Financial Data and Key Metrics Changes - The company reported underlying sales growth of 3% for the quarter, with adjusted earnings per share of $1.52, which grew 6% year over year [19][21][24] - Adjusted segment EBITDA margin was 27.1%, meeting expectations, and was negatively impacted by tariffs [21][24] - Free cash flow generation was better than expected at $970 million, resulting in a margin of 21.3% [21][24] Business Line Data and Key Metrics Changes - Industrial Software annual contract value (ACV) grew double digits year over year, ending the quarter at $1.5 billion [8] - Process and Hybrid businesses saw underlying orders grow mid single digits, while Test and Measurement orders were up 16% [8][12] - MRO sales remained strong at 62% of total sales, driven by software and cybersecurity upgrades [9] Market Data and Key Metrics Changes - Underlying orders in North America, India, and the Middle East and Africa showed strong growth, while Europe experienced a decline of 7% [20] - The company expects underlying sales growth of 5% to 6% in the fourth quarter, driven by improvements in Test and Measurement and sustained growth in Process and Hybrid businesses [10][14] - The tariff environment improved, with the annualized gross incremental tariff impact reduced to approximately $210 million [17][18] Company Strategy and Development Direction - The company is focused on innovation, highlighted by collaborations with Total Energies and the launch of AI-enabled products [5][6] - The demand outlook remains healthy, with expectations for continued growth in LNG, power generation, and life sciences [12][14] - The company plans to host an investor conference to discuss its transport portfolio and value creation framework [10] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the recovery in discrete markets and the overall demand for automation [10][12] - The company anticipates strong exit rates for underlying orders to support sales growth in fiscal 2026 [10][14] - Management noted that the tariff environment has improved, leading to better visibility and decision-making from customers [86] Other Important Information - The company has a project funnel of $11.2 billion, with consistent project wins of $350 million to $400 million per quarter [87] - The Ovation AI-enabled Virtual Advisor has been launched and is already seeing customer adoption [106] Q&A Session Summary Question: Can you elaborate on the margins in Intelligent Devices? - Management noted that tariffs and unexpected foreign exchange impacts affected margins, but underlying performance was positive [31][32] Question: What is driving the recovery in Test and Measurement? - The recovery is broad-based across segments, with strong performance in aerospace, defense, and semiconductors [34][35] Question: How did orders trend in May and June? - Orders remained consistent, with MRO bookings steady throughout the quarter [41][42] Question: What is the outlook for the power vertical? - Management believes sustainable growth rates can remain elevated in the high teens for the next couple of years [78][80] Question: How has the dialogue with customers changed regarding large projects? - There has been no slowdown in decision-making for projects in LNG, power, and life sciences [86][87] Question: What is the order outlook for Q4? - The company expects underlying sales growth of 5% to 7%, driven by various business segments [111]

Q3 2025 Performance - Underlying sales growth was 3%[13], impacted by reduced pricing actions due to improved tariff exposure[13] - Adjusted EPS of $1.52 met the top end of guidance[13] - Free cash flow generation exceeded expectations, yielding a 21.3% margin[11] Orders and Demand - Underlying orders grew by 4%[13]; Test & Measurement orders increased by 16%[13] - Strong demand continues in process and hybrid markets, with discrete markets showing recovery[10] - Industrial software saw strong demand, with Annual Contract Value (ACV) at $1.5 billion, up 10% year-over-year[10] Q4 2025 Guidance - Expects underlying sales growth between 5% and 6%[11], driven by Test & Measurement recovery and automation investments[11] - Anticipates an adjusted segment EBITA margin of approximately 27%[11], higher than previously expected due to lower tariff exposure[11] - Projects adjusted EPS of $1.58 to $1.62, representing a 7% to 10% year-over-year increase[11] Tariff Mitigation - Reduced tariff exposure by approximately $210 million annualized[21], expecting full offset[21] - Gross tariffs are estimated at $455 million annualized[22], with mitigations of approximately $130 million[22] through price and supply chain actions[22] Full Year 2025 Guidance - Free Cash Flow raised to approximately $3.2 billion[32], with an ~18% margin[32] - Price is now expected to contribute ~2.5 percentage points due to the improved tariff environment[32]

Core Insights - Emerson has launched the Nigel™ AI Advisor, an AI-enabled feature in its test software aimed at enhancing engineers' productivity and simplifying test and measurement processes across various industries [1][3]. Group 1: Product Features - Nigel is built on advanced large language models and is designed to understand NI software, helping engineers improve productivity while maintaining control over their test environments [2]. - The AI Advisor analyzes code and offers recommendations for enhancing the development and execution of tests, allowing users to interact using plain language prompts [2]. - Nigel is integrated into Emerson's NI LabVIEW™ and NI TestStand™, which are part of the NI LabVIEW+ Suite, aimed at automating measurements, analysis, and tests [3]. Group 2: Strategic Vision - The introduction of Nigel AI Advisor is part of Emerson's broader strategy to integrate AI capabilities into its test and measurement software portfolio, reflecting a commitment to innovation in the industry [3][4]. - Emerson plans to further enhance Nigel's integration into other test software products, aiming to save engineers time and resources for more complex tasks [4].