Financial Data and Key Metrics Changes - In Q4 2025, the company generated revenue of $772 million, resulting in 4% organic growth, with a full-year revenue of $2.86 billion, reflecting 3% organic growth [22][24] - Adjusted EPS for Q4 was $1.70, exceeding the high end of expectations, while full-year adjusted EPS was $5.06, representing 3% growth year-over-year [10][24] - Adjusted operating margins for Q4 were 29.7%, down 60 basis points year-over-year, and for the full year, they were 27.1%, down 120 basis points year-over-year [23][24] Business Line Data and Key Metrics Changes - The diagnostics segment saw revenue of $390 million in Q4, up 10% reported and 7% organic, while the life sciences segment generated $382 million, flat on an organic basis [26][28] - For the full year, diagnostics grew 4% organically, while life sciences grew 2% organically [26][27] - The Signals software business was flat year-over-year organically in Q4 but grew in the high teens organically for the full year [27] Market Data and Key Metrics Changes - Geographically, the company experienced flat performance in both the Americas and APAC, with double-digit growth in Europe [26] - For the full year, the Americas grew low single digits, Europe grew high single digits, and APAC declined in the low single digits [26] Company Strategy and Development Direction - The company plans to continue capital deployment through share repurchases and acquisitions, having repurchased over $800 million worth of shares in 2025 [10][11] - The acquisition of ACD/Labs is expected to contribute over $20 million in revenue in 2026, adding approximately 75 basis points to overall revenue growth [12][13] - The introduction of the AI models-as-a-service platform, Signals Xynthetica, is aimed at enhancing drug development processes [15][16] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the recovery of end markets, reiterating a 2%-3% organic growth outlook for 2026 [12][31] - The company noted potential upside from improved customer sentiment in pharma and biotech, as well as ongoing cost efficiency initiatives [20][22] - Management highlighted the importance of maintaining a disciplined approach to capital deployment while navigating a fluid market environment [11][20] Other Important Information - The company generated free cash flow of $162 million in Q4, resulting in 84% conversion of adjusted net income, with a full-year free cash flow of $515 million [25] - The net debt to adjusted EBITDA leverage ratio was 2.7x, with 100% of debt being fixed rate [25] Q&A Session Summary Question: Can you provide more color on the 2%-3% organic growth framework and potential upside? - Management acknowledged positive signs in end markets since September and identified multiple paths for potential upside in both revenue and EPS [39][40] Question: What is the outlook for life sciences versus diagnostics relative to the 2%-3% growth? - Management indicated that life sciences is expected to grow at low single digits, while diagnostics is also expected to grow at low single digits, with specific growth rates for sub-segments [55] Question: How is the company approaching M&A opportunities? - Management stated that any potential M&A must provide a strong strategic addition and that they have not yet identified compelling targets [58] Question: Can you elaborate on the performance within pharma biotech and order trends? - Management noted cautious optimism and consistency in order trends, with no budget flush observed but improved clarity in the policy environment [60][61] Question: What are the expectations for the diagnostics business going into 2026? - Management expressed that diagnostics could provide upside, particularly in newborn screening and immunodiagnostics, despite taking a more prudent approach to assumptions [63][64]

Financial Data and Key Metrics Changes - For Q3, the group revenue was $1.8 billion, reflecting a year-on-year growth of 4.6% and organic revenue growth of 3.4% [2][8] - North America showed organic growth of 3.4%, with pest control services growing by 1.8%, an improvement from 0.3% in Q2 [3][6] - The customer retention rate increased to 80.9%, up from the half-year stage [5] Business Line Data and Key Metrics Changes - Pest control organic revenue growth for the group was 3.4%, driven by strong performance in North America [7] - Hygiene and well-being grew by 3% organically, an improvement from 0.9% in the first half [8] - North America business services organic revenue growth was particularly strong at 11.9% in Q3 [3] Market Data and Key Metrics Changes - International revenue grew by 4.6%, with organic growth of 3.3%, particularly strong in southern European markets [7] - The Pacific region's growth remained below average due to adverse weather impacts [7] Company Strategy and Development Direction - The company is focused on enhancing lead generation and customer retention through a revised North America strategy [4] - Plans to open 150 satellite branches this year are on track, with 139 already operational [5] - Cost efficiency initiatives are expected to deliver $100 million in cost reductions by the end of 2026 [9] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the continued positive trends and expects to deliver financial results for the full year in line with market expectations [2][8] - The company noted that Q4 is seasonally quieter and anticipates a 60 basis point impact on organic growth due to the non-repeat of one-off emergency mosquito control work [6][9] Other Important Information - The company completed three M&A deals in the quarter, bringing the total for the year to 21, with annualized revenue of around $39 million from these acquisitions [8] - Net debt at the end of the quarter was reported at $3.9 billion [8] Q&A Session Summary Question: Can you discuss the contract portfolio net gain improvement performance in Q3? - Management noted that both jobbing and contract portfolio growth improved, with net gain being the best seen in a while [13][14] Question: How did residential, commercial, and permit performance compare? - Improvements were seen across all areas, with termite performance particularly better in Q3 compared to H1 [15][16] Question: What is the balance between lowering prices to gain market share and pushing through price increases? - The pricing strategy is sophisticated, focusing on identifying opportunities rather than a blanket increase [22] Question: Can you discuss progress on levers to improve free cash flow? - There are opportunities in working capital and capital expenditure to drive free cash flow [24] Question: What are the expectations for growth in the next quarter? - Management refrained from making precise forecasts but expressed satisfaction with lead flow improvements [30] Question: Can you clarify the net gain calculation? - Net gain reflects customer retention, price increases, and new business, with a focus on maintaining momentum in the contract portfolio [80][82]

Core Viewpoint - JPMorgan analyst Ryan Brinkman maintains an Underweight rating on Hertz Global Holdings, indicating concerns about the sustainability of the company's earnings despite recent partnerships and pricing strategies [1][3]. Financial Performance - Hertz reported first-quarter revenue of $1.81 billion, which fell short of the $2 billion analyst consensus, marking a 13% year-over-year decline [4]. - The company also experienced a first-quarter adjusted loss of $1.12 per share, compared to an expected loss of 97 cents per share [4]. Earnings Outlook - Brinkman suggests that while Hertz may appear undervalued based on normalized earnings, the company is not expected to reach those levels until after 2026 [3]. - The company is projected to generate negative free cash flow in 2024 and 2025, which will limit its ability to repurchase shares at current lower prices [3]. Operational Initiatives - Hertz is making progress on cost efficiency initiatives, including partnerships with technology firms aimed at enhancing customer experience and operational productivity [5]. - The company is implementing improvements to its revenue management system and deploying AI tools for vehicle inspection and pricing optimization [5]. - Management has reaffirmed expectations for the progression of EBITDA throughout the year [5]. Market Reaction - Hertz shares are trading lower by 2.88% to $5.60 at the time of publication [6].