Watts Water Technologies Inc
NYSE:WTS
Watts Water Technologies Inc
Watts Water Technologies Inc. has carved a unique niche in the landscape of global water infrastructure. It began its journey in 1874, and over the decades, has evolved into a leader in water safety and conservation. The company's core business revolves around providing a comprehensive array of plumbing, heating, and water quality solutions that cater to residential, commercial, and institutional markets. With a focus on innovation, Watts has developed a diverse product line that includes everything from backflow prevention devices to sophisticated water filtration systems. This ingenuity enables the company to not only address the growing demand for safer and more efficient water systems but also to generate steady revenue through its wide-ranging portfolio.
The way Watts Water Technologies makes money is deeply embedded in its ability to anticipate and adapt to the changing needs of the global water sector. By investing heavily in research and development, the company stays ahead of trends such as water conservation and sustainability, which are becoming increasingly vital in a world grappling with water scarcity and climate change. Its wide-reaching distribution network ensures that its products are available across various markets, allowing Watts to maintain a competitive advantage. Furthermore, strategic acquisitions help the company expand its technological capabilities and global presence, bolstering its financial performance. This approach not only strengthens its position within the industry but also supports its mission to provide advanced water solutions that benefit society at large.
Watts Water Technologies Inc. has carved a unique niche in the landscape of global water infrastructure. It began its journey in 1874, and over the decades, has evolved into a leader in water safety and conservation. The company's core business revolves around providing a comprehensive array of plumbing, heating, and water quality solutions that cater to residential, commercial, and institutional markets. With a focus on innovation, Watts has developed a diverse product line that includes everything from backflow prevention devices to sophisticated water filtration systems. This ingenuity enables the company to not only address the growing demand for safer and more efficient water systems but also to generate steady revenue through its wide-ranging portfolio.
The way Watts Water Technologies makes money is deeply embedded in its ability to anticipate and adapt to the changing needs of the global water sector. By investing heavily in research and development, the company stays ahead of trends such as water conservation and sustainability, which are becoming increasingly vital in a world grappling with water scarcity and climate change. Its wide-reaching distribution network ensures that its products are available across various markets, allowing Watts to maintain a competitive advantage. Furthermore, strategic acquisitions help the company expand its technological capabilities and global presence, bolstering its financial performance. This approach not only strengthens its position within the industry but also supports its mission to provide advanced water solutions that benefit society at large.
Record Results: Watts Water reported record sales, operating margin, and EPS for both Q4 and the full year 2025.
Organic & Reported Growth: Q4 organic sales rose 8% (reported sales up 16%). Full-year organic sales grew 5% (reported up 8%).
Margin Expansion: Adjusted operating margin improved by 220 bps in Q4 to 19% and by 190 bps for the year to 19.6%.
Strong Cash Flow: Free cash flow hit a record $356 million for 2025, up 7% with 105% conversion.
Active M&A: Completed 2 new acquisitions in the quarter and 5 in 2025, with acquisitions now a key part of growth; these are expected to dilute operating margin by 50 bps in 2026 but be accretive to EPS after synergies.
2026 Outlook: Guiding for 8–12% reported and 2–6% organic sales growth in 2026, with margin expansion expected to be partly offset by acquisition dilution and continued product rationalization.
Data Centers: Data center solutions are the fastest growing initiative, now over 3% of sales and growing at high double digits.
