Core Viewpoint - Baron Asset Fund demonstrated strong performance in Q4 2025, outperforming the Russell Midcap Growth Index by 11.59 percentage points, primarily due to favorable stock selection [1] Fund Performance - The Baron Asset Fund returned 7.89% in Q4 2025, while the Russell Midcap Growth Index declined by 3.70% [1] - As of December 31, 2025, the Fund held 53 positions, with the 10 largest holdings accounting for 52.8% of net assets and the 20 largest holdings representing 73.3% of net assets [1] Key Holdings - Mettler-Toledo International Inc. (NYSE:MTD) was highlighted as a leading contributor to the Fund's performance, benefiting from improving sentiment in the life sciences tools sector [2][3] - Mettler-Toledo's stock closed at $1,380.88 per share on February 9, 2026, with a one-month return of -7.00% and a 52-week gain of 3.67% [2] Industry Insights - The strength in the healthcare sector was attributed to Mettler-Toledo, with favorable stock selection in financials coming from Arch Capital Group Ltd [3] - The positive sentiment towards life sciences tools companies was influenced by drug pricing agreements between biopharmaceutical companies and the Trump Administration, which were perceived as not materially impacting pharmaceutical businesses [3] - Mettler-Toledo is expected to benefit from reduced tariff threats against China, stabilization in the Chinese market, and accelerating demand in broader end-markets, with anticipated earnings growth in the mid-teens or better over the long term [3]

Core Insights - Mettler-Toledo reported revenue of $1.13 billion for the quarter ended December 2025, reflecting an 8.1% increase year-over-year and surpassing the Zacks Consensus Estimate of $1.1 billion by 2.53% [1] - The company's EPS for the quarter was $13.36, up from $12.41 in the same quarter last year, exceeding the consensus EPS estimate of $12.76 by 4.67% [1] Revenue Breakdown - Net Sales- Products reached $856.96 million, exceeding the average analyst estimate of $839.62 million, representing a year-over-year increase of 6.9% [4] - Net Sales- Service totaled $272.77 million, surpassing the average estimate of $263.45 million, with an 11.9% increase compared to the previous year [4] - Net Sales- Retail amounted to $54.41 million, exceeding the average estimate of $49.53 million, showing a significant year-over-year growth of 24% [4] - Net Sales- Industrial was reported at $437.13 million, above the average estimate of $421.26 million, reflecting a 9.7% increase year-over-year [4] - Net Sales- Laboratory reached $638.2 million, slightly above the average estimate of $630.62 million, marking a 5.9% increase from the prior year [4] Stock Performance - Mettler-Toledo's shares have declined by 5.6% over the past month, while the Zacks S&P 500 composite has decreased by 1.5% during the same period [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [3]

Core Insights - Mettler-Toledo International (MTD) reported fourth-quarter 2025 adjusted earnings of $13.36 per share, exceeding the Zacks Consensus Estimate by 4.67%, with an 8% year-over-year increase in earnings [1][8] - Net sales reached $1.13 billion, surpassing the Zacks Consensus Estimate by 2.53%, reflecting an 8% increase on a reported basis and a 5% increase on a local currency basis compared to the previous year [1][8] Revenue Breakdown - MTD's revenues were segmented into Laboratory ($638 million, 56.5% of net sales), Industrial ($437 million, 38.7% of net sales), and Food Retail ($54 million, 4.8% of net sales), with year-over-year local currency growth of 3%, 7%, and 19% respectively [2][8] - Total sales from the Americas ($456 million, 40.4% of net sales), Europe ($346 million, 30.6%), and Asia/Rest of the World ($328 million, 29.1%) showed year-over-year local currency increases of 7%, 4%, and 4% respectively [3] Operating Performance - The gross margin for Q4 was 59.8%, a contraction of 140 basis points year over year [6] - Research and development (R&D) expenses were $52.6 million, up 5.1% year over year, while selling, general & administrative (SG&A) expenses increased 9.5% year over year to $259.8 million [7] - The adjusted operating margin was 32.2%, declining by 150 basis points year over year [9] Cash Flow and Balance Sheet - As of December 31, 2025, Mettler-Toledo's cash and cash-equivalent balance was $66.9 million, down from $69.1 million as of September 30, 2025 [10] - The company generated $225.6 million in cash from operating activities during the reported quarter, with free cash flow amounting to $188.1 million [10] Guidance - For Q1 2026, Mettler-Toledo anticipates a sales increase of approximately 3% in local currency year over year, with adjusted earnings expected between $8.60 and $8.75 per share, reflecting a growth rate of 5% to 7% year over year [11] - For the full year 2026, the company expects local currency sales to increase approximately 4% over 2024, with adjusted earnings projected between $46.05 and $46.70 per share, representing an 8-9% growth over 2025 [11]

Financial Instruments and Liabilities - As of December 31, 2025, the fair value of cross currency swap agreements was a net liability of $32.2 million, with a 100-basis-point change in interest rates and foreign currency exchange rates potentially impacting the net aggregate market value by approximately $6.4 million[261]. - The company has limited involvement with derivative financial instruments and does not use them for trading purposes[260]. Taxation - The valuation allowance for deferred tax assets was $68.1 million as of December 31, 2025, based on management's estimates of future taxable income[264]. - The effective tax rate could be materially affected by changes in assumptions or estimates, with an increase of $10.5 million in tax expense raising the effective tax rate by 1% based on earnings before taxes of $1.0 billion for the year ended December 31, 2025[266]. - The company plans to repatriate earnings from multiple countries, expecting additional tax costs associated with non-U.S. withholding taxes and U.S. taxes on currency gains[265]. Pension Obligations - The net periodic pension cost for the U.S. pension plan in 2025 was $1.6 million, while the projected benefit obligation was $99.1 million[267]. - The weighted average return on assets assumption for the U.S. pension plan was 6.75% for 2025, with a 1% change impacting annual benefit plan expense by approximately $10.4 million after tax[269]. - The discount rate assumption for the U.S. pension plan was 5.0% for 2025, with a 1% change impacting annual benefit plan expense by approximately $8.9 million after tax[270]. Goodwill and Intangible Assets - Goodwill on the consolidated balance sheet as of December 31, 2025, was $739.2 million, with other intangible assets totaling $278.9 million[271]. - The company evaluates goodwill and indefinite-lived intangible assets annually for impairment, with no impairment indicated to date[275].

Financial Data and Key Metrics Changes - Sales in Q4 were $1.1 billion, representing an increase of 5% in local currency or 8% on a reported basis [7][11] - Adjusted EPS for the quarter was $13.36, an 8% increase over the prior year, while reported EPS was $13.98 compared to $11.96 in the prior year [10][11] - Gross margin was 59.8%, a decrease of 140 basis points, impacted by unfavorable foreign currency and tariff costs [8][12] Business Line Data and Key Metrics Changes - Laboratory sales increased 3%, industrial sales increased 7%, and food retail sales grew 19% in the quarter [7][8] - Service revenue grew 8% in the quarter, including a 2% benefit from acquisitions [8] - For the full year, local currency sales increased 3%, with adjusted operating profit declining 1% and adjusted EPS increasing 4% [11][12] Market Data and Key Metrics Changes - Local currency sales in the Americas increased 7%, Europe increased 4%, and Asia increased 4% [7] - Local currency sales in China increased 3% during the quarter, with modest growth expected in 2026 [7][25] - Emerging markets outside of China accounted for 18% of sales in 2025 and grew above the company average [25] Company Strategy and Development Direction - The company is focused on driving growth through its Spinnaker sales and marketing program and innovative product portfolio [6] - Strategic initiatives include capitalizing on automation, digitalization, and onshoring investments globally [6][26] - The company aims to maintain its competitive advantage through continuous innovation and operational excellence [6][19] Management's Comments on Operating Environment and Future Outlook - Management noted that customers are expected to be cautious with investments at the start of the year due to geopolitical tensions and market uncertainties [14][31] - The company anticipates gradual improvements throughout the year, with a local currency sales growth forecast of approximately 4% for 2026 [15][16] - Management expressed confidence in their ability to execute growth initiatives and gain market share despite macroeconomic challenges [15][26] Other Important Information - Free cash flow for 2025 was $878 million, with a conversion ratio of 99% of adjusted net income [12] - The company expects total amortization for 2026 to be approximately $78 million and interest expense to be around $70 million [17][18] - Share repurchases are expected to be in the range of $825 million to $875 million [18] Q&A Session Summary Question: Customer caution in Q1 guidance - Management acknowledged that while there are positive headlines in pharma and life sciences, they expect customers to be cautious at the start of the year, which has been factored into their guidance [31][33] Question: Components of guidance regarding pricing and volume - Management indicated that pricing is expected to be around 3.5% for Q1, with a full-year expectation of 2.5% [34][36] Question: Food retail performance and outlook - Management noted that food retail is a lumpy business with project-based revenue, and while they are pleased with Q4 performance, they expect flat growth for the full year [55][56] Question: China market and pharmacopoeia opportunity - Management stated that while there is good engagement in China, the pharmacopoeia opportunity will support ongoing growth but is not expected to result in a significant step change [57][75] Question: Reshoring and onshoring opportunities - Management views reshoring as a longer-term opportunity, likely materializing in 2027 and beyond, as factories need to be built before orders can be realized [61][62] Question: European market performance - Management highlighted strong performance in Europe, particularly in product inspection, despite a softer economic backdrop [66][68] Question: Service business outlook - Management expects mid- to high-single-digit growth for the service business in 2026, with continued focus on penetrating the serviceable addressable market [71]

Financial Data and Key Metrics Changes - Sales in Q4 were $1.1 billion, representing an increase of 5% in local currency or 4% excluding acquisitions, and an 8% increase on a reported basis in US dollars [7] - Adjusted EPS for the quarter was $13.36, an 8% increase over the prior year, while reported EPS was $13.98 compared to $11.96 in the prior year [10][11] - Gross margin was 59.8%, a decrease of 140 basis points, impacted by unfavorable foreign currency and incremental gross tariff costs [8][9] - Adjusted operating profit amounted to $363 million, up 3% versus the prior year, with an adjusted operating margin of 32.1%, a decrease of 160 basis points [9][11] Business Line Data and Key Metrics Changes - Laboratory sales increased 3% in Q4, while industrial sales increased 7%, including a 3% benefit from acquisitions [7][8] - Food retail sales grew 19% in the quarter, and service revenue grew 8%, including a 2% benefit from acquisitions [8] - For the full year, local currency sales increased 3%, with adjusted operating profit declining 1% and adjusted EPS increasing 4% [11][12] Market Data and Key Metrics Changes - Local currency sales in the Americas increased 7%, Europe increased 4%, and Asia (rest of the world) also increased 4% [7] - Local currency sales in China increased 3% during the quarter, with modest growth expected in the lab and industrial segments [24][25] - Emerging markets outside of China accounted for 18% of sales in 2025 and grew above the company average due to dedicated resources and growth initiatives [25] Company Strategy and Development Direction - The company is focused on driving growth through the Spinnaker sales and marketing program and innovative product portfolio, capitalizing on automation, digitalization, and onshoring investments [6][19] - The company aims to maintain a strong culture of innovation and operational excellence to gain market share and deliver strong financial performance [6][26] - Future growth opportunities are anticipated from customer replacement cycles and investments in on- and nearshoring activities [26] Management's Comments on Operating Environment and Future Outlook - Management noted that while there have been favorable headlines in the pharma and life sciences markets, customers are expected to be cautious with investments at the start of the year [31][32] - The company does not anticipate significant improvement in market conditions in 2026 compared to the previous year, but remains confident in executing growth and productivity initiatives [14][15] - Management highlighted the importance of their innovative portfolio and strong global leadership positions in navigating ongoing market challenges [26] Other Important Information - Free cash flow for 2025 was $878 million, with a conversion ratio of 99% of adjusted net income [12] - Guidance for 2026 includes local currency sales growth forecast of approximately 4%, with adjusted EPS expected to be in the range of $46.05-$46.70, representing a growth rate of 8%-9% [15][18] Q&A Session Summary Question: Customer caution in pharma and life sciences - Management acknowledged that despite positive headlines, there is still uncertainty in the market leading to longer deal cycles and a cautious start to the year [31][32] Question: Components of guidance for pricing and volume - Management indicated that pricing is expected to start the year stronger due to mid-year pricing actions from the previous year, with a forecast of 3.5% for Q1 and 2.5% for the full year [34][35] Question: Growth in food retail - Management noted that food retail is a lumpy business with project-based revenue, and while they are pleased with Q4 performance, they expect flat growth for the full year 2026 due to tough comparisons [55][56] Question: Outlook for China and pharmacopoeia opportunity - Management stated that while there is good engagement in China, the pharmacopoeia opportunity will support ongoing growth but is not expected to result in a significant step change [57][75] Question: Reshoring and onshoring opportunities - Management views reshoring as a longer-term opportunity, likely materializing in 2027 and beyond, as factories need to be built before orders can be realized [61][62] Question: Performance in Europe - Management highlighted strong performance in Europe despite a softer economy, driven by effective sales strategies and innovation in product offerings [66][68] Question: Service business outlook - Management expects mid- to high-single-digit growth for the service business in 2026, with continued focus on penetrating the serviceable addressable market [70][71]

Financial Data and Key Metrics Changes - Sales in Q4 2025 were $1.1 billion, representing an 8% increase on a reported basis and a 5% increase in local currency, or 4% excluding acquisitions [6][10] - Adjusted EPS for the quarter was $13.36, an 8% increase over the prior year, while reported EPS was $13.98 compared to $11.96 in the prior year [9][10] - Gross margin was 59.8%, a decrease of 140 basis points, impacted by unfavorable foreign currency and tariff costs [7][11] Business Line Data and Key Metrics Changes - Laboratory sales increased 3%, industrial sales increased 7% (including a 3% benefit from acquisitions), and food retail sales grew 19% in the quarter [6][7] - Service revenue grew 8% in the quarter, including a 2% benefit from acquisitions [7] - For the full year 2025, local currency sales increased 3%, with adjusted operating profit declining 1% and adjusted EPS increasing 4% [10][11] Market Data and Key Metrics Changes - Local currency sales in the Americas increased 7%, Europe increased 4%, and Asia (rest of the world) increased 4% [6] - Local currency sales in China increased 3% during the quarter, with modest growth expected in 2026 [6][23] - Emerging markets outside of China accounted for 18% of sales in 2025 and grew above the company average [23] Company Strategy and Development Direction - The company is focused on driving growth through its Spinnaker sales and marketing program and innovative product portfolio, capitalizing on automation, digitalization, and onshoring investments [5][24] - The company aims to maintain a strong culture of innovation and operational excellence to gain market share and deliver strong financial performance [5][24] - Future growth opportunities are anticipated from customer replacement cycles and investments in on- and nearshoring activities [24] Management's Comments on Operating Environment and Future Outlook - Management noted that customers are expected to be cautious with investments at the start of the year due to ongoing geopolitical tensions and market uncertainties [12][28] - The company does not anticipate significant improvement in market conditions in 2026 compared to the previous year, but remains confident in its growth and productivity initiatives [12][13] - Management highlighted the importance of their innovative portfolio and strong global leadership positions in navigating market challenges [24] Other Important Information - Adjusted free cash flow for 2025 was $878 million, with a conversion ratio of 99% of adjusted net income [11] - Guidance for 2026 includes local currency sales growth of approximately 4%, adjusted EPS forecasted to be in the range of $46.05-$46.70, representing an 8%-9% growth rate [13][15] Q&A Session Summary Question: Customer caution in pharma and life sciences - Management acknowledged that while headlines have improved, there is still uncertainty leading to longer deal cycles, and customers are expected to start the year cautiously [28][30] Question: Components of guidance regarding pricing and volume - Management indicated that pricing is expected to start strong due to mid-year pricing actions from the previous year, with a forecast of 3.5% for Q1 and 2.5% for the full year [32][33] Question: Q1 guidance and market assumptions - Management provided insights into expected growth rates across different business lines, indicating a cautious outlook for Q1 compared to Q4 [40][41] Question: Food retail performance and outlook - Management noted that food retail is a lumpy business with project-based revenue, guiding for flat growth in 2026 after strong performance in 2025 [54][55] Question: China market and pharmacopoeia opportunity - Management expressed optimism about the ongoing growth in China, particularly in the pharmaceutical sector, but noted that significant changes are not expected immediately [56][74] Question: Reshoring and onshoring opportunities - Management sees reshoring as a longer-term opportunity, primarily beyond 2026, as factories need to be built before significant orders can be expected [60][62]

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Earnings Call Webcast February 6, 2026 Mettler-Toledo International Inc. Q4 2025 Financial Results Safe Harbor Statement 2 Statements in this presentation which are not historical facts constitute "forward looking statements" within the meaning of Section 27A of the U.S. Securities Act of 1933 and Section 21E of the U.S. Securities Exchange Act of 1934. These statements involve known and unknown risks, uncertainties and other factors that may cause our or our businesses, actual results, levels of activity, ...

Core Insights - Mettler-Toledo (MTD) reported quarterly earnings of $13.36 per share, exceeding the Zacks Consensus Estimate of $12.76 per share, and showing an increase from $12.41 per share a year ago, resulting in an earnings surprise of +4.67% [1] - The company achieved revenues of $1.13 billion for the quarter ended December 2025, surpassing the Zacks Consensus Estimate by 2.53% and up from $1.05 billion year-over-year [2] - Mettler-Toledo has consistently surpassed consensus EPS estimates over the last four quarters, indicating strong performance [2] Earnings Outlook - The sustainability of Mettler-Toledo's stock price movement will depend on management's commentary during the earnings call and future earnings expectations [3][4] - The current consensus EPS estimate for the upcoming quarter is $8.91 on revenues of $926.17 million, while for the current fiscal year, the estimate is $45.81 on revenues of $4.18 billion [7] Industry Context - The Medical - Instruments industry, to which Mettler-Toledo belongs, is currently ranked in the top 38% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]