Q1 2026 IDEX Corp Earnings Call

April 29, 2026

Operator 2: Hello, and welcome to the Q1 2026 IDEX Corporation Earnings Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, just press star followed by the number one on your telephone keypad. If you would like to withdraw your question, just press star one again. Thank you. Now I would like to turn the call over to Jim Giannakouros, Vice President of Investor Relations. Please go ahead, Jim.

Operator: Hello, and welcome to the Q1 2026 IDEX Corporation Earnings Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, just press star followed by the number one on your telephone keypad. If you would like to withdraw your question, just press star one again. Thank you. Now I would like to turn the call over to Jim Giannakouros, Vice President of Investor Relations. Please go ahead, Jim.

Speaker #1: If you would like to ask a question during this time, just press star followed by the number 1 on your telephone keypad. And if you would like to drop your question, just press star 1 again.

Speaker #1: Thank you. Now I would like to turn the call over to Jim Giannakouros, Vice President of Investor Relations. Please go ahead, Jim. Good morning, everyone, and welcome to IDEX's first quarter 2026 earnings conference call.

Jim Giannakouros: Good morning, everyone, welcome to IDEX's Q1 2026 earnings conference call. We released our Q1 financial results earlier this morning, and you can find both our press release and earnings call slide presentation in the investor section of our website, idexcorp.com. On the call with me today are Eric Ashleman, President and Chief Executive Officer of IDEX, and Sean Gillen, our Chief Financial Officer. Today's call will begin with Eric providing highlights of our Q1 results and an update on our business outlook and strategies. Sean will discuss additional financial details and our updated outlook for 2026. Following our prepared remarks, we will open the line for questions. Before we begin, please refer to slide 2 of our presentation, where we note that comments today will include forward-looking statements based on current expectations.

Speaker #1: We released our first quarter financial results earlier this morning, and you can find both our press release and earnings call slide presentation in the Investors section of our website, IDEX CORP dot com.

Speaker #1: On the call with me today are Eric Ashleman, President and Chief Executive Officer of IDEX, and Sean Gillan, our Chief Financial Officer. Today's call will begin with Eric providing highlights of our first quarter results.

Speaker #1: And an update on our business outlook and strategies. Then Sean will discuss additional financial details and our updated outlook for 2026. Following our prepared remarks, we will open the line for questions.

Speaker #1: But before we begin, please refer to slide 2 of our presentation where we note that comments today will include forward-looking statements based on current expectations.

Speaker #1: 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.

Jim Giannakouros: 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.

Speaker #1: As IDEX provides non-gap financial information, we provided reconciliations between gap and non-gap measures in our press release and in the appendix of our presentation materials which are available on our website.

Speaker #1: With that, I will turn the call over to Eric. Thanks, Jim. Good morning, everyone, and thank you for joining us today. Please turn to slide 3.

Eric Ashleman: Thanks, Jim. Good morning, everyone, and thank you for joining us today. Please turn to slide 3. IDEX delivered a strong Q1 and continue to see our growth strategies gain traction as we expand and integrate capabilities in targeted advantage markets powered by 80/20. I'd like to thank our teams around the world for their disciplined execution, agility, and focus as they help drive long-term value creation. In the Q1, IDEX delivered organic sales growth of 5% and adjusted EBITDA margin of 26%, which reflects a margin expansion of 50 basis points year over year. These results were above our expectations and reflect strong performance across each of our segments. Additionally, orders were better than expected, growing 10% organically year over year.

Speaker #1: IDEX delivered a strong first quarter and continue to see our growth strategies gain traction as we expand and integrate capabilities in targeted advantage markets powered by 80/20.

Speaker #1: I'd like to thank our teams around the world for their disciplined execution, agility, and focus as they help drive long-term value creation. In the first quarter, IDEX delivered organic sales growth of 5% and adjusted EBITDA margin of 26%.

Speaker #1: Which reflects a margin expansion of 50 basis points year over year. These results were above our expectations and reflect strong performance across each of our segments.

Speaker #1: Additionally, orders were better than expected, growing 10% organically year over year. Strength was most pronounced in our health and science technologies, or HST, segment, where secular drivers continue to fuel growth across high-value applications in data center, semiconductor, and space and defense markets.

Eric Ashleman: Strength was most pronounced in our Health & Science Technologies or HST segment, where secular drivers continue to fuel growth across high-value applications in data center, semiconductor, and space and defense markets. The strong backlog build in HST improves our visibility to deliver continued solid growth for the balance of the year and into 2027. Orders in our Fluid & Metering Technologies or FMT segment grew 9% organic year over year. This was driven by strong order activity in our water platform and our pumps businesses. In our general industrial business units, we are off to a good start to the year, and it's encouraging to see signs of improvement in these end markets. Taking our Q1 performance and backlog build into account, we are raising our full year 2026 financial outlook.

Speaker #1: The strong backlog build in HST improves our visibility to deliver continued solid growth for the balance of the year and into 2027. Finally, orders in our fluid and metering technologies, or FMT, segment, grew 9% organic year over year.

Speaker #1: This was driven by strong order activity in our water platform and our pumps businesses, in our general industrial business units we are off to a good start to the year, and it's encouraging to see signs of improvement in these end markets.

Speaker #1: Taking our Q1 performance and backlog build into account, we are raising our full year 2026 financial outlook. Sean will get into greater detail later in the call.

Eric Ashleman: Sean will get into greater detail later in the call. Before turning it over to Sean, I'd like to walk through a live example of IDEX's capabilities to drive long-term value as 80/20 drives growth, margins, and earnings. Please turn to slide 4. At the highest level, this starts with a very high-quality portfolio of market-leading applied technologies used in environments where performance is critical and failure is not an option. Space and defense is a prime example of faster-growing durable end markets where we are increasingly deploying resources in the HST segment to expand our opportunity set. In simple terms, we provide critical components that move, manage, filter, focus, and protect data, energy, and fluids in space and defense systems. These markets benefit from growing demand for space-based connectivity and breakthrough defense technologies, with long program lives and rising system complexity creating a multiyear growth runway.

Speaker #1: Before turning it over to Sean, I'd like to walk through a live example of IDEX's capabilities to drive long-term value as 80/20 drives growth, margins, and earnings.

Speaker #1: Please turn to slide 4. At the highest level, this starts with a very high-quality portfolio of market-leading applied technologies used in environments where performance is critical and failure is not an option.

Speaker #1: Space and defense is a prime example of faster-growing, durable end markets where we are increasingly deploying resources in the HST segment to expand our opportunity set.

Speaker #1: In simple terms, we provide critical components that move, manage, filter, focus, and protect data, energy, and fluids in space and defense systems. These markets benefit from growing demand for space-based connectivity and breakthrough defense technologies, with long program lives and rising system complexity creating a multi-year growth runway.

Speaker #1: Importantly, our participation spans multiple touch points across the portfolio, from optics enabling secure data transmission to MOTS filtration solutions supporting propulsion and thermal management, alongside other engineered components for mission-critical systems.

Eric Ashleman: Importantly, our participation spans multiple touch points across the portfolio from optics enabling secure data transmission to Mott filtration solutions supporting propulsion and thermal management, alongside other engineered components for mission-critical systems. These solutions are co-engineered early with customers, allowing us to move quickly, adapt as requirements evolve, and reinforce our role as a trusted partner. Please turn to slide 5. For more than a decade, 80/20 has helped us improve focus, margins, and execution. Within our growth platforms, we are increasingly using it as a growth tool, segmenting markets more deliberately, clarifying where we win, and actively reallocating capital and talent toward the highest value opportunities. What's different today is the quality and scale of growth emerging from our platform 80/20 customers and markets. As demand concentrates in more complex, higher value applications, our pivot toward durable growth areas is reinforcing a stronger overall outlook for IDEX.

Speaker #1: These solutions are co-engineered early with customers, allowing us to move quickly, adapt as requirements evolve, and reinforce our role as a trusted partner. Please turn to slide 5.

Speaker #1: For more than a decade, 80/20 has helped us improve focus, margins, and execution. Within our growth platforms, we are increasingly using it as a growth tool, segmenting markets more deliberately, clarifying where we win, and actively reallocating capital and talent toward the highest value opportunities.

Speaker #1: What's different today is the quality and scale of growth emerging from our platform 80's customers and markets. As demand concentrates in more complex, higher-value applications, our pivot toward durable growth areas is reinforcing a stronger overall outlook for IDEX.

Speaker #1: This momentum also creates a flywheel effect. Strengthen our advantage platforms allows us to further simplify, rationalize, and refine the portfolio. Driving higher growth, stronger margins, and enhanced shareholder value over time.

Eric Ashleman: This momentum also creates a flywheel effect. Strength in our advantage platforms allows us to further simplify, rationalize, and refine the portfolio, driving higher growth, stronger margins, and enhanced shareholder value over time. It might seem counterintuitive to some, we grow fastest by focusing and doubling down on fewer customers over time as we help winning customers quickly grow share within advantage spaces. Our component orientation allows us full flexibility to move right or left into the other application arenas to apply 80/20 again, smoothing out the peaks and valleys of dynamic growth as we compound value. We complement this work with balanced and disciplined capital deployment, maintaining a strong balance sheet for flexibility, investing organically, actively pursuing tuck-in acquisitions, and returning capital to shareholders. We repurchased $76 million of IDEX shares in Q1 and expect to maintain that pace throughout 2026.

Speaker #1: It might seem counterintuitive to some, but we grow fastest by focusing and doubling down on fewer customers over time as we help winning customers quickly grow share with an advantaged space.

Speaker #1: Our component orientation allows us full flexibility to move right or left into other application arenas to apply 80/20 again, smoothing out the peaks and valleys of dynamic growth as we compound value.

Speaker #1: We complement this work with balanced and disciplined capital deployment, maintaining a strong balance sheet for flexibility, investing organically, actively pursuing tuck-in acquisitions, and returning capital to shareholders.

Speaker #1: We repurchase 76 million dollars of IDEX shares in the first quarter and expect to maintain that pace throughout 2026. With that, I'll turn it over to Sean to walk through the quarter in more detail including segment performance and our updated outlook.

Eric Ashleman: With that, I'll turn it over to Sean to walk through the quarter in more detail, including segment performance and our updated outlook.

Speaker #2: Thanks, Eric. Good morning, everyone, and thank you for joining us today. Please turn to slide 6. As Eric mentioned, in the first quarter of 2026, IDEX delivered better-than-expected financial performance.

Sean Gillen: Thanks, Eric. Good morning, everyone, and thank you for joining us today. Please turn to slide 6. As Eric mentioned, in Q1 2026, IDEX delivered better than expected financial performance. Organic revenue growth of 5% was better than we forecasted, with notable strength in HST. Adjusted EBITDA margin expanded 50 basis points year over year on productivity improvements, positive volume leverage, and positive price cost, partially offset by mix. Adjusted EPS came in significantly higher than our guided range in Q1. Overall, our orders grew approximately 10% organically in the quarter, again led by HST's organic order growth of 17% year over year. FMT orders grew 9% organically in Q1, FSDP orders declined 4% organically. As a reminder, we typically enter any given quarter approximately 50% booked overall.

Speaker #2: Organic revenue growth of 5% was better than we forecasted with notable strength in HST. Adjusted EBITDA margin expanded 50 basis points year over year on productivity improvements, positive volume leverage, and positive price/cost, partially offset by mix.

Speaker #2: And adjusted EPS came in significantly higher than our guided range in the first quarter. Overall, our orders grew approximately 10% organically in the quarter, again led by HST's organic order growth of 17% year over year.

Speaker #2: FMT orders grew 9% organically in the first quarter and FSDP orders declined 4% organically. As a reminder, we typically enter any given quarter approximately 50% booked overall.

Speaker #2: But the strong order activity in HST is driving a backlog build that offers greater confidence in our ability to deliver better financial performance than we outlined entering 2026.

Sean Gillen: The strong order activity in HST is driving a backlog build that offers greater confidence in our ability to deliver better financial performance than we outlined entering 2026. In FMT and FSDP, the rapid fulfillment nature of those businesses limit our visibility to approximately midway into any given quarter. Touching on some of the more meaningful business demand trends in the quarter, we saw a continuation of strong order activity in areas influenced by AI, which for us is most meaningfully in power generation for data centers, semiconductor manufacturing, and optical switching. We also continued to see strength in municipal water, mining, pharma, and space and defense. Organic sales in Q1 grew 5%, with HST growing at 11% and FMT growing at 2%, while FSDP was down slightly. On a consolidated basis, organic sales growth was balanced between volume and price contribution.

Speaker #2: And FMT and FSDP, the rapid fulfillment nature of those businesses limit our visibility to approximately midway into any given quarter. Touching on some of the more meaningful business demand trends in the quarter, we saw a continuation of strong order activity in areas influenced by AI, which for us is most meaningfully in power generation for data centers, semiconductor manufacturing, and optical switching.

Speaker #2: We also continued to see strength in municipal water, mining, pharma, and space and defense. Organic sales in the first quarter grew 5%, with HST growing at 11% and FMT growing at 2%, while FSDP was down slightly.

Speaker #2: On a consolidated basis, organic sales growth was balanced between volume and price contribution. IDEX adjusted gross margin declined 40 basis points year over year to 44.9%, reflecting productivity gains and volume leverage being more than offset by mix.

Sean Gillen: IDEX adjusted gross margin declined 40 basis points year over year to 44.9%, reflecting productivity gains and volume leverage being more than offset by mix. Adjusted EBITDA margin expanded 50 basis points versus last year, reflecting productivity gains, volume leverage, and cost discipline more than offsetting negative mix. The Q1 is our seasonally lowest cash flow period. Free cash flow of $86 million declined $5 million versus last year, driven mostly by higher working capital investment due to higher growth. We continue to expect free cash flow conversion of at least 100% on an annual basis. We ended the quarter with strong liquidity of approximately $1.1 billion. Finally, we spent $76 million to repurchase IDEX shares in the quarter, and we remain committed to that quarterly pace for 2026. Now quickly, some color on our results by segment.

Speaker #2: Adjusted EBITDA margin expanded 50 basis points for its last year, reflecting productivity gains, volume leverage, and cost discipline more than offsetting negative mix. The first quarter is our seasonally lowest cash flow period.

Speaker #2: Free cash flow of 86 million declined 5 million, versus last year, driven mostly by higher working capital investment due to higher growth. We continue to expect free cash flow conversion of at least 100% on an annual basis.

Speaker #2: We ended the quarter with strong liquidity of approximately 1.1 billion. And finally, we spent 76 million to repurchase IDEX shares in the quarter, and we remain committed to that quarterly pace for 2026.

Speaker #2: Now quickly some color on our results by segment. I'm on slide 7. In HST, organic orders increased 17% and revenue grew 11% organically. Volumes increased in advantaged markets, including semiconductor OE and consumables, data center applications, and space and defense.

Sean Gillen: I'm on slide 7. In HST, organic orders increased 17% and revenue grew 11% organically. Volumes increased in advantage markets, including semiconductor OE and consumables, data center applications, and space and defense. Notably, these exposures are, as Eric mentioned, in the areas we have pivoted the portfolio towards in the last few years and where our integrated growth strategies and platform building reside. Pharma was also an area of strength in the quarter. HST adjusted EBITDA margin expanded 100 basis points year over year as positive volume leverage, positive price cost, and productivity benefits more than offset unfavorable mix and acquisitions. Turning to slide 8. In FMT, organic orders increased 9% and organic sales increased 2%. Orders growth was supported by our intelligent water platform and our mining exposures, partially offset by global softness in chemical end markets.

Speaker #2: And notably, these exposures are as Eric mentioned, in the areas we have pivoted the portfolio towards in the last few years, and where our integrated growth strategies and platform-building reside.

Speaker #2: Pharma was also an area of strength in the quarter. HST adjusted EBITDA margin expanded 100 basis points year over year, as positive volume leverage, positive price/cost, and productivity benefits more than offset unfavorable mix and acquisitions.

Speaker #2: Turning to slide 8. In 9% and organic sales increased 2%. Orders growth was supported by our intelligent water platform and our mining exposures, partially offset by global softness in chemical and markets.

Speaker #2: Looking at our leading indicator, industrial order rates, they showed growth in the quarter as orders and revenue in these businesses were slightly better than we had expected.

Sean Gillen: Looking at our leading indicator industrial order rates, they showed growth in the quarter as orders and revenue in these businesses were slightly better than we had expected. Our water platform continued to perform well, contributing to both the order and sales growth in the quarter. FMT's adjusted EBITDA margin declined slightly by 10 basis points year-over-year as productivity benefits were more than offset by mix and volume deleverage. Please turn to slide 9. FSDP organic orders declined 4% year-over-year, and organic sales decreased 1%. Our fire and safety franchise grew high single digit in the quarter as we continued to see strong demand for our fire and rescue tools in North America and stable demand in Europe. This growth was offset by an expected decline in dispensing.

Speaker #2: Our water platform continued to perform well, contributing to both the order and sales growth in the quarter. FMT's adjusted EBITDA margin declined slightly by 10 basis points year over year, as productivity benefits were more than offset by mix and volume deleverage.

Speaker #2: Please turn to slide 9. FSDP organic orders declined 4% year over year, and organic sales decreased 1%. Our fire and safety franchise grew high single digit in the quarter as we continued to see strong demand for our fire and rescue tools in North America and stable demand in Europe.

Speaker #2: This growth was offset by an expected decline in dispensing. This decline in dispensing was due to tough comps in project volumes in North America and Asia.

Sean Gillen: This decline in dispensing was due to tough comps and project volumes in North America and Asia. We expect to see stability in our dispensing business on a sequential basis. FSDP adjusted EBITDA margin increased 30 basis points year-over-year as strong productivity improvements more than offset mix and volume deleverage influences in Q1. Please turn to slide 10, where I'll touch on capital deployment. Like I mentioned earlier, we drove $86 million of free cash flow in Q1, which is our seasonally lowest cash generating period in a given calendar year. Our gross leverage position as of the end of Q1 is at roughly 2 times. As outlined last quarter, we continue to maintain a balanced approach to capital deployment. In the near term, we will focus on organic investments to drive growth, bolt-on M&A, and capital return to shareholders.

Speaker #2: We expect to see stability in our dispensing business on a sequential basis. FSDP adjusted EBITDA margin increased 30 basis points year over year, as strong productivity improvements more than offset mix and volume deleverage influences in the first quarter.

Speaker #2: Please turn to slide 10, where I'll touch on capital deployment. Like I mentioned earlier, we drove 86 million of free cash flow in the first quarter, which is our seasonally lowest cash-generating period in a given calendar year.

Speaker #2: Our gross leverage position as of the end of the first quarter is at roughly 2 times. As outlined last quarter, we continue to maintain a balanced approach to capital deployment.

Speaker #2: In the near term, we will focus on organic investments to drive growth, bolt-on M&A, and capital return to shareholders. In the quarter, we paid $53 million in dividends and repurchased $76 million in shares.

Sean Gillen: In the quarter, we paid $53 million in dividends and repurchased $76 million in shares. We plan on maintaining this share repurchase level per quarter through the rest of 2026. Now I'd like to discuss our updated guidance for 2026. Please turn to slide 11. For the full year 2026, we now expect organic growth in the 3% to 4% range, an increase over our original 1% to 2% organic growth guidance coming into the year. Our overall IDEX organic growth guidance balances approximate high single-digit growth for HST and flattish outlooks for FMT and FSDP. These outlooks reflect HST's strong order book and relative stability in our FMT and FSDP segments. Adjusted EBITDA margin is expected to be in the 26.5% to 27% range in 2026, unchanged from our previous guidance.

Speaker #2: We plan on maintaining this share repurchase level per quarter through the rest of 2026. Now I'd like to discuss our updated guidance for 2026.

Speaker #2: Please turn to slide 11. For the full year 2026, we now expect organic growth in the 3 to 4 percent range and increase over our original 1 to 2 percent organic growth guidance coming into the year.

Speaker #2: Our overall IDEX organic growth guidance balances approximate high single digit growth for HST and flattish outlooks for FMT and FSDP. These outlooks reflect HST's strong order book and relative stability in our FMT and FSDP segments.

Speaker #2: Adjusted EBITDA margin is expected to be in the 26.5 to 27 percent range in 2026, unchanged from our previous guidance. We continue to expect productivity benefits throughout IDEX businesses and solid leverage and margin expansion at HST this year.

Sean Gillen: We continue to expect productivity benefits throughout IDEX businesses and solid leverage and margin expansion at HST this year. Volume decrementals in FMT and FSDP and mix influences keep our near-term margin expansion expectations unchanged. We are increasing our adjusted EPS guidance for 2026 by $0.20 to $8.35 to $8.55, representing mid to high single-digit growth year over year. For Q2 2026, we expect 3% to 4% organic growth, adjusted EBITDA margin in the 26.5% to 27% range, and adjusted EPS of $2.07 to $2.12. I wanted to provide an update on tariffs. We continue to monitor the changes closely and adapt our businesses accordingly.

Speaker #2: However, volume decrementals in FMT and FSDP and mix influences keep our near-term margin expansion expectations unchanged. We are increasing our adjusted EPS guidance for 2026 by 20 cents to $8.35 to $8.55, representing mid to high single digit growth year over year.

Speaker #2: For the second quarter of 2026, we expect 3 to 4 percent organic growth, adjusted EBITDA margin in the 26.5 to 27 percent range, and adjusted EPS of $2.07 to $2.12.

Speaker #2: Also, I wanted to provide an update on tariffs. We continue to monitor the changes closely and adapt our businesses accordingly. While the IEPA tariffs have been repealed, the administration has implemented new tariffs in reaction to this.

Sean Gillen: While the IEEPA tariffs have been repealed, the administration has implemented new tariffs in reaction to this. For our businesses, these new tariffs are largely consistent with the ones repealed, such that we currently do not anticipate much of a net impact to our financial results. As it relates to the expected IEEPA refunds, we have taken the requisite actions to apply for these and will keep you updated if applicable as it is expected to play out over the coming months. With that, I'll turn the call back over to Eric.

Speaker #2: For our businesses, these new tariffs are largely consistent with the ones repealed, such that we currently do not anticipate much of a net impact to our financial results.

Speaker #2: As it relates to the expected IEPA refunds, we have taken the requisite actions to apply for these and will keep you updated, if applicable, as it is expected to play out over the coming months.

Speaker #2: With that, I'll turn the call back over to Eric.

Speaker #1: Thanks, Sean. I'm on slide 12. As we step back, we feel very good about the start to the year and the momentum-building across IDEX.

Eric Ashleman: Thanks, Sean. I'm on slide 12. As we step back, we feel very good about the start to the year and the momentum building across IDEX. Our performance reflects strong execution, increasing traction in our advantage markets, and continued progress as we execute our growth strategies. The demand signals we're seeing within our growing backlog reinforce our confidence in the direction of the portfolio. Many of the demand trends in our advantage markets are expected to remain robust well beyond 2026. At the core of this progress is 80/20. It continues to sharpen our focus, guide where we invest capital and talent, and help us scale growth across platforms and applications that matter most. Just as importantly, it is enabled by our teams and our culture, one that emphasizes trust, collaboration, and accountability across the organization.

Speaker #1: Our performance reflects strong execution, increasing traction in our advantaged markets, and continued progress as we execute our growth strategies. The demand signals we're seeing within our growing backlog reinforce our confidence in the direction of the portfolio, many of the demand trends in our advantaged markets are expected to remain robust well beyond 2026.

Speaker #1: At the core of this progress is 80/20. It continues to sharpen our focus, guide where we invest capital and talent, and help us scale growth across platforms and applications that matter most.

Speaker #1: Just as importantly, it has enabled by our teams and our culture. One that emphasizes trust, collaboration, and accountability across the organization. We recognize there's still work ahead as we continue to execute our strategy and further enhance the quality of growth across the portfolio.

Eric Ashleman: We recognize there's still work ahead as we continue to execute our strategy and further enhance the quality of growth across the portfolio. We are encouraged by what we are seeing, confident in the path forward, and excited about the value creation opportunity in front of us. With that, we appreciate your continued interest in IDEX, and I'll turn the call back to the operator for your questions.

Speaker #1: But we are encouraged by what we are seeing, confident in the path forward, and excited about the value creation opportunity in front of us.

Speaker #1: With that, we appreciate your continued interest in IDEX, and I'll turn the call back to the operator for your questions.

Speaker #3: We will now begin the question-and-answer session. If you would like to ask a question at this time, simply press * followed by the number 1 on your telephone keypad.

Operator 2: We will now begin the question and answer session. We will pause for a brief moment to compile the Q&A roster. Our first question comes from the line of Joe Giordano with D.A. Davidson. Joe, please go ahead.

Operator: We will now begin the question and answer session. We will pause for a brief moment to compile the Q&A roster. Our first question comes from the line of Joe Giordano with D.A. Davidson. Joe, please go ahead.

Speaker #3: We will pause for a brief moment to compile the Q&A roster. Our first question comes from the line of Joe Giordano with Didi Covin.

Speaker #3: Joe, please go ahead.

Speaker #4: Hey guys, good morning.

Joe Giordano: Hey, guys. Good morning.

Speaker #5: Morning.

Eric Ashleman: Morning.

Joe Giordano: Just curious on how to think about the guide here. Q1 comes in 5%, Q2 guided 3% to 4%. Given the orders here, why should the H2 organic decelerate from the pace that we're on now? Or is this just kind of, look, there's a lot going on in the world, and we're just playing it safe?

Speaker #4: just curious, and how to think about the guide here. So one cue comes in 5%, two cue guided 3 to 4. Given the orders here, why should the second half organic decelerate from the pace that we're on now, or is this just kind of, "Look, there's a lot going on in the world, and we're just playing it safe"?

Eric Ashleman: Yeah. I think, to give a little bit of color on that, it's really around, I think HST should continue at a pretty similar clip, as we've mentioned. The, you know, high single digit to, you know, double digit growth at HST. That's really driven by the order backlog, as you referenced, where we're seeing that momentum. I think in FMT in particular is where we saw good performance in the quarter. You know, the end of the quarter was stronger than the beginning, seeing some sequential improvement. As we outlook for the year, still seeing or forecasting a growth outlook that's a bit flat. That's probably a little bit of the macro world.

Speaker #5: yeah, I think, to give a little bit of color on that, it's really around, I think, HST should continue at a pretty similar clip as we mentioned, the, you know, high single digit to, you know, double digit growth, at HST.

Speaker #5: And that's really driven by the order backlog as you referenced, where, where, where we've seen that, momentum. and I think in, FMT in particular, is where we saw good performance in the quarter, you know, the end of the quarter was stronger than the beginning, seeing some sequential improvement.

Speaker #5: But as we outlook for the year, still seeing, forecasting a, a, a, a growth outlook, that's a bit flat. and that's probably a little bit of the macro world, you know, one quarter into the year, some uncertainty in the macro world, and what we're seeing in visibility, keeping that around flat.

Eric Ashleman: You know, Q1 into the year, some uncertainty in the macro world, what we're seeing, the visibility, keeping that around flat. That's a little bit of color as, you know, H1 of the year as we move into H2.

Speaker #5: So that's a little bit of color as, you know, first half of the year as we move into the second half.

Speaker #4: And then what needs to happen at HST to get margins back to, like, that, you know, 30-ish percent range that you were at a couple years ago?

Joe Giordano: What needs to happen at HST to get margins back to, like, that, you know, 30-ish% range that you were at a couple years ago? Like, is that incumbent on life sciences picking back up? Like, what's kind of needed there to get back to historical highs?

Speaker #4: Like, which is, is that incumbent on life sciences picking back up? Like, what, what's kind of needed there to, to get back to historical highs?

Speaker #5: Yeah, good question. And I think there's two pieces to that. one is, is the acquired, the recently acquired businesses, which are performing quite well and are driving a lot of the growth as more of the growth in that business has come from the acquired businesses, there's still margins are strong, but they're not quite at the segment average yet.

Eric Ashleman: Yeah, good question. I think there's two pieces to that. One is the acquired, the recently acquired businesses, which are performing quite well and are driving a lot of the growth. As more of the growth in that business has come from the acquired businesses, their still margins are strong, but they're not quite at the segment average yet. What we'll take to get there is, as we've talked in the last couple quarters, some continued focus on 80/20 to drive margins higher in the acquired businesses. As they get their margins up and the growth continues to come from them, that will have a mixed benefit. The other piece is, as you mentioned, life sciences, you know, kind of flattish to slightly down in the quarter. That's a nicely profitable business for us, a little mix there.

Speaker #5: and what we'll take to get there is, as we've talked in the last couple quarters, some continued focus on 80/20, to drive margins higher in the acquired businesses.

Speaker #5: So as they get their margins up and the growth continues to come from them, that will have a mixed benefit. And then the other piece is, as you mentioned, life sciences, you know, kind of flattish to slightly down in the quarter, and that's a nicely profitable business for us.

Speaker #5: So a little mix there, but would expect growth to return to that, as we go forward as well.

Eric Ashleman: Would expect growth to return to that, as we go forward as well.

Speaker #4: Awesome. Thanks, guys. I'll, I'll jump back in the queue.

Joe Giordano: Awesome. Thanks, guys. I'll jump back in the queue.

Speaker #3: Your next question comes from the line of Matt Somerville with DA Davidson. Matt, please go ahead.

Operator 2: Your next question comes from the line of Matt Summerville with D.A. Davidson. Matt, please go ahead.

Operator: Your next question comes from the line of Matt Summerville with D.A. Davidson. Matt, please go ahead.

Speaker #5: Thanks. a couple questions. Just on, on one of the last points Sean made, can you give a bit more context as to why you expect to see, what sounded like maybe some sustained inflection from here in the life sciences portion of HST?

Matt Summerville: Thanks. A couple questions. Just on one of the last points Sean made, can you give a bit more context as to why you expect to see what sounded like maybe some sustained inflection from here in the life sciences portion of HST? I have a follow-up.

Speaker #5: And then I have a follow-up. So I think, look, the, the life science business is about exactly where we thought it would be. The core fluidics and optical filters franchise is the drive the, the bulk of the profits there are still growing low single digits.

Eric Ashleman: Look, the life science business is about exactly where we thought it would be. The core fluidics and optical filters franchises that drive the bulk of the profits there are still growing low single digits. Honestly, the drivers on both sides remain the same. Pharma, really, really strong. The pressure points coming largely from both the China market for our end customers and then the funding, NIH funding, academic pressures that we've seen for a while now. I think for us in Q1, you remember about a year ago, you know, this was just starting to play out. Now we're pretty deep into it. I think most people are expecting that it'll remain at this pressure.

Speaker #5: and honestly, the, the drivers on both sides remain the same. So pharma really, really strong. And then the pressure points coming largely from both the China market for our end customers and then the, the funding NIH funding, academic pressures that we've seen for a while now.

Speaker #5: I think for us in the first quarter, you remember about a year ago, you know, this was just starting to play out. Now we're pretty deep into it.

Speaker #5: and I, I think most people are expecting that it'll, it'll remain at this, pressure. And so we, we had a call here that coming into the year, we thought, you know, at least customers, some of our customers that depend on us, we're going to be a little guarded in some of the inventory positions of IDEX product.

Eric Ashleman: We had a call here that coming into the year, we thought, you know, these customers, some of our customers that depend on us were gonna be a little guarded in some of the inventory positions of IDEX product. We saw that play out as we thought. You know, the dynamics here remain exactly as we've been talking about over the last few quarters. A low single digit growth, some positives, some negatives, and, you know, but a ton of innovation and things that are going on here that I think longer term is gonna give us a lot of confidence in where this market's gonna go.

Speaker #5: We saw that play out as we thought. You know, but the dynamics here remain exactly as we've been talking about over the last few quarters.

Speaker #5: And a low single digit growth, some positives, some negatives, and, you know, but a ton of innovation and things that are going on here that I think longer term still give us a lot of confidence in where this market's going to go.

Speaker #6: Can you also maybe highlight just how you saw incoming orders cadence through the first three months of the year, what you're seeing in, in April thus far across the businesses?

Matt Summerville: Can you also maybe highlight just how you saw incoming orders cadence through the first 3 months of the year, what you're seeing in April thus far across the businesses? Specifically, I'd be curious as to how the general industrial book-to-bill has been trending in both FMT and HST. Thank you.

Speaker #6: And specifically, I'd be curious, as to how the general industrial book-to-bill has been trending in both FMT and HST? Thank you.

Speaker #5: Yep. Yep. I mean, and it's, it's a little different depending on the segments. you know, the HST side with the momentum that we're seeing there has, you know, less of a nonlinearity profile.

Eric Ashleman: Yep. Yep. I mean, it's a little different, depending on the segments. You know, the HST side with the momentum that we're seeing there has, you know, less of a non-linearity profile. It's just been generally pretty strong for a while and kind of saw it that way, play out that way in the quarter. On the FMT and FSDP segments, which are certainly more, you know, fragmented, broadly indexed to industrial markets, you know, that was interesting. It, it was, it was pretty soft in the beginning of the year in January. It, you know, came back a bit in February, and it was a much stronger March. We've kind of stayed at that level here in April.

Speaker #5: It's just been generally pretty strong for a while. And we kind of saw it that way, play out that way in the quarter. On the, FMT and FSDP segments, which are certainly more f you know, fragmented, broadly indexed to, industrial markets, you know, that was interesting.

Speaker #5: It, it was, it was pretty soft in the beginning of the year. In January, it, you know, came back a bit in February, and it was a much stronger March.

Speaker #5: and then we've kind of stayed at that level here in April. The one thing that's interesting, we-we've talked a lot about, the, the businesses that we use as diagnostics for kind of near-term health.

Eric Ashleman: The one thing that's interesting, we've talked a lot about the businesses that we use as diagnostics for kind of near-term health. While those were overall positive, you know, they didn't move positive in a uniform way. You know, we don't have sort of every member seeing the exact same thing. It's a little mixed. Even the project business that we saw in there, we don't get a lot of it, but you know, that tells us something too. Almost all of those you can trace back, the successful ones, back to, you know, some of the same megatrends that we're referencing in HST: data center work, energy grid, things like that. I think it's improving.

Speaker #5: And while those were overall positive, you know, they, they didn't move positive in a uniform way. You know, so we don't have sort of every member, seeing the exact same thing.

Speaker #5: The little mixed, and even the project business that we saw in there, we don't get a lot of it, but we, you know, that tells us something too.

Speaker #5: almost all of those, you can trace back the successful ones back to, you know, some of the same megatrends that we're referencing in HST.

Speaker #5: Data center work, energy, grid, things like that. So I think it's, it's improving. it's better than, you know, we had obviously modeled, originally, for the quarter, but I would still put it in sort of a mixed, place.

Eric Ashleman: It's better than, you know, we had obviously modeled originally for the quarter, but I would still put it in sort of a mixed place. I think largely that's because of the overhang of the geopolitical situation.

Speaker #5: And I think largely that's because of the overhang of, the geopolitical situation.

Matt Summerville: Looks good. Thank you.

Speaker #6: You're good. Thank you.

Speaker #3: And your, and your next question comes from the line of Nathan Jones with Stifel. Nathan, please go ahead.

Operator 2: Your next question comes from the line of Nathan Jones with Jefferies. Nathan, please go ahead.

Operator: Your next question comes from the line of Nathan Jones with Jefferies. Nathan, please go ahead.

Speaker #7: Morning, everyone.

Nathan Jones: Morning, everyone.

Speaker #5: Good morning.

Eric Ashleman: Morning.

Speaker #7: I guess I'll follow up on the short cycle industrial question. Maybe you can talk a little bit more about the pieces of that that you, where you're not seeing, some improvement and maybe what you think is required to get those businesses going in the right direction again.

Nathan Jones: I guess I'll follow up on the short cycle industrial question. Maybe you can talk a little bit more about the pieces of that, where you're not seeing some improvement and maybe what you think is required to get those businesses going in the right direction again.

Speaker #5: Well, in the, in the few places where that, that played out, I'd say tho-those are businesses that are a little bit more indexed to, you know, chemical markets and some of the ones that we mentioned.

Eric Ashleman: Well, in the, in the few places where that played out, I'd say those are businesses are a little bit more indexed to, you know, chemical markets and some of the ones that we mentioned, or kind of core energy. Their exposure there probably explains some of it. They're also probably the most fragmented businesses. You know, a lot of the orders there are one or two here, and they have really quick lead times. If somebody is uncertain, they're the kind of businesses that you really don't have to make much of a commitment because we're gonna be able to quick turn all of the product. I would say that's, you know, those would be the two characteristics.

Speaker #5: or, or kind of core energy. so their exposure there probably explains some of it. they're also probably the most fragmented businesses. You know, a lot of the orders there are one or two here, and they have really quick lead times.

Speaker #5: So if somebody is uncertain, they're the kind of businesses that you really don't have to make much of a commitment because we're going to be able to quick turn all of the product.

Speaker #5: So I would say that's, you know, those would be the two characteristics. Again, this, this wasn't a lot of businesses, but it, but there is some mix.

Eric Ashleman: Again, this wasn't a lot of businesses, but there is some mix, there is a mixed nature of how these ran out over the last four months.

Speaker #5: There, there is a mixed nature of how these, ran out over the last four months.

Speaker #7: Fair enough. I'm going to ask the HST margin question a little bit differently. You've seen good positive growth for the last three quarters, and the incremental margins have been in the low 30s.

Nathan Jones: Fair enough. I'm gonna ask the HST margin question a little bit differently. You've seen good positive growth for the last 3 quarters. The incremental margins have been in the low 30s. I think I would have expected, and I think you would expect long term those incrementals to be higher. Can you maybe just run through the pieces that are keeping those depressed? I know you talked a little bit about acquisitions. There's probably some drag on that. Maybe just some color on what's depressing those a little bit, what it takes to get back to kind of, you know, maybe into the 40s on incremental margins, and when you think you'll be able to get those incrementals to move back to a more historically normal level. Thanks.

Speaker #7: I think I would have expected, and I think you would expect long-term, those incrementals to be higher? Can you maybe just run through the pieces that are, are keeping those depressed?

Speaker #7: I know you, you talked a little bit about acquisitions. It's probably some drag on that. but maybe just some color on what's depressing those a little bit, what it takes to get back to kind of, you know, maybe into the 40s, on, on incremental margins.

Speaker #7: And when you think you'll be able to get those incrementals, to move back to, to a more historically normal level? Thanks.

Speaker #5: Yeah. so, you know, for the last quarter or two, and in this quarter, you know, the flow-through, in HST, was about 33%. So in that low to mid, 30%, as your reference, as you think about, kind of the guide for the year, we see that improving slightly, getting to kind of those mid 30%.

Sean Gillen: For the last quarter or two and in this quarter, the flow-through in HST was about 33%, so in that low to mid 30%, as you referenced. As you think about kind of the guide for the year, we see that improving slightly, getting to kind of those mid 30%. All of that's really in line with where we expected it to be for the year so far. On kind of what needs to happen to have it tick up, I think it's a couple points which I referenced. It's the acquired businesses which are below the segment EBITDA margins of kind of 26%, 27%.

Speaker #5: and all of that's really in line with where we expected it to be. for the year so far. and then in kind of what needs to happen to have it tick up, I think it's, a couple points, you know, which I referenced.

Speaker #5: It's the acquired businesses, which are below the segment EBITDA margins of kind of 26, 27 percent. as we take some 80/20 actions, what I mean by that is as we start to prune some pieces of the portfolio within those businesses, that are drags on the margin within the acquired businesses and continue to grow the higher value-add, higher margin parts, of the acquired businesses.

Sean Gillen: As we take some 80/20 actions, what I mean by that is as we start to prune some pieces of the portfolio within those businesses that are drags on the margin within the acquired businesses and continue to grow the higher value add, higher margin parts of the acquired businesses. I'm thinking Muon, Microflown, and Mott being some of the ones that have some room for improvement in overall margin. That's kind of point one. You know, as those acquired businesses, and as you mentioned, a lot of the growth you're seeing are coming from those businesses. As they continue to provide more of the earnings power, getting their margin up will help increase the flow-through towards that 40%. Part two is life sciences, which is a nicely profitable business for us.

Speaker #5: and I'm thinking Muon, MicroLam, and Mott, being some of the ones that have some room, for improvement in overall margin. So that's kind of point one.

Speaker #5: You know, as those acquired businesses—and as we mentioned—a lot of the growth you're seeing is coming from those businesses. So, as they continue to provide more of the earnings power, getting their margin up will help increase the flow-through towards that 40%.

Speaker #5: and then part two is, is, is life sciences, which is a nicely profitable business for us. as that grows, it has, strong leverage and EBITDA flow-through, haven't seen that in the first quarter or two, but for all the reasons that Eric mentioned, you would expect that, to improve as we move through this fiscal year.

Sean Gillen: As that grows, it has strong leverage and EBITDA flow-through. Haven't seen that in Q1 or Q2, for all the reasons that Eric mentioned, you would expect that to improve as we move through this fiscal year. In terms of getting to 40%, as I mentioned for the year, you know, the guide contemplates kind of mid-30 flow-throughs. I think as we get into next year and some of those 80/20 actions take hold and some improvement in some end markets, I think we'll get towards that 40%.

Speaker #5: In terms of getting to 40%, as I mentioned, for the year, you know, the guide contemplates kind of mid 30 flow-throughs. And as I think as we get into next year, and some of those 80/20 actions take hold, and some improvement in, in some end markets, I think we'll get, towards that 40%.

Speaker #7: Thanks for taking the questions.

Nathan Jones: Thanks. Does that take any questions?

Speaker #3: Your next question comes from the line of Dean Dre with RBC. Dean, please go ahead.

Sean Gillen: Your next question comes from the line of Deane Dray with RBC. Deane, please go ahead.

Operator: Your next question comes from the line of Deane Dray with RBC. Deane, please go ahead.

Speaker #7: Thank you. Good morning, everyone.

Deane Dray: Thank you. Good morning, everyone.

Speaker #5: Good morning, Dean.

Eric Ashleman: Morning, Deane.

Speaker #7: Hey, you called out some strength in the water, business in FMT. Just kind of give us a sense of where that demand is. you know, how much of that is kind of the flow, business versus projects?

Deane Dray: Hey, you called out some strength in the water, business in FMT. Just kind of give us a sense of where that demand is. you know, how much of that is kind of the flow, business versus projects, and what are your assumptions for the balance of the year?

Speaker #7: And what's your, what are your assumptions for the balance of the year?

Speaker #5: Yeah. Now it's, it's, it remains a really strong part of the story. and, you know, the, the municipal-facing side of that that's, you know, kind of our core inspection and analytical, software piece has been really good.

Eric Ashleman: No, it remains a really strong part of the story. And, you know, the municipal facing side of that's, you know, kind of our core inspection and analytical software piece has been really good. We had some nice equipment sales in particular, this particular quarter to back that up. So the hardware side was nice. Again, to remind people it's a really great business that's very, very focused around storm water, storm water flow conditions and remediating those are a big part of what they do. That remains really, really relevant as we see given the nature of infrastructure and catastrophic weather events. It's just really well-positioned.

Speaker #5: We had some nice equipment sales, in particular, this particular quarter, to back that up. So, the hardware side was nice. Again, I remind people, it's a really great business that's very, very focused around stormwater, stormwater flows.

Speaker #5: So overflow conditions and remediating those are a big part of what they do. that remains really, really relevant as we see, given the nature of infrastructure and catastrophic weather events.

Speaker #5: So it's just really well positioned. The part that's, giving it an added boost this year is, we do have a component of that platform that is focused on, high purity water, largely for semi-con applications.

Eric Ashleman: The part that's giving it an added boost this year is, we do have a component of that platform that is focused on high purity water, largely for semicon applications. That has actually been headwind for that, for that group in the last year or so. It's flipped over. It's now positive and growing as well. We've got kind of both of those firing. That accounts for the high single-digit growth that we posted, and we continue that to sustain.

Speaker #5: That has actually been headwind for that, for that group in the last, year or so. It's flipped over. It's now positive and growing as well.

Speaker #5: So we've had kind of both of those firing, that accounts for the high single-digit, growth that we posted and we continue that to sustain.

Speaker #7: Great. And, just as a follow-up, I wanted to ask about M&A activity, and, your sector, but that was done away. and just, you know, what your, the implications are, what, and, you know, what the thoughts might be.

Deane Dray: Great. Just as a follow-up, I wanted to ask about M&A activity in your sector, but that was done away. Just, you know, what the implications are, what and, you know, what the thoughts might be. First, we've seen some deals in the stormwater space, combined sewer overflow. I mean, I think that's just a validation of how much a focus this is. Where do you see growth rates for you all in terms of is it M&A? Is it organic? That's a question. The second one, there was a really interesting transaction in fire and security recently, which I think is a validation of your commitment to this business. Just, you know, two different sectors, interesting M&A away, you know, what are the implications for IDEX?

Speaker #7: So first, we've seen some deals in the stormwater, space, combined sewer overflow. I mean, I think that's just a validation of how much a focus this is.

Speaker #7: where do you see growth rates? for you all in terms of, is it M&A? Is it organic? That's a question. And then the second one that was a really interesting transaction in fire and security, recently, which I think is a validation of, your commitment to this business.

Speaker #7: So just, you know, two different sectors, interesting M&A, away. You know, what are the implications for IDEX?

Speaker #5: Yeah. Well, certainly, I mean, you're, you're pinging on two spots where we play and, you know, we do very, very good work with, you know, in both cases, very critical, technologies, Applied to get jobs done that are highly valued.

Eric Ashleman: Yeah. Well, certainly, I mean, you're pinging on two spots where we play and, you know, we do very, very good work with, you know, in both cases, very critical technologies applied to get jobs done that are highly valued. I think, you know, both from small deals to large deals in the spaces that you referenced here, you're seeing appreciation, you know, for work of that nature and quality. I think it's a testament, a continued testament to kind of where we are, where we're positioned, and the way that we see those businesses as well. You know, as things play out and businesses change hands, I mean, we always kind of look at that and just see if that has a competitive impact on the market.

Speaker #5: So I think, you know, both from small deals to large deals in the spaces that you referenced here, you're seeing appreciation, you know, for work of that nature and quality.

Speaker #5: And so I think it's a testament, a continued testament to kind of where we are, where we're positioned. and the way that we see those businesses, as well.

Speaker #5: You know, as, as things play out and people and businesses change hands, I mean, we always kind of look at that and just see if that has a competitive impact on the market.

Speaker #5: And we're very, very close to those worlds and customers. And, you know, we'd respond accordingly in any way we had to. But I think, you know, bottom line here is it's, I take it as a, a testament to the quality of the work that, that we do.

Eric Ashleman: We're very, very close to those worlds and customers and, you know, we'd respond accordingly in any way we had to. I think, you know, bottom line here is it's, I take it as a testament to the quality of the work that we do.

Speaker #7: Real helpful. Thank you.

Deane Dray: Real helpful. Thank you.

Speaker #3: Your next question comes from the line of Brian Blair with Oppenheimer. Brian, please go ahead.

Operator 2: Your next question comes from the line of Bryan Blair with Oppenheimer. Bryan, please go ahead.

Operator: Your next question comes from the line of Bryan Blair with Oppenheimer. Bryan, please go ahead.

Speaker #7: Thank you. Morning, guys. Nice to talk to you.

Rachel Smith: Thank you. Morning, guys. Nice start to the year.

Bryan Blair: Thank you. Morning, guys. Nice start to the year.

Speaker #5: Thank you.

Eric Ashleman: Thank you.

Speaker #7: I was hoping you could offer a little more color on HSP visibility. starting with backlog expansion. I think last quarter you had cited around $100 million, in, in year-on-year build.

Rachel Smith: I was hoping you could offer a little more color on HST's visibility, starting with backlog expansion. I think last quarter you had cited around $100 million in year-on-year build. Where does that fit now? Given the investment trends and project orientation of some of HST's advantage markets, you know, how are you thinking about underlying demand support through the back half and into 2027? Eric, you had, you know, alluded to, you know, solid runway in your prepared remarks.

Bryan Blair: I was hoping you could offer a little more color on HST's visibility, starting with backlog expansion. I think last quarter you had cited around $100 million in year-on-year build. Where does that fit now? Given the investment trends and project orientation of some of HST's advantage markets, you know, how are you thinking about underlying demand support through the back half and into 2027? Eric, you had, you know, alluded to, you know, solid runway in your prepared remarks.

Speaker #7: where does that fit now? And, and given the investment trends and project orientation, of some of HSP's advantage markets, you know, how are you thinking about underlying demand support through the back half and into 2027?

Speaker #7: Eric, you had, you know, alluded to, you know, solid runway in your prepared remarks there. Just curious if you can offer any additional detail.

Eric Ashleman: Yeah.

Rachel Smith: Just curious if you can offer any additional detail?

Bryan Blair: Just curious if you can offer any additional detail?

Speaker #5: Yeah. Well, as, as you saw, we, we, you know, drove, a nice backlog, number again, increase for HSP this quarter. And it's, it's interesting here.

Eric Ashleman: Well, as you saw, we, you know, drove a nice backlog number again increase for HST this quarter. It's interesting here. You know, we're getting more visibility than we've typically had, you know, for classic IDEX. You can see that growing in HST, and it's really growing in these faster-growing order wins and application spaces. The nature of it is, you know, these are moving fast. Many cases, these are novel solutions, you know, where we're just kind of bringing them to market.

Speaker #5: you know, we're, we're getting more visibility than we've typically had. you know, for, for classic IDEX, you can see that growing in HSP and it's really growing in, in these faster growing, order wins and application spaces.

Speaker #5: And the nature of it is, you know, the, these are moving fast. Many cases, these are novel solutions. You know, where we're just kind of bringing them to market.

Eric Ashleman: You've got customers here that are trying to ramp pretty aggressively, and so they're giving us, and as well as other suppliers, some good visibility to the road ahead, you know, to make sure that we've, you know, are properly capitalized, we've got labor lined up, we've got materials available. We get more than we typically would, let's say, in certainly in FMT and other places, even much of the rest of HST. That accounts for some of it. That being said, you know, it's anything that we've are recognizing here, of course, is within a 12-month period, and it's, you know, it's actually pretty linear as it runs.

Speaker #5: and then you've got customers here that are trying to ramp, pretty aggressively. And so they're giving us, and as well as other suppliers, some good visibility to the road ahead.

Speaker #5: You know, to make sure that we've, you know, properly capitalized. We've got labor lined up. We've got materials available. so we get more than we typically would, let's say, in, certainly in FMT and other places, even much of the rest of HSP.

Speaker #5: so that accounts for some of it. That being said, you know, it's anything that we've, are recognizing here, of course, is within the 12-month period.

Speaker #5: And it's, you know, you don't, it's, it's actually pretty linear as it runs. also in the discussions that we have with customers as we're booking it and we're working with them, you know, that same, that same spirit runs into discussions about out years.

Eric Ashleman: Also in the discussions that we have with customers as we are booking it and we are working with them, you know, that same spirit runs into discussions about out years. You know, what comes next in terms of technology is something we talk about. What kind of volume requirements might be needed there so that, again, we get the jump on any capital we and others might need to lay in. That's why we are able to point towards, you know, continued growth beyond a 12-month horizon here because of those conversations that kind of look forward that, again, is a little different from what we have typically experienced in IDEX. It's something that we had planned to be part of, you know, our growth story here, and it's playing out that way.

Speaker #5: So, you know, what comes next in terms of technology is something we talk about. what kind of volume requirements might be needed there so that, again, we get the jump on any capital we and others might need to lay in.

Speaker #5: that's why we're able to point towards, you know, continued growth beyond a 12-month horizon here because of those conversations. That kind of look forward that, again, is a little different from what we've typically experienced in IDEX, but it's something that we had planned to be part of, you know, our growth story here.

Speaker #5: And it's, it's playing out that way hence the, you know, the references to confidence both for this year and the out years.

Eric Ashleman: Hence the, you know, the references to confidence both for this year and the out years.

Speaker #7: That's very helpful. Thank you. I'd like to.

Rachel Smith: That's very helpful. Thank you.

Nathan Jones: That's very helpful. Thank you.

Speaker #3: Sorry for that. Let me do go next to Mike Halloran with Baird. Mike, please go ahead.

Operator 2: Sorry for that. Let me go next to Mike Halloran with Baird. Mike, please go ahead.

Operator: Sorry for that. Let me go next to Mike Halloran with Baird. Mike, please go ahead.

Speaker #6: Hey, everybody. How you doing?

Michael Halloran: Hey, everybody. How you doing?

Mike Halloran: Hey, everybody. How you doing?

Speaker #5: Hi, Mike. I'm going to tell you that I had some user error. I might have hung up on you right when Dean was asking his first question.

Eric Ashleman: Hi, Mike.

Michael Halloran: I'm gonna tell you that I had some user error. I might have hung up on you right when Deane Dray was asking his first question, and I came back on. I apologize ahead of time if I ask anything that's redundant here. Could you help me a little bit with the sequential dynamics you're assuming for the remainder of the year? Obviously, the orders are really good. As we sit here today, the short cycle piece seems like it's going the right direction. All else equal with a couple of end market headwinds. You know, Eric Ashleman, maybe simply, do you feel like we're at an inflection point or close enough to an inflection point to be comfortable with the trajectory on those short cycle pieces yet? Obviously, you just talked about the higher growth areas, the investment areas, you feel good there.

Mike Halloran: I'm gonna tell you that I had some user error. I might have hung up on you right when Deane Dray was asking his first question, and I came back on. I apologize ahead of time if I ask anything that's redundant here. Could you help me a little bit with the sequential dynamics you're assuming for the remainder of the year? Obviously, the orders are really good. As we sit here today, the short cycle piece seems like it's going the right direction. All else equal with a couple of end market headwinds. You know, Eric Ashleman, maybe simply, do you feel like we're at an inflection point or close enough to an inflection point to be comfortable with the trajectory on those short cycle pieces yet? Obviously, you just talked about the higher growth areas, the investment areas, you feel good there.

Speaker #5: And then I came back on. So I apologize ahead of time. If I ask anything that's redundant here. so could you help me a little bit with the sequential dynamics you're assuming for the remainder of the year?

Speaker #5: Obviously, doors are really good. As we sit here today, the short cycle piece seems like it's going the right direction. All LC tool with a couple of end market headwinds.

Speaker #5: you know, Eric, maybe simply, do you, do you feel like we're at an inflection point or close enough to an inflection point to be comfortable with the trajectory on those short cycle pieces yet?

Speaker #5: Obviously, you just talked about the higher growth areas, the investment areas you feel good there. But, but maybe more just on the short cycle dynamics, trajectories we work through the year and how you're thinking about sequentials.

Michael Halloran: Maybe more just on the short cycle dynamics trajectories you worked through the year and how you think about sequentials?

Mike Halloran: Maybe more just on the short cycle dynamics trajectories you worked through the year and how you think about sequentials?

Speaker #5: Yeah. We, we, we did talk about a little, talk about this a little earlier, but, I think it's worth restating. you know, we, we definitely saw, you know, a cadence of improvement, across really the four months of the year.

Eric Ashleman: Yeah. We did talk about this a little earlier, but I think it's worth restating. You know, we definitely saw Cadence of improvement across really the four months of the year. You know, kind of, kind of weak in January, a little better in February, pretty strong March, and then it sort of held at that level in April. I mean, I actually think that's a testament to the resilience of these markets in the face of, you know, some pretty concerning or uncertain headlines geopolitically. I did reference though, as you know, we have these diagnostic businesses that give us some insight into, you know, strength of inflection. That usually comes about when they're all moving in the exact same way.

Speaker #5: You know, kind of, kind of weak in January, a little better in February, pretty strong March, and then it sort of held at that level in April.

Speaker #5: I mean, I actually think that's a testament to the, the resilience of these markets in the face of, you know, some pretty concerning or uncertain headlines, geopolitically.

Speaker #5: I did reference, though, as, as you know, we have these diagnostic businesses that, you could give us some insight into a, you know, strength of inflection.

Speaker #5: And that usually comes about when they're all moving in the exact same way. that's the one piece that I, I pointed to and said, you know, we, we've got a few that are not moving in the same direction.

Eric Ashleman: That's the one piece that I pointed to and said, you know, we've got a few that are not moving in the same direction. You know, they're okay, they're stable, they're not jumping yet. That matches the conversations we're having. You still see an awful lot of references to what might play out in terms of energy pricing, material availability, all the, you know, usual suspects when something like this is going on in the world around us. I think we're better. I believe it is an indicator of, you know, how strong maybe that industrial world wants to run here. I would also say pretty reasonably guarded because of some of the things that are out there.

Speaker #5: you know, they're okay. They're stable, but they're not jumping yet. So I, I think in that matches the conversations we're having. You still see an awful lot of references to what might play out in terms of energy energy pricing, material availability, all the, you know, usual suspects when something like this is going on in the world around us.

Speaker #5: So I, I think—I think we're better. I believe it's, it is an indicator of, you know, how strong maybe the, that industrial world wants to run here.

Speaker #5: but I would also say pretty reasonably guarded, because of some of the things that are out there. So the way that we have it modeled, you know, we kind of have it probably appropriately conservatively modeled as flattish running out, kind of not too far from our original assumption.

Eric Ashleman: The way that we have it modeled, you know, we kind of have it probably appropriately conservatively modeled as flattish running out, kind of not too far from our original assumption. I think that's the right call based on what we're seeing and what we're hearing.

Speaker #5: but I think that's the right call based on what we're seeing and what we're hearing.

Speaker #7: So is it fair to say then that the delta in the guidance here—obviously the uptick is partially the first quarter strength—but it's more tied to the internal growth initiatives, the investments you've made internally and with some of the M&A, than it is any real change in the cyclical dynamics?

Michael Halloran: Is it fair to say then that the delta in the guidance here, obviously the uptick is partially the Q1 strength, but it's more tied to the internal growth initiatives, the investments you've made internal and with some of the M&A than it is any real change in the cyclical dynamics?

Mike Halloran: Is it fair to say then that the delta in the guidance here, obviously the uptick is partially the Q1 strength, but it's more tied to the internal growth initiatives, the investments you've made internal and with some of the M&A than it is any real change in the cyclical dynamics?

Eric Ashleman: That's absolutely true.

Speaker #5: that's absolutely true.

Eric Ashleman: That's absolutely true.

Speaker #7: Okay. Thank you for that. And then just quickly, just thoughts on buybacks versus the M&A side of things and, how you, how you're thinking about the pipeline on, on acquisitions as it sits here today?

Michael Halloran: Okay. Thank you for that. Then just quickly, just thoughts on buybacks versus the M&A side of things and how you, how you're thinking about the pipeline on acquisitions as it sits here today.

Mike Halloran: Okay. Thank you for that. Then just quickly, just thoughts on buybacks versus the M&A side of things and how you, how you're thinking about the pipeline on acquisitions as it sits here today.

Speaker #5: Yeah, the, you know, pipeline on M&A continues to be active, and continues to be kind of focused in that bolt-on type, size of deal.

Sean Gillen: The, you know, pipeline on M&A continues to be active and continues to be kind of focused in that bolt-on type, size of deal. You know, we have sufficient capacity to take that on while continuing to maintain the current buyback levels. You know, we did $76 million in the quarter, mentioned that we'd expect that cadence to continue for each of the quarters through this year. At those levels we still have, you know, more than enough capacity to execute on bolt-on M&A as it comes into focus. I'd say kind of no change from a capital allocation, specifically as it relates to repurchase, and then still focused on M&A with a pipeline that's active and focused on that bolt-on world.

Speaker #5: you know, we have sufficient, capacity, to take that on while continuing to maintain the current buyback levels. You know, we did 76 million in the quarter, mentioned that we'd expect that, cadence to continue for each of the quarters through this year.

Speaker #5: and at those levels, we still have, you know, more than enough capacity to execute on bolt-on M&A, as it comes into focus. So I'd say kind of no change, from a capital allocation as specifically as it relates to, repurchase, and then still focused on, on M&A with a, with a pipeline that's, that's active and, and focused on that bolt-on world.

Speaker #5: And then I, I would just add that, you know, the cultivation for those tuck-ins, I mean, it's, it's, it continues to improve. So the more traction we get on our initiatives, largely alm-almost all of which involve some integration of units, you know, people, people see that.

Eric Ashleman: I would just add that, you know, the cultivation for those tuck-ins, I mean, it's it continues to improve. The more traction we get on our initiatives, largely almost all of which involve some integration of units, you know, people see that, they recognize that, and increasingly want to be a part of it.

Speaker #5: They recognize that in an increasingly want to be a part of it.

Speaker #7: Thanks, Ted.

Michael Halloran: Thanks, guys.

Mike Halloran: Thanks, guys.

Speaker #3: Our next question comes from the line of Brian Blair with Oppenheimer, the continuous follow-up questions. Brian, please go ahead.

Operator 2: Our next question comes from the line of Bryan Blair with Oppenheimer to continue his follow-up questions. Bryan, please go ahead.

Operator: Our next question comes from the line of Bryan Blair with Oppenheimer to continue his follow-up questions. Bryan, please go ahead.

Rachel Smith: Thanks, guys. I actually cut out a bit. I appreciate you letting me ask a follow-up. I am not sure if this was just addressed, so apologies if that was the case. I wanted to circle back to FMT trends and just the disconnect between order rates being kind of high single-digit range over the last 4 quarters, relative to, you know, sales being 1%, give or take, on average. Sounds like trends are generally positive, and there is that disconnect between, you know, order and revenue recognition. Just trying to get a sense of how much conservatism you are baking in versus something else that would, you know, drive a, you know, continued delta on that front.

Speaker #8: thanks, guys. I, actually cut out a bit. I appreciate you letting me, ask a follow-up. I'm not sure if this was just addressed, so apologies if it was the case.

Bryan Blair: Thanks, guys. I actually cut out a bit. I appreciate you letting me ask a follow-up. I am not sure if this was just addressed, so apologies if that was the case. I wanted to circle back to FMT trends and just the disconnect between order rates being kind of high single-digit range over the last 4 quarters, relative to, you know, sales being 1%, give or take, on average. Sounds like trends are generally positive, and there is that disconnect between, you know, order and revenue recognition. Just trying to get a sense of how much conservatism you are baking in versus something else that would, you know, drive a, you know, continued delta on that front.

Speaker #8: I wanted to, to circle back to FMT trends and just the, the disconnect between order rates being kind of high single-digit range over the last four quarters, relative to, you know, sales being 1%, give or take.

Speaker #8: on average. Sounds like trends are, are generally positive. And there is that disconnect between, you know, order and, and revenue recognition. Just trying to, to get a sense of how much conservatism you're baking in, versus some, something else that would, you know, drive, you know, continued delta on that front.

Speaker #5: Yeah. good, good question. I, I I think that's where, you know, looking at a quarter or two in FMT can be a little bit misleading because a lot of that order activity is consumed within the quarter.

Sean Gillen: Yeah, good question. I think that's where, you know, looking at a Q1 or Q2 in FMT can be a little bit misleading 'cause a lot of that order activity is consumed within the Q. If you look over a longer, call it, you know, kind of four-Q period, you normalize for some of those movements, that'll help. You know, in the order activity that we saw in the Q, which was strong at 9% organic, you know, water really led the way on that performance, and we would expect that performance to continue as we have them pegged in kind of that high single-digit growth. We saw some notable bright spots in our mining end markets in the Q, as well as in just the overall pumps market.

Speaker #5: If you look over a longer, call it, you know, kind of four-quarter period, you know, you normalize for some of those movements, that'll help.

Speaker #5: But, you know, in the order activity that we saw in the quarter, which was strong at 9% organic, you know, Water really led the way on that performance.

Speaker #5: And we would expect that performance to continue as we have them pegged in kind of that high single-digit growth. and we saw some notable bright spots, in our mining end markets, in the quarter as well as in just the overall pumps market.

Sean Gillen: Some of that was a little bit of, you know, demand coming in Q1 that we might have expected in Q2. That probably led to the order growth being at 9% in excess of the sales growth and in excess of what we expect for the balance of the year. I do think, as you mentioned, there's a touch of conservatism as you think about the guide, on flattish growth in FMT. You know, Eric's touched on it, I mentioned it earlier in the call. There's a piece of that as well, given that we're just 1 quarter in, the world's kind of uncertain. While the trend seems to be pointing in the right direction, you know, not extrapolating that for the balance of the year.

Speaker #5: some of that was a little bit of, you know, demand coming in Q1 that we might have expected in Q2. So that probably led to, the order growth being at 9% in excess of the sales growth and in excess of what we expect for the balance of the year.

Speaker #5: but I do think, as you mentioned, there's, a touch of conservatism as you think about the guide, on flattish growth in FMT, you know, Eric's touched on it.

Speaker #5: I mentioned it earlier in the call. but there's a piece of that as well, given that we're just one quarter in, the world's kind of uncertain, while the trend seems to be porting in, in the right direction.

Speaker #5: You know, not extrapolating that for the balance of the year.

Speaker #8: Okay. All makes sense. Appreciate the filler.

Rachel Smith: Okay. All makes sense. Appreciate the color.

Bryan Blair: Okay. All makes sense. Appreciate the color.

Speaker #5: Yep.

Sean Gillen: Yep.

Speaker #3: Our next question comes from the line of Andrew Boscaglia with BNP Paribas. Andrew, please go ahead.

Operator 2: Our next question comes from the line of Andrew Buscaglia with BNP Paribas. Andrew, please go ahead.

Operator: Our next question comes from the line of Andrew Buscaglia with BNP Paribas. Andrew, please go ahead.

Speaker #9: Hey, good morning, everyone.

Andrew Buscaglia: Hey, good morning, everyone.

Speaker #5: Good morning.

Sean Gillen: Morning.

Andrew Buscaglia: You know, we're picking up this earnings season, just some companies talking about these higher energy prices. You know, the near term, maybe some volatility, long term, maybe positive impact for their businesses. I know direct energy exposure is not huge for IDEX, I'm wondering how you're thinking about your business in that context.

Speaker #9: so you know, some sort of a trend we're picking up, this earnings season, just some companies talking about, just higher energy prices, you know, the near-term maybe some volatility, but long-term maybe positive impact for their businesses.

Speaker #9: And I know, direct energy exposure is not huge for IDEX, but I'm wondering how you're thinking about, your business in that context.

Speaker #5: Well, yeah. We do have a segment involved in energy. A lot of it's downstream, custody transfer. We're kind of the cash register for a lot of the industry.

Eric Ashleman: Well, yeah, we do have a segment involved in energy. A lot of it's downstream, custody transfer. We're kind of a cash register for a lot of the industry. It never directly correlates. It's not a well head kind of business. I would say higher energy prices and activity tend to have kind of a derivative impact positively over time. We saw some of that in Q1. You'll, you know, you'll note, you know, we didn't list energy as a significant pressure point, whereas we have in some of the preceding quarters. We've seen, you know, certainly more activity there, more money being put to work, US exports, all of that stuff. As that happens, it generally kind of back feeds into the markets that we're a part of.

Speaker #5: So it, it, it never directly correlates. it's not a wellhead kind of business. But I would say higher energy prices and activity tend to have kind of a derivative impact, positively.

Speaker #5: Over time, we saw some of that in the first quarter. You'll, you'll, you'll know, you know, we didn't list energy as a significant pressure point, whereas we have in some of the preceding quarters.

Speaker #5: We've seen, you know, certainly more activity there, more money being put to work, US exports, all of that stuff. So as that happens, it generally kind of backfeeds into the markets that we're a part of.

Speaker #5: So we, we've kind of got that in a, in a, in a slightly better place. We'll watch it as it, obviously this whole story runs out.

Eric Ashleman: We've kind of got that in a slightly better place. We'll watch it as it, obviously, this whole story runs out. There's a lot of volatility there. You know, the energy exposure at IDEX at least now has moved more to the green.

Speaker #5: There's a lot of volatility there. But, you know, the energy exposure at IDEX is at least now has, has moved more to the green.

Speaker #9: Yeah, okay, that's interesting. And then, yeah, and, and Eric, you know, the last couple of quarters, you know, the execution's been strong, and you're talking about, you know, 80/20 and, and the growth investments you're making.

Vlad Bystricky: Yeah. Okay, that's interesting. Yeah, and Eric, you know, the last couple quarters, you know, the execution's been strong. You're talking about, you know, 80/20 and the growth investments you're making. Is there any other subtle changes to the 80/20 process that's been going on under the hood? Are you know, doing anything differently in terms of that process that's driving these better margins?

Andrew Buscaglia: Yeah. Okay, that's interesting. Yeah, and Eric, you know, the last couple quarters, you know, the execution's been strong. You're talking about, you know, 80/20 and the growth investments you're making. Is there any other subtle changes to the 80/20 process that's been going on under the hood? Are you know, doing anything differently in terms of that process that's driving these better margins?

Speaker #9: But is there any other subtle changes to the 80/20 process that's been going on under, under the hood? Are you, are you, you know, doing anything differently in terms of that, that process that's driving these better margins?

Speaker #5: Yeah. Well, I, I think, I think the, the two extensions of the playbook, which we've had in place a long t a long time here, really it's in the areas where we're growing and acquiring businesses.

Eric Ashleman: Well, I think the two extensions of the playbook, which we've had in place a long time here, really it's in the areas where we're growing and acquiring businesses. You know, we're integrating some of the units together into these growth platforms in the way that are a little different from kind of classic IDEX. When you do that, it does add another dimension. It's kind of taking a 2-axis story and makes it 3-axis. You have to be cognizant of how you define 80/20s, how you allocate resources, sometimes crossing business units. We're doing a lot of work this year to kind of write that code, codify it, and train it in those areas.

Speaker #5: You know, we are, we're integrating some of the units together into these, growth platforms in the way that are a little different from kind of classic IDEX.

Speaker #5: And so when you do that, it does add another dimension. It's kind of making it taking a two-axis story and makes it three-axis. And so you have to be cognizant of how you define 80s and 20s, how you allocate resources, sometimes crossing business units.

Speaker #5: so we're doing a lot of work this year to, to kind of write that code, codify it, and train it, in those areas because, as I referenced in my opening comments, I mean, what's exciting about it is the, the scale of opportunity here also grows.

Eric Ashleman: As I referenced in my opening comments, I mean, what's exciting about it is the scale of opportunity here also grows. You're seeing some of that come onto the board here. You know, I had a graph in the slide deck that showed sort of this, you know, difference between a customer set that's declining as we focus on the winners and then sales and margins, you know, ramping on the backside of that. That's that codebook at work, that extension. Very exciting piece of it, very much pivoted towards growth. Of course, you get almost one-for-one margin support as we grow the company. That's a great question, and that's sort of the new chapters that are being written right now.

Speaker #5: And so you're seeing some of that come onto the board here, you know, I, I had a, a graph in the, in the slide deck that showed sort of this, you know, the difference between a customer set that's declining as we focus on the winners and then sales and margins, you know, ramping on the backside of that.

Speaker #5: Th-that's that codebook at work, that extension. so very, very exciting, piece of it, very much pivoted towards growth. And then, of course, the you get the almost one-for-one margin support as we grow the company.

Speaker #5: So, and it's a great question. And that's sort of the new chapters that are being written right now.

Speaker #9: Yeah. Interesting. Thanks, Eric.

Vlad Bystricky: Yeah, interesting. Thanks, Eric.

Andrew Buscaglia: Yeah, interesting. Thanks, Eric.

Speaker #3: Your next question comes from the line of Dan DiCicco with BMO Capital Markets. Dan, please go ahead.

Operator 2: Your next question comes from the line of Daniel DiCicco with BMO Capital Markets. Dan, please go ahead.

Operator: Your next question comes from the line of Daniel DiCicco with BMO Capital Markets. Dan, please go ahead.

Speaker #9: Great. Thank you for taking my question. just slide four, base and defense, where a lot of these products already in place or you kind of tweaked and tailored some of these solutions and platforms to better align to these markets.

Daniel DiCicco: Great. Thank you for taking my question. Just slide 4, space and defense, were a lot of these products already in place, or have you kind of tweaked and tailored some of these solutions and platforms to better align to these markets? Then is there any more opportunity here down the road?

Dan DiCicco: Great. Thank you for taking my question. Just slide 4, space and defense, were a lot of these products already in place, or have you kind of tweaked and tailored some of these solutions and platforms to better align to these markets? Then is there any more opportunity here down the road?

Speaker #9: And then is there any more opportunity here down the road?

Eric Ashleman: Well, I mean, this whole industry, particularly on the space side, is developing really, really fast. There's almost always something new there. We're actually leveraging, you know, kind of an early incumbency position. You know, we long ago studied this market. Frankly, I'd argue we helped it develop. As we've done that, you know, that's given us presence in the rooms with, you know, the people that matter to help solve problems along the way. You have an incumbent position that was very thoughtfully deployed, and then that access point allowed us to see where things needed to go from there. Our innovation stream is actually enabling it. I'd argue you have some of all of that. Just, you know, as a space, there's a reason we highlight it here.

Speaker #5: Well, I mean, this whole industry, particularly on the space side, is developing really, really fast. There's almost always something new there. But we're actually leveraging, you know, kind of an early incumbency position.

Speaker #5: You know, we, we long ago studied this market, kind of helped frankly, I'd argue we helped it develop. and as we've done that, you know, that's given us presence in the rooms with, you know, the people that matter to help solve problems along the way.

Speaker #5: So you have an incumbent position that was very thoughtfully deployed, and then that access point allowed us to see where things needed to go from there.

Speaker #5: And then our innovation stream is actually enabling it. So, I'd argue you have some of all of that. And then just, you know, as a space, there's a reason we highlight it here.

Speaker #5: I think it's tremendous. in terms of growth, growth potential, you know, both in terms of depth of applications as well as the number of people, that are starting to play here.

Eric Ashleman: I think it's tremendous, in terms of growth potential, you know, both in terms of depth of applications as well as the number of people, that are starting to play here. Just couldn't be more excited about it, absolutely.

Speaker #5: so just couldn't be more excited about it. Absolutely.

Speaker #9: Great. Thanks. And, and then just maybe if you could just touch quickly on your overall exposure in just power generation and then more specifically around fuel sal fuel cell power support.

Daniel DiCicco: Great. Thanks. Then just maybe if you could just touch quickly on your overall exposure in just power generation and then more specifically around fuel cell power support. Thanks.

Dan DiCicco: Great. Thanks. Then just maybe if you could just touch quickly on your overall exposure in just power generation and then more specifically around fuel cell power support. Thanks.

Speaker #9: Thanks.

Speaker #5: Yeah. Well, we mentioned in our data center applications, in the pneumatic space, we've long talked about, you know, that's some of the work that we do there.

Eric Ashleman: Yeah. Well, we mentioned in our data center applications, in the pneumatic space, we've long talked about, you know, that's some of the work that we do there. It's behind the meter power gen, you know, to power data centers, essentially, with standby power. We do a very, very critical job there of thermal management within those applications. Yeah, that is an area that we've capitalized on, we've, you know, helped support and are excited about for the future.

Speaker #5: It's behind the meter, power gen, you know, to power data centers essentially with standby power. and we do, a very, very critical job there of, of thermal management within those applications.

Speaker #5: and so, yeah, that is an area that we've capitalized on. We've, you know, helped support and, are excited about for the future.

Speaker #9: Great. Thank you.

Daniel DiCicco: Great. Thank you.

Dan DiCicco: Great. Thank you.

Speaker #3: Your next question comes from the line of Vlad Bystryki with Citigroup. Vlad, please go ahead.

Operator 2: Your next question comes from the line of Vlad Bystricky with TD Cowen. Vlad, please go ahead.

Operator: Your next question comes from the line of Vlad Bystricky with TD Cowen. Vlad, please go ahead.

Speaker #10: Hey, good morning, guys. Thanks for, thanks

Vlad Bystricky: Hey, good morning, guys. Thanks for taking my question.

Speaker #5: Good morning, Vlad.

Eric Ashleman: Morning, Vlad.

Vlad Bystricky: Nice quarter, obviously, and like the positive outlook for 2026. I did wanna ask you mentioned some price cost pressures impacting gross margin in Q1. Can you just talk about what price cost was in the quarter, how you see it evolving going forward through the year, and whether you're expecting to take or need to take incremental price related to, you know, tariffs or any other inflationary pressures?

Speaker #10: so next quarter, obviously, and, and, like the, like the positive outlook for '26, I did wanna ask you, you, you mentioned some price-cost pressures impacting gross margin in one queue.

Speaker #10: So, can you just talk about what price/cost was in the quarter, how you see it evolving going forward through the year, and whether you're expecting to take, or need to take, incremental price related to, you know, tariffs or any other inflationary pressures?

Speaker #5: Yeah. good, good question. you know, for the quarter, to the EBITDA line, price cost was a was a net positive. you know, not to the same magnitude, that we saw in a couple of quarters in the in the last year given, you know, tariff pricing actions.

Eric Ashleman: Yeah. Good, good question. You know, for the quarter, to the EBITDA line, price cost was a, was a net positive. You know, not to the same magnitude that we saw in a couple quarters in the last year, given, you know, tariff pricing actions. Positive to the quarter. Would expect that to continue, kind of be net even, a little bit positive. We're not contemplating any second-round price actions in the guide as it stands today based on what's happening in the world. If it continues and we need to do those things, those are, of course, actions that we'll continue to do. I think the tariff example is a good one in that it shows that the, you know, the businesses within IDEX have the ability to move price in accordance with what they're seeing in cost.

Sean Gillen: Yeah. Good, good question. You know, for the quarter, to the EBITDA line, price cost was a, was a net positive. You know, not to the same magnitude that we saw in a couple quarters in the last year, given, you know, tariff pricing actions. Positive to the quarter. Would expect that to continue, kind of be net even, a little bit positive. We're not contemplating any second-round price actions in the guide as it stands today based on what's happening in the world. If it continues and we need to do those things, those are, of course, actions that we'll continue to do. I think the tariff example is a good one in that it shows that the, you know, the businesses within IDEX have the ability to move price in accordance with what they're seeing in cost.

Speaker #5: But positive to the quarter. Would expect that to continue, kind of be net even, a little bit positive. We're not contemplating any second-round price actions in the guide as it stands today based on what's happening in the world.

Speaker #5: If it continues and we need to do those things, those are, of course, actions that we'll continue to do. I think the tariff example is a good one in that it shows that the, you know, the businesses within IDEX have the ability to move price in accordance with what they're seeing in cost.

Speaker #5: And so, if we do start to see some sustained price pressures, or we expect that on the cost side, we will revisit our price assumptions and actions with our customers.

Eric Ashleman: If we do start to see some sustained price pressures, or we expect that on the cost side, we will revisit our price assumptions and actions with our customers. For the quarter, positive. Kinda for the guide, expect that to continue and can be revisited depending on what happens in the businesses.

Sean Gillen: If we do start to see some sustained price pressures, or we expect that on the cost side, we will revisit our price assumptions and actions with our customers. For the quarter, positive. Kinda for the guide, expect that to continue and can be revisited depending on what happens in the businesses.

Speaker #5: So, for the quarter, positive, kind of for the guide—expect that to continue. And it can be revisited, depending on what happens in the businesses.

Speaker #9: Got it. That's helpful. Appreciate that, Sean. And then, I think you talked a little bit about life sciences, you know, where you're seeing sort of some pressures in China and, and, and NIH.

Robert Jamieson: Okay. That's helpful. Appreciate that, Sean. I think you talked a little bit about life sciences, you know, where you're seeing sort of some pressures in China and at NIH. I guess could you just talk more about, you know, how you're thinking about the potential for a more positive inflection within life sciences in HST over the coming quarters or into 2027?

Vlad Bystricky: Okay. That's helpful. Appreciate that, Sean. I think you talked a little bit about life sciences, you know, where you're seeing sort of some pressures in China and at NIH. I guess could you just talk more about, you know, how you're thinking about the potential for a more positive inflection within life sciences in HST over the coming quarters or into 2027?

Speaker #9: I guess could you just talk more about, y-you know, ho-how you're thinking about the potential for a more positive inflection within life sciences in, in, in HST over the coming quarters or into '27?

Speaker #5: Yeah. Well, you know, we we're gonna focus where we can focus, and that's in core innovation with a customers that we've long, you know, had relationships with.

Eric Ashleman: Yeah. Well, you know, we're gonna focus where we can focus, and that's in core innovation with the customers that we've long, you know, had relationships with. The team is driving some great things there. We're seeing that now playing out positively in largely in the pharma space. You know, there's just a number of things going on in that area. Even some of the questions around geography and, you know, how that's gonna all play out given that the, you know, the world turns in different ways there. I'd say we actually are helping customers think through that too because, you know, we've got great global scale, and so if people wanna position, reposition assets or target different markets around the globe, we can support that.

Speaker #5: And there's some, some the team is driving some great things there. we're seeing that now playing out positively in, largely in the pharma space.

Speaker #5: You know, there's just a number of things going on in that area—even some of the questions around geography, and, you know, how that's gonna all play out given that the, you know, the world turns in different ways there.

Speaker #5: I'd, I'd say we actually are helping customers, think through that too because you know, we've got great global scale, and so if people wanna position reposition assets or target different markets around the globe, we can support that.

Eric Ashleman: We're talking through, you know, those situations with customers too. For us, we're just gonna focus on what we do best, which is, you know, kinda double down on the global span that we have, the scale that we have within the business. Remember, those have long been integrated units where people are used to working together and driving that scale of solutions. Then bring innovation to bear in the markets that are inflecting the most positively.

Speaker #5: and we're talking through, you know, those, those situations with customers too. So, for us, we're just gonna focus on what we do best, which is, you know, kind of double down on the, the global span that we have, the scale that we have within the business.

Speaker #5: Remember, those are long been integrated units where people are used to working together, and, and driving that scale. Of solutions, and then bring innovation to bear in the, the markets that are inflecting the most positively.

Speaker #9: Got it. Thanks for that, Eric.

Robert Jamieson: Yeah. Thanks for that, Eric.

Vlad Bystricky: Yeah. Thanks for that, Eric.

Speaker #3: Your next question comes from the line of Rob Wertheimer with Melius Research. Rob, please go ahead. Rob, your line is now open.

Operator 2: Your next question comes from the line of Rob Wertheimer with Melius Research. Rob, please go ahead. Rob, your line is now open.

Operator: Your next question comes from the line of Rob Wertheimer with Melius Research. Rob, please go ahead. Rob, your line is now open.

Speaker #11: I apologize. Thank you. you've had a lot of success in some of the growth investments you've made, and I'm curious how much kind of remains in the pipeline, products you haven't launched, products you're developing, you know, maybe you could characterize how fall far along that curve you are.

Rob Wertheimer: I apologize. Thank you. You've had a lot of success in some of the growth investments you've made, and I'm curious how much kinda remains in the pipeline. Products you haven't launched, products you're developing. You know, maybe you could characterize how far along that curve you are. My second question I'm not sure you'll want to answer, but, you know, of the total order growth, maybe in USD, how much was attributable to kind of your, you know, I don't know, new markets, or advantage markets, or growth investments you've done versus a general cyclical rebound? Thanks.

Speaker #11: And my second question, I'm not sure you'll want to answer, but, could you know, of the total order growth, maybe in dollars, how much was attributable to kind of your, you know, I don't know, new markets or advantage markets or growth investments you've done versus the general cyclical rebound?

Speaker #11: Thanks.

Speaker #5: Sure. well, look, I, I, I think these spaces have a lot of potential, not just this year, but in later years. You know, it's one of the reasons we've indexed so positively that, the year's past two to 2026, we see as being very good for us.

Eric Ashleman: Sure. Well, look, I think these spaces have a lot of potential, not just this year, but in later years. You know, it's one of the reasons we've indexed so positively that the years past 2026, we see as being very good for us. We're involved in the discussions. We're working on the technology. We're talking about problems that need to be solved. We know kind of when those would go to market and how they would run out. Obviously, you know, the investment cycle here has got multiple chapters, and we're exposed to it. To your second question, it's related actually to the first.

Speaker #5: Because we're involved in the discussions, we're working on the technology, we're talking about problems that need to be solved. We know kind of when those would go to market and how they would run out.

Speaker #5: And obviously, you know, the, you know, the investment cycle here has, has got multiple chapters, and we're exposed to it. To your second question, it's related, actually, to the first.

Speaker #5: I mean, I, I wouldn't give a specific number here, but I mean, you know, much of what we're talking about is you can you can point back to recently acquired units, very specific investments that choices that we made, to link to units of this quality.

Eric Ashleman: I mean, I wouldn't give a specific number here, but I mean, you know, much of what we're talking about is you can point back to recently acquired units, very specific investments, the choices that we made to link to units of this quality. A fair amount of it is coming from there. What I particularly like about it is it's, you know, we're kind of pinging these different worlds from multiple points. If you think of those as entrances, you know, entrances into really great application spaces, each one of which has their own, you know, subsequent chapters to write through our innovation efforts. We talked about data centers, you know, we talked about kind of behind the meter power gen over there.

Speaker #5: And so a, a fair amount of it is coming from there. What I particularly like about it is it's, you know, we're, we're kind of pinging these, these different worlds from multiple points.

Speaker #5: And so if think of those as entrances, you know, entrances into really great application spaces. Each one of which has their own, you know, subsequent chapters to write through our innovation efforts.

Speaker #5: So we talked about data centers. You know, we talked about kind of behind-the-meter power gen over there. We're also involved in really interesting things related to optical switching and how that's gonna play out.

Eric Ashleman: We're also involved in really interesting things related to optical switching and how that's gonna play out. We've got valves there that are positioned around liquid cooling and other aspects of thermal management. Broad semi exposure, which has been very positive for us. You know, we're involved in everything from consumables to metrology to lithography. We've got these nice little entry points, each one of which, again, just has this sort of extended discussion about, Here's what we need today. Here's what we're gonna need tomorrow, and here's what we're thinking about in terms of the future. You know, water in the FMT space has some of those same characteristics. You know, we're providing data and data sets to people that are now starting to think about how that could be commingled with their own AI applications.

Speaker #5: We've got valves there that are positioned around liquid cooling and other aspects of thermal management. Broad semi-exposure, which has been very positive for us.

Speaker #5: You know, we're involved in everything from consumables to metrology to lithography. We've got these nice little entry points. Each one of which, again, just has this sort of extended discussion about, "Here's what we need today.

Speaker #5: Here's what we're gonna need tomorrow, and here's what we're thinking about in terms of the future." You know, water in the FMT space has some of those same characteristics.

Speaker #5: You know, we-we're providing data and data sets to people that are now starting to think about how that could be co-mingled with their own AI applications.

Speaker #5: So, I really, really like how the investments that we have made link to advantage spaces and then have this nice runway potential.

Eric Ashleman: Really like how the investments that we have made link to advantage spaces and then have this nice runway potential.

Speaker #11: Thank you.

Rob Wertheimer: Thank you.

Speaker #3: Your next question comes from the line of Robert Jamieson with Vertical Research Partners. Robert, please go ahead.

Operator 2: Your next question comes from the line of Robert Jamieson with Vertical Research Partners. Robert, please go ahead.

Operator: Your next question comes from the line of Robert Jamieson with Vertical Research Partners. Robert, please go ahead.

Speaker #12: Good morning. Thanks for taking my questions. Just have a quick one on CapEx and the step-up that we're seeing this year. I know there's no change in guidance, but is this more related to capacity or automation?

Robert Jamieson: Morning. Thanks for taking my questions. Just a quick one on CapEx and just the step up that we're seeing this year. I know no change in guidance, but is this more related to capacity or automation investment? Is that more specific to like the HST segment? Just trying to think about like where that bulk of the incremental investment's being directed towards.

Speaker #12: Investment, and is that more specific to, like, the HST segment? Just trying to think about, like, where that bulk of the incremental investments is being directed towards.

Sean Gillen: Good question. As you mentioned, you know, we have guided, and no change to the guide on that front, an increase in CapEx for the year. It's really supporting all the growth that you're seeing. It is overweight towards HST. The nature of the business, there's no one or two really big-ticket items in terms of CapEx that we need to drive the growth. It's really across a variety of the businesses. We are allowing for more growth CapEx to be spent in this year to help support the growth and the demand that we're seeing. That's in the form of equipment and other things, you know, like that to help support the growth. Not a huge step up, but a meaningful one.

Speaker #5: Good, good question. And as you mentioned, you know, we have guided, and no change to the guide on that front. Yeah, an increase in CapEx for the year.

Speaker #5: And it's really supporting, all the growth that you're seeing. So it is overweight towards HST. there's n the nature of the business. There's no one or two really big ticket items, in terms of CapEx that we need to drive the growth.

Speaker #5: It's really across a variety of the businesses. but we are allowing for more growth CapEx, to be spent in this year, to help support the growth and the, the demand, that we're seeing.

Speaker #5: And that's in the form of equipment and other things, you know, like that to help support the growth. So, not a huge step-up, but a meaningful one.

Speaker #5: It's still relatively low in terms of kind of the overall, size of the business. But, you have budgeted for, some growth in CapEx for the year.

Sean Gillen: It's still relatively low in terms of kind of the overall size of the business. Yeah, budgeted for some growth in CapEx for the year.

Speaker #5: This is this is actually an area where 80/20 helps us a lot as well. in line with our component orientation 'cause it if we make choices, you know, to, to, let's say, move on from a small part of a business, very often it's the same capital, or the same technology that we would run faster-growing applications across.

Eric Ashleman: This is actually an area where 80/20 helps us a lot as well, in line with our component orientation. 'Cause if we make choices, you know, to, let's say, move on from a small part of a business, very often it's the same capital or the same technology that we would run faster-growing applications across. It actually kind of gives us an internal funding source or offset so that, you know, it keeps CapEx increases at a nice level too. That's another lever that we have that comes out of 80/20 work.

Speaker #5: So it actually kind of gives us, an, an internal funding source, or an offset, so that, you know, it keeps, keeps CapEx increases in a in a nice level too.

Speaker #5: So that's, that's another lever that we have that comes out of 80/20 work.

Speaker #11: That's great. Super helpful. And then, just taking a step back, just given the strategy and, you know, the pivot over the last couple of years on advantaged markets with secular tailwinds, I mean, what are maybe some of the top two or three secular themes?

Robert Jamieson: That's great. Super helpful. Then just taking a step back, just given the strategy and, you know, the pivot over the last couple years on advantage markets with secular tailwinds, I mean, what are maybe some of the top two or three secular themes, you know, outside of AI, where you think that IDEX is most under indexed today and potentially willing to invest more aggressively in?

Speaker #11: You know, outside of AI, where you think that IDEX is, most under-indexed today and potentially willing to invest more aggressively in?

Speaker #5: Well, you know, it look, I mean, when you step back, what's, what's nice about the, the changes that we've made is our I, I actually start with the things that are constant.

Eric Ashleman: Well, you know, look, I mean, when you step back, what's nice about the changes that we've made, I actually start with the things that are constant. You know, we essentially always have kind of moved either fluids, gas, or light. That's basically what we're doing, even in these advantaged spaces. We've got great technologies, great access here. I'm particularly excited in terms from an end market perspective. You know, we highlighted space and defense for a reason. I think that's, you know, just getting off on the ground, and we were there from the beginning. Our positioning there is really good. Our optics technologies and specifically tie very nicely to that world.

Speaker #5: You know, so we essentially, always have kind of moved either fluids, gas, or light. That's basically what we're doing, even in these advantage spaces.

Speaker #5: so we've got great technologies, great access here. And particularly excited in terms from an end-market perspective. You know, we highlighted space in defense for a reason.

Speaker #5: I think that that's, you know, just getting off on the ground, and we were there from the beginning. And so our positioning there is really, really good.

Speaker #5: our optics technologies in, in, in s-specifically tie very nicely to that, to that world. And here's where the a-acquisition work comes in, very handy because we're actually kind of moving technologies and joining them across a couple of the businesses here.

Eric Ashleman: Here's where the acquisition work comes in very handy because we're actually kind of moving technologies and joining them across a couple of the businesses here to create solutions that are pretty novel and really could only kind of come from us. That's part of the thesis too. I think, you know, how we position MSS, the Material Science Solutions platform, that's where optics sits. I mean, that whole thesis really gives us a nice jump-off point into virtually every market that we've talked about here that is advantaged. You know, continuing to expand it through bolt-on tuck-in work. That's why we're excited about that as well. There's some other things we'd like to bring in as our presence increases.

Speaker #5: It creates solutions that are pretty novel, and, and really could only kind of come from us. And that's part of the thesis too. So, so I think, you know, how we position MSS, the material science solutions platform, that's where optics sits, I mean, that, that, that whole thesis really gives us, a nice jump-off point into virtually every market that we've talked about here that is advantaged.

Speaker #5: So, you know, continuing to expand it through bolt-on tuck-in work, that's why we're excited about that as well. There are some other things we'd like to bring in as our presence increases.

Speaker #5: So, more to come here, but I think we're off to a great start, and it's kind of playing out the way that we had hoped and expected.

Eric Ashleman: Some more to come here, but I think off to a great start and kind of playing out the way we had hoped and expected.

Speaker #12: Thank you.

Robert Jamieson: Thank you.

Speaker #3: Your next question comes from the line of Brett Lindsay with Mizuho. Brett, please go ahead.

Operator 2: Your next question comes from the line of Brett Linzey with Mizuho. Brett, please go ahead.

Operator: Your next question comes from the line of Brett Linzey with Mizuho. Brett, please go ahead.

Speaker #11: Hey, good morning, all. question regarding your, your CapEx-intensive businesses. I, I guess as you parse through the composition of your, your growth and activity, how are those performing versus the more Opex-oriented businesses?

Brett Linzey: Hey, good morning, all. Question regarding your CapEx-intensive businesses. I guess as you parse through the composition of your growth and activity, how are those performing versus the more OpEx-oriented businesses? I guess as IDEX has grown in areas like material science and defense and space, what does that mix look like today, and how has that evolved?

Speaker #11: And I guess as IDEX has grown, in areas like material science and defense and space, w-what does that mix look like today and, and how's that evolved?

Sean Gillen: I'd start by saying, I mean, none of the businesses we're in are that capital intensive. You know, you're seeing an increase in CapEx, but it's really in line with growth, and angled towards the HST segment as well as some other platforms, where we're seeing that growth. I don't think that there's a material shift in the CapEx intensity of the business. We're just allowing for some capital to support the growth that we're seeing. No, no material move in terms of what you should expect in terms of CapEx for our businesses going forward.

Speaker #5: I, I'd start by saying, I mean, none of the businesses we're in are that capital-intensive. and so, you know, you're seeing an increase in CapEx, but it's really in line with growth.

Speaker #5: And, and angled towards the HST segment, as well as some other platforms where we're seeing that growth. So I don't think that there's a material shift in the CapEx intensity of the business.

Speaker #5: We're just allowing for some capital, to support the growth, that we're seeing. So, so, so no, no material move, in terms of, what you should expect in terms of CapEx, for our businesses going forward.

Speaker #5: Yeah, that, that continues to be part of the filter set when we think about a space, a technology set, or acquisitions. I mean, we're looking for kind of max innovation, in relatively low capitalization, requirements.

Eric Ashleman: Yeah, that continues to be part of the filter set when we think about a space, a technology set or acquisitions. I mean, we're looking for kind of max innovation at relatively low capitalization requirements. You know, there's not just from the economics of it, but that gives us the, you know, the agility, the optionality of moving the technology fast. It's all kind of part of the filter set for us. It's simply rising here because frankly, the growth rates are rising.

Speaker #5: you know, there's not just from the economics of it, but that gives us the, you know, the agility, the optionality of moving the technology fast.

Speaker #5: So it's all kind of part of the filter set for us. It's simply riding, rising here because, frankly, the growth rates are rising.

Speaker #11: And then just shifting over to fire and safety, so encouraging to see the, the strong demand in North America, you noted the relative stability in Europe and Asia, the, the stable Europe comment, I think, is maybe a change in trend, perhaps just, some color there.

Brett Linzey: Just shifting over to fire and safety, encouraging to see the strong demand in North America. You noted the relative stability in Europe and Asia. The stable Europe comment, I think is maybe a change in trend. Perhaps just some color there. Are the local spending priorities maybe firming up and shifting a little bit to the upside here?

Speaker #11: are the local spending priorities maybe firming up and, and shifting a, a little bit to the, to the upside here?

Speaker #5: Yeah, I mean, I, I, I think on the fire and safety European front, you know, we I don't recall if it was late in the summer, last year, we had we had that turn down kind of unexpectedly.

Eric Ashleman: Yeah, I mean, I think on the fire and safety European front, you know, and I recall it was late in the summer last year, we had that turn down kind of unexpectedly. We saw some very specific positioning over to alternate spends. That actually came back to something more normal at the end of the year, and it's basically remained there. You know, it's not widely growing, but it's kind of back in its normal corridor, and I think that was actually kind of a temporal shift. We've seen again, the further from home markets have been stable for a while. As you said, most of the growth strength on the North American side.

Speaker #5: We saw some very specific positioning over to alternate spend. that actually came back to something more normal, at the end of the year, and it's, it's basically remained there.

Speaker #5: So, you know, it's not widely growing, but it's, it's kind of back in its normal corridor. And I think that was actually kind of a temporal shift.

Speaker #5: and then we've seen, a-again, the, the further, from home markets have, have been stable for a while. And as you said, most of the growth, strength on the North American side.

Speaker #11: Thanks for the color.

Brett Linzey: Thanks for the color.

Speaker #5: Yeah.

Eric Ashleman: Yeah.

Speaker #3: And our final question comes from the line of Joe Giordano with D.D. Cohen. Joe, please go ahead.

Operator 2: Our final question comes from the line of Joe Giordano with D.A. Davidson. Joe, please go ahead.

Operator: Our final question comes from the line of Joe Giordano with D.A. Davidson. Joe, please go ahead.

Speaker #12: Hey, guys. I appreciate letting me have the follow-up here. Just like one last kind of bigger picture question on M&A. You know, Eric, as you moved into some of these newer areas, like when you bought MOD, you bought Muon—I think from an investor angle, it seemed a little bit more, are these more complicated?

Joe Giordano: Hey, guys. Appreciate letting me have the follow-up here. Just like one last kind of bigger picture question on M&A. You know, Eric, as you moved into some of these newer areas, like when you bought Mott, you bought Muon, I think from an investor angle, it seemed a little bit more. Are these more complicated? Is this away from core a little bit more? And then obviously those businesses started a little slow and now are doing quite well and are directly aligned with what you, with what your strategy is. I'm just curious, as you look back on the last couple of years with these businesses, what's like the takeaway in your head? Does this like reinforce that IDEX knows how to do M&A as a core competency?

Speaker #12: is this a is this a way from core a little bit more? and then obviously, those businesses started a little slow and, and, and now are doing quite well and are directly aligned with what you with what you're, you're strategy is.

Speaker #12: So I'm just curious, as you look back on the last couple of years with these businesses, what's like the takeaway in your head? Does this, like, reinforce that IDEX knows how to do M&A as a core competency?

Joe Giordano: Does it inform you on timing of when it is appropriate to do this and how much work we need to do through the businesses that are in these kind of markets? Just curious, like I know we're in a good place to talk about it now, but just curious, like what you guys kinda like took away from getting from where you were when you started to where you are today.

Speaker #12: does it inform you on timing of when it is appropriate to do this and how much work we need to do through the businesses that are in these kind of markets?

Speaker #12: Just curious, like, what your and I know we're in a good place to talk about it now, but just curious, like, what you guys kind of, like, took away from the from getting from where you were when you started to where you are today.

Speaker #5: Yeah. No, no. Th-thanks for that. Well, look, the, a big part of the thesis here was, was s-supporting stronger growth for the company. I mean, that's why we went down this direction.

Eric Ashleman: Yeah. No, no. Thanks for that. Well, look, a big part of the thesis here was supporting stronger growth for the company. I mean, that's why we went down this direction. I think one of the insights that comes out of this, given all that you cited, is actually I put it in the end, I put it into a strength category. I mean, these are mission-critical markets where, you know, the uptick on growth takes a little longer than maybe we would, you know, like out of the gate. That actually becomes the moat for us once we get through it, you know? That defensibility of, you know, people that are super risk-averse, gotta make sure everything's gonna work right, make sure that we're a trusted partner.

Speaker #5: And I think one of the one of the insights that comes out of out of this, given all that you cited, is actually I'd put it in the end in the end, I put it into a strength category.

Speaker #5: I mean, these are mission-critical markets where, you know, the, the uptick on growth takes a little longer than maybe we would ulti you know, like out of the out of the gate.

Speaker #5: But that actually becomes the moat for us once we get through it. You know, so that defensibility of, you know, people that are super risk-averse gotta make sure everything's gonna work right, make sure that we're a trusted partner, all those things are, have always been true at IDEX.

Eric Ashleman: All those things have always been true at IDEX. They're probably even more true in these kind of critical markets. You know, that delayed some things out of the gate in terms of take-up and adoption, and it was, let's remember, a pretty crazy world at the same time. What we're seeing now is the backside of that. Those same characteristics I actually think are massively in our favor because that's the deep moat that now surrounds us. We're in the room. We're having the discussion. We're at the table to say, Hey, what comes next? What can we do? What can we do? Now we have more pieces and parts to play with. We're not a single business in there. We're actually a couple of units to three. We've got more people in the room.

Speaker #5: They're probably even more true in these kind of critical markets. You know, so that, that delayed some things out of the gate in terms of takeup and adoption.

Speaker #5: And it was, let's remember, a pretty crazy world at the same time. But what we're seeing now is the backside of that. And so those same characteristics, I actually think, are massively in our favor, because that's the deep moat that now surrounds us.

Speaker #5: We're in the room. We're having the discussion. We are at the table to say, "Hey, what comes next? Then what can we do? Then what can we do?" And now we have more pieces and parts to play with.

Speaker #5: We're not a single business in there. We're actually a couple of units to three. We've got more people in the room. We've got more depth.

Eric Ashleman: We've got more depth, and, you know, we've gained that trusted partner status. I think that's the insight, and I think it's a net positive as we sit here today.

Speaker #5: And, you know, we've gained that trusted partner status. So, I think that's the insight. and I think it's a net positive, as we sit here today.

Speaker #11: Great color. Thank you.

Joe Giordano: Great color. Thank you.

Speaker #3: That concludes our question and answer session. I will now turn the call back over to E-Eric Ashleman for any closing remarks. Eric?

Operator 2: That concludes our question and answer session. I will now turn the call back over to Eric Ashleman for any closing remarks. Eric?

Operator: That concludes our question and answer session. I will now turn the call back over to Eric Ashleman for any closing remarks. Eric?

Speaker #5: Yeah. Well, thanks, everyone, for your interest in, in support of IDEX. I, I'd say to sum up here, we're, we're very pleased with the strong start to the year.

Eric Ashleman: Well, thanks everyone for your interest and support of IDEX. I'd say to sum up here, we're very pleased with the strong start to the year. You know, HST in particular continues to build strong sequential momentum within its target advantage growth markets. As we said during the call, perhaps most encouraging for us is the fact that many of their wins have long multi-year tails that point to really nice growth over time. You know, with FMT and FSDP, we saw some encouraging positive signs of early inflection, we still most likely need to clear the uncertainty of geopolitical stuff to move materially to the next level of support. Our businesses there are really well-positioned to capitalize on that strength as it plays out from here.

Speaker #5: You know, HST in particular continues to build strong sequential momentum within its target advantage growth markets. As we said during the call, perhaps most encouraging for us is the fact that many of their wins have long multi-year tails that point to really nice growth over time.

Speaker #5: You know, with FMT and FSDP, we saw some encouraging positive signs of early inflection, but we still most likely need to clear the uncertainty of geopolitical stuff, to move materially to the next level of support.

Speaker #5: Our businesses there are really well positioned to capitalize on that strength as it plays out from here. So I think bottom line, our growth strategies supported by our growth platforms, expanded through thoughtful M&A and operational integration, are powering IDEX towards a really bright and successful future.

Eric Ashleman: I think bottom line, our growth strategy is supported by our growth platforms, expanded through thoughtful M&A and operational integration are powering IDEX towards a really bright and successful future, and we look forward to updating you as we go along the way. Thanks so much.

Speaker #5: And we look forward to, updating you as we go along the way. Thanks so much.

Operator 2: That concludes today's call. You may now disconnect.

Operator: That concludes today's call. You may now disconnect.

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