Financial Data and Key Metrics Changes - The company reported Q4 revenue of $704 million, representing a high single-digit increase year-over-year and exceeding prior guidance [5][11] - Full year 2025 revenue was $2.66 billion, flat compared to the prior year, but showed improving momentum throughout the year [7][12] - Q4 non-GAAP EPS was $0.71, surpassing the guidance range of $0.62-$0.68 [11] - Gross margin for Q4 was 10.6%, up 50 basis points sequentially and 20 basis points year-over-year [11][12] - Operating margin for Q4 was 5.5%, demonstrating leverage in the company's model [5] Business Line Data and Key Metrics Changes - Semi-Cap revenue decreased 8% quarter-over-quarter and 14% year-over-year, but full year revenue grew 2% [12][13] - Industrial revenue was flat for the full year but up 3% year-over-year [13] - A&D revenue grew 17% year-over-year and 19% for the full year [13] - Medical revenue increased 23% year-over-year in Q4, leading to 7% growth for the full year [13] - AC&C revenue rebounded in Q4, up 27% year-over-year, with expectations for continued growth [14] Market Data and Key Metrics Changes - The company noted improved sell-through and healthier end demand across sectors as channel inventory normalized [20] - The semi-cap sector is expected to see a demand inflection in the back half of 2026, with early signs of improvement [21][22] - Industrial sector performance is expected to gradually improve throughout 2026, driven by demand in transportation and HVAC [22] - A&D revenue growth is expected to moderate in 2026 due to program timing, but bookings momentum in space applications is promising [23][24] - Medical sector is anticipated to maintain double-digit growth in 2026, supported by strong bookings in MedTech [24] Company Strategy and Development Direction - The company targets five core high-value markets, focusing on complex, high-mix opportunities while avoiding commoditized markets [8] - Continued investment in global precision technology and production equipment is planned to align with new business wins [10][16] - The company aims to improve working capital efficiency and maintain positive free cash flow while investing in growth [9][15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the momentum of bookings and operational execution, particularly in medical and AC&C sectors [9][20] - The company anticipates a strong recovery in the semi-cap sector in 2026, with proactive capacity planning already in place [10][59] - Management remains optimistic about mid-single-digit growth guidance for 2026, with potential for further strengthening as visibility improves [26] Other Important Information - The company generated $85 million in free cash flow for fiscal year 2025 and maintained a net cash positive position of $111 million [15][16] - An $11.1 million non-cash impairment was recorded on certain assets due to program end-of-life [18] - The cash conversion cycle improved to 67 days, with significant improvements in inventory management [17][70] Q&A Session Summary Question: Areas of increased confidence beyond Semi-Cap - Management indicated that medical and AC&C sectors have shown improved momentum, with industrial gradually picking up as well [31][32] Question: Thoughts on gross margins and operating leverage - Management noted that while gross margins are stable, operating margins are where leverage can be realized as revenue accelerates [33][34] Question: Expansion of Total Addressable Market (TAM) in industrial - Management highlighted the broad nature of the industrial segment, with opportunities in HVAC, transportation, and agriculture [41][43] Question: Insights on space applications and bookings - Management expressed excitement about the momentum in space bookings, which is expected to contribute positively to A&D growth [44][45] Question: Details on medical program wins and momentum - Management confirmed ongoing success in medical devices and life sciences, with expectations for continued growth into 2026 [55][56] Question: Timeline for semi-cap recovery - Management indicated that they are prepared to respond to orders within 1-3 months, with proactive capacity planning already in place [58][59] Question: Expectations for cash cycle days and CapEx - Management aims to maintain stability in cash conversion cycle days while anticipating a slight increase in CapEx due to new projects [70][72]

Core Insights - The Hackett Group, Inc. announced the results of its 2025 European Working Capital Survey, indicating a decline in working capital efficiency in 2024 [1] - The cash conversion cycle (CCC) worsened by 3%, highlighting a significant deterioration in the region's financial metrics [1] - The analysis focused on the 1,000 largest European-headquartered nonfinancial companies, revealing that the decline was primarily driven by an increase in days [1]

Financial Data and Key Metrics Changes - The company reported a strong Q2 performance with significant revenue beats, indicating stabilization in end markets [5][9] - Operating margins improved due to better tariff conditions and effective expense management, with a 200 basis point increase in operating margin outlook for the year [7][42] - Cash flow was strong, with a focus on free cash flow generation [8] Business Line Data and Key Metrics Changes - The Process Chrome segment showed strong performance, with over 50% growth in Q2, contributing positively to the overall revenue [10][14] - Consumables experienced consistent growth year-over-year, while instrument sales faced challenges, particularly in the biopharma sector [6][17] - The Droplet Digital PCR (ddPCR) portfolio expansion is expected to drive mid-single-digit growth rates in the near term, with long-term goals of reaching high single-digit growth [29][30] Market Data and Key Metrics Changes - The U.S. academic and government (A and G) market is stabilizing, with expectations of a decline of 0% to -10% rather than the previously anticipated -20% [22] - European markets, particularly France and Germany, are under pressure due to shifts in funding from healthcare to defense [23] - The Chinese market remains challenging, with reimbursement rate changes impacting the diagnostics business, but growth outside of China was reported at 3.7% [50][49] Company Strategy and Development Direction - The company aims to invest in growth opportunities and is focusing on strategic acquisitions that can provide near-term accretion, such as the recent Stila acquisition [90] - There is an emphasis on improving working capital efficiency and leveraging procurement to enhance margins [68][70] - The company is also looking to expand its presence in diagnostics, particularly in oncology applications [32] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about the stability of the business, noting improved visibility compared to previous years [13][14] - The resolution of the NIH budget is expected to gradually rebuild trust among researchers, which may positively impact instrument sales in the future [24] - The company is preparing for a potential recovery in the diagnostics market, particularly as it relates to the adoption of new technologies [32] Other Important Information - The company closed the Stila acquisition at the end of Q2, with expectations of revenue contribution in the second half of the year being lower than initially projected [34][38] - The impact of tariffs has been mitigated, with a reduction in the anticipated headwind from 130 basis points to 30-40 basis points [53] Q&A Session Summary Question: How is the visibility for Process Chrome compared to previous periods? - Management indicated that visibility has improved significantly due to better partnerships with customers, leading to a more stable business outlook [13][14] Question: What is the outlook for the U.S. A and G market? - The company expects the U.S. A and G market to remain stable, with no significant budget flush anticipated [25][26] Question: What are the growth expectations for ddPCR? - The company anticipates mid-single-digit growth in the near term, with long-term goals of reaching high single-digit growth rates [30][31] Question: How is the company addressing working capital efficiency? - Management acknowledged the need for improvement in working capital efficiency and is implementing initiatives to enhance inventory turnover and procurement leverage [68][70] Question: What is the capital allocation strategy moving forward? - The company plans to invest in growth opportunities, pursue strategic acquisitions, and continue share repurchases opportunistically [90][91]

Financial Data and Key Metrics Changes - The company reported a strong Q2 performance with significant revenue beats, indicating stabilization in end markets, particularly in process chromatography, which was driven by customer demand [4][6] - Operating margin improved due to stabilization of tariff situations and effective expense management, with cash flow also being strong during the quarter [5][6] Business Line Data and Key Metrics Changes - Process chromatography showed strong performance, contributing significantly to revenue growth, with visibility improving compared to previous years [7][8] - The life science business is experiencing challenges in the instrument segment, while consumables are seeing consistent activity [11][14] Market Data and Key Metrics Changes - The U.S. academic and government (A&G) market is expected to remain stable, with a potential decline of 0% to -10% year-over-year, while Europe faces pressures due to geopolitical issues [14][15] - The Chinese market is experiencing challenges, but Japan and Korea have shown improvement [15] Company Strategy and Development Direction - The company is focused on expanding its portfolio, particularly in the ddPCR segment, with expectations of mid-single-digit growth rates in the near term and aspirations for high single-digit growth in the long term [21][24] - The acquisition of Stillia is expected to contribute to revenue growth, with a focus on integrating teams and products effectively [25][30] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the operating environment, noting that while there are challenges, there are also opportunities for growth, particularly in diagnostics and life sciences [24][37] - The company is monitoring the impact of tariffs and reimbursement changes, particularly in China, and is focused on improving working capital efficiency [39][54] Other Important Information - The company is implementing lean manufacturing concepts to improve productivity and efficiency within its supply chain [46][48] - There is a focus on capital allocation towards business investments and strategic acquisitions, with share repurchases being considered opportunistically [72][73] Q&A Session Summary Question: What is the outlook for the U.S. A&G market? - Management indicated that the U.S. A&G market is expected to remain stable, with no significant budget flush anticipated [14][17] Question: How is the ddPCR portfolio expected to grow? - The company expects the ddPCR growth rate to improve from low singles to mid-singles, driven by an expanded portfolio [21][24] Question: What is the impact of tariffs on margins? - Initially, a 130 basis point headwind was expected, but this has been mitigated to about 30 to 40 basis points for the remainder of the year [40][41] Question: What are the plans for capital allocation? - The company plans to invest back into the business, focusing on strategic acquisitions and opportunistic share repurchases [72][73] Question: What is the timeline for the next investor day? - The company aims to hold an investor day in the spring, providing a three-year model from 2026 to 2028 [74]