Q1 2026 ESAB Corp Earnings Call

May 7, 2026

Operator: Thank you for standing by, welcome to the ESAB Corporation Q1 2026 earnings release and conference 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, simply press star followed by the number 1 on your telephone keypad. If you'd like to withdraw your question, again, press star 1. Thank you. I'd now like to turn the call over to Mark Barbalato, Vice President of Investor Relations. Mark, you may begin.

Operator: Thank you for standing by. Welcome to the ESAB Corporation Q1 2026 Earnings Release and Conference 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, simply press star followed by the number 1 on your telephone keypad. If you'd like to withdraw your question, again, press star 1. Thank you. I'd now like to turn the call over to Mark Barbalato, Vice President of Investor Relations. Mark, you may begin.

Speaker #2: After the speakers' remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star, followed by the number one on your telephone keypad.

Speaker #2: And if you'd like to withdraw your question, again, press star one. Thank you. I'd now like to turn the call over to Mark Barbalato, Vice President of Investor Relations, Mark, you may begin.

Speaker #3: Thanks, operator. Welcome to ESAB's first quarter 2026 earnings call. This morning, I'm joined by our President and CEO, Shyam Kambeyanda, and CFO, Brent Jones.

Mark Barbalato: Thanks, operator. Welcome to ESAB's Q1 2026 Earnings Call. This morning, I'm joined by our President and CEO, Shyam Kambeyanda, and CFO, Brent Jones. Please keep in mind that some of the statements we are making are forward-looking and are subject to risks, including those set forth in our SEC filings and today's earnings release. Actual results may differ, and we do not assume any obligation or intend to update these forward-looking statements except as required by law. With respect to any non-GAAP financial measures mentioned during the call today, the accompanying reconciliation information related to those measures can be found in our earnings press release and today's slide presentation. With that, I'd like to turn the call over to our President and CEO, Shyam Kambeyanda.

Speaker #3: Please keep in mind that some of the statements we are making are forward-looking and are subject to risks, including those set forth in our SEC filings and today's earnings release.

Speaker #3: Actual results may differ, and we do not assume any obligation or intend to update these forward-looking statements except as required by law. With respect to any non-GAAP financial measures mentioned during the call today, the accompanying reconciliation information related to those measures can be found in our earnings press release and today's slide presentation.

Speaker #3: With that, I'd like to turn the call over to our President and CEO, Shyam Kambeyanda.

Speaker #4: Thank you, Mark. And good morning, everyone. Thank you for joining us today. Turning to slide three, to discuss our first quarter highlights. We're pleased to report a strong start to the year, headlined by record first quarter sales.

Shyam Kambeyanda: Thank you, Mark, and good morning, everyone. Thank you for joining us today. Turning to slide 3 to discuss our Q1 highlights. We are pleased to report a strong start to the year, headlined by record Q1 sales. Total core sales grew 10% year-over-year, a result that reflects both the effectiveness of our compounder strategy and the resilience of our diversified global footprint. Despite a more challenging environment, which included higher costs as a result of the conflict in Iran, we generated sales of $715 million and adjusted EBITDA of $136 million, an increase of 6% year-over-year. We delivered this performance while continuing to invest in the long-term drivers for the business. I am especially encouraged with the performance of our acquisitions.

Shyam P. Kambeyanda: Thank you, Mark, and good morning, everyone. Thank you for joining us today. Turning to slide 3 to discuss our Q1 highlights. We are pleased to report a strong start to the year, headlined by record Q1 sales. Total core sales grew 10% year-over-year, a result that reflects both the effectiveness of our compounder strategy and the resilience of our diversified global footprint. Despite a more challenging environment, which included higher costs as a result of the conflict in Iran, we generated sales of $715 million and adjusted EBITDA of $136 million, an increase of 6% year-over-year. We delivered this performance while continuing to invest in the long-term drivers for the business. I am especially encouraged with the performance of our acquisitions.

Speaker #4: Total core sales grew 10% year over year, a result that reflects both the effectiveness of our compounded strategy and the resilience of our diversified global footprint.

Speaker #4: Despite a more challenging environment, which included higher costs as a result of the conflict in Iran, we generated sales of $715 million and adjusted EBITDA of $136 million, an increase of 6% year over year.

Speaker #4: We delivered this performance while continuing to invest in the long-term drivers for the business. I am especially encouraged with the performance of our acquisitions.

Speaker #4: EWM and Active both grew double digits year over year. And our sales synergy funnel across the portfolio improved meaningfully. Reinforcing our confidence in the strategic value these businesses bring to ESAB and their potential to drive organic growth in the years to come.

Shyam Kambeyanda: EWM and Aktiv both grew double digits year over year, and our sales synergy funnel across the portfolio improved meaningfully, reinforcing our confidence in the strategic value these businesses bring to ESAB and their potential to drive organic growth in the years to come. Looking ahead, we are accelerating our compounded journey through the previously announced acquisition of Eddyfi, which we expect to close mid-year. This transaction strengthens our portfolio and extends our runway into profitable growth. Given our Q1 performance and our visibility into the remainder of the year in booked orders and additional price, we are reiterating our previously announced guidance. We are confident in the trajectory of the business while remaining mindful of the dynamic environment in which we operate. Moving to slide 4. Before we turn to the quarter, I want to put the past year and a half into context.

Shyam P. Kambeyanda: EWM and Aktiv both grew double digits year over year, and our sales synergy funnel across the portfolio improved meaningfully, reinforcing our confidence in the strategic value these businesses bring to ESAB and their potential to drive organic growth in the years to come. Looking ahead, we are accelerating our compounded journey through the previously announced acquisition of Eddyfi, which we expect to close mid-year. This transaction strengthens our portfolio and extends our runway into profitable growth. Given our Q1 performance and our visibility into the remainder of the year in booked orders and additional price, we are reiterating our previously announced guidance. We are confident in the trajectory of the business while remaining mindful of the dynamic environment in which we operate. Moving to slide 4. Before we turn to the quarter, I want to put the past year and a half into context.

Speaker #4: Looking ahead, we are accelerating our compounded journey through the previously announced acquisition of Edify. Which we expect to close mid-year. This transaction strengthens our portfolio and extends our runway into profitable growth.

Speaker #4: Given our first quarter performance and our visibility into the remainder of the year in booked orders and additional price, we are reiterating our previously announced guidance.

Speaker #4: We are confident in the trajectory of the business while remaining mindful of the dynamic environment in which we operate. Moving to slide four, before we turn to the quarter, I want to put the past year and a half into context.

Speaker #4: Throughout 2025 and into the start of '26, we have deliberately been reshaping ESAB—sharpening the portfolio and building new capabilities across the company. The ESAB you see today is meaningfully stronger.

Shyam Kambeyanda: Throughout 2025 and into the start of 2026, we have deliberately been reshaping ESAB, sharpening the portfolio and building new capabilities across the company. The ESAB you see today is meaningfully stronger. Our capital allocation strategy is the clearest place to see it. We have continued to build a premier industrial compounder by adding strength across every layer of the value chain. We have strengthened our position in gas control with Delta P and Aktiv. We've created a best-in-class equipment portfolio with EWM and filled out every gap in our equipment product lineup. We added to our leadership position in proprietary filler metal with Bavaria, and Eddyfi, which is expected to close mid-year, extends our workflow solution into inspection and monitoring. Complementing these acquisitions, we now have more than 40 AI projects actively underway, contributing both to near-term productivity and long-term growth.

Shyam P. Kambeyanda: Throughout 2025 and into the start of 2026, we have deliberately been reshaping ESAB, sharpening the portfolio and building new capabilities across the company. The ESAB you see today is meaningfully stronger. Our capital allocation strategy is the clearest place to see it. We have continued to build a premier industrial compounder by adding strength across every layer of the value chain. We have strengthened our position in gas control with Delta P and Aktiv. We've created a best-in-class equipment portfolio with EWM and filled out every gap in our equipment product lineup. We added to our leadership position in proprietary filler metal with Bavaria, and Eddyfi, which is expected to close mid-year, extends our workflow solution into inspection and monitoring. Complementing these acquisitions, we now have more than 40 AI projects actively underway, contributing both to near-term productivity and long-term growth.

Speaker #4: Our capital allocation strategy is the clearest place to see it. We have continued to build a premier industrial compounder by adding strength across every layer of the value chain.

Speaker #4: We have strengthened our position in gas control with Delta P and Active. We've created a best-in-class equipment portfolio with EWM. And filled out every gap in our equipment product lineup.

Speaker #4: We added to our leadership position in proprietary filler metal with Bavaria. And Edify, which is expected to close mid-year extends our workflow solution into inspection and monitoring.

Speaker #4: Complementing these acquisitions, we now have more than 40 AI projects actively underway, contributing both to near-term productivity and long-term growth. The new acquisitions coupled with AI initiatives will drive growth, reduce cyclicality, expand our gross margins profile, making ESAB more durable through the cycle than it has ever been.

Shyam Kambeyanda: The new acquisitions, coupled with AI initiatives, will drive growth, reduce cyclicality, expand our gross margins profile, making ESAB more durable through the cycle than it has ever been. Turning to slide 5. This slide brings the story to life. Over the past decade, we have reshaped ESAB into a faster-growing, higher-margin enterprise, and the shift is now plainly evident in both our mix and our margins. 3 levers have driven the work. First, sustained R&D investment to refresh our product portfolio and fuel growth. Second, EBX AI, our operating system for productivity and operational excellence. Third, a disciplined M&A program that has added growth and margin. Let's start with our mix. In 2016, equipment represented roughly 38% of our sales. A fully refreshed product portfolio and an optimized manufacturing footprint and 18 successful acquisitions have changed that picture.

Shyam P. Kambeyanda: The new acquisitions, coupled with AI initiatives, will drive growth, reduce cyclicality, expand our gross margins profile, making ESAB more durable through the cycle than it has ever been. Turning to slide 5. This slide brings the story to life. Over the past decade, we have reshaped ESAB into a faster-growing, higher-margin enterprise, and the shift is now plainly evident in both our mix and our margins. 3 levers have driven the work. First, sustained R&D investment to refresh our product portfolio and fuel growth. Second, EBX AI, our operating system for productivity and operational excellence. Third, a disciplined M&A program that has added growth and margin. Let's start with our mix. In 2016, equipment represented roughly 38% of our sales. A fully refreshed product portfolio and an optimized manufacturing footprint and 18 successful acquisitions have changed that picture.

Speaker #4: Turning to slide five, this slide brings the story to life. Over the past decade, we have reshaped ESAB into a faster-growing, higher-margin enterprise and the shift is now plainly evident in both our mix and our margins.

Speaker #4: Three levers have driven the work. First, sustained R&D investment to refresh our product portfolio and fuel growth. Second, EBX AI, our operating system for productivity and operational excellence.

Speaker #4: Third, a disciplined M&A program that has added growth and margin. Let's start with our mix. In 2016, equipment represented roughly 38% of our sales.

Speaker #4: A fully refreshed product portfolio and an optimized manufacturing footprint and 18 successful acquisitions have changed that picture. With the recent additions of EWM and Bavaria in fabrication technology and Delta P and Active in gas control, equipment now accounts for roughly 44% of revenue.

Shyam Kambeyanda: With the recent additions of EWM and Bavaria in fabrication technology and Delta P and Aktiv in gas control, equipment now accounts for roughly 44% of revenue. Upon closing Eddyfi mid-year, that mix will rise to approximately 52%. The margin trajectory tells the same story. Our gross margin has moved from approximately 35% in 2016 to nearly 38% today. Eddyfi accelerates the next step. As I've shared with you before, our equipment product carries gross margins closer to 45%. Eddyfi, as we shared before, is close to 65%. Together, these dynamics will push our consolidated gross margins to greater than 40% for 2027 and beyond. Moving to slide 6. Momentum is building globally across our welding equipment portfolio, and two launches are leading the way. The Ruffian 270 engine powered welder and the Aristo Edge.

Shyam P. Kambeyanda: With the recent additions of EWM and Bavaria in fabrication technology and Delta P and Aktiv in gas control, equipment now accounts for roughly 44% of revenue. Upon closing Eddyfi mid-year, that mix will rise to approximately 52%. The margin trajectory tells the same story. Our gross margin has moved from approximately 35% in 2016 to nearly 38% today. Eddyfi accelerates the next step. As I've shared with you before, our equipment product carries gross margins closer to 45%. Eddyfi, as we shared before, is close to 65%. Together, these dynamics will push our consolidated gross margins to greater than 40% for 2027 and beyond. Moving to slide 6. Momentum is building globally across our welding equipment portfolio, and two launches are leading the way. The Ruffian 270 engine powered welder and the Aristo Edge.

Speaker #4: Upon closing Edify mid-year, that mix will rise to approximately 52%. The margin trajectory tells the same story. Our gross margin has moved from approximately 35% in 2016 to nearly 38% today.

Speaker #4: Edify accelerates the next step. As I've shared with you before, our equipment product carries gross margins closer to 45%. And Edify, as we shared before, is close to 65%.

Speaker #4: Together, these dynamics will push our consolidated gross margins to greater than 40% for 2027 and beyond. Moving to slide six, momentum is building globally across our welding equipment portfolio.

Speaker #4: And two launches are leading the way. The Ruffian 270 engine-powered welder and the Aristo Edge. The Ruffian fills a critical gap in our offering and stands out as the most productive operator-friendly unit in its class.

Shyam Kambeyanda: The Ruffian fills a critical gap in our offering and stands out as the most productive operator-friendly unit in its class. It is the only welder in its category to deliver full power simultaneously, 270 amps of welding output and 11,000 watts of generator power at the same time. At 100% duty cycle, an independent generator arc ensures that running power tools never causes a spike or drop in the welding arc. The Aristo Edge sets a new performance benchmark on both the advanced manual and robotic sides. Its ultra-fast arc control manages the arc 10 to 20 times faster than traditional equipment, clearing short circuits instantly and preventing defects, and the advanced waveforms reduce spatter by up to 85%, producing a stable puddle that virtually eliminates post-weld cleanup.

Shyam P. Kambeyanda: The Ruffian fills a critical gap in our offering and stands out as the most productive operator-friendly unit in its class. It is the only welder in its category to deliver full power simultaneously, 270 amps of welding output and 11,000 watts of generator power at the same time. At 100% duty cycle, an independent generator arc ensures that running power tools never causes a spike or drop in the welding arc. The Aristo Edge sets a new performance benchmark on both the advanced manual and robotic sides. Its ultra-fast arc control manages the arc 10 to 20 times faster than traditional equipment, clearing short circuits instantly and preventing defects, and the advanced waveforms reduce spatter by up to 85%, producing a stable puddle that virtually eliminates post-weld cleanup.

Speaker #4: It is the only welder in its category to deliver full power, simultaneously. 270 amps of welding output and 11,000 watts of generator power at the same time.

Speaker #4: At 100% duty cycle, an independent generator arc ensures that running power tools never causes a spike or drop in the welding arc. The Aristo Edge sets a new performance benchmark on both the advanced manual and robotic sides.

Speaker #4: Its ultra-fast arc-controlled manages the arc, 10 to 20 times faster than traditional equipment, clearing short circuits, instantly and preventing defects. And the advanced waveforms reduce spatter by up to 85%, producing a stable puddle that virtually eliminates post-weld cleanup.

Speaker #4: With 500 amps at a 60% duty cycle, the plug-and-play compatibility with all major robot and cobot brands, it is built for continuous industrial-scale production.

Shyam Kambeyanda: With 500 amps at a 60% duty cycle, the plug-and-play compatibility with all major robot and cobot brands, it is built for continuous industrial scale production. Customer response has been strong. We have secured preferred status with the Yellow Goods OEM on the Aristo Edge, and we're gaining channel share with the Ruffian. Together, these two product families add roughly $250 million to our servable market. Turning to slide 7. When we acquired EWM, additive manufacturing was one of the capabilities we were most excited about. It is an advanced 3D metal printing process that uses electric arc as the heat source and metal wire as the feedstock to build large, high-strength components layer by layer. EWM is a clear leader in this space. EWM's React technology is now opening doors for the broader ESAB portfolio.

Shyam P. Kambeyanda: With 500 amps at a 60% duty cycle, the plug-and-play compatibility with all major robot and cobot brands, it is built for continuous industrial scale production. Customer response has been strong. We have secured preferred status with the Yellow Goods OEM on the Aristo Edge, and we're gaining channel share with the Ruffian. Together, these two product families add roughly $250 million to our servable market. Turning to slide 7. When we acquired EWM, additive manufacturing was one of the capabilities we were most excited about. It is an advanced 3D metal printing process that uses electric arc as the heat source and metal wire as the feedstock to build large, high-strength components layer by layer. EWM is a clear leader in this space. EWM's React technology is now opening doors for the broader ESAB portfolio.

Speaker #4: Customer response has been strong. We have secured preferred status with a yellow goods OEM on the Aristo Edge. And we're gaining channel share with the Ruffian.

Speaker #4: Together, these two product families add roughly 250 million to our servable market. Turning to slide seven, when we acquired EWM, additive manufacturing was one of the capabilities we were most excited about.

Speaker #4: It is an advanced 3D metal printing process that uses electric arc as the heat source and metal wire as the feedstock to build large, high-strength components layer by layer.

Speaker #4: And EWM is a clear leader in this space. EWM's react technology is now opening doors for the broader ESAB portfolio. We are gaining real traction with a major US distributor and with defense OEMs.

Shyam Kambeyanda: We are gaining real traction with a major US distributor and with defense OEMs. We have secured orders with integrators, engineering and construction firms, and two German OEMs manufacturing in the US today. In parallel, our teams are building a healthy cross-sell funnel, bringing ESAB filler metal to EWM customers and EWM equipment to ESAB customers. There is still work ahead, but Q1 was an encouraging start. The next product, Tetrix 350, adds a second growth lane. It is the best-in-class power source for TIG applications, including precision welding requirements needed for semiconductor wafer manufacturing. It pairs naturally with our AMI product, where order activity continues to rise. Together, these two products give ESAB access to an additional $900 million of servable market across additive manufacturing and TIG and orbital TIG welding.

Shyam P. Kambeyanda: We are gaining real traction with a major US distributor and with defense OEMs. We have secured orders with integrators, engineering and construction firms, and two German OEMs manufacturing in the US today. In parallel, our teams are building a healthy cross-sell funnel, bringing ESAB filler metal to EWM customers and EWM equipment to ESAB customers. There is still work ahead, but Q1 was an encouraging start. The next product, Tetrix 350, adds a second growth lane. It is the best-in-class power source for TIG applications, including precision welding requirements needed for semiconductor wafer manufacturing. It pairs naturally with our AMI product, where order activity continues to rise. Together, these two products give ESAB access to an additional $900 million of servable market across additive manufacturing and TIG and orbital TIG welding.

Speaker #4: We have secured orders with integrators. Engineering and construction firms and two German OEMs manufacturing in the US today. In parallel, our teams are building a healthy cross-cell funnel, bringing ESAB filler metal to EWM customers and EWM equipment to ESAB customers.

Speaker #4: There is still work ahead, but Q1 was an encouraging start. The next product, Tetrix 350, adds a second growth lane. It is the best-in-class power source for TIG applications, including precision welding requirements needed for semiconductor wafer manufacturing.

Speaker #4: And it pairs naturally with our AMI product, where it order activity continues to rise. Together, these two products give ESAB access to an additional 900 million of servable market across additive manufacturing and TIG and orbital TIG welding.

Speaker #4: They have our sales team's energized by the new workflow solutions. We can now deliver to our most discerning customers. Moving to slide eight, let me reiterate what I shared when we announced the Edify acquisition.

Shyam Kambeyanda: They have our sales teams energized by the new workflow solutions we can now deliver to our most discerning customers. Moving to slide 8. Let me reiterate what I shared when we announced the Eddyfi acquisition. This transaction extends ESAB workflow solutions into faster growing, higher margin inspection and monitoring space. A bit more detail on the asset itself. Eddyfi is a clear market leader in electromagnetic testing, ultrasonic testing, and automated inspection. It serves mission-critical end markets with attractive secular tailwinds across aerospace, defense, nuclear, and energy infrastructure. The business also brings meaningful North American exposure that pairs naturally with ESAB's global footprint, opening immediate geographic expansion opportunities for both companies. Financially, Eddyfi is a premier asset, high single-digit growth, gross margins about 65%, and EBITDA margins around 30%.

Shyam P. Kambeyanda: They have our sales teams energized by the new workflow solutions we can now deliver to our most discerning customers. Moving to slide 8. Let me reiterate what I shared when we announced the Eddyfi acquisition. This transaction extends ESAB workflow solutions into faster growing, higher margin inspection and monitoring space. A bit more detail on the asset itself. Eddyfi is a clear market leader in electromagnetic testing, ultrasonic testing, and automated inspection. It serves mission-critical end markets with attractive secular tailwinds across aerospace, defense, nuclear, and energy infrastructure. The business also brings meaningful North American exposure that pairs naturally with ESAB's global footprint, opening immediate geographic expansion opportunities for both companies. Financially, Eddyfi is a premier asset, high single-digit growth, gross margins about 65%, and EBITDA margins around 30%.

Speaker #4: This transaction extends ESAB workflow solutions into faster-growing, higher-margin inspection and monitoring space, a bit more detail on the asset itself, Edify is a clear market leader in electromagnetic testing, ultrasonic testing, and automated inspection.

Speaker #4: It serves mission-critical end markets with attractive secular tailwinds across aerospace, defense, nuclear, and energy infrastructure. The business also brings meaningful North American exposure that pairs naturally with ESAB's global footprint, opening immediate geographic expansion opportunities for both companies.

Speaker #4: Financially, Edify is a premier asset. High single-digit growth, gross margins about 65%, and EBITDA margins around 30%. Strategically, the deal accelerates our shift towards equipment, strengthens our ability to deliver differentiated workflow solutions, expand margins, reduce cyclicality, and ultimately improves the predictability and resilience of our earnings profile.

Shyam Kambeyanda: Strategically, the deal accelerates our shift towards equipment, strengthens our ability to deliver differentiated workflow solutions, expand margins, reduce cyclicality, and ultimately improves the predictability and resilience of our earnings profile. Although the transaction is expected to close mid-year, we're already in motion. Our integration team is in place, sharpening the combined workflow solutions value proposition, and beginning to share Eddyfi's capability with ESAB customers. Turning to slide 9. What I love about this industry is that we enable extraordinary engineering every day. A few moments capture that better than what is happening right now with NASA's Artemis program. For the first time in more than 50 years, humanity returned to the moon, ESAB technology helped make that possible. A decade ago, we would not have been at the table. Today, we are a key contributor, that is a source of enormous pride across our company.

Shyam P. Kambeyanda: Strategically, the deal accelerates our shift towards equipment, strengthens our ability to deliver differentiated workflow solutions, expand margins, reduce cyclicality, and ultimately improves the predictability and resilience of our earnings profile. Although the transaction is expected to close mid-year, we're already in motion. Our integration team is in place, sharpening the combined workflow solutions value proposition, and beginning to share Eddyfi's capability with ESAB customers. Turning to slide 9. What I love about this industry is that we enable extraordinary engineering every day. A few moments capture that better than what is happening right now with NASA's Artemis program. For the first time in more than 50 years, humanity returned to the moon, ESAB technology helped make that possible. A decade ago, we would not have been at the table. Today, we are a key contributor, that is a source of enormous pride across our company.

Speaker #4: Although the transaction is expected to close mid-year, we're already in motion. Our integration team is in place, sharpening the combined workflow solutions value proposition and beginning to share Edify's capability with ESAB customers.

Speaker #4: Turning to slide nine, what I love about this industry is that we enable extraordinary engineering every day. A few moments capture that better than what is happening right now with NASA's Artemis program.

Speaker #4: For the first time in more than 50 years, humanity returned to the Moon and ESAB technology helped make that possible. A decade ago, we would not have been at the table.

Speaker #4: Today, we are a key contributor and that is a source of enormous pride across our company. You can see one example on this slide, our friction slow welding technology delivers the exact combination of strength, precision, reliability, and weight optimization that the most demanding aerospace environments require.

Shyam Kambeyanda: You can see one example on this slide. Our friction stir welding technology delivers the exact combination of strength, precision, reliability, and weight optimization that the most demanding aerospace environments require. ESAB's technology enables aluminum alloy structures to be extraordinarily strong and remarkably light. Boeing's selection of our technology for the Space Launch System's fuel tank reinforces the thesis behind our portfolio. Differentiated innovation applied to mission-critical manufacturing in the world's most demanding end markets. This is what we mean when we talk about being the fabrication technology provider of choice, and it is what gets our teams out of bed every morning. Before I go into more detail about the quarter, I'd like to take this opportunity to thank Kevin Johnson for his contributions to ESAB and wish him well in his new role. At the same time, I'm very excited to welcome Brent Jones to the ESAB family.

Shyam P. Kambeyanda: You can see one example on this slide. Our friction stir welding technology delivers the exact combination of strength, precision, reliability, and weight optimization that the most demanding aerospace environments require. ESAB's technology enables aluminum alloy structures to be extraordinarily strong and remarkably light. Boeing's selection of our technology for the Space Launch System's fuel tank reinforces the thesis behind our portfolio. Differentiated innovation applied to mission-critical manufacturing in the world's most demanding end markets. This is what we mean when we talk about being the fabrication technology provider of choice, and it is what gets our teams out of bed every morning. Before I go into more detail about the quarter, I'd like to take this opportunity to thank Kevin Johnson for his contributions to ESAB and wish him well in his new role. At the same time, I'm very excited to welcome Brent Jones to the ESAB family.

Speaker #4: ESAB's technology enables aluminum alloy structures to be extraordinarily strong and remarkably light. Boeing's selection of our technology for the Space Launch Systems fuel tank reinforces the thesis behind our portfolio.

Speaker #4: Differentiated innovation, applied to mission-critical manufacturing in the world's most demanding end markets. This is what we mean when we talk about being the fabrication technology provider of choice and it is what gets our teams out of bed every morning.

Speaker #4: Before I go into more detail about the quarter, I'd like to take this opportunity to thank Kevin Johnson for his contributions to ESAB and wish him well in his new role.

Speaker #4: At the same time, I'm very excited to welcome Brent Jones to the ESAB family. Brent brings diverse and highly valuable expertise as we move into the next phase of our compounder journey.

Shyam Kambeyanda: Brent brings diverse and highly valuable expertise as we move into the next phase of our compounder journey. With that, let me hand it over to Brent to say a few words.

Shyam P. Kambeyanda: Brent brings diverse and highly valuable expertise as we move into the next phase of our compounder journey. With that, let me hand it over to Brent to say a few words.

Speaker #4: With that, let me hand it over to Brent to say a few words.

Speaker #3: Thank you, Shyam, and good morning, everyone. I want to start by thanking Shyam and the entire ESAB team for the warm welcome. I'm thrilled to be joining ESAB and look forward to working closely with the team as we continue to advance ESAB's compounder journey.

Brent Jones: Thank you, Shyam, and good morning, everyone. I want to start by thanking Shyam and the entire ESAB team for the warm welcome. I'm thrilled to be joining ESAB and look forward to working closely with the team as we continue to advance ESAB's compounder journey. ESAB has a strong foundation, a compelling strategy, and a tremendous opportunity ahead, and I'm excited to be part of it. Let me hand it back to Shyam to go through the financials.

R. Brent Jones: Thank you, Shyam, and good morning, everyone. I want to start by thanking Shyam and the entire ESAB team for the warm welcome. I'm thrilled to be joining ESAB and look forward to working closely with the team as we continue to advance ESAB's compounder journey. ESAB has a strong foundation, a compelling strategy, and a tremendous opportunity ahead, and I'm excited to be part of it. Let me hand it back to Shyam to go through the financials.

Speaker #3: ESAB has a strong foundation, a compelling strategy, and a tremendous opportunity ahead and I'm excited to be part of it. Let me hand it back to Shyam to go through the financials.

Speaker #4: Thanks, Brent. Moving to slide 10. Turning to the quarter, we're pleased with how the business has performed overall, strong execution by our global teams, drove record first-quarter total sales growth of 10% year over year, a clear demonstration of the power of our compounder strategy.

Shyam Kambeyanda: Thanks, Brent. Moving to slide 10. Turning to the quarter, we're pleased with how the business has performed overall. Strong execution by our global teams drove record Q1 total sales growth of 10% year-over-year, a clear demonstration of the power of our compounder strategy. Adjusted EBITDA was $136 million, up 6% year-over-year, with an adjusted EBITDA margin of 19%. Margins in the quarter reflected an expected 40 basis points impact from EWM and an additional 30 basis points of headwind from the conflict in Iran. Important to note, EWM is already contributing strong growth this quarter. As I've shared before, EWM is accretive to gross margins but dilutive to EBITDA margins for the first three quarters in 2026.

Shyam P. Kambeyanda: Thanks, Brent. Moving to slide 10. Turning to the quarter, we're pleased with how the business has performed overall. Strong execution by our global teams drove record Q1 total sales growth of 10% year-over-year, a clear demonstration of the power of our compounder strategy. Adjusted EBITDA was $136 million, up 6% year-over-year, with an adjusted EBITDA margin of 19%. Margins in the quarter reflected an expected 40 basis points impact from EWM and an additional 30 basis points of headwind from the conflict in Iran. Important to note, EWM is already contributing strong growth this quarter. As I've shared before, EWM is accretive to gross margins but dilutive to EBITDA margins for the first three quarters in 2026.

Speaker #4: Adjusted EBITDA was 136 million up 6% year over year, with an adjusted EBITDA margin of 19%. Margins in the quarter reflected an expected 40 basis points impact from EWM and an additional 30 basis points of headwind from the conflict in Iran.

Speaker #4: Important to note, EWM is already contributing strong growth this quarter as I've shared before, EWM is a critic to gross margins but dilutive to EBITDA margins for the first three quarters in 2026.

Speaker #4: Our cost out and sales synergy efforts are running ahead of schedule and we expect EWM to be EBITDA accretive as we exit the year.

Shyam Kambeyanda: Our cost out and sales synergy efforts are running ahead of schedule, and we expect EWM to be EBITDA accretive as we exit the year. Turning to slide 11 and talking about the Americas. The Americas delivered a steady Q1. Total sales were $288 million, up 3% year-over-year, and adjusted EBITDA was $56 million, also up 3% year-over-year, with margins flat at 19.4%. Within the segment, North America, excluding Mexico, grew mid-single digits, and Mexico held stable. We're also seeing meaningful interest in EWM across the US, which is encouraging as we broaden the commercial reach of that business. At the same time, we're reshaping our manufacturing footprint and accelerating our EBX AI initiatives, which are designed to strengthen competitiveness and expand margins. Moving to slide 12 to talk about EMEA and APAC.

Shyam P. Kambeyanda: Our cost out and sales synergy efforts are running ahead of schedule, and we expect EWM to be EBITDA accretive as we exit the year. Turning to slide 11 and talking about the Americas. The Americas delivered a steady Q1. Total sales were $288 million, up 3% year-over-year, and adjusted EBITDA was $56 million, also up 3% year-over-year, with margins flat at 19.4%. Within the segment, North America, excluding Mexico, grew mid-single digits, and Mexico held stable. We're also seeing meaningful interest in EWM across the US, which is encouraging as we broaden the commercial reach of that business. At the same time, we're reshaping our manufacturing footprint and accelerating our EBX AI initiatives, which are designed to strengthen competitiveness and expand margins. Moving to slide 12 to talk about EMEA and APAC.

Speaker #4: Turning to slide 11 and talking about the Americas. The Americas delivered a steady first quarter total sales were 288 million up 3% year over year, an adjusted EBITDA was 56 million also up 3% year over year, with margins flat at 19.4%.

Speaker #4: Within the segment, North America excluding Mexico grew mid-single digits, and Mexico held stable. We're also seeing meaningful interest in EWM across the US, which is encouraging as we broaden the commercial reach of that business.

Speaker #4: At the same time, we're reshaping our manufacturing footprint and accelerating our EBX AI initiatives, which are designed to strengthen competitiveness and expand margins. Moving to slide 12 to talk about EMEA and APAC.

Speaker #4: We continue to gain share from competition across EMEA and APAC, a clear demonstration of our global footprint. Sales increased 16% to 426 million and adjusted EBITDA rose 9% to 80 million.

Shyam Kambeyanda: We continue to gain share from competition across EMEA and APAC, a clear demonstration of our global footprint. Sales increased 16% to $426 million, and adjusted EBITDA rose 9% to $80 million. Margins declined 130 basis points, with 50 basis points of that reflecting the conflict in Iran and the additional 70 basis points coming from EWM. Europe and India performed in line with expectations, and the Middle East saw limited disruption. EWM and Aktiv Technologies both grew double digits, with strong sales funnel momentum building across all 4 acquisitions. EWM integration is progressing ahead of schedule, and we're already seeing early benefits from the combination with ESAB. Moving to slide 13. We continue to gain share in the Middle East, and that success starts with our local presence in the region.

Shyam P. Kambeyanda: We continue to gain share from competition across EMEA and APAC, a clear demonstration of our global footprint. Sales increased 16% to $426 million, and adjusted EBITDA rose 9% to $80 million. Margins declined 130 basis points, with 50 basis points of that reflecting the conflict in Iran and the additional 70 basis points coming from EWM. Europe and India performed in line with expectations, and the Middle East saw limited disruption. EWM and Aktiv Technologies both grew double digits, with strong sales funnel momentum building across all 4 acquisitions. EWM integration is progressing ahead of schedule, and we're already seeing early benefits from the combination with ESAB. Moving to slide 13. We continue to gain share in the Middle East, and that success starts with our local presence in the region.

Speaker #4: Margins declined 130 basis points, with 50 basis points of that reflecting the conflict in Iran and the additional 70 basis points coming from EWM.

Speaker #4: Europe and India performed in line with expectations and the Middle East saw limited disruption. EWM and Active both grew double digits, with strong sales funnel momentum building across all four acquisitions.

Speaker #4: EWM integration is progressing ahead of schedule and we're already seeing early benefits from the combination with ESAB. Moving to slide 13. We continue to gain share in the Middle East.

Speaker #4: And that success starts with our local presence in the region. The resilience we have shown this quarter reflects both the local footprint and the way our teams have responded to changing conditions.

Shyam Kambeyanda: The resilience we have shown this quarter reflects both the local footprint and the way our teams have responded to changing conditions. The Middle East represents roughly 7% of our sales. Despite the conflict, the region saw limited disruption. Our teams reacted quickly to the disruption by rerouting inventory through ports of Jeddah and Salalah in Oman and implementing surcharges to offset higher costs. It is a clear example of the agility and discipline that define our operating model. Long-term fundamentals remain attractive. We've made investments on the ground, most notably in Saudi Arabia. That footprint positions us better than any of our peers to win with customers and support the rebuild once conditions stabilize. Turning to slide 14. Our balance sheet and cash flow remain important enablers of our compounder journey. We've made meaningful progress on both fronts.

Shyam P. Kambeyanda: The resilience we have shown this quarter reflects both the local footprint and the way our teams have responded to changing conditions. The Middle East represents roughly 7% of our sales. Despite the conflict, the region saw limited disruption. Our teams reacted quickly to the disruption by rerouting inventory through ports of Jeddah and Salalah in Oman and implementing surcharges to offset higher costs. It is a clear example of the agility and discipline that define our operating model. Long-term fundamentals remain attractive. We've made investments on the ground, most notably in Saudi Arabia. That footprint positions us better than any of our peers to win with customers and support the rebuild once conditions stabilize. Turning to slide 14. Our balance sheet and cash flow remain important enablers of our compounder journey. We've made meaningful progress on both fronts.

Speaker #4: The Middle East represents roughly 7% of our sales and despite the conflict, the region saw limited disruption. Our teams reacted quickly to the disruption by rerouting inventory through ports of Jeddah and Salalah in Oman, and implementing surcharges to offset higher costs.

Speaker #4: It is a clear example of the agility and discipline that define our operating model. Long-term fundamentals remain attractive. We've made investments on the ground, most notably in Saudi Arabia, and that footprint positions us better than any of our peers to win with customers and support the rebuild once conditions stabilize.

Speaker #4: Turning to slide 14. Our balance sheet and cash flow remain important enablers of our compounder journey and we've made meaningful progress on both fronts.

Speaker #4: Adjusted free cash flow was 40 million and cash conversion improved to 49%, up from 40% in the prior year quarter. The improvements reflect strong working capital management and continued EBX AI-driven process gains in order to cash.

Shyam Kambeyanda: Adjusted free cash flow was $40 million, and cash conversion improved to 49%, up from 40% in the prior year quarter. The improvements reflect strong working capital management and continued EBX AI-driven process gains in order to cash. We expect strong full-year cash generation. We're also focused on deleveraging. We ended the Q1 at net leverage of 1.9. That figure will step up temporarily once the Eddyfi acquisition closes, but we expect to be back below 3 by year-end. Moving to slide 15. Given our Q1 performance and our visibility to the remainder of the year in booked orders and additional price, we are reiterating our previously announced guidance. We are confident in the trajectory of the business while remaining mindful of the dynamic environment in which we operate.

Shyam P. Kambeyanda: Adjusted free cash flow was $40 million, and cash conversion improved to 49%, up from 40% in the prior year quarter. The improvements reflect strong working capital management and continued EBX AI-driven process gains in order to cash. We expect strong full-year cash generation. We're also focused on deleveraging. We ended the Q1 at net leverage of 1.9. That figure will step up temporarily once the Eddyfi acquisition closes, but we expect to be back below 3 by year-end. Moving to slide 15. Given our Q1 performance and our visibility to the remainder of the year in booked orders and additional price, we are reiterating our previously announced guidance. We are confident in the trajectory of the business while remaining mindful of the dynamic environment in which we operate.

Speaker #4: We generation. We're also focused on deleveraging, we ended the first quarter at net leverage of 1.9. That figure will step up temporarily once the Edify acquisition closes, but we expect to be back below 3 by year-end.

Speaker #4: Moving to slide 15. Given our first quarter performance and our visibility to the remainder of the year and booked orders and additional price, we are reiterating our previously announced guidance.

Speaker #4: We are confident in the trajectory of the business while remaining mindful of the dynamic environment in which we operate. On a core basis, our outlook assumes total sales growth of 6% to 9%, which consists of organic growth of 2% to 4%.

Shyam Kambeyanda: On a core basis, our outlook assumes total sales growth of 6% to 9%, which consists of organic growth of 2% to 4%, 400 basis points from M&A, and FX contributing approximately 1%. Our adjusted EBITDA range remains $575 million to $595 million, and our adjusted EPS range remains $5.70 to $5.90. Turning to slide 16. In summary, our recent initiatives have fundamentally reshaped ESAB, accelerating our transformation into a premier industrial compounder. The four acquisitions we made last year, EWM, Bavaria, DeltaP, and Aktiv, and Eddyfi now to start 2026, have moved the company decisively towards higher growth, higher margin, lower cyclicality, and a more predictable earnings profile. We have meaningfully increased our exposure to defense, nuclear, and the fast-growing additive manufacturing space while positioning ourselves opportunistically to benefit from rising semiconductor capital spending.

Shyam P. Kambeyanda: On a core basis, our outlook assumes total sales growth of 6% to 9%, which consists of organic growth of 2% to 4%, 400 basis points from M&A, and FX contributing approximately 1%. Our adjusted EBITDA range remains $575 million to $595 million, and our adjusted EPS range remains $5.70 to $5.90. Turning to slide 16. In summary, our recent initiatives have fundamentally reshaped ESAB, accelerating our transformation into a premier industrial compounder. The four acquisitions we made last year, EWM, Bavaria, DeltaP, and Aktiv, and Eddyfi now to start 2026, have moved the company decisively towards higher growth, higher margin, lower cyclicality, and a more predictable earnings profile. We have meaningfully increased our exposure to defense, nuclear, and the fast-growing additive manufacturing space while positioning ourselves opportunistically to benefit from rising semiconductor capital spending.

Speaker #4: 400 basis points from M&A and FX contributing approximately 1%. Our adjusted EBITDA range remains $575 million to $595 million, and our adjusted EPS range remains $5.70 to $5.90.

Speaker #4: Turning to slide 16. In summary, our recent initiatives have fundamentally reshaped ESAB, accelerating our transformation into a premier industrial compounder, the four acquisitions we made last year, EWM, Bavaria, Delta P, and Active, and Edify now to start 2026 have moved the company decisively towards higher growth, higher margin, lower cyclicality, and a more predictable earnings profile.

Speaker #4: We have meaningfully increased our exposure to defense, nuclear, and the fast-growing additive manufacturing space while positioning ourselves opportunistically to benefit from rising semiconductor capital spending.

Speaker #4: We are thrilled with these acquisitions and the way they have shaped our portfolio, strengthening our ability to compound value and generate stronger cash flow over the long term.

Shyam Kambeyanda: We are thrilled with these acquisitions and the way they have shaped our portfolio, strengthening our ability to compound value and generate stronger cash flow over the long term. Operationally, we're winning in the market. Our acquisitions are performing. EBX AI continues to power productivity across the company. The Q2 is tracking to plan with stable sales and orders, supporting our decision to reiterate full-year guidance. Taken together, these actions position ESAB to compound long-term shareholder value at an accelerating pace. Our teams are energized. Our strategy is working. The path ahead for ESAB is full of opportunity, and our finest moments are still in front of us. With that, operator, let's open the line for questions.

Shyam P. Kambeyanda: We are thrilled with these acquisitions and the way they have shaped our portfolio, strengthening our ability to compound value and generate stronger cash flow over the long term. Operationally, we're winning in the market. Our acquisitions are performing. EBX AI continues to power productivity across the company. The Q2 is tracking to plan with stable sales and orders, supporting our decision to reiterate full-year guidance. Taken together, these actions position ESAB to compound long-term shareholder value at an accelerating pace. Our teams are energized. Our strategy is working. The path ahead for ESAB is full of opportunity, and our finest moments are still in front of us. With that, operator, let's open the line for questions.

Speaker #4: Operationally, we're winning in the market. Our acquisitions are performing. EBX AI continues to power productivity across the company. The second quarter is tracking to plan, with stable sales and orders supporting our decision to reiterate full-year guidance.

Speaker #4: Taken together, these actions position ESAB to compound long-term shareholder value at an accelerating pace, our teams are energized, our strategy is working, the path ahead for ESAB is full of opportunity, and our finest moments are still in front of us.

Speaker #4: With that operator, let's open the line for questions.

Speaker #1: Thank you. We will now begin the question and answer session. If you would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue.

Operator: Thank you. We will now begin the question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star one again. We ask that you please limit yourself to 1 question and 1 follow-up. Your first question comes from the line of Nathan Jones with Stifel. Please go ahead.

Speaker #1: And if you would like to withdraw your question, simply press star one again. We ask that you please limit yourself to one question in one follow-up.

Speaker #1: Your first question comes from the line of Nathan Jones, with Stifel, please go ahead.

Speaker #5: Good morning, everyone. I guess I thought at, at a fairly high level, volume in the first quarter was minus three, and I would have thought that price should be fading from the plus two that we had in the first quarter, maybe not with all the renewed inflation.

Nathan Jones: Morning, everyone.

Shyam Kambeyanda: Hi, Nathan.

Shyam P. Kambeyanda: Hi, Nathan.

Nathan Jones: I guess I'll start at a fairly high level. Volume in Q1 was -3%. I would have thought that price should be fading from the +2% that we had in Q1. Maybe not with all the renewed inflation. Does imply an inflection on volume to get to the 2% to 4% organic growth for the full year. Can you maybe talk about where you see the inflection in volumes as we go through the year from that -3% to something that's positive?

Speaker #5: Does imply an inflection on volume to get to the two to four percent organic growth for the full year. So can you maybe talk about where you see, the inflection in volumes as we go through the year from, from that negative three to, to something that's, that's positive?

Speaker #6: Yeah. I think, Nathan, we obviously were, were going against the comparable last year, if you remember, with the pull ahead with tariffs. so comparably, we knew Q1 would be just a bit softer.

Shyam Kambeyanda: Yeah, I think, Nathan, we obviously were going against the comparable last year, if you remember, with the pull ahead with tariffs. Comparably, we knew Q1 would be just a bit softer, as a result of the pull aheads that happened last year, when the tariffs went into play. We sort of landed in Q1 even a little stronger than what we thought, based on when the conflict started. Very pleased with the top-line number and how the teams performed. As you go through the year, a couple of things happen. One, obviously we go in with some additional price into Q2.

Shyam P. Kambeyanda: Yeah, I think, Nathan, we obviously were going against the comparable last year, if you remember, with the pull ahead with tariffs. Comparably, we knew Q1 would be just a bit softer, as a result of the pull aheads that happened last year, when the tariffs went into play. We sort of landed in Q1 even a little stronger than what we thought, based on when the conflict started. Very pleased with the top-line number and how the teams performed. As you go through the year, a couple of things happen. One, obviously we go in with some additional price into Q2.

Speaker #6: as a result of the pull aheads that happened last year, when the tariffs went into play. so we, we sort of landed in Q1 even a little stronger than what we thought, based on when the conflict started.

Speaker #6: So, very pleased with the top-line number and how the teams performed. And as you go through the year, a couple of things happen.

Speaker #6: One, obviously, we go up, go in with some additional price, into Q2. second, the back half of the year, as you know, some of the acquisitions that today show up, you know, the acquisitions that show up today on a different line become organic, as we go into the third and the fourth quarter.

Shyam Kambeyanda: Second, in the H2 of the year, as you know, some of the acquisitions that today show up, you know, the acquisitions that show up today on a different line become organic, as we go into Q3 and Q4, driving up organic sales as we finish out the year. The thoughtful way to look at it, down slightly, neutral, a little bit more positive in Q3, and then when the acquisitions become part of the base, you really see that organic driver kick in. Clearly for us, the teams have done, in my view, a phenomenal job navigating through Q1.

Shyam P. Kambeyanda: Second, in the H2 of the year, as you know, some of the acquisitions that today show up, you know, the acquisitions that show up today on a different line become organic, as we go into Q3 and Q4, driving up organic sales as we finish out the year. The thoughtful way to look at it, down slightly, neutral, a little bit more positive in Q3, and then when the acquisitions become part of the base, you really see that organic driver kick in. Clearly for us, the teams have done, in my view, a phenomenal job navigating through Q1. Even though the war came upon us as we finished out February, the team sort of really rallied, figured things out quickly in terms of supply chain, handled the quarter strong, and we finished well, and we set us up nicely for Q2 and beyond.

Speaker #6: Driving up organic sales as we finish out the year. So the, the thoughtful way to look at it, down slightly, neutral, a little bit more positive in Q3, and then when the really see that organic driver kick in.

Speaker #6: clearly for us, the teams have done in my view a phenomenal job navigating through the first quarter. even though the war came upon us as we finished out February, the teams sort of really rallied, figured, things out quickly in terms of supply chain.

Shyam Kambeyanda: Even though the war came upon us as we finished out February, the team sort of really rallied, figured things out quickly in terms of supply chain, handled the quarter strong, and we finished well, and we set us up nicely for Q2 and beyond.

Speaker #6: handled, the quarter strong. and we finished well. and we've set us up nicely for Q2 and beyond.

Speaker #7: Thanks for that. I guess I'll, I'll ask my follow-up about the Middle East. We have heard, from companies, about lack of side access and things like that that are, impeding, I guess, work being done in the Middle East.

Nathan Jones: Thanks for that. I guess I'll ask my follow-up about the Middle East. We have heard from companies about lack of site access and things like that that are impeding, I guess, work being done in the Middle East. Can you talk about the impact that's having on your business? You know, we're only at war for 1 month out of the quarter, in Q1. Should we expect a little bit more impact than, you know, I think you called out 50 basis points of margin in EMEA and APAC? Does that get a little bit worse in Q2? Maybe talk about the mitigation activities that you've deployed to help offset that. Thanks for taking the questions.

Speaker #7: Can you talk about the impact that's having on your business, you know, we're, we're only at war for one, one month out of the quarter in the first quarter.

Speaker #7: Should we expect a little bit more impact than, you know, I think you called that a 50 basis points of, of margin in a mere an APAC.

Speaker #7: Does that get a little bit worse in the second quarter or maybe talk about the mitigation activities that you've deployed to, to help offset that?

Speaker #7: Thanks for taking the questions.

Speaker #6: Yeah. So, so, the, the way to think about it, at least in the first quarter, was when it came upon us, I think we, we drove to get supplies into the Middle East so that we had the right inventory in place, for the business.

Shyam Kambeyanda: Yeah. The way to think about it, at least in Q1, was when it came upon us, I think we drove to get supplies into the Middle East so that we had the right inventory in place for the business. Think of it as some additional costs that came at us in Q1 that we thoughtfully engaged with to make sure that the business was in a good spot. We've gone out for price as the month went on, think about that margin gap actually reducing. That being said, we are going out for price to match costs, we don't have any additional price there. We expect to be price cost neutral.

Shyam P. Kambeyanda: Yeah. The way to think about it, at least in Q1, was when it came upon us, I think we drove to get supplies into the Middle East so that we had the right inventory in place for the business. Think of it as some additional costs that came at us in Q1 that we thoughtfully engaged with to make sure that the business was in a good spot. We've gone out for price as the month went on, think about that margin gap actually reducing. That being said, we are going out for price to match costs, we don't have any additional price there. We expect to be price cost neutral.

Speaker #6: And so think of it as some additional costs that came at us, in Q1 that we thoughtfully engaged with to make sure that the business was in a good spot.

Speaker #6: We've gone out for price as the month went on. And so think about that margin gap actually reducing. That being said, we are going out for price to match costs so we don't have any additional price there.

Speaker #6: So we expect to be price-cost neutral. So it's an improving scenario. And as the year goes along, we'll continue to work the price, piece, to continue our journey forward like we've done in the past.

Shyam Kambeyanda: It's an improving scenario, and as the year goes along, we'll continue to work the price piece to continue our journey forward like we've done in the past. That's the way to think about it. A little additional hit in Q1, getting better as we get into Q2 with the additional price that we've gone out with, and then getting slightly positive as we finish out the year in Q3 and Q4.

Shyam P. Kambeyanda: It's an improving scenario, and as the year goes along, we'll continue to work the price piece to continue our journey forward like we've done in the past. That's the way to think about it. A little additional hit in Q1, getting better as we get into Q2 with the additional price that we've gone out with, and then getting slightly positive as we finish out the year in Q3 and Q4.

Speaker #6: So that's the way to think about it. So a little additional hit in Q1, getting better as we get into Q2 with the additional price that we've gone out with, and then getting slightly positive as we finish out the year in the third and fourth quarter.

Speaker #7: That makes sense. Thanks for taking the questions.

Nathan Jones: That makes sense. Thanks for taking the questions.

Speaker #1: Your next question comes from the line of Tammy Zakaria with JPMorgan. Please go ahead.

Operator: Your next question comes from the line of Tami Zakaria with JPMorgan. Please go ahead.

Tami Zakaria: Hey, good morning. Thank you so much. I heard you talk about acquisitions growing double-digit %. Did those acquisitions have unusually easy compares, or that's a good gauge for the rest of the year? Within that double-digit %, how much was price versus volume?

Speaker #8: Hey, good morning. Thank you so much. I heard you talk about acquisitions growing double-digit percent. did those acquisitions have unusually easy compares or that's a good gauge for the rest of the year?

Speaker #8: And within that double-digit percent, how much was price versus volume?

Shyam Kambeyanda: All right. Let me start with the first piece. You know, the two businesses that I highlighted were EWM and Aktiv. The short answer is year-over-year, it wasn't about easy comparables, it was the actions that the team were taking, engaging with new customers, getting new orders, especially in Europe, the Middle East, and to some extent also in North America for the EWM business. We feel really good, one, about the acquisition, two, about the funnel that we've created that's now creating momentum in the equipment business. There was some price in it, but most of it was volume, which is what's exciting for us as we go through the year.

Speaker #6: all right. So let me, let me start with, the first piece. the, you know, the two businesses that I s highlighted were EWM and, and Active.

Shyam P. Kambeyanda: All right. Let me start with the first piece. You know, the two businesses that I highlighted were EWM and Aktiv. The short answer is year-over-year, it wasn't about easy comparables, it was the actions that the team were taking, engaging with new customers, getting new orders, especially in Europe, the Middle East, and to some extent also in North America for the EWM business. We feel really good, one, about the acquisition, two, about the funnel that we've created that's now creating momentum in the equipment business. There was some price in it, but most of it was volume, which is what's exciting for us as we go through the year.

Speaker #6: the short answer is year over year, it was, wasn't about easy comparables. It was the actions that the team were taking, engaging with new customers, getting new orders.

Speaker #6: especially in Europe, the Middle East, and to some extent also in North America for the EWM business. And so we feel really good. one about the acquisition, two about the funnel that we've created that's now creating momentum in the equipment business.

Speaker #6: there was some price in it, but most of it was volume, which is what's exciting for us as we go through the year. so I hope that, that sort of answers that question.

Tami Zakaria: Great

Shyam Kambeyanda: That sort of answers that question. The other piece that I think I want to reiterate as we look at H2 as well, we have some automation orders that we booked, several of them that stack up quite nicely, adding to that organic growth number that we expect to see in H2 in Q3 and Q4. Additional price, additional orders in automation. These businesses that we've acquired that are really matching the strategic fit that we saw are today outperforming our plan, creating additional tailwind for volume as we finish out the year.

Shyam P. Kambeyanda: That sort of answers that question. The other piece that I think I want to reiterate as we look at H2 as well, we have some automation orders that we booked, several of them that stack up quite nicely, adding to that organic growth number that we expect to see in H2 in Q3 and Q4. Additional price, additional orders in automation. These businesses that we've acquired that are really matching the strategic fit that we saw are today outperforming our plan, creating additional tailwind for volume as we finish out the year.

Speaker #6: The other piece that I think I wanna reiterate as we look at the second half of the year as well. we have some automation orders that we booked, several of them that stack up quite nicely.

Speaker #6: Adding to that organic growth number that we expect to see in the second half of the year in Q3 and Q4. So additional price, additional orders in automation, these businesses that we've acquired that, are really matching the strategic fit that we saw are today outperforming our plan, creating additional tailwind for volume as we finish out the year.

Speaker #8: That is excellent color. Thank you. And, regarding the 30 basis points headwind you saw in the quarter, to EBITDA from the Iran conflict, do you expect a similar 30 bips headwind in 2Q or that steps down?

Tami Zakaria: That is excellent color. Thank you. Regarding the 30 basis points headwind you saw in the quarter to EBITDA from the Iran conflict, do you expect a similar 30 basis points headwind in Q2, or that steps down?

Speaker #6: You know, I, I, I think the way to think about it is, we'll obviously see a, you know, well, let's, let's start with the positive.

Shyam Kambeyanda: You know, I think the way to think about it is, we'll obviously see, you know, let's start with the positive. You know, the war could settle in a week, maybe we're talking about something different. On the side, if the war were to continue, we would see 2 additional months of volume that would then get offset by some additional price that we've gone in. The way to think about it is that it's not gonna get worse, could get slightly better as the quarter goes on.

Shyam P. Kambeyanda: You know, I think the way to think about it is, we'll obviously see, you know, let's start with the positive. You know, the war could settle in a week, maybe we're talking about something different. On the side, if the war were to continue, we would see 2 additional months of volume that would then get offset by some additional price that we've gone in. The way to think about it is that it's not gonna get worse, could get slightly better as the quarter goes on.

Speaker #6: You know, the, the war could settle in a week and maybe we're talking about something different. but on, on the side of the war, were to continue, we would see two additional months of volume.

Speaker #6: That would then get offset by, by some additional price that we've gone in. So the way to think about it is that it's not gonna get worse.

Speaker #6: could get slightly better as the quarter goes on.

Tami Zakaria: Understood. Thank you.

Speaker #8: Understood. Thank you.

Speaker #1: Your next question comes from the line of Meg Dobre with Baird. Please go ahead.

Operator: Your next question comes from the line of Mircea Dobre with Baird. Please go ahead.

Speaker #9: Thank you. And, good morning, everyone. I wanna talk a little bit about the Americas segment. And, I guess, the, the moving pieces here, I'm trying to think through them.

Mircea Dobre: Thank you, and good morning, everyone. I wanna talk a little bit about the Americas Segment. I guess the moving pieces here, I'm trying to think through them. You know, you had the -1 organic in the quarter, but you kind of call out here that excluding Mexico and North America is up mid-single digits. Mexico is stable. Obviously something else acted as a drag here. Can you comment at all on that?

Speaker #9: You know, you had the negative one organic in the quarter, but you kind of call out here that excluding Mexico, North America is up mid-single digits.

Speaker #9: Mexico is stable. obviously, something else acted as a drag here. Can you, can you comment at all on that?

Speaker #6: Yeah. we were actually very pleased with our, US and Canadian businesses for the quarter. price, and on, on what I would call created volume, we were very happy with how the business performed.

Shyam Kambeyanda: We were actually very pleased with our US and Canadian businesses for the quarter, Mircea Dobre. We felt that both on price and on what I would call created volume, we were very happy with how the business performed. I would also say that in April, we did better than how we finished out in Q1. Really happy about how that business is performing, the traction that we're getting with customers and the channel. I was actually out with some of the distributors. Our team had an EDAC, you know, our distributor meeting out in Albuquerque. That went really well.

Shyam P. Kambeyanda: We were actually very pleased with our US and Canadian businesses for the quarter, Mircea Dobre. We felt that both on price and on what I would call created volume, we were very happy with how the business performed. I would also say that in April, we did better than how we finished out in Q1. Really happy about how that business is performing, the traction that we're getting with customers and the channel. I was actually out with some of the distributors. Our team had an EDAC, you know, our distributor meeting out in Albuquerque. That went really well.

Speaker #6: And I would also say that in April, we did better than how we finished out in Q1. So, really happy about how that business is performing.

Speaker #6: The traction that we're getting with customers and the channel—I was actually out with some of the distributors. Our team had an EDAC, you know, our distributor meeting out in Albuquerque.

Speaker #6: That went really well. I've done some Gemba with, the North American team down in Texas and also down in Mexico. And we feel really good about the traction, the funnel, the growth bridges that the teams have, that are now driving results, in US, and Canada.

Shyam Kambeyanda: I've done some Gemba with the North American team down in Texas and also down in Mexico, and we feel really good about the traction, the funnel, the growth bridges that the teams have that are now driving results in US and Canada. When it comes to Mexico, as you remember, this was the last quarter in those comparables that we spoke about. What I meant by stable is that the business continues to be at the levels that it was in Q4. As I visited with the team last week, there are shoots of improvement as we go through the year. Optimistic about how the year sort of shapes up also with Mexico kinda lapping itself in Q2.

Shyam P. Kambeyanda: I've done some Gemba with the North American team down in Texas and also down in Mexico, and we feel really good about the traction, the funnel, the growth bridges that the teams have that are now driving results in US and Canada. When it comes to Mexico, as you remember, this was the last quarter in those comparables that we spoke about. What I meant by stable is that the business continues to be at the levels that it was in Q4. As I visited with the team last week, there are shoots of improvement as we go through the year. Optimistic about how the year sort of shapes up also with Mexico kinda lapping itself in Q2.

Speaker #6: When it comes to Mexico, as you remember, this was the last quarter in those comparables that we spoke about. And so what I meant by stable is that the business continues to be at the levels that it was in, in Q4.

Speaker #6: as I visited with the team last week, there are shoots of, of, improvement, as we go through the year. So optimistic, about how the year sort of shapes up also with Mexico kinda lapping itself in, in Q2.

Shyam Kambeyanda: To give you some additional color on the volume, obviously the rest is South America, where they also had some tariff re-related volume bump last year, that sort of goes away and neutralizes now and puts us in a better spot for Q2.

Speaker #6: To give you some additional color on the volume, obviously, the rest is South America, where they also had some tariff-related volume bump last year. That sort of goes away and neutralizes now and puts us in a better spot for Q2.

Shyam P. Kambeyanda: To give you some additional color on the volume, obviously the rest is South America, where they also had some tariff re-related volume bump last year, that sort of goes away and neutralizes now and puts us in a better spot for Q2.

Mircea Dobre: I see. Given, you know, the way the comparisons are looking here from a volume standpoint for the rest of the year, I mean, we started with -4, but then your comps are getting easier.

Speaker #9: I see. And, you know, given the way the comparisons are looking here from a, from a volume standpoint for the rest of the year, I mean, we started with negative four, but then your comps are getting easier.

Speaker #9: At what point in time do you oh, so I guess two questions. At what point in time do you see volume, im-inflection here? what, when, when can we expect some growth?

Shyam Kambeyanda: Yeah.

Shyam P. Kambeyanda: Yeah.

Mircea Dobre: I guess two questions. At what point in time do you see volume inflection here? When can we expect some growth? How do you think about the full year from a volume perspective? What's embedded in the 2026 guide for America's volume specifically?

Speaker #9: And how do you think about the full year from a volume perspective? so what's embedded in the 2026 guide for Americas volume specifically?

Speaker #6: Well, Americas volume we expect to be now, so let me, let me just sort of thoughtfully walk you through that. When you, when you look at, US and Canada, we feel that we're gonna be volume positive.

Shyam Kambeyanda: Well, America's volume, we expect to be now. Let me just sort of thoughtfully walk you through that. When you look at US and Canada, we feel that we're gonna be volume positive. When it comes to Mexico as well, we think as the year goes on, we're gonna be volume positive, slightly positive on volume also in Mexico. South America, in my view, will stay slightly volume positive. They were a bit volume negative in Q1 just on the back of year-over-year comparables with the tariff year. They also go positive. The way to think about the year as it plays out is, you saw Q1 be slightly negative.

Shyam P. Kambeyanda: Well, America's volume, we expect to be now. Let me just sort of thoughtfully walk you through that. When you look at US and Canada, we feel that we're gonna be volume positive. When it comes to Mexico as well, we think as the year goes on, we're gonna be volume positive, slightly positive on volume also in Mexico. South America, in my view, will stay slightly volume positive. They were a bit volume negative in Q1 just on the back of year-over-year comparables with the tariff year. They also go positive. The way to think about the year as it plays out is, you saw Q1 be slightly negative.

Speaker #6: and when it comes to Mexico as well, we think as the year goes on, we're gonna be volume positive, slightly positive on volume also in Mexico.

Speaker #6: South America, i-in my view, will stay slightly volume positive. They were a bit volume negative in the first quarter just on the back of year-over-year comparables with the tariff year.

Speaker #6: they also go positive. So the way to think about the year as it plays out is, you saw Q1 be, be slightly negative. You'll see Q1, Q2 be neutral.

Shyam Kambeyanda: You'll see Q2 be neutral, Q3 getting positive, and then Q4, in my view, will be nicely positive because some of the acquisitions that today, you know, are not considered part of our base, become part of our base. In addition to that, obviously we're really excited about the Eddyfi acquisition that'll close here in mid-year. That then allows us additional opportunities for growth for our base business and to be able to pull to Eddyfi with our customers.

Shyam P. Kambeyanda: You'll see Q2 be neutral, Q3 getting positive, and then Q4, in my view, will be nicely positive because some of the acquisitions that today, you know, are not considered part of our base, become part of our base. In addition to that, obviously we're really excited about the Eddyfi acquisition that'll close here in mid-year. That then allows us additional opportunities for growth for our base business and to be able to pull to Eddyfi with our customers.

Speaker #6: Q3 getting positive. And then Q4, in my view, will be nicely positive. Because some of the acquisitions that today, you know, are not considered part of our base become part of our base.

Speaker #6: In addition to that, obviously, we're really excited about the Edify acquisition that'll close, here in mid-year. that then allows us additional opportunities for growth, for our base business and to be able to pull two Edify with our customers.

Speaker #9: All right. Thank you.

Mircea Dobre: All right. Thank you.

Speaker #6: Yeah. And Meg, the other thing I, I'd say to you is that, you know, on the second half of the year, I, I made the comment earlier, we've got, additional price going in in Q2.

Shyam Kambeyanda: Yeah. Maybe the other thing I'd say to you is that, you know, H2, I made the comment earlier, we've got additional price going in in Q2. We've also got additional automation orders that we have booked for the 3rd and Q4. As you look at it, one, obviously you're lapping a tariff quarter in Q1. You're getting to a spot where Mexico becomes laps itself in Q2. You've got additional price. Q3, you've got these automation orders plus additional price. In Q4, you've got these businesses that today drove double-digit growth in Q1, becoming part of the base in Q4.

Shyam P. Kambeyanda: Yeah. Maybe the other thing I'd say to you is that, you know, H2, I made the comment earlier, we've got additional price going in in Q2. We've also got additional automation orders that we have booked for the 3rd and Q4. As you look at it, one, obviously you're lapping a tariff quarter in Q1. You're getting to a spot where Mexico becomes laps itself in Q2. You've got additional price. Q3, you've got these automation orders plus additional price. In Q4, you've got these businesses that today drove double-digit growth in Q1, becoming part of the base in Q4.

Speaker #6: We've also got additional, automation orders that we have booked for the third and the fourth quarter. So as you, as you look at it, one, obviously, you're, you're lapping a tariff quarter in, in, in Q1.

Speaker #6: You're, you're getting to a, a spot where Mexico becomes laps itself in Q2. You've got additional price. Q3, you've got these automation orders plus additional price.

Speaker #6: In Q4, you've got these businesses that today drove double-digit growth in Q1, becoming part of the base in Q4. And so as you, as you sort of look at it, my thoughts here are there's very realistic and maybe slightly conservative is how you think about, the volume numbers as you finish out the year.

Shyam Kambeyanda: As you sort of look at it, my thoughts here are they're very realistic and maybe slightly conservative is how you think about the volume numbers as you finish out the year.

Shyam P. Kambeyanda: As you sort of look at it, my thoughts here are they're very realistic and maybe slightly conservative is how you think about the volume numbers as you finish out the year.

Speaker #1: Your next question comes from the line of Neil Burke, with UBS. Please go ahead.

Operator: Your next question comes from the line of Neal Burk with UBS. Please go ahead.

Neal Burk: Good morning. I just wanted to go back to the Middle East question just to clarify this 50 basis point drag that was on segment EBITDA margin. Was there any impact on volumes? Is there any sense that more broadly higher commodity prices are in any sense weighing on overall demand?

Speaker #10: good morning. I just wanted to go back to the Middle East question just to clarify this. 50 basis point drag that was on, on segment EBITDA margin, was there any impact on volumes?

Speaker #10: and is there any sense that more broadly, higher commodity prices are, are in any sense weighing on overall demand?

Speaker #6: Yeah. The, the short answer is, we did not see it, and we have not seen it yet. but we have seen cost impact, specifically some, some you know, like tungsten, we've seen nickel move a little bit.

Shyam Kambeyanda: Yeah. The short answer is, we did not see it, and we have not seen it yet. We have seen cost impact, specifically some, you know, like tungsten. We've seen nickel move a little bit. We've seen steel move a little bit. Yes, the war has created a little bit more costs, in some of the steel and components that we buy. The other piece that we've really seen is around freight. Freight costs have gone up, and partially that's slightly because of fuel costs. Those are two aspects. We're moving price to the market, to sort of overcome and offset all of it.

Shyam P. Kambeyanda: Yeah. The short answer is, we did not see it, and we have not seen it yet. We have seen cost impact, specifically some, you know, like tungsten. We've seen nickel move a little bit. We've seen steel move a little bit. Yes, the war has created a little bit more costs, in some of the steel and components that we buy. The other piece that we've really seen is around freight. Freight costs have gone up, and partially that's slightly because of fuel costs. Those are two aspects. We're moving price to the market, to sort of overcome and offset all of it.

Speaker #6: we've seen steel move a little bit. so yes, the war has created a little bit more costs, in, in some of the steel and com and, components that we buy.

Speaker #6: the other piece that we've really seen is around freight. freight costs have gone up and partially that's partly because of fuel costs. And so those, those are the two aspects.

Speaker #6: We're moving price to the market, to sort of overcome and offset all of it. we expect price costs to be neutral. for at least the second quarter.

Shyam Kambeyanda: We expect price cost to be neutral, for at least Q2, and then we'll continue to sort of work, to be price cost positive as the year plays on.

Shyam P. Kambeyanda: We expect price cost to be neutral, for at least Q2, and then we'll continue to sort of work, to be price cost positive as the year plays on.

Speaker #6: And then we'll continue to sort of work, to be price costs positive as the year plays on.

Speaker #10: Okay. Thank you. And then, just another question on margins. I think incremental margin in the quarter was about 12% for the total company. And the guide seems to embed something around 20%.

Neal Burk: Okay. Thank you. Just another question on margins. I think incremental margin in the quarter was about 12% for the total company, and the guide seems to embed something around 20%. Can you just kind of walk through the progression through the rest of the year of how incremental margin should improve?

Speaker #10: So can you just kind of walk through the progression through the rest of the year of how incremental margin should, should improve?

Speaker #6: Yeah. I think the, the first one, obviously, is we expect better price from Q1 to Q2. So that's, that's assumption number one. the things came at us a bit fast in, in, in March.

Shyam Kambeyanda: Yeah. I think the first one obviously, we expect better price from Q1 to Q2. That is assumption number 1. The things came at us a bit fast in March. We went out with some price. We didn't get all of it in Q1. We get price in Q2. The second piece is that we are seeing good momentum in the North American market. Those margins for us are also accretive. We see really nice activity in Europe. One of the things that we have not talked about is how well Europe performed for us to offset some of the issues that we had in the Middle East. Those are basically the two aspects of it. Then we continue to make improvements in the acquisitions.

Shyam P. Kambeyanda: Yeah. I think the first one obviously, we expect better price from Q1 to Q2. That is assumption number 1. The things came at us a bit fast in March. We went out with some price. We didn't get all of it in Q1. We get price in Q2. The second piece is that we are seeing good momentum in the North American market. Those margins for us are also accretive. We see really nice activity in Europe. One of the things that we have not talked about is how well Europe performed for us to offset some of the issues that we had in the Middle East. Those are basically the two aspects of it. Then we continue to make improvements in the acquisitions.

Speaker #6: We went out with some price. We didn't get all of it in Q1. We get price in Q2. The second piece is that we are seeing good momentum, in, the North American market.

Speaker #6: and those margins for us are also accretive. we see really nice activity in Europe. one of the things that we have not talked about is how well Europe performed for us to offset some of the issues that we had, in the Middle East.

Speaker #6: so those are the basically the two aspects of it. and then we continue to make, improvements in the acquisitions. We talked about, EWM being ahead of schedule, in terms of its integration plan and the plans that we had to continue to improve EBITDA percentage in that business.

Shyam Kambeyanda: We talked about EWM being ahead of schedule in terms of its integration plan and the plans that we had to continue to improve EBITDA percentage in that business. Q1 will be sort of in terms of EBITDA, the lowest quarter for EWM, and every quarter sequentially, the EBITDA percentage for EWM improves, becoming accretive in Q4.

Shyam P. Kambeyanda: We talked about EWM being ahead of schedule in terms of its integration plan and the plans that we had to continue to improve EBITDA percentage in that business. Q1 will be sort of in terms of EBITDA, the lowest quarter for EWM, and every quarter sequentially, the EBITDA percentage for EWM improves, becoming accretive in Q4.

Speaker #6: So Q1 will be, sort of, the lowest quarter for EWM in terms of EBITDA. And every quarter, sequentially, the EBITDA percentage for EWM improves, becoming accretive in Q4.

Speaker #10: Thank you.

Neal Burk: Thank you.

Speaker #1: As a reminder, if you would like to ask a question, please press star one on your telephone keypad. Your next question comes from Steve Volkman with Jefferies.

Operator: As a reminder, if you would like to ask a question, please press star one on your telephone keypad. Your next question comes from Steve Volkmann with Jefferies. Please go ahead.

Speaker #1: Please go ahead.

Speaker #11: Thank you. Shyam, you mentioned Europe's strength, a couple of times. Can you just delve into that a little bit and sort of share versus kind of what you're seeing from an end market perspective?

Steve Volkmann: Thank you, Shyam. You mentioned Europe strength a couple of times. Can you just delve into that a little bit and sort of share versus kind of what you're seeing from an end market perspective? I think you might have mentioned some stimulus benefits over there in past calls or something. Just an update on what's happening there.

Speaker #11: I think you might have mentioned some stimulus benefits over there in, in past calls or something. Just an update on what, what's happening there.

Speaker #6: Yeah. Th-there's a couple of pieces playing in our favor. One, obviously, we have a phenomenal footprint. And now with the two acquisitions that we've made in the Germanic region, really have a position of strength, in Europe.

Shyam Kambeyanda: Yeah. There, there's a couple of pieces playing in our favor. One, obviously we have a phenomenal footprint, and now with the 2 acquisitions that we've made in the Germanic region, really have a position of strength in Europe. We are local. We are able to supply and serve our customers locally, giving us a significant advantage in the region. In moments of conflict and in moments of uncertainty, what we find is customers begin to realize that they can rely on ESAB. The second thing that's driving it, to some extent is, the defense spending that's happening in Europe. We're seeing quite a bit of orders associated with that come to us. We're also seeing a lot of momentum on the equipment side, especially with EWM, that's benefiting our business.

Shyam P. Kambeyanda: Yeah. There, there's a couple of pieces playing in our favor. One, obviously we have a phenomenal footprint, and now with the 2 acquisitions that we've made in the Germanic region, really have a position of strength in Europe. We are local. We are able to supply and serve our customers locally, giving us a significant advantage in the region. In moments of conflict and in moments of uncertainty, what we find is customers begin to realize that they can rely on ESAB. The second thing that's driving it, to some extent is, the defense spending that's happening in Europe. We're seeing quite a bit of orders associated with that come to us. We're also seeing a lot of momentum on the equipment side, especially with EWM, that's benefiting our business.

Speaker #6: we are local. we are able to supply and serve our customers locally, giving us a significant advantage in the region. in moments of conflict and the moments of uncertainty, what we find is customers, begin to realize that they can rely on ESAB.

Speaker #6: The second thing that's driving it, to some extent, is, the defense spending that's happening in Europe. we're seeing, quite a bit of orders associated with that come to us.

Speaker #6: we're also seeing a lot of momentum in the equipment side, especially with EWM. that's benefiting our business. And there's a couple of, actions underway in Europe that could also benefit us.

Shyam Kambeyanda: There's a couple of actions underway in Europe that could also benefit us. One is this carbon tax piece that is expected to land in 2027. That's giving us a little bit of an advantage. Then there are some additional tariffs and quotas that the European Union is expected to put in mid-year that would advantage local companies in Europe. Those are the aspects that are giving us a benefit. Really pleased with how our European business did. Obviously if the Middle East conflict resolves, there's some additional significant tailwind for us in Europe and Asia Pacific.

Shyam P. Kambeyanda: There's a couple of actions underway in Europe that could also benefit us. One is this carbon tax piece that is expected to land in 2027. That's giving us a little bit of an advantage. Then there are some additional tariffs and quotas that the European Union is expected to put in mid-year that would advantage local companies in Europe. Those are the aspects that are giving us a benefit. Really pleased with how our European business did. Obviously if the Middle East conflict resolves, there's some additional significant tailwind for us in Europe and Asia Pacific.

Speaker #6: One is this carbon tax piece that is expected to land in 2027. That's giving us a, a little bit of an advantage. and then there are some additional tariffs and quotas that the European Union is expected to put in mid-year that would advantage local companies in Europe.

Speaker #6: So those are the aspects that are giving us a benefit. Really pleased with how our European business did. obviously, if, if the Middle East conflict resolves, there's some additional significant tailwind for us, in Europe and, and Asia Pac.

Speaker #11: Okay. Great. And, and I think you may have, almost segued to my follow-up, which is I know it's early days, but has your team been able to think about what type of sort of rebuilding and upgrades might be required in the Middle East and, and how that you, you might participate in that?

Steve Volkmann: Okay, great. I think you may have, almost segued to my follow-up, which is I know it's early days, but has your team been able to think about what type of sort of rebuilding and upgrades might be required in the Middle East and how that you might participate in that?

Speaker #6: Yes. we actually have, we, we met with our leader in the Middle East, this week, to look through what the opportunities will be once, peace, finds its way into that conflict.

Shyam Kambeyanda: Yes. We actually have. We met with our leader in the Middle East this week to look through what the opportunities will be once peace finds its way into that conflict. We feel that with the damage that has occurred in the conflict and the repair that would be needed, ESAB would have a position to take advantage of that rebuild because most of our filler metal is specced into most of the damaged sites. As a result, we find ourselves in a position of advantage.

Shyam P. Kambeyanda: Yes. We actually have. We met with our leader in the Middle East this week to look through what the opportunities will be once peace finds its way into that conflict. We feel that with the damage that has occurred in the conflict and the repair that would be needed, ESAB would have a position to take advantage of that rebuild because most of our filler metal is specced into most of the damaged sites. As a result, we find ourselves in a position of advantage.

Speaker #6: we feel that, with the damage that has occurred, in the conflict, and the repair that would be needed, ESAB would, would have a position, to take advantage of that rebuild.

Speaker #6: because most of our filamental is specced into most of the damaged sites. as a result, we find ourselves in, in a position of advantage.

Speaker #11: Okay. Thank you.

Steve Volkmann: Okay. Thank you.

Speaker #1: And that concludes our question and answer session. I would now like to turn the conference back over to Mark Barbalato for closing comments.

Operator: That concludes our question and answer session. I would now like to turn the conference back over to Mark Barbalato for closing comments.

Speaker #12: Thank you for joining us today. And we look forward to speaking to you next quarter.

Mark Barbalato: Thank you for joining us today, and we look forward to speaking to you next quarter.

Operator: Ladies and gentlemen, this does conclude today's conference call. Thank you for your participation, and you may now disconnect.

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