Results
Vontier Corporation
02/12/2026 | Press release | Distributed by Public on 02/12/2026 14:55
Annual Report for Fiscal Year Ending December 31, 2025 (Form 10-K)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") is designed to provide a reader of our financial statements with a narrative from the perspective of management and is intended to help the reader understand our results of operations and financial condition. Our MD&A should be read in conjunction with our Consolidated Financial Statements and the accompanying Notes to the Consolidated Financial Statements included elsewhere in this Annual Report.
Discussion and analysis of our financial condition and results of operations as of and for the year ended December 31, 2024 compared to December 31, 2023 is included under the heading "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K filed for the fiscal year ended December 31, 2024 with the Securities and Exchange Commission on February 13, 2025.
OVERVIEW
General
Vontier is a global industrial technology company uniting productivity, automation and multi-energy technologies to meet the needs of a rapidly evolving, more connected mobility ecosystem. Leveraging leading market positions, decades of domain expertise and unparalleled portfolio breadth, Vontier powers the way the world moves, delivering smart, safe and sustainable solutions to our customers and the planet. Vontier has a culture of continuous improvement and innovation built upon the foundation of the Vontier Business System and embraced by colleagues worldwide. Refer to "Item 1. Business - General" included in this Annual Report for a discussion of our strategies for delivering long-term shareholder value.
We operate through three reportable segments which align to our three operating segments: (i) Mobility Technologies, which provides digitally enabled equipment and solutions to support efficient operations across the mobility ecosystem, including point-of-sale and payment systems, workflow automation solutions, telematics, data analytics, software platform for electric vehicle charging networks, and integrated solutions for alternative fuel dispensing; (ii) Repair Solutions, which manufactures and distributes aftermarket vehicle repair tools, toolboxes, automotive diagnostic equipment and software through a network of mobile franchisees; and (iii) Environmental & Fueling Solutions, which provides environmental and fueling hardware and software, and aftermarket solutions for global fueling infrastructure. Our Coats business, which was divested during January 2024, is presented in Other for periods prior to the divestiture.
Outlook
We expect core sales to increase on a year-over-year basis in 2026. Our outlook is subject to various assumptions and risks, including but not limited to the impact of changes in United States and international trade policies, other changes in governmental policies or regulations, the resilience and durability of the economies of the United States and other critical regions, the condition of global supply chains, including the availability of electronic components, the impact of international conflicts, including Russia-Ukraine and conflicts in the Middle East and market conditions in key end product segments. Additional uncertainties are identified in "Information Relating to Forward-Looking Statements" and "Risk Factors" in this Form 10-K.
We continue to monitor the macroeconomic and geopolitical conditions which may impact our business, including monetary and fiscal policies, changes in the banking system and investment and taxation policy initiatives being considered in the United States and by the Organization for Economic Co-operation and Development. We also continue to monitor the Russia-Ukraine conflict, conflicts in the Middle East and political and economic conditions in Latin America and the impact on our business and operations. As of the filing date of this report, we do not believe they are material.
During April 2025, the United States announced a new baseline tariff of 10%, plus an additional country-specific tariff, on all imports into the United States. In response, certain countries announced reciprocal tariffs on imports from the United States. While the United States has reached trade agreements with certain countries, tariffs on imports from other countries and other reciprocal tariffs either remain in effect or have been temporarily paused, and as such, significant uncertainty around future tariff policies remains. We import inventory into the United States from a number of countries, and as such, if tariffs remain in effect for a prolonged period of time, we expect our cost to import inventory into the United States to increase. We have actively managed our tariff exposure and continue to diversify our supply chain to reduce our exposure to tariffs on imports into the United States, particularly from high-tariff countries. In addition, certain of our products manufactured in the United States are exported internationally and are subject to reciprocal tariffs. If we are unable to effectively mitigate the financial impact of tariffs, or if tariffs lead to other impacts, including but not limited to a decrease in demand for our products, it would have a material impact on our business, financial condition and results of operations.
RESULTS OF OPERATIONS
Comparison of Results of Operations
| Year Ended December 31, | |||||||||||||||||||||||
| ($ in millions) | 2025 | % of Sales | 2024 | % of Sales | |||||||||||||||||||
| Sales | $ | 3,075.6 | $ | 2,979.0 | |||||||||||||||||||
| Operating costs and expenses: | |||||||||||||||||||||||
|
Cost of sales(a)
|
(1,624.8) | 52.8 | % | (1,554.9) | 52.2 | % | |||||||||||||||||
| Selling, general and administrative expenses ("SG&A") | (639.4) | 20.8 | % | (629.7) | 21.1 | % | |||||||||||||||||
| Research and development expenses ("R&D") | (175.7) | 5.7 | % | (177.7) | 6.0 | % | |||||||||||||||||
| Amortization of acquisition-related intangible assets | (74.1) | 2.4 | % | (79.7) | 2.7 | % | |||||||||||||||||
| Operating profit | $ | 561.6 | 18.3 | % | $ | 537.0 | 18.0 | % | |||||||||||||||
(a)Excluding amortization of acquisition-related intangible assets.
Sales
The components of our consolidated sales growth were as follows for the periods indicated:
|
2025 vs 2024
|
|||||
| Total sales growth (GAAP) | 3.2 | % | |||
| Core sales (Non-GAAP) | 3.7 | % | |||
| Acquisitions and divestitures (Non-GAAP) | (0.5) | % | |||
| Currency exchange rates (Non-GAAP) | - | % | |||
Sales for each of our segments were as follows for the periods indicated:
| Year Ended December 31, | |||||||||||
| ($ in millions) | 2025 | 2024 | |||||||||
|
Mobility Technologies(a)
|
$ | 1,123.9 | $ | 1,014.5 | |||||||
| Repair Solutions | 589.9 | 633.4 | |||||||||
| Environmental & Fueling Solutions | 1,436.7 | 1,359.8 | |||||||||
| Other | - | 1.3 | |||||||||
| Intersegment eliminations | (74.9) | (30.0) | |||||||||
| Total | $ | 3,075.6 | $ | 2,979.0 | |||||||
(a) Includes $74.9 million and $30.0 million of intersegment sales for the years ended December 31, 2025 and 2024, respectively, that are eliminated in consolidation.
Mobility Technologies
The components of sales growth for our Mobility Technologies segment were as follows for the periods indicated:
|
2025 vs 2024
|
|||||
| Total sales growth (GAAP) | 10.8 | % | |||
| Core sales (Non-GAAP) | 10.7 | % | |||
| Acquisitions and divestitures (Non-GAAP) | - | % | |||
| Currency exchange rates (Non-GAAP) | 0.1 | % | |||
Total sales within our Mobility Technologies segment increased 10.8% during the year ended December 31, 2025, as compared to the prior year, driven by a 10.7% increase in core sales. The increase in core sales was due to solid demand for our convenience retail payment and enterprise productivity solutions, partially offset by lower demand for our car wash solutions.
Repair Solutions
The components of sales growth for our Repair Solutions segment were as follows for the periods indicated:
|
2025 vs 2024
|
|||||
| Total sales growth (GAAP) | (6.9) | % | |||
| Core sales (Non-GAAP) | (6.8) | % | |||
| Acquisitions and divestitures (Non-GAAP) | - | % | |||
| Currency exchange rates (Non-GAAP) | (0.1) | % | |||
Total sales within our Repair Solutions segment decreased 6.9% during the year ended December 31, 2025, as compared to the prior year, driven by a 6.8% decrease in core sales. The decrease in core sales was due to a decrease in volume in the tool storage, hardline and power tools product categories driven by macroeconomic impacts on service technicians' discretionary spending.
Environmental & Fueling Solutions
The components of sales growth for our Environmental & Fueling Solutions segment were as follows for the periods indicated:
|
2025 vs 2024
|
|||||
| Total sales growth (GAAP) | 5.7 | % | |||
| Core sales (Non-GAAP) | 6.4 | % | |||
| Acquisitions and divestitures (Non-GAAP) | (1.0) | % | |||
| Currency exchange rates (Non-GAAP) | 0.3 | % | |||
Total sales within our Environmental & Fueling Solutions segment increased 5.7% during the year ended December 31, 2025, as compared to the prior year, driven by a 6.4% increase in core sales, partially offset by a 1.0% decrease due to the impact of recently exited businesses and product lines and a 0.3% increase due to the impact of currency translation. The increase in core sales was due to growth in environmental solutions and dispenser systems.
Cost of Sales
Cost of sales, excluding amortization of acquisition-related intangible assets, increased $69.9 million, or 4.5%, during the year ended December 31, 2025, as compared to the prior year and as a percentage of sales, increased 60 basis points during the same period, mainly due to core sales growth as discussed above.
Operating Costs and Other Expenses
SG&A expenses increased $9.7 million, or 1.5%, during the year ended December 31, 2025, as compared to the prior year and as a percentage of sales, decreased 30 basis points during the same period, due to $7.0 million of asset impairments recognized during the year ended December 31, 2025 and a $4.8 million increase in transaction and deal-related costs.
R&D expenses decreased $2.0 million, or 1.1%, during the year ended December 31, 2025, as compared to the prior year and as a percentage of sales, decreased 30 basis points during the same period, due to savings from focus and prioritization process initiatives and adoption of AI technologies.
Amortization of acquisition-related intangible assets decreased $5.6 million, or 7.0%, during the year ended December 31, 2025, due to certain intangible assets becoming fully amortized between periods. Amortization of acquisition-related intangible assets as a percentage of sales decreased 30 basis points during the same period.
Operating Profit
Operating profit increased $24.6 million, or 4.6%, during the year ended December 31, 2025, as compared to the prior year, and operating profit margin increased 30 basis points during the same period.
Segment operating profit is used as a performance metric by the chief operating decision maker ("CODM") in determining how to allocate resources and assess performance. Segment operating profit represents total segment sales less operating costs attributable to the segment, which does not include unallocated corporate costs and other operating costs not allocated to the reportable segments as part of the CODM's assessment of reportable segment operating performance, including amortization of acquisition-related intangible assets, stock-based compensation expense, restructuring and other related charges and other unallocated income or expense not indicative of the segment's core operating performance. As part of the CODM's assessment of the Repair Solutions segment, a capital charge calculated based on the segment's average gross outstanding financing receivables portfolio during the period and an estimated weighted average cost of capital is assessed by Corporate (the "Repair Solutions Capital Charge"). Refer to Note 15. Segment Information to the Consolidated Financial Statements for additional information.
Segment operating profit, operating profit and related margins were as follows for the periods indicated:
| Year Ended December 31, | |||||||||||||||||||||||
| ($ in millions) | 2025 | Margin | 2024 | Margin | |||||||||||||||||||
| Mobility Technologies | $ | 211.5 | 18.8 | % | $ | 192.6 | 19.0 | % | |||||||||||||||
| Repair Solutions | 123.1 | 20.9 | 140.7 | 22.2 | |||||||||||||||||||
| Environmental & Fueling Solutions | 422.0 | 29.4 | 394.9 | 29.0 | |||||||||||||||||||
| Other | - | - | (0.4) | (30.8) | |||||||||||||||||||
|
Corporate & other unallocated costs(a)
|
(195.0) | (6.3) | (190.8) | (6.4) | |||||||||||||||||||
| Total operating profit | $ | 561.6 | 18.3 | % | $ | 537.0 | 18.0 | % | |||||||||||||||
(a)Margin for corporate & other unallocated costs is presented as a percentage of total sales. Refer to further discussion of Corporate & other unallocated costs below.
Mobility Technologies
Segment operating profit for our Mobility Technologies segment increased $18.9 million, or 9.8%, during the year ended December 31, 2025, as compared to the prior year, and segment operating profit margin decreased 20 basis points during the same period. The decrease in segment operating profit margin was due to the impact of product mix.
Repair Solutions
Segment operating profit for our Repair Solutions segment decreased $17.6 million, or 12.5%, during the year ended December 31, 2025, as compared to the prior year, and segment operating profit margin decreased 130 basis points during the same period. The decrease in segment operating profit margin was due to a decrease in volume, as further discussed above.
Environmental & Fueling Solutions
Segment operating profit for our Environmental & Fueling Solutions segment increased $27.1 million, or 6.9%, during the year ended December 31, 2025, as compared to the prior year, and segment operating profit margin increased 40 basis points during the same period. The increase in segment operating profit margin was due to an increase in volume, as further discussed above, and focus and prioritization process initiatives.
Corporate & Other Unallocated Costs
Corporate & other unallocated costs consists of the following for the periods indicated:
| Year Ended December 31, | |||||||||||
| ($ in millions) | 2025 | 2024 | |||||||||
| Amortization of acquisition-related intangible assets | $ | (74.1) | $ | (79.7) | |||||||
| Stock-based compensation expense | (30.1) | (31.6) | |||||||||
| Restructuring and other related charges | (10.4) | (13.5) | |||||||||
| Other unallocated expense | (13.3) | (0.9) | |||||||||
| Corporate costs | (110.3) | (109.0) | |||||||||
| Repair Solutions Capital Charge | 43.2 | 43.9 | |||||||||
| Total corporate & other unallocated costs | $ | (195.0) | $ | (190.8) | |||||||
Corporate & other unallocated costs increased $4.2 million, or 2.2%, during the year ended December 31, 2025, as compared to the prior year, due to a $12.4 million increase in other unallocated expense from $7.0 million of asset impairments recognized during the year ended December 31, 2025, partially offset by a $5.6 million decrease in amortization of acquisition-related intangible assets from certain intangible assets becoming fully amortized between periods and a $3.1 million decrease in restructuring and other related charges. Corporate & other unallocated costs as a percentage of total sales decreased 10 basis points during the year ended December 31, 2025, as compared to the prior year.
NON-GAAP FINANCIAL MEASURES
Core Sales
We define core sales as total sales excluding (i) sales from acquired and certain divested businesses; (ii) the impact of currency translation; and (iii) certain other items.
•References to sales attributable to acquisitions or acquired businesses refer to GAAP sales from acquired businesses recorded prior to the first anniversary of the acquisition less the amount of sales attributable to certain divested or exited businesses or product lines not considered discontinued operations.
•The portion of sales attributable to the impact of currency translation is calculated as the difference between (a) the period-to-period change in sales (excluding sales from acquired businesses) and (b) the period-to-period change in sales, including foreign operations (excluding sales from acquired businesses), after applying the current period foreign exchange rates to the prior year period.
•The portion of sales attributable to other items is calculated as the impact of those items which are not directly correlated to core sales which do not have an impact on the current or comparable period.
Core sales should be considered in addition to, and not as a replacement for or superior to, total sales, and may not be comparable to similarly titled measures reported by other companies.
Management believes that reporting the non-GAAP financial measure of core sales provides useful information to investors by helping identify underlying growth trends in our business and facilitating easier comparisons of our sales performance with our performance in prior and future periods and to our peers. We exclude the effect of acquisitions and certain divestiture-related items because the nature, size and number of such transactions can vary dramatically from period to period and between us and our peers. We exclude the effect of currency translation and certain other items from core sales because these items are either not under management's control or relate to items not directly correlated to core sales. Management believes the exclusion of these items from core sales may facilitate assessment of underlying business trends and may assist in comparisons of long-term performance.
INTEREST COSTS
Interest expense, net was $59.8 million during the year ended December 31, 2025 as compared to $74.7 million during the prior year, a decrease of $14.9 million, driven by a decrease in our outstanding debt obligations, a decrease in variable interest rates on certain of our outstanding debt obligations and an increase in interest income between periods.
For a discussion of our outstanding indebtedness, refer to Note 10. Financing to the Consolidated Financial Statements.
INCOME TAXES
General
Income tax expense and deferred tax assets and liabilities reflect management's assessment of current and future taxes expected to be paid on items reflected in our financial statements. Our effective tax rate can be affected by, among other items, changes in the mix of earnings in countries with differing statutory tax rates (including as a result of business acquisitions and dispositions), changes in the valuation of deferred tax assets and liabilities, the implementation of tax planning strategies, tax rulings, court decisions, settlements with tax authorities and changes in tax laws.
We are routinely examined by various domestic and international taxing authorities. The amount of income taxes we pay is subject to audit by federal, state and foreign tax authorities, which may result in proposed assessments. We are subject to examination in the United States, various states and foreign jurisdictions. We review our global tax positions on a quarterly basis. Based on these reviews, the results of discussions and resolutions of matters with certain tax authorities, tax rulings and court decisions and the expiration of statutes of limitations, reserves for contingent tax liabilities are accrued or adjusted as necessary. The IRS started an examination of our U.S. federal income tax return for 2023. At this point, no material issues or adjustments have been identified. We remain subject to U.S. federal income tax audit for the tax years 2022 and 2024. We are subject to tax audits for our combined/consolidated state income tax returns for the tax years 2021 to 2024. We remain subject to tax audits for our separate company tax returns in various U.S. states for the tax years 2021 to 2024. Our operations in certain foreign jurisdictions remain subject to routine examinations for the tax years 2018 to 2024.
For a description of our income tax accounting policies, refer to Note 2. Basis of Presentation and Summary of Significant Accounting Policies and Note 14. Income Taxes to the Consolidated Financial Statements.
Comparison of the Years Ended December 31, 2025 and 2024
Our effective tax rate for the years ended December 31, 2025 and 2024 was 20.1% and 15.2%, respectively. The increase in our effective tax rate during the year ended December 31, 2025, as compared to the prior year, was primarily due to favorable impacts of business reorganizations and divestitures during the year ended December 31, 2024.
Our effective tax rate for the year ended December 31, 2025 differs from the U.S. federal statutory rate of 21.0% primarily due to the effect of state taxes, non-U.S. income taxed at different rates than the U.S. federal statutory rate, foreign derived intangible income, and tax credits.
Our effective tax rate for the year ended December 31, 2024 differs from the U.S. federal statutory rate of 21.0% primarily due to the effect of state taxes, foreign derived intangible income, and tax credits. Additionally, there were favorable impacts related to business reorganizations and divestitures and a decrease to uncertain tax positions.
One Big Beautiful Bill
On July 4, 2025, the One Big Beautiful Bill ("OBBB") was signed into law. The OBBB includes several changes to corporate taxation, notably modifications to capitalization of research and development expenses and accelerated depreciation of fixed assets. We have reflected the impact of the enacted changes in our financial statements for the year ended December 31, 2025. The OBBB has reduced cash tax payments by $30.0 million during the year ended December 31, 2025, and will reduce cash tax payments by $30.0 million during the year ended December 31, 2026, due to the accelerated deduction for previously capitalized research and development expense. The other provisions within the OBBB have not and are not expected to have a material impact.
Pillar Two
On January 5, 2026, the OECD released additional Administrative Guidance under Pillar Two, including the new Side-by-Side safe harbour framework. These updates clarify how certain jurisdictions, including the United States, may apply safe-harbour relief once local legislation is enacted. We evaluated the impact of these developments and, consistent with our prior assessment of Pillar Two, we do not expect a significant impact on our financial statements.
COMPREHENSIVE INCOME
Comprehensive income increased by $108.6 million during the year ended December 31, 2025, as compared to the prior year. Comprehensive income for the year ended December 31, 2025 includes a favorable foreign currency translation adjustment of $75.8 million. Comprehensive income for the year ended December 31, 2024 includes an unfavorable foreign currency translation adjustment of $49.6 million and a gain on the sale of our Coats business of $37.2 million.
Refer to Note 20. Divestitures to the Consolidated Financial Statements for additional information on the divestiture of our Coats businesses.
FINANCIAL INSTRUMENTS AND RISK MANAGEMENT
We are exposed to market risk from changes in interest rates, foreign currency exchange rates, credit risk and commodity prices, each of which could impact our financial statements. We generally address our exposure to these risks through our normal operating and financing activities. In addition, our broad-based business activities help to reduce the impact that volatility in any particular area or related areas may have on our operating profit as a whole.
Interest Rate Risk
We are exposed to interest rate risk through fluctuations in interest rates on our debt obligations. As of December 31, 2025, we had $500.0 million outstanding of debt that was subject to variable interest rates. As a result, increases in interest rates could increase the cost of servicing our debt and could materially reduce our profitability and cash flows. We seek to manage exposure to adverse interest rate changes through our normal operating and financing activities.
A hypothetical 100 basis points increase in market interest rates as of December 31, 2025 on our variable-rate debt obligations as of December 31, 2025 would increase our annual interest expense by approximately $5.0 million.
Foreign Currency Exchange Rate Risk
We face transactional exchange rate risk from transactions with customers in countries outside of the United States and from intercompany transactions between affiliates. Transactional exchange rate risk arises from the purchase and sale of goods and services in currencies other than our functional currency or the functional currency of an applicable subsidiary. We also face translational exchange rate risk related to the translation of financial statements of our foreign operations into U.S. dollars, our functional currency. Costs incurred and sales recorded by subsidiaries operating outside of the United States are translated into U.S. dollars using exchange rates effective during the respective period. As a result, we are exposed to movements in the exchange rates of various currencies against the U.S. dollar. The effect of a change in currency exchange rates on our net investment in international subsidiaries is reflected in the accumulated other comprehensive income component of equity. A 10% change in major currencies relative to the U.S. dollar as of December 31, 2025 would have resulted in an impact to equity of approximately $86.0 million.
Currency exchange rates did not have a material impact on reported sales for the year ended December 31, 2025 as compared to the prior year. If the exchange rates in effect as of December 31, 2025 were to prevail throughout the year ended December 31, 2026, currency exchange rates would positively impact estimated sales for the year ended December 31, 2026 by approximately 0.5% compared to the year ended December 31, 2025.
In general, weakening of the U.S. dollar against other major currencies would positively impact our sales and results of operations on an overall basis and strengthening of the U.S. dollar against other major currencies would adversely impact our sales and results of operations.
We have generally accepted the exposure to exchange rate movements without using derivative financial instruments to manage this risk. Both positive and negative movements in currency exchange rates against the U.S. dollar will therefore continue to affect the reported amount of sales, profit, and assets and liabilities in our Consolidated Financial Statements.
Credit Risk
We are exposed to potential credit losses in the event of nonperformance by counterparties to our financial instruments. Financial instruments that potentially subject us to credit risk consist of cash and highly-liquid investment grade cash equivalents, and receivables from customers and franchisees. We place cash and cash equivalents with various high-quality financial institutions throughout the world and exposure is limited at any one institution. Although we typically do not obtain collateral or other security to secure these obligations, we regularly monitor third party depository institutions that hold our cash and cash equivalents. We emphasize safety and liquidity of principal over yield on those funds. Concentrations of credit risk arising from receivables from customers are limited due to the diversity of our customers. We perform credit evaluations of our customers' financial conditions and also obtain collateral or other security as appropriate. Notwithstanding these efforts, distress in the global economy may increase the difficulty in collecting receivables.
The assumptions used in evaluating our exposure to credit losses associated with our financing receivables portfolio involve estimates and significant judgment. Holding other estimates constant, a hypothetical 100 basis points increase in the expected loss rate on the financing receivables portfolio would have resulted in an increase in the allowance for credit losses of approximately $5.0 million as of December 31, 2025.
No customer accounted for more than 10% of sales during all periods presented.
Commodity Price Risk
For a discussion of risks relating to commodity prices, refer to "Item 1A. Risk Factors."
LIQUIDITY AND CAPITAL RESOURCES
We assess our liquidity in terms of our ability to generate cash to fund our operating, investing and financing activities. We generate substantial cash from operating activities and believe that our operating cash flow and other sources of liquidity will be sufficient to allow us to continue to support working capital needs, capital expenditures, pay interest and service debt, pay taxes and any related interest or penalties, fund our restructuring activities and pension plans as required, invest in existing businesses, consummate strategic acquisitions, manage our capital structure on a short and long-term basis and support other business needs or objectives. Refer also to Note 10. Financing to the Consolidated Financial Statements for additional information.
Our long-term debt requires, among others, that we maintain certain financial covenants, and we were in compliance with all of these covenants as of December 31, 2025.
2025 Financing and Capital Transactions
During the year ended December 31, 2025, we completed the following financing and capital transactions:
•Voluntarily repaid $50.0 million of the Three-Year Term Loans Due 2025;
•Executed an amendment to extend the maturity date of the Three-Year Term Loans Due 2025 to February 2028, remove the credit spread adjustment and reduce the ratings-based margin by 12.5 basis points;
•Executed an amendment to the Revolving Credit Facility, which extended the maturity date to February 2030 and removed the SOFR adjustment;
•Repurchased 8.0 million shares for $300.2 million in the open market.
Refer to Note 10. Financing to the Consolidated Financial Statements for more information related to our long-term indebtedness and Note 19. Capital Stock and Earnings per Share to the Consolidated Financial Statements for more information related to our share repurchases.
Overview of Cash Flows and Liquidity
Following is an overview of our cash flows and liquidity:
| Year Ended December 31, | |||||||||||
| ($ in millions) | 2025 | 2024 | |||||||||
| Net cash provided by operating activities | $ | 511.0 | $ | 427.5 | |||||||
| Proceeds from sale of businesses, net of cash provided | $ | 50.4 | $ | 68.4 | |||||||
| Cash paid for acquisitions | (10.9) | - | |||||||||
| Payments for additions to property, plant and equipment | (69.9) | (82.7) | |||||||||
| Proceeds from sale of property, plant and equipment | 0.4 | 5.6 | |||||||||
| Cash paid for equity investments | (1.8) | (2.9) | |||||||||
| Proceeds from sale of equity investments | 11.1 | 0.2 | |||||||||
| Net cash used in investing activities | $ | (20.7) | $ | (11.4) | |||||||
| Proceeds from issuance of long-term debt | $ | 83.3 | $ | - | |||||||
| Repayment of long-term debt | (133.3) | (150.0) | |||||||||
| Net proceeds from (repayments of) short-term borrowings | 0.2 | (4.5) | |||||||||
| Payments for debt issuance costs | (2.3) | - | |||||||||
| Payments of common stock cash dividend | (14.7) | (15.2) | |||||||||
| Purchases of treasury stock | (300.2) | (224.7) | |||||||||
| Proceeds from stock option exercises | 10.0 | 17.0 | |||||||||
| Other financing activities | (14.3) | (14.9) | |||||||||
| Net cash used in financing activities | $ | (371.3) | $ | (392.3) | |||||||
Operating Activities
Cash flows from operating activities can fluctuate significantly from period to period as working capital needs and the timing of payments for income taxes, restructuring activities and other items impact reported cash flows.
Cash flows from operating activities were $511.0 million during the year ended December 31, 2025, an increase of $83.5 million as compared to the prior year. The year-over-year change in operating cash flows was primarily attributable to the following factors:
•The aggregate of accounts receivable and long-term financing receivables generated $10.4 million of operating cash flows during the year ended December 31, 2025 as compared to using $56.0 million in the prior year. The amount of cash flow generated from or used by accounts receivable depends upon how effectively we manage the cash conversion cycle and can be significantly impacted by the timing of collections in a period. Additionally, when we originate certain financing receivables, we assume the financing receivable by decreasing the franchisee's trade accounts receivable. As a result, originations of certain financing receivables are non-cash transactions.
•The aggregate of other operating assets and liabilities used $66.9 million of cash during the year ended December 31, 2025 compared to using $30.7 million in the prior year. This difference is due primarily to working capital needs and the timing of accruals and payments and tax-related amounts.
Investing Activities
Net cash used in investing activities was $20.7 million during the year ended December 31, 2025, driven by payments for additions to property, plant and equipment and cash paid for the acquisition of Sergeant Sudz, partially offset by proceeds from the sale of businesses. Net cash used in investing activities was $11.4 million during the year ended December 31, 2024, driven by payments for additions to property, plant and equipment, partially offset by proceeds from the sale of our Coats business.
We made capital expenditures of $69.9 million and $82.7 million during the years ended December 31, 2025 and 2024, respectively.
Refer to Note 3. Acquisitions to the Consolidated Financial Statements for additional information on our acquisition of Sergeant Sudz and Note 20. Divestitures to the Consolidated Financial Statements for additional information on our dispositions.
Financing Activities
Net cash used in financing activities was $371.3 million during the year ended December 31, 2025, driven by repurchases of our common stock of $300.2 million and the voluntary repayment of $50.0 million of the Three-Year Term Loans due 2025. Net cash used in financing activities was $392.3 million during the year ended December 31, 2024, driven by repurchases of our common stock of $224.7 million and the voluntary repayment of $150.0 million of the Three-Year Term Loans due 2024 and Three-Year Term Loans due 2025.
Share Repurchase Program
Refer to Note 19. Capital Stock and Earnings per Share to the Consolidated Financial Statements for a description of our share repurchase program.
Dividends
We paid regular quarterly cash dividends of $0.025 per share during the year ended December 31, 2025. The declaration of future cash dividends is at the discretion of our Board of Directors and will depend upon, among other things, our future earnings, cash flows, capital requirements, financial condition and general business conditions.
Supplemental Guarantor Financial Information
As of December 31, 2025, we had $1.6 billion in aggregate principal amount of registered notes and $500.0 million in aggregate principal amount outstanding of term loans. Our obligations to pay principal and interest on the registered notes and term loans are fully and unconditionally guaranteed on a joint and several basis on an unsecured, unsubordinated basis by Gilbarco Inc. and Matco Tools Corporation, two of Vontier's wholly-owned subsidiaries (the "Guarantor Subsidiaries"). Our other subsidiaries do not guarantee any such indebtedness (collectively, the "Non-Guarantor Subsidiaries"). Refer to Note 10. Financing to the Consolidated Financial Statements for additional information regarding the terms of our notes and the term loans.
The registered notes and the guarantees thereof are the Company's and the Guarantor Subsidiaries' senior unsecured obligations and:
•rank without preference or priority among themselves and equally in right of payment with our existing and any future unsecured and unsubordinated indebtedness, including, without limitation, indebtedness under our credit agreement;
•are senior in right of payment to any of our existing and future indebtedness that is subordinated to the notes;
•are effectively subordinated to any of our existing and future secured indebtedness to the extent of the assets securing such indebtedness; and
•are structurally subordinated to all existing and any future indebtedness and any other liabilities of our Non-Guarantor Subsidiaries.
The following tables present summarized financial information for Vontier Corporation and the Guarantor Subsidiaries on a combined basis and after the elimination of (a) intercompany transactions and balances between Vontier Corporation and the Guarantor Subsidiaries and (b) equity in earnings from and investments in the Non-Guarantor Subsidiaries.
| Summarized Results of Operations Data ($ in millions) | Year Ended December 31, 2025 | ||||
|
Net sales (a)
|
$ | 1,615.3 | |||
|
Operating profit (b)
|
532.5 | ||||
|
Net income (c)
|
$ | 381.8 | |||
|
(a)Includes intercompany sales of $47.0 million.
|
|||||
|
(b)Includes intercompany operating profit of $20.0 million.
|
|||||
|
(c)Includes intercompany pretax income of $35.3 million.
|
|||||
| Summarized Balance Sheet Data ($ in millions) | December 31, 2025 | ||||
| Assets | |||||
| Current assets | $ | 437.7 | |||
| Intercompany receivables | 2,537.2 | ||||
| Noncurrent assets | 646.4 | ||||
| Total assets | $ | 3,621.3 | |||
| Liabilities | |||||
| Current liabilities | $ | 846.0 | |||
| Intercompany payables | 211.5 | ||||
| Noncurrent liabilities | 1,656.3 | ||||
| Total liabilities | $ | 2,713.8 | |||
Cash and Cash Requirements
As of December 31, 2025, we held approximately $492.2 million of cash and cash equivalents that were held in either operating accounts or invested in highly liquid investment-grade instruments with a maturity of 90 days or less with an annual effective rate generally around 3.5% as of December 31, 2025. Approximately 49% of our cash was held outside of the United States.
We have made an assertion regarding the amount of earnings that we do not intend to repatriate due to local working capital needs, local law restrictions, high foreign remittance costs, previous investments in physical assets and acquisitions, or future growth needs. Such earnings are intended for indefinite foreign reinvestment and no provision for income taxes has been made. The amount of income taxes that may be applicable to such earnings is not readily determinable given the unknown duration of local law restrictions as applicable to such earnings, unknown changes in foreign tax law that may occur during the restriction periods, and the various alternatives we could employ if we repatriated these earnings. The cash that our foreign subsidiaries hold for indefinite reinvestment is generally used to finance foreign operations and investments, including acquisitions.
We have cash requirements to support working capital needs, capital expenditures, pay interest and service debt, pay taxes and any related interest or penalties, fund our restructuring activities and pension plans as required and support other business needs or objectives. Refer to Note 9. Leases and Note 10. Financing to the Consolidated Financial Statements for further details on our contractual obligations and the timing of expected future payments under our lease and debt agreements, respectively.
We also have purchase obligations which consist of agreements to purchase goods or services that are enforceable and legally binding on us and that specify all significant terms, including fixed or minimum quantities to be purchased, fixed, minimum or variable price provisions and the approximate timing of the transaction. As of December 31, 2025, we had purchase obligations of $197.4 million, with $192.7 million payable in the next 12 months.
With respect to our cash requirements, we generally intend to use available cash and internally generated funds to meet these cash requirements, but in the event that additional liquidity is required, particularly in connection with acquisitions, we may also borrow under our credit facilities, enter into new credit facilities and borrow directly thereunder and/or access the capital markets. As of December 31, 2025, we had $750.0 million of borrowing capacity under our revolving credit facility. We also may from time to time access the capital markets, including to take advantage of favorable interest rate environments or other market conditions.
As of December 31, 2025, we believe that we have sufficient liquidity to satisfy our cash needs.
Guarantees
As of December 31, 2025, we had guarantees consisting primarily of outstanding standby letters of credit, bank guarantees, and performance and bid bonds of $77.1 million. These guarantees have been provided in connection with certain arrangements with vendors, customers, financing counterparties, and governmental entities to secure our obligations and/or performance requirements related to specific transactions.
LEGAL PROCEEDINGS
Refer to Note 17. Litigation and Contingencies to the Consolidated Financial Statements for information regarding legal proceedings, contingencies, and guarantees. For a discussion of risks related to legal proceedings and contingencies, refer to "Item 1A. Risk Factors."
CRITICAL ACCOUNTING ESTIMATES
Management's discussion and analysis of our financial condition and results of operations is based upon our Consolidated Financial Statements, which have been prepared in accordance with GAAP. The preparation of these financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. We base these estimates and judgments on historical experience, the current economic environment and on various other assumptions that are believed to be reasonable under the circumstances. Actual results may differ materially from these estimates and judgments.
We believe the following accounting estimates are most critical to an understanding of our financial statements. Estimates are considered to be critical if they meet both of the following criteria: (i) the estimate requires assumptions about material matters that are uncertain at the time the estimate is made, and (ii) material changes in the estimate are reasonably likely from period to period. For a detailed discussion on the application of these and other accounting estimates, refer to Note 2. Basis of Presentation and Summary of Significant Accounting Policies to the Consolidated Financial Statements.
Accounts and Financing Receivables Allowances
We maintain allowances for credit losses to reflect expected credit losses inherent in our portfolio of receivables. Determination of the allowances requires us to exercise judgment about the timing, frequency and severity of credit losses that could materially affect the allowances and, therefore, net earnings. The allowances for credit losses represent management's best estimate of the credit losses expected from our trade accounts and financing receivables portfolios over the remaining contractual life. We pool assets with similar risk characteristics for this measurement based on attributes that may include asset type, duration, and/or credit risk rating. The future expected losses of each pool are estimated based on numerous quantitative and qualitative factors reflecting management's estimate of collectability over the remaining contractual life of the pooled assets, including:
•portfolio duration;
•historical, current, and forecasted future loss experience by asset type;
•historical, current, and forecasted delinquency and write-off trends;
•historical, current, and forecasted economic conditions; and
•historical, current, and forecasted credit risk.
We regularly perform detailed reviews of our accounts receivable and financing receivables portfolios to determine if changes in the aforementioned qualitative and quantitative factors have impacted the adequacy of the allowances.
Goodwill and Other Intangible Assets
Goodwill arises from the purchase price for acquired businesses exceeding the fair value of tangible and intangible assets acquired less assumed liabilities. In accordance with accounting standards related to business combinations, neither goodwill nor indefinite-lived intangible assets are amortized; however, definite-lived identifiable intangible assets, primarily customer relationships, acquired technology and trade names, are amortized over their estimated useful lives. We assess the goodwill of each of our reporting units for impairment at least annually as of the first day of the fourth quarter or more frequently if events and circumstances indicate that goodwill may not be recoverable.
When evaluating for impairment, we may first perform a qualitative assessment to determine whether it is more likely than not that a reporting unit or indefinite-lived intangible asset is impaired. If we do not perform a qualitative assessment, or if we determine that it is not more likely than not that the fair value of the reporting unit or indefinite-lived intangible asset exceeds its carrying amount, we will calculate the estimated fair value of the reporting unit or indefinite-lived intangible asset. Our decision to perform a qualitative impairment assessment for an individual reporting unit in a given year is influenced by a number of factors, inclusive of the size of the reporting unit's goodwill, the significance of the excess of the reporting unit's estimated fair value over carrying value at the last quantitative assessment date and the amount of time in between quantitative fair value assessments.
As part of our 2025 annual impairment analysis, we elected to apply the qualitative goodwill impairment assessment guidance in ASC 350-20, Goodwill, for all three of our reporting units as of the assessment date, or approximately $1.7 billion of goodwill as of the assessment date. Factors we considered in the qualitative assessment included general macroeconomic conditions, industry and market conditions, cost factors, overall financial performance of our reporting units, events or changes affecting the composition or carrying value of the net assets of our reporting units, information related to market multiples of peer companies and other relevant entity specific events. Based on our assessment we determined on the basis of the qualitative and quantitative factors, that the fair values of the reporting units were more likely than not greater than their respective carrying values, and therefore, a quantitative test was not required.
If we do not perform a qualitative assessment, goodwill impairment is determined by using a quantitative approach. We identify potential impairment by comparing the fair value of each reporting unit, determined using various valuation techniques, with the primary technique being a discounted cash flow analysis, to its carrying value. If the carrying amount of the reporting unit exceeds the fair value, an impairment loss is recognized.
We review identified intangible assets for impairment whenever events or changes in circumstances indicate that the related carrying amounts may not be recoverable. Determining whether an impairment loss occurred requires a comparison of the carrying amount to the sum of undiscounted cash flows expected to be generated by the asset. We also test intangible assets with indefinite lives at least annually for impairment. In these analyses, management considers general macroeconomic conditions, industry and market conditions, cost factors, financial performance and other entity and asset specific events and may require management to make judgments and estimates about future revenues, expenses, market conditions and discount rates related to these assets.
If actual results are not consistent with management's estimates and assumptions, goodwill and other intangible assets may be overstated, and a charge would need to be taken against net earnings which would adversely affect our financial statements. No goodwill impairment charges were recorded during the years ended December 31, 2025, 2024 and 2023. We recognized an immaterial other intangible assets impairment charge during the year ended December 31, 2025. There were no other intangible assets impairment charges during the years ended December 31, 2024 and 2023.
Contingent Liabilities
We are, from time to time, subject to a variety of litigation and similar contingent liabilities incidental to our business or the business operations of previously owned entities. We recognize a liability for any contingency that is known or probable of occurrence and reasonably estimable. These assessments require judgments concerning matters such as litigation developments and outcomes, the anticipated outcome of negotiations, the number of future claims and the cost of both pending and future claims. In addition, outside risk insurance professionals may assist in the determination of reserves for incurred but not yet reported claims through evaluation of our specific loss history, actual claims reported, and industry trends among statistical and other factors. Reserve estimates are adjusted as additional information regarding a claim becomes known. If the reserves established with respect to these contingent liabilities are inadequate, we would be required to incur an expense equal to the amount of the loss incurred in excess of the reserves, which would adversely affect our financial statements.
Revenue Recognition
We derive revenues from the sale of products and services. Revenue is recognized when control over the promised products or services is transferred to the customer in an amount that reflects the consideration that we expect to receive in exchange for those products or services. In determining if control has transferred, we consider whether certain indicators of the transfer of control are present, such as the transfer of title, present right to payment, significant risks and rewards of ownership and customer acceptance when acceptance is not a formality.
To qualify for revenue recognition, we must have an enforceable contract with a customer that defines the goods or services to be transferred and the payment terms related to those goods or services. We assess whether collection of substantially all consideration for the goods or services transferred is probable based on the customer's intent and ability to pay the promised consideration. This assessment requires judgment and considers financial and qualitative factors, including the customers' financial condition, collateral, debt-servicing ability, past payment experience and credit bureau information.
Variable consideration, including volume discounts, rebates and other short-term incentive programs, is estimated and included in the transaction price only to the extent it is probable that a significant reversal of cumulative revenue will not occur. Significant judgment is exercised in determining product returns, customer allowances and rebates, which are estimated based on historical experience and known trends.
Certain customer arrangements, including our SaaS product offerings, include multiple performance obligations, typically hardware, installation, training, consulting, services and/or post-contract customer support ("PCS"). We allocate the contract transaction price to each performance obligation using the standalone selling price. Whenever possible, standalone selling price is based on observable prices and when such observable data is not available, the Company estimates the standalone selling price using an approach designed
to maximize the use of observable inputs in accordance with ASC 606. Allocating the transaction price to each performance obligation may require judgment.
If our judgments regarding revenue recognition prove incorrect, our reported revenues in particular periods may be adversely affected. Historically, our estimates of revenue have been materially correct.
Income Taxes
In accordance with GAAP, deferred tax liabilities and assets are determined based on the difference between the financial statement and tax basis of assets and liabilities using enacted rates expected to be in effect during the year in which the differences reverse. Deferred tax assets generally represent items that can be used as a tax deduction or credit in our tax return in future years for which the tax benefit has already been reflected in our Consolidated Statements of Earnings and Comprehensive Income. We establish valuation allowances for our deferred tax assets if it is more likely than not that some or all of the deferred tax asset will not be realized. This requires us to make judgments and estimates regarding the timing and amount of the reversal of taxable temporary differences, expected future taxable income and the impact of tax planning strategies.
We provide for unrecognized tax benefits when, based upon the technical merits, it is "more-likely-than-not" that an uncertain tax position will not be sustained upon examination. Judgment is required in evaluating tax positions and determining income tax provisions. We re-evaluate the technical merits of our tax positions and may recognize an uncertain tax benefit in certain circumstances, including when: (i) a tax audit is completed; (ii) applicable tax laws change, including a tax case ruling or legislative guidance; or (iii) the applicable statute of limitations expires. We recognize potential accrued interest and penalties associated with unrecognized tax positions in income tax expense.
NEW ACCOUNTING STANDARDS
Refer to Note 2. Basis of Presentation and Summary of Significant Accounting Policies to the Consolidated Financial Statements for information regarding new accounting standards.
Vontier Corporation published this content on February 12, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on February 12, 2026 at 20:55 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]