Earnings Recap — Q2 FY2026
CY Q3 2026 · Reported July 28, 2026 · Beat 2 of last 3 quarters
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Ecolab's accelerating Global High-Tech growth (29%) and the CoolIT acquisition underscore the critical role of water and cooling in AI infrastructure. The company's integrated liquid cooling and water management platform positions it as a key enabler of sustainable data center buildout, with a path to $4 billion in sales by 2030. This reinforces the thesis that AI infrastructure demand extends beyond chips to the physical systems that power and cool them.
Ecolab delivered another strong quarter with adjusted EPS of $2.09, up 11%, and organic sales growth of 5%, accelerating from Q1. Pricing strengthened to 4% as the global energy surcharge was implemented, offsetting rising commodity costs and stabilizing organic gross margin. Growth engines continued to scale: Global High-Tech grew 29%, Life Sciences 15%, Ecolab Digital 27%, and Pest Elimination 7%. The CoolIT acquisition closed on July 2, adding a leading direct-to-chip liquid cooling platform, and the company now expects Global High-Tech to approach $1.5 billion in annualized sales.
Management raised full-year 2026 adjusted EPS guidance to $8.05-$8.25 (7%-10% growth), reflecting strong underlying performance and short-term dilution from CoolIT amortization and financing costs. They expect second-half organic sales growth of 6%-7%, with pricing in the targeted 5%-6% range as energy surcharge benefits fully materialize. Adjusted operating income margin is expected to be 19% in the second half, keeping them on track for the 20% OI margin target in 2027. Global High-Tech is now expected to grow more than 25% annually, reaching $4 billion in sales by 2030 with a 25% operating income margin, up from prior expectations of 20% growth and 20% margin. Management reaffirmed the 2027 20% OI margin target and expects EPS growth to accelerate back to 12%-15% beyond 2026.
“At the heart of AI is water. Water is required to produce, to power, and to cool chips. We are now the only company with an integrated solutions across that value chain.”
on AI infrastructure opportunity
“We have never been better positioned to deliver long-term organic sales growth of 5% to 7%. To expand operating income margins well beyond 20% and continue strengthening our EPS growth algorithm.”
on Long-term growth algorithm
“It is going to be really good to share with all of you and customers, obviously, Supercomputing how everything comes together.”
on Integrated cooling platform launch
Can you help bridge the gap to the 20% operating margin target for 2027 given the incremental amortization from CoolIT?
Christophe reaffirmed the 20% OI margin target for 2027, noting the second half of 2026 will be at 19% and that the Nalco amortization falls off next year, offsetting CoolIT amortization. He emphasized the portfolio mix shift toward higher-margin growth engines.
Can you provide the current mix of the high-tech business between data centers and microelectronics and your confidence in the $4 billion target?
Christophe said the business is roughly $1.5 billion annualized, split roughly equally among legacy microelectronics/data centers, CoolIT, and Ovivo. All three are growing strongly (legacy 29%, Ovivo mid-teens, CoolIT >100%), supporting the 25% growth trajectory to $4 billion by 2030.
Given CoolIT's >100% growth in the first half, should we model a higher growth rate than 30%?
Christophe said it's too early to change the 30% assumption, but the trajectory is better than expected. He noted the team will provide more detail at the November Investor Day at Supercomputing after a few months of integration.