Financial Data and Key Metrics Changes - The company reported earnings per share of $0.88, or $0.90 excluding certain items, exceeding consensus estimates [5] - Adjusted revenues grew by 6% year over year, with net interest income (NII) increasing by 7% [6][19] - Adjusted pre-provision net revenue (PPNR) increased by 10%, with a positive operating leverage of 250 basis points [6][18] - Adjusted return on assets was 1.2%, and return on tangible common equity was 18% [7] - Tangible book value per share increased by 18% year over year and by 5% sequentially [9][18] Business Line Data and Key Metrics Changes - The company achieved average loan growth of 5% year over year across diversified loan origination platforms [9] - Commercial relationship manager headcount increased by 11% year over year, contributing to record production in the Provide platform [10] - Wealth Management in Southeast markets grew assets under management by 16% year over year [12] - Embedded Payments business, New Line, saw fees increase by 30% compared to last year [27] Market Data and Key Metrics Changes - The Southeast regions contributed significantly to middle market loan growth, with North Carolina, South Carolina, Georgia, and Alabama showing the strongest results [11] - The consumer bank grew net new households by 6% year over year in the Southeast [10] - Average cost of consumer and small business deposits in the Southeast was 191 basis points, a 250 basis points spread to Fed funds [11] Company Strategy and Development Direction - The company emphasizes organic growth as its primary capital allocation priority, with a focus on stability, profitability, and growth [14][15] - The company plans to continue expanding its branch network in the Southeast, with 50 branches expected to open this year [25][36] - The company is raising its full-year guidance on NII, expecting record NII in 2025 even without rate cuts [14][33] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating uncertain economic conditions, highlighting strong profitability and credit trends [5][14] - The company anticipates continued improvement in unrealized losses in its securities portfolio [32] - Management expects full-year adjusted noninterest income to increase by 1% to 2% despite muted capital market trends [33] Other Important Information - The company plans to resume share repurchases in the third quarter [14] - The net charge-off ratio was 45 basis points, at the lower end of expectations, with commercial charge-offs at 38 basis points [29] - The CET1 ratio ended the quarter at 10.6%, consistent with near-term targets [31] Q&A Session Summary Question: Capital allocation and potential M&A - Management emphasized organic growth as the priority, with M&A being a means to achieve strategic outcomes rather than a standalone strategy [44][46] Question: Impact of tax bill on solar residential solar panel industry - Management noted that existing solar portfolios are unaffected, and expects net solar charge-offs to decrease in the coming quarters [51][53] Question: Margin improvement and competitive dynamics - Management highlighted strong DDA performance as a key driver of margin improvement and noted rational competition in both loan and deposit sides [62][65] Question: Expectations for loan growth - Management expressed confidence in consumer loan growth and noted that commercial clients are beginning to make larger investment decisions [71][75] Question: Thoughts on stablecoins and regulatory relief - Management is optimistic about stablecoins' potential use cases, particularly in cross-border payments, and expects regulatory relief to benefit regional banks [83][90]

Financial Data and Key Metrics Changes - Adjusted total revenue increased by 16% year-over-year, amounting to $42.3 million, with net interest income growing by 17% and adjusted fee-based revenue by 11% [10] - Adjusted net income to common rose by 100% year-over-year to $75.5 million, while adjusted earnings per share expanded by 104% [11] - Adjusted return on average assets reached 1.02%, approaching the 1.1% goal set for 2025 [5] Business Line Data and Key Metrics Changes - Commercial loans grew by 5% linked quarter and 13% year-over-year, reflecting effective competition for client relationships [5] - Treasury product fees increased by 37% year-over-year, marking a record high for the firm [7] - Investment banking and trading income rose by 43% quarter-over-quarter and 4% year-over-year, driven by a rebound in capital markets activity [8] Market Data and Key Metrics Changes - Average commercial loan balances increased by 4% during the quarter, with year-over-year balances up approximately $1.4 billion [12] - Interest-bearing deposits grew by $2.8 billion or 19% year-over-year, while the ratio of average mortgage finance deposits to average mortgage finance loans improved to 91% [13][14] Company Strategy and Development Direction - The company is focused on building a diversified and client-centric institution, enhancing client journeys, and driving operational efficiency [9] - Continued investments in technology and client service models are expected to enhance profitability and support growth in various business lines [8][44] - The firm aims to maintain a strong capital position, with a CET1 ratio of 11.45%, and views excess capital as a strategic advantage [17][35] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the durability of the diversified earnings platform and the ability to drive consistent client engagement across market conditions [19] - The outlook for revenue growth is reaffirmed at low double-digit percentages, with non-interest expense growth expected to be mid to high single digits [19] - Management remains cautious about the mortgage outlook for the remainder of 2025, anticipating a 10% increase in full-year average balances [13] Other Important Information - The allowance for credit loss increased to $334 million, representing 1.79% of loans held for investment, with a strong reserve coverage ratio [16] - The firm repurchased approximately 318,000 shares for a total of $21 million at a weighted average price of $65.5 per share [18] Q&A Session Summary Question: Insights on investment banking and trading pipeline - Management noted that despite capital markets being closed in April and May, investment banking and trading income exceeded guidance, supported by strong syndication fees and sales growth [24] Question: Expectations for ROA and future performance - Management indicated that while the aspiration is not solely to achieve a 1.1% ROA, the strategy is working well, and client acceptance has been strong [28][29] Question: Commentary on restructuring charges - Management highlighted ongoing efforts to drive structural efficiencies and reposition expenses against fee income areas [32] Question: Impact of regulatory tone on excess capital - Management stated that the regulatory outlook does not affect their view on excess capital, which is seen as a competitive advantage [35] Question: Revenue trends and guidance adjustments - Management expressed confidence in moving towards the high end of the revenue guidance due to strong net interest income momentum [39] Question: Commercial customer behavior during the quarter - Management reported continued strong client acquisition and a 20% annualized growth in commercial and industrial loans, with no significant changes in line utilization [48] Question: Progress on wealth management build-out - Management is optimistic about the wealth management segment, noting improvements in client journey and performance compared to other wealth managers [61]

Financial Data and Key Metrics Changes - The company reported a return on tangible common equity of 18% and a return on assets (ROA) of nearly 1.3% with overall revenue growth of 1.6% quarter-over-quarter [6][18] - The common equity Tier one ratio increased, and the loan to deposit ratio remained flat at 81% [7][18] - The tangible book value per common share grew to $35.13, up over 3% from the previous quarter [18][26] Business Line Data and Key Metrics Changes - Total loans increased by $616 million or 1.2% linked quarter, with a notable one-time transfer of $242 million of loans to held for sale [19] - Total deposits grew by $739 million, with deposit costs up three basis points due to seasonal mix shifts [20] - Non-interest income was $95 million, reflecting a modest increase driven by growth in deposit service fees [23] Market Data and Key Metrics Changes - The company noted no new pockets of credit deterioration across industries, maintaining a strong operating position [9] - The Healthcare Financial Services segment is expected to see significant growth due to favorable provisions in recent legislation, potentially adding $1 billion to $2.5 billion in deposits over five years [13][14] Company Strategy and Development Direction - The company is focused on organic growth, tuck-in acquisitions, and enhancing its healthcare services vertical [30][50] - The asset management partnership with Marathon is expected to enhance loan growth and drive fee revenue starting in 2026 [11][15] - The company aims to maintain a disciplined approach to capital management, prioritizing growth and shareholder returns [38] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate a less certain macroeconomic environment and highlighted the potential for loan growth to accelerate [6][28] - The company anticipates that regulatory changes will strengthen the competitive position of U.S. banks [29] - Management remains vigilant regarding credit quality, with expectations for continued improvement in credit metrics [80] Other Important Information - The company announced the addition of Jason Schugel as Chief Risk Officer and Fred Crawford as a new Board member [30] - The company is preparing to cross $100 billion in assets, with significant investments in technology and operations [24] Q&A Session Summary Question: Capital and Buyback Strategy - Management indicated a willingness to reduce the CET1 ratio over time while maintaining a target of 11% for the near term, with potential buybacks in the second half of the year [35][37][39] Question: NIM Outlook and Debt Issuance - Management confirmed that cash balances are at desired levels, with a minor impact on NIM expected from cash build and upcoming debt issuance [42][43] Question: Deposit Costs and Growth - Management expects deposit costs to decrease with potential rate cuts, but competition may limit significant reductions [45][46] Question: HSA Market Expansion - Management noted that no major changes in expenses are anticipated for HSA, but marketing investments will be necessary to educate new consumers [56][59] Question: Credit Quality Metrics - Management expressed cautious optimism about credit quality improvements, emphasizing stability in risk ratings and no new problem areas [80][81] Question: Commercial and Industrial Originations - Management reported strong originations across all categories, with expectations for continued growth in the second half of the year [66][68] Question: Rent-Regulated Buildings Impact - Management indicated limited exposure to rent-regulated buildings, with a well-seasoned portfolio and good credit stats [72][75] Question: Non-Interest Bearing Deposits - Management noted a recent uptick in non-interest bearing deposits, with expectations for mild growth in the second half of the year [88][90] Question: HSA Provisions and Market Size - Management highlighted that the majority of the deposit growth opportunity stems from new eligibility for HSA accounts under recent legislation [91][93]

Financial Data and Key Metrics Changes - The company achieved high single-digit sales growth, with adjusted earnings per share of $1.26, reflecting an 11% increase year-over-year and exceeding consensus estimates [8][18] - Adjusted gross margin increased by 100 basis points to 57% of sales, while adjusted operating margin also rose by 100 basis points to 22.9% of sales [19][20] - Sales growth excluding COVID testing was 7.5% in Q2 and 8% in the first half of the year [8][18] Business Line Data and Key Metrics Changes - Nutrition sales increased by 3.5%, driven by a 6.5% growth in adult nutrition [9] - Diagnostics sales declined by 1.5%, primarily due to a decrease in COVID testing sales and volume-based procurement in China, with a projected headwind of approximately $700 million for the full year [10] - Established Pharmaceuticals Division (EPD) saw nearly 8% sales growth, particularly in key markets like India and China [11] - Medical devices sales grew by 12%, with notable growth in diabetes care and heart failure segments [12][16] Market Data and Key Metrics Changes - Core Lab Diagnostics grew by 8% excluding China, indicating strong underlying demand globally [10][32] - The U.S. market for diabetes care saw a 19.5% increase in continuous glucose monitors [12] - The company reported strong performance in international markets, particularly in Latin America and Asia, which are expected to drive future growth [11] Company Strategy and Development Direction - The company is focused on sustainable growth with targets of high single-digit growth, healthy margin expansion, and double-digit EPS growth [15][20] - There is a commitment to expanding the biosimilars portfolio and launching new products across various segments, including diabetes and electrophysiology [11][28] - The company is exploring M&A opportunities selectively, aiming for strategic fits that generate attractive returns [79] Management's Comments on Operating Environment and Future Outlook - Management acknowledged headwinds from COVID testing declines and challenges in the China market but remains optimistic about achieving high single-digit growth despite these challenges [26][28] - The company expects to see recovery in certain markets and product lines, with a positive outlook for 2026 as headwinds dissipate [29][32] - Management emphasized the importance of innovation and product launches in driving future growth [11][90] Other Important Information - The company is making significant investments in R&D and expanding its product portfolio, particularly in structural heart and electrophysiology [90][101] - The dual analyte sensor is expected to be a significant innovation in the continuous glucose monitoring market, with ongoing clinical trials [112] Q&A Session Summary Question: Context for 2025 performance and headwinds - Management discussed the impact of COVID testing declines and challenges in the China market, estimating over $1 billion in headwinds but still forecasting high single-digit growth [24][26] Question: Potential for growth acceleration into 2026 - Management indicated that there is a scenario for growth acceleration as headwinds fade and new product launches gain traction [35][36] Question: Trends in diabetes and electrophysiology products - Management reported strong growth in diabetes care, particularly with the Libre product, and positive trends in electrophysiology with the Volt catheter [42][48] Question: Competitive bidding for CGM and potential impacts - Management noted that competitive bidding for CGM is expected to take time to implement and will primarily affect DMEs rather than manufacturers [57] Question: Update on CRM product conversion and growth expectations - Management highlighted a significant increase in the uptake of the Avera leadless pacemaker and expects continued growth in the CRM market [64][66] Question: M&A opportunities and strategic focus - Management expressed a strong interest in M&A opportunities that align with strategic goals and profitability, while also focusing on organic growth [79][80]

Financial Data and Key Metrics Changes - The company reported a return on tangible common equity of 18% and a return on assets (ROA) of nearly 1.3% with overall revenue growth of 1.6% compared to the prior quarter [5][6] - The common equity Tier one ratio increased, and the loan to deposit ratio remained flat at 81% [6][15] - The tangible book value per common share grew to $35.13, up over 3% from the previous quarter [15][23] Business Line Data and Key Metrics Changes - Total loans increased by $616 million or 1.2% linked quarter, with a notable one-time transfer of $242 million of loans to held for sale [16][17] - Total deposits grew by $739 million, with deposit costs up three basis points due to seasonal mix shifts [17][20] - Non-interest income was $95 million, reflecting a modest increase driven by growth in deposit service fees [20] Market Data and Key Metrics Changes - The company has not observed new pockets of credit deterioration across any industry or sector, maintaining a strong operating position [7][22] - The healthcare financial services segment is expected to benefit from favorable provisions in the reconciliation bill, potentially increasing HSA deposits significantly over the next five years [11][12] Company Strategy and Development Direction - The company is focused on organic growth, tuck-in acquisitions, and enhancing its healthcare services vertical [25][46] - The asset management partnership with Marathon is anticipated to enhance loan growth and drive fee revenue starting in 2026 [9][13] - The company aims to leverage its differentiated deposit profile and strong capital position to capitalize on growth opportunities [7][28] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about loan growth accelerating as clients adapt to the current economic environment [25][26] - The company is well-positioned to thrive in various operating environments, including an accelerating investment cycle [27][28] - Management remains vigilant regarding potential impacts from proposed tariffs but does not foresee significant exposure to affected industries [7][26] Other Important Information - The company authorized an additional $700 million in share repurchases and bought back 1.5 million shares during the quarter [6][15] - The company welcomed a new Chief Risk Officer and a new Board member, enhancing its executive management team [28][29] Q&A Session Summary Question: What is the company's willingness to reduce CET1 and thoughts on near-term buyback pace? - Management indicated a medium-term goal of 11% for CET1 and a potential reduction over time, with disciplined capital management strategies in place [34][35] Question: What is the outlook for NIM and cash balances? - Management confirmed that cash balances are at desired levels, with a slight impact on NIM expected from cash build and new debt issuance [40] Question: How does the company view deposit costs in light of expected rate cuts? - Management expects to lower deposit costs if rate cuts occur but noted significant competition in the deposit market [42][43] Question: What is the company's stance on M&A if the category four threshold is lifted? - Management stated that while they are not actively pursuing whole bank M&A, they remain open to opportunities if the regulatory environment changes [46][47] Question: How will the expansion of the HSA market impact expenses? - Management indicated no major changes in expense trajectory for HSA, with some marketing investments anticipated for consumer education [53][55] Question: What is the outlook for credit quality metrics? - Management expressed cautious optimism about continued improvement in credit quality metrics, with no new pockets of problems identified [76][78] Question: How will the joint venture with Marathon impact loan growth? - Management expects the joint venture to enhance competitive positioning and facilitate participation in larger transactions, positively impacting loan growth [95][101]

Financial Data and Key Metrics Changes - The company reported earnings per share of $0.88, or $0.90 excluding certain items, exceeding consensus estimates [3][4] - Adjusted revenues grew by 6% year over year, with net interest income (NII) increasing by 7% [4][16] - Adjusted pre-provision net revenue (PPNR) increased by 10%, with a positive operating leverage of 250 basis points [4][14] - Tangible book value per share increased by 18% year over year and by 5% sequentially [5][15] - The adjusted return on assets was 1.2%, and the adjusted return on tangible common equity was 18% [4][5] Business Line Data and Key Metrics Changes - The company achieved average loan growth of 5% year over year across various segments, including commercial and industrial (C&I), commercial real estate (CRE), leasing, mortgage, home equity, and auto [6][7] - The Home Equity business ranked second in market share within its footprint, with production growth being the third best in the country [7] - The Southeast markets saw a 16% year-over-year growth in assets under management in Wealth Management, reaching nearly $16 billion [9] Market Data and Key Metrics Changes - The Southeast regions contributed significantly to total middle market loan growth, with North Carolina, South Carolina, Georgia, and Alabama showing the strongest results [8] - Average cost of consumer and small business deposits in the Southeast was 191 basis points, providing a 250 basis points spread to Fed funds [8] Company Strategy and Development Direction - The company emphasized organic growth as its primary capital allocation priority, followed by dividends and share repurchases [12][35] - The focus remains on building density in branch locations to drive organic growth, particularly in the Southeast [46][77] - The company plans to continue investing in technology and sales personnel to support growth initiatives [26][33] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving record NII for 2025, even without rate cuts for the remainder of the year [12][30] - The company is positioned to perform well in various economic environments, with a resilient business mix and defensively positioned balance sheet [11][30] - Management noted that while economic uncertainty exists, there are positive indicators for loan growth, particularly in consumer lending [71][96] Other Important Information - The company plans to resume share repurchases in the third quarter [12] - The net charge-off ratio was at the lower end of expectations, with a decrease in nonperforming assets (NPAs) [27][28] - The CET1 ratio was reported at 10.6%, consistent with near-term targets [29] Q&A Session Summary Question: Capital allocation and potential M&A - Management emphasized organic growth as the priority, with M&A being a means to achieve strategic outcomes rather than a standalone strategy [40][42] Question: Impact of tax bill on solar industry exposure - Management indicated that existing solar portfolios are unaffected, and net solar charge-offs are expected to decrease in the coming quarters [49][50] Question: Margin improvement and competitive dynamics - Management noted strong performance in demand deposits and expects continued NIM improvement driven by fixed-rate asset repricing [60][65] Question: Expectations for loan growth - Management expressed confidence in balanced growth across consumer and commercial loans, supported by diverse origination platforms [71][96] Question: Thoughts on stablecoins and regulatory relief - Management is optimistic about stablecoins' potential in cross-border payments and anticipates benefits from expected regulatory relief for regional banks [82][90]

Financial Data and Key Metrics Changes - The company achieved high single-digit sales growth, with adjusted earnings per share of $1.26, reflecting an 11% increase year-over-year and exceeding consensus estimates [6][18] - Adjusted gross margin increased by 100 basis points to 57% of sales, while adjusted operating margin also rose by 100 basis points to 22.9% of sales [19][20] - Sales growth excluding COVID testing was 7.5% in Q2 and 8% in the first half of the year [6][18] Business Line Data and Key Metrics Changes - Nutrition sales increased by 3.5%, driven by a 6.5% growth in adult nutrition [7] - Diagnostics sales declined by 1.5%, primarily due to a decrease in COVID testing sales and volume-based procurement in China, with a projected headwind of approximately $700 million for the full year [8][9] - Established Pharmaceuticals Division (EPD) saw nearly 8% sales growth, particularly in key markets like India and China [10] - Medical devices sales grew by 12%, with notable growth in diabetes care and heart failure segments [11][12] Market Data and Key Metrics Changes - Core Lab Diagnostics grew by 8% excluding China, indicating strong underlying demand globally [9] - The U.S. dollar's weakening had a favorable impact on sales, contributing to a 0.5% year-over-year increase in Q2 sales [18] - The company noted high teens growth in Latin America and strong performance in the European region [32] Company Strategy and Development Direction - The company aims for high single-digit growth, healthy margin expansion, and double-digit EPS growth as part of its long-term sustainable growth objectives [16] - There is a focus on expanding the biosimilars portfolio and launching new products, with significant regulatory submissions planned for emerging markets [10] - The company is committed to maintaining leadership in the structural heart market through innovation and strategic investments [97] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges from COVID testing sales decline and changes in foreign aid funding for HIV testing, but remains optimistic about achieving high single-digit growth despite these headwinds [28][30] - The company expects to see headwinds dissipate by 2026, with a strong pipeline of product launches anticipated to drive growth [30][34] - Management expressed confidence in the performance of the Core Lab business and the overall healthcare system's importance [33] Other Important Information - The company is exploring M&A opportunities in diagnostics and medical devices, focusing on strategic fit and profitability [79][80] - The dual analyte sensor is expected to significantly impact the continuous glucose monitoring market, with ongoing clinical trials supporting its development [113][114] Q&A Session Summary Question: Context for 2025 performance - Management discussed headwinds from COVID testing and challenges in the China Core Lab market, emphasizing the goal of reliable and sustainable growth despite these factors [22][24] Question: Potential for growth acceleration into 2026 - Management indicated that there is a scenario for growth acceleration as headwinds fade and new product launches gain traction [34][36] Question: Trends in diabetes and electrophysiology (EP) products - Management highlighted strong growth in diabetes care, particularly with the Libre product, and positive trends in EP with the Volt catheter [40][48] Question: Competitive bidding for CGM and its implications - Management noted that competitive bidding would primarily affect DMEs rather than CGM manufacturers, and they are prepared to adapt [57] Question: Update on CRM business and growth expectations - Management expressed confidence in the CRM business's growth trajectory, supported by innovation and increased physician training [64][66] Question: M&A strategy and potential targets - Management confirmed a focus on diagnostics and devices for M&A opportunities, emphasizing the importance of strategic fit and profitability [79][80]

Financial Data and Key Metrics Changes - Adjusted total revenue increased by $42.3 million or 16% year-over-year, supported by a 17% growth in net interest income and an 11% growth in adjusted fee-based revenue [10][11] - Adjusted net income to common rose to $75.5 million, a 100% increase compared to the same quarter last year, with adjusted earnings per share expanding by 104% [11][12] - The adjusted return on average assets reached 1.02%, nearing the 1.1% goal set for 2025 [5][11] Business Line Data and Key Metrics Changes - Commercial loans grew by 5% linked quarter and 13% year-over-year, reflecting effective competition for holistic client relationships [5][12] - Treasury product fees increased by 37% year-over-year, marking a record high for the firm [6][12] - Investment banking and trading income rose by 43% quarter-over-quarter and 4% year-over-year, driven by a rebound in capital markets activity [8][12] Market Data and Key Metrics Changes - Average commercial loan balances increased by 4% or $399 million during the quarter, with year-over-year balances up approximately $1.4 billion or 13% [12] - Client interest-bearing deposits grew by $2.8 billion or 19% year-over-year, while deposit betas increased to 81% [13][14] - The allowance for credit loss increased to $334 million, representing 1.79% of loans held for investment, which is among the top decile in the peer group [16][17] Company Strategy and Development Direction - The company is focused on building a diversified and client-centric institution, enhancing client journeys, and driving operational efficiency [9][10] - Continued investments in technology and capabilities are expected to support growth in investment banking and trading [25][66] - The firm aims to maintain a strong capital position, with a CET1 ratio of 11.45%, allowing for onboarding of new clients [17][37] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the durability of the diversified earnings platform and the ability to drive consistent client engagement across various market conditions [20][41] - The firm anticipates continued earnings momentum and aims to achieve a quarterly return on average assets of 1.1% in the second half of the year [20][41] - Management remains cautious about the mortgage outlook for the remainder of 2025, expecting a 10% increase in full-year average balances [13][52] Other Important Information - The company repurchased approximately 318,000 shares for a total of $21 million at a weighted average price of $65.5 per share [19] - The firm is focused on maintaining strong credit quality, with a 26% reduction in year-over-year criticized loans [61][62] Q&A Session Summary Question: Insights on investment banking and trading pipeline - Management noted that despite capital markets being closed in April and May, investment banking and trading income exceeded guidance, supported by strong syndication fees and growth in sales and trading [25] Question: Commentary on restructuring charges - Management highlighted ongoing efforts to drive structural efficiencies and match expenses with fee income areas of focus [34] Question: Guidance on revenue trends - Management indicated that net interest income momentum could support moving to the high end of the current revenue guidance [41] Question: Update on wealth management build-out - Management expressed optimism about the wealth management segment, noting improvements in client journey and performance compared to other wealth managers [66]

Financial Data and Key Metrics Changes - System-wide revenue for the quarter was $4.9 billion, with reported revenue at $4.5 billion, down 3% year over year in constant currency [9][12] - Reported EBITDA for the quarter was $72 million, while adjusted EBITDA was $89 million, representing a decrease of 25% in constant currency year over year [9][10] - Adjusted earnings per share decreased 43% year over year in constant currency, with reported losses per share at $1.44 and adjusted EPS at $0.78 [10][14] Business Line Data and Key Metrics Changes - On an organic constant currency basis, the Manpower brand had growth of 1%, while the Experis brand declined by 9% and the Talent Solutions brand grew by 1% [14][15] - The Manpower brand comprised 62% of gross profit, with the Experis brand at 22% and Talent Solutions at 16% [16] - Consolidated gross profit decreased by 5% on an organic constant currency basis year over year, with the Manpower brand reporting flat organic constant currency gross profit year over year [16][17] Market Data and Key Metrics Changes - Revenue in the Americas segment was $1.1 billion, representing a 2% year-over-year increase on a constant currency basis [19] - Revenue in Southern Europe was $2.1 billion, reflecting a 2% decrease in organic constant currency [23] - Revenue in Northern Europe was $794 million, representing a 10% decline in constant currency [26] Company Strategy and Development Direction - The company is focused on market share gains by targeting faster-growing industry verticals and leveraging AI for sales targeting [42][43] - The strategy includes moving certain businesses to franchise models to enhance local market growth [46] - The company continues to invest in digital transformation and AI capabilities to support evolving client needs and drive productivity [35][38] Management's Comments on Operating Environment and Future Outlook - Management noted a stabilization in the U.S. and parts of Europe, with a cautious outlook in Northern Europe due to economic and geopolitical headwinds [9][60] - The company anticipates ongoing stability in most markets and forecasts earnings per share for Q3 to be in the range of $0.77 to $0.87 [32] - Management highlighted the potential for improved market conditions in Northern Europe if economic uncertainties subside [60][62] Other Important Information - The company received multiple accolades, including being named Forbes America's number one temp staffing firm and recognized for sustainability [39] - Free cash flow represented an outflow of $7 million compared to an outflow of $150 million in the prior year, with expectations for strong free cash flow in the second half of the year [30] Q&A Session Summary Question: Market share gains strategy - The company is targeting faster-growing industry verticals and using AI to enhance sales targeting, resulting in improved revenue performance [42][43] Question: Franchise model expansion - The company is exploring additional markets for the franchise model to enhance local growth and brand deployment [46] Question: U.S. trends and organic growth outlook - The U.S. business saw a 3% decline overall, but the Manpower brand grew by 9%, indicating strong market performance [48][49] Question: Northern Europe revenue trends - Management indicated that Northern Europe is facing challenges due to economic conditions, but expects improvements as the economic environment stabilizes [60][62] Question: Impact of defense spending on industrial sectors - The company anticipates that increased defense and infrastructure spending in Europe will positively impact broader economic conditions and manufacturing sectors [95][96]

Financial Data and Key Metrics Changes - Consolidated revenue increased by 12% to $7 billion, with underlying revenue growth of 4% [16][20] - Adjusted operating income rose by 14% year-over-year, with adjusted EPS growing by 11% to $2.72 [7][21] - Adjusted operating margin improved by 50 basis points to 29.5% [20] Business Line Data and Key Metrics Changes - Risk and Insurance Services (RIS) revenue was $4.6 billion, up 15% year-over-year, with 4% underlying growth [21][16] - Marsh's revenue increased by 18% to $3.8 billion, with 5% underlying growth [22][16] - Guy Carpenter's revenue grew by 7% to $677 million, maintaining 5% underlying growth [23][16] - Consulting segment revenue was $2.4 billion, up 7% or 3% on an underlying basis [24][16] - Mercer's revenue was $1.5 billion, up 9% or 3% on an underlying basis [25][16] - Oliver Wyman's revenue increased by 5% to $873 million, with 3% underlying growth [27][16] Market Data and Key Metrics Changes - Commercial insurance rates decreased by 4% in Q2, following a 3% decline in Q1 [12][16] - Global casualty rates increased by 4%, with US excess casualty up 18% [13][16] - Workers' compensation rates decreased by 4%, while global property rates decreased by 7% year-over-year [14][16] Company Strategy and Development Direction - The company aims for mid-single-digit underlying revenue growth and continued margin expansion [17][32] - Focus on advising clients on strategies to navigate geopolitical instability and supply chain risks [8][18] - Commitment to addressing the challenges posed by the US litigation environment and rising liability insurance costs [10][11] Management's Comments on Operating Environment and Future Outlook - The global economic outlook remains uncertain, with various geopolitical and economic challenges impacting clients [7][8] - Management expressed confidence in the company's resilience and ability to deliver value despite economic uncertainties [18][32] - The company anticipates continued growth in adjusted EPS and margin expansion for the remainder of 2025 [17][32] Other Important Information - The company announced a 10% increase in its quarterly dividend to $0.90 and completed $300 million in share repurchases [16][32] - Total debt at the end of the quarter was $19.7 billion, with a cash position of $1.7 billion [31][32] Q&A Session Questions and Answers Question: Are you seeing upward pressure on pricing in the insurance market? - Management noted that insurance and reinsurance markets continue to soften, particularly in property, but excess casualty rates are under pressure due to the US litigation environment [38][39] Question: Can you provide more detail on the wealth and career components of organic growth? - Management explained that the wealth business is driven by AUM, but the defined benefits pension consulting work is in structural decline, impacting organic revenue growth [43][48] Question: How does the macroeconomic environment affect the RIS segment? - Management agreed that nominal GDP is a significant factor, and noted that project work is being deferred in the US due to economic uncertainty [57][58] Question: What is the outlook for Marsh International growth? - Management expressed confidence in the strong growth in international markets, despite pricing headwinds, and highlighted the company's capabilities in various regions [76][78] Question: How are rising medical costs impacting your business? - Management indicated that rising healthcare costs are a stress point for clients, but the majority of their business operates on a fixed fee basis, limiting direct impacts from medical inflation [96][99] Question: What are the implications of AI technology on your business? - Management is optimistic about the potential of AI to create efficiencies and improve insights, and is actively investing in technology to support these initiatives [100][102]