Zurn Water Solutions (4RX0) Q3 2026 Earnings Report
DE:4RX0 Q3 2026 EPS Results
- Actual EPS
- EUR 0.46
- Consensus EPS
- EUR 0.45
- Beat/Miss
- Beat by +EUR 0.02
- One Year Ago EPS
- EUR 0.38
DE:4RX0 Q3 2026 Revenue Results
- Actual Revenue
- EUR 442.67M
- Expected Revenue
- EUR 441.12M
- Beat/Miss
- Beat by +EUR 1.55M
- YoY Revenue Growth
- +8.72%
Earnings Announcement Details
- Quarter
- Q3 2026
- Date
- 10/27/2026
- Time
- After Close
- Conference Call
- Tuesday, October 27, 2026
DE:4RX0 Upcoming Earnings
Zurn Water Solutions's next earnings date is estimated for February 9, 2027, based on past reporting schedules.
Q3 2026 Earnings Call Audio
DE:4RX0 Q3 2026 Earnings Call
0:00 / 0:00
Q3 2026 Earnings Slide Deck
Q3 2026 Earnings Call Summary
Earnings Call Sentiment|Positive
The call was predominantly positive. The company reported strong revenue and EBITDA growth, margin expansion, robust free cash flow, increased shareholder returns, low leverage, raised 2026 EBITDA guidance, and progress in hot-water adjacencies. These strengths outweighed the acknowledged challenges from a soft residential market, continued softness in architecture billings, commercial-market volatility, moderating price realization, and a market outlook that currently points to a decline of a couple points in 2027.
Company Guidance
For the fourth quarter, the company expects sales in a range of $430 million to $437 million and adjusted EBITDA to be between $120 million and $123 million; for full year 2026, it raised adjusted EBITDA outlook to a range of $512 million to $515 million and maintained full year free cash flow of greater than $350 million excluding the net impact of tariff refunds and taxes. For 2027, the company will not provide guidance until next February, but said 2027 looks like 40% incrementals plus, with SKU simplification providing a benefit to EBITDA of around $5 million or more in 2027, on top of year-over-year 40% incrementals; the market looks to be likely down a couple points next year, while price should be thought of as regular way, a couple points of price in 2027, with no incremental price assumed in the fourth quarter other than what is already been implemented.
- Strong Third-Quarter Revenue GrowthThird-quarter sales totaled $95 million, representing 9% reported growth and 7% core growth year over year, landing at the high end of the company's quarterly guide. Growth was broad-based across most product categories, led by Water Safety and Control and Drinking Water.
- Intellihot Added to Quarterly GrowthIntellihot performed in line with expectations and contributed 2 points, or $6 million, of sales growth in the quarter.
- Price and Volume Supported GrowthPrice contributed 2 points to year-over-year growth, with the remainder coming from unit volume. The company stated that it had fully cycled against the carryover benefit of its calendar 2025 tariff-related price increases.
- Adjusted EBITDA and Margin ExpansionThird-quarter adjusted EBITDA was $140 million, up 15% year over year, while adjusted EBITDA margin increased 150 basis points to 28.3%. Margin expansion was attributed to ongoing mix improvement, productivity gains from the Zurn Elkay Business System, and benefits from supply-chain repositioning.
- Year-to-Date Financial PerformanceYear-to-date net sales were $1.419 billion, up 10% on a reported basis and 9% on a core basis. Year-to-date adjusted EBITDA was $392 million, up 16%, with a 27.6% margin, an improvement of 140 basis points versus the prior-year period and a 41% incremental margin.
- Strong Free Cash Flow GenerationThird-quarter free cash flow was $110 million. Year-to-date free cash flow was approximately $264 million, excluding the net impact of tariff refunds and applicable cash taxes, keeping the company on track for full-year free cash flow of greater than $350 million.
- Shareholder Returns IncreasedThe company repurchased $35 million of stock during the quarter, and the Board increased the annual dividend by 18%. Management cited continued flexibility in its capital-allocation options.
- Low Leverage and Balance-Sheet FlexibilityThe company ended the quarter at 0.4x leverage after using $107 million of cash to acquire Intellihot earlier in the year. Management said liquidity, leverage, and cash-flow generation provide flexibility to reinvest in the business, pursue adjacencies, and return capital through buybacks and dividends.
- Tariff Refunds RecognizedThe company recognized $1.5 million of IEEPA and reciprocal tariff refunds during the third quarter, reflected in GAAP cost of goods sold and excluded from non-GAAP measures.
- Runpoint Digital Mixing Valve LaunchThe company introduced the Wilkins Runpoint digital master mixing valve, which provides continuous temperature and flow monitoring, real-time alerts, field adjustability, building-management-system connectivity, and documentation support for compliance.
- Hot Water Adjacency OpportunityTogether, Intellihot and Runpoint establish a position in the domestic hot-water system, covering hot-water generation and delivery control. Mixing valves represent a complementary market of more than $200 million, and management believes the category can become a $50 million business for Zurn Elkay over the long run.
- Continued Hot Water Portfolio ExpansionThe company plans to continue adding products and services to its hot-water portfolio throughout 2027. It expects to build on Intellihot's Intelli-Pro certified support network and use its representative network to support specification, commissioning, troubleshooting, and contractor needs.
- Constructive Dodge Momentum and Backlog IndicatorsThe Dodge Momentum Index improved meaningfully in recent months and reached the high end of its recent range. Commercial and institutional construction backlog remained stable at high levels, at roughly 8+ months.
- Portfolio Coverage Across the Construction CycleThe portfolio participates across the approximately 18-month construction cycle: Flow Systems tends to be installed early, Water Safety and Control mid-cycle, and Hygienic and Environmental Solutions and Drinking Water at or near project completion.
- Exposure to Stable Institutional ConstructionInstitutional markets represent approximately 50% of Zurn Elkay's exposure. Education and health care represent 57% of institutional square footage in the Dodge data and approximately 72% of the company's institutional exposure, leaving the company over-indexed to the stated stable parts of institutional construction.
- Filtration and Secular Growth ProgressManagement cited secular growth tailwinds, including Drinking Water, and stated that filtration sales had grown by more than $40 million over the last four years.
- Consistent Core Growth Track RecordZurn Elkay has delivered positive core growth in 59 of the last 63 quarters. Core growth from 2022 to 2026 had a 6% CAGR, and the long-term core sales CAGR over the past 10 years was also 6%.
- Expected 2027 Incremental MarginsManagement expressed high confidence in 2027 incremental margins of 40% plus. SKU simplification work is expected to provide an EBITDA benefit of around $5 million or more in 2027, on top of the year-over-year 40% incrementals.
- 2026 EBITDA Outlook RaisedThe company raised its full-year 2026 adjusted EBITDA outlook to $512 million-$515 million while maintaining full-year free cash flow guidance of greater than $350 million, excluding the net impact of tariff refunds and taxes.
- Fourth-Quarter Guidance ProvidedFourth-quarter sales are expected to be in a range of $430 million-$437 million, with adjusted EBITDA expected to be between $120 million and $123 million.
- Regional Strength and Share GainsManagement reported strength in the Northeast, Gulf Region, and West. Since the Elkay merger, the company said it has strengthened regional representative networks and resources and has been able to take market share and outperform across most regions.
- Ongoing Adjacency and M&A DevelopmentManagement expects additional 2027 opportunities in categories in the $100 million-$200 million range. The company is pursuing both internal product development and acquisitions on a situation-by-situation basis and said more opportunities are expected to come through the pipeline in 2027.
DE:4RX0 Earnings History
| Report Date | Fiscal Quarter | Forecast / EPS | Last Year's EPS | EPS YoY Change | Press Release |
|---|---|---|---|---|---|
| Feb 09, 2027 | 2026 (Q4) | 0.39- | 0.32 | ― | ― |
| Oct 27, 2026 | 2026 (Q3) | 0.450.46 | 0.38 | 20.93% (+0.08) | |
| Jul 28, 2026 | 2026 (Q2) | 0.420.45 | 0.38 | 19.05% (+0.07) | |
| Apr 21, 2026 | 2026 (Q1) | 0.320.37 | 0.28 | 32.26% (+0.09) | |
| Feb 03, 2026 | 2025 (Q4) | 0.300.32 | 0.29 | 12.50% (+0.04) | |
| Oct 28, 2025 | 2025 (Q3) | 0.350.38 | 0.3 | 26.47% (+0.08) | |
| Jul 29, 2025 | 2025 (Q2) | 0.320.38 | 0.3 | 27.27% (+0.08) | |
| Apr 22, 2025 | 2025 (Q1) | 0.260.28 | 0.26 | 6.90% (+0.02) | |
| Feb 04, 2025 | 2024 (Q4) | 0.250.29 | 0.23 | 23.08% (+0.05) | |
| Oct 29, 2024 | 2024 (Q3) | 0.290.30 | 0.26 | 17.24% (+0.04) |
The table shows recent earnings report dates and whether the forecast was beat or missed. See the change in forecast and EPS from the previous year.
Beat Missed
