Veralto is a company that operates through two main segments, focusing on enhancing water and product quality. The Water Quality segment aims to improve water quality and reliability through brands like Hach, Trojan Technologies, and ChemTreat, while the Product Quality & Innovation segment enhances consumer trust and product innovation with brands such as Videojet, Linx, Esko, X-Rite, and Pantone **[0001967680-24-000111_vlto-20240628.htm:26]** **[0001967680-24-000137_vlto-20240927.htm:28]** **[0001140361-24-034419_ny20032797x1_s4.htm:57]** **[0001967680-24-000033_vlto-20231231.htm:88]**. In 2023, Veralto generated $5.0 billion in sales, with a significant portion derived from consumables, spare parts, services, and software, indicating a strong recurring revenue model **[0001967680-24-000033_vlto-20231231.htm:11]** **[0001140361-24-034419_ny20032797x1_s4.htm:88]**. The company maintains a resilient financial performance across economic cycles due to its business model, which supports a strong margin profile with limited capital expenditure requirements **[0001967680-24-000111_vlto-20240628.htm:26]** **[0001967680-24-000137_vlto-20240927.htm:28]** **[0001140361-24-034419_ny20032797x1_s4.htm:57]**.

1. **Water Quality (WQ)** - Focuses on improving the quality and reliability of water through brands like Hach, Trojan Technologies, and ChemTreat, offering solutions for water analysis, treatment, and management.
2. **Product Quality & Innovation (PQI)** - Promotes consumer trust and product innovation through brands such as Videojet, Linx, Esko, X-Rite, and Pantone, providing solutions for product identification, packaging, and color management.

445039a456c2d124b01c1da47f09cde3382a9f113181ed57b1e7c50defadfbde

Core sales growth for Veralto (percent)

Revenue increase due to price changes for Veralto (percent)

Core sales growth for Water Quality (percent)

Revenue increase due to price changes for the Water Quality segment (percent)

Core sales growth for Product Quality & Innovation (percent)

Revenue increase due to price changes for the Product Quality & Innovation segment (percent)

6bdb268ff3ef90e9dcf9c5fb80cafe99fe5d8b14f786d5ecbb10f81b85503f10

| Metric [USD Million] | Q4 2022 | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 |
|----------------------|---------|---------|---------|---------|---------|---------|---------|---------|
| Water Quality        | N/A     | **729**  **[0001628279-23-000215_filename2.htm:308]**  | **1,485**  **[0001628280-23-027286_exhibit991-veraltoform10.htm:293]**  | **772**  **[VLTO_3375835_3]** **[0001967680-23-000011_vlto-20230929.htm:33]** **[0001967680-23-000011_vlto-20230929.htm:10]**  | **782**  **[VLTO_3375833_3]**  | **749**  **[0001967680-24-000059_vlto-20240329.htm:27]**  | **777**  **[0001140361-24-034419_ny20032797x1_s4.htm:62]**  | **801**  **[0001967680-24-000137_vlto-20240927.htm:10]** **[0001967680-24-000137_vlto-20240927.htm:33]**  |
| Product Quality & Innovation | N/A | **496**  **[0001628279-23-000215_filename2.htm:308]**  | **993**  **[0001628280-23-027286_exhibit991-veraltoform10.htm:293]**  | **483**  **[VLTO_3375835_3]** **[0001967680-23-000011_vlto-20230929.htm:33]** **[0001967680-23-000011_vlto-20230929.htm:10]**  | **506**  **[VLTO_3375833_4]**  | **497**  **[0001967680-24-000059_vlto-20240329.htm:27]**  | **511**  **[0001140361-24-034419_ny20032797x1_s4.htm:62]**  | **513**  **[0001967680-24-000137_vlto-20240927.htm:10]** **[0001967680-24-000137_vlto-20240927.htm:33]**  |
| Total Revenue        | N/A     | **1,225**  **[0001628279-23-000215_filename2.htm:308]**  | **2,478**  **[0001628280-23-027286_exhibit991-veraltoform10.htm:293]**  | **1,255**  **[VLTO_3375835_3]** **[0001967680-23-000011_vlto-20230929.htm:33]** **[0001967680-23-000011_vlto-20230929.htm:10]**  | **1,290**  **[VLTO_3375833_3]**  | **1,246**  **[0001967680-24-000059_vlto-20240329.htm:27]**  | **1,288**  **[0001140361-24-034419_ny20032797x1_s4.htm:62]**  | **1,314**  **[0001967680-24-000137_vlto-20240927.htm:10]** **[0001967680-24-000137_vlto-20240927.htm:33]**  |

b7135ef2327514a4254bbb68343eb3f37100b2a1c1eadd2cee38d55e0d79866c

| Geographical Segment | Q4 2022 | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 |
|----------------------|---------|---------|---------|---------|---------|---------|---------|---------|
| North America (in millions) | N/A | **$576**  **[0001628279-23-000215_filename2.htm:307]**  | N/A | **$600**  **[0001967680-23-000011_vlto-20230929.htm:8]**  | N/A | **$603**  **[0001967680-24-000059_vlto-20240329.htm:7]**  | **$616**  **[0001967680-24-000111_vlto-20240628.htm:8]**  | **$637**  **[0001967680-24-000137_vlto-20240927.htm:8]**  |
| Western Europe (in millions) | N/A | **$278**  **[0001628279-23-000215_filename2.htm:307]**  | N/A | **$272**  **[0001967680-23-000011_vlto-20230929.htm:8]**  | N/A | **$281**  **[0001967680-24-000059_vlto-20240329.htm:7]**  | **$284**  **[0001967680-24-000111_vlto-20240628.htm:8]**  | **$285**  **[0001967680-24-000137_vlto-20240927.htm:8]**  |
| Other Developed Markets (in millions) | N/A | **$29**  **[0001628279-23-000215_filename2.htm:307]**  | N/A | **$30**  **[0001967680-23-000011_vlto-20230929.htm:8]**  | N/A | **$27**  **[0001967680-24-000059_vlto-20240329.htm:7]**  | **$29**  **[0001967680-24-000111_vlto-20240628.htm:8]**  | **$29**  **[0001967680-24-000137_vlto-20240927.htm:8]**  |
| High-Growth Markets (in millions) | N/A | **$342**  **[0001628279-23-000215_filename2.htm:307]**  | N/A | **$353**  **[0001967680-23-000011_vlto-20230929.htm:8]**  | N/A | **$335**  **[0001967680-24-000059_vlto-20240329.htm:7]**  | **$359**  **[0001967680-24-000111_vlto-20240628.htm:8]**  | **$363**  **[0001967680-24-000137_vlto-20240927.htm:8]**  |

8619ec54ab92b5894c06f726170511f1965a2591dc5b9f73e7a030ed85a1f0f2

Current Assets [USD, Millions]

Cash and Cash Equivalents [USD, Millions]

Accounts Receivable [USD, Millions]

Inventory [USD, Millions]

Non-Current Assets [USD, Millions]

PP&E [USD, Millions]

Goodwill [USD, Millions]

Intangible Assets [USD, Millions]

Current Liabilities [USD, Millions]

Accounts Payable [USD, Millions]

Short-term Debt [USD, Millions]

Accrued Expenses [USD, Millions]

Non-Current Liabilities [USD, Millions]

Long-term Debt [USD, Millions]

Lease Liabilities [USD, Millions]

Deferred Tax Liabilities [USD, Millions]

Shareholders' Equity [USD, Millions]

Retained Earnings [USD, Millions]

Common Stock [USD, Millions]

Additional Paid-in Capital [USD, Millions]

Adjustments for Non-Cash Items [USD, Millions]

Stock-Based Compensation [USD, Millions]

Changes in Working Capital [USD, Millions]

Capital Expenditures (CapEx) [USD, Millions]

Proceeds from / Repayments of Debt [USD, Millions]

Share Repurchases [USD, Millions]

Dividend Payments [USD, Millions]

Net Change in Cash [USD, Millions]

Total Revenue [USD, Millions]

Cost of Goods Sold (COGS) [USD, Millions]

SG&A [USD, Millions]

R&D [USD, Millions]

D&A [USD, Millions]

Interest Expense [USD, Millions]

Operating Income (EBIT) [USD, Millions]

Net Income [USD, Millions]

EPS - Basic [USD, Per Share]

EPS - Diluted [USD, Per Share]

fae6b43df3b7be7a833b17badfa05fa5c16278828d06b49262211cf69e3e483d

1. Given TraceGains is expected to be modestly dilutive to 2025 earnings due to planned investments, can you elaborate on what specific investments are required and how they will drive growth to achieve your double-digit ROI target by year six?
2. With Latin America showing 10% core sales growth driven by factors like reshoring and privatization of water utilities, how sustainable is this growth, and what risks do you anticipate that could potentially slow down this momentum?
3. You reported a 3% decline in sales into China; can you provide more insight into the underlying factors contributing to this decline and what strategies you have in place to address this market challenge?
4. The PQI segment is experiencing a gradual U-shaped recovery rather than the V-shaped recoveries seen in the past; what are the key barriers preventing a faster rebound, and how are you addressing these to accelerate growth in this segment?
5. In the context of your M&A strategy and the acquisition of TraceGains, how do you navigate paying high entry multiples while ensuring you meet your long-term ROI targets, especially given the competitive environment for high-quality assets?

2a148f4b6b7251c2c74edb8c237017407fb38201f09c3f767053400e3ee46897

### Q3 2024 Earnings Call
- **Issued Period**: Q3 2024
- **Guided Period**: Q4 2024 and FY 2024
- **Guidance**:
  - **Core Sales Growth**: Low to mid-single-digit range for Q4 2024.
  - **Acquisitions Contribution**: About 60 basis points to year-over-year sales growth.
  - **Adjusted Operating Profit Margin**: Approximately **24%** for Q4 2024.
  - **Adjusted EPS for Q4 2024**: Between **$0.86 to $0.90** per share.
  - **Full Year Adjusted EPS Guidance**: **$3.44 to $3.48** per share, with an 8% year-over-year growth  **[VLTO_3403587_4]** .

### Q2 2024 Earnings Call
- **Issued Period**: Q2 2024
- **Guided Period**: Q3 2024 and FY 2024
- **Guidance**:
  - **Full Year 2024**:
    - **Core Sales Growth**: Low single digits, trending towards high end.
    - **Adjusted Operating Profit Margin**: Approximately **75 basis points** expansion, aiming for about **24%**.
    - **Adjusted EPS**: **$3.37 to $3.45** per share, 7% growth.
    - **Free Cash Flow Conversion**: 100% to 110% of GAAP net income.
  - **Q3 2024**:
    - **Core Sales Growth**: Low to mid-single digits.
    - **Adjusted Operating Profit Margin**: Approximately **23.5%**.
    - **Adjusted EPS**: **$0.82 to $0.86** per share  **[VLTO_3394856_5]** .

### Q1 2024 Earnings Call
- **Issued Period**: Q1 2024
- **Guided Period**: Q2 2024 and FY 2024
- **Guidance**:
  - **Full Year 2024**:
    - **Core Sales Growth**: Low single-digit growth.
    - **Price Contribution**: 100 to 200 basis points.
    - **Adjusted Operating Profit Margin**: 50 to 75 basis points improvement.
    - **Adjusted EPS**: **$3.25 to $3.34** per share.
    - **Free Cash Flow Conversion**: 100% to 110%.
  - **Q2 2024**:
    - **Core Sales Growth**: Low single-digit growth.
    - **Adjusted Operating Margin**: Approximately 23%.
    - **Adjusted EPS**: **$0.75 to $0.80** per share  **[VLTO_3380691_4]** .

### Q4 2023 Earnings Call
- **Issued Period**: Q4 2023
- **Guided Period**: Q1 2024 and FY 2024
- **Guidance**:
  - **Core Sales Growth**: Low single digits.
  - **Price Contribution**: 100 to 200 basis points.
  - **Corporate and Other Expense**: About $100 million.
  - **Adjusted Operating Profit Margin**: 50 to 75 basis points improvement.
  - **Adjusted EPS**: **$3.20 to $3.30** per share.
  - **Sequential Core Sales Growth**: Improvement expected throughout 2024.
  - **Q1 2024 Specific**:
    - **Core Sales**: Approximately flat.
    - **Adjusted Operating Profit Margin**: 23% to 23.5%.
    - **Adjusted EPS**: **$0.73 to $0.78** per share  **[VLTO_3375833_5]** .

893e73e928587a0ff57cd183b1538eed4095889c8ecd7bbf53dfbcb1c440e0ec

c5e58ef10fa567ab70392b8354d36660b1879ff6b86a10cf1effebe262ea58f8

| Name               | Position                                      | Start Date         | Short Bio                                                                                                                                                                                                 |
|--------------------|-----------------------------------------------|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Jennifer L. Honeycutt | President and Chief Executive Officer; Director | 2023               | Jennifer L. Honeycutt serves as **President and Chief Executive Officer** and a member of the Board at Veralto. She has been in this role since the company's separation from Danaher in 2023  **[0001140361-24-034419_ny20032797x1_s4.htm:104]** **[0001967680-24-000046_vlto-20240327.htm:14]** **[0001140361-24-034419_ny20032797x1_s4.htm:111]** .                                      |
| Sameer Ralhan      | Senior Vice President and Chief Financial Officer | 2023               | Sameer Ralhan serves as Veralto's **Senior Vice President and Chief Financial Officer**. Before joining Veralto, he held various positions at The Chemours Company from **November 2014 to June 2023**  **[0001140361-24-034419_ny20032797x1_s4.htm:104]** **[0001967680-24-000033_vlto-20231231.htm:139]** **[0001628280-23-031040_exhibit991-veraltoform10a.htm:150]** **[0001628280-23-030661_exhibit991-veraltoform10a.htm:150]** **[0001628280-23-027286_exhibit991-veraltoform10.htm:150]** **[0001628279-23-000296_filename30.htm:176]** .                      |
| Melissa Aquino     | Senior Vice President, Water Quality          | January 9, 2023    | Melissa Aquino serves as **Senior Vice President, Water Quality** at Veralto. She began her role as Vice President and Group Executive of Danaher’s Water Quality companies on **January 9, 2023**  **[0001967680-24-000033_vlto-20231231.htm:139]** **[0001628280-23-027286_exhibit109-form10.htm:0]** .                                      |
| Mattias Byström    | Senior Vice President, Product Quality & Innovation | November 2021     | Mattias Byström serves as **Senior Vice President, Product Quality & Innovation** at Veralto. He has held this position since **November 2021**  **[0001140361-24-034419_ny20032797x1_s4.htm:104]** **[0001967680-24-000033_vlto-20231231.htm:139]** **[0001628280-23-031040_exhibit991-veraltoform10a.htm:150]** **[0001628280-23-027286_exhibit991-veraltoform10.htm:150]** .                                                                                   |
| Surekha Trivedi    | Senior Vice President, Strategy & Sustainability | 2007               | Surekha Trivedi serves as Veralto's **Senior Vice President, Strategy & Sustainability**. She has held various positions at Danaher since joining the company in **2007**  **[0001140361-24-034419_ny20032797x1_s4.htm:104]** **[0001967680-24-000033_vlto-20231231.htm:139]** **[0001628280-23-030661_exhibit991-veraltoform10a.htm:150]** **[0001628280-23-027286_exhibit991-veraltoform10.htm:150]** **[0001628280-23-031040_exhibit991-veraltoform10a.htm:150]** **[0001628279-23-000296_filename30.htm:176]** .                                                    |
| Lesley Beneteau    | Senior Vice President, Human Resources        | 2010               | Lesley Beneteau serves as **Veralto's Senior Vice President and Chief Human Resources Officer**. She joined Danaher in **2010** and has held various positions, including Vice President, Talent Management of Danaher since November 2015  **[0001140361-24-034419_ny20032797x1_s4.htm:105]** **[0001967680-24-000033_vlto-20231231.htm:139]** **[0001140361-24-034419_ny20032797x1_s4.htm:104]** . |
| Sylvia Stein       | Senior Vice President and General Counsel     | June 26, 2023      | Sylvia Stein serves as **Senior Vice President and General Counsel** at Veralto. She joined the company on **June 26, 2023**  **[0001967680-24-000033_vlto-20231231.htm:140]** **[0001967680-24-000033_offerofemploymentletterbet.htm:0]** .                                                                                                          |
| Vijay Sankaran     | Board Member, Audit Committee                 | July 2024          | **Vijay P. Sankaran** has been serving as a **Class I director** and a member of the **Audit Committee** at Veralto since **July 2024**  **[0001140361-24-034419_ny20032797x1_s4.htm:122]** .                                                                                                    |

b7f9287fc4e43f89e99cdbd6907b727b92ca879be32d441c632456cbd2e97aea

6f227ce47b4c0c47f79c8e88bb70a57d7e9df34c49b2b0174bd06be9bd619f8b

Water Quality

- Recurring Revenue

- Nonrecurring Revenue

Product Quality & Innovation

Total Revenue

93a191353bad521dca2b17dd3a07772201c45119bb1cc0651235cf7612cacab0

North America

Western Europe

Other Developed Markets

High-Growth Markets

- United States

- China

- Germany

- All Other Countries

68ae3bfab5924411487d3b4305675b2e7f31865665da644200cdf36e8421b254

7a2d9dab365937804944fd8f00cee24dab23d3bd62fc674998d00b02613d070d

**Quarterly guidance for Q4 2024:**
- **Core Sales Growth**: Low to mid-single-digit range  **[VLTO_3403587_4]**  (no prior guidance)  
- **Acquisitions Contribution**: About 60 basis points  **[VLTO_3403587_4]**  (no prior guidance)  
- **Adjusted Operating Profit Margin**: ~24%  **[VLTO_3403587_4]**  (no prior guidance)  
- **Adjusted EPS**: $0.86 to $0.90  **[VLTO_3403587_4]**  (no prior guidance)

**Annual guidance for FY 2024:**
- **Adjusted EPS**: $3.44 to $3.48  **[VLTO_3403587_4]**  (raised from $3.37 to $3.45  **[VLTO_3394856_5]** )

ba26d4b729c1749b4604e72215586aecc5d73856d21aa46826e237c3cb2e2725

39acc388f39f27eac0a8bf02f53d103c4b96602a07758113374733edd0c22cd9

| Name               | Start Date | End Date | Reason for Change |
|--------------------|------------|----------|-------------------|
| Ernst & Young LLP | 2022  **[0001967680-24-000033_vlto-20231231.htm:82]**  | Present  | Current auditor   |

87c9c9cd37226d5746f8bc44b097b43af2ff09ca87cd316e2e87b8e26956fab6

23794d91c53ae875c8e247d72561e35d9d06ee07c70c9e0dbcc977a6d161504a

- Total Revenue: $1,314 million (+5% YoY)  **[0001967680-23-000011_vlto-20230929.htm:10]** **[0001967680-24-000137_vlto-20240927.htm:10]**   
- Water Quality: $801 million (+4% YoY)  **[0001967680-23-000011_vlto-20230929.htm:10]** **[0001967680-24-000137_vlto-20240927.htm:10]**   
- Product Quality & Innovation: **$513 million (+6% YoY)**  **[0001967680-23-000011_vlto-20230929.htm:10]** **[0001967680-24-000137_vlto-20240927.htm:10]**   
- North America: **$637 million (+6% YoY)**  **[0001967680-23-000011_vlto-20230929.htm:8]** **[0001967680-24-000137_vlto-20240927.htm:8]**   
- Western Europe: $285 million (+5% YoY)  **[0001967680-23-000011_vlto-20230929.htm:8]** **[0001967680-24-000137_vlto-20240927.htm:8]**   
- Other Developed Markets: $29 million (-3% YoY)  **[0001967680-23-000011_vlto-20230929.htm:8]** **[0001967680-24-000137_vlto-20240927.htm:8]**   
- High-Growth Markets: $363 million (+3% YoY)  **[0001967680-23-000011_vlto-20230929.htm:8]** **[0001967680-24-000137_vlto-20240927.htm:8]**   

6df6ec1e4860bcd9dd951fdb05a930d13459d319a57e14aa365a5b0268e040d9

1. **Revenue Guidance Increase**  
   **Q:** What drove the $100 million increase in revenue guidance?  
   **A:** We see strength across the board, benefiting from our essential products and strong markets. Demand in water and municipalities, especially in U.S. and Europe, remains robust. Our water treatment businesses are seeing growth from factors like the **CHIPS Act** and data center build-outs.  **[VLTO_3394856_11]** 

2. **Margin Sustainability**  
   **Q:** Is 60% gross margin the new normal?  
   **A:** Gross margin improvements are driven by increased rigor on **VES** and a shift towards higher-margin consumables. While we feel really good about **60%**, as equipment sales equilibrate with consumables over time, we expect gross margins to settle in the **high 50%** range.  **[VLTO_3394856_7]** 

3. **M&A Strategy and Timing**  
   **Q:** Any updates on M&A plans and potential large deals?  
   **A:** We remain active with robust funnels in both PQI and Water Quality. We're disciplined in our approach, focusing on market, company, and valuation. Valuations are still somewhat inflated, so timing is uncertain. We'll consider all funding options but will maintain an **investment-grade balance sheet**.  **[VLTO_3394856_8]** **[VLTO_3394856_12]** 

4. **China Outlook**  
   **Q:** What is the demand outlook in China?  
   **A:** Our view hasn't materially changed; China has stabilized but we don't expect meaningful recovery this year. Funding for state-owned municipalities is **extraordinarily tight**. Sequentially, we assume China will be **flat**, with a slight year-over-year uptick in the second half.  **[VLTO_3394856_10]** 

5. **Free Cash Flow Conversion**  
   **Q:** Can you sustain strong free cash flow conversion?  
   **A:** While quarter-to-quarter variability exists, we feel confident about delivering **100% to 110%** free cash flow conversion of GAAP net income for the full year, given our business strength and execution.  **[VLTO_3394856_13]** 

6. **Incremental Margins Outlook**  
   **Q:** Could incremental margins exceed 35% long-term?  
   **A:** Short-term execution is driving near **50%** fall-through, but we maintain a long-term incremental margin framework of **30%–35%**, incorporating healthy reinvestment in sales and R&D to support sustainable growth.  **[VLTO_3394856_20]** 

7. **Investment in Growth**  
   **Q:** How will you invest in sales and R&D over several years?  
   **A:** Our investments will support our mid-single-digit growth framework of **4%–6%**. On average, we'll invest in line with revenue growth, focusing on cumulative growth and acknowledging portfolio evolution.  **[VLTO_3394856_21]** 

8. **Recycle, Reuse, Reclaim Market Potential**  
   **Q:** What is the growth outlook in recycle, reuse, reclaim markets?  
   **A:** We see great demand, especially benefiting our **Trojan** business, with the space growing **mid- to high single digits**. Industries are under pressure to meet sustainability targets, and we're well-positioned to help them.  **[VLTO_3394856_22]** 

9. **SG&A Increase Explanation**  
   **Q:** What drove the increase in SG&A expenses?  
   **A:** We are investing in sales and marketing to drive growth, adding heads in these areas. Inflation plays a minor role. Corporate expenses will normalize in the second half as we reach a run-rate level.  **[VLTO_3394856_14]** 

10. **Sequential Margin Pressure**  
    **Q:** Why do margins step down in Q3 versus Q2?  
    **A:** Two factors: a mix shift towards equipment sales, which have lower margins than consumables, and increased corporate expenses as we reach run-rate levels in the second half.  **[VLTO_3394856_19]** 

11. **Product Rationalization**  
    **Q:** How far along is product rationalization?  
    **A:** We continually prune our portfolio to focus on higher growth and higher-margin areas. This is standard work, not episodic, and we'll take action on anything materially outside our desired profile.  **[VLTO_3394856_15]** 

12. **Industrial Growth Drivers**  
    **Q:** What's unique about your industrial growth?  
    **A:** Our end markets are driven by non-optional secular growth drivers like food, water, and pharma. With **85%** of sales in these areas and **60%** recurring revenue, our products are essential, leading to durable demand.  **[VLTO_3394856_27]** 

13. **PFAS Regulation Opportunity**  
    **Q:** Any updates on PFAS regulation products?  
    **A:** We're interested and investing in this complex area. While solutions are still a few years away, we're leveraging our history in testing and treatment to develop fit-for-purpose solutions.  **[VLTO_3394856_26]** 

14. **Packaging and Color Bookings**  
    **Q:** Are you seeing improving trends in packaging and color?  
    **A:** Yes, we've had strong bookings following the **drupa** trade show, with pent-up demand and interest in our innovative cloud-native digital solutions. Brand owners are under pressure to compress development cycles, benefiting us.  **[VLTO_3394856_18]** 

15. **Argentina Exposure**  
    **Q:** What's your exposure to Argentina's situation?  
    **A:** We've insulated impact through a **blue chip swap**, reducing our exposure significantly. This reduced exposure is reflected in our guidance.  **[VLTO_3394856_24]** 

16. **Long-term SG&A Normalization**  
    **Q:** What is the realistic long-term SG&A level?  
    **A:** Our business model relies on investments in sales, marketing, and R&D. While SG&A might seem high, our direct model provides a competitive advantage, and we feel good about it.  **[VLTO_3394856_28]** 

17. **Favorable Mix in Water Quality**  
    **Q:** How is favorable mix affecting Water Quality margins?  
    **A:** Increased consumables are driving margins, with recurring revenue at almost **62%**. As equipment volumes recover over multiple quarters, this mix will normalize to **high 50%** levels.  **[VLTO_3394856_17]** 

18. **Confidence in Second Half Outlook**  
    **Q:** Has anything changed in your end market outlook?  
    **A:** Our confidence comes from steady Water Quality businesses and improving macro conditions in consumer packaged goods markets. With **85%** of revenue in water, food, and pharma, steady or improving markets benefit us.  **[VLTO_3394856_16]** 

19. **High-end Guidance Drivers**  
    **Q:** What's behind the high end of your guidance?  
    **A:** It depends on the evolving consumer packaged goods (CPG) markets and their impact on PQI top line. We've taken a prudent view, so any positive changes in CPG demand or raw material costs could push us to the high end.  **[VLTO_3394856_25]** 

20. **Gross Margins vs. SG&A Levels**  
    **Q:** With 60% gross margins, will SG&A normalize lower?  
    **A:** Our SG&A reflects strategic investments in sales, marketing, and R&D, aligning with our value creation. Our direct business model results in higher SG&A but provides competitive strength.  **[VLTO_3394856_28]** 

c6e4e55c56dd6e6cec4cac45249094ac03e825dc334d239e06f676e93104578e

719932eb3db28895e4086b90e228878cd0af704d68e8ac779ead6689169fdaa5

| Year | Amount Due (in $ millions) | Debt Type                  | Interest Rate (%) | % of Total Debt                                                                 |
|----------|-------------------------------|--------------------------------|-----------------------|------------------------------------------------------------------------------------|
| 2026 | 697 **[0001967680-24-000137_vlto-20240927.htm:13]**               | 5.50% senior unsecured notes  | 5.50 **[0001967680-24-000137_vlto-20240927.htm:13]**     | 26.4% = (697 / 2,639) * 100 **[0001967680-24-000137_vlto-20240927.htm:13]**                                           |
| 2028 | 695 **[0001967680-24-000137_vlto-20240927.htm:13]**               | 5.35% senior unsecured notes  | 5.35 **[0001967680-24-000137_vlto-20240927.htm:13]**     | 26.3% = (695 / 2,639) * 100 **[0001967680-24-000137_vlto-20240927.htm:13]**                                           |
| 2031 | 554 **[0001967680-24-000137_vlto-20240927.htm:13]**               | 4.15% senior unsecured notes  | 4.15 **[0001967680-24-000137_vlto-20240927.htm:13]**     | 21.0% = (554 / 2,639) * 100 **[0001967680-24-000137_vlto-20240927.htm:13]**                                           |
| 2033 | 693 **[0001967680-24-000137_vlto-20240927.htm:13]**               | 5.45% senior unsecured notes  | 5.45 **[0001967680-24-000137_vlto-20240927.htm:13]**     | 26.3% = (693 / 2,639) * 100 **[0001967680-24-000137_vlto-20240927.htm:13]**                                           |

4be370e532649a52b9cf37c7c1b0eca6399a1963ce194c1d132f4cc173310ee3

- **China sales are expected to decline in the first half of 2024**, with recovery only anticipated in the second half, posing a headwind to growth.  **[VLTO_3375833_7]**
- **Adjusted operating profit margins are projected to decrease in Q1 2024**, with guidance of 23% to 23.5%, down from around 25% in Q4 2023, due to increased stand-alone company costs and select investments, raising concerns about profitability.  **[VLTO_3375833_17]**
- **Currency devaluation and portfolio pruning are negatively impacting financials**, including a **$17 million loss due to the Argentine peso devaluation** and **$20 million annual revenue reduction** from product line shutdowns, which may continue to affect performance.  **[VLTO_3375833_3]** **[VLTO_3375833_9]**

825f5b7a5fcca2dc6b254e9e6471cdeaa46864bbd32d9c4e3d06ace5e8406693

- **High SG&A expenses at 30%** of revenue seem elevated for a new company and may impact long-term profitability.  **[VLTO_3394856_28]**
- **Margins are expected to decline** in Q3 due to an unfavorable sales mix shifting towards equipment sales and increased corporate expenses, potentially pressuring profitability.  **[VLTO_3394856_19]**
- The company does **not expect meaningful recovery in China this year** due to tight funding in state-owned municipalities, which could hinder growth in a key market.  **[VLTO_3394856_10]**

1926de9733f41433cc3b6783ab7e52f69c030d788fde91028a2de6b7923390c8

- **Veralto's simplification and enhancement of the Veralto Enterprise System (VES)** have fortified execution, driving discipline and focus, enabling the company to better capitalize on **durable growth trends** across both segments.  **[VLTO_3403587_10]**
- **The acquisition of TraceGains strengthens Veralto's position in food safety and traceability**, enhancing capabilities to provide ingredient traceability and leveraging their coding and marking business to identify and quarantine contaminated products, addressing the growing demand for **food safety solutions**.  **[VLTO_3403587_12]** **[VLTO_3403587_13]**
- **Veralto is experiencing strong growth in Latin America, now representing 10% of total sales**, propelled by investments in high-growth opportunities, benefits from reshoring/onshoring trends as customers diversify supply chains, and **privatization of water utilities in Brazil**, contributing to sustainable growth going forward.  **[VLTO_3403587_19]**

31101cc803be3f1e2a17fcbda9392e1f8a0e1d41e60b0e539f80858d1ddfd2ba

1. **Q4 Margin Guidance**  
   **Q:** Why is Q4 margin expected to be down versus Q3?  
   **A:** Margins in Q4 are projected to be lower due to a **30 basis point impact** from TraceGains' operating impact and transaction costs  **[VLTO_3403587_6]** , an additional **50 basis point impact** from higher corporate costs related to first-year public company expenses  **[VLTO_3403587_6]** , and a mix shift towards equipment sales as printer volumes recover.  **[VLTO_3403587_6]**  Combined, these factors contribute to an **80 basis point margin impact**.  **[VLTO_3403587_6]** 

2. **Growth Outlook**  
   **Q:** Any changes in growth trends for Q4 and into 2025?  
   **A:** Growth patterns are expected to be similar to Q3  **[VLTO_3403587_6]** , with steady recovery in the consumer packaged goods (CPG) sector.  **[VLTO_3403587_6]** **[VLTO_3403587_8]**  Demand remains consistent, and the company is encouraged by ongoing improvements in PQI.  **[VLTO_3403587_6]** **[VLTO_3403587_8]**  China is anticipated to be sequentially flat, but a strong Q4 last year may impact year-over-year comparisons.  **[VLTO_3403587_6]** 

3. **TraceGains Acquisition Impact**  
   **Q:** How will TraceGains drive growth and affect earnings?  
   **A:** TraceGains provides cloud-based solutions connecting brands with ingredient manufacturers, enhancing compliance and traceability in food and beverage safety.  **[VLTO_3403587_7]** **[VLTO_3403587_11]**  It's expected to continue delivering **double-digit sales growth**.  **[VLTO_3403587_7]** **[VLTO_3403587_11]**  However, due to ongoing investments to fuel this growth, TraceGains is projected to be **modestly dilutive** to earnings in 2025.  **[VLTO_3403587_11]** 

4. **CPG Market Recovery**  
   **Q:** What are the signs of recovery in the CPG market?  
   **A:** The company observes a **fifth consecutive quarter** of mid- to high single-digit growth in recurring revenue at PQI  **[VLTO_3403587_8]** , indicating that production lines are coming back online and being refurbished.  **[VLTO_3403587_8]**  Additionally, there have been **two consecutive quarters** of year-over-year growth in equipment sales, suggesting brand owners are upgrading and replacing aging printers.  **[VLTO_3403587_8]** 

5. **China Sales Outlook**  
   **Q:** What is the outlook for China sales?  
   **A:** China sales are expected to remain **sequentially flat**.  **[VLTO_3403587_6]** **[VLTO_3403587_16]**  There is modest recovery in PQI within CPG and industrial markets  **[VLTO_3403587_16]** , but challenges persist in Water Quality due to funding issues at municipal customer sites and tough comparisons from strong semiconductor project sales last year.  **[VLTO_3403587_16]** 

6. **Latin America Growth**  
   **Q:** Why has Latin America growth accelerated, and is it sustainable?  
   **A:** Growth in Latin America has accelerated due to commercial investments and focusing on high-growth opportunities.  **[VLTO_3403587_19]**  Benefits are seen from **reshoring/onshoring activities** as customers diversify risk from China.  **[VLTO_3403587_19]**  Also, privatization of water utilities in Brazil is providing new opportunities.  **[VLTO_3403587_19]**  Latin America now represents **10% of total sales**, and the company believes this growth is sustainable.  **[VLTO_3403587_19]** 

7. **CapEx Requirements**  
   **Q:** What are the long-term CapEx needs?  
   **A:** The business operates on an **asset-light model**, with CapEx typically at **1% to 2%** of sales.  **[VLTO_3403587_22]**  Investments focus on R&D and commercial activities rather than capital expenditures.  **[VLTO_3403587_22]** 

8. **M&A Strategy and ROIC Targets**  
   **Q:** What are the acquisition criteria and ROIC expectations?  
   **A:** The company focuses on market, company, and valuation alignment for acquisitions.  **[VLTO_3403587_13]** **[VLTO_3403587_25]**  For small bolt-on acquisitions, they aim to achieve cost of capital by **year 3**.  **[VLTO_3403587_13]**  For larger, technology-focused acquisitions like TraceGains, they target achieving ROIC close to cost of capital by **year 5 or 6**.  **[VLTO_3403587_13]** **[VLTO_3403587_25]** 

9. **Water Quality Margins**  
   **Q:** What's affecting margins in the Water Quality segment?  
   **A:** Margins are influenced by a mix shift towards higher growth in industrial and chemical treatment businesses, which have slightly lower margins than analytics.  **[VLTO_3403587_17]** **[VLTO_3403587_21]**  Additionally, investments in sales and marketing are being made to capture future growth opportunities.  **[VLTO_3403587_17]** **[VLTO_3403587_21]** 

10. **Traceability Solutions**  
    **Q:** How is the company positioned in food traceability?  
    **A:** The company's coding and marking business provides date codes and lot codes, enabling traceability to identify and quarantine affected products in the event of contamination.  **[VLTO_3403587_13]**  The integration of TraceGains enhances the ability to trace ingredient information, crucial for brand manufacturers.  **[VLTO_3403587_12]** **[VLTO_3403587_13]** 

d25e22ce411dffeeae46c9a419bd58ae9795327396a09c89867495978a37ad9a

- **Limited Capabilities in Food-Borne Contamination Detection:** Veralto admits they are less equipped to handle acute outbreaks of food-borne issues compared to water-borne outbreaks, stating "*we don't play as heavily there*."  **[VLTO_3403587_12]**
- **Margin Pressure in Water Quality Segment Due to Product Mix and Investments:** The company acknowledges that the analytics business, which has higher margins, is being outpaced by growth in lower-margin industrial and chemical treatment businesses, impacting overall margins.  **[VLTO_3403587_17]**
- **Potential Risks Associated with M&A Strategy and Valuation:** When questioned about entry multiples in M&A, the CFO emphasizes value creation over valuation discipline, which could imply risks in overpaying for acquisitions.  **[VLTO_3403587_26]**

1bd6735299b12cc767d2bc6f37b3b1950413d5a9cf17db71dc2e2a0cd6dc4744

1. **China Sales Outlook**  
   **Q:** What's the outlook for China sales in 2024?  
   **A:** Management expects China sales to stabilize and improve sequentially in 2024, believing the market is near the bottom. They foresee year-over-year sales declines in the first half, improving throughout the balance of the year, with a positive start observed in January.  **[VLTO_3375833_7]** ,  **[VLTO_3375833_12]** 

2. **Margin Outlook for 2024**  
   **Q:** How will margins evolve in 2024?  
   **A:** They expect to deliver **50 to 75 basis points** of margin expansion for the full year, despite approximately **$40 million** of headwinds from corporate expenses. Margins will improve sequentially, with Q1 being the toughest compare due to stand-alone company costs and select growth investments.  **[VLTO_3375833_13]** ,  **[VLTO_3375833_17]** 

3. **Product Quality Segment Recovery**  
   **Q:** What's driving recovery in the Product Quality segment?  
   **A:** Customer destocking has largely been completed, with PQI consumables growing mid-single digits in Q4. Management expects steady sequential recovery over the year, modeling low single-digit core growth, with volume declining in the first half and turning positive in the second half.  **[VLTO_3375833_11]** 

4. **Water Quality Segment Outlook**  
   **Q:** What is the outlook for the Water Quality segment?  
   **A:** Despite tough comparisons, they anticipate steady demand, with strong growth in North America for UV Trojan systems and stable demand in Europe. China demand remains suppressed but shows sequential stability, and they are cautiously optimistic about improvements in coming quarters.  **[VLTO_3375833_12]** 

5. **M&A and Capital Allocation**  
   **Q:** What's the focus regarding M&A and returning capital?  
   **A:** The company maintains a bias towards M&A, with a strong pipeline in both Water Quality and PQI. They announced a **$0.09** dividend in Q4 and are committed to long-term shareholder value through disciplined capital deployment.  **[VLTO_3375833_8]** 

6. **Frictional Costs Post-Spin-off**  
   **Q:** Are there remaining frictional costs post-spin-off?  
   **A:** Frictional costs are minimal and mostly complete. Starting Q1, they will see the run-rate costs, with **$100 million** in corporate expenses representing the ongoing run rate. Portfolio cleanup actions amounted to about **$20 million** in annual revenue.  **[VLTO_3375833_9]** 

7. **Interest Expense Guidance**  
   **Q:** What is the expected interest expense for 2024?  
   **A:** The anticipated interest expense is approximately **$140 million** on a run-rate basis, including some benefit from interest income.  **[VLTO_3375833_13]** 

8. **Aria Filtra Strategy**  
   **Q:** What's the strategy for Aria Filtra (Pall Water)?  
   **A:** They have pivoted investments in Aria Filtra, focusing on high-return opportunities, particularly in North America, and investing in mobile water treatment to meet strong demand in applications like drinking water and potable reuse.  **[VLTO_3375833_10]** ,  **[VLTO_3375833_15]** 

9. **PQI Equipment Sales Lag**  
   **Q:** When will PQI equipment sales improve after consumables?  
   **A:** Improvement in equipment sales typically lags consumables by about **two quarters**, though it varies by customer.  **[VLTO_3375833_14]** 

10. **Price-Cost Impact on Margins**  
    **Q:** How will price and cost affect margins in 2024?  
    **A:** Price increases of **100 to 200 basis points** are expected, which may be slightly positive to margins. Combined with cost optimization initiatives, this contributes to the overall expected margin expansion.  **[VLTO_3375833_16]** 

11. **Innovation Spend and Benefits**  
    **Q:** How will innovation impact growth in 2024?  
    **A:** The company allocates about **4% to 5%** of sales to R&D and innovation, focusing on high-return investments across both segments to drive growth through new product development.  **[VLTO_3375833_18]** 

52cf6cb8a1534ad0656ea37cd6c6e90c52e88982ff972632feadac2252ed3f2b

- **Strong Industrial Demand and Growth Opportunities in Water Quality Segment**: Veralto is experiencing robust industrial demand in its Water Quality segment, particularly in North America, with sectors like food and beverage, chemical processing, mining, and power generation showing strength. This is fueled by positive macroeconomic conditions and reshoring activities, including opportunities from the CHIPS Act which benefits their UV treatment systems for ultra-high-purity water used in semiconductor manufacturing.  **[VLTO_3380691_20]** ,  **[VLTO_3380691_23]**
- **Significant Growth Potential in Industrial Recycle and Reuse Markets**: There is a great deal of activity and growth potential in industrial recycle and reuse markets, which are considered "sweet spots" for Veralto's water quality businesses. Their product portfolio is well-positioned to help customers reduce and recycle water usage, tapping into the increasing ESG focus among customers.  **[VLTO_3380691_19]**
- **Strong Financial Performance Leading to High Margins and Cash Flow**: Veralto has achieved impressive gross margins around **60%**, demonstrating the earnings power of their businesses. They have increased their free cash flow conversion guidance from **100% to 110%** due to better operating performance and conviction on margins. Operating discipline and value-based pricing are helping them manage inflationary pressures effectively.  **[VLTO_3380691_6]** ,  **[VLTO_3380691_17]** ,  **[VLTO_3380691_16]**

7821c957ca191ad6b62ac9f75f3826eebe741f5b49c3443adbdc4c2c8c659710

1. **M&A Pipeline**  
   **Q:** How is the M&A pipeline developing?  
   **A:** Jennifer stated they have a **very robust M&A pipeline** with numerous opportunities in both the Water Quality and PQI segments.  **[VLTO_3380691_10]**  They remain disciplined, focusing on the right markets and valuations, targeting companies with similar operating models and financial profiles.  **[VLTO_3380691_10]**  She mentioned they see **more actionable opportunities opening up** as the year progresses.  **[VLTO_3380691_10]** 

2. **Gross Margin Sustainability**  
   **Q:** Is the 60% gross margin sustainable?  
   **A:** Sameer explained that they expect gross margins to remain in the **58% to 60% range**.  **[VLTO_3380691_6]**  Jennifer added that despite the impressive 60% figure, they will likely see margins in that "ZIP code" as equipment sales recover in the second half of the year.  **[VLTO_3380691_6]** 

3. **PQI Recovery and Equipment Demand**  
   **Q:** How is the PQI recovery and equipment demand outlook?  
   **A:** Jennifer is **encouraged by PQI performance**, noting **mid-single-digit growth** in consumables for the third consecutive quarter.  **[VLTO_3380691_8]**  She observed that consumables recover first, followed by equipment.  **[VLTO_3380691_8]**  They saw positive equipment orders late in Q1, indicating a sequential improvement.  **[VLTO_3380691_8]**  Sameer added they are cautiously building equipment recovery into the second half of the year.  **[VLTO_3380691_8]** 

4. **Margin Outlook Amid Mix Shift**  
   **Q:** Why will margins decline sequentially from Q1 to Q2 despite higher revenues?  
   **A:** Sameer explained that margins will be lower due to **seasonally higher operating expenses** in Q2, such as increased trade show activity.  **[VLTO_3380691_11]**  Additionally, they are ramping up corporate expenses and investments in SG&A, affecting margins across both segments.  **[VLTO_3380691_11]** 

5. **Impact of PFAS Regulations**  
   **Q:** Are you developing economical PFAS testing solutions?  
   **A:** Jennifer acknowledged the challenge of PFAS detection at **4 parts per trillion**, stating that solutions are **a couple of years out**.  **[VLTO_3380691_14]**  They are investing in both detection and destruction technologies, believing that winning will require addressing both.  **[VLTO_3380691_14]**  She noted they are open to both organic and inorganic options.  **[VLTO_3380691_14]** 

6. **Free Cash Flow Conversion**  
   **Q:** Should we expect free cash flow conversion over 100% going forward?  
   **A:** Sameer indicated they are guiding for a free cash flow conversion of **100% to 110%** for the full year.  **[VLTO_3380691_17]**  This reflects better operating performance and increased confidence in margins.  **[VLTO_3380691_17]**  He mentioned that they provide conversion based on GAAP metrics.  **[VLTO_3380691_17]** 

7. **Industrial Demand Drivers**  
   **Q:** What is driving strong industrial demand in Water Quality?  
   **A:** Jennifer highlighted **strong industrial output**, especially in North America, with growth in food and beverage, chemical processing, mining, and power generation.  **[VLTO_3380691_20]**  She mentioned opportunities from reshoring activities, particularly related to microelectronics and the CHIPS Act.  **[VLTO_3380691_20]** 

8. **Direct Sales vs. Distribution Model**  
   **Q:** Will you leverage distribution more to reduce costs?  
   **A:** Jennifer prefers maintaining the **direct sales model** due to the customer intimacy it provides, which drives innovation.  **[VLTO_3380691_15]** **[VLTO_3380691_18]**  While they use distribution selectively in certain countries or product lines, they believe direct engagement is key to understanding customer needs.  **[VLTO_3380691_15]** **[VLTO_3380691_18]** 

9. **Cost Management and Pricing**  
   **Q:** How are you managing inflationary pressures and pricing?  
   **A:** Sameer stated they are modeling price increases of **100 to 200 basis points**, in line with historical norms.  **[VLTO_3380691_16]**  They are managing inflation through operational discipline and the application of VES, minimizing spot buys, and maintaining strong pricing strategies.  **[VLTO_3380691_16]** 

10. **Recycle and Reuse Opportunities**  
    **Q:** What are the trends in industrial recycle and reuse markets?  
    **A:** Jennifer sees significant growth potential in recycle and reuse, with increased customer focus due to ESG priorities.  **[VLTO_3380691_19]**  Their Water Quality businesses, including ChemTreat, Trojan, and Hach, are well-positioned to help customers reduce and recycle water usage.  **[VLTO_3380691_19]** 

11. **Organizational Changes for M&A**  
    **Q:** Did you build up M&A capabilities post-spin?  
    **A:** Jennifer said they brought in top talent in strategy and corporate development with strong M&A experience from Danaher.  **[VLTO_3380691_12]**  They have upskilled leadership in operating companies for due diligence and integration, enhancing their M&A muscle.  **[VLTO_3380691_12]** 

12. **Impact of M&A on Margins**  
    **Q:** Will margins decline as you add acquisitions?  
    **A:** Sameer stated they follow a disciplined approach, considering multiple financial metrics like ROIC and margins.  **[VLTO_3380691_21]**  They focus on value creation potential, aiming for acquisitions that drive core growth and synergies, rather than focusing solely on margins.  **[VLTO_3380691_21]** 

1c026937d421f06f9f1a51fa7e76074d43b7fb61a230ab2a0356d3c67e9afbbc

- **Strong Commitment to Innovation Driving Growth:** Veralto invests about **4% to 5% of sales in R&D and innovation**, strategically focusing on high-return investments across both Water Quality and PQI segments to solve customer problems, enhancing growth prospects.  **[VLTO_3375833_18]**
- **Recovery in PQI Segment Indicating Growth Potential:** Sales of PQI consumables, including **ink, solvents, and spare parts**, grew **mid-single digits year-over-year** in Q4, signifying early recovery in **food and beverage markets** and expected to lead to **steady sequential recovery** in 2024.  **[VLTO_3375833_11]** ,  **[VLTO_3375833_14]**
- **Strategic Repositioning in Water Quality Segment Driving Demand:** Veralto has repositioned its **Aria Filtra business** to focus on high-return opportunities in North America, seeing **strong demand in critical applications for drinking water and potable reuse**, and investing in **mobile water treatment**, capitalizing on increasing importance of water conservation.  **[VLTO_3375833_10]**

d900533b3fe2207022ef7b946d07d60ded26d08abaeed4800b6976614f7ed6e9

- **PQI Segment is Performing Well with Growth in Marking and Coding Businesses:** Veralto's Product Quality and Innovation (PQI) segment is experiencing strong performance, with marking and coding businesses growing in line with the recovery of the consumer packaged goods market. Equipment sales have returned to growth, and new product launches are gaining momentum, contributing to positive customer sentiment.  **[VLTO_3394856_9]** **[VLTO_3394856_11]**
- **Increased Rigor in Deploying Veralto Enterprise System (VES) Driving Margin Expansion:** The company is benefiting from improved gross margins due to strong execution and increased use of the Veralto Enterprise System (VES). This has led to better productivity, operational leverage, and cost optimization, resulting in expanded margins.  **[VLTO_3394856_7]**
- **Robust Demand Across Water Quality Segment with Secular Growth Drivers:** Veralto is experiencing robust demand in its Water Quality segment, capitalizing on secular growth drivers. The company is benefiting from data center build-outs requiring extensive water in cooling towers, which supports businesses like ChemTreat and Trojan. This strong demand is leading to continued strong momentum in water treatment and water quality.  **[VLTO_3394856_16]** **[VLTO_3394856_11]**

4f6ce76c05d9484f5540a00510bedfbf0f6f521673b59c667e76a1f9b0d2a372

- The company acknowledged that **gross margins may decline from 60% to between 58% and 60%** as lower-margin equipment sales increase in the second half of the year, suggesting that current high gross margins may not be sustainable.  **[VLTO_3380691_6]**
- **Operating expenses are expected to rise in Q2**, due to increased SG&A spending, corporate expenses, and seasonal factors like trade shows. This will lead to a **sequential decline in operating margins despite higher revenues**, which could pressure profitability in the near term.  **[VLTO_3380691_11]**
- **Future acquisitions could potentially dilute margins**, especially in the high-margin Water Quality segment, as the company prioritizes value creation over maintaining current margin levels. Management indicated that margin accretion is not the sole focus in M&A decisions.  **[VLTO_3380691_21]**

9827ddfa910be7c49d76593770a5a0b1e4a81f6ba96daf356b64507d68e49c9a

Veralto Corp (VLTO)

Financials