Supply Chain and Manufacturing Strategy for Capacity Optimization
The company is consolidating low-cost commodity capacity into supporting high-demand, high-margin products, with a focus on hybrid manufacturing strategies.
Progress in qualifying internal wafer fab capacity is ongoing, with key customers supporting this transition.
The strategy aims to support future growth, reduce dependency on external foundries, and improve manufacturing efficiency and margins.
Adjusted free cash flow was $89 million, representing a 76% conversion to adjusted net income and about 12% of sales.
Environmental and Fueling Solutions (EFS) grew nearly 16% in Q2, driven by dispenser shipments up over 20% and strong environmental sensing and monitoring growth.
Mobility Technologies core sales grew 18%, led by Invenco's strong double-digit growth, while DRB sales declined in the teens as expected.
Net leverage ratio improved to 2.5x, and $50 million in share buybacks were completed in the quarter, totaling $105 million in the first half.
Orders grew 8% organically with a book-to-bill ratio of approximately 1.
Repair Solutions sales were flat year-over-year, with segment operating profit declining $700,000 due to mix headwinds despite cost savings.
Vontier delivered strong Q2 2025 results with core sales growth of 11%, adjusted operating profit margin expansion of 80 basis points, and adjusted EPS increasing 25% to $0.79, exceeding guidance.
The move away from bulk hardware sales is part of a broader effort to align revenue with customer buying cycles, which should benefit revenue predictability starting in 2026.
This transition has caused a temporary decline in hardware margins but is expected to improve overall margin profile as SaaS and recurring revenues grow.
The company booked over 24,000 new units in Q2, the highest in over a year, indicating early positive traction from the new sales approach.
Dafinchi