We delivered another quarter of better-than-expected results, including record sales, operating income and earnings per share. Organic sales rose 12% in the quarter as we benefited from strong growth in data centers and favorable price, as well as pull-forward demand, partly offset by our 80:20 rationalization program. Even with those headwinds, margin performance was better than expected due to favorable price, volume leverage, and productivity. Our balance sheet remains strong and provides ample capacity to support our disciplined capital allocation strategy.

This includes evaluating strategic M&A opportunities while continuing to invest in productivity, product innovation, and other key growth initiatives. As a reminder, we completed five acquisitions in 2025 to expand our portfolio, strengthen our market reach, and increase exposure to non-residential markets. We're also pleased with the resilience of our newly acquired Saudi Cast business as its in-country, for-country business model has limited the impact from the disruptions in the region. As a result, while residential and non-institutional new construction markets remain challenged, we have continued to execute well and have been able to allocate resources towards high-growth market opportunities, including our data center initiatives.

We continue to see accelerated demand in data center cooling applications, and while data centers remain a relatively small part of our overall business today, we're encouraged by the momentum we're seeing. These efforts reinforce our commitment to solving our customers' most critical water challenges while supporting long-term growth. Now, an update on our outlook for the remainder of the year. Due to our strong first half and our expectations for the third quarter, we are increasing our full-year sales and margin outlook.

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Reported 2026-08-06 · figures from the Watts Water Technologies Inc Q2 2026 earnings call.

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