Watts Water Technologies (WTS) Q3 2026 Earnings Report
MX:WTS Q3 2026 EPS Results
- Actual EPS
- MXN 63.67
- Consensus EPS
- MXN 58.88
- Beat/Miss
- Beat by +MXN 4.79
- One Year Ago EPS
- MXN 46.82
MX:WTS Q3 2026 Revenue Results
- Actual Revenue
- MXN 13.63B
- Expected Revenue
- MXN 12.97B
- Beat/Miss
- Beat by +MXN 663.46M
- YoY Revenue Growth
- +19.01%
Earnings Announcement Details
- Quarter
- Q3 2026
- Date
- 11/04/2026
- Time
- After Close
- Conference Call
- Wednesday, November 4, 2026
Watts Water Technologies's next earnings date is estimated for February 10, 2027, based on past reporting schedules.
Q3 2026 Earnings Call Audio
Q3 2026 Earnings Slide Deck
Q3 2026 Earnings Call Summary
The call was strongly positive overall. Watts reported record third-quarter results, broad-based margin expansion, strong data center momentum, improved regional performance, higher full-year guidance and solid cash generation. These strengths outweighed acknowledged challenges from weak residential and noninstitutional new construction, inflation, geopolitical uncertainty, rationalization-related sales reductions, acquisition dilution and difficult future data center comparisons.
For full year 2026, Watts expects organic sales growth of 11% to 12%, reported sales up 17% to 18%, Americas organic sales growth of 12% to 13%, Europe organic sales growth of 5% to 6%, APMEA organic growth between 18% and 19%, incremental acquisition sales of $107 million to $109 million in the Americas and $21 million to $22 million in APMEA, and a $20 million favorable foreign exchange impact; 80/20 product rationalization headwinds are expected to be $26 million to $28 million in the Americas and $4 million to $5 million in Europe. Adjusted EBITDA margin and adjusted operating margin are each expected to increase 70 to 80 basis points, including 50 basis points of acquisition dilution, while free cash flow conversion is expected to be greater than or equal to 90% of net income. For the fourth quarter, reported sales are expected to increase by 11% to 14%, organic sales up 9% to 12%, Americas organic growth of 11% to 14%, Europe 2% to 5%, APMEA 9% to 12%, acquisition sales of $13 million to $15 million in the Americas and $3 million to $4 million in APMEA, a $2 million foreign exchange headwind, adjusted EBITDA margin of 21.6% to 22.2%, and adjusted operating margin of 19.1% to 19.7%. The outlook assumes no change in the severity of the Middle East conflict and no further changes in the tariff structure, and adjusted earnings excludes the impact of tariff refunds; management also referenced normal price increases in the 2 percentage area and data center market growth in the 15% to 20% growth rate assumptions for next year.
- Record Third-Quarter ResultsThird-quarter performance exceeded expectations, with record sales, operating income and earnings per share. Sales increased to $728 million, up 19% on a reported basis and 12% organically.
- Strong Data Center DemandGrowth was driven by strong data center demand, which more than offset the impact of the 80/20 product rationalization program. Data center growth was at the high single digits in the quarter, and contractors' and installers' books of business were described as solid for the next couple of years.
- Broad-Based Margin ExpansionAdjusted EBITDA increased 32% to $169 million, with adjusted EBITDA margin up 230 basis points year-over-year to 23.2%. Adjusted operating income increased 34% to $152 million, while adjusted operating margin expanded 240 basis points to 20.9%, driven by price, volume leverage and productivity.
- Improvement Across All RegionsAmericas reported sales increased 19% and organic sales rose 12%; Europe reported sales increased 7% and organic sales rose 9%; and APMEA reported sales increased 54% and organic sales grew 30%. All three regions delivered meaningful year-over-year segment margin improvement.
- Regional Margin GainsAmericas segment margin increased 180 basis points to 25.5%, Europe increased 230 basis points to 14.5%, and APMEA increased 170 basis points to 21.1%.
- Positive Price-Cost RelationshipThe company maintained a positive price-cost relationship despite inflation in commodities, tariffs, freight, logistics, wages and benefits. Pricing actions, sourcing initiatives and productivity efforts under the One Watts performance system helped preserve the favorable price/cost dynamic.
- Portfolio Mix Shift Toward Growth MarketsStrategic acquisitions, targeted product innovation and the 80/20 initiative expanded served markets and capabilities while shifting the mix toward higher-growth, higher-margin end markets. Residential markets are expected to represent approximately 1/4 of 2026 sales versus 40% in 2022, while nonresidential markets are expected to represent 75% versus 60% in 2022.
- Raised Full-Year OutlookThe company raised its full-year outlook to organic sales growth of 11% to 12% and reported sales growth of 17% to 18%. Full-year adjusted EBITDA margin and adjusted operating margin are now each expected to increase 70 to 80 basis points, a 25 basis point improvement to the midpoint of the previous outlook.
- Positive Fourth-Quarter GuidanceFourth-quarter reported sales are expected to increase 11% to 14% and organic sales are expected to increase 9% to 12%. Fourth-quarter adjusted EBITDA margin is expected to be 21.6% to 22.2%, up 20 to 80 basis points, while adjusted operating margin is expected to be 19.1% to 19.7%, up 10 to 70 basis points.
- Strong Cash Generation and Balance SheetYear-to-date free cash flow was $230 million versus $216 million in the same period last year. The company expects free cash flow conversion of greater than or equal to 90% of net income in 2026, and management described the balance sheet as strong enough to support strategic acquisitions, innovation, automation and shareholder returns.
- Data Center Capacity and Product ExpansionThe company is investing in factory capacity, plant expansions in China, supply-chain partners and new products to support data center demand. New products are launched every quarter, with increasing participation in liquid cooling and technical water applications.
- Europe and APMEA Growth DriversEurope benefited from favorable pricing, higher volumes, heat pump incentives and transportation-cost-related price increases. APMEA growth was driven by better-than-expected data center sales in China and higher volumes in Australia and New Zealand.
- M&A and Internal Investment PipelineManagement reported a strong M&A pipeline and intends to remain disciplined in pursuing acquisitions that create shareholder value. Capital allocation priorities include internal investments supporting data centers, new product development, factory automation, productivity and strategic M&A.
MX:WTS Earnings History
| Report Date | Fiscal Quarter | Forecast / EPS | Last Year's EPS | EPS YoY Change | Press Release |
|---|---|---|---|---|---|
| Feb 10, 2027 | 2026 (Q4) | 57.53- | 49.06 | ― | ― |
| Nov 04, 2026 | 2026 (Q3) | 58.8863.67 | 46.82 | 36.00% (+16.85) | |
| Aug 05, 2026 | 2026 (Q2) | 62.4068.54 | 57.87 | 18.45% (+10.67) | |
| May 06, 2026 | 2026 (Q1) | 50.4956.93 | 44.38 | 28.27% (+12.55) | |
| Feb 11, 2026 | 2025 (Q4) | 43.8249.06 | 38.39 | 27.80% (+10.67) | |
| Nov 05, 2025 | 2025 (Q3) | 42.4046.82 | 38.01 | 23.15% (+8.80) | |
| Aug 06, 2025 | 2025 (Q2) | 49.6157.87 | 46.07 | 25.61% (+11.80) | |
| May 07, 2025 | 2025 (Q1) | 39.6644.38 | 43.63 | 1.72% (+0.75) | |
| Feb 10, 2025 | 2024 (Q4) | 35.7738.39 | 36.89 | 4.06% (+1.50) | |
| Oct 30, 2024 | 2024 (Q3) | 37.1738.01 | 38.2 | -0.49% (-0.19) |
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.
