On October 4, 2024, the Company completed its acquisition of Information Exchange Holdings, Inc., the holding company that owns TraceGains, for $349 million, net of cash acquired. The Company believes this business complements the PQI segment, specifically the packaging and color solutions business.

On November 12, 2024, the Company completed an investment of CAD $20 million to establish a minority interest in Axine Water Technologies (“Axine”), a leading provider of electrochemical oxidation technology for contaminant destruction. The strategic collaboration with Axine builds upon Veralto's diverse portfolio of water solutions for customers in the Company's WQ segment.

The Company anticipates 2025 results will be driven by the following expectations in each of the Company's reportable segments: Water Quality: the Company expects continued year-over-year growth driven by on-going strong demand for industrial water treatment, particularly in North America, with steady demand across municipal end-markets in North America and Europe, partially offset by continued weakness in China; Product Quality & Innovation: the Company expects continued year-over-year growth driven by improved demand in the consumer packaged goods market globally.

SG&A expenses as a percentage of sales increased 110 basis points on a year-over-year basis during 2024 as compared to 2023 primarily due to select investments in sales and marketing growth initiatives, as well as the costs to operate as a stand-alone company.

R&D expenses as a percentage of sales increased by 40 basis points on a year-over-year basis during 2024 as compared to 2023 driven by growth related R&D initiatives.

The Company has access to capital resources and continues to focus on profitability improvements and leveraging Veralto Enterprise System (“VES”) to manage the anticipated impact of the challenging macroeconomic environment on business operations.

Conditions in the global economy, including military conflicts, the particular markets we serve and the financial markets can adversely affect our business and financial statements.

We face intense competition and if we are unable to compete effectively, we may experience decreased demand and decreased market share. Even if we compete effectively, we may be required to reduce the prices we charge.

Our businesses are subject to extensive regulation, and failure to comply with those regulations could adversely affect our business and financial statements.

Although Veralto's businesses generally operate in highly competitive markets, Veralto's competitive position cannot be determined accurately in the aggregate or by segment since none of its competitors offer all of the same product and service lines or serve all of the same markets as Veralto, or any of its segments, does.

Veralto is facing increased competition in a number of its served markets as a result of the entry of well-resourced companies into certain markets, the entry of competitors based in low-cost manufacturing locations, the development of competitive technologies by early-stage and emerging companies and increasing consolidation in particular markets.

Management believes that Veralto has a leadership position in many of the markets it serves. Key competitive factors vary among Veralto's businesses and product and service lines, but include the specific factors noted above with respect to each particular business and typically also include price, quality, performance, delivery speed, application expertise, service and support, technology and innovation, distribution network, breadth of product, service and software offerings and brand name recognition.

Cost of sales decreased $32 million, or 1.5%, on a year-over-year basis during 2024 as compared to 2023 primarily due to the impact of lower year-over-year material costs.

The Company has access to capital resources and continues to focus on profitability improvements and leveraging Veralto Enterprise System (“VES”) to manage the anticipated impact of the challenging macroeconomic environment on business operations.

The supply chain disruptions, labor availability constraints, and labor cost increases that began in 2021 for a number of our businesses eased in 2024. Through the application of VES tools and processes (including the implementation of price increases), Veralto largely mitigated the impact of these pressures on Veralto's profitability and as a result these pressures did not have a material, adverse effect on the business in 2024.

Veralto conducts R&D activities for the purpose of developing new products, enhancing the functionality, effectiveness, ease of use and reliability of its existing products and expanding the applications for which uses of its products are appropriate.

Our success depends on several factors, including our ability to allocate our R&D funding to products and services with higher growth prospects.

We generally sell our products and services in industries that are characterized by rapid technological changes, frequent new product introductions and changing industry standards.

Veralto uses VES tools to improve our profitability and cash flows, which support our ability to expand our addressable market and improve our market position through investments in areas such as our commercial organization and research and development (“R&D”), including software and digital solutions.

We have historically paid a quarterly dividend of $0.09 per share of our common stock. In December 2024, our Board of Directors increased the quarterly dividend paid to $0.11 per share from $0.09 per share, an increase of 22%.

The Company generally intends to use available cash and internally generated funds to meet these cash requirements, but in the event that additional liquidity is required, the Company may also borrow under its commercial paper programs (if available) or borrow under the Company's Credit Facility, enter into new credit facilities and either borrow directly thereunder or use such credit facilities to backstop additional borrowing capacity under its commercial paper programs (if available) and/or access the capital markets. The Company also may from time to time seek to access the capital markets to take advantage of favorable interest rate environments or other market conditions.

At our core, the products and services we provide underscore our commitment to advancing broad sustainability objectives for our customers.

Our leadership has conducted a sustainability prioritization assessment to inform our sustainability priorities.

Our sustainability program is organized around the three pillars of Products, Planet, and People. Coupled with strong corporate governance practices to provide oversight and management support, the sustainability program is positioned to iteratively prioritize initiatives using the insights we learn from engaging with our stakeholders.

As a diversified, global business, Veralto's operations are affected by worldwide, regional and industry-specific economic and political factors.

Our business is sensitive to general economic conditions. Slower economic growth in the domestic and/or international markets, inflation, actual or anticipated default on sovereign debt, volatility in the currency and credit markets, military conflicts, high levels of unemployment or underemployment, labor availability constraints, reduced levels of capital expenditures, changes or anticipation of potential changes in government trade and tariff, fiscal, tax and monetary policies, changes in capital requirements for financial institutions, government budget negotiation dynamics, sequestration, austerity measures and other challenges that affect economies of the world have in the past adversely affected, and may in the future adversely affect, the Company and its distributors, customers and suppliers.

Our growth depends in part on the growth of the markets which we serve, and visibility into our markets can be limited (particularly for markets into which we sell through distribution).