Watts Water Technologies Q2 Earnings Call Highlights

2 weeks ago 15

MarketBeat

Sun, August 9, 2026 astatine 12:03 PM CDT 7 min read

Key Points

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Record Q2 performance: Sales roseate 19% to $763 million, portion adjusted EPS accrued 18% to $3.66. Growth was driven by pricing, acquisitions and beardown data-center demand, though adjusted operating borderline fell 60 ground points to 21%.
Data centers are a rapidly expanding opportunity: Sales to data-center customers much than tripled twelvemonth implicit year, and Watts raised its estimated served marketplace to astir $2 billion, including liquid-cooling and thermal-storage applications. Management cautioned that task timing and lawsuit pull-forwards could summation quarterly volatility.
Full-year outlook raised contempt operation weakness: Watts present expects 8%–11% integrated income growth, 14%–17% reported maturation and 20–80 ground points of adjusted borderline expansion. Residential and broader nonresidential operation stay soft, but repair-and-replacement activity, which represents astir 60% of sales, provides support.

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Watts Water Technologies (NYSE:WTS) reported grounds second-quarter sales, operating income and net per share, driven by pricing, information halfway request and contributions from caller acquisitions. The institution raised its full-year income and borderline outlook, though executives said residential and non-institutional operation markets stay nether pressure.

Second-quarter income accrued 19% connected a reported ground to $763 cardinal and roseate 12% organically. Adjusted operating income accrued 15% to $160 million, portion adjusted operating borderline declined 60 ground points to 21%. Adjusted net per stock roseate 18% twelvemonth implicit twelvemonth to $3.66.

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"We delivered different 4th of better-than-expected results, including grounds sales, operating income and net per share," Chief Executive Officer Robert Pagano Jr. said. He attributed integrated maturation to information halfway request and favorable pricing, partially offset by the company's 80:20 merchandise rationalization program.

Data Center Sales More Than Tripled

Data centers continued to beryllium a large root of maturation for Watts during the quarter. Pagano said information halfway income much than tripled from the prior-year period, supported by request for cooling products, including the company's precocious launched CoolVault thermal retention tanks.

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For the archetypal six months of 2026, information halfway income represented 8% of full institution sales, including immoderate customer-driven income that were pulled guardant from aboriginal periods. Watts present expects information halfway gross to relationship for a mid- to high-single-digit percent of full-year sales, compared with 3% successful the anterior year.

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