Parsons (PSN) Q2 2025 Earnings Call August 06, 2025 08:00 AM ET Speaker0Good day, and thank you for standing by. Welcome to the Second Quarter twenty twenty five Parsons Corporation Earnings Conference Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer session. Please be advised that today's conference is being recorded.I'd now like to turn the conference over to Dave Spilley, Senior Vice President, Investor Relations. Please ...

Financial Data and Key Metrics Changes - Royalty Pharma reported a 20% growth in portfolio receipts, reaching $727 million, and an 11% growth in royalty receipts to $672 million, exceeding previous guidance [5][18] - The company raised its full-year 2025 top-line guidance for portfolio receipts to a range of $3.05 billion to $3.15 billion, reflecting a growth of approximately 9% to 12% [7][23] Business Line Data and Key Metrics Changes - The strong performance in royalty receipts was driven by key products such as Voronego, Trelegy, Evrysdi, and Tremfya [17] - A one-time payment of approximately $50 million contributed to the growth in portfolio receipts [18] Market Data and Key Metrics Changes - The company highlighted the significant unmet need in pancreatic cancer, with around 56,000 new diagnoses annually, emphasizing the potential market for the oncology therapy Daraxonrezib [14] - The partnership with Revolution Medicines is expected to provide up to $2 billion in funding, indicating a strong market opportunity for innovative therapies [10][12] Company Strategy and Development Direction - Royalty Pharma aims to be a leading partner in funding innovation in life sciences, as evidenced by the groundbreaking collaboration with Revolution Medicines [6][10] - The company is focused on maintaining a diversified portfolio and capitalizing on new funding paradigms to support innovative biotech companies [6][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in delivering strong financial performance for 2025, supported by the updated guidance and the successful execution of their strategy [25][27] - The company is actively exploring additional partnerships and investments, particularly in emerging markets like China [42][44] Other Important Information - Royalty Pharma has access to approximately $3.4 billion in cash and equivalents, providing significant financial capacity to execute its strategy [21] - The company has initiated a dispute resolution process with Vertex regarding royalty payments, which may impact future revenue [26][72] Q&A Session Summary Question: Interest in Revolution Medicines deal and future capacity for similar deals - Management confirmed the excitement around the Revolution Medicines transaction and indicated the capacity to engage in more similar deals in the future [38][39] Question: Royalty opportunities in China - Management acknowledged the growing innovation in China and expressed interest in developing relationships with emerging companies in the region [42][44] Question: Bladder cancer market exposure and royalty tracking - Management did not disclose specific royalty figures for adstilodrine but expressed optimism about the market's growth despite upcoming competitors [48][52] Question: Operating expenses and share repurchase strategy - Management indicated a trend towards lower operating expenses and a dynamic approach to share repurchases based on capital allocation opportunities [49][50] Question: Vertex dispute resolution timing - Management provided a conservative estimate for the resolution of the Vertex dispute, indicating it could extend into 2026 but may resolve sooner [81][83] Question: Impact of competition and large-scale deals - Management emphasized the company's unique position and ability to compete for large transactions, highlighting the increasing frequency of multibillion-dollar deals in the industry [88][90]

Financial Data and Key Metrics Changes - The company reported strong second quarter results, surpassing expectations with improved performance across all three business segments [8] - Adjusted EBITDA margin for the TSS business was 35%, reflecting the strength of the differentiated portfolio [11] - The company anticipates third quarter net sales to decrease 4% to 6% sequentially, with adjusted EBITDA expected to range between $175 million to $195 million [21] Business Segment Performance Changes - TSS business saw net sales of Opteon refrigerants grow 65% year over year, with Opteon now making up 75% of total refrigerants revenues, up from 57% in the prior year [10][12] - TT delivered sequential net sales up 10%, supported by increased volumes of 9% despite operational issues [13][14] - APM's performance reflected a sequential sales increase of 14%, driven by product sales into the data center cable market, with Advanced Materials seeing a 20% sequential sales increase [16][17] Market Data and Key Metrics Changes - The company noted the effects of Chinese producer capacity rationalization, which has provided opportunities in Western markets [15] - The demand for Opteon refrigerants is expected to continue growing in the second half of the year, moderated by typical seasonality [11] Company Strategy and Industry Competition - The company is focused on executing its Pathway to Thrive strategy, with significant progress in resolving legacy litigation and improving operational excellence [23] - The company aims to be the lowest cost manufacturer and is focused on gaining share in fair trade markets [66] Management's Comments on Operating Environment and Future Outlook - Management acknowledged operational challenges but expressed confidence in the team's ability to address these issues and drive long-term improvements [39] - The company expects to deliver adjusted EBITDA of $775 million to $825 million for the full year 2025, with capital expenditures anticipated to approximate $250 million [21][22] Other Important Information - A settlement with New Jersey was reached, resolving all environmental claims related to PFAS, with a net present value of approximately $250 million [7] - The company has established a new agreement with DuPont and Corteva to acquire rights to insurance proceeds, providing approximately $150 million to fund the New Jersey settlement [7] Q&A Session Summary Question: Outlook for the full year and seasonal patterns - Management indicated that while there will be a seasonal decline, strength in TSS and continued execution across businesses will help offset typical seasonal patterns [32] Question: Drivers of TSS performance - Management highlighted that the strong performance was driven by the transition to Opteon and some potential hoarding due to shortages, but confidence remains for continued growth [35] Question: Vulnerability of TT operations - Management reassured that cost-cutting efforts have not impacted operational reliability and emphasized a clear plan to address operational issues [39] Question: APM outage impact - The outage at Washington Works is expected to have a one-time impact of approximately $20 million, with management confident in the business's overall performance [41] Question: Insurance proceeds and liquidity - The $150 million insurance proceeds relate to past claims and will be realized over the next five years to offset payments under the New Jersey settlement [44] Question: Long-term sales growth expectations - Management anticipates greater than 5% sales growth starting in 2026, driven primarily by TSS [48] Question: Competitive dynamics in TiO2 - The company is focused on being the lowest cost manufacturer and gaining share in fair trade markets, with significant capacity taken out of the market [66][75]

Financial Data and Key Metrics Changes - The company reported a net loss of $64 million for Q2 2025, reflecting increased R&D and SG&A expenses [22][24] - Cash consumption for operations was €57 million in Q2, nearly double the previous quarter, with a total cash position of $242 million at the end of the quarter [23][24] - Total liquidity, including undrawn standby facilities and a grant, stood at $375 million, sufficient to sustain operations through 2026 [24][66] Business Line Data and Key Metrics Changes - The company secured its first firm order for 50 aircraft from Revo, with a total potential value of $250 million, expected to generate revenue starting in 2027 [11][12] - The total preorder backlog now stands at approximately 2,800 aircraft, valued at around $14 billion, including non-binding letters of intent from 28 customers [13][14] - Contracts for aftermarket services could bring up to $1.6 billion in revenue over the first few years of operations [14] Market Data and Key Metrics Changes - Sao Paulo is highlighted as the largest helicopter market globally, presenting significant potential for eVTOL operations [11] - The company has signed additional letters of intent for a total of 104 eVTOLs from new customers in Brazil, the United States, and Costa Rica [12][13] Company Strategy and Development Direction - The company aims to achieve TAP certification and enter service by 2027, with ongoing advancements in program development and partnerships with suppliers [7][20] - A focus on developing a strong ecosystem for urban air mobility, including infrastructure and energy partnerships, is emphasized [14] - The company is committed to optimizing aircraft design for safety, performance, reliability, and cost-effectiveness [16][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the current cash position and liquidity, indicating sufficient resources to sustain operations through 2026 [24][66] - The company is closely monitoring expenses and leveraging resources from Embraer to optimize cash consumption [28] - Management remains optimistic about the order book and the potential for converting letters of intent into firm orders as the certification date approaches [45] Other Important Information - The company unveiled a full-scale mock-up of its eVTOL at the Paris Air Show, receiving positive feedback from stakeholders [6][9] - The engineering prototype is undergoing final ground tests before initiating flight campaigns, with expectations to start flying in the next few months [15][25] Q&A Session Summary Question: Cash consumption and guidance - Management indicated that cash consumption is being closely monitored, with expectations to remain at the lower end of the guidance range of $200 million to $250 million for the year [28] Question: Engineering flight testing timeline - The timeline for flight testing of conforming prototypes is still planned for late 2026, with a focus on hover flight and transitioning to cruise [30][39] Question: Order book strategy - The company plans to continue building the order book and converting letters of intent into binding orders as they approach certification [41][45] Question: Competitive landscape changes - Management welcomed the acquisition of Blade's passenger business by Joby, viewing it as a positive development for the eVTOL market [50][52] Question: Motor performance differences - The company confirmed that the battery sourcing remains unchanged, and differences between motors from Beta and Nidec include cooling systems and integration methods [56] Question: Capital needs and funding options - Management expressed confidence in their cash position and outlined various funding options available for future capital needs [63][66]

Financial Data and Key Metrics Changes - LivaNova reported a 10% organic revenue growth compared to the previous year, driven by strong performance in the cardiopulmonary and neuromodulation segments [5][29] - Revenue for the quarter was $353 million, reflecting a 9% increase on a constant currency basis and a 10% increase on an organic basis [29] - Adjusted gross margin increased to 69% from 68% in the previous year, attributed to positive pricing and geographic mix [30] - Adjusted diluted earnings per share rose to $1.05 from $0.93 in the prior year [34] - Cash balance increased to $594 million from $429 million at year-end 2024, while total debt decreased to $431 million from $628 million [34][35] Segment Performance Changes - Cardiopulmonary segment revenue was $199 million, a 13% increase year-over-year, with heart-lung machine revenue growing in the low double digits [11][12] - Epilepsy segment revenue increased by 6%, with U.S. revenue growing by 5% and Europe and rest of the world combined growing by 9% [13][14] - The company expects cardiopulmonary revenue to grow 12-13% for the full year 2025, up from a previous forecast of 9-10% [12] - Epilepsy revenue growth forecast for 2025 was raised to 4.5-5.5% from 4-5% previously [16] Market Data and Key Metrics Changes - The company anticipates launching the Essence heart-lung machine in China in Q3 2025, which is expected to be a significant market for the product [12][72] - The CMS proposal to increase reimbursement for end-of-service procedures to level five could significantly impact procedure penetration, as it affects 70% of implants in the U.S. [52][53] Company Strategy and Industry Competition - LivaNova is focused on expanding its portfolio into high-growth markets, particularly in obstructive sleep apnea (OSA) and difficult-to-treat depression (DTD) [42] - The company is investing in its core businesses to sustain market leadership and clinical excellence, with a strong emphasis on innovation and regulatory achievements [42][27] - The company is optimistic about the competitive landscape, noting that it has gained market share in the cardiopulmonary segment [59] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to sustain growth and capitalize on opportunities in the epilepsy and cardiopulmonary segments [42] - The management highlighted the importance of recent clinical data in driving awareness and adoption of VNS therapy for drug-resistant epilepsy [20][49] - The company remains focused on addressing significant unmet needs in the market, particularly in OSA and DTD [42] Other Important Information - The company is working closely with CMS to seek national Medicare coverage for VNS therapy in treatment-resistant depression [22][24] - The company is also making significant investments in IT infrastructure and innovation to drive long-term efficiencies and scalability [32][39] Q&A Session Summary Question: Can you elaborate on the positive data from the epilepsy business and its implications for growth? - Management highlighted the large study demonstrating significant seizure reduction, which is expected to enhance patient access and drive growth [46][49] Question: What is the expected impact of the CMS proposal to boost end-of-service procedures to level five? - Management noted that this proposal could significantly improve reimbursement for providers, potentially increasing procedure penetration [52][53] Question: Can you break down the oxygenator business and its demand versus capacity? - Management indicated healthy procedure growth and market share gains, but noted that supply is not yet catching up with demand [59][60] Question: What are the expectations for the launch in China? - Management expressed confidence in the Essence product's launch in China, indicating it is a significant market for the company [72] Question: What are the plans for the obstructive sleep apnea program? - Management is confident in its ability to commercialize the OSA portfolio internally but remains open to partnerships if beneficial [96]

Financial Data and Key Metrics Changes - The company reported a revenue of $22.4 million for the second quarter of 2025, a decrease of $54.1 million compared to $76.5 million in the same period of 2024, primarily due to reduced revenue from the Novartis license agreement and the VetDeg collaboration with Pfizer [31][32] - Cash, cash equivalents, and marketable securities at the end of the second quarter were approximately $861.2 million, down from $1.04 billion as of December 31, 2024 [31] - General and administrative expenses decreased to $25.3 million from $31.3 million year-over-year, while research and development expenses fell to $68.6 million from $93.7 million [32] Business Line Data and Key Metrics Changes - The company is focusing on three Phase I trials in its neuro and oncology portfolio, including the recently initiated trial with the KRAS G12D degrader, ARV-806 [3][4] - Significant clinical progress was made with ARV-102, the LAR2 degrader, and ARV-393, the BCL6 degrader, with compelling preclinical data supporting their advancement [4][21] - The restructuring included a reprioritization of the research pipeline, cutting several programs while continuing investment in high-potential assets [5][28] Market Data and Key Metrics Changes - The collaboration with Pfizer for VetDeg is being reworked due to the removal of combination pivotal trials, which has led to a reassessment of the co-commercialization agreement [10][30] - The company is actively seeking a new partner for VetDeg should negotiations with Pfizer not yield favorable terms [10][30] Company Strategy and Development Direction - The company aims to advance VetDeg towards commercial launch, achieve critical data milestones from its pipeline, and allocate capital efficiently [9][35] - The long-term strategy includes focusing on differentiated PROTAC technology in both neuroscience and oncology, with an emphasis on maximizing shareholder value [11][28] - The company is conducting a CEO search process to ensure leadership continuity and strategic direction [8][9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's financial position and the potential of its clinical pipeline to drive future value [11][28] - The company anticipates multiple near-term milestones across its clinical development and regulatory efforts, including potential approval of a PROTAC [34][35] - Management highlighted the importance of achieving critical data milestones in the next twelve months to support the company's growth trajectory [11][35] Other Important Information - The company has extended its cash runway into 2028 following the restructuring and cost-reduction measures [28][33] - The NDA for VetDeg has been submitted, marking a significant milestone as the first PROTAC degrader to enter clinical trials and submit for approval [19][31] Q&A Session Summary Question: Can you provide more details on the expected data from ARV-102 this year? - Management indicated that they expect to present data from healthy volunteers and initial data from Parkinson's patients in upcoming conferences [40][41] Question: What are the expectations for the BCL6 program and potential combination therapies? - Management emphasized the importance of establishing a monotherapy dose before exploring combination therapies, particularly with bispecifics in DLBCL [51][52] Question: How does the company plan to handle the potential return of VetDeg rights from Pfizer? - The company is negotiating with Pfizer to rework the collaboration and is prepared to seek a new partner if necessary, aiming to minimize any gaps in commercialization [68][70] Question: What is the company's outlook on the recent Phase III trial results in breast cancer? - Management stated that the results would have little impact on their modeling and confirmed they would not pursue further development with the drug in question [77][78] Question: Can you comment on the interactions with the FDA regarding the NDA submission? - Management reported that interactions with the FDA have been smooth and timely, with no current delays affecting their submission process [94][96]

Financial Data and Key Metrics Changes - Revenue for Q2 2025 was $215 million, representing a 25% sequential increase and a 6% year-over-year increase [9][25] - Total shipments were $206 million, up 32% sequentially and 2% year-over-year [9][25] - Gross margin was 48.7%, exceeding the targeted range of 42% to 48% [9][26] - Operating income was $41.5 million, down 20.2% year-over-year, with an operating margin of 19.3% [27] - Net income attributable to ACM Research was $36.8 million, compared to $37.5 million in the previous year [28] Business Line Data and Key Metrics Changes - Revenue from single wafer cleaning, Tahoe, and semi-critical cleaning tools grew 1%, representing 72% of total revenue [10] - Revenue from ECP furnace and other technologies grew 23%, representing 22% of total revenue [12] - Revenue from advanced packaging, excluding ECP but including service, was up 20% and represented 6% of total revenue [13] Market Data and Key Metrics Changes - The long-term revenue target for Mainland China was increased to $2.5 billion from $1.5 billion, based on an updated market size assumption of $40 billion for the China WFE market [15][16] - The company maintained its revenue target for the rest of the world at $1.5 billion [17] Company Strategy and Development Direction - The company is focused on delivering innovative products to meet the challenges of next-generation semiconductor manufacturing, particularly driven by AI demand [7] - A major upgrade to the Ultra C WB wet bench cleaning tool was announced, integrating new nitrogen bubbling technology [8] - The company is expanding its production capacity in both China and Oregon to support growth initiatives [20][21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving revenue growth for 2025, maintaining a target range of $850 million to $950 million, implying a 15% year-over-year growth at the midpoint [23] - The company is actively working to mitigate supply chain risks by diversifying suppliers and sourcing components from multiple regions [41][42] Other Important Information - ACM Shanghai received approval for a follow-on offering to raise up to $620 million, aimed at accelerating updated revenue targets [19] - The company is investing in R&D, with plans for R&D expenses in the 14% to 16% range of sales [27] Q&A Session Summary Question: Shipment growth expectations for 2025 - Management acknowledged that while shipments were up, they were only slightly higher year-over-year and emphasized that the second half of the year is expected to be stronger [32][34] Question: Strategic purchases and supply chain risks - The company is multi-sourcing components and looking for suppliers outside the U.S. to mitigate potential supply chain risks due to export controls [38][42] Question: Differences in financial results between ACM and ACM Shanghai - The difference in reported revenue is attributed to different revenue recognition standards between U.S. GAAP and China GAAP [77][80] Question: Long-term market size assumptions for China - Management expressed confidence in the long-term WFE market size in China, projecting it to remain around $40 billion based on demand for memory and logic products [92][95] Question: Progress in Taiwan and Southeast Asia - The company is actively engaging with customers in Taiwan and Southeast Asia, focusing on panel level packaging technology [60][122]

Financial Data and Key Metrics Changes - Masterbrand's second quarter net sales were $730.9 million, an 8% increase compared to $676.5 million in the same period last year [26] - Gross profit was $239.7 million, up 3.8% year over year, with a gross profit margin of 32.8%, down 130 basis points from last year [28] - Net income for the second quarter was $37.3 million, down from $45.3 million in the same period last year [29] - Adjusted EBITDA was $105.4 million, relatively flat compared to $105.1 million in the same period last year [30] - Diluted earnings per share were $0.29, compared to $0.35 in the prior year [31] Business Line Data and Key Metrics Changes - Builder direct sales increased by 5% year over year, outperforming the broader single-family new construction market, which declined low single digits [22] - The legacy repair and remodel business, excluding Supreme, declined approximately mid single digits year over year, aligning with broader market trends [23] - Semi-custom products showed growth as consumers shifted towards mid-tier options, indicating a positive trend within the product offering [24] Market Data and Key Metrics Changes - The broader single-family new construction market is expected to decline mid single digits for the full year 2025 [22] - The repair and remodel market is anticipated to be down high to mid single digits for the full year 2025, reflecting ongoing consumer sentiment challenges [24] Company Strategy and Development Direction - The merger with American Woodmark aims to create the industry's most comprehensive portfolio of cabinet brands, enhancing customer choice and operational efficiency [7][8] - The combined entity expects to realize approximately $90 million in run-rate cost synergies by the end of year three, with a focus on procurement and overhead optimization [9][18] - The strategic focus includes investing in next-generation automation and enhancing customer experience through operational flexibility and marketing capabilities [20] Management's Comments on Operating Environment and Future Outlook - Management acknowledged ongoing market softness and a challenging external environment but expressed confidence in the company's strategic priorities and execution capabilities [22][39] - The expectation is for overall new construction and market demand to decline mid single digits for 2025, with a cautious but optimistic outlook for long-term growth [23][36] Other Important Information - The merger is expected to close in early 2026, pending shareholder and regulatory approvals, with Masterbrand shareholders owning approximately 63% of the combined company [10] - The combined company will maintain a significant presence in both Beachwood, Ohio, and Winchester, Virginia [10] Q&A Session Summary Question: Why is the merger happening now given the market conditions? - Management highlighted the compelling combination of two strong U.S. companies that can generate value through an expanded product portfolio and operational efficiencies [42][44] Question: Can you provide more detail on the cost synergies? - Management indicated that synergies would be approximately 40% from G&A and indirect costs and under 60% from COGS, with a detailed analysis already conducted [47][48] Question: How will the combined entity address potential regulatory hurdles? - Management expressed confidence in navigating regulatory processes and emphasized the compelling value proposition for customers and consumers [49][50] Question: What is the expected phasing of the $90 million in synergies? - Management indicated that synergies would phase in similarly to previous acquisitions, with some easier initiatives implemented first [54][55] Question: How will the merger impact market share and channel exposure? - Management noted that the merger would enhance value across all channels and provide opportunities for cross-selling, with a focus on maintaining and expanding customer relationships [64][66]

Financial Data and Key Metrics Changes - The second quarter demonstrated resilience with GMV and revenue performing above the midpoint of guidance, while adjusted EBITDA exceeded the high end [5][19] - Operating expenses declined by 4% year over year, reflecting a commitment to cost management [5][28] - Net revenue was $22.1 million, flat year over year, with transaction revenue making up approximately 75% of total revenue [25][26] - Adjusted EBITDA loss was $1.8 million compared to a loss of $1.6 million last year, with an adjusted EBITDA margin loss of 8% [28][30] Business Line Data and Key Metrics Changes - GMV modestly declined, but market share was gained in the luxury home goods market [6][36] - Average order value was nearly $2,600, flat year over year, while median order values increased by 10% to approximately $13.50 [22] - Jewelry accounted for about 20% of total GMV, increasing in high single digits, while other verticals were flat or down [24] Market Data and Key Metrics Changes - Active buyers totaled approximately 64,400, up 5% [24] - The company ended the quarter with nearly 1.9 million listings, up 3%, but unique sellers decreased by 21% year over year [16][17] - The U.S. housing market has shown the slowest spring selling season in thirteen years, impacting the luxury home goods market [36] Company Strategy and Development Direction - The 2025 roadmap focuses on accelerating organic traffic growth, ensuring competitive pricing, and optimizing the multi-step conversion funnel [7][10] - The company is embedding AI throughout its platform to enhance efficiencies and capabilities [15] - A significant addition to the leadership team was made with the hiring of Bradford Shellhammer as chief marketing officer and chief product officer [19] Management's Comments on Operating Environment and Future Outlook - The macro environment for luxury home goods remains challenging, with no major changes observed since the beginning of the year [35][36] - Despite a soft market, the company believes it can continue to gain market share based on its product roadmap [37] - The guidance for the third quarter reflects a modest rebound in average order value growth and continued conversion growth [30] Other Important Information - The company has implemented machine learning-based pricing models across all verticals to enhance pricing transparency [10][11] - Seller churn has remained elevated due to subscription pricing optimizations, but the impact on GMV and overall listings has been minimal [18][25] Q&A Session Summary Question: Changes in the overall environment since the beginning of the year - Management noted that there have not been major changes in the macro environment, with both the U.S. housing market and luxury home goods market remaining soft [35][36] Question: Vulnerability of organic traffic to AI-driven search results - Management acknowledged the potential impact of AI and chatbots on traffic but stated that there has not been a material impact on organic search traffic to date [39][40]

Financial Data and Key Metrics Changes - Total sales growth of 2% was achieved, with record adjusted EBITDA margins of 20.4% [7][26] - Adjusted EBITDA reached 20.1%, highlighting the company's resilience despite challenges [26] - Free cash flow generated in the quarter was $46 million, with expectations for improvement in cash flow during the second half of 2025 [30][31] Business Line Data and Key Metrics Changes - EMEA and APAC segments showed strong performance, with total sales rising 11% and EBITDA margins hitting a record 20.6% [28][29] - Organic sales in The Americas declined due to tariff-related delays, but strong pricing helped balance this [27][28] - Automation orders were delayed, impacting the Americas, but a robust automation funnel gives confidence for recovery in the second half [14][46] Market Data and Key Metrics Changes - The Middle East delivered double-digit growth, while India grew at high single digits [12][13] - China and Southeast Asia experienced mid-single-digit growth, supported by increased capital expenditure [13][62] - Europe remained steady, benefiting from EU stimulus measures, with expectations for stable growth [11][94] Company Strategy and Development Direction - The company is focused on disciplined cost control, enhancing customer experience, and sharpening market differentiation [5][8] - Recent acquisitions, including Delta P and Active, are expected to accelerate growth and expand product offerings [22][24] - The integration of EBX and AI initiatives aims to enhance operational excellence and innovation [16][17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the recovery of the automation business in North America and the overall health of the business [34][40] - The company raised its full-year guidance based on strong market conditions and successful acquisitions [8][32] - Management remains optimistic about the high growth markets and expects continued momentum in EMEA and APAC [34][94] Other Important Information - The Flame internship program aims to build a robust talent pipeline for the fabrication technology sector [10] - The company is committed to investing approximately $20 million in strategic growth initiatives in 2025 [17][80] Q&A Session Summary Question: Can you provide more details on the tariff impact? - Management noted that tariffs introduced unexpected volume headwinds, particularly in Mexico, but expects recovery in the second half [37][39] Question: What are the underlying order trends in The Americas? - Management indicated that automation orders are expected to recover, while Mexico's market is showing signs of life but will take longer to stabilize [46][48] Question: Can you elaborate on the EWM acquisition? - The EWM acquisition is expected to enhance the heavy industrial portfolio and is projected to have mid-single-digit growth potential with gross margins over 40% [49][52] Question: What is the outlook for Europe and the impact of EU stimulus measures? - Management expects stable growth in Europe, with stimulus measures beginning to show positive effects, although not at the anticipated rate [90][94] Question: How is the company addressing productivity improvements? - The company has increased its savings target and is investing back into the business to support long-term growth initiatives [78][80]