Q2 2025 IDEX Corp Earnings Call

Akhil Mahendra: Greetings and welcome to the second quarter 2025 IDEX Corporation Earnings Conference call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. If anyone should require operating assistance, please press star zero on your telephone keypad. Please note this conference call is being recorded. It is now my pleasure to introduce your host, Jim Giannakouros, Vice President of Investor Relations. Thank you. You may begin.

Greetings and welcome to the second quarter of 2025, adding Corporation earnings Conference call.

At this time all participants are in a listen only mode.

A question and answer session will follow the presentation.

If anyone should require operator assistance, please press star zero.

Please note this conference call.

Right.

It is now my pleasure to introduce your host Jim G and of course, Vice President Investor Relations. Thank you you.

You may begin.

Jim Giannakouros: Thank you. Good morning, everyone, and welcome to IDEX's second quarter 2025 earnings conference call. We released our second quarter financial results earlier this morning, and you can find both our press release and earnings call slide presentation in the Investor Relations section of our website, idexcorp.com. On the call with me today are Eric Ashleman, President and Chief Executive Officer of IDEX, and Akhil Mahendra, our Interim Chief Financial Officer and Vice President of Corporate Development. Today's call will begin with Eric providing highlights of our second quarter results and a discussion of our current business outlook and strategies. And Akhil will discuss additional financial details and our updated outlook for 2025. Following our prepared remarks, we will open up the line for questions.

Thank you.

Morning, everyone and welcome to Itt's second quarter 2025 earnings Conference call.

We released our second quarter financial results earlier. This morning, and you can find both our press release and earnings call Slide presentation in the Investor Relations section of our website IDEXX Corp Dot com.

On the call with me today are Eric gasoline, President and Chief Executive Officer of IDEXX and it killed Mahindra, our interim Chief Financial Officer, and Vice President of corporate development.

Today's call will begin with you Eric providing highlights of our second quarter results and a discussion of our current business outlook and strategy and a keel will discuss additional financial details and our updated outlook for 2025.

Following our prepared remarks, we will open up the line for questions.

Jim Giannakouros: But before we begin, please refer to slide two of our presentation, where we note that comments today will include forward-looking statements based on current expectations. Actual results could differ materially from these statements due to a number of risks and uncertainties, which are discussed in our press release and SEC filings. As IDEX provides non-GAAP financial information, we provided reconciliations between GAAP and non-GAAP measures in our press release and in the appendix of our presentation materials, which are available on our website. With that, I will turn the call over to Eric.

But before we begin please refer to slide two of our presentation, where we note. The comments today will include forward looking statements based on current expectations.

Actual results could differ materially from these statements due to a number of risks and uncertainties, which are discussed in our press release and our SEC filings.

<unk> provides non-GAAP financial information that we provided reconciliations between GAAP and non-GAAP measures in our press release and in the appendix of our presentation materials, which are available on our website.

I will turn the call over to Eric.

Eric Ashleman: Thanks, Jim. Good morning, everyone, and thank you for joining us today. I'm on slide three. The IDEX teams across all three segments delivered better than expected results in Q2 despite continued macro uncertainty. I'd like to thank our teams around the world for their hard work and strong execution as they navigated a very fluid environment. Our teams are bound together with a simple value creation equation that adapts quickly to address challenges and deliver on opportunities. We deliver differentiated critical impact from low points in our customers' bill of materials, typically at the component level, allowing us to quickly shift towards advantage applications, and increasingly so with integrated growth opportunities, most often driven by changes in customer demands. I'd like to walk through a real-time growth example of this dynamic tuning at AirTech, a business acquired in 2021 with an HST, to illustrate our team's agility in action.

Thanks, Jim Good morning, everyone and thank you for joining us today I'm on slide three.

The IDEXX teams across all three segments delivered better than expected results in Q2. Despite continued macro uncertainty I'd like to thank our teams around the world for their hard work and strong execution as they navigated a very fluid environment.

Our teams are bound together with a simple value creation equation that adapts quickly to address challenges and deliver on opportunities.

We deliver differentiated critical impact from low points in our customer's bill of materials typically at the component level, allowing us to quickly shift towards advantage applications and increasingly so with integrated growth opportunities. Most often driven by changes in customer demands I'd like to walk through a real time growth example of this dynamic tuning it.

Aerotech business acquired in 2021 with an H S T illustrate our team's agility and action.

Eric Ashleman: AirTech delivers customer value through pneumatic solutions, most often in the form of specialty blowers or valves. It sits next to our outstanding gas business, with some light integration within channels to market and functional leadership. Four years ago, at the time of acquisition, their product lines were growing within mutually exclusive application sets supported by good operational performance with room for targeted improvements. Today, they are growing much faster as they've helped their customers shift their core businesses towards solutions within data center applications, specifically fuel cell power support and thermal management via liquid cooling. AirTech's two product lines benefit from joint exposure to this fast-growing space, and the leadership team at Gast is leaning in to help them drive process efficiency to fully leverage profitability to support group performance.

Aerotech delivers customer value through nomadic solutions, most often in the form of specialty blowers are valves. It sits next to our outstanding gas business. Some light integration within channels to market and functional leadership four years ago at the time of acquisition. There are product lines, we're growing within mutually exclusive application sets supported by good <unk>.

Operational performance with room for targeted improvements today, they are growing much faster as they've helped their customers shift their core businesses toward solutions within data center applications, specifically fuel cell power support and thermal management via liquid cooling.

Urtext, two product lines benefit from joint exposure to this fast growing space and the leadership team at Gast is leaning in to help them drive process efficiency to fully leverage profitability to support group performance.

Eric Ashleman: Finally, applying 80/20 has helped them focus and fully resource these applications in a powerful way, which in turn is multiplying their impact. As data center solutions scale, our customers have experienced additional pain points outside the scope of pneumatics. This is where other IDEX capabilities come in, and in this case, AirTech is looking to Mott to address a key technical problem to drive significant system efficiencies. Their solution is currently under review by a key customer. Finally, they are also exploring operational opportunities that leverage IDEX's infrastructure and world-class capabilities in India. This is a great story that advanced in the second quarter. It demonstrates the power of our dynamic business model, our commitment to 80/20, and the leverage of IDEX's global capabilities with proprietary capital deployment via M&A as the key catalyst.

Finally, applying 80 20 is help them focus in fully resource these applications in a powerful way, which in turn is multiplying their impact.

Data Center solutions scale, our customers have experienced additional pain points outside the scope of Nomad X. This is where other IDEXX capabilities come in and in this case are tech is looking to mark to address the key technical problem to drive significant system efficiencies.

Their solution is currently under review by a key customer finally, they are also exploring operational opportunities that leverage IDEXX is infrastructure and world class capabilities in India.

This is a great story that advanced in the second quarter. It demonstrates the power of our dynamic business model, our commitment to 80 20, and the leverage of IDEXX has global capabilities with proprietary capital deployment via M&A is the key catalyst we're confident in the pneumatics teams plans to drive even more growth and value creation in the quarters and years to come.

Eric Ashleman: We're confident in the pneumatics team's plans to drive even more growth and value creation in the quarters and years to come. Turning to an overview of business conditions, we saw some impactful patterns play out in Q2 in July that helped us think about our likely path to close out the year. First, we have some areas of healthy demand, including food and pharma applications within IHNS and MPT, space and defense applications in Mott and optical technologies, North American Fire, downstream energy custody transfer, intelligent water, and data center thermal management within pneumatics. Weaker areas include chemicals, auto, semiconductor lithography, and ag. The rest of the portfolio is pretty steady. Within Q2, there were some strong demand imprints in the form of trade policy positioning statements that were unpredictable, shocking the system and setting up sine waves of up and down order patterns.

Turning to an overview of business conditions, we saw some impactful patterns play out in Q2 in July and they help us think about a likely path to close out the year.

First we have some areas of healthy demand, including food and pharma applications within the IH N S and M. P T space and defense applications, and Mod and optical technologies, North American fire downstream energy custody transfer intelligent water and datacenter thermal management within pneumatics weaker areas include chemicals auto.

Semiconductor lithography and egg the rest of the portfolio was pretty steady.

Within Q2, there were some strong demand entrants in the in the form of trade policy positioning statements that were unpredictable shocking the system and setting up sine waves of up and down order patterns daily demand levels move dynamically between policy announcements and negotiation deadlines as customers attempt to derisk tariff and pricing exposure.

Eric Ashleman: Daily demand levels moved dynamically between policy announcements and negotiation deadlines as customers attempted to de-risk tariff and pricing exposure. In the end, we see two implications. First, the patterns are moving around a relatively stable baseline that didn't line up well with the quarter endpoint. However, in July, we saw a modest order recovery build through the month. Second, and most important for us, the sudden and unpredictable shifts in policy are slowing down decision-making and conviction for larger orders. This has the highest go-forward impact for us in some more recently acquired areas of IDEX, where strong growth funnels supported earlier expectations of accelerating back half revenue and margins. As a result, we are lowering our back half financial projections to better reflect this dynamic. We're very confident in the quality of our businesses.

In the end, we see two implications first the patterns are moving around a relatively stable baseline that didn't line up well with a quarter end point. However in July we saw modest order recovery build through the month.

Second and most important for us.

The sudden and unpredictable shifts in policy are slowing down decision, making and conviction for larger orders. This has the highest go forward impact for us and some more recently acquired areas have IDEXX, where strong growth funnel supported earlier expectations of accelerating back half revenue and margins.

As a result, we are lowering our back half financial projections to better reflect this dynamic where very quality confident in the quality of our businesses. They are set up to solve some of the most complex challenges in advantaged markets coupling. This with our long established operational capabilities. We believe we are very well positioned to drive attractive growth and value for all of our stay calm.

Eric Ashleman: They are set up to solve some of the most complex challenges in advantage markets. Coupling this with our long-established operational capabilities, we believe we are very well positioned to drive attractive growth and value for all of our stakeholders. I'm now on slide four. Before Akhil covers the financial details of both our Q2 performance and our updated guidance, I'd like to step back and help you understand our journey and the progress we are making towards long-term revenue and margin acceleration through growth platforms. Our goal is simple: extend IDEX's growth potential through variable levels of integration to win in advantage markets where customers are demanding more solutions impact than any one single business unit can provide alone. Here are two examples. First is HST's IDEX Health and Science Platform that we built through thoughtful capital deployment over the last 20 years.

Others.

I'm now on slide four.

Before I kill covers the financial details of both our Q2 performance and our updated guidance I'd like to step back and help you understand our journey and the progress we are making towards long term revenue and margin acceleration through growth platforms.

Our goal is simple extend IDEXX has growth potential through variable levels of integration to win in advantaged markets, where customers are demanding more solutions impact than any one single business unit can provide alone.

Here are two examples.

First is H S. Ts IDEXX health and science platform that we built through thoughtful capital deployment over the last 20 years today IH NFS as an integrated global platform of World Class technologies that is added thin film optics system integration and microfluidic capabilities to its core fluidics portfolio, we divested some small non core.

Eric Ashleman: Today, IHNS is an integrated global platform of world-class technologies that has added thin film optics, system integration, and microfluidic capabilities to its core fluidics portfolio. We've divested some small non-core businesses along the way, consolidated like businesses together in a state-of-the-art Greenfield site in Rochester, New York, and integrated commercial and technical teams across the platform. This work has driven strong value for customers and shareholders over the years and is well positioned to meaningfully do so in the years to come. An example of this work in action today involves a key win for integrated sample prep within a cutting-edge protein analysis instrument. Our team designed a metal-free ceramic valve for cutting-edge core performance. Then, a cross-business development team enhanced overall systems performance by incorporating a suite of our platform's fluidic connection technologies. They even pulled on nanofiltration technologies from Mott to take everything one step further.

Core businesses, along the way consolidated like businesses together in a state of the art Greenfield site in Rochester, New York and integrated commercial and technical teams across the platform. This work has driven strong value for customers and shareholders over the years and is well positioned to meaningfully do so in the years to come.

An example of this work in action today involves a key win for integrated sample prep within a cutting edge protein analysis instrument our team designed to metal free ceramic valve for cutting edge core performance then across business development team enhanced overall system performance by incorporating a suite of our platforms fluid at connection.

Oh geez, they even pulled on nano filtration technologies Fremont to take everything one step further.

Eric Ashleman: Finally, they collaborated with a customer to integrate all the technology deeply within the front end of their instrument. The initial response to the customer's product line has been outstanding. Our second example is the strong value created over time through the build-out of optical technologies, a cornerstone within HST's Materials Science Solutions platform. We built the optical technologies group over the last 14 years, both organically and through multiple transactions, broadening its capabilities. We're taking another step forward today with our news of the acquisition of MicroLam, a high-quality bolt-on that brings proprietary difficult-to-machine forming capabilities into our already advantaged technical toolbox. Over the years, we helped drive a culture of 80/20 to each individual company entering IDEX to drive focus around core capabilities while rapidly improving profitability.

Finally, they collaborated with a customer to integrate all of the technology deeply within the front end of their instrument. The initial response to the customer's product line has been outstanding.

Our second example is the strong value created over time through the build out of optical technologies at cornerstone with an H S. Ts materials science solutions platform with.

Built the optical technologies group over the last 14 years, both organically and through multiple transactions broadening its capabilities. We're taking another step forward today with our news of the acquisition of micro lab high quality bolt on that brings proprietary difficult to machine forming capabilities into our already advantaged technical toolbox.

Over the years, we helped drive a culture of 80 20 to each individual company entering IDEXX to drive focus around core capabilities, while rapidly improving profitability in.

Eric Ashleman: In later stages, we increasingly encouraged joint commercial and technical collaboration between units to attack emerging applications within semiconductor lithography and metrology. Most recently, the group is accelerating its growth by working together to support advanced space and defense applications. MicroLam is very complementary here given their customer access points and technical capabilities. Moving to slide five. Since 2020, we have focused a greater portion of capital deployment towards M&A to accelerate building and expanding our growth platforms. In the last three years, through several acquisitions, we created HST's Materials Science Solutions platform. And last year, we added Mott, which is highly complementary to many HST businesses, adding nanofiltration technologies at scale, a meaningful and very attractive capability for us. I'd like to dive a bit deeper into both of these areas to illustrate the strong links to our past success and frame the potential for even faster growth.

In later stages, we increasingly encourage joint commercial and technical collaboration between units to attack emerging applications within semiconductor lithography and metrology.

Most recently the group is accelerating its growth by working together to support advanced space and defense applications Micro Lam is very complimentary here given their customer access points and technical capabilities.

Moving to slide five.

Since 2020, we have focused a greater portion of capital deployment towards M&A to accelerate building and expanding our growth platforms.

The last three years through several acquisitions, we created H S. Ts material science solutions platform and last year, we added Mark which is highly complementary to many H S. T businesses, adding nano filtration technologies at scale are meaningful and very attractive capability for us.

I'd like to dive a bit deeper into both of these areas to illustrate the strong links to our past success and frame the potential for an even faster growth.

Eric Ashleman: I'll first discuss our value creation journey building MSS. We started with a highly optimized optical technologies business, which we just discussed. Next, we applied 80/20 and operational improvement tools to our acquisitions of STC and all businesses within the Muon Group. As a reminder, a large piece of our cost optimization work this year is substantially complete within these areas. Today, our teams are focusing resources on the best customers and solutions as we align teams commercially and technically to win in advanced markets. While our growth and margin expansion acceleration has hit a near-term air pocket as our strong positioning with advanced semiconductor lithography is caught up in geopolitical tensions, we continue to be excited about our funnel of growth opportunities overall and in particular attractive markets like data center optical switchings.

First discuss our value creation journey building MSS, we started with a highly optimized optical technologies business, which we just discussed.

Next we applied 80, 20, and operational improvement tools to our acquisitions of S. T C and all businesses within the new on group.

As a reminder, a large piece of our cost optimization work. This year is substantially complete within these areas today.

Today, our teams are focusing resources on our best customers and solutions as we align teams commercially and technically to win in advanced markets.

While our growth and margin expansion acceleration has hit a near term air pocket as our strong positioning with advanced semiconductor lithography is caught up in geopolitical tensions we continue to be excited about our funnel of growth opportunities overall and in particular attractive markets like data center optical switching.

Eric Ashleman: Here, the Muon team recently secured a multi-year win through collaboration between two of its units, a great example of our integrated growth strategy at work. And teams are attacking other attractive opportunities within a variety of advanced semiconductor applications, space and defense, sustainable energy, and precision forming. The businesses within the MSS group are truly outstanding. They are highly differentiated and complement each other well as they provide trusted solutions to advantage markets. Turning to Mott, we are aggressively deploying 80/20 as we help the business grow and optimize profitability. Mott has an outstanding track record of deploying its core specialty filtration capabilities in a variety of end markets to build important scale advantages. Their solutions have ranged from differentiated components like high-purity gas filtration elements that serve as critical consumables within semiconductor lithography to large-scale filtration solutions that embed Mott's core technology within engineered skid-based solutions.

Here the meal on team recently secured a multiyear win through collaboration between two of its units are Great example of our integrated growth strategy at work and teams are attacking other attractive opportunities within a variety of advanced semiconductor applications space and defense sustainable energy and precision forming the businesses within the <unk>.

MSS group are truly outstanding they are highly differentiated and complement each other well as they provide trusted solutions to advantaged markets.

Turning to Mark we are aggressively deploying 80 20, as we help the business grow and optimize profitability.

<unk> has an outstanding track record of deploying its core specialty filtration capabilities in a variety of end markets to build important scale advantages.

The solutions have range from differentiated components like high purity gas filtration elements that service critical consumables within semiconductor lithography to large scale filtration solutions that embed <unk> core technology within engineered skid based solutions.

Eric Ashleman: Both lines of business are strong within their own relative merits, but our collective teams are leveraging 80/20 and product line strategy to tune towards more IDEX-like highest differentiation, highest margin component-level solutions. This should even out the growth path over time and best fuel Mott's development resources towards growth with the highest return profiles. Mott's acceleration has slowed a bit this year as the larger, more complex opportunities within their funnel were impacted by the policy-driven demand uncertainties described earlier. We expect Mott's growth will continue to accelerate this year, but we've recalibrated its growth potential for the back half of the year given the pause we are seeing in customer decision-making. As a team works through these headwinds, they are attacking a rapidly growing set of opportunities within space and defense and high-purity semiconductor applications that match all screening elements for the best IDEX-like businesses.

Both lines of businesses are our strong within their own relative merits, but our collective teams are leveraging 80 20 in product line strategy to tuned towards more IDEXX like highest differentiation highest margin component level solutions.

This should even out the growth path over time, and best fuel months' development resources towards growth with the highest return profiles.

Mott's acceleration has slowed a bit this year as the larger more complex opportunities within their funnel were impacted by the policy driven demand uncertainties described earlier.

We expect modest growth will continue to accelerate this year, but we've recalibrated its growth potential for the back half of the year given the pause we are seeing in customer decision, making.

As the team works through these headwinds they are attacking a rapidly growing set of opportunities within space and defense and high purity semiconductor applications that match all screening elements for the best IDEXX like businesses.

Eric Ashleman: The core differentiation of Mott's nanofiltration technology deployed at scale is powerful. We continue to love the business and the team and confirm that the acquisition will be accretive exiting the year. Putting our past and present together, you can see that we're following a simple and powerful growth formula that's long-driven value for IDEX. But we're more intentional today as we deploy capital and integrate more rapidly to support the emerging needs of today's fastest growing markets. And while we didn't dive into them today, I'd like to mention that our intelligent water and fire and safety platforms are very well positioned in this regard with very similar stories of focused cross-business collaboration. I'll pass it over to Akhil to discuss our financials and our updated outlook in greater detail.

Core differentiation of Matson nano filtration technology deployed at scale is powerful we continue to love the business and the team and confirm that the acquisition acquisition will be accretive exiting the year.

Putting our past and present together you can see that we're following a simple and powerful growth formula that's long driven value for IDEXX, but we're more intentional today as we deploy capital and integrate more rapidly to support the emerging needs of today's fastest growing markets.

While we didnt dive into them today I'd like to mention that our intelligent water and fire and safety platforms are very well positioned in this regard with very similar stories of Fox focused cross business collaboration.

Pass it over to appeal to discuss our financials and our updated outlook in greater detail.

Jim Giannakouros: Thanks, Eric, and good morning, everyone. Let's turn to slide six. As Eric mentioned, in the second quarter of 2025, IDEX delivered strong financial performance. While revenue came in toward the midpoint of our guidance, we outperformed on both adjusted EBITDA margin and adjusted EPS. Now, all the comparisons I will discuss will be against the prior year period unless stated otherwise. In the second quarter of 2025, orders grew organically by 2%. We saw positive demand in our pharmaceutical, energy, and agriculture end markets, along with continued stability in diversified industrial and water. However, softness persisted in our automotive, rescue tool, and parts of our semiconductor businesses. Organic sales in the second quarter increased 1% year over year. We benefited from positive price across all three of our segments, as well as favorable results in businesses serving aerospace, defense, data centers, pharmaceuticals, and North American Fire OEMs.

Thanks, Eric and good morning, everyone, let's turn to slide six.

As Eric mentioned in the second quarter of 2025.

We delivered strong financial performance.

While revenue came in toward the midpoint of our guidance.

<unk> outperformed on both adjusted EBITDA margin and adjusted EPS.

Now all the comparisons I will discuss will be against the prior year period unless stated otherwise.

In the second quarter of 2025 orders grew organically by 2%.

We saw positive demand you know pharmaceutical energy and agricultural end markets, along with continued stability in diversified industrial and water. However.

However, softness persisted in our automotive rescue tool and parts of our semiconductor businesses.

Organic sales in the second quarter increased 1% year over year, we benefited from positive price across all three of our segments as well as favorable results in businesses, serving aerospace defense data centers Pharmaceuticals, and North American fire Oems.

Jim Giannakouros: Strength in these areas isn't fully visible given challenging prior year comparisons within our FMT and FSD businesses, as well as continued weakness within semiconductor and automotive. Adjusted gross margin declined 10 basis points year over year, primarily due to the near-term dilution from the Mott acquisition, unfavorable mix, and volume deleverage. These effects were partially offset by favorable price cost and operational productivity net of employee-related costs. Adjusted EBITDA margin declined 40 basis points to 27.4%, reflecting our gross margin performance and lower variable compensation expense in the second quarter last year. Our platform optimization and dealer ring initiatives and cost containment efforts delivered a combined $14 million in savings during the quarter, in line with our plans. Both of these remain on track to achieve $62 million or 63 cents per share in full-year savings.

Strength in these areas is it fully visible given challenging prior year comparisons within our FMT and FSD businesses as well as continued weakness within semiconductor and automotive.

Adjusted gross margin declined 10 basis points year over year, primarily due to the near term dilution from the <unk> acquisition unfavorable mix and volume deleverage. These effects were partially offset by favorable price cost and operational productivity net of employee related cost.

<unk>.

Adjusted EBITDA margin declined 40 basis points to 27, 4%, reflecting our gross margin performance and lower variable compensation expense in the second quarter last year.

Our platform optimization, and Delevering initiatives and cost containment efforts delivered a combined 14 million in savings during the quarter in line with our plans. Both of these remain on track to achieve $62 million or 63 cents per share and full year savings.

Jim Giannakouros: Additionally, we continue to work on our baseline productivity improvements planned for this year, some of which are going to be influenced by volume. Free cash flow of $147 million increased 25% year over year and represents 94% conversion versus adjusted net income. The increase was driven by higher earnings and favorable timing of receivables, partially offset by payments related to our platform optimization and dealer ring actions. We ended the quarter with strong liquidity of approximately $1.1 billion, including $568 million in cash and $541 million in undrawn revolver capacity, after paying down $100 million in long-term debt and $12.5 million in short-term borrowings during the quarter. Finally, we deployed another $50 million to repurchase IDEX shares in the second quarter, taking our total through the first half of the year to $100 million. Now, quickly, some color on our results by segment. I'm on slide seven.

Additionally, we continue to work our baseline productivity improvements planned for this year.

Some of which are going to be influenced by volume.

Yeah.

Free cash flow of $147 million increased 25% year over year and represents 94% conversion versus adjusted net income.

The increase was driven by higher earnings and favorable timing of receivables, partially offset by payments related to our platform optimization and delayering actions.

We ended the quarter with strong liquidity of approximately $1 1 billion, including $568 million in cash and $541 million in undrawn revolver capacity.

After paying down $100 million in long term debt and $12 5 million in short term borrowings during the quarter.

Finally, we deployed another $50 million to repurchase shares in the second quarter, taking our total through the first half of the year to $100 million.

Now quickly some color on our results by segment I'm on slide seven.

Jim Giannakouros: In HST, second quarter organic orders increased 2% and organic sales increased 4%. Revenue growth was supported by positive price, as well as volume increases within our pharmaceutical, space, defense, and data center focused businesses. Demand for advanced semiconductor lithography solutions and automotive continued to face headwinds. Adjusted EBITDA margin of 26% increased sequentially by 40 basis points, but tracked lower than we anticipated given mixed pressure within our material science solutions and Mott businesses. Turning to slide eight. In FMT, organic orders increased 7% and organic sales declined 2%. From an orders perspective, we experienced growth in our downstream energy, agriculture, and municipal water businesses. As we said earlier, our industrial distribution businesses posted daily order rates in line with our expectations through May, but pulled back in June, weighing on our expectations near term.

In HST second quarter organic orders increased 2% and organic sales increased 4% revenue growth was supported by positive price as well as volume increases where they know pharmaceuticals.

<unk> defense and data center focused businesses.

<unk> for advanced semiconductor lithography solutions, and automotive continued to face headwinds.

Adjusted EBITDA margin of 26% increase sequentially by 40 basis points, but tracked lower than we anticipated given mixed pressure within our material science solutions and <unk> businesses.

Turning to slide eight in FMT organic orders increased 7% and organic sales declined 2% from an orders perspective, we experienced growth in our downstream energy agriculture and municipal water businesses as.

As we said earlier, our industrial distribution businesses posted daily order rates in line with our expectations some way, but pulled back in June weighing on our expectations near term on.

Jim Giannakouros: On the revenue side, our chemical, energy, and agriculture businesses declined against challenging prior year comparables. Semiconductor remains challenging, and water was down year over year, which we attribute mostly to timing. Positive price was a partial offset. Adjusted EBITDA margin of 35% increased 130 basis points year over year as positive price, cost, and productivity improvements more than offset volume deleverage. I'm on slide nine. FSD organic sales grew 2%, but organic orders declined 7%. Our fire and safety business continues to benefit from strong OEM demand and strong adoption of our integrated solutions. But order patterns are somewhat choppy near term, which we attribute mostly to timing in both our fire and safety as well as dispensing businesses. Adjusted EBITDA margin of 29.4% increased 40 basis points year over year given positive price cost, which more than offset net productivity, volume deleverage, and mixed headwinds year over year.

On the revenue side, our chemical energy and agriculture businesses declined against challenging prior year comparable.

Semiconductor remains challenging and water was down year over year, which we attribute mostly to timing.

Positive price was a partial offset.

Adjusted EBITDA margin of 35% increased 130 basis points year over year as positive price cost and productivity improvements more than offset volume deleverage.

I'm on slide nine FSC organic sales grew 2%, but organic orders declined 7% or.

Our fire and safety business continues to benefit from strong OEM demand and strong adoption of our integrated solutions.

Order patterns are somewhat choppy near term, which we attribute mostly to timing in both our fire and safety as well as just been sick businesses.

Adjusted EBITDA margin of 29, 4% increased 40 basis points year over year, given positive price cost, which more than offset net productivity volume deleverage and mix headwinds year over year.

Jim Giannakouros: Now, please turn to slide 10 for our updated full year and third quarter guidance. We are adjusting our organic sales growth guidance for the full year to approximately 1% versus 1% to 3% previously, given the up and down day rates, slower customer decision-making on larger orders, and a key semiconductor customer lowering their growth expectations. Adjusted EPS guidance moves to $785 to $795 versus prior guidance of $810 to $845 for the year. We are adjusting our profitability outlook for the second half of 2025, given the flow-through impact from lower volumes and expectations for continued mixed headwinds near term. In the third quarter, we expect 2% to 3% organic revenue growth and adjusted EPS of $1.90 to $1.95. Our third quarter revenue guidance reflects our recent order performance and current backlog.

Now please turn to slide 10 for our updated full year and third quarter guidance. We are adjusting our organic sales growth guidance for the full year to approximately 1% versus 1% to 3% previously given the up and down day rates slower customer decision, making on larger orders and a key.

Semiconductor customer lowering their growth expectations.

Adjusted EPS guidance moves to 785 to 795 versus prior guidance of 810 to 845 for the year.

We are adjusting our profitability outlook for the second half of 2025, given the flow through impact from lower volumes and expectations for continued mix headwinds near term.

In the third quarter, we expect 2% to 3% organic revenue growth and adjusted EPS of $1 90 to $1 95.

Our third quarter revenue guidance reflects our recent order performance and current backlog.

Jim Giannakouros: We expect that revenue will be relatively flat in the third quarter versus the second quarter across each of our segments. Our adjusted EBITDA margins and adjusted EPS are expected to decrease sequentially, driven by anticipated timing of corporate costs and slightly lower volumes and related deleverage. From a tariff standpoint, we have updated our 2025 tariff impact to be approximately $50 million, with about two-thirds of it recognized in 2025. We expect to fully mitigate tariff-related inflation with price increases and additional sourcing and supply chain savings we are actively pursuing. Our 2025 guidance does not include the possibility of additional tariffs. We expect to take mitigating actions as needed to offset these additional tariffs if or as they occur. Now, please turn to slide 11 for our capital allocation strategy.

We expect that revenue will be relatively flat in the third quarter versus the second quarter across each of our segments. Our adjusted EBITDA margins and adjusted EPS are expected to decrease sequentially driven by anticipated timing of corporate costs and slightly lower volumes and related deleverage.

Yeah.

From a tariff standpoint, we have updated our 2025 tariff impact to be approximately $50 million with about two thirds of it recognized in 2025, we expect to fully mitigate tariff related inflation with price increases and additional sourcing and supply chain savings we are actively.

Assuming.

Our 2025 guidance does not include the possibility of additional tariffs, we expect to take mitigating actions as needed to offset these additional tariffs if or as they occur.

Now please turn to slide 11 for our capital allocation strategy, we maintained a purposeful and return focused approach to capital allocation supported by a strong balance sheet robust cash flow generation and meaningful borrowing capacity orgs.

Jim Giannakouros: We maintain a purposeful and return-focused approach to capital allocation supported by a strong balance sheet, robust cash flow generation, and meaningful borrowing capacity. Organic investments remain our highest priority as we look to consistently drive innovation across our platforms. From an inorganic standpoint, our current focus is on opportunistic tuck-in M&A to scale and expand critical capabilities in advantaged markets. We continue to work an active funnel to broaden our capabilities and will continue to seek opportunities to leverage 80/20 and operational improvements, which together enhance the IDEX advantage moving forward. In addition, we are focused on returning capital to maximize shareholder value. We have a long track record of growing our dividend as we grow earnings. We also consistently evaluate additional return of capital through share repurchases.

Organic investments remain our highest priority as we look to consistently drive innovation across our platforms from an inorganic standpoint, our current focus is on opportunistic tuck in M&A to scale and expand critical capabilities in advantaged markets. We continue to work an active funnel to broaden our capability.

And we will continue to seek opportunities to leverage 80, 20, and operational improvement, which together enhanced the IDEXX advantage moving forward.

In addition, we are focused on returning capital to maximize shareholder value. We have a long track record of growing our dividend as we grow earnings.

We also consistently evaluate additional return of capital to share repurchases June year to date, we have paid $106 million in dividends and repurchased $100 million of common stock, including $50 million in the past quarter.

Jim Giannakouros: June, year to date, we have paid $106 million in dividends and repurchased $100 million of common stock, including $50 million in the past quarter. And we have $440 million remaining in our current authorization. As we focus on leveraging the larger platform-building investments made over the past few years, we expect a more balanced approach to capital deployment in the near to immediate term. With that, I will now turn it back over to Eric.

And we have 440 million remaining in our current authorization.

As we focus on leveraging the larger platform building investments made over the past few years, we expect a more balanced approach to capital deployment in the near to immediate term.

With that I will now turn it back over to Eric.

Eric Ashleman: Thanks, Akhil. I'm on slide 12, where we highlight the key value drivers for IDEX shareholders. While we have recalibrated our financial expectations for the second half of 2025, primarily due to the pause in customer decision-making, we are paving the way for sustainable value creation with all three pillars here contributing and thoughtful capital allocation to drive attractive shareholder value and return sustainably going forward. Thank you. And with that, I'll turn it over to the operator to take your questions.

Thanks to kill I'm on Slide 12, where we highlight the key value drivers for IDEXX shareholders, well, we have recalibrated, our financial expectations for the second half of 2025, primarily due to the pause in customer decision, making we are paving the way for sustainable value creation with all three pillars here contributing and thoughtful capped.

It'll allocation to drive attractive share about shareholder value and returns sustainably going forward.

Thank you and with that I'll turn it over to the operator to take your questions.

Speaker 6: Thank you. We will now be conducting a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two to remove yourself from the queue. For participants using speaker equipment, it may be necessary to pick up the handset before pressing the star keys. One moment, please, while we poll for questions. Our first question comes from the line of Nathan Jones with Stifel. Please proceed with your question.

Thank you we will now be conducting a question and answer session. If you would like to ask a question. Please press star one on your telephone keypad a.

Confirmation tone will indicate your line is in the question queue.

You May press star two to remove yourself from the queue for.

All participants using speaker equipment, it may be necessary to pick up the handset before pressing the star keys.

One moment, please while we poll for questions.

Our first question comes from the line of Nathan Jones with Stifel. Please proceed with your question.

Nathan Jones: Good morning, everyone. I guess I'll start with the delayed orders on the semi side. You know, obviously, there was plenty of disruption going on in the second quarter. We are starting to get a bit more clarity on trade and tariffs. Maybe you can just talk about that as a catalyst for getting some more decision-making going on that front. And we have been waiting for these orders to improve in the back half. What is your level of confidence that these things will actually come through in the next couple of quarters? I mean, projects can be deferred indefinitely. So maybe just talk about your confidence on those projects coming through versus continuing to be deferred.

Good morning, everyone.

Yes.

I guess I'll start with the delayed orders on that on the semi side.

Obviously that was tied to construction going on in the second quarter.

We are starting to get a bit more clarity on trade and tariffs maybe you can just talk about.

That is a catalyst for getting some more decision, making going on that front.

And we have been waiting for these orders to improve in the back half what is your level of confidence that these things will actually come through and all that in the next couple of quarters, you mean projects can be deferred indefinitely.

So maybe just talk about your confidence on those projects coming through bus is continuing to be deferred.

Eric Ashleman: Sure, Nathan. And you started off talking about semi, but then I think the question was more broadly framed around large orders in general. So I'll kind of hit it that way and probably go in reverse. And so, look, no doubt, as we talked about in the prepared remarks, we saw some oscillation in both small order patterns and decision-makings around those announcements and negotiation deadlines. What was interesting here, and I think probably gives us the most confidence, is, as you know, some of that just timed out where in early July, you know, we got some resolution here that things were moving forward. And I think everybody got a sense of where the pattern is likely to settle in. And so we saw order recovery throughout July in both buckets, frankly, on the small order side and on the decision-making piece of larger orders.

Sure Nathan.

You started off talking about semi but then I think the question was more broadly framed around large orders in general so I'll kind of hit it that way and probably go in reverse.

And so so look I know no doubt as we talked about in the prepared remarks, we saw some oscillation in both small order patterns and decision makings around those announcements and negotiation deadlines.

What was interesting here and I think probably gives us the most confidence is as you know some of that just timed out where in early July we got some resolution here that things were moving forward and I think I think everybody got a sense of where the pattern is likely to settle in and so we saw order recovery throughout July.

Both buckets frankly on the small order side and on the decision, making a piece of larger orders.

Eric Ashleman: And so I think part of the confidence comes from, you know, our sense that while there's still announcements and things to come, there's kind of a predictable nature of where they're likely to settle in, how they're likely to play out. And we're hearing that reflected in the conversations that we're having with customers and decision-makers along the way. So I think the confidence primarily comes from a pattern that, you know, partially is in the current quarter that's played out here in July. You know, again, one of the reasons we dove as far as we did into the new acquired larger businesses within HST is, you know, that's really where most of the impact comes here in terms of the shift in guidance. We had both those businesses, especially on the Mott side, had a really, really strong funnel.

I think part of that confidence comes from you know our sense that.

While theres still announcements and things to come and there's kind of a predictable nature of where they are likely to settle in how they are likely to play out and we're hearing that reflected in the conversations that we're having with customers and decision makers along the way.

And so I think the confidence primarily comes from a pattern that partially is in is in the current quarter. That's played out here in July.

You know again.

Yeah, one of the reasons, we dove as far as we did into the new acquired a larger businesses with an H S. T. As you know that's that's really where most of the impact comes here in terms of you.

The shift in guidance we.

Had we had both of those businesses, especially on the mob side had a really really strong funnel. They typically kind of run that business in a non linear way that kind of races to year end.

Eric Ashleman: They typically kind of run that business in a nonlinear way that kind of races to year-end. And really, as Q2 played out, they just saw a lot of kind of frozen decision-making there, much of it released here in July. And so then ultimately, you have kind of a physics question in terms of how much they can produce in Q4. But even some of those orders coming in for that business and others along the way, we saw the same thing in water with recovery in July. I think gives us a better feel as we enter the back half of the year that things are stable. They're still likely to change up and down, but that baseline is pretty stable in both sides of the business. You opened the question around semi in general.

And it really is Q2 played out and they just saw a lot of kind of frozen decision, making there <unk> much of it released here in July.

So then ultimately you have kind of a physics question in terms of how much they can produce in Q4, but even some of those orders coming in for that business and others along the way. We saw the same thing in water with recovery in July I think gives us a better feel as we enter the back half of the year that things are stable there is still likely to change up and down.

That baseline is pretty stable in both sides of the business you opened a question around semi in general I just want to say, yes, we will.

Eric Ashleman: I just want to say, you know, we see semi exposure in different ways in different businesses. Probably the piece that, you know, has given us the most pressure when we talk about mix and talk about semi mix in HST, it's really a large chunk of business in the Muon business up in our MSS platform. It's outstanding cutting-edge lithography componentry that we make there. You know, that's coming from a customer that initially had talked about inventory timing in the first half of the year, and I think is more settled now that, hey, things are going to be kind of steady for a while, largely because of some of the geopolitical tensions, restrictions, and things that have also played out. Now, the other pieces of semi within IDEX, there's a lot of them that are growing, growing well. Some of them quite markedly in areas like metrology.

See semi exposure in different ways in different businesses.

Probably the piece that has given us the most pressure when we talk about mix and talk about semi mix in H S. T. It's really a large chunk of business and the muon business up in our <unk> platform.

Outstanding cutting edge lithography componentry that we make there yeah. That's that's coming from a customer that initially had talked about inventory timing in the first half of the year and I think is more.

Settled now that things are things are going to be kind of steady for a while largely because of some of the geopolitical tensions restrictions and things that have also played out.

Now the other pieces of semi with IDEXX, there's a lot of them that are growing growing well some of them.

White markedly in areas like metrology, we see that in optics. So it's kind of a mixed bag there depending on how we play out the pre.

Eric Ashleman: We see that in optics. So it's kind of a mixed bag there depending on how we play out. But the pressure point for us is a portion of really high-quality business that looks like it's going to be flatter for a while.

Your point for US is a portion of really high quality business that looks like it's gonna be flatter for a while.

Nathan Jones: I would assume that that kind of stuff that you're talking about there is also very high margin and very high incremental margins. You have cut the guidance, full-year margin guidance by 100 basis points, which kind of implies 200 basis points in the back half. Is that really, you know, outsized impacts from what are very high-margin businesses that aren't quite getting the volume that you'd anticipated? And when that volume comes in, those orders come in, we should start to see that margin improvement come back up?

I would assume that.

That kind of stuff that you're talking about there is also.

Very high margin and very high incremental margins.

You have you have cut their guidance full year margin guidance by 100 basis points, which kind of implies 200 basis points in the back half.

Is that really it.

Outsized impacts from what are very high margin businesses that aren't quite getting the volume that you'd anticipated and when that volume comes in as orders come in we should start to see that margin improvement come back up.

Eric Ashleman: That is definitely a piece of it, especially on the HST side. That's some of the best business that we have in the acquired group. You know, some of the opportunity that I mentioned is a partial offset the great work they're doing on things like data center switching. I mean, it's equally attractive, and over time, we'll also complement it. But there's no doubt a return to growth there will really, really help profitability in that particular platform and in HST. I'd say the second half of it, though, is really the acceleration of Mott. You know, we're tuning that business a lot. We've taken some cost out there, and they were heading already for a lot of volume and still are in the back half of the year. That's where you get full leverage.

That is definitely a piece of it especially on the HST side. That's some of the best business that we have in our in the acquired group.

Some of the the opportunity that I mentioned as a partial offset the great work, they're doing on things like data City Center.

The center switching I mean, it's equally attractive and over time will also complement it but theres no doubt a return to growth. There. We're really really helped profitability in that particular platform and in HST I'd say the second half of it though.

It's really the acceleration of Mont we're tuning that business a lot we've taken some cost out there.

And they were heading already for a lot of volume and still are in the back half of the year, that's where you get full leverage and so I think those two things together you know.

Eric Ashleman: And so I think those two things together, you know, tuning and revenue and acceleration at Mott and then ultimately a release on the really good margin business towards more acceleration would be the two chief components here that we'd be looking for.

Tuning in revenue and acceleration in March and then ultimately a release on the really good margin business towards more acceleration would be the two chief components here that we'd be looking for.

Nathan Jones: Awesome. Thanks very much for taking my questions.

Awesome, Thanks, very much for taking my questions. Thanks Nathan.

Eric Ashleman: Thanks, Nathan.

Speaker 6: Thank you. Our next question comes from the line of Vlad Bistricki with Citigroup. Please proceed with your question.

Thank you.

Our next question comes from the line of Matt the strictly with Citigroup. Please proceed with your question.

Vlad Bistricki: Morning, guys. Thanks for taking my questions this morning.

Hey, guys. Thanks for taking my questions. This morning.

Eric Ashleman: Sure.

Vlad Bistricki: I guess, Eric, first off, maybe can you just give us a little more granularity or specificity on what's embedded now in the current guidance? Is it, you know, a continuation of current trends? Are you, you know, I know you talked about sort of more predictability around the policy front, but how are you thinking about potential for, you know, any incremental volatility or downshift in those day rate trends that you've seen bounce around over the past couple of months, it sounds like?

I guess first off maybe can you just give us.

Little more granularity on <unk>.

Specificity on what's embedded now in the current guidance is it you know.

Continuation of current trends trends are you.

I know you talked about sort of more predictability around the policy front how are you.

Thinking about potential for.

Any incremental volatility or.

Down shift in those day rate trends that you've seen it bounce around over the past couple of months it sounds like.

Eric Ashleman: Yeah, I think really, again, we're going to end up talking here a lot about HST because the FMT and FSDP segments, we've got those, we had them originally modeled to be pretty steady, and that's kind of where they're sitting now. And they're performing really, really well. So I think we were able to kind of deal with what we had in the second quarter and come out of it with the rates in July. You know, maybe a little pressure on the third quarter, we would have chosen to accelerate that a bit. Ultimately, the recovery will help us get where we need to. And then we kind of got those running out from here. And so in HST, you know, that's where we had some more aggressive acceleration hopes with, again, those two most recently acquired businesses.

Yeah, I think really again, we're going to end up talking to hear a lot about H S. T. Because the F. M. T N F S D P segments.

We've got those we had them originally modeled to be pretty steady and that's kind of where they are sitting now and they're performing really really well. So I think we were able to kind of deal with what we had in the second quarter and come out of it with the rates in July.

Maybe a little pressure on the third quarter, we would have chosen to accelerate that a bit.

Ultimately the recovery will help us get where we need to and then we kind of got those running out from here.

And so in HST, that's where we had some more aggressive acceleration hopes with again those two most recently acquired businesses, we've moderated those a bit but they are still moving forward.

Eric Ashleman: We've moderated those a bit, but they are still moving forward. A lot of it coming from a pretty strong fourth quarter for Mott. We mentioned that we're confirming that's going to be an accretive business at that point. I kind of take us back to the beginning of the year. You might remember we talked about a large project that we booked in Q1. A portion of that starts to come out of the business and hit the revenue line in Q4. Some of the orders, even the ones delayed, are now in hand and will also support that. And it's kind of been the natural tendency of that business to run there. So we have some acceleration there, but we've, you know, we've tempered that acceleration a bit. And then it's generally steady in the other two segments.

A lot of it coming from a pretty strong fourth quarter for Monmouth. We mentioned that that said, we're confirming that's going to be an accretive business at that point.

I kind of take us back to the beginning of the year you might remember we talked about a large projects that we booked in Q1, a portion of that starts to come out of the business and hit the revenue line in Q4 and.

Some of the orders even the ones delayed are now in hand, and will also support that and it's kind of been the natural tendency of that business to run there. So we have some acceleration there but we've.

Tempered that acceleration a bit and then it's generally study and the other two segments.

Vlad Bistricki: Okay, that makes sense. And that's quite helpful. And then just a follow-up for me on within FMT specifically, I think you called out positive ag orders growth in the quarter, but there's also still a red line next to ag on the slide. So I guess, can you just clarify or talk about what you're seeing and expecting within that specific market vertical?

Okay.

That makes sense and that's that's quite helpful.

And then just to follow up on.

FMT specifically.

I think you called out positive.

Orders growth.

In the quarter, but there is also still a red line.

Just to add on the slides. So I guess can you just clarify or talk about what youre seeing and expecting within that specific market vertical sure.

Eric Ashleman: Sure. I'm just reminding everybody that, you know, for us, we've got two businesses there, the largest of which, while it has an OEM component, it's the smaller piece of the business. A lot of it just depends on its components that farmers retrofit as they go and as they're, you know, planning and harvesting. So it's a little less tied to the dynamics of heavy CapEx and OEMs, but it's all related, certainly. I would say, look, it's still a rough cycle for ag. However, it's kind of played out better than we originally had hoped. And I think a lot of that is coming from a bit more confidence. Growing season's been pretty good. And our team there has done a really good job on the commercial side of things in terms of some channel management and things that they're doing, expansion in Europe.

Just reminding everybody that you know for US we've got a we've got two businesses. There are the largest of which while it has an OEM component. It's the smaller piece of the business a lot of it just depends on its components that are farmers retrofit as they go and as they're planning and and harvesting them.

So it's a less little less tied to the dynamics of heavy capex in <unk> and Oems, but it's it's all related certainly I would say look it's still a rough cycle for AG.

However, it's kind of played out better than we originally had hoped them and I think a lot of that is coming from a bit more confidence.

Growing season has been pretty good and our team there has done a really good job on the commercial side of things in terms of channel management and things that they're doing expansion in Europe.

Eric Ashleman: So put it down as still a business, you know, that's in the lower part of the cycle, but performing above kind of the lower expectations that we had coming into the year.

So to put it down is still a business that's in the lower part of the cycle that performing above kind of the lower expectations that we had coming into the year.

Yeah.

Vlad Bistricki: Understood. That's helpful. I'll get back in to you.

Understood that's helpful I'll get back in queue.

Eric Ashleman: Thanks.

Thanks.

Speaker 6: Thank you. Our next question comes from the line of Mike Holleran with Baird. Please proceed with your question.

Thank you.

Our next question comes from the line of Mike Halloran with Baird. Please proceed with your question.

Mike Holleran: Morning, everyone.

Good morning, everyone.

Eric Ashleman: Hi, Mike.

Mike Holleran: Not to belabor here, I just want to, Eric, make sure I understand the moving pieces. So it's not so much that there's been a deterioration. It's just that the pace of growth that you're assuming as you move to the back half of the year is slower than you originally would have thought. On top of some of those project push-outs where I don't think that your optimism over a medium term has really changed. It's just the timing or the duration of when those actually hit has shifted. Is that a fair characterization?

Not to belabor here I, just wanted to make sure I understand the moving pieces.

So it's not so much that there's been a deterioration. It's just the pace of growth that you're assuming as you move into the back half of the year slower than we originally would have thought.

On top of some of those project push outs, where I I don't think that your optimism over a medium term has really changed its just the timing or the duration of windows actually hit has shifted.

Is that a fair characterization.

Eric Ashleman: Yeah, no, that's dead on. And partially here, this is, you know, we, again, we're really close to customers. I mean, we, you know, of course, have a bunch of businesses that are rapidly turning components. So any inflection, we tend to feel a lot more sensitively and quicker than others. And so we just went through a quarter where there was, you know, tremendous up and downs and some periods of frozen decision-making and then release points. It played out in kind of an unusual way. Then resolved itself largely in the month of July. So, you know, from an ongoing confidence standpoint, I actually feel better given that I think everybody can kind of see the patterns that are working here. It appears to be reasonable. We can kind of draw a straighter line than we could coming into the quarter.

Yeah no that's.

That's dead on and partially here this is <unk>.

Again, we're really close to customers I mean, we of course have a bunch of businesses that are rapidly turning components. So any inflection we tend to feel a lot more sensitively and quicker than others and so we just went through a quarter, where there was tremendous up and downs in some periods of frozen decision, making and then release points.

It played out in kind of an unusual way then resolved itself largely in the month of July. So you know from an ongoing confidence standpoint actually feel better given that I think everybody can kind of see the patterns that are working here appears to be reasonable we can kind of draw a straight line then we could coming into the quarter, we hear that from customers distributors and users.

Eric Ashleman: We hear that from customers, distributors, end users, all over the place. But, you know, for where we are, I mean, we're often, you know, coming into a quarter with X amount of the backlog secured, and then we're hunting for the rest. That decision-making has an impact, had an impact in the second quarter for us. And most specifically, again, I just point to, you know, we really have some strong funnels up in those recently acquired businesses and those acceleration rates. You know, we just, we're dealing with a pause there and a timeout, again, with some resolution in the same exact capacity in July. So confidence level pretty good, but, you know, it was a period of oscillation and kind of strange patterns for us that just, we're going to experience maybe more than some other businesses.

<unk> all over the place, but for where we are I mean, where we're often coming into a quarter with X amount of the backlog secured and then we're hunting for the rest of that decision, making has it has an impact had an impact in the second quarter for us and most specifically again I'd just point to.

Really strong funnels.

Up in those recently acquired businesses and those acceleration rates.

We're dealing with a pause there in a time out again with some resolution in the same exact capacity in July so confidence level pretty good but yeah.

It was it was a period of oscillation and kind of strange patterns for us they're just.

We're going to experience maybe more than some other businesses.

No that makes sense and then.

Vlad Bistricki: That makes sense. And then just on the capital deployment side, maybe just some thoughts on the funnel of opportunity. I know the tenor or the tone has been a little bit more measured about the pace of M&A. Is that a reflection of where the balance sheet is, a reflection of the opportunity set as you sit in the market today, and just maybe a little bit broader thoughts on the opportunity set holistically?

So the capital deployment side.

Maybe give some thoughts on the funnel of opportunity I know.

The Palmer.

The tone has been a little bit more measured about the pace of M&A.

Is that a reflection of where the balance sheet is reflection of the opportunity set as you sit in the market today.

And just maybe a little bit broader thoughts and opportunities holistically.

Eric Ashleman: Yeah. Well, I mean, obviously, we talked about, you know, bolt-ons, tuck-ins, and then, of course, we announced one. I think it's largely the output from what the funnel looks like. You know, because if you think about it, if you step back here, I mean, as we dove in and talked about the Material Science Solutions platform, you know, we took essentially an optics platform that we built over the time horizon that I talked about in my remarks, 14 years. And then we built the second half, largely pretty aggressively here over the last couple of years with the acquisition of the businesses that form that unit. Now that it exists, essentially, the next move and the piece we've been getting ready for are those tuck-ins and technology fillers that really then bolt onto a really great framework.

Yeah, well I mean, obviously, we talked about bolt ons tuck ins and then of course, we announced one.

I think it's largely.

It's largely the output from what the funnel looks like because if you think about it if you step back here I mean, as we dove in and talked about the materials science solutions platform.

We took essentially an optics platform that we built over the time horizon that I talked about in my remarks, 14 years, and then we built a second half largely pretty aggressively here over the last couple of years with the.

The acquisition of the businesses that form that unit.

Now that it exists essentially the next move in the piece, we've been getting ready for our those tuck ins and technology fillers that really then bolt onto a really great framework and so it was always kind of the plan is to get it to this level completed with the technologies that we have and then put complementary businesses like micro Lam right next.

Eric Ashleman: And so it was always kind of the plan is to get it to this level, complete it with the technologies that we have, and then put complementary businesses like MicroLam right next to it. You know, Mott's a little different. It was an unusually scaled business. It presented technologies that we'd not had in the portfolio. You know, so one of the things we see there is just wide applicability to almost everything we have in HST. So we're actually not forcing that one at the moment. We're getting a read on where it kind of fits the best, where it complements things the most. We're using it as sort of a, as I said in the comments, something in the toolbox for everybody to exploit.

To it.

What's a little different it was a it was a.

Unusually scaled business it prevented it presented a technologies.

Technologies that we've not had in the portfolio.

So one of the things we see there is just wide applicability to almost everything we have and I H.

S. T. So we're actually not forcing that one at the moment, we're getting a read on where its kind of fits the best where it complements things. The most we're using it as sort of a <unk>.

Said in our comments or something in the toolbox for everybody to exploit but I think the nature of capital deployment is really reflective of just whether it's fire and rescue water IH and us and now MSS. These incredible platforms that have multiple touch points that were attempting to take advantage of.

Eric Ashleman: But I think the nature of capital deployment is really reflective of just whether it's fire and rescue, water, IHNS, and now MSS, these incredible platforms that have multiple touch points that we're attempting to take advantage of.

Speaker 6: Thanks, Eric.

Thanks, Eric.

Eric Ashleman: Thanks, Mike.

Thanks, Mike.

Speaker 6: Thank you. Our next question comes from the line of Dean Dre with RBC Capital Markets. Please proceed with your question.

Thank you.

Our next question comes from the line of Deane Dray with RBC capital markets. Please proceed with your question. Thank.

Eric Ashleman: Thank you. Good morning, everyone. Hi, Dean.

Thank you and good morning, everyone.

Dean Dre: Good morning.

Good morning.

Eric Ashleman: Hey, I appreciate all the color you're providing here because it is kind of an unusual, choppy, mixed kind of signals. And you guys are really good historically at being able to identify them and, you know, versus expectations. So, you know, in the spirit of that, can you give us any calibration on the day rates? Just you said May was as expected, June declined, July was it up or stabilized? And any kind of sizing of that, just because it's really important this quarter to get a sense of like the amplitude, you know, how far was June down and how much has July come back and what the implications are? Yeah, I appreciate it, Dean. I mean, look, it played out with each month kind of had its own little story over the last four. I think in, you know, April, we talked about it.

I appreciate all the color you're providing here because it is kind of an unusual choppy mixed kind of signals and you guys are really good historically of being able to identify them and you know versus expectation. So yes.

In the spirit of that can you give us any calibration on the day rates are just you said may was as expected June decline July was it upper stabilize in any kind of sizing of that just because it's really important this quarter to get a sense of.

I like the amplitude how far was June down and how much has July come back and what the implications are.

I appreciate it Deane I mean look at it played out with each each month kind of had its own little story over the last four I think in <unk>.

April we talked about it we probably like a lot of business experienced some pull ahead of pre tariffs after the initial announcement.

Eric Ashleman: You know, we probably, like a lot of business experience, some pull ahead pre-tax after the initial announcement. In May, as expected, we saw some of that come back, and we were probably at about the position we thought we'd be at the end of May. We always knew, you know, June was going to be a pretty key month, particularly with some big announcements sitting right in the beginning of July, concurrent with a holiday. And so the backlog reductions that you see overall for IDEX, all of it came out of the month of June, really over kind of the last three weeks, I'd say, right into that US holiday that we had at the beginning of July. Then we got the news. The news said, hey, things are delayed. You start to get more clarity on like how this is ultimately probably going to play out.

In may as expected, we saw some of that come back and we were probably at about the position we thought we'd be at the end of May we always knew June was going to be a pretty key months, particularly with some big announcements sitting right in the beginning of July concurrent with the holiday.

And so the backlog reductions that you see overall for IDEXX all of it came out of the month of June really over kind of the last three weeks I'd say right into that U S holiday that we had at the beginning of July.

Then we got the news the news said Hey, things are delayed you start to get more clarity on like how this is ultimately probably going to play out and then all through July you saw steady build back and I'd say as we close July.

Eric Ashleman: And then all through July, you saw a steady build back. And I'd say as we closed July, in that four-month period, we ended up about exactly where we thought we would. It's just the patterns themselves were pretty dynamic, pretty different. And certainly, as we said, at least from a larger decision-making perspective, I think froze some people as they were really putting their, you know, concentration towards ups, downs, and things that they could do, you know, to try to mitigate potential tariff hits or things like that. That's ultimately what was playing out.

In that four month period, we ended up exactly where we thought we would its just the patterns themselves, we're pretty dynamic pretty different.

Certainly as we said at least from a larger decision, making perspective, I think frozen people as they were really putting there.

You know concentration towards ups downs and things that they could do you have.

To try to mitigate potential tariff hits or things like that that's ultimately what was playing out.

Vlad Bistricki: Good. That's helpful. And look, we've all seen periods in the macro where customer decision-making slows down. You know, you need extra signatures. It's just longer to get to, yes. But it really does sound like for your guidance cut, it's concentrated in Mott. So how much of the guidance cut is attributed specifically to Mott?

Good that's that's helpful and look we've all seen periods in the macro where customer decision, making slows down and you need extra signatures is just longer to get to yes.

But it really does sound like for your guidance cut it's concentrated in March.

So how much of the guidance cut is attributed specifically to mark.

Eric Ashleman: Well, I'd say two places really. And you got to think of this from a revenue and then the profitability flow through along it. It's really from the MSS group, which I talked about right next to Mott. I think the issue there is not so much on the revenue line. It's the continued mix issue that we have with a great piece of semi lithography business. It's kind of flattened out for us. And we had long hoped that that was going to start to move again. But revenue largely solid and in fact growing around it, just not at the same kind of mixed quality. And then, you know, from Mott's standpoint, as I said before, that really historically has been a nonlinear business that kind of starts low and builds throughout the quarter. That was the plan of attack for it in 2025.

Well I'd say I'd say, two places really and you got to think of US from a revenue and then the profitability flow through along and it's really from the MSS group, which I talked about right next to Marc I think the issue there is not so much on the revenue line. It's the mix of continued mix issue that we have with a great piece of semi lithography business, it's kind of flattened out.

For us and we had long hope that that was going to start to move again.

But revenue largely solid and in fact growing around it just not at the same kind of mix quality and then from my standpoint, as I said before that it really historically has been a non linear business to kind of start slow and builds throughout the quarter that was the plan of attack for it in 2025.

Eric Ashleman: Large funnel, I mean, they've got a funnel that's frankly overbuilt for what they ultimately still need in the back half of the year. But that decision, kind of the frozen decision-making loop in the second quarter really delays just kind of the physics and fundamentals of what can possibly be produced as we exit the year. And so you're seeing that because, you know, that's where a lot of the margin appreciation is happening simultaneous to the volume stacking on. So I'd say those two pieces, relative to what our previous call were, is the significant piece of the delta. The only trailing component would be, again, I think generally had those small order patterns not played out the way I described. We might have had a little bit more cross IDEX momentum into Q3.

Large funnel I mean, they've got a funnel, that's frankly overbuilt for what they ultimately still need in the back half of the year, but that decision kind of frozen decision, making loop in the second quarter really delays just kind of the physics and fundamentals of what can possibly be produced as we exit the year.

And so youre seeing that because.

That's where a lot of the margin appreciation is happening simultaneous to the volume stacking on so.

I'd say those two pieces relative to what are our previous call where is the significant piece of the delta. The only trailing component would be again I think generally had those small order patterns not played out the way I described we might have had a little bit more cross IDEXX momentum into Q3, we kind of had to build through July to kind of get back.

Eric Ashleman: We kind of had to build through July to kind of get back to the zero point. But I'd put that as a trailing third and certainly not a chapter we're worried about going forward.

To the zero point, but I'd put that as a trailing third and certainly not a chapter we're worried about going forward.

Vlad Bistricki: Okay, that's really helpful. And just last question for me is, you know, the past couple of years, most of the consternation was around life sciences and the kind of destocking extended demand falloff that we went through. And that doesn't seem to be the case here. Can you just refresh us where has the life sciences gone during this period when I guess most of the focus here has been on semi, but just an update there. Are you seeing any blanket order changes as well?

Okay. That's really helpful and just last question for me is.

The past couple of years most of the costs are nation was around life sciences, and they're kind of destocking extended demand.

Falloff that we went through <unk>.

And that doesn't seem to be the case here can you just refresh us where has the life Sciences gone during this period when I guess most of the focus here has been on Saturday purchased.

An update there are you seeing any blanket order changes as well.

Eric Ashleman: Really, I'd say the life science story is playing out exactly like we thought it would be. You know, it's a slow recovery off the bottom. It's growing low single digits. You know, there are some areas that are weaker, but they're generally offset by things that are stronger. So for, you know, talk around NIH funding and academia, that's definitely under a bit of pressure, but it's a smaller piece of our business. Those applications that are targeted to pharma drug discovery are strong and generally offsetting them. And then that core kind of moderate recovery heading to something better in the future is playing out exactly as we thought it would be.

Really I'd I'd I'd.

Say the life Science story is playing out exactly like we thought it would be you know it's a it's a slow recovery.

Recovery off the bottom it's growing low single digits. You know there are some there's some areas that are weaker but they are generally offset by things that are stronger so for talk around NIH funding and academia, that's definitely under a bit of pressure, but it's a smaller piece of our business.

Those applications that are targeted towards pharma drug discovery are strong and generally offsetting them and then that core kind of moderate recovery heading to something better in the future is playing out exactly as we thought it would be.

Vlad Bistricki: That's great to hear. Thank you.

That's great to hear thank you.

Eric Ashleman: Thanks, Dean.

Thanks, Steve.

Speaker 6: Thank you. Our next question comes from the line of Brian Blair with Oppenheimer and Company. Please proceed with your question.

Thank you. Our next question comes from the line of.

Bryan Blair with Oppenheimer and company. Please proceed with your question.

Brian Blair: Thank you, more than I guess. Hi.

Thank you good morning, yes.

Yeah.

Vlad Bistricki: You mentioned that water was down in the quarter. It's a little bit of a surprise. I guess if I heard correctly, that was attributed to timing. Hoping you can offer a little more detail on water performance in Q2 and then, more importantly, what your team's seeing on an underlying basis, you know, where there's opportunity versus perhaps risk in terms of platform demand and what level of growth you expect in the back half.

You mentioned that water was down in the quarter, so little bit of a surprise I guess, Mike if I heard correctly that was attributed to timing.

Yes.

Hoping you can offer a little more detail on the water performance in Q2, and then more importantly, what your team is seeing on an underlying basis.

Where there's opportunity versus perhaps a risk in terms of platform demand and what level of growth you expect in the back half.

Eric Ashleman: Yeah, well, I'm glad you asked. Actually, what I isolated there is that, you know, water, which has some larger order components in it, you know, more than some of the rest of IDEX, I mean, had some of the same kind of frozen timing dynamics in Q2 that we talked about elsewhere. A lot of that released in July and really does nothing to impact, you know, what we've generally seen, which has been a favorable runout of that business. And we've actually got good numbers for it going forward. So really, no pause in water. It's just I was able to reference.That

Yeah well.

Well I'm glad you asked it actually what we what I isolated there is that water, which has some larger order components in it.

You know more than some of the rest of IDEXX <unk> had some of the same kind of frozen timing dynamics in Q2 that we talked about elsewhere. A lot of that released in July and really does nothing to impact what we've generally seen which has been a favorable run out of that business.

And we've actually got good numbers for it going forward. So really no pause in water. It's just I was able to reference that that same dynamic played there released nicely for us in July.

Akhil Mahendra: same dynamic played there released nicely for us in July.

Jim Giannakouros: Okay, understood. And circling back to MicroLab, that's an interesting tuck-in. The technology, I'm admittedly not familiar with. Can you offer a little more color on the strategic fit and synergy with the MSS platform? And then as we think of, you know, think about your tuck-in strategy going forward, how does MicroLab compare to the average prospect in your funnel, just, you know, deal size, revenue generation, et cetera?

Okay understood.

Circling back to micro lab.

Interesting tuck in.

And the.

<unk>.

Admittedly not familiar with <unk> can you offer a little more color on the strategic fit and synergy with the MSS platform and then as we think as I think about your tuck in strategy going forward, how does micro Atlanta compare to the average prospect in your funnel just deal size revenue generation et cetera.

Akhil Mahendra: Yeah, hi, it's Akil here. I'll take this one. And then Eric, please feel free to add in any color. So when you think about MicroLab, right, it sort of plays in the same workflows that our optical businesses do. When you think about what we do in optics today, right, a lot of that is on the coding side of the business. But MicroLab is essentially a provider of precision optics. So they actually manufacture the optic, which can then get coded. So there's a really nice complementarity here and a strategic fit between our optical technologies business and MicroLab. And so this is, as you know, MicroLab, it's sort of, it will sit within our MSS platform. And when you think about some of the other capabilities we have in there, the touch points are really interesting and unique.

Yeah, Hi, it's like here I'll take this one.

And then Eric please feel free to add in any color. So when you think about micro lambright. It sort of plays in the same workflows that our optical businesses do when you think about what we do in optic study right a lot of that is on the coating side of the business, but Michael Lam is essentially a provider of precision optics. So they actually manufacture the optic which can then get.

So there's a really nice complementarity here and a strategic fit between our optical technologies business and micro Lam.

And so this is as you know micro Lam.

We will sit within our MSS platform and when you think about some of the other capabilities. We have in there. The touch points are really interesting and unique and I think we can drive a lot of value there.

Akhil Mahendra: And I think we can drive a lot of value there. As we mentioned, when we think about MicroLab, right, and how does it compare to, you know, will tuck-ins look similar going forward? We've got a pretty, I think, broad funnel across our, you know, platforms here that we're cultivating pretty actively. And we've got a great foundation in place with the platforms that we have built. And so we expect to strategically, you know, find opportunities that help fill a capability gap, help us scale, or, you know, take us, open up some new customer doors. So it'll continue to look like that. You know, they have to have, I think one of the filters that we're going to be applying here is that they have to have an existing or a touch point within an existing IDEX business.

We mentioned when we think about micro lambright and how does it compare to.

We'll tuck ins look similar going forward.

Got a pretty I think broad funnel across our platforms here that we're cultivating pretty actively and we've got a great foundation in place with the platforms that we have built and so we expect to strategically fine.

Opportunities that help fill a capability gap help us scale or take us open up some new customer doors. So it will continue to look like that they have to have I think one of the filters that we're gonna be applying here is that they have to have an existing.

Or a touch point within within existing IDEXX business, So what youre going to see us as focus acquisitions tuck in acquisitions around businesses that we know that we can bolt on and tuck into our platform for sure and again, we'll be targeting strong returns there and as you see with micro lambright, we're going to be accretive.

Akhil Mahendra: So what you're going to see us is focus acquisitions, tuck-in acquisitions around businesses that we know that we can bolt on and tuck into a platform for sure. And again, we'll be targeting strong returns there. And as you see with MicroLab, right, we're going to be accretive in the first full year of our ownership.

In the first full year of our ownership.

Jim Giannakouros: Just a couple of other comments here. You know, that while the technology is really, really complementary, I would oversimplify and say they're really good at making the optics. We're really good at polishing, coding, and assembling them. That's kind of the high level where this fits. They also have outstanding customer touch points that are really complementary in the space and defense sphere based on the technologies they have. So, you know, we've been actually working with these guys for a while now. Our teams know them, know them really well. Everybody in optics knows each other. And so we're going to hit the ground running here.

Just a couple a couple of other comments here that while the technology is really really complementary I would oversimplify and say, they're really good at making the optics were really good at polishing coding and assembling them, that's kind of the high level, where this fits they also have outstanding customer touch points that are really complementary and.

Space and defense here based on the technologies they have so.

We've been actually working with these guys for a while now our teams know them know them really well everybody and ethics knows each other and so we're going to hit the ground running here.

Akhil Mahendra: I appreciate all the color. Thanks again.

I appreciate all the color. Thanks, guys. Thank you.

Jim Giannakouros: Thank you.

Speaker 3: Thank you. Our next question comes from the line of Joe Giordano with TD Cowan. Please proceed with your question.

Thank you Eric.

Our next question comes from the line of Joe Giordano with TD Cowen. Please proceed with your question.

Jim Giannakouros: Hey guys, good morning.

Hey, guys good morning.

Jim Giannakouros: Hi Joe.

Good morning.

Jim Giannakouros: Morning. Hey, so like last quarter, I thought the messaging was more like, we are confident in the margin path because of actions that we've already taken that we know we're going to read out and that the back cap acceleration was like really not dependent any longer on these larger semi-orders coming in. Like what changed? Like the commentary you're saying today about MoveOn and stuff, it seems consistent with what you said last quarter, but like the outcome of it feels different now. So maybe if you can give us a little color on how that messaging is changing.

So like last quarter.

I thought the messaging was more like.

We are confident in the margin path.

Cause all of the actions that we've already taken then we know we're going to read out and that's a back half acceleration was really not.

<unk> any longer on these.

These larger semi orders coming in like what changed right.

Commentary, you're saying today about <unk>.

So it seems consistent with what you said last quarter, but like the outcome of it feels different now so maybe if you can give us a little color on how that messaging is changing.

Jim Giannakouros: Yeah, I think, I think once again, kind of in the same way when Nathan had this in a question, the only piece of semi here that really is playing out is a decent chunk of really high margin business that's kind of up in the MoveOn business. And that has been a piece we've been talking about. We talked about originally there was an inventory correction. You know, there was a lot of customer feedback pointing to acceleration after that point, kind of saying at this point, okay, they based on our interactions with them, we don't see that coming here. We're not going to get the lift from that component of it. The rest of semi elsewhere is really not an issue that plays a lot in things that are different. So I think it's that piece of it and it's the acceleration amount.

I think once again kind of in the same way when when Nathan I had this question now.

The only piece of semi here that really is playing out it's a decent chunk of really high margin business, that's kind of up in the in the <unk> business and that has been a piece we've been talking about we talked about originally there was an inventory correction.

You know there's a lot of.

Customer feedback pointing to acceleration after that point kind of saying at this point, okay based on our interactions with them, we don't see that coming here, we're not going to get the lift from that component of it the rest of semi elsewhere, there's really not an issue that place a lot and things that are different. So I think it's that piece of it and it's the acceleration of <unk>.

Not really we were again, we've kind of always had a path it was going to run a pretty aggressively for them.

Jim Giannakouros: Really, we were, again, we've kind of always had a path that was going to run pretty aggressively for them. And having a timeout on some of the order flow there, we've kind of got a physics problem at the end of the year. It's still going to be a really, really strong Q4 for them, very similar to what they had last year. The funnel is still really strong. It's overbuilt, frankly, for what we need. So, and we see good business growth past that point. But taking some time out here from frozen decision making for that business in particular does impact us.

And having a time out on some of the order flow there.

We've kind of got a physics problem at the end of the year, it's still going to be a really really strong Q4 for them very similar to what they had last year.

<unk> is still really strong it's overbuilt frankly for what we need so we see good business growth past that point.

But taking some time out here from frozen decision, making for that business in particular does impact us.

Jim Giannakouros: And then follow up here, can the tie-ins to some of these new acquisitions to like existing businesses, like it makes sense, I get it. But are we like, has there been a pivot more, does that kind of pivot to bolting on within kind of the context of IDEX? Does it get us into a situation where like there could be a more of a cascading effect of like a market issue across the franchise than you've had previously at IDEX where I felt like there could always kind of be a problem somewhere, but these businesses are largely independent enough that there's enough other things that would probably offset. It feels like like one kind of problem somewhere has like more of an impact across more businesses now because of how they're kind of being tied in. Is that, is that accurate?

And then follow up here.

The tie ins to some of these new acquisitions to like existing businesses like it makes sense I get it.

Are we like has there been a pivot more does that kind of pivot to bolting on within kind of the context of IDEXX does it get us into a situation where like there could be a cast of a more of a cascading effect of a market issue across the franchise than you've had previously at IDEXX, where I felt like there can always kind of be a problem somewhere but.

These businesses are largely independent enough that there's enough other things that would probably offset it feels like like one kind of problem somewhere has like more of an impact across more businesses now because of how they are kind of being tight and is that is that accurate.

Alright.

Jim Giannakouros: I don't, I don't think so. I mean, I think I get the spirit of the question, but if we really step back and let's take MOD as an example. And I gave several examples in the comments where, you know, MOD's technology is linking with current IDEX solutions. They actually cover a pretty wide range of end markets, everything from, you know, data center switching to something over on the life science side. And so that in itself to me says very IDEX-like, you can take a core capability, you can actually tune it in several different areas.

I don't think so I mean.

I think I get the spirit of the question, but if you really step back and it must take modest. An example, I gave several examples in the comments, where you know months' technology is linking with current IDEXX solutions. They actually cover a pretty wide range of end markets everything from data center switching to something over on the <unk>.

Science side, and so that in itself to me says very IDEXX like you can take a core capability you can actually tune it in several different areas that to the extent a lot of the work is being done here. Most recently in H S. T. It does tend to be bracketed in faster growing emerging markets, but it was not going to have necessarily the range and the fragmentation of a lot of our.

Jim Giannakouros: Now, to the extent a lot of the work is being done here most recently in HST, it does tend to be bracketed in faster growing emerging markets, you know, that is not going to have necessarily the range and the fragmentation of a lot of our industrial kind of core FMT assets. So there's a different look and feel here. But, you know, we're not kind of chasing one singularity over and over and over here. These are very appropriable technologies. They just happen to be a lot of them more recently here in the HST side of the house, which is a little narrower than certainly almost everything is narrower than what we have over in very, very mature industrial businesses.

Real.

Core F N T assets, so theres, a different look and feel here, but.

Kind of chasing one singularity over and over and over here. These are very appropriate bolt technologies.

They just happened to be a lot of them more recently here in the H S. T side of the house.

It is a little narrower than certainly almost everything is narrower than what we have over in very very mature industrial businesses.

Akhil Mahendra: And maybe if I can just add, when you think about MicroLab, right, essentially the applicability of that technology is very broad-based, right? Eric highlighted some of the fast-growing markets that they're levered to, but when you think about sort of the markets they can serve, it's actually pretty broad-based from a capability standpoint.

And maybe if I can just add when you think about micro Lam right.

Essentially the applicability of that technology is very broad based right Erik highlighted some of the fast growing markets that are levered to but when you think about sort of the markets. They can serve it's actually pretty broad based from a capability standpoint.

Jim Giannakouros: Thanks, guys.

Thanks, guys. Thanks. Thank.

Jim Giannakouros: Thank you.

Thank you.

Speaker 3: Thank you. Our next question comes from the line of Jeff Sprague with Vertical Research Partners. Please proceed with your question.

Thank you.

Our next question comes from the line of Jeff Sprague with vertical Research partners. Please proceed with your question.

Eric Ashleman: Hey, thanks. Good morning, everyone.

Hey, Thanks, good morning, everyone.

Jim Giannakouros: Hi Jeff.

Eric Ashleman: Hey, hi. I wonder if we could just get to kind of the internal cost and productivity actions. A comment was made in the pitch that they're on track, but some vulnerability to volume weakness, which I get, you know, makes sense, obviously. But can you just level set us on what you've accomplished year to date, what remains to be done in, you know, the back half of the year, and if there's any other interpretation we need to add to your comment about maybe, you know, volume risk to those aspirations?

Hey, Hi, I.

I Wonder if we could just get too.

Kind of a call it the internal cost and productivity actions.

The comment was made in the pitch that they're on track, but some vulnerability to the volume weakness, which I get.

<unk> sense, obviously, but can you just level set us on what you've accomplished year to date what remains to be done.

In the back half of the year and if there's any other interpretation, we need to add to your comment about maybe.

Volume risk to those aspirations.

Akhil Mahendra: Yeah, hey Jeff, it's Akil, I'll take that one. So if you recall, we had three buckets of cost actions. The first was the platform optimization and de-layering initiatives, and that was the 42 million that we had talked about. So that's in place. We're actually at run rate. And so year to date, we've, or I would say in the second quarter, we achieved 11 million of that, and year to date, it's about 20 million. And then when you think about the second bucket, right, that was the 20 million of cost containment. Again, we expect that to hit run rate in this quarter, and that's about 4 million. And then when you look at the total, right, between those two buckets, we have, we're at about 23 million, and we'll recognize the balance of those savings in the back half of the year.

Yeah, Hey, Jeff it's okay, I'll I'll take that one so if you recall, we had three buckets of cost actions. The first was the platform optimization and de layering initiatives and that was a 42 million that we had talked about so that's in place we're actually at run rate and so year to date we've.

I would say in the second quarter, we achieved $11 million of that in year to date, it's about $20 million.

And then when you think about the second bucket right that was the 20 million of cost containment again, we expect that to hit run rate in this quarter and that's about $4 million and then when you look at the total right between those two buckets.

We have we're at about $23 million and we will recognize the balance of those savings in the back half of the year and really the third bucket is our baseline productivity, we're still pursuing that but some of that is a function of volume, which we will we expect to again ramp in the third and fourth quarter.

Akhil Mahendra: And really, the third bucket is our baseline productivity. We're still pursuing that, but some of that is a function of volume, which we will, we expect to again ramp in the third and fourth quarter.

Eric Ashleman: Got it. Thanks for that clarification. And then also on the, you know, the so-called OB3 or Big Beautiful Bill, whatever we want to call it here, are you expecting some cash flow benefits from the change in R&D deductibility or any other impact on your financial results in 2025?

Got it thanks for that clarification.

And then also on the.

So called Ob, three or a big beautiful bill.

Whatever we want to call it here.

Are you expecting some cash flow benefits from the change in R&D deductibility or any other impact on your financial results and 2025.

Akhil Mahendra: Yeah, and you know, it's not only been the OBB, but you've also got some state tax laws and foreign tax laws that have actually changed this year. That's why when you look at the third quarter, right, you see your tax rate bumping up just marginally. That reflects really a true up of the tax changes and rules that are going into effect for the year. And then therefore, when you think about our tax rate overall for the year, you see it coming down, which would imply a lower fourth quarter. But the OBB does help us from a cash standpoint and cash taxes, and it is supportive of incremental cash there.

Yes.

It's not only been the Ob, but you've also got some state tax laws and foreign tax laws that have actually changed this year. That's why when you look at the third quarter right you see our tax rate.

Bumping up just marginally that reflects really a true up of the tax changes in rules that are going into effect for the year and then therefore, when you think about our tax rate overall for the year, you see it coming down which would imply a lower fourth quarter, but the Ob does help us from a cash standpoint and cash taxes than it is.

It is supportive of incremental cash there.

Eric Ashleman: Right, and then maybe just one little loose end also, just on price, it sounded like it was mostly positive across the corporation. Can you just aggregate that for us? What was your price capture in Q2?

Great and then maybe just one a little looser and also just on price it sounded like it was mostly positive.

The Corporation can you disaggregate that for US what was your price capture in Q2.

Akhil Mahendra: Yeah, so when I think about price capture, right, for the second quarter, we were just shy of 3%, right? And let me just take you back, right? When we thought about price, we implemented that in the first quarter, and that's about a percent. And we came into the second quarter, tariffs got announced, so we had to, we were responding to the tariff environment, and that had us not only with traditional, but the tariff piece added on top of it that put us right under the 3% mark for the quarter.

Yes, so when I think about price capture right.

For the second quarter, we were just shy of 3% right and let me just take you back right and when we thought about price we implemented that in the first quarter and that's about 1% and we came into the second quarter tariffs got announced that we had a we were responding to tariff environment and that had.

Not only with traditional but the tariffs piece added on top of it that that put us right under the 30% Mark for the quarter.

Eric Ashleman: And I guess you'd expect something similar for the year, maybe a little bit of dial back though, as the tariffs faded, right?

And I guess, you would expect something similar for the year, maybe a little bit of dial back those tariffs faded right.

Akhil Mahendra: That's right. We're actually expecting a slight acceleration because if you think about when we put our tariff pricing in effect, right, it went into effect into Q2, so we didn't realize the full benefit in the quarter, and you'll do that going forward. Now, this obviously assumes the current rules that are in place. As August 1 comes, you know, to bear, and then there's other deadlines or tariffs move around, we'll continue to respond accordingly.

That's right, where we're actually expecting a slight acceleration because if you. If you think about when we put our tariff pricing in effect right. It went into effect into Q2. So we didn't realize the full benefit in the quarter and Youll do that going forward. Now. This obviously assumes the current rules that are in place as August one comes.

It's a bear and then there is other deadlines or terrorism over on we'll continue to respond accordingly.

Eric Ashleman: Great, thanks for the feedback.

Great. Thanks for the feedback.

Speaker 3: Thank you. Our next question comes from the line of Rob Wertheimer with Melius Research. Please proceed with your question.

Thank you. Our next question comes from the line of Rob Wertheimer with Melius Research. Please proceed with your question.

Eric Ashleman: Thank you, and thank you for all the color around customers. It's been helpful. Just a quick follow-up on that. I mean, to the extent that you know when you talk to them, is the uncertainty largely tariff-related? There's obviously a few other areas of uncertainty in the world, but as we get stability on tariff, I mean, maybe that's what unlocked July a little bit. Is there more of that? And then just to tack on my second one, is there, your M&A activity has been great. Is there any related M&A freeze in the market, either from you or other potential buyers or sellers from the uncertainty we're seeing? Thank you.

Thank you and thank you for all the color around customers. It's been helpful. Just a quick follow up on that I mean.

That you know when you talk to them as the uncertainty largely tariff related there.

A few other areas of uncertainty in the world, but as we get stability on tariff I mean, maybe that's what unlocks for awhile.

Theyre more of that and then just to tack on my second one.

Is there any M&A activity has been great is there any.

Related M&A freezing the market, either you or other potential buyers or sellers from the uncertainty we're seeing thank you.

Jim Giannakouros: Yep. I would say probably 90% of all conversations are related to trade policy, you know, and the things that we're covering here as we talk through Q2. And it really comes down to, you know, I think two things. Anybody who's working on a larger order with us, it's generally, remember, we're a component level to something much bigger than we are. And so it becomes a stack-up issue. And I think singularly becomes how much is it going to cost? And I need to know that. And is it likely going to change again? To your point, there are other factors out there, but they really don't enter the conversation much, or they certainly didn't in the second quarter. It was kind of where's this going to go? Where's it going to settle out? Is it going to happen 10 days from now, 20 days from now, 30?

I would say probably 90% of all conversations are related to trade policy.

And the things that we're covering here as we talk through Q2.

And it really comes down to I think two things for anybody who is working on a larger order with us. It's generally remember we're a component level to something much bigger than we are.

So it becomes a stack up issue and I think singularly becomes how much is it going to cost.

You didn't know that.

Is it likely going to change again.

Point, there are other factors out there, but they really don't enter the conversation much do they certainly didn't in the second quarter. It was kind of where is this going to go where is it going to settle out is it going to happen 10 days from now 20 days from now 30, how can I sort of move my things around <unk>.

Jim Giannakouros: How can I sort of move my things around? Again, with somebody on our side, that's generally pretty rapid fulfillment. So there's not a lot of buffer in between us and that conversation. And that's largely what played out. So I do think certainty in that particular area is a really good thing for us and others. And when I say certainty, it's such a relative term around, you know, a reasonable band, kind of in a way to anticipate and call as we experience both sides of those conversations, potential things that could happen and what ultimately plays out. So I think that's really, really positive.

With somebody on our side that is generally pretty rapid fulfillment. So theres not a lot of buffer in between us and that conversation and that's largely what played out. So I do think certainty in that particular area is a really good thing for us and others and when I say certainty doesn't.

That's a relative term around.

A reasonable band kind of in a way to anticipate and call.

As we experienced both sides of those conversations potential things that could happen and what ultimately plays out.

It is really really positive and on the M&A front look I would say that early on in the quarter. When all of these tariff announcements went into play there was really a freeze in the market and we saw a number of sale processes that were due to come to market get halted and now I would say, that's all sort out and activity is starting to pick up and that's.

Akhil Mahendra: Yeah, and on the M&A front, look, I would say that, you know, early on in the quarter, when all of these tariff announcements went into play, there was really a freeze in the market. And we saw a number of sale processes that were due to come to market get halted. And now I would say that's all thawed out and activity is starting to pick up. And that's just really a general, I think, view of the market at the moment.

Just really a general I think our view of the market at the moment.

Jim Giannakouros: Thank you.

Thank you.

Okay.

Speaker 3: Thank you. Our next question comes from the line of Matt Summerville with DA Davidson. Please proceed with your question.

Thank you.

Our next question comes from the line of Matt Summerville with D. A Davidson. Please proceed with your question.

Eric Ashleman: Thanks. I just again want a little more clarity here. That 20 million in cost containment was a hedge against what exactly if it wasn't a hedge against some of the things you're describing on the call as driving down your EPS guidance for the year? And then have a quick follow-up.

I just want a little more clarity here that the $20 million cost containment was a hedge against what exactly if it wasn't a hedge against some of the things you're describing.

Call as driving down your EPS guidance for the year and then a quick follow up.

Akhil Mahendra: Yeah, hey Matt, this is Akil. So this was a hedge against a downturn in volumes. Now it only captured a certain sort of downtrend in volume, and what we're calling here is slightly more than that. So, you know, that containment action is in place. It is supportive of our back half, and again, it does ramp this quarter, and then it'll be fully at run rate in the fourth quarter.

Yeah.

Hey, Matt This is <unk>. So this was a hedge.

Against a downturn in volumes not only captured a certain.

Sort of a downtrend in volume and what we're calling here is slightly more than that so that containment action is in place. It is supportive of our back half and again it does ramp this quarter.

And then it will be fully at run rate in the fourth quarter.

Eric Ashleman: Okay, and then throughout your prepared remarks and a few times during the Q&A, Eric, you referenced, you know, your data center related exposure. Can you maybe size that up for us in terms of roughly how much revenue that will generate for IDEX in '25? And again, just kind of big picture, you know, where that can sort of go over the next two to three years for the company. Thank you.

Okay and then.

Throughout your prepared remarks in a few times during the Q&A, Eric you referenced your datacenter related exposure can you maybe size that up for us in terms of roughly how much revenue that we'll generate for IDEXX and 25, and again, just kind of big picture, where that can sort of go over the next two to three years for the company.

Yeah.

Jim Giannakouros: Yeah, like it's not a giant part of IDEX. It's a decent part of the air tech business that I talked about. You really don't see it over in gas. So if you're looking at performance pneumatics, air tech's only a portion of that, and this is becoming a larger portion of their business. So that starts to dimensionalize it too. It's important for that business, not yet rising to a major catalyst for IDEX. What's interesting though is then we're starting to see it in other places. I mentioned the win in the MoveOn group. Again, these are very peripheral kind of applications. It's not that, you know, massive stuff that you see around the center of a data center, but it's interesting little niches off to the side.

Yeah look it's not a giant part of IDEXX, it's a decent part of the air Tech business that I talked about you really don't see it over in gas. So if youre looking at performance Pneumatics Urtext only a portion of that and this is is becoming a larger portion of their business. So that starts to dimensionalize. It to it's important for that business not yet rising too.

A major catalyst for IDEXX, what's interesting, though is then we're starting to see it in other places I mentioned the win in the Muon group again with these are very peripheral kind of applications. It's not that you know massive.

Massive stuff that you see around the center of a data center, but it's interesting little niches off to the side.

Jim Giannakouros: What it can become from here, I'm great to see these initial wins because as you know in this space, I mean, often you can take something that's working and delivers performance and efficiency in one area and run to lots of others and deliver that as well. So I mean, our commercial teams are doing that. I think as it goes, we'll certainly probably work to dimensionalize this a little better, talk about the funnel, but these are some interesting initial wins that are pretty early for us that we're going to continue to drive forward.

What it can become from here.

Great to see these initial wins because as you.

No in this space I mean, often you can take something that's working and delivers performance and efficiency in one area and run to lots of others.

And deliver that as well so I mean, our commercial teams are doing that I think as it goes well certainly probably worked to dimensionalize. This a little better talk about the funnel, but these are some interesting initial wins that are pretty early for us that we're going to continue to drive forward.

Eric Ashleman: Got it. Thanks, Eric.

Got it thank you Sir.

Speaker 3: Thank you. Our next question comes from the line of Brett Lindsey with Mizuho Securities. Please proceed with your question.

Thank you.

Our next question comes from the line of Ryan Menzie with Mizuho Securities. Please proceed with your question.

Jim Giannakouros: Hey, thanks for taking the questions. Just first one on China, pretty sluggish here in the quarter still based on results thus far. I know IDEX exposure isn't huge there, but you do have some larger landed exposure indirectly in the China and HST. So just any color on, you know, what you're seeing in the region and then what are the expectations for the second half of the year there?

Hey, Thanks for taking the questions just first one on China pretty.

Sluggish here in the quarter is still based on <unk>.

Our results, thus far I know IDEXX exposures and isn't huge there, but you do have some.

Larger and landed exposure indirectly in the China in HST. So just any color on what youre seeing in there in the region and then what are the expectations for the second half of the year there.

Jim Giannakouros: Yeah, I mean, certainly we wouldn't say that it's different conditions there. I mean, we're seeing the same thing in terms of, you know, not really, really strong. It again is a small piece of what we do, about 6% overall of revenue. We kind of surgically attacked that, a product line at the time. You know, probably the areas of pressure that we would note, you mentioned one of them, you know, for our HST customers, that's an area they've long been talking about and are, you know, concerned about in terms of rates and when it might recover and how stimulus programs may help that. We do a little bit of direct shipping there that has been softer. Some rescue, we've talked a little bit about the rescue business. We've got a decent franchise up there that's also been impacted by some of the slowdowns.

Yes, I mean, certainly we wouldnt say that its a different conditions. There I mean, we're seeing the same thing in terms of not really really strong. It again is a small piece of what we do about 6% overall of revenue.

We kind of surgically attack that a product line at the time.

Probably the areas of pressure that we would note you mentioned one of them for.

For our HST customers, that's an area. They have long been talking about and are concerned about in terms of rates and when it might recover and how stimuli stimulus programs may help that we do a little bit of direct shipping there that has been softer.

Some rescue we've talked a little bit about the rescue business, we've got a decent franchise up there that's also been impact.

Impacted by some of the slowdowns.

Jim Giannakouros: The core that we have around it, I mean, they're generally really appropriate. They do incredible things for that local economy and they're, you know, kind of branded at a level that's long been localized for the geography. So I would say it's pressured, it's small for IDEX. You know, we're treating it accordingly as we think of resourcing investments. And in many ways, you know, kind of our Asia-Pac concentration is China and India, very surgical and specific. And the India side is more than offset that from just really strong fundamentals.

Core that we have around it I mean, they are generally really appropriate they do incredible things for that local economy, and they're kind of branded it at a level that's long been localized for the for the geography. So I'd say, it's it's pressured its small for IDEXX.

Treating it accordingly, as we think of Resourcing investments in many ways kind of our Asia Pac concentration as China, and India, very surgical and specific in the India side is more than offset that from just really strong fundamentals.

Jim Giannakouros: Right, and then maybe shifting back over to tariffs. So you're moving from the 100 million to the 50. Could you just expand a bit on some of the underlying assumptions there? Are you assuming the incremental copper tariffs, you know, embedded in that assumption? And then any other color on some of the regional tariffs would be great.

Great and then maybe shifting back over to tariff. So you are moving from the $100 million did the.

50 could you just expand a bit on some of the underlying assumptions there.

Are you assuming the incremental copper tariffs.

Embedded in that assumption and then any any other color on some of the regional tariffs would be great.

Akhil Mahendra: Yeah, so what's not embedded in here is obviously the, you know, the copper, as you mentioned. And then the finalized rules around what's going to happen with Europe, Japan, that's also not in here. I know there's been an announcement, right, but we're waiting for further clarification on how that's going to be implemented. And then you got, you have Taiwan, China, any changes there versus the status quo is not in here. But generally, this, if there are incremental tariffs, right, we'll continue to offset that one for one with price.

Yes, so what's not embedded in here is obviously the copper as you mentioned.

Then the finalized rules around what's going to happen with Europe, Japan.

That's also not in here I know there has been announcement right, but we're waiting for further clarification on how thats going to be implemented and then you've got you have Taiwan, China any changes there versus the status quo is not in here, but.

But generally.

If there are incremental tariffs right will continue to offset that one for one with price.

Jim Giannakouros: All right, appreciate all the detail. Thanks.

Alright, I appreciate all the detail thanks.

Speaker 3: Thank you. Our next question comes from the line of Andrew Lascagna with BNP Paribas. Please proceed with your question.

Thank you.

Our next question comes from the line of Andrew Buscaglia with BNP Paribas. Please proceed with your question.

Jim Giannakouros: Hi, good morning everyone.

Hi, good morning, everyone Hello.

Jim Giannakouros: Hello.

Hum.

Jim Giannakouros: Apologies if I missed this, but what were your expectations for MOD's growth into the year? And then where do you see that playing out for the full year? What will the growth be?

It seems that I missed this but what were your expectations for a modest growth into the year, and then where do you see that playing out for the full year, but what will the growth be.

Akhil Mahendra: Yeah, look, I would say from a MOD standpoint, right, when we announced the transaction last year, our expectations were the business were going to improve the margins in that business, and that was going to be over a longer period. And we expected the business to be able to deliver high single digits in terms of growth. I think where we are right now, it's more or less just given the pause where we're calling the business flat, and then it's just going to be a different trajectory. But again, our expectations for the business overall, as Eric mentioned earlier, right, we're excited about the business, the team itself remain intact, and we do expect to generate, or our expectation is still to generate double-digit returns for the business over the longer horizon.

Yeah look I would say from a math standpoint, right. When we announced the transaction last year are our expectations was the business, where we're going to improve the margins in that business and that was going to be over a longer period than we expected.

The business to be able to deliver high single digits in terms of growth I think where we are right now it's more or less just given the pause where we're calling the business flat and then it's just going to be a different trajectory, but again our expectations for the business overall as Eric mentioned earlier right. We're excited about the business the team itself remain <unk>.

And we do expect to generate.

Our expected expectation is still to generate double digit returns for the business over the longer horizon.

Jim Giannakouros: Okay, got it. And maybe, you know, a lot of like the detailed questions are taken, and so I'd like to take a, you know, ask a bigger, broader question, but you know, we're seeing some trends across industrials where some peers are, you know, trying to reduce complexity in their businesses and, you know, making strategic decisions one way or the other to do that. How do you guys view your portfolio at this point, given, you know, the world has changed a lot in the last five years, even the last three, and you quite haven't been able to grow earnings the way one would hope? So is this, is there, is there a conversation to be had? Are you having those conversations where maybe you look to, rather than acquire, divest anything or redo your portfolio?

Okay got it and maybe.

The detailed questions are taken in.

Let's take a you know ask a bigger broader question, but what we're.

We're seeing some trends across industrials were.

Peers are trying to reduce complexity in their businesses.

Making strategic decisions, one way or the other to do that how do you guys view your portfolio at this point given the world has changed a lot of the last five years, even the last three and you're quite but haven't been able to grow earnings. The way one would hope. So is this is there is there a conversation to be had or are you.

Having those conversations where maybe you'd like to rather than acquire divest anything or review your portfolio.

Jim Giannakouros: Look, we always consider all the pieces of our portfolio along the year while we've, you know, talked a lot about the things we've added, and we've added things more aggressively over the last four years. You know, we've pruned small to medium-sized assets along the way as well, because honestly, they're not going to scale, and to your point, they become more complex over time if, in fact, they become relatively smaller as the business goes. And so I do think we consider both sides of the equation. I think really here though, what you see is, you know, we haven't talked a lot about FMT, we haven't talked a lot about FSDP. I mean, to your point on complexity, I mean, we've taken a ton of complexity out of those two particular platforms, and they're performing really, really well.

Look we are we always consider all the pieces of our portfolio along the ear, while we've talked a lot about the things. We've added we've added things that more aggressively over the last four years.

We've proved small to medium sized assets, along the way as well because honestly they are not going to scale and to your point they become more complex over time. If in fact, they may become relatively smaller as the business goes and so I do think we consider both sides of the equation I think really here, though what you see as you know, we we haven't talked a lot about.

S. M T. We haven't talked a lot about F. S. D. P. I mean to your point on complexity I mean, we've taken a ton of complexity out of those two particular platforms and they're performing really really well, what we're doing with them with an H S. T is.

Jim Giannakouros: What we're doing with an HST is, you know, we're arguably trying to move this portfolio over towards faster growing, more inherently advantaged markets, and doing it, the connection points between each business, in some ways, is taking complexity out of the equation as well, because it's taking a large suite of end markets and things where we could go attack them single units at a time to more concentrated energy towards a handful of really, really good markets where we're trying to set those initial specification points to generate the same kind of annuity streams that we had elsewhere in industrial businesses in the two segments that we're not spending as much time talking about. So we're kind of very active work in the HST side now.

Arguably you're trying to move this portfolio over towards faster growing more inherently advantaged markets and doing it the connection points between each business is in some ways. It's taking complexity out of the equation as well because it's taking a large suite of end markets and things, where we could go attack them single units at a time, it's more concentrated energy.

Towards.

A handful of really really good markets, where we're trying to set those initial specification points to generate the same kind of annuity streams that we had elsewhere in industrial businesses in the two segments that we're not spending as much time talking about so we're kind of very active work on the H S. T side now we're talking about it appropriately, but it's really to put.

Jim Giannakouros: We're talking about it appropriately, but it's really to put it in a state where it's frankly inherently simpler than it is today. And then through all of it, looking at both sides of the equation, each unit has got to kind of earn its relative merits, and we talk about that constantly as we go.

Put it in a state where it's frankly inherently simpler than it is today and then through all of it looking at both sides of the equation. Each unit has got a kind of earned its relative merits and we talk about that constantly as we go.

Jim Giannakouros: Yeah, okay, that's fair. Thanks, Eric.

Okay. Okay. That's fair Thanks, Ed.

Speaker 3: Thank you. And we have reached the end of the question and answer session. I would like to turn the floor back to Eric Ashleman for closing remarks.

Thank you.

We have reached the end of the question and answer session I would like to turn the floor back to Eric for closing remarks.

Jim Giannakouros: Okay, thank you. Thank you all for joining here. And of course, today, you know, we talked about a lot of the work we're doing to put pieces of IDEX together to multiply our growth input. You've heard examples of that, you know, today reflecting on our past. We talked about IHNS and the optical technologies and the build-out of those, you know, over more than a decade or in some cases two. We discussed our present when we talked about air tech and the many HST touch points that we have for MOD. We didn't talk about them today, but you know, the great work that's going on on the extended intelligent water platform, the automation growth that's happening in fire and safety, and then all of the future work, a lot of it within the MSS group and the larger MOD group work across HST.

Thank you. Thank you all for joining here and of course today, we talked about a lot of the work we're doing to put pieces of IDEXX together to multiply our growth input you've heard examples of that today, reflecting on our past when we talked about IHS in the optical technologies and the build out of those over more than a decade or in some case.

As to when.

When we discussed our present when he talks about aerotech and the many HST touch points that we have for Mont we didn't talk about them today, but you know the great work that's going on in the extended intelligent water platform. The automation growth that's happening in fire and safety.

And then all of the future work a lot of it within the MSS group and the larger group work across HST. These are all examples of how whether it's a couple of units or a platform coming together, we're able to go and solve problems in ways that are just very very difficult for any one single unit and we think we're going to absolutely propel the company goes.

Jim Giannakouros: These are all examples of how, you know, whether it's a couple of units or a platform coming together, they're able to go and solve problems in ways that are just very, very difficult for any one single unit, and we think are going to absolutely propel the company going forward. We thank you for your time today, your interest in IDEX, and we hope you all have a great day.

Forward.

We thank you for your time today your interest in <unk> and we hope you all have a great day.

Speaker 3: Thank you. And this concludes today's conference, and you may disconnect your line at this time. Thank you for your participation. Have a great day.

Thank you and this concludes today's conference you may disconnect. Your lines at this time. Thank you for your participation and have a great day.

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