Q2 2026 Watts Water Technologies Inc Earnings Call Transcript

Aug 6, 2026 / 01:00 PM GMT

Release Date Price: €312 (+1.96%)

Transcript 10-Q8-K

Key Points

Positve

Record sales, operating income, and earnings per share in Q2 2026, with organic sales up 12%.
Data center sales more than tripled year-over-year, with full-year expectations raised to mid-to-high single digits as a percentage of total sales.
Raised full-year 2026 organic sales growth outlook to 8%-11% and adjusted operating margin expansion to up 20-80 basis points.
Strong balance sheet with negative net leverage of 0.4, providing ample capacity for M&A and capital allocation.
Successful integration of recent acquisitions, with performance on track to achieve or exceed targeted synergies.
Resilient performance in Europe and APMEA, with organic sales up 9% and 31% respectively, despite macro headwinds.

Negative

Adjusted operating margin declined 60 basis points year-over-year due to acquisition dilution and a difficult prior-year price-cost comparison.
Persistent weakness in residential and non-institutional new construction markets, with single-family residential getting slightly worse.
Uncertainty from the Middle East conflict creating headwinds, though mitigated by pricing and supply chain actions.
Fluid tariff environment with new Section 301 and 338 tariffs announced, adding to existing Section 232 tariffs.
Data center business is project-based and lumpy, with customer-driven pull-forwards in Q2 expected to cause sequentially lower growth in Q3.
Free cash flow year-to-date decreased to $98 million from $105 million due to higher accounts receivable and strategic inventory investment.

Refinitiv StreetEvents Event Transcript
E D I T E D V E R S I O N

WTS.N - Watts Water Technologies, Inc.
Q2 2026 Watts Water Technologies Inc Earnings Call
Aug 06, 2026 / 01:00PM GMT

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Presentation
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Unidentified_1 [1]
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Welcome to Watts Water Technologies, Inc. Second quarter 2026 earnings call. At the end of the presentation, we will open the line for questions. I will now turn the call over to Ray Nash, Vice President, Investor Relations.

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Unidentified_2 [2]
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Thank you, and good morning, everyone. Welcome to our second quarter earnings conference call.

Before we begin, I'd like to remind everyone that during this call, we may be making certain comments that constitute forward-looking statements. These statements are subject to numerous risks

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