AI-extracted from the 10-Q filed 2026-08-06 — Q2 FY2026 (quarter ended June 28, 2026). Every figure is machine-verified against the filing text on SEC EDGAR.
Watts Water grew Q2 net sales 18.6% YoY to $763.2M on broad-based organic growth (12.2%) plus acquisitions, but gross margin slipped to 49.0% from 50.6% as acquisition dilution and lapping prior-year tariff pricing benefits offset price/productivity gains.
Biggest Revenue Drivers
Americas$585.0M+17.4% YoY
Favorable price realization and incremental volume driven by data center growth, plus $28.4M of acquired sales, partially offset by OEM/DIY product rationalization
Europe$124.6M+12.3% YoY
Favorable price realization and incremental volume plus $3.4M favorable FX, partially offset by OEM channel product rationalization
Biggest Revenue Drivers
Total revenue: $763.2M+18.6% YoY
Americas$585.0M+17.4% YoY
Favorable price realization and incremental volume driven by data center growth, plus $28.4M of acquired sales, partially offset by OEM/DIY product rationalization
Europe$124.6M+12.3% YoY
Favorable price realization and incremental volume plus $3.4M favorable FX, partially offset by OEM channel product rationalization
APMEA$53.6M+56.7% YoY
Growth in China (data center driven), Australia and New Zealand plus $5.9M acquired sales, partially offset by a decline in the Middle East
Largest Expense Items
Cost of goods sold$389.1M+22.4% YoY
Gross margin fell to 49.0% from 50.6% due to the dilutive impact of acquisitions and the prior-year benefit of tariff-related price increases ahead of related cost recognition
Selling, general and administrative expenses$214.5M+14.6% YoY
Higher compensation accruals ($5.4M), strategic investments ($5.0M), general inflation ($4.2M) and travel/marketing spend, plus $10.8M from acquisitions
Restructuring$5.6M+65% YoY
Primarily severance costs for immaterial cost-saving actions in the Americas and Europe segments
Watch Items from the Filing
Free cash flow conversion fell to 45.1% of net income for the first six months of 2026 from 60.1% a year earlier, driven by higher accounts receivable and inventory built to support tariff mitigation and demand.
Following the Supreme Court's ruling that IEEPA tariffs were unauthorized, the company is seeking refunds via CBP while new tariffs have been imposed under other regimes; full impact remains uncertain.
Data center demand is cited as a key driver of Americas and China/APMEA organic growth this quarter, indicating a concentration of growth in one end market.
Company estimates reasonably possible losses in excess of accrued contingencies of approximately $5.8 million, including exposure from the Chemetco Superfund site in Illinois.
APMEA segment grew net sales 56.7% YoY but remains only 7.0% of consolidated net sales, with growth partly offset by a decline in the Middle East amid regional instability.
AI-extracted and verified against SEC EDGAR filing text. Not investment advice.
Reitmeier Joseph WilliamDirectorGrant or award · Aug 3, 2026
Stefany SuzanneDirectorGrant or award · Aug 3, 2026
Napolitano KennethDirectorGrant or award · Aug 3, 2026
Raines MerileeDirectorGrant or award · Aug 3, 2026
About WATTS WATER TECHNOLOGIES INC (WTS): stock profile, AI score and financials
WATTS WATER TECHNOLOGIES INC (WTS) stock profile, AI quality score, and SEC EDGAR financial data, a Industrials sector company. 13F Pro's AI-powered ranking engine scores WTS at 64.4/100 on a composite quality score built from its SEC filings, placing it at rank #541 of 2,925 stocks — the top 25% of the AI-ranked universe. WTS scores in the top quartile across balance sheet strength (91.5). Areas of concern include earnings quality (36.0), which score below median versus the broader universe. Based on the latest XBRL financial filings (Q2 2026), WATTS WATER TECHNOLOGIES INC reports quarterly revenue of $763.2M, net income of $118.3M, an operating margin of 20.2%. Top institutional holders of WTS by reported 13-F value include BlackRock, KAYNE ANDERSON RUDNICK INVESTMENT MANAGEMENT, VANGUARD PORTFOLIO MANAGEMENT, based on the most recent SEC filings. WTS trades on the NYSE exchange and files with the SEC under CIK 795403. 13F Pro's AI research platform runs 10 specialized AI analysts — value, growth, momentum, macro, and activist specialists — that debate WTS daily and publish AI-generated analysis with cited SEC sources. The platform aggregates historical XBRL financial facts, 10-Q and 10-K filings, insider Form 4 transactions, and institutional 13-F holdings for WATTS WATER TECHNOLOGIES INC directly from SEC EDGAR.