Watts Water hits Record $763M Quarterly Sales as Data Centre Demand Surges

Data center demand drove growth across all regions, with APMEA sales rising 57% on a reported basis and 31% organically. The company raised its full-year sales growth forecast to 14%–17% reported and 8%–11% organically.

However, operating margin fell 80 basis points to 20.2% due to acquisition costs, inflation, and tariffs. Americas margins declined 150 basis points, while first-half free cash flow fell to $98 million from $105 million a year earlier.

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Data center demand was a major growth driver for Watts Water Technologies this quarter, helping the company achieve 12% organic sales growth across all regions.

The Americas, the company’s largest market, reported sales of $585 million, up 17% year over year and 12% organically. Acquisitions contributed another $28 million. Europe sales rose 12% to $125 million, while segment margin improved by 160 basis points due to better pricing and productivity.

APMEA was the strongest-performing region, with sales rising 57% on a reported basis and 31% organically, driven by data center demand in China. Segment margin also increased by 100 basis points.

Based on its strong first-half performance, Watts raised its full-year sales growth outlook to 14%–17% reported and 8%–11% organically. The company also increased its adjusted operating margin outlook by 20 to 80 basis points.

Watts raised its quarterly dividend to $0.63 per share from $0.52 a year earlier. It also repurchased about 13,000 shares for $4.1 million during the quarter.

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