Financial Data and Key Metrics Changes - Group revenue decreased slightly to just over $3,000,000,000, down 1.5% primarily due to lower defense and social infrastructure revenue [6][14] - EBITDA increased by 2.8%, with margin expanding to 8.3%, up 0.3 percentage points due to improved mix and focus on margin enhancement [6][15] - NPATA was $119,400,000, an increase of 11.9% year on year, with cash conversion rising to 93.2%, up 2.5 percentage points [6][15] Business Line Data and Key Metrics Changes - Defense and Social Infrastructure revenue declined by 6% due to lower defense-based services project work and revised contract scopes, but EBITDA margin improved by 1.4 percentage points to 8.1% [18] - Infrastructure Services revenue increased by 9.6%, with EBITDA up by 21.4% and EBITDA margin improving to 8.8%, driven by new higher-margin contracts in Energy and Water [19] - Telecommunications sector experienced a slight dip in revenue and EBITDA due to mobilization costs from new contracts, with expectations for ramp-up in the second half [19] Market Data and Key Metrics Changes - The total addressable market is forecasted to expand from $86,800,000,000 in FY 2025 to $100,000,000,000 by FY 2029, reflecting a compound annual growth rate of 4.7% [27] - The Australian government's plan to increase defense investment above 2.3% of GDP by 2033 is expected to benefit the company, with 77% of revenue linked to government entities [28] Company Strategy and Development Direction - The company aims to redefine service excellence with a focus on customer satisfaction, innovation, and sustainability [32] - Recent contract wins and a strong pipeline support the company's growth ambitions, particularly in telecommunications and energy sectors [11][30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in a positive second half, expecting underlying NPATA growth of 10% to 12% compared to FY 2024, driven by recent contract wins and operational improvements [35] - The company anticipates a rebound in revenue growth in the second half as timing issues unwind [14] Other Important Information - The company has maintained a consistent track record of progressive financial results, with dividends growing by 43.4% since 2022 and a share buyback of $82,500,000 [4][24] - The acquisition of PowerNet enhances the company's position in the energy transition market, supporting upgrades to Australia's power network [22][23] Q&A Session Summary Question: Guidance for NPATA growth - Management expects a combination of revenue uplift and EBITDA margin improvement, particularly in the telco sector, to contribute to the guidance [39][40] Question: NBN contract pipeline and market share - The company has secured significant contracts with major telco carriers and estimates about 50% market share in the NBN space [44][46] Question: Working hand profile and revenue expectations - The company has a record work in hand and anticipates growth in this area, with a high renewal rate [48][50] Question: Telco segment mobilization costs - Management did not provide specific figures but indicated that mobilization costs are expected to reverse in the second half [53][55] Question: Defense and social infrastructure revenue variability - Revenue variability is attributed to several factors, including contract exits and timing of new contracts, but margins are expected to be sustainable [75][78] Question: Drivers of lower depreciation and amortization - The lower depreciation is primarily due to low capital expenditure in previous years, with expectations for an increase in future years [79]

Financial Performance - Total Revenue was $3,037.2 million, a decrease of 1.5% compared to HY24[11] - EBITDA increased by 2.8% to $252.6 million, with an EBITDA margin of 8.3%, up 0.3 percentage points from HY24[11, 12] - NPATA increased by 11.9% to $119.4 million[8, 13] - Cash conversion ratio increased to 93.2%, up from 87.3% in HY22 and 2.5 percentage points from HY24[8, 11] Growth and Pipeline - Work in Hand increased by 19.4% to $20.6 billion[8, 14, 17] - Strategic wins in HY25 amounted to $4.3 billion, up from $1.5 billion in HY24[17] Shareholder Returns - Interim dividend declared was 10.71 cents per share, an increase of 43.4% compared to HY22[8] - $82.5 million of capital was returned to shareholders through an on-market buyback in HY25[8, 54] - The buyback target was increased to $150 million[43, 54] Outlook - Upgraded FY25 guidance forecasts NPATA growth of 10-12%[8, 78] - The company has secured approximately $3.2 billion of new work with nbn in the past 6 months[71]

Company Performance - Vontier Corporation (VNT) has seen strong stock performance, with an increase of 11.8% over the past month and a year-to-date gain of 15.3% compared to the Zacks Business Services sector's decline of 0.6% and the Zacks Technology Services industry's return of 19.8% [1][2] Earnings and Valuation - The company has a solid track record of positive earnings surprises, beating the Zacks Consensus Estimate in the last four quarters, with the latest EPS reported at $0.79 against an estimate of $0.72 [2] - Vontier's current valuation metrics show it trading at 13.4 times the current fiscal year EPS estimates, below the peer industry average of 20 times, and at 11 times trailing cash flow compared to the peer group's average of 12.9 times [6] Style Scores and Zacks Rank - Vontier has a Value Score of B, with Growth and Momentum Scores both at C, resulting in a combined VGM Score of B [5] - The stock holds a Zacks Rank of 2 (Buy), indicating rising earnings estimates and meeting the criteria for potential investment [7] Industry Comparison - In comparison to industry peers, SPX Technologies, Inc. (SPXC) also shows strong performance with a Zacks Rank of 2 (Buy) and has reported earnings exceeding consensus estimates by 13.79% [8][9] - The Technology Services industry is positioned in the top 39% of all industries, suggesting favorable conditions for both Vontier and SPXC [10]

Company Overview - Rightworks is an intelligent cloud service provider focused on solutions for accounting firms and professionals, aiming to simplify operations and enhance client value through its platform, Rightworks OneSpace [7] - The company has grown to serve over 10,000 accounting firms in the US, ranging from single practitioners to Top 10 firms, since its founding in 2002 [7] Leadership Appointments - Ian Williams has been appointed as Chief Executive Officer, bringing decades of experience in technology-enabled businesses and a proven track record of driving transformation and profitability [2][3] - Jay Muelhoefer has been appointed as Chief Revenue Officer, known for his ability to lead global go-to-market efforts and achieve revenue growth above 30% in previous roles [5] Strategic Goals - The leadership changes reflect Rightworks' commitment to scaling growth, expanding market presence, and delivering exceptional value to the accounting profession through innovation and operational excellence [1] - Williams' previous experience includes increasing organic growth to approximately 25% per annum and improving customer retention at DRB Systems [2] - Muelhoefer has a history of scaling organizations from $75 million to over $1 billion and spearheading international expansion [5] Acknowledgments - Matt Kinsey, Managing Partner of BV Investment Partners, expressed confidence in Williams' leadership capabilities and thanked the outgoing CEO, Joel Hughes, for his contributions since 2017 [4]

Industry Overview - The Technology Services industry ranks within the top 40% of Zacks Ranked Industries and is expected to outperform the market over the next three to six months [1][8] - The industry is mature with strong demand for services, leading to significant growth in the first half of 2025, which is likely to continue in the second half [1][3] Market Trends - The global shift toward digitization is creating opportunities in markets such as 5G, blockchain, and artificial intelligence (AI) [3] - Companies are rapidly adopting generative AI, machine learning (ML), and data science to gain competitive advantages [3][4] - There is robust demand for multi-cloud-enabled software solutions as businesses transition from legacy platforms to modern cloud-based infrastructure [3] Company Highlights Coherent Corp. (COHR) - Coherent is positioned in the industrial, communications, electronics, and instrumentation markets, offering diversified applications [7] - Expected revenue and earnings growth rates for the current year are 11.5% and 29.3%, respectively, with a 4.1% improvement in the Zacks Consensus Estimate for current-year earnings over the last 30 days [9] Vimeo Inc. (VMEO) - Vimeo provides cloud-based video software solutions, including video hosting, management, and analytics [10][11] - Expected revenue and earnings growth rates for the next year are 6.2% and over 100%, respectively, with no change in the Zacks Consensus Estimate for next-year earnings over the last 60 days [12] Skillsoft Corp. (SKIL) - Skillsoft offers personalized learning experiences and operates in two segments: Talent Development Solutions and Global Knowledge [13][14] - Expected revenue and earnings growth rates for the current year are 1.2% and -157%, respectively, with a 54.8% improvement in the Zacks Consensus Estimate for current-year earnings over the last 60 days [15] Vontier Corp. (VNT) - Vontier focuses on transportation and mobility solutions, operating through three segments: Mobility Technologies, Repair Solutions, and Environmental and Fueling Solutions [16] - Expected revenue and earnings growth rates for the current year are 0.1% and 9%, respectively, with a 2.9% improvement in the Zacks Consensus Estimate for current-year earnings over the last seven days [17] SPX Technologies Inc. (SPXC) - SPX Technologies is a diversified supplier in the HVAC and detection and measurement markets, operating in two segments [18] - Expected revenue and earnings growth rates for the current year are 12.7% and 17%, respectively, with a 3.2% improvement in the Zacks Consensus Estimate for current-year earnings over the last seven days [19]

Core Viewpoint - Vontier Corporation (VNT) has been upgraded to a Zacks Rank 2 (Buy), indicating a positive outlook on its earnings estimates, which significantly influence stock prices [1][3]. Earnings Estimates and Stock Price Impact - The Zacks rating system is based on changes in earnings estimates, which are strongly correlated with near-term stock price movements [4][6]. - Institutional investors often adjust their valuations based on earnings estimates, leading to significant stock price movements when estimates are revised [4]. Company Performance and Outlook - The upgrade for Vontier suggests an improvement in the company's underlying business, which could lead to higher stock prices as investors respond positively [5]. - Vontier is expected to earn $3.15 per share for the fiscal year ending December 2025, with a 2% increase in the Zacks Consensus Estimate over the past three months [8]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with a strong historical performance, particularly for Zacks Rank 1 stocks, which have generated an average annual return of +25% since 1988 [7]. - Vontier's upgrade to Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, indicating a strong potential for market-beating returns in the near term [10].

Group 1 - Vontier Corporation (VNT) is currently rated 2 (Buy) by Zacks Rank, while Duolingo, Inc. (DUOL) is rated 4 (Sell), indicating a stronger earnings outlook for VNT [3] - VNT has a forward P/E ratio of 12.82, significantly lower than DUOL's forward P/E of 117.01, suggesting VNT is more attractively priced [5] - VNT's PEG ratio is 1.37, compared to DUOL's PEG ratio of 2.60, indicating VNT's expected earnings growth is more favorable relative to its valuation [5] Group 2 - VNT has a P/B ratio of 4.9, while DUOL has a P/B ratio of 17.22, further highlighting VNT's relative undervaluation [6] - Based on various valuation metrics, VNT holds a Value grade of B, whereas DUOL has a Value grade of F, reinforcing VNT's position as the superior value option [6]

Core Insights - Vontier reported strong Q2 2025 results, with adjusted EPS of $0.79 exceeding expectations of $0.72 and revenue of $773.5 million surpassing the forecast of $734.5 million, indicating broad-based strength in its segments [1][2] - The company raised its full-year 2025 financial outlook but expressed caution regarding volume growth in the second half of the year due to mixed conditions in its portfolio [1][12] Financial Performance - Adjusted EPS increased by 25.4% year-over-year from $0.63 in Q2 2024 to $0.79 in Q2 2025 [2] - Revenue grew by 11.1% year-over-year from $696.4 million in Q2 2024 to $773.5 million in Q2 2025 [2] - Adjusted free cash flow surged by 241.7% year-over-year, rising from $25.9 million in Q2 2024 to $88.5 million in Q2 2025 [2] Business Segments - Mobility Technologies segment saw a 17.9% increase in sales, driven by demand for digital payment platforms and enterprise productivity software, with operating profit rising by 29.9% [5] - Environmental & Fueling Solutions reported a 16.2% sales increase and an 18.4% rise in operating profit, benefiting from investments in the convenience retail channel [6] - Repair Solutions segment experienced flat sales year-over-year, with a 2.2% decline in operating profit, reflecting macroeconomic pressures [7][8] Innovation and Strategy - Innovation is a key focus for Vontier, with successful new product introductions in digital payment and enterprise productivity solutions contributing to strong performance [9] - The company completed the acquisition of Sergeant Sudz, reinforcing its strategy of targeted growth and expanding into adjacent product areas [10] - Vontier is actively managing its supply chain to reduce exposure to China and mitigate tariff impacts [10] Outlook - Full-year 2025 adjusted diluted net EPS guidance increased to a range of $3.10 to $3.20, with revenue guidance set at $3.02 billion to $3.07 billion [11] - For Q3 2025, the company anticipates revenue of $745 million to $755 million, with flat core sales growth and adjusted diluted net EPS of $0.74 to $0.78 [11] - Management has communicated a cautious outlook for the second half of 2025, particularly regarding volume growth and demand in Repair Solutions and car wash systems [12]

Financial Data and Key Metrics Changes - The company reported sales of $774 million, an 11% increase year-over-year, with adjusted EPS rising 25% to $0.79, exceeding guidance [18][19] - Adjusted operating profit increased 15% year-over-year, with margin expansion of 80 basis points [6][19] - Free cash flow conversion was strong at 76% of adjusted net income, amounting to $89 million [19][28] Business Line Data and Key Metrics Changes - Environmental and Fueling Solutions (EFS) saw core growth of nearly 16%, with shipments of dispensers increasing over 20% [20] - Mobility Technologies core sales grew 18%, driven by strong performance at Invenco, while DRB sales declined in the teens [21] - Prepared Solutions sales were flat compared to the prior year, with ongoing market pressures affecting higher ticket product categories [22][24] Market Data and Key Metrics Changes - Orders were up 8% organically, with a book-to-bill ratio of approximately one [4][66] - The company noted strong demand in North America and Rest of the World, particularly in EFS and Mobility Technologies [20][21] Company Strategy and Development Direction - The company is focused on operational discipline and commercial excellence, with a three-pillar value creation framework [8][29] - There is an emphasis on innovation and new product development, with R&D investments around 6% of total sales [16] - The company is advancing its connected mobility strategy and optimizing its regional footprint to align resources with profitable regions [9][11] Management's Comments on Operating Environment and Future Outlook - Management raised full-year guidance, expecting adjusted EPS growth in the high single digits despite macro uncertainties [17][28] - The company remains confident in its growth trajectory, citing resilience in key end markets like convenience retail and fueling [17][29] - Management acknowledged tariff-related cost pressures but indicated progress in mitigation initiatives [10][28] Other Important Information - The company completed a bolt-on acquisition during the quarter and has ongoing share repurchases totaling $105 million in the first half [7][25] - The company is targeting a free cash flow conversion of approximately 100% for the year [28] Q&A Session Summary Question: Revenue outlook for Repair Solutions and EFS - Management indicated Repair Solutions is expected to decline mid to high single digits, while EFS is projected to grow mid single digits [36][37] Question: Margin outlook for Repair Solutions - Margins in Repair Solutions have stabilized, with potential for future expansion as market conditions improve [39][40] Question: Impact of shipment timing on revenue - Management confirmed a $15 million to $20 million benefit from shipment timing across EFS and Mobility Technologies [46][47] Question: Invenco's growth and recurring revenue - Invenco is expected to generate over $600 million in revenue this year, with about 40% of Mobility Technologies' revenue being recurring [50][51] Question: Impact of the Big Beautiful Bill on customers - The bill is expected to enhance free cash flow and provide benefits to customers through accelerated depreciation, though significant impacts may be seen next year [59][60] Question: Trends in the underground tank replacement cycle - Management noted early signs of growth in the underground business, supported by new product innovations [63][64] Question: Contribution of recent acquisition in the car wash space - The acquisition is strategic, enhancing the company's value proposition in the car wash sector, though its financial impact is relatively small [78][79]

Financial Data and Key Metrics Changes - The company reported sales of $774 million, an 11% increase both on a reported and core basis, with adjusted EPS increasing 25% to $0.79 [19][20] - Adjusted operating profit increased 15% year over year with margin expansion of 80 basis points [7][20] - Adjusted free cash flow of $89 million increased significantly versus the prior year, reflecting a strong 76% conversion to adjusted net income [20][28] Business Line Data and Key Metrics Changes - Environmental and Fueling Solutions delivered core growth of nearly 16%, with shipments of dispensers increasing over 20% in the second quarter [21] - Mobility Technologies core sales grew 18%, driven by strong performance at Invenco, while DRB sales declined in the teens year over year [22] - Prepared Solutions sales were flat compared to the prior year, with ongoing market pressures offsetting gains expected from the annual Matco Expo [23] Market Data and Key Metrics Changes - Orders were up 8% organically, with a book to bill ratio of approximately one in the quarter [5][67] - The company noted that 70% of its portfolio outperformed in the quarter, reflecting strong progress in resilient end markets [20] Company Strategy and Development Direction - The company is focusing on operational discipline and commercial excellence, supported by a three-pillar value creation framework [8][29] - There is an emphasis on innovation and new product development, particularly in connected mobility and environmental solutions [12][16] - The company is advancing an agreement to divest its European service business to optimize its regional footprint [10] Management's Comments on Operating Environment and Future Outlook - Management raised the full-year guidance for adjusted EPS to a high single-digit growth, despite expected tariff headwinds and macro uncertainties [18][28] - The company remains confident in its growth trajectory, supported by strong free cash flow and prudent capital allocation [29][30] Other Important Information - The company completed $50 million in share buybacks during the quarter, totaling $105 million in the first half of the year [25] - The company expects to fully mitigate tariff headwinds within the year, with significant progress made in Q2 [28] Q&A Session Summary Question: Revenue outlook for the second half, particularly for Repair Solutions - Management indicated a guide of down mid to high single digits for Repair Solutions, with signs of stabilization but still early to call an inflection [36][40] Question: Margin outlook for Repair Solutions - Margins have stabilized, with potential for improvement as higher-priced items start selling better and bad debt challenges stabilize [39][41] Question: Impact of shipment timing on EFS and Mobility Technologies - The company benefited from shipment timings of about $15 million to $20 million, with Mobility Technologies contributing approximately $5 million to $7 million [47] Question: Invenco's growth and revenue outlook - Invenco is expected to generate over $600 million in revenue this year, with strong growth anticipated despite tougher comparisons [50][52] Question: Recurring revenue base for Vontier - Approximately 40% of Mobility Technologies revenue is recurring, with Invenco at about 35% [52] Question: Customer conversations regarding the Big Beautiful Bill - The bill is expected to benefit free cash flow and may accelerate customer decisions, particularly for smaller operators [59][60] Question: Trends in the underground tank replacement cycle - The company sees early opportunities in the underground tank upgrade cycle, supported by new product innovations [63][64] Question: Month-to-month trends in Matco - Sellout was down 5% for the first half, but July showed improvement, indicating potential positive trends moving forward [84]