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    VNT
    Earnings call· Jun 2026(Q2 FY26)

    Vontier Q2 FY26 earnings call VNT

    Aug 6, 2026 Source

    Executive summary

    Vontier Q2 FY26 — Strong Performance Ahead of Expectations, Raised EPS Guidance

    Vontier delivered a strong second quarter, exceeding top and bottom-line expectations, driven by robust demand in convenience retail and strategic portfolio alignment. The company raised its full-year EPS guidance, supported by strong order trends, cost savings ahead of plan, and disciplined capital allocation focused on share repurchases and strategic tuck-in acquisitions like EKOS. While Repair Solutions margins remain a focus, new leadership and operational levers are being pulled to improve performance.

    Highlights

    5

    • Core sales were flat, slightly ahead of guidance, driven by upside in Environmental & Fueling Solutions.

    • Adjusted operating margin increased 190 basis points year-over-year, led by strong performance at Mobility Technologies.

    • Orders were up low single digits in the quarter, and book-to-bill was above 1.

    • Increased share repurchase authorization to $1 billion and accelerated buyback activity, repurchasing $130 million (4 million shares) in Q2 and $200 million (6 million shares) year-to-date.

    • The acquisition of EKOS adds a high-growth fleet energy management business with approximately 80% recurring revenue (ARR) and a 25% compound annual growth rate over the last 3 years.

    Concerns

    3

    • Repair Solutions margin performance was below expectations, decreasing 180 basis points, with a $1.5 million headwind versus guidance.

    • Mobility Technologies core sales declined against a difficult prior-year comparison, representing a $25 million or 10-point growth headwind in the quarter.

    • Migrations from legacy to new cloud-connected Patheon software in the DRB business are taking longer than expected and will likely slip out of the year.

    Guidance & targets

    13
    CategoryTargetConfidence
    Q3 Sales
    $720M-$735M
    high materiality
    High
    Q3 Operating Margin Expansion
    110 bps
    medium materiality
    High
    Q3 Adjusted EPS
    $0.82-$0.86
    high materiality
    High
    Full Year Sales
    Midpoint increases by ~$10M
    high materiality
    High
    Full Year Core Growth
    Approximately 3%
    high materiality
    High
    Full Year Operating Margin Expansion
    Approximately 100 bps
    high materiality
    High
    Full Year Adjusted EPS
    $3.45-$3.55
    high materiality
    High
    Full Year Adjusted Free Cash Flow Conversion
    95%
    medium materiality
    High
    Full Year Share Buyback
    ~$250M
    medium materiality
    High
    Full Year Cost Savings
    Exceed $50M
    medium materiality
    High
    EKOS Revenue
    $15M-$17M
    medium materiality
    High
    EKOS Margins
    Mid-teens, maybe mid-teens plus
    low materiality
    Medium
    EKOS ROIC
    Double-digit by year 3, approaching 20% by year 5
    medium materiality
    High

    Segment performance

    3
    SegmentRevenueYoYQoQMargin
    Environmental & Fueling Solutions
    Strong demand trends with healthy double-digit growth in global dispenser sales driven by continued investment and strong demand for new equipment as well as strong upgrade and replacement activity. Segment margin includes a 220 basis point tailwind from tariff refunds.
    Global dispenser sales: double-digit growth
    		—5%—increased 240 bps
    Mobility Technologies
    Core sales declined against a difficult prior year comparison related to elevated shipments of vehicle identification system solution, which equated to approximately $25 million or a 10-point growth headwind. Excluding this dynamic, sales would have increased mid-single digits. Segment margin includes a 20 basis point benefit from tariff refunds, with underlying segment margins expanding 170 basis points to approximately 21%.
    Customer adoption: strong for integrated payment, point-of-sale, and asset management solutions
    		—declined—expanded 190 bps
    Repair Solutions
    Same-store sales were essentially flat, reflecting a stable demand environment and still constrained technician spend. Profitability continues to see pressure from unfavorable price and mix as well as targeted investment spend, amounting to around a $1.5 million headwind versus guidance. Segment margin includes a 130 basis point tailwind from tariff refunds.
    Same-store sales: essentially flatTechnician spend: constrainedDemand: oriented towards products with clear and quick payback
    		—essentially flat—decreased 180 bps

    Operational metrics

    28
    Underlying operating margin expansion
    70YoY
    Q2 FY26

    Company-wide, excluding the net benefit from IEEPA tariff refunds.

    Cost savings
    $4MYoY
    Q2 FY26

    Year-over-year savings, ahead of plan.

    SKU rationalization
    1,400
    H1 FY26

    Rationalized across the company following a Kaizen event.

    Connected assets managed growth
    >20%YoY
    YTD FY26

    Managed through Vontier's applications.

    New sites online (asset management)
    >2,000
    Q2 FY26

    For several existing customers.

    Truck rolls reduction (QuikTrip)
    >80%
    Q2 FY26

    Reduced for service events through asset management platform deployment.

    FlexPay 6 terminal mix
    Nearly 1/4
    Q2 FY26

    Of new dispensers that left the factory were equipped with the updated FlexPay 6 terminal.

    Adjusted free cash flow conversion to adjusted net income
    80%
    Q2 FY26

    Conversion to adjusted net income.

    Adjusted free cash flow as % of sales
    ~13%
    Q2 FY26

    Approximately 13% of sales.

    Cash and investments balance
    >$260M
    Q2 FY26

    As of quarter end.

    Net leverage
    2.3x
    Q2 FY26

    As of quarter end.

    Share repurchases
    $130M
    Q2 FY26

    During the quarter.

    Share repurchases YTD
    $200M
    YTD FY26

    Year-to-date total.

    EKOS cash purchase price
    $43M
    Q2 FY26

    Completed after quarter end.

    EKOS ARR CAGR
    25%
    Last 3 years

    Compound annual growth rate for EKOS's recurring revenue.

    EKOS vehicles connected
    >1M
    Q2 FY26

    Managed by the EKOS platform.

    EKOS customer sites managed
    ~10,000
    Q2 FY26

    Managed by the EKOS platform.

    IEEPA tariff refunds benefit to adjusted operating margin
    120
    Q2 FY26

    Net benefit from onetime favorable IEEPA tariff refunds related to inventory sold in the prior year.

    IEEPA tariff refunds benefit to EFS margin
    220
    Q2 FY26

    Tailwind from tariff refunds.

    IEEPA tariff refunds benefit to Mobility Tech margin
    20
    Q2 FY26

    Benefit from tariff refunds.

    IEEPA tariff refunds benefit to Repair Solutions margin
    130
    Q2 FY26

    Tailwind from tariff refunds.

    Teletrac divestiture tailwind to Q3 operating margin
    70
    Q3 FY26

    Approximate tailwind from the Teletrac divestiture.

    Teletrac divestiture tailwind to FY operating margin
    40
    FY26

    Approximate tailwind from the Teletrac divestiture.

    Repair Solutions margin headwind vs. guidance
    $1.5M
    Q2 FY26

    Delta versus guidance framework.

    Repair Solutions H2 margin
    19%
    H2 FY26

    Expected stability in margins, a step up when accounting for tariff benefit.

    DRB Patheon launch progress
    <10%
    Q2 FY26

    Less than 10% into the launch of Patheon.

    DRB SiteWatch installations
    >5,000
    Q2 FY26

    Existing installations of the legacy SiteWatch product.

    Dispenser platforms rationalized
    from 32 to 8
    Q2 FY26

    Nearing completion of the move, with remaining rationalization expected in H2.

    Industry KPIs

    7
    MetricValueDetails
    M a contribution$15M-$17MUSD
    Orders book to billOrders up low single digits; book-to-bill above 1
    Design wins product cycle rampsFlexPay 6 terminal
    Recurring software services mix80%%
    Capacity expansion internal sourcingfrom 32 to 8 dispenser platforms
    End market revenue mix organic growthCore sales flat%
    Operating margin incremental leverage190bps

    Orderbook & backlog

    2
    Ordersup low single digitsQ2 FY26
    Book-to-billabove 1Q2 FY26

    Led by strength in Mobility Tech and Environmental & Fueling Solutions.

    Product announcements

    3
    ProductTypeDetails
    FlexPay 6 terminalupdate
    M2-15launch
    Patheon softwareupdate

    Deals & partnerships

    2
    TeletracSale of Teletrac business

    Better aligns the portfolio with the Connected Mobility strategy and returns-driven philosophy.

    EKOSAcquisition of a high-growth fleet energy management business that integrates with existing fuel equipment and site management offerings.$43M

    Strengthens ability to provide comprehensive solutions across private fueling operations. Brings an attractive recurring revenue profile with ARR representing approximately 80% of revenue and growing at a 25% compound annual rate over the last 3 years. Connects over 1 million vehicles and manages approximately 10,000 customer sites.

    Risks & headwinds

    4
    Difficult prior year comparison for Mobility TechnologiesQ2 FY26

    Approximately $25 million or a 10-point growth headwind in Q2

    Mitigation: Compare dynamics are now behind the company, and underlying growth is expected to continue.

    Repair Solutions margin pressureQ2 FY26

    Decreased 180 basis points in Q2, amounting to a $1.5 million headwind versus guidance

    Mitigation: New leadership transition, focus on key operational levers including supplier management, SKU rationalization, and sales force productivity to strengthen execution and improve profitable growth.

    DRB Patheon software migration delaysFY26

    Larger migrations from legacy technology to new cloud-connected Patheon software are taking longer and will likely slip out of the year

    Mitigation: These projects are still in the pipeline and offer attractive ROI for customers. The company has a good pipeline of opportunities and is working to smooth out the process.

    Memory chip price inflation

    High single-digit headwind

    Mitigation: The company is implementing price increases in the market, resulting in a slightly positive price-cost dynamic for the first half of the year.

    What to watch in Q3 FY26

    5

    Repair Solutions margin recovery

    H2 FY26
    CurrentDecreased 180 bps in Q2, ~$1.5M headwind vs. guidance.
    TargetStability around 19% in H2, with potential for further improvement.

    Why it matters

    Repair Solutions margins were below expectations and a clear area of focus, with new leadership implementing turnaround actions to improve profitability.

    To put the margin pressure into context, the delta versus our guidance framework amounted to around a $1.5 million headwind in the quarter.

    Q&A highlights

    5

    Can you provide more color on the adjusted operating margin guidance, expected margin across segments in H2, price versus cost dynamics, and any memory chip inflation impact?

    Anshooman detailed that the full-year operating margin guide is down $4 million, primarily due to Repair Solutions ($7M-$8M reduction, 150 bps down for FY). Mobility Tech growth was lowered to low single digits due to DRB delays, while EFS guidance was increased to mid-single digits with 100 bps margin increase. A high single-digit memory chip headwind is offset by price increases, making H1 price/cost slightly positive.

    “The biggest piece of the difference is in Repair Solutions, where we're bringing that number down by $7 million to $8 million. So Repair Solutions will be down about 150 basis points for the year in operating profit margin.”

    asked by Andrew Kaplowitz · answered by Anshooman Aga

    2 min read5 chapters

    Detailed Narrative

    01

    Strategic Portfolio Transformation and Connected Mobility

    Vontier is actively transforming its portfolio, evidenced by the sale of Teletrac and the acquisition of EKOS, aligning with its Connected Mobility strategy. Approximately 80% of the portfolio is now aligned to end markets with favorable secular trends like convenience retail and fleets, where operators are increasingly investing in connected, intelligent, and integrated operating environments. The company's value proposition, including asset management solutions, is resonating as customers prioritize productivity, growth, and operating efficiency.

    02

    Operational Efficiency and Cost Savings Initiatives

    The company is making significant progress on VBS-led simplification efforts, including 80/20 principles, SKU rationalization (1,400 SKUs in H1), and platform consolidation (from 32 to 8 dispenser platforms in EFS). These actions are driving structural cost reductions, improving execution, and are ahead of the initial $15 million annual savings plan, now expected to exceed $50 million for the full year. These efforts are viewed as a multi-year program, currently in its 'third or fourth innings', with continuous improvement expected.

    03

    Environmental & Fueling Solutions (EFS) Segment Strength

    Environmental & Fueling Solutions continues to demonstrate strong performance with 5% core growth, driven by healthy double-digit growth in global dispenser sales and continued investment in site modernization, new store expansion, and replacement activity. New product introductions like FlexPay 6 and M2-15 unified payment offerings are resonating with customers, with nearly a quarter of new dispensers in Q2 equipped with the updated FlexPay 6 terminal, supporting top-line growth and margin expansion.

    04

    Mobility Technologies Dynamics and DRB Delays

    While Mobility Technologies faced a difficult prior-year comparison due to elevated vehicle identification system shipments, underlying demand for integrated payment, point-of-sale, and asset management solutions remains strong, with mid-single-digit growth excluding the compare. However, some larger migrations from legacy to new cloud-connected Patheon software in the DRB business are taking longer than expected and will likely slip out of the year, impacting the segment's growth outlook for the full year.

    05

    Repair Solutions Turnaround Efforts

    Repair Solutions experienced margin pressure due to unfavorable price/mix and targeted investments, with performance below expectations, resulting in a $1.5 million headwind versus guidance in Q2. A new leadership team, led by Kameron Richardson, is implementing actions focused on supplier management, SKU rationalization, and upgrading district managers to drive a turnaround and improve profitable growth, with expectations for margin stability around 19% in the second half.

    AI-generated summary of the company’s earnings call. Not investment advice.