTO) Q3 2025 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

VLTO

VLTO fundamentals

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