Dover Corporation

Please stand by. Your program is about to begin. Good morning and welcome to Dover's second quarter 2025 earnings conference call. Speaking today are Richard J. Tobin, President and Chief Executive Officer, Chris Wunker, Senior Vice President and Chief Financial Officer, and Jack Dickens, Vice President, Investor Relations. After the speaker's remarks, there will be a question and answer period. If you'd like to ask a question during this time, please press the star, then the number one on your telephone keypad. If you would like to withdraw your question, please press star two. As a reminder, ladies and gentlemen, this conference is being recorded, and your participation implies consent to our recording of this call. If you do not agree with these terms, please disconnect at this time. Thank you. I would like to now turn the call over to Mr. Jack Dickens. Please go ahead.

Thank you, Stephanie. Good morning, everyone, and thank you for joining our call. An audio version of this call will be available on our website through August 14, and a replay link of the webcast will be archived for 90 days. Our comments today will include forward-looking statements based on current expectations. Actual results and events could differ from those statements due to a number of risks and uncertainties. which are discussed in our SEC filings. We assume no obligation to update our forward-looking statements. With that, I will turn this call over to Rich.

Thanks, Jack. Let's get started on slide three. Dover's second quarter results were strong, driven by excellent production performance, positive margin mix from our growth platforms, and carry-forward cost actions taken in prior periods. Top line performance accelerated in the quarter on broad-based shipment growth and short cycle components and outperformance over secular growth exposed end markets. Order trends continued to be positive momentum in the quarter, up 7% year over year, bolstering our confidence in the second half outlook with the majority of our third quarter revenue already in backlog. As an antidote, July orders are tracking really well going into the back end of the third quarter. Margin performance in the quarter was exemplary with a record adjusted segment EBITDA margins above 25 as a result of prior period portfolio actions, positive mix from the growth platforms and our rigorous cost containment and productivity actions. Adjusted EPS was up 16% in the quarter. Our solid operational results were complemented by ongoing capital deployment actions. We continue to invest in high ROI organic capital projects, including productivity and capacity expansion, as well as targeted footprint optimization. During the quarter, we also completed two acquisitions of attractive, fast-growing assets within our high-priority pumps and process solutions segment. Our balance sheet strength remains an advantage. that provides flexibility as we pursue value-creating capital deployment to further expand our businesses in high-growth, high-margin areas. We are approaching the second half of the year constructively. Despite some macroeconomic noise, underlying NMARC demand is healthy and is supported by our sustained order rates. As a result, we are raising our full-year adjusted EPS guidance to $9.35 to $9.55, which is plus 14% for the full year at midpoint. Let's go to slide five, engineer products revenues down in the quarter of lower volumes of vehicle services. We did see improving sentiment in vehicle services as the quarter progressed, most notably in North America where book-to-bill was north of one. Margin performance of the segment was up on structural cost management and productivity. Clean energy and fueling was up 8% of the quarter, led by strong shipments in clean energy components, fluid transport, and North American retail fueling software and equipment. Margin performance was solid in the quarter, up 80 basis points on volume leverage, higher mix of below ground fueling equipment, and restructuring benefit carry forward. Imaging and ID was stable on growth in our core marketing and coding business, partially offset with timing of textiles. Margin performance remains exemplary in the segment at 28% adjusted. Margin management actions on cost to serve and structural cost controls continue to drive incremental margins higher. Pumps and process solution was up 4% organically on double-digit growth in single-use biopharma components. thermal connectors for liquid cooling of data centers, and digital controls of midstream natural gas compression. Industrial pumps posted solid results as well, and as forecasted, the long cycle polymer processing equipment business was down year over year, though quoting activity improved in the quarter, and book to bill was ahead of one. Segment revenue performance, including the acquisition of Sikora and volume leverage, drove margin improvement on excellent production performance of volume and secular growth exposed end markets. Revenue was down in the quarter in climate sustainability on a comparative declines in food retail cases and engineering services, which more than offset the record quarterly volumes in CO2 systems. Heat exchangers was up sequentially and year over year on record quarterly shipments in North America, where we are actively increasing capacity to accommodate growing demand tied to liquid cooling of data centers. Shipments of heat exchanges for installation in European heat market heat pumps was down slightly in the quarter, but are expected to inflect positively in the second half of the year. Despite the lower top line, the segment posted 60 basis points of margin improvement against a difficult comp period on productivity actions and a higher mix of CO2 systems. I'll pass it on to Chris here.