I'm LongbridgeAI, I can summarize articles.Revenue: As of FY2026 Q2, the actual value is USD 763.2 M, beating the estimate of USD 726.02 M.
EPS: As of FY2026 Q2, the actual value is USD 3.53, beating the estimate of USD 3.3556.
EBIT: As of FY2026 Q2, the actual value is USD 153.5 M.
Second Quarter 2026 Financial Highlights
Watts Water Technologies, Inc. reported net sales of $763.2 million, an increase of 19% on a reported basis and 12% organically compared to the second quarter of 2025. Operating income increased by 14% to $154.0 million, though the operating margin decreased by 80 basis points to 20.2%. Adjusted operating income rose by 15% to $160.0 million, and the adjusted operating margin decreased by 60 basis points to 21.0%. Net income for the quarter was $118.3 million, up from $100.9 million in the prior year period.
Segment Revenue (Second Quarter 2026)
- Americas: Sales reached $585.0 million, growing 17% on a reported basis and 12% organically, driven by favorable price realization and higher volume from data center growth. Segment margin decreased by 150 basis points due to acquisition dilution, inflation, tariffs, and a difficult comparison against a prior-year tariff-related price/cost benefit, partially offset by favorable price realization, sales volume leverage, and productivity.
- Europe: Sales were $124.6 million, an increase of 12% on a reported basis and 9% organically, mainly due to higher volumes and favorable price realization. Segment margin increased by 160 basis points, attributed to favorable price realization, sales volume leverage, and productivity, which more than offset higher inflation.
- APMEA: Sales increased significantly to $53.6 million, up 57% on a reported basis and 31% organically, with organic growth primarily from data center expansion in China, partially offset by a decline in the Middle East. Segment margin improved by 100 basis points due to favorable price realization and acquisition accretion, despite inflation and cost headwinds from the Middle East conflict.
Six Months Ended June 28, 2026 Financial Highlights
For the first six months of 2026, net sales were $1,440.4 million, an increase from $1,201.7 million in the comparable period of 2025. Gross profit was $700.3 million, up from $598.4 million in the prior year. Operating income for the six months was $287.0 million, an increase from $223.0 million, with operating margin at 19.9%, up from 18.6%. Adjusted operating income reached $295.9 million, compared to $245.2 million in 2025, and adjusted operating margin was 20.5%, slightly up from 20.4%. Net income for the period was $217.9 million, an increase from $174.9 million in the prior year.
Cash Flow and Capital Allocation (Six Months Ended June 28, 2026)
Operating cash flow for the first six months of 2026 was $120.8 million, a decrease from $124.9 million in the comparable period last year. Net capital expenditures totaled $22.6 million, resulting in free cash flow of $98.2 million, down from $105.1 million in the prior year. The decline in free cash flow was primarily due to higher working capital levels and increased capital expenditures. Watts Water Technologies, Inc. repurchased approximately 13,000 shares of Class A common stock for $4.1 million during the second quarter of 2026, with approximately $121 million remaining under the authorized stock repurchase program. The company’s long-term debt (net of current portion) was $108.0 million as of June 28, 2026, down from $197.7 million at December 31, 2025. Net debt was -$239.9 million, and the net debt to capitalization ratio was -12.3% as of June 28, 2026.
Full Year 2026 Outlook
Watts Water Technologies, Inc. is increasing its full year 2026 sales and organic sales growth outlook, projecting sales growth from 14% to 17% on a reported basis and 8% to 11% on an organic basis. The full year operating margin is expected to be between 19.4% and 20.0%, and adjusted operating margin is anticipated to be between 19.8% and 20.4%. This outlook assumes no change in the impact from the Middle East conflict and incorporates estimated tariffs in place or announced as of August 4, 2026.