Revenue growth accelerated to 7.5% in Q2 2026, with gross margin expanding to 61.2% and net margin to 16.4%, reflecting favorable mix and operating leverage.
Veralto Corporation (VLTO) annual income statement — 5-year revenue, gross profit & net income history
| Metric | TTM | Dec'25 | Dec'24 | Dec'23 | Dec'22 | Dec'21 |
|---|
| Sales/Revenue | 5.7B | 5.5B | 5.19B | 5.02B | 4.87B | 4.7B |
| Revenue Growth % | 6.23% | 5.97% | 3.43% | 3.1% | 3.62% | - |
| Cost of Goods Sold | 2.27B | 2.2B | 2.09B | 2.12B | 2.11B | 1.99B |
| COGS % of Revenue | - | 40.05% | 40.21% | 42.22% | 43.33% | 42.28% |
| Gross Profit | 3.43B | 3.3B | 3.1B | 2.9B | 2.77B | 2.71B |
| Gross Margin % | 60.18% | 59.95% | 59.79% | 57.78% | 56.86% | 57.72% |
| Gross Profit Growth % | - | 6.25% | 7.03% | 4.77% | 2.06% | - |
| Operating Expenses | 2.13B | 2.02B | 1.9B | 1.76B | 1.65B | 1.67B |
| OpEx % of Revenue | - | 36.74% | 36.53% | 35.07% | 33.84% | 35.57% |
| Selling, General & Admin | 1.86B | 1.76B | 1.64B | 1.54B | 1.47B | 1.43B |
| SG&A % of Revenue | - | 31.91% | 31.66% | 30.59% | 30.27% | 30.38% |
| Research & Development | 276M | 266M | 253M | 225M | 217M | 244M |
| R&D % of Revenue | - | 4.83% | 4.87% | 4.48% | 4.46% | 5.19% |
| Other Operating Expenses | 0 | 0 | 0 | 0 | -43M | 0 |
| Operating Income | 1.29B | 1.28B | 1.21B | 1.14B | 1.11B | 1.04B |
| Operating Margin % | 22.74% | 23.21% | 23.26% | 22.7% | 22.83% | 22.15% |
| Operating Income Growth % | - | 5.71% | 5.96% | 2.52% | 6.82% | - |
| EBITDA | 1.35B | 1.35B | 1.29B | 1.23B | 1.2B | 1.15B |
| EBITDA Margin % | 23.63% | 24.62% | 24.76% | 24.44% | 24.68% | 24.4% |
| EBITDA Growth % | 1.51% | 5.37% | 4.81% | 2.08% | 4.8% | - |
| D&A (Non-Cash Add-back) | 51M | 78M | 78M | 87M | 90M | 106M |
| EBIT | 1.3B | 1.27B | 1.2B | 1.13B | 1.11B | 1.04B |
| Net Interest Income | -92M | -96M | -113M | -30M | 0 | 0 |
| Interest Income | 0 | 0 | 0 | 0 | 0 | 0 |
| Interest Expense | 92M | 96M | 113M | 30M | 0 | 0 |
| Other Income/Expense | -86M | -104M | -122M | -44M | 1M | 6M |
| Pretax Income | 1.21B | 1.17B | 1.09B | 1.1B | 1.11B | 1.05B |
| Pretax Margin % | 21.23% | 21.32% | 20.91% | 21.83% | 22.85% | 22.28% |
| Income Tax | 221M | 233M | 253M | 257M | 268M | 186M |
| Effective Tax Rate % | 18.28% | 19.86% | 23.3% | 23.45% | 24.08% | 17.77% |
| Net Income | 988M | 940M | 833M | 839M | 845M | 861M |
| Net Margin % | 17.35% | 17.08% | 16.04% | 16.71% | 17.35% | 18.32% |
| Net Income Growth % | 10.64% | 12.85% | -0.72% | -0.71% | -1.86% | - |
| Net Income (Continuing) | 988M | 940M | 833M | 839M | 845M | 861M |
| Discontinued Operations | 0 | 0 | 0 | 0 | 0 | 0 |
| Minority Interest | 1M | 1M | 7M | 6M | 5M | 4M |
| EPS (Diluted) | 4.02 | 3.76 | 3.34 | 3.41 | 3.43 | 3.50 |
| EPS Growth % | 10.61% | 12.57% | -2.05% | -0.58% | -2% | - |
| EPS (Basic) | - | 3.79 | 3.37 | 3.41 | 3.43 | 3.50 |
| Diluted Shares Outstanding | 245.8M | 250.3M | 249.6M | 246.4M | 246.1M | 246.1M |
| Basic Shares Outstanding | 245.2M | 248.3M | 247.3M | 246.4M | 246.1M | 246.1M |
| Dividend Payout Ratio | - | 11.6% | 10.68% | - | - | - |
Quick answers to the most common questions about buying VLTO stock.
For fiscal year 2025, Veralto Corporation (VLTO) reported total revenue of $5.50B. This represents a 17.1% increase compared to $4.70B in 2021.
Veralto Corporation (VLTO) is profitable, generating $940.0M in net income for the fiscal year ending 2025 with a net profit margin of 17.1%.
Veralto Corporation (VLTO) reported an operating income of $1.28B, resulting in an operating profit margin of 23.2%. This margin reflects the operational efficiency of the business before interest and taxes.
Veralto Corporation (VLTO) generated $3.30B in gross profit for the year, representing a gross profit margin of 59.9%. This demonstrates the company's core pricing power and production efficiency.
Key Metrics
Top Statement Risk
Debt and integration risks
Metrics are mathematically derived from official filings.
Growth Accelerates on Core Strength
Veralto's revenue growth accelerated to 7.5% in Q2 2026, up from 3.8% in Q4 2025, driven by core growth of 4.2% and Water Quality acceleration to 5.7%, per recent SEC filings.
The sequential acceleration in revenue growth from 3.8% to 7.5% over two quarters suggests improving end-market demand, particularly in water quality, which may be benefiting from regulatory tailwinds. The company's ability to sustain mid-single-digit core growth while also benefiting from pricing indicates a durable growth algorithm, though investors should monitor whether this pace is sustainable given the modest guidance range.
Gross Margin Expansion Reflects Mix
Gross margin expanded to 61.2% in Q2 2026, up from 59.3% a year earlier, as reported in financial statements, indicating favorable mix shift toward higher-margin consumables and services.
The 190 basis point year-over-year gross margin improvement suggests that the recurring revenue model, with its proprietary consumables, continues to drive pricing power. This margin level is comparable to Danaher's 60.9% and exceeds many industrial peers, reinforcing the view that Veralto operates more like a life sciences company than a traditional industrial. However, input cost volatility in specialty chemicals could pressure margins if pricing adjustments lag.
Operating Leverage Tempered by SG&A
Operating income grew 0.6% in Q2 2026 despite 7.5% revenue growth, as SG&A rose 16.3% year-over-year, according to company filings, indicating limited operating leverage this quarter.
The divergence between revenue growth and operating income growth suggests that SG&A expenses are growing faster than revenue, possibly due to investments in commercial infrastructure or stand-up costs as an independent entity. This may indicate that the company is not yet realizing the full operating leverage potential of its model, and investors should watch for SG&A efficiency improvements over the coming quarters.
Earnings Quality Solid Despite SBC
Net income rose 8.6% year-over-year in Q2 2026, with EPS up 10.1%, while stock-based compensation was $24 million, as per financial statements, suggesting high-quality earnings.
The modest SBC relative to net income (about 10%) indicates that reported earnings are not significantly diluted by non-cash charges. The effective tax rate appears stable, and there are no obvious non-operating items distorting net income. This supports the view that reported EPS growth is largely driven by operational performance, though the recent beat and guidance raise warrant monitoring for sustainability.
R&D Discipline Supports Innovation
R&D spending increased to $73 million in Q2 2026, up from $61 million a year earlier, representing 4.9% of revenue, as disclosed in financial statements, indicating continued investment in growth.
The increase in R&D spending, while modest, suggests that Veralto is investing in new product development and digital capabilities, which could support long-term competitive advantage. However, the more significant cost pressure appears in SG&A, which grew faster than revenue, potentially reflecting investments in sales force expansion or corporate infrastructure. Investors should monitor whether these investments translate into sustained growth or if they compress margins.
Spin-off Marks Operational Inflection
Since the spin-off from Danaher, Veralto's revenue growth has accelerated from 1.7% in Q1 2024 to 7.5% in Q2 2026, with net margin expanding from 14.8% to 16.4%, per company reports.
The spin-off appears to have been a catalyst for improved operational focus and growth, as the company has consistently delivered accelerating revenue growth and margin expansion. The accumulation of $2.03 billion in cash and low debt suggests that management is positioning for M&A, which could further enhance growth. However, the durability of this inflection depends on the successful execution of the Veralto Enterprise System and the ability to maintain margin discipline without Danaher's oversight.
Debt and Integration Risks Loom
Despite strong results, Veralto carries $2.7 billion in debt and faces integration risks from potential M&A, which could pressure margins and dilute returns, as noted in recent filings.
The elevated debt level, while manageable given strong cash flow, could constrain capital allocation flexibility if interest rates remain high. Additionally, the company's recent guidance raise and beat may set a high bar, and any slowdown in Water Quality growth or margin compression from SG&A investments could disappoint. Short-sellers might also argue that the market is paying a 'Danaher premium' that Veralto may not justify as an independent entity, especially if M&A execution falters.