Watts Water Technologies, Inc. (WTS) Income Statement

The sequence of growth rates suggests the business has moved from a near-flat 2025 into a durable expansion phase, though the reported figures do not separate price, volume, and acquired revenue. The Bradley contribution is not separately disclosed, so part of the Q3 gain may be inorganic, which warrants monitoring before treating the trend as fully organic. Sustained double-digit growth across three consecutive quarters appears more consistent with pricing actions and repair-and-replace demand than with a single new-construction cycle.

A gross margin this far above the peer set suggests pricing power and specification-driven value capture rather than commodity-level economics, since copper and brass inputs would otherwise compress margins. The step-up in 2026Q3 is large relative to prior quarters and may reflect favorable input cost timing, mix toward smart and higher-value products, or pricing carryover, and the data does not isolate these. Investors should monitor whether this elevated level holds as metal costs move, because a reversal would expose how much of the expansion depends on temporary cost conditions.

Quarterly SG&A stayed in a relatively narrow range of roughly $185M to $215M while gross profit expanded from $252.6M to $401.0M, implying strong operating leverage on the existing cost base. This pattern suggests overhead discipline is real, but it also means a revenue decline would compress margins quickly given the fixed-cost nature of SG&A. The sustainability of the 26.2% operating margin therefore depends on continued top-line growth rather than on cost reduction alone.