Key financial results
- Sales: Ecolab reported 7% organic sales growth in the third quarter.
Our core businesses strengthened, our growth engines accelerated, and together they drove 7% organic sales growth.
- Gross margin: Organic gross margin was maintained despite significant commodity cost inflation.
- Operating income: Organic operating income margin expanded to 19.6%, accelerating organic operating income growth to 11%.
As a result, our organic OI margin in the quarter expanded to 19.6%, accelerating organic OI growth to 11%.
- Pro forma results: On a pro forma basis including CoolIT and Ovivo, third quarter sales grew high single digits and adjusted EPS grew mid-teens.
On a pro forma basis, including the operating performance of CoolIT and Ovivo, Ecolab's Q3 sales would have grown high single digits and adjusted EPS would have grown mid-teens.
Business segment results
- Food & Beverage: Food & Beverage accelerated to 8% organic growth with broad-based growth across dairy, protein, and beverage.
You can see this clearly in Food & Beverage, which accelerated to 8% organic growth, with broad-based growth across dairy, protein and beverage against stable end market demand.
- Light Water: Light Water strengthened, accelerating to 5% growth driven by manufacturing and institutional markets.
Light Water also strengthened, accelerating to 5% growth.
- Paper and Heavy Water: Paper and Heavy Water returned to solid growth supported by new wins and improved pricing.
Paper and Heavy Water also returned to solid growth.
- Institutional & Specialty: Institutional & Specialty performance remained consistent despite North American restaurant foot traffic declining mid-single digits.
Institutional & Specialty performance remained consistent despite industry trends that continue to get tougher, including restaurant food traffic that declined mid-single digits in North America.
- Life Sciences: Life Sciences organic sales grew 17%, led by bioprocessing share gains.
Life Sciences continued to drive very strong share gains with organic sales growing 17%.
- Ecolab Digital: Ecolab Digital sales increased 34%.
Ecolab Digital also continued to grow rapidly, with sales up 34%.
- Pest Elimination: Pest Elimination sales growth accelerated to 8% driven by strong new business wins and Pest Intelligence.
In the third quarter, Pest sales growth accelerated to 8% driven by strong new business wins from our One Ecolab growth platform and Pest Intelligence.
- Global High-Tech: Global High-Tech accelerated, growing organic sales by 63%.
Global High-Tech, now Ecolab's largest growth engine, continues to accelerate, growing organic sales by 63%.
- CoolIT: CoolIT more than doubled its sales with very strong profitability.
CoolIT is off to an incredible start within Ecolab, more than doubling its sales with very strong profitability.
- Ovivo: Ovivo delivered strong double-digit growth compared to pre-acquisition sales.
Ovivo is also performing very well, delivering strong double-digit growth versus pre-acquisition sales.
Capital allocation
- Leverage: Management noted that debt reduction toward a 2x leverage ratio is a primary priority alongside integration.
And obviously, that's leading the deleveraging, getting so closer to this 2x that we talked about. This is my 1b priority that I have in front of me.
- Capital return: Management did not give specific figures for share repurchases or dividends on the call.
Industry trends and dynamics
- Commodity inflation: Commodity costs remained high and are expected to stay high, with pricing execution and supply chain management used to offset them.
This will remain a critical focus in the quarters ahead as commodity costs are expected to remain high.
- Hospitality traffic: Restaurant food traffic declined mid-single digits in North America, representing a tough industry trend for institutional markets.
Institutional & Specialty performance remained consistent despite industry trends that continue to get tougher, including restaurant food traffic that declined mid-single digits in North America.
Competitive landscape
- Water circularity: Management stated that Ovivo recycles more than 80% of water used in a fab and no one can compete with them today.
- Cooling solutions: In data center cooling, competitors sell individual equipment or coolant, whereas Ecolab provides end-to-end solutions and cooling as a service.
Macroeconomic environment
- Middle East impact: The Middle East created a headwind representing roughly 1 point of growth in the quarter.
Growth opportunities and strategies
- One Ecolab: Since launching One Ecolab, the company generated over $400 million of sales growth with its largest 35 customers only.
- Life Sciences margins: Life Sciences is approaching $1 billion in sales and targeting operating income margins to expand to 30% over the next few years.
- Global High-Tech targets: Global High-Tech has a global ambition to grow more than 25% annually, reach $4 billion in sales by 2030, and deliver a 25% operating income margin.
Last quarter, we outlined our global ambition for Global High-Tech to grow more than 25% annually, reach $4 billion in sales by 2030 and deliver 25% operating income margin.
- Institutional strategy: Institutional will double its sales firepower in North America, integrate service offerings across segments, and combine hygiene, water, and pest intelligence.
Financial guidance and outlook
- Sales guidance: For 2027, organic sales growth is expected to grow at the upper end of the 5% to 7% target.
- Margin guidance: Adjusted operating income margin is expected to reach 20% in 2027.
and Ecolab's adjusted operating income margin to reach the 20% that we promised.
- EPS guidance: Adjusted EPS growth has a clear path to meet or exceed the long-term target of 12% to 15% in 2027.
That provides a clear path to meet or exceed our long-term adjusted EPS growth target of [ 12% to 15% ] in 2027.
Q3 2026 results
| Metric | Result | Change |
|---|---|---|
| Organic sales growth | 7% | Not stated |
| Organic operating income margin | 19.6% | Not stated |
| Organic operating income growth | 11% | Not stated |
| Global High-Tech organic sales growth | 63% | Not stated |
| Life Sciences organic sales growth | 17% | Not stated |
| Pest Elimination organic sales growth | 8% | Not stated |
How management sounded
Positive (+45 on our -100 to +100 scale). Management expressed strong confidence following accelerated organic sales growth, margin expansion, and a clear path to meet 2027 targets. Management sounded more upbeat than on 62% of the 302 calls we cover; most companies sound positive on their own calls, so the comparison says more than the label.
Read the analyst Q&A summary and guidance and outlook for this call.
What to watch before the next call
- Integration progress and synergy realization from the CoolIT and Ovivo acquisitions.
- Commodity cost inflation trends and their ongoing impact on gross margins.
- Execution of capacity expansions for CDUs and cold plates to support high-tech growth.
Earlier calls
- Q2 2026 (Jul 28, 2026), tone Balanced: Ecolab reported double-digit adjusted EPS growth of 11% and raised its full-year EPS outlook to $8.05 to $8.25, driven by strong pricing execution and momentum in growth engines like Global High-Tech.
