Financial Data and Key Metrics Changes - Total sales for 2025 grew 6% year-over-year to $5.5 billion, marking an all-time high [6] - Adjusted earnings per share (EPS) was $3.90, up 10% year-over-year, indicating the second consecutive year of double-digit EPS growth [7] - Free cash flow exceeded $1 billion, strengthening the company's financial position [8] Business Line Data and Key Metrics Changes - Water Quality segment delivered $846 million in total sales for Q4, up 4.3% year-over-year, with core sales growth of 1.4% [22][23] - PQI segment total sales grew 3% year-over-year to $550 million in Q4, with core sales growth of 1.8% [24][25] - Both segments showed strong operating profit growth, with Water Quality's adjusted operating profit increasing 5.8% and PQI's adjusted operating profit up $13 million year-over-year [22][25] Market Data and Key Metrics Changes - Core sales in North America grew 5.3% and in Western Europe by 3.8% in 2025, with high-growth markets seeing a 5.1% increase [8][12] - Core sales growth in Water Quality was driven by strong demand in chemical processing, power generation, mining, and data centers [9] - In high-growth markets, core sales increased 5.1% year-over-year, led by Latin America, India, and the Middle East [11] Company Strategy and Development Direction - The company aims for continued core sales growth and margin expansion, with a focus on strategic growth and disciplined capital allocation [5][16] - Recent acquisitions, including In-Situ, are expected to enhance the company's water analytics portfolio and address freshwater challenges [17][19] - The company is committed to leveraging its Veralto Enterprise System to drive continuous improvement and support customer needs [32] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in steady demand for products and services due to the ongoing need for clean water and safe food [5][16] - The company anticipates another year of core sales growth in 2026, with adjusted EPS growth projected in the mid- to high single digits [29][30] - Management noted that underlying demand remains steady, despite some macroeconomic uncertainties [67] Other Important Information - The company established a $750 million share repurchase program and announced an 18% increase in its dividend [5][27] - The acquisition of In-Situ was completed early in 2026, funded with cash on hand, and is expected to contribute significantly to growth [26][29] Q&A Session Summary Question: Expectations on municipal CapEx and demand trends - Management sees steady demand across both municipal and industrial markets, with strong growth in industrial sectors like data centers [39] Question: Impact of DRAM supply on business - The company's exposure to DRAM is minimal, and no material impact is expected [40] Question: Margin expansion guidance and inflation concerns - Management expects 50 basis points of margin expansion, driven by pricing and the rolling off of tariff-related headwinds [48][49] Question: Data center growth potential - Data centers represent a small but growing segment, with expectations for continued double-digit growth [52] Question: Geographic performance in Western Europe - The year-over-year performance was impacted by fewer shipping days, but overall execution remains strong [61] Question: Guidance range for sales growth - The company aims for low to mid-single-digit growth, with various factors influencing the range [101]

Financial Data and Key Metrics Changes - Adjusted EPS for Q4 2025 was $1.53, up 21% year-over-year, driven by a 5.4% core sales growth [5][29] - For the full year 2025, adjusted EPS increased by 24%, reflecting strong performance and customer satisfaction [5] - Core FX neutral backlog increased by 14% year-over-year, indicating strong demand [29] Business Line Data and Key Metrics Changes - Aerospace and Advanced Technologies segment sales reached $272 million, a 15% increase, primarily organic growth [30] - Process Flow Technologies segment delivered sales of $309 million, flat compared to the previous year, with core sales down 1.5% [31][20] - Adjusted segment margin for Aerospace and Advanced Technologies expanded to 23.6%, up 50 basis points from the previous year [31] Market Data and Key Metrics Changes - The commercial aerospace market remains strong, with Boeing and Airbus ramping up production [15] - Defense procurement spending is solid, with a focus on strengthening the defense industrial base amid global uncertainties [15] - Chemical markets remain subdued, impacting the Process Flow Technologies segment [18] Company Strategy and Development Direction - The company aims for 4%-6% core sales growth and 35%-40% core operating leverage, with a focus on delivering shareholder value [4] - Recent acquisitions, including Druck, Panametrics, and Reuter-Stokes, are expected to enhance growth and support existing and new customers [6][9] - The company plans to widen its strategic focus in the Aerospace and Advanced Technologies segment, looking for adjacent market opportunities [8][52] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's strong performance and resilience, anticipating continued growth in 2026 [11] - The guidance for 2026 includes an adjusted EPS of $6.55-$6.75, reflecting a solid growth outlook despite challenges [12] - Management noted that while the first quarter of 2026 may be seasonally soft, the overall outlook for the year remains positive [35] Other Important Information - The company has a planned succession timeline, with Alex Alcala set to become CEO in April 2026, while Max Mitchell will transition to Executive Chairman [10][11] - The integration of recent acquisitions is progressing well, with expectations for these businesses to be slightly accretive to earnings in 2026 [22] Q&A Session Summary Question: What are the pricing opportunities at Druck in 2026 and 2027? - Management indicated significant pricing opportunities and expects improvements starting this year, with no obstacles to achieving goals [39][40] Question: Can you clarify guidance related to cost takeout at PSI? - Management confirmed no changes to previously discussed cost takeout targets, with productivity and commercial growth being key elements [41][42] Question: Can you discuss the impact of the government shutdown on military programs? - Management noted no significant changes in orders or funding due to the government shutdown, although some flight tests were delayed [77][78] Question: What is the expected performance for the aerospace segment in 2026? - Management anticipates strong growth in commercial OEM and mid-single digits for military OEM, with aftermarket volumes also expected to remain strong [76][77]

Financial Data and Key Metrics Changes - Adjusted EPS for the quarter was $1.49, reflecting a 6.5% core sales growth driven by aerospace and process flow technologies [4][20] - Core FX neutral backlog increased by 29% year over year, reaching over $1 billion, while core FX neutral orders were up 19% compared to last year [21][24] - Adjusted operating profit increased by 15%, supported by strong net pricing and productivity [20] Business Line Data and Key Metrics Changes - Aerospace and Electronics segment sales reached $258 million, a 12% increase, with total aftermarket sales up 18% [24] - Process Flow Technologies delivered sales of $319 million, up 7%, with core sales growth of 3% [25] - Adjusted segment margin for Aerospace and Electronics was a record high of 26.3%, up from 23.8% last year [24] Market Data and Key Metrics Changes - Aerospace and defense markets are experiencing strong demand, with Boeing ramping up production and solid procurement spending in defense [13][16] - The chemical market is showing softness, particularly in Europe, but other segments like cryogenics and wastewater are growing [48][49] Company Strategy and Development Direction - The company announced the acquisition of Precision Sensors and Instrumentation businesses from Baker Hughes, aiming to enhance its technology portfolio [5][11] - The company is optimistic about deploying further capital for acquisitions, with a robust pipeline of opportunities [6][11] - The strategy focuses on leveraging existing strengths and pursuing new business opportunities to ensure sustainable growth [16][18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in raising the full-year adjusted earnings outlook to a range of $5.5 to $5.8 billion, up from the previous range of $5.3 to $5.6 billion [7][28] - The macroeconomic environment remains unpredictable, but strong execution and a solid backlog provide confidence for future performance [7][16] Other Important Information - The company is in a net cash position, with leverage expected to be around 1x net debt to EBITDA after the PSI transaction [22] - Tariff impacts are anticipated to be offset through pricing and productivity measures, with a gross cost increase of approximately $30 million for the year [22][23] Q&A Session Summary Question: Can you discuss the areas of strength in the Aerospace and Electronics business? - Management noted broad-based strength across both commercial and military sectors, with significant orders in air defense and communication platforms for future years [32][34] Question: What is driving the expected drop in A&E margins in the second half? - The mix shift towards commercial OEM and challenging year-over-year comparisons in the aftermarket are expected to impact margins [35][36] Question: How is the GTF program performing in the aftermarket? - The GTF aftermarket revenues are growing at around 15% this year, with expectations of 30% growth next year, although it currently represents less than 5% of commercial aftermarket sales [39][40] Question: Can you provide insights on the cadence of PFT orders? - Orders were up 4% year over year, with stable market conditions, although some softness was noted in the chemical market [46][48] Question: What is the expected impact of the R&D tax changes? - A modest improvement in free cash flow is expected, but nothing significant, estimated to be less than 5% of total free cash flow [57] Question: How confident is the company in achieving the 10% ROIC from the PSI acquisition? - Management expressed high confidence in improving margins and achieving the targeted ROIC through operational efficiencies and strong aftermarket demand [78][79] Question: Are there any signs of project cancellations in the chemical market? - No significant cancellations are observed, but some projects are being pushed to the right due to customer demand uncertainties [94][96]

Financial Data and Key Metrics Changes - Adjusted EPS for the first quarter of 2025 was $1.39, reflecting a 7.5% core sales growth driven by Aerospace and Electronics and Process Flow Technologies [6][27] - Core orders increased by 16% in the quarter, primarily due to strength in Aerospace and Electronics [6][27] - Adjusted operating profit rose by 18%, supported by volumes, solid net pricing, and productivity [27] Business Line Data and Key Metrics Changes - Aerospace and Electronics segment sales reached $249 million, a 10% increase, with a record backlog of $960 million, up 21% year-over-year [28][29] - Total aftermarket sales in Aerospace and Electronics increased by 20%, with commercial aftermarket sales up 19% and military aftermarket up 24% [28] - Process Flow Technologies delivered sales of $309 million, up 9%, with core sales growth of 5% and a 5% contribution from recent acquisitions [29] Market Data and Key Metrics Changes - The Aerospace market remains strong, with Boeing ramping up production and solid procurement spending in defense [16][27] - Core sales growth for Aerospace and Electronics is anticipated to be mid to high single digits for the year, leveraging a 35% to 40% margin [17] - In the Process Flow Technologies segment, notable wins included a $5.7 million project for a Saudi Arabian mining company [21] Company Strategy and Development Direction - The company aims to continue growing through adversity, focusing on strategic execution and innovation [6][10] - There is a strong emphasis on maintaining a robust balance sheet with over $1.5 billion in M&A capacity, indicating ongoing acquisition activity [22][23] - The company is committed to long-term core sales growth of 4% to 6% through cycles, supported by solid aftermarket and operating leverage [26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in emerging stronger from current economic dislocations, despite uncertainties in the macroeconomic environment [7][8] - The company reaffirmed its full-year 2025 adjusted EPS outlook in the range of $5.3 to $5.6, reflecting current economic conditions [7][8] - Management highlighted the importance of adapting to changes in demand and maintaining focus on long-term goals [20][26] Other Important Information - The company has a robust pipeline of potential acquisitions and has not seen any slowdown in M&A activity [22][92] - Management noted that supply chain disruptions have stabilized since last year, with no significant changes expected [80] - The company is actively engaged in new product development and technology roadmaps to support growth initiatives [25][26] Q&A Session Summary Question: Can you provide clarity on updated guidance and the contribution of price to sales? - Management expects about 3% overall price contribution, more heavily weighted to Process Flow Technologies [37] Question: What is the growth split between volume and price in Aerospace and Electronics? - The growth was roughly 50% from volume and 50% from price [50] Question: Are there any major commercial OE long-term agreements that repriced this quarter? - No major repricing occurred this quarter [53] Question: How is the company managing supply chain risks? - Supply chain disruptions have returned to normal rates, with no significant changes expected [80] Question: What is the outlook for the chemical market within Process Flow Technologies? - The company anticipates some project activity in the Americas to shift to the right, with softening demand in Europe [102]