Snapshot
Watts Water Technologies Inc reported $625M of revenue in Q4 2025, up 15.7% year over year, with diluted EPS of $2.50 and an operating margin of 18.2%.
- Revenue
- $625M
- YoY growth
- +15.7%
- Diluted EPS
- $2.50
- Operating margin
- 18.2%
$625M
Revenue
+15.7%
YoY growth
$2.50
Diluted EPS
18.2%
Operating margin
01 Key takeaways
What management said
- •Please turn to slide three, where I'll recap 2025 and outline the key drivers for our 2026 outlook.
- •We achieved record sales, operating margin, and earnings per share for both the fourth quarter and the full year.
- •Organic sales rose 8%, and reported sales were up 16% this quarter.
- •For the entire year, organic sales grew 5% and adjusted operating margin improved by 190 basis points to 19.6% while we continued investing in strategic priorities.
- •We generated a record $356 million in free cash flow for 2025, up 7%, reaching a conversion rate of 105%.
- •This strong cash flow supports our robust balance sheet and gives us flexibility to invest in future growth.
- •Our capital allocation continues to focus on strategic M&A, high-return organic investments, competitive dividends, and steady share buybacks.
- •Both acquisitions are expected to be accretive to Adjusted EPS in 2026 after accounting for added interest expense and normal purchase accounting adjustments.
- •Through this ongoing evaluation, we've identified $10-15 million of European sales and $25-30 million in the Americas, mainly in lower-margin retail and OEM channels that we intend to eliminate during 2026.
- •We anticipate these changes will be neutral or potentially margin accretive in 2026.
- •We expect that pricing, along with continued repair and replacement activity, will fuel further growth in 2026.
- •However, the Dodge Momentum Index is slightly more optimistic, indicating potential growth in non-residential projects.
SourcesCompany financials · earnings call
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