IDEX Corporation

Greetings and welcome to the third quarter 2025 IDEX Corporation earnings conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the phone presentation. If anyone should require operator assistance, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Jim Giannacoros. Thank you. You may begin.

Good morning, everyone, and welcome to IDEX's third quarter 2025 earnings conference call. We released our third quarter financial results earlier this morning, and you can find both our press release and earnings call slide presentation in the investor relations section of our website, IDEXCorp.com. On the call with me today are Eric Ashleman, President and Chief Executive Officer of IDEX, and Akhil Mahendra, our Interim Chief Financial Officer and Vice President of Corporate Development. Today's call will begin with Eric providing highlights of our third quarter results and a discussion of our current business outlook and strategies. Then Akhil will discuss additional financial details and our updated outlook. Following our prepared remarks, we will open the line for questions. But before we begin, please refer to slide two of our presentation, where we note that comments today will include forward-looking statements based on current expectations. Actual results could differ materially from these statements due to a number of risks and uncertainties, which are discussed in our press release and SEC filings. As IDEX provides non-GAAP financial information, we've provided reconciliations between GAAP and non-GAAP measures in our press release and in the appendix of our presentation materials, which are available on our website. With that, I will turn the call over to Eric.

Thanks, Jim. Good morning, everyone, and thank you for joining us today. The IDEX teams across the globe collectively delivered better than expected results in the third quarter of 2025. I'm proud of our team's hard work and steadfast commitment to execution, particularly given today's challenging economic conditions. I'm on slide three. Regardless of the business environment, our business model and 80-20 philosophy, along with our strong balance sheet and continued robust cash generation, position us to quickly address challenges and pursue opportunities as they arise. We do this while remaining focused on driving long-term sustainable growth and value for all of our stakeholders. As we'll discuss further today, our team is laser focused on the things we can control. thoughtfully executing our strategy amid a dynamic economic environment. Before I provide an overview into our results, I'd like to step back and highlight where we are in IDEX's evolution and frame our priorities in the months and quarters ahead. When IDEX was founded almost 40 years ago, it was effectively a holding company with a portfolio of disparate but attractive industrial businesses. These were strong brands operating independently without a clear governing framework. In phase two, we introduced a common IDEXX culture and business approach, powered by an operating model with 80-20 as its heartbeat. 80-20 not only enhanced the efficiency of our operations, but also served as a decision-making framework and growth accelerator, guiding our focus, resource allocation, and portfolio optimization. In our current phase three, we've made a number of foundational acquisitions accompanied by complementary bolt-ons to expand our capabilities in targeted, advantaged end markets. These additions helped us establish higher growth platforms leveraged to 21st century secular trends. Today, we are intensively deploying 80-20 in these areas to enhance efficiencies and productivity and unlock integrated growth potential. We followed this playbook over the previous decade to build our IDEX health and science platform. Now, we want to repeat the work at a faster pace with more power as we integrate new businesses and technologies into IDEX. I'd like to take a moment and shine a light on the three pillars of 80-20 driven higher growth so you can best understand our strategy to unlock sustainable value for shareholders. Please turn to slide four. The first pillar involves targeting high growth advantage markets as we allocate capital within our portfolio. We acquired 11 outstanding companies over the past five years. Each business brings one or more critical technologies to IDEX alongside a series of attractive market access points. Examples of the critical solution set that's expanded for us include support for data centers, space and defense, advanced semiconductor manufacturing, and water. Each acquired company links and integrates in some way with other pieces of IDEX, providing scale and efficiency while reducing enterprise complexity. And parallel to this work, we divested four businesses with less attractive market exposures and lower potential to scale. Our collective growth entitlement has moved to the right of traditional industrial indexes. We now have five thematic growth platforms that cover half of our revenue, and we believe they will disproportionately fuel organic growth for IDEX as we move forward. In prior earnings calls, we talked about our build out of the intelligent water platform. expanded in the last few years with the acquisitions of Nexite and Subterra. These businesses were a strong contributor of organic growth for IDEX and Q3. In September, we were proud to host a number of analysts and investors at the largest water industry trade show in North America. They were impressed by what we've built. We've also publicly referenced some great work at Airtek within our performance pneumatics group. The team continues to win as they support PowerGen applications for data centers. They were a top driver of orders and sales growth for HST this quarter. Making great businesses work together is the second pillar of phase three growth outperformance. Please turn to slide five. Here, we integrate technologies and market access points within growth platforms. As an active example, I'd like to take you through our integration progress within our material science solutions platform. The teams there have done excellent work. They also were strong contributors to HST's growth in Q3. All of the companies within MSS map close to one of three critical jobs to do for customers. One, we form critical material properties. Two, we shape materials to create and control surfaces. And three, we add functionality by applying coatings. The platform brings these capabilities together for power. Our teams like to say, if we hit one of these attributes, we can bid on a project. If we hit two, we're highly likely to get the order. If we hit all three, we can set specifications in the space and drive transformative growth. Within MSS, I'd like to highlight how the team at Muon is doing a great job effectively offsetting pressures within Semicon lithography to drive performance. With 8020 at the heart of the work, Muon is improving productivity, rationalizing its cost structure, focusing on higher quality revenue and redeploying resources towards higher value commercial opportunities. An example of tuning towards advantage markets is the development work Muon is actively pursuing now within data center cooling applications after recently winning business in the optical switching space, which we mentioned last quarter. We are excited about the results our 80-20 actions are driving, which notably improved Muon's profitability in the third quarter to above HST segment average. the MSS platform is well positioned to drive profitable growth going forward. Please turn to slide six. The third key component of phase three of IDEX's evolution is balanced capital allocation. Akhil will get into more details here, but after the last few years of accelerating larger M&A to build out growth platforms, our current focus is on optimizing our business portfolio, tuning our capabilities in an ever-evolving marketplace, augmenting those efforts with strategic bolt-on acquisitions, and returning capital to shareholders. I hope you found this overview of the evolution of IDEXX helpful and engaging. We are confident in the strategic plans to drive sustainable, profitable growth for shareholders in the years ahead. Now I'd like to move to our third quarter 2025 results, which demonstrate traction on these collective efforts and position us well to deliver within the guidance we set for the second half of 2025. I'm on slide seven. IDEX delivered better than expected third quarter results despite continued macro uncertainty. Our health and science technology segment, or HST, is building momentum as our teams continue to identify integrated growth opportunities. Overall, organic orders and sales increased 5% and 10% respectively year over year on the back of growth in pharma and data centers. Our most recent acquisition, MicroLAM, is off to a great start. enhancing our capabilities in optics given their proprietary material shaping technology. As discussed earlier, we saw strength from our businesses within MSS, notably within our optics businesses and Muon. HST also drove strong margin improvement due to volume leverage and full run rate of their platform optimization efforts. We see a path for continued margin expansion going forward. While HST continues to successfully tune its capabilities towards advantage markets, the segment's more fragmented industrial market exposures are netting to flattish, and we see little evidence of near-term improvements. In fluid and metering technologies or FMT, third quarter sales and profitability exceeded expectations driven by strong execution and pricing. Our water businesses facing municipal markets were standouts in terms of orders and revenue growth. FMT's general industrial exposure points remain stable without signs of positive inflection. Finally, in our fire and safety diversified product segment, or FSDP, disruptions in the funding environment and sluggish replenishment spend impacted our third quarter results and temper our expectations for near to midterm demand. So overall, we see a dynamic macro environment with an uncertainty overhang that we expect will continue into 2026. It's not clear how and when broad external catalysts will line up to support more predictable and positive conditions. But at IDEXX, we plan to continue to make our own luck through 80-20, tuning our resources and technologies towards those opportunities with higher growth velocities, and work together as a team to integrate our growth platforms, providing more solutions power for key customers. We're on track to deliver the second half of the year and look forward to continuing our momentum into 2026. With that, I'll pass it over to Akil to discuss our financials and our updated outlook in greater detail.