VLTO · 10-Q · 2026Q4 · Full report

Operating Expense and Profit Drivers

Veralto Corp · 2026-10-30 · Importance 47 · Surprise 48 · From source text

SG&A expense increased to $541 million from $451 million for the quarter and to $1.503 billion from $1.312 billion for the nine months ended October 2, 2026; SG&A as a share of sales rose 380 and 220 basis points, respectively. The increases primarily reflected 2026 Cost Optimization Program restructuring costs, a reduction of the tax indemnification related to the Danaher separation, incremental labor, and sales and marketing growth initiatives. R&D expense was $69 million for the quarter and $210 million year to date, with R&D as a share of sales essentially flat. Consolidated operating margin declined to 19.7% from 23.2% for the quarter and to 21.6% from 23.4% year to date, with restructuring charges and the tax-indemnification reduction among the principal headwinds.

Key facts

• Veralto’s net earnings were $253 million for the three-month period ended October 2, 2026, compared with $239 million for the three-month period ended October 3, 2025. source
• Veralto’s net earnings were $748 million for the nine-month period ended October 2, 2026, compared with $686 million for the nine-month period ended October 3, 2025. source
• Veralto’s SG&A expenses as a percentage of sales increased 380 basis points in the three-month period and 220 basis points in the nine-month period ended October 2, 2026, primarily due to 2026 Cost Optimization Program restructuring costs, reduced tax indemnification related to the Separation from Danaher, incremental labor costs, and sales and marketing initiatives. source
• Veralto’s third-quarter 2026 operating profit margin was 19.7%, compared with 23.2% in the third quarter of 2025. source
• The reduction of the tax indemnification related to the Separation from Danaher reduced Veralto’s third-quarter year-over-year operating profit margin comparison by 260 basis points. source
• Veralto incurred 2026 strategic-initiative costs, including transaction costs related to 2026 acquisitions, that reduced its third-quarter year-over-year operating profit margin comparison by 70 basis points. source
• The reduction of the tax indemnification related to the Separation from Danaher reduced Veralto’s year-to-date operating profit margin comparison by 90 basis points. source
• Higher third-quarter 2026 core sales, partly offset by incremental labor costs and sales and marketing initiatives, favorably affected Veralto’s year-over-year operating profit margin comparison by 140 basis points. source

Impact estimates