Watsco (NYSE:WSO) Q4 2025 Earnings call February 17, 2026 10:00 AM ET Company ParticipantsA.J. Nahmad - PresidentAaron Nahmad - PresidentAlbert Nahmad - Chairman and CEOBarry Logan - EVPChris Snyder - Executive DirectorMike Francis - Equity Research AssociatePaul Johnston - COORick Gomez - CFOSteve Tusa - Managing DirectorConference Call ParticipantsDavid Manthey - Senior Research AnalystJeff Hammond - Managing Director and Equity Research AnalystPatrick Baumann - AnalystTommy Moll - Equity Research Analyst ...

Financial Data and Key Metrics Changes - The company generated a GAAP return on common equity of negative 14.6% during 2025, which is slightly better than the market-wide assessment by Nomura Research, which estimated a median CLO equity return of negative 15% for the same period [6][17] - As of December 31, the company's NAV was $5.70 per share, down from $7 per share on September 30 [7] - The fourth quarter of 2025 saw a net investment income (NII) less realized losses of -$0.26 per share, compared to -$0.16 per share in the third quarter [16] Business Line Data and Key Metrics Changes - The company completed 10 resets and 3 refinancings of its CLOs in the fourth quarter alone, participating in 34 resets and 27 refinancings throughout 2025 [8] - Recurring cash flows from the portfolio increased to $80 million, or $0.61 per share, up from $77 million or $0.59 per share in the prior quarter [7] - The non-CLO portion of the investment portfolio was approximately 26% at year-end, reflecting a strategic shift towards credit assets beyond CLO equity [9] Market Data and Key Metrics Changes - The trailing twelve-month default rate decreased from 1.5% in September to 1.2% as of December 31, significantly below the long-term average of 2.6% [22] - The S&P UBS Leveraged Loan Index posted a 1.2% return for the fourth quarter and a 5.9% return for the full year 2025 [21] - CLO new issuance volumes rose slightly to $55 billion in the fourth quarter, bringing the total for 2025 to $209 billion, surpassing the previous year's record [22] Company Strategy and Development Direction - The company is focusing on increasing exposure to credit assets beyond CLO equity, reflecting a strategic decision to maximize total return for shareholders [10] - A new joint venture was launched to invest in regulatory capital relief transactions, with plans to add more JVs over time [12] - The company aims to retain more capital for investments with attractive risk-adjusted returns, supporting sustained cash flow and long-term total return [15] Management's Comments on Operating Environment and Future Outlook - Management noted that while defaults remain below long-term averages, spread compression in the loan market and negative sentiment towards credit have impacted financial performance [4] - The outlook for 2026 suggests continued opportunities for capital deployment in both CLO equity and other credit asset classes, with expectations of a stable or growing NAV over time [15][25] - Management anticipates that the loan market fundamentals will remain stable, despite potential volatility due to external factors [21] Other Important Information - The company announced a $100 million common stock repurchase program to buy stock in the open market if it trades at a material discount to NAV [14] - The company redeemed its 8% Series F Term Preferred Stock, which was the highest cost of financing, and proactively repurchased $9 million of other securities at discounts [12][13] Q&A Session Summary Question: Impact of captive CLO equity funds on fee structures - Management acknowledged that CLOs without internal management fees could outperform those with fees, but noted that spread compression affects all funds [30][32] Question: Outlook for resets and refinancings in 2026 - Management indicated that predicting the exact number of resets and refinancings is challenging, as it depends on market conditions, particularly AAA spreads [61] Question: Strategy for stock repurchase program - Management stated that decisions on stock repurchases will consider share price, leverage ratios, and investment opportunities, balancing between repurchases and capital deployment [50][52] Question: Trends in credit quality and expenses - Management expects credit quality trends to mirror those of the previous year, with no significant uptick in credit expenses anticipated [45][46]

Watsco (NYSE:WSO) Q4 2025 Earnings call February 17, 2026 10:00 AM ET Company ParticipantsA.J. Nahmad - PresidentAaron Nahmad - PresidentAlbert Nahmad - Chairman and CEOBarry Logan - EVPChris Snyder - Executive DirectorMike Francis - Equity Research AssociatePaul Johnston - COORick Gomez - CFOSteve Tusa - Managing DirectorConference Call ParticipantsDavid Manthey - Senior Research AnalystJeff Hammond - Managing Director and Equity Research AnalystPatrick Baumann - AnalystTommy Moll - Equity Research Analyst ...

Financial Data and Key Metrics Changes - The company generated a GAAP return on common equity of negative 14.6% during 2025, which is slightly better than the market-wide assessment by Nomura Research, which estimated a median CLO equity return of negative 15% for the same period [6][17] - As of December 31, the company's NAV was $5.70 per share, down from $7.00 per share on September 30 [7] - The fourth quarter of 2025 saw a net investment income (NII) less realized losses of -$0.26 per share, compared to -$0.16 per share in the third quarter [16] Business Line Data and Key Metrics Changes - The company completed 10 resets and 3 refinancings of its CLOs in the fourth quarter, totaling 34 resets and 27 refinancings for the entire year [8] - Recurring cash flows from the portfolio increased to $80 million, or $0.61 per share, up from $77 million or $0.59 per share in the prior quarter [7] - The non-CLO portion of the portfolio was approximately 26% of the total investment portfolio at year-end [9] Market Data and Key Metrics Changes - The trailing twelve-month default rate decreased from 1.5% in September to 1.2% as of December 31, which is below the long-term average of 2.6% [22] - The S&P UBS Leveraged Loan Index posted a 1.2% return for the fourth quarter and a 5.9% return for the full year 2025 [21] - CLO new issuance volumes rose slightly to $55 billion in the fourth quarter, bringing the total to $209 billion for all of 2025, surpassing the previous year's record [22] Company Strategy and Development Direction - The company is focusing on increasing exposure to credit assets beyond CLO Equity, reflecting a strategic shift to maximize total return for shareholders [10] - The company plans to retain more capital for investments with attractive risk-adjusted returns, aiming for a stable or growing NAV over time [15] - A new joint venture was launched to invest in regulatory capital relief transactions, indicating a diversification strategy [12] Management's Comments on Operating Environment and Future Outlook - Management noted that while defaults remain below long-term averages, spread compression in the loan market and negative sentiment towards credit impacted financial performance [4] - The company anticipates continued spread compression and a similar credit environment to 2025, with no significant uptick in credit expenses expected [41][45] - Management expressed optimism about a robust pipeline of refinancings and resets of CLOs in the portfolio, indicating potential for future growth [24] Other Important Information - The company announced a $100 million common stock repurchase program to buy stock in the open market if it trades at a material discount to NAV [14] - The company redeemed its 8% Series F Term Preferred Stock, which was its highest cost of financing, and proactively repurchased $9 million of other securities at discounts [12][13] Q&A Session Summary Question: Impact of captive CLO equity funds on fee structures - Management acknowledged that CLOs without internal management fees could outperform those with fees, but noted that spread compression affects all funds [30][32] Question: Outlook for resets and refinances in 2026 - Management indicated that predicting the exact number of resets and refinances is challenging, but they have a robust calendar of investments planned [61] Question: Stock repurchase program and NAV stability - Management stated that the decision to use the repurchase program will depend on various factors, including share price and investment opportunities [50][52] Question: Trends in credit quality and expenses - Management expects credit quality trends to mirror those of the previous year, with no significant changes anticipated [45][46]

Financial Data and Key Metrics Changes - The partnership achieved record adjusted EBITDA of $706 million in Q4, excluding approximately $60 million of one-time transaction expenses [5] - For the full year 2025, adjusted EBITDA reached a record $2.12 billion, a 36% increase over the prior year [6] - Q4 distributable cash flow, as adjusted, was $442 million, with a trailing twelve-month coverage ratio finishing at 1.9x [5][6] Business Line Data and Key Metrics Changes - Fuel distribution segment adjusted EBITDA was $391 million in Q4, up from $238 million in the previous quarter and $192 million in Q4 of 2024 [9] - Pipeline system segment adjusted EBITDA for Q4 was $187 million, consistent with Q4 of last year [12] - Terminal segment adjusted EBITDA for Q4 was $87 million, compared to $76 million in Q3 and $61 million in Q4 of 2024 [13] - New refining segment adjusted EBITDA for Q4 was $41 million, reflecting approximately two months of operations following the Parkland transaction [14] Market Data and Key Metrics Changes - The company distributed 3.3 billion gallons in Q4, up 44% versus the previous quarter and up 54% versus Q4 of last year [9] - Canadian refined product demand has been flat to slightly up over the last couple of years, contrasting with the U.S. market [28][29] - Strong demand in the Caribbean, particularly in markets like Guyana, which has experienced over 20% GDP growth in the last three years [31] Company Strategy and Development Direction - The company aims for an annual distribution growth rate of at least 5% over the next several years, supported by a strong financial position and disciplined capital allocation [6][21] - The integration of Parkland is progressing well, with expectations of realizing $125 million of the total $250 million annual synergy target in 2026 [15] - The company is positioned as both a defensive play and an attractive growth story, with a focus on bolt-on acquisitions across its expanded footprint [20][41] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of the legacy Sunoco business and the expected strong performance of all segments in 2026 [17][19] - The company is well-positioned to navigate macro challenges such as inflation and market volatility, with a strong track record of delivering results [18] - Management highlighted the importance of maintaining a healthy balance sheet while pursuing growth opportunities [7][21] Other Important Information - The company declared a distribution of $0.9317 per common unit for both Sunoco LP common units and SunocoCorp shares, marking a 1.25% increase over the prior quarter [5] - The company has a strong liquidity position with $2.5 billion available under its revolving credit facility at the end of the year [6] Q&A Session Summary Question: Demand trends across the footprint pro forma Parkland - Management noted that U.S. demand has been flat to slightly off, but Sunoco outperformed those trends due to effective capital deployment [26] Question: Outlook for bolt-on M&A - Management indicated that the $500 million annual target for bolt-on acquisitions is a floor and could be exceeded, with opportunities across the entire footprint [41][42] Question: Impact of greenhouse gases endangerment finding - Management stated that in the short run, there is no effect on Sun, but long-term, it is bullish for refined products [49] Question: Distribution growth potential beyond 5% - Management emphasized a multiyear growth strategy, with confidence in continued growth of DCF per common unit and cash flows [50][51] Question: Synergy target for Parkland acquisition - Management expressed optimism about exceeding the synergy target, with a focus on delivering synergies quickly [60][61]

Financial Data and Key Metrics Changes - Revenue for Q4 2025 was $572 million, with adjusted EBITDA of $99 million and non-GAAP EPS of $2.46, reflecting strong execution and demand for Grid Edge Intelligence [5][11] - Free cash flow reached $112 million in Q4, up from $70 million a year ago, indicating improved earnings growth and working capital management [12] - GAAP net income was $102 million, or $2.21 per diluted share, compared to $58 million, or $1.26 in the prior year, driven by higher operating income and lower tax expense [11][12] Business Line Data and Key Metrics Changes - Device Solutions revenue decreased by 7% year-over-year, primarily due to a decline in legacy electricity products in EMEA [13] - Network Solutions revenue decreased by 15% year-over-year, mainly due to the timing of project deployments [13] - Outcomes revenue increased by 22% year-over-year, driven by growth in delivery services and recurring revenue [14] - The new Resiliency Solutions segment contributed $3 million in revenue since its acquisition of Urbint [14] Market Data and Key Metrics Changes - Fourth quarter bookings were $737 million, with a total backlog of $4.5 billion, indicating strong demand for Grid Edge solutions [7] - Outcomes backlog grew by 58% year-over-year, surpassing $1 billion, reflecting a positive trend in market demand [29] Company Strategy and Development Direction - The company is focused on enhancing utility resiliency through strategic acquisitions, including Urbint and Locusview, which will support customers throughout the asset lifecycle [9][10] - Itron aims to leverage its heritage in hardware and networks while expanding into high-growth areas driven by data, AI, software, and services [24] - The company emphasizes the importance of trusted data and operational intelligence in the ongoing grid transformation [24] Management's Comments on Operating Environment and Future Outlook - Management noted that the operating environment for utilities is evolving rapidly, creating both opportunities and challenges [23] - The company anticipates 2026 revenue to be in the range of $2.35 billion to $2.45 billion, representing a slight growth compared to 2025 [19] - Non-GAAP EPS for 2026 is expected to be between $5.75 and $6.25, with a dilutive impact from recent acquisitions [20] Other Important Information - The company ended 2025 with approximately $368 million in annual recurring revenue (ARR), up 20% year-over-year [30] - Total debt was $1.265 billion, with cash and equivalents at $1.02 billion, reflecting a decrease in cash balance due to acquisitions and stock buybacks [18] Q&A Session Summary Question: Update on utility demand and behavior trends - Management reported strong fourth quarter bookings of $737 million, indicating a constructive market environment [28] Question: Clarification on ARR metric - The ARR run rate at the end of Q4 was $368 million, with expectations of mid-teens to 20% growth for 2026 [31][35] Question: Barriers to entry in resiliency solutions - The company highlighted the stickiness of its solutions due to extensive field service usage, which enhances customer value [44][46] Question: Trends in utility ordering patterns - Management noted that ordering patterns have normalized, with no significant cancellations, and the Book and Ship business remains strong [52] Question: Expectations for bookings and revenue growth - The company expects bookings to continue to grow, supported by a strong pipeline and increasing Outcomes backlog [81]

Financial Data and Key Metrics Changes - For Q4 2025, the company reported earnings per share of $0.68, while for the full year, earnings per share were $1.28, marking the fifth consecutive year of profitability [3][11] - Net revenue for Q4 2025 totaled $49.4 million, with adjusted EBITDA at $28.9 million and net income at $12.5 million [11] - Full year net revenue reached $158.1 million, adjusted EBITDA was $81.7 million, and net income was $21.2 million, translating into earnings per share of $1.02 [11][12] Business Line Data and Key Metrics Changes - The company achieved a daily time charter equivalent of approximately $26,600 in Q4 2025, with a full year average of approximately $21,000 per day [7][12] - Fleet utilization exceeded 96% despite a rigorous drydocking schedule, indicating strong operational efficiency [7] Market Data and Key Metrics Changes - The Baltic Capesize Index averaged approximately $21,300 per day in 2025, with a strong recovery in the second half of the year driven by iron ore and coal restocking in China [17] - In early 2026, the BCI averaged 22,000, indicating a strong start to the year [18] Company Strategy and Development Direction - The company is focused on fleet renewal and optimization, having secured three high-specification eco newbuildings at a total cost of approximately $226 million [4][10] - Capital allocation priorities include returning capital to investors, modernizing the fleet, and preserving financial strength [6] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in a favorable Capesize environment supported by expanding long-haul demand and constrained fleet supply [4][17] - The outlook for 2026 remains constructive, with expectations of continued growth in bauxite trade and resilient iron ore demand [18][19] Other Important Information - The company declared total dividends of $0.43 per share in 2025, returning approximately $96 million to shareholders since Q4 2021 [6][7] - The fleet loan-to-value ratio stood at 43%, reflecting a conservative leverage profile [5][12] Q&A Session Summary Question: Market Strategy on Long-term Time Charters - Management indicated that 35% of fleet days are already under long-term contracts, with plans to increase this as market conditions strengthen [26] Question: Balancing Asset Values and Rate Environment - Management is focusing on securing newbuildings at high-quality shipyards while considering the disposal of older assets to manage inflated asset values [28] Question: Expectations for Operational Off-hire Days - Management expects operational off-hire days in 2026 to be consistent with or slightly lower than 2025 due to a softer dry dock schedule [36] Question: Shipyard Availability and Order Book - Management clarified that while global shipbuilding capacity is high, the order book for Capesize vessels is limited due to demand from other ship types [39][40] Question: Dividend Policy with Newbuild Expenditures - Management confirmed that the dividend policy will not be affected by newbuild expenditures, as cash flow from asset sales and financing will cover costs [45]

Financial Data and Key Metrics Changes - In 2025, the company delivered $2.3 billion of adjusted EBITDA, a 13% increase over the prior year, with an adjusted EBITDA margin expanding by 160 basis points to 29.3% [4] - Aggregates cash gross profit per ton grew to $11.33, achieving the previously established target of $11-$12, driving operating cash flow of over $1.8 billion, a 29% increase over the prior year [5][6] - Free cash flow increased by over 40% after reinvesting $678 million in capital expenditures [10] Business Line Data and Key Metrics Changes - Aggregate shipments of approximately 227 million tons increased by 3% for the full year, driven by prior year acquisitions, although same-store aggregate shipments were slightly lower than the prior year [7] - Aggregates mix adjusted price improved by 6% for the full year and 5% in the fourth quarter [8] - SAG expenses for the full year were $564 million, 10 basis points lower than the prior year as a percentage of revenue at 7.1% [11] Market Data and Key Metrics Changes - Public non-highway infrastructure investments grew, with starts in Vulcan markets for water, sewer, and other infrastructure projects increasing double digits in 2025 [15] - Highway starts in Vulcan markets continued to grow at three times the rate compared to the U.S. overall [13] - In California, highway starts were up 47% in 2025 versus 2024, indicating strong demand in key markets [56] Company Strategy and Development Direction - The company aims to expand its industry-leading aggregates franchise in both current and new geographies, focusing on improving underlying business operations [4] - The company anticipates continued growth in public demand complemented by improving private demand, expecting aggregate shipments to grow between 1% and 3% in 2026 [16] - The company plans to reinvest in its franchise through operating and maintenance and internal growth capital expenditures of $750 million to $800 million in 2026 [18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in leveraging demand growth and a healthy pricing environment for 2026, with expectations of modest overall growth [21] - The company expects to deliver between $2.4 billion and $2.6 billion of adjusted EBITDA in 2026, driven by high single-digit expansion of aggregates cash gross profit per ton [16] - Management noted that while residential activity is expected to be limited in 2026, there are potential opportunities for improvement in the second half of the year [15] Other Important Information - The company returned $260 million to shareholders through dividends and $438 million through share repurchases [11] - The company has improved its adjusted EBITDA margin by over 700 basis points and return on invested capital by over 200 basis points over the last three years [12] Q&A Session Summary Question: Can you discuss your confidence levels regarding end market demand and expectations around pricing and profitability for 2026? - Management indicated that public starts remain solid, and there is a good story for public infrastructure outside of highways, expecting steady public growth [21][22] Question: Can you clarify the pricing dynamics and the impact of geographic and product mix on pricing? - Management confirmed a "triple whammy" impact on pricing due to geographic mix, acquisitions, and product mix, with expectations for pricing to be lower in the first half of 2026 and improve later [36][38] Question: What gives you confidence in keeping costs down in 2026? - Management attributed confidence in cost control to the Vulcan Way of Operating, which focuses on efficiency and productivity in plants [46][49] Question: How is the IIJA reauthorization impacting your guidance? - Management expects a new bill to be passed, with historical trends indicating that it will be higher than the previous bill, and noted that 50% of IIJA funding has yet to be spent [54][56] Question: What is the outlook for M&A activity in 2026? - Management anticipates a very active year for M&A, focusing on aggregates-led opportunities and expanding geographic footprint [72][75]

Financial Data and Key Metrics Changes - The partnership achieved record adjusted EBITDA of $706 million in Q4 2025, excluding approximately $60 million of one-time transaction expenses, marking a 36% increase in full-year adjusted EBITDA to $2.12 billion compared to the prior year [5][6] - Fourth quarter distributable cash flow, as adjusted, was $442 million, with a trailing twelve-month coverage ratio finishing at 1.9x, indicating strong financial health [5][6] - A distribution of $0.9317 per common unit was declared, representing a 1.25% increase over the prior quarter, marking the fifth consecutive quarterly distribution increase [5] Business Line Data and Key Metrics Changes - The fuel distribution segment reported adjusted EBITDA of $391 million in Q4 2025, up from $238 million in Q3 2025 and $192 million in Q4 2024, driven by a 44% increase in distributed gallons [9][10] - The pipeline system segment's adjusted EBITDA was $187 million, consistent with Q4 2024, while throughput remained at 1.4 million barrels per day [12] - The terminal segment's adjusted EBITDA increased to $87 million, up from $76 million in Q3 2025 and $61 million in Q4 2024, benefiting from the Parkland acquisition [13] - The new refining segment generated adjusted EBITDA of $41 million, reflecting improved performance compared to previous years [14] Market Data and Key Metrics Changes - The U.S. fuel distribution market showed flat to slightly declining demand, while the Canadian market exhibited slightly increasing demand, indicating regional variations in market performance [27][28] - The Caribbean market demonstrated strong volume growth, particularly in jurisdictions like Guyana, which experienced significant GDP growth [30] Company Strategy and Development Direction - The company aims for a multi-year annual distribution growth rate of at least 5%, supported by disciplined expense management and a focus on optimizing gross profit [6][21] - The integration of Parkland and TanQuid is expected to enhance operational scale and synergies, with a target of realizing $125 million of the total $250 million annual synergy target in 2026 [16][19] - The company is positioned as both a defensive play and an attractive growth opportunity within the midstream sector, emphasizing its ability to deliver strong results amid market volatility [20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to deliver sustained value for investors, highlighting a strong financial position and growth opportunities across various geographies [18][19] - The company anticipates continued strong performance across all segments, with the Parkland acquisition expected to significantly contribute to future growth [19][21] Other Important Information - The company has a strong balance sheet with $2.5 billion in availability under its revolving credit facility and a leverage ratio of approximately 4x, aligning with long-term targets [6][7] - Minimal corporate income taxes are expected for at least five years, which will support distribution growth for both Sunoco and SunC unitholders [44][45] Q&A Session Summary Question: Demand trends in the fuel distribution business post-Parkland acquisition - Management noted that while U.S. demand has been flat, Sunoco has outperformed trends due to effective capital deployment, and the Canadian market shows stronger demand [26][27] Question: Outlook for bolt-on M&A and its impact on guidance - Management indicated that the $500 million annual target for bolt-on acquisitions is a floor, with potential for upside based on execution across various geographies [39][41] Question: Synergy targets from the Parkland acquisition - Management expressed confidence in exceeding the $125 million synergy target, with activities already ramping up in Q4 2025 [60][62]

Financial Data and Key Metrics Changes - Revenue for Q4 2025 was $572 million, with adjusted EBITDA of $99 million and non-GAAP EPS of $2.46, reflecting strong execution and demand for Grid Edge Intelligence [5][11] - Free cash flow reached $112 million, up from $70 million in the previous year, indicating improved earnings growth and working capital management [12] - Full year 2025 revenue was $2.37 billion, down 3% year-over-year, with a gross margin of 37.7% and adjusted EBITDA of $374 million [16][17] Business Line Data and Key Metrics Changes - Device Solutions revenue decreased by 7% year-over-year, primarily due to a decline in legacy electricity products [13] - Network Solutions revenue fell by 15% year-over-year, attributed to project deployment timing [13] - Outcomes revenue increased by 22% year-over-year, driven by delivery services and recurring revenue growth [13] - The new Resiliency Solutions segment contributed $3 million in revenue since its acquisition of Urbint [13] Market Data and Key Metrics Changes - Fourth quarter bookings totaled $737 million, with a backlog of $4.5 billion, indicating strong demand for Grid Edge solutions [6] - Annual recurring revenue (ARR) reached approximately $368 million, up 20% year-over-year [29] Company Strategy and Development Direction - The company is focused on enhancing utility resiliency through strategic acquisitions, including Urbint and Locusview, which will support customers throughout the asset lifecycle [9][10] - Itron aims to leverage its expertise in hardware and networks to drive growth in data, AI, software, and services, positioning itself as a leader in intelligent infrastructure [22][23] Management's Comments on Operating Environment and Future Outlook - Management noted that the utility market is evolving, creating both opportunities and challenges, but remains confident in the company's strategic direction [21] - The company anticipates 2026 revenue to be between $2.35 billion and $2.45 billion, with non-GAAP EPS expected to range from $5.75 to $6.25 [18][19] Other Important Information - Total debt at the end of Q4 was $1.265 billion, with cash and equivalents at $1.02 billion, reflecting a decrease due to acquisitions and stock buybacks [17] - The company expects the new Resiliency Solutions segment to be accretive to revenue growth and EBITDA but dilutive to EPS in 2026 due to acquisition costs [19][20] Q&A Session Summary Question: Update on utility demand and behavior trends - Management reported strong fourth quarter bookings of $737 million and noted that the market is constructive, with no further delays in project timelines [27][28] Question: Barriers to entry in resiliency solutions and outcomes business - Management highlighted the stickiness of their solutions due to field service tools and the value generated from data capture during emergency responses [44][46] Question: Utility ordering patterns and Book and Ship business trends - Management indicated that ordering patterns have normalized, with good Book and Ship business continuing, particularly in the electricity space [52][54] Question: Forward guidance and backlog levels - Management stated that approximately 80% of the forward guidance is typically in backlog, with current levels reflecting a structural change in the business [63] Question: Revenue goals for 2027 - Management maintained the revenue target for 2027 but suggested it may lean towards the lower end of the previously stated range due to deployment complexities [80][81]