Full-year adjusted EPS guidance raised to $4.20-$4.28
Veralto beat expectations with 7% total sales growth and raised its full-year EPS guidance, citing strong water quality demand (especially data centers) and steady CPG demand. Management announced a new cost optimization program expected to yield full run-rate savings by 2028. The call provided limited cross-company signal, focusing on end-market trends rather than specific competitors or customers. Raised FY2026 adjusted EPS guidance to $4.20-$4.28, driven by Q1 strength and higher expected pricing.
Buzzberg readFull-year adjusted EPS guidance raised to $4.20-$4.28Veralto beat expectations with 7% total sales growth and raised its full-year EPS guidance, citing strong water quality demand (especially data centers) and steady CPG demand. Management announced a new cost optimization program expected to yield full run-rate savings by 2028. The call provided limited cross-company signal, focusing on end-market trends rather than specific competitors or customers. Raised FY2026 adjusted EPS guidance to $4.20-$4.28, driven by Q1 strength and higher expected pricing.Read full analysisCollapse analysis
Veralto beat expectations with 7% total sales growth and raised its full-year EPS guidance, citing strong water quality demand (especially data centers) and steady CPG demand. Management announced a new cost optimization program expected to yield full run-rate savings by 2028. The call provided limited cross-company signal, focusing on end-market trends rather than specific competitors or customers. Raised FY2026 adjusted EPS guidance to $4.20-$4.28, driven by Q1 strength and higher expected pricing.
Reported 7% total sales growth in Q1; core sales growth expected to accelerate through the year.
Announced a cost optimization program with ~50% of run-rate savings in 2027 and full run-rate in 2028, not included in 2026 guidance.
Water quality saw strong demand from data centers, semiconductor, power, and mining sectors; municipal demand was described as steady mid-single-digit growth.
Revenue$1.422B
+2% QoQ
EPS$1.07
+3% QoQ
Gross margin60.06%
reported
Op margin23.77%
reported
What changed this quarter
01
Guidance
Full-year adjusted EPS guidance raised to $4.20-$4.28
Guidance tone
02
Growth
Expect core sales growth to accelerate as year progresses
Raised FY2026 adjusted EPS guidance to $4.20-$4.28, driven by Q1 strength and higher expected pricing.
03
Margins
Cost optimization program initiated to enhance efficiency
Reported gross margin was 60.06%, reinforcing the quarter's better-than-guided profitability.
04
M&A
Two strategic acquisitions completed for ~$1 billion
Announced a cost optimization program with ~50% of run-rate savings in 2027 and full run-rate in 2028, not included in 2026 guidance.
Demand & capex
Demand
Bookings & conversion
Water quality sees strong demand in municipal and industrial. Management expressed confidence in strong start, raised guidance, and highlighted successful execution of strategic initiatives.
Capex
Investment and capacity
Management did not explicitly discuss capital expenditure plans, but noted a strong balance sheet and flexibility for acquisitions and share repurchases.
Tone · Confident
Management expressed confidence in strong start, raised guidance, and highlighted successful execution of strategic initiatives.
Supply-chain alpha
A1
PQI's Q1 packaging and color sales were down high single digits due to non-recurring revenue (color testing, packaging inspection equipment) in discrete industrial end markets (automotive, textiles, building materials, housing), not weak core CPG demand.
“When you look at Q1 here relative to packaging and color, as you noted, we do see sales down high single digits here, primarily due to the non-recurring revenue, including sales of color testing and packaging inspection equipment.”
Trojan's order book for UV water treatment is strong, but bookings now will only ship largely in Q4 2027, indicating extended lead times and a multi-year visibility for this business.
“The bookings that we would see now would be, you know, shipping largely in Q4 2027.”