Request for current mix of Global High-Tech between data centers and microelectronics, and confidence in reaching the $4 billion target.

Christophe Beck stated Global High-Tech is roughly $1.5 billion annualized, split into three roughly $0.5 billion components: legacy microelectronics/data centers, Ovivo (microelectronics), and CoolIT. He expressed confidence in the 25% growth trajectory leading to $4 billion by 2030. “it's roughly $1.5 billion annualized sales. Obviously, so right now, when you have our legacy business, microelectronics and data centers within legacy, and then CoolIT, and then Ovivo, which is in microelectronics. And each of them is roughly $0.5 billion today of annualized sales.”

Given CoolIT's >100% growth in H1, should models be updated to a higher growth rate than the previously stated 30%?

Christophe Beck acknowledged CoolIT's strong performance but stated it's too early to change the 30% growth trajectory for the next 10 years, as the acquisition just closed. He indicated more clarity would be provided at the November Investor Day. “So it's so early, that we're not in a position to change anything. But if I look at the trajectories, well, they're better than what we had told. That's the good news.”

Inquire about share gains in early-stage vs. commercial bioprocessing and whether CapEx additions are ahead of growth for adjacencies or a sustained run rate.

Christophe Beck stated they have a good position across the entire spectrum (early innovation, clinical, commercial drugs). He confirmed investments are ahead of growth to drive 30%-ish margins at cruising speed, but emphasized the need for continued investment in capacity and capabilities. “we've clearly been investing ahead of the growth in that business. That's why we were talking about reported growth in the mid-teens and underlying growth in the mid-20s. Well, those 10 points were investments ahead of the growth as we want to see that business driving 30%-ish type of margin at cruising speed.”

ECL

Ecolab (ECL) Q2 FY26 earnings call: guidance and Q&A

Earnings call· Jun 2026 (Q2 FY26)· Materials· Jul 28, 2026

Source: earnings call transcript

Executive summary

Ecolab Q2 FY26 — Growth Engines Accelerate, FY26 EPS Outlook Raised

Ecolab delivered a strong second quarter, driven by accelerating organic sales and robust performance from its growth engines, particularly Global High-Tech following the CoolIT acquisition. The company successfully navigated rising commodity costs through effective pricing strategies, stabilizing gross margins and raising its full-year EPS outlook. Management remains committed to its 2027 operating margin target, with a strategic focus on high-growth, high-margin businesses and continued investment in innovation.

Highlights

Adjusted EPS grew 11% year-over-year.
Organic sales growth accelerated to 5%.
Global High-Tech sales grew 29%, approaching $1.5 billion annualized, with targets raised to $4 billion by 2030 and 25% OI margin.
Life Sciences accelerated to 15% growth with mid-20% operating income margin.
Ecolab Digital grew 27% and Pest Elimination grew 7%.

Concerns

Volumes grew 1% despite a nearly 1% headwind from customer operations disrupted by conflict in the Middle East.
Life Sciences reported margin in Q3 expected to be in the high teens, down from mid-20s in Q2, due to continued investments.
Short-term impact from noncash amortization and financing costs from the CoolIT acquisition on FY26 EPS.
Expected high single-digit commodity prices for the balance of the year.

Guidance & targets

Category	Target	Timeline	Confidence
Adjusted EPS	$8.05 to $8.25 high materiality	FY26	High
Organic Sales Growth	6% to 7% high materiality	H2 FY26	High
Adjusted Operating Income Margin	19% high materiality	H2 FY26	High
Adjusted Operating Income Margin	20% high materiality	FY27	High
Adjusted EPS Growth	12% to 15% high materiality	Beyond FY26	High
Global High-Tech Annual Growth	more than 25% annually high materiality	Annually	High
Global High-Tech Sales	$4 billion high materiality	FY30	High
Global High-Tech Operating Income Margin	25% high materiality	Long-term	High
Pest Elimination Connected Devices	1 million medium materiality	Year-end · FY26	High
Ecolab Digital Long-term Growth	more than 20% medium materiality	Long-term	High
Life Sciences Operating Income Margin	high teens medium materiality	Q3 · FY26	High
Life Sciences Long-term Growth	10% to 12% medium materiality	Long-term	High
Capital Expenditure as % of Sales	around the 7% medium materiality	Next couple of years	Medium
Organic Return on Invested Capital (ROIC)	pre-acquisition levels medium materiality	FY28	Medium

Segment performance

Segment	Revenue	YoY	QoQ	Margin
Food & Beverage Accelerated to 7% growth, driven by the 'One Ecolab' approach integrating food safety and water capabilities, leading to cross-selling opportunities. Performing at the higher end of its long-term target range. Long-term target growth: 5% to 7%	—	7%	—	—
Institutional & Specialty Grew 4%, showing strong performance despite a 5% decline in US restaurant foot traffic, indicating market share gains. Maintains strong operating margins.	—	4%	—	low 20s to mid-20s operating margins
Life Sciences Accelerated to 15% growth, driven by strong share gains in bioprocessing and pharma/personal care. Achieved exceptional Q2 operating margin, but Q3 margin expected lower due to continued investments. Business started in 2017, less than $100M. Underlying operating income margin: mid-20sLong-term target growth: 10% to 12%	close to $1 billion annualized	15%	—	mid-20% operating income margin
Ecolab Digital Reflecting strong adoption of software and connected solutions. Introduced solutions like DishIQ, AquaIQ, KitchenIQ, CIP IQ. Aims to connect 100% of customer locations and applications to generate revenue. Long-term growth target: >20%Potential revenue from current customers: $3 billion	nearly at a $500 million annual run rate	27%	—	—
Pest Elimination Driven by share gains and expansion of its Pest Intelligence platform. Long-term growth target is 6% to 8%. Operating margins are strong, with ongoing investments in Pest Intelligence. Connected devices deployed: nearly 800,000Target connected devices by year-end: 1 millionPest-free environment target: nearly 99%	—	7%	—	around 20% operating margins
Global High-Tech Accelerated to 29% growth, reflecting strong demand in microelectronics and data centers, driven by AI infrastructure build-out. Includes Ovivo and CoolIT. Pro forma sales growth with Ovivo and CoolIT would have been approximately 7% in Q2. Sales by 2030 target: $4 billionAnnual growth target: >25%	approaching $1.5 billion annualized sales	29%	—	25% operating income margin
Paper Was barely positive in Q2 after more than a year in negative territory, impacted by industry consolidation. Management expects it to be more positive in Q3 and beyond, gaining share.	—	barely positive	—	good margins
Heavy Water Performance improved.	—	improved	—	—

ECL operating KPIs by quarter

ECL operating KPIs stated on its earnings calls, by fiscal quarter
KPI	Dec 2024 Q4 FY24	Mar 2025 Q1 FY25	Mar 2026 Q1 FY26	Change vs prior quarter
Connected devices Ecolab Digital	100K Well, we get lease or rent for our devices and we have 100,000 of those connections around the world. Source: earnings call transcript	100K But when you think about it, we have 100,000 devices that are connected today. Source: earnings call transcript	~700K We have roughly 700,000 smart devices that have been implemented so far. Source: earnings call transcript	—

Operating figures the company stated on at least two of the calls shown, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Product announcements

Product	Type	Timeline	Details
Integrated End-to-End Cooling Platform	launch	SuperCompute in November

Deals & partnerships

CoolIT Systems Acquisition of a direct liquid cooling technology company.

Closed on July 2. CoolIT had >100% YTD sales growth prior to acquisition. Strengthens Ecolab's position in Global High-Tech market, especially for AI infrastructure cooling.

Risks & headwinds

Customer operations disrupted by conflict in the Middle East Q2 FY26, ongoing

nearly 1% headwind on underlying volume growth

Mitigation:Strong new business wins are expected to more than offset this in H2.

Increasing commodity costs H2 FY26

high single-digit commodity prices expected for the balance of the year

Mitigation:Implemented global energy surcharge and value pricing, stabilizing organic gross margin and expecting 5-6% pricing in H2.

Continued investments in Life Sciences business Q3 FY26

Reported margin in Q3 expected to be in the high teens, down from mid-20s in Q2.

Mitigation:Investments are strategic for long-term growth and higher margins (underlying margin expected to remain mid-20s).

Noncash amortization and financing costs from CoolIT acquisition FY26

Short-term impact on FY26 EPS

Mitigation:Offset by strong underlying performance and Nalco amortization falling off in FY27.

What to watch in Q3 FY26

Global High-Tech Growth Trajectory Update

November Investor Day at SuperCompute

Current CoolIT >100% YTD growth; GHT 29% Q2 growth

Target Updated long-term growth rate for CoolIT and GHT beyond 30% / 25% respectively

Why it matters

Global High-Tech is the largest growth engine, and an accelerated trajectory would significantly impact the company's overall growth and margin profile.

But if I look at the trajectories, well, they're better than what we had told. That's the good news. But when we did our plans for the next 4, 5, 10 years, a lot can happen, and that's why we've picked a trajectory of 30%, which I think is the right one... And in November, we will sit together to share with you how do we see '27 and the years beyond.

Find out whether ECL delivers this. Inve re-checks your case every morning.

Q&A highlights

Reconcile the reaffirmed 20% operating margin target for 2027 with the incremental amortization from the CoolIT acquisition.

Christophe Beck reaffirmed the 20% OI margin target for 2027, noting that the vast majority of businesses are already near or above 20%. Scott Kirkland added that the Nalco amortization falls off next year, offsetting the CoolIT amortization.

“You understood that right. So we've been very consistent, by the way, on making sure that we stay on our commitment of delivering 20% operating income in 2027. So that remains unchanged.”

asked by Timothy Mulrooney · answered by Christophe Beck

2 min read 6 chapters

Detailed narrative

Accelerating Performance and Strategic Shift

Ecolab delivered strong Q2 results with adjusted EPS growth of 11% and organic sales growth of 5%, reflecting accelerating momentum across the business. The company is strategically shifting its portfolio towards higher-growth, higher-margin businesses, with growth engines expected to approach 25% of sales by 2027, compounding at double-digit rates and driving margin expansion.

Global High-Tech Expansion

The Global High-Tech platform, including Ovivo and the recently acquired CoolIT Systems, is now Ecolab's largest growth engine, approaching $1.5 billion in annualized sales, up from $150 million in 2021. The company raised its long-term targets for this segment to over 25% annual growth, $4 billion in sales by 2030, and a 25% operating income margin, driven by strong demand in microelectronics and AI infrastructure.

Life Sciences Momentum

The Life Sciences business accelerated to 15% growth, reaching nearly $1 billion in annualized sales. This growth is fueled by strong share gains in bioprocessing and pharma/personal care, supported by strategic investments in capabilities and capacity globally. The segment achieved a mid-20% operating income margin in Q2, though Q3 is expected to be in the high teens due to continued investments.

Digital and Pest Elimination Growth

Ecolab Digital demonstrated 27% growth, driven by strong adoption of connected solutions like DishIQ and AquaIQ, with a long-term growth target exceeding 20%. Pest Elimination also delivered a strong quarter with 7% growth, expanding its intelligence platform to nearly 800,000 connected devices, aiming for 1 million by year-end to deliver 99% pest-free environments.

Effective Pricing and Margin Management

The company successfully navigated increasing commodity costs by implementing a global energy surcharge and strengthening pricing to 4% in Q2, with expectations of 5-6% in the second half. This strategy allowed for stabilization of organic gross margins and is crucial for achieving the reaffirmed 20% operating income margin target by 2027.

Core Business Strength and Outlook

Core businesses like Food & Beverage (7% growth) and Institutional & Specialty (4% growth) are performing well, while previously "underperforming" businesses like Paper are stabilizing. The company increased its FY26 adjusted EPS outlook to $8.05-$8.25, reflecting strong underlying performance despite short-term amortization impacts from the CoolIT acquisition.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.