# Zurn Elkay Q3 2026 Earnings Results

> Zurn Elkay reports 9% top-line growth and 28.3% adjusted EBITDA margin in Q3 2026 with 40% incremental margin target for 2027.
- Title: Zurn Elkay Q3 2026 Earnings Results · The Motley Fool
- Summary: Zurn Elkay reports 9% top-line growth and 28.3% adjusted EBITDA margin in Q3 2026 with 40% incremental margin target for 2027. Zurn Elkay Water Solutions…
- Keywords: zurn elkay, q3 2026, earnings call, intellihot, runpoint, hot water loop, mro, commercial construction, dodge momentum index, architecture billings index, finance, money
- Source: The Motley Fool — https://fool.com/earnings/call-transcripts/2026/10/28/zurn-elkay-zws-q3-2026-earnings-call-transcript
- Author: Motley Fool Transcribing
- Published: 2026-10-28T16:24:47+00:00
- Read time: 2 min
- Topics: zurn elkay, q3 2026, earnings call, intellihot, runpoint, hot water loop, mro, commercial construction, dodge momentum index, architecture billings index, finance, money
## Q3 2026 Results
Zurn Elkay reported 9% reported sales growth and 7% core growth year over year.
## Adjusted EBITDA Performance
Adjusted EBITDA grew 15% year over year to $140.1 million with a 28.3% margin, expanding 150 basis points from prior year.
## Free Cash Flow
Generated $109.6 million in free cash flow excluding $7.2 million in net tariff refunds.
## Share Repurchases
Executed $35 million share repurchases to buy back 700,000 shares of common stock.
## Dividend Increase
Increased annual dividend by 18% to $0.52 per share reflecting confidence in long-term business model.
## Net Debt Leverage
Maintained 0.4x net debt leverage at end of Q3 2026, historically low levels.
## Intellihot Acquisition
Acquired Intellihot for $107.3 million cash to enter commercial hot water loop market.
## Hot Water Loop Strategy
Integrated Intellihot's tankless condensing heaters with Runpoint digital valve for temperature and flow control.
## Market Opportunity
Hot water mixing valve market presents $200 million opportunity with potential for $50 million category capture by Zurn Elkay.
## Market Outlook
Dodge Momentum Index at recent highs while Architecture Billings Index below 50 for extended period indicating diverging signals.
## End Market Mix
50% new construction and 50% maintenance, repair, and operations (MRO) and retrofit projects.
## Institutional Market Exposure
50% of portfolio with education and healthcare subverticals accounting for 72% of that exposure.
## Commercial Market Exposure
30% of total business with growth in data centers offsetting weakness in other office subverticals.
## Q4 Sales Guidance
Guided Q4 sales between $430 million and $437 million reflecting seasonal market softness.
## Q4 Adjusted EBITDA Guidance
Guided Q4 adjusted EBITDA between $120 million and $123 million.
## Full Year 2026 Guidance
Raised full-year 2026 adjusted EBITDA guidance to $512-$515 million and free cash flow to greater than $350 million.
## Key takeaway

Zurn Elkay Water Solutions achieved 9% reported sales growth and 28.3% adjusted EBITDA margin in Q3 2.026, raising full-year 2026 adjusted EBITDA guidance to $512-$515 million with a 40% incremental margin target for 2027.