Pentair PLC

Welcome to the Pentair third quarter 2025 earnings conference call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star and then one on your telephone keypads. To withdraw your questions, you may press star and two. Please also note today's event is being recorded. At this time, I would like to turn the floor over to Shelly Hubbard, Vice President, Investor Relations. Please go ahead.

Thank you, Operator, and welcome to Pentair's third quarter 2025 earnings conference call. On the call with me are John Stouck, our President and Chief Executive Officer, and Bob Fishman, our Chief Financial Officer. On today's call, we will provide details on our third quarter performance as outlined in this morning's press release. On the Pantera Investor Relations website, you can find our earnings release and slide deck, which is intended to supplement our prepared remarks during today's call and provide a reconciliation of differences between GAAP and non-GAAP financial measures that we will reference. The non-GAAP financial measures provided should not be considered as a substitute for or superior to the measures of financial performance prepared in accordance with GAAP. They are included as additional clarifying items to aid investors in further understanding the company's performance, in addition to the impact these items and events have on the financial results. Before we begin, let me remind you that during our presentation today, we will make forward-looking statements, which are predictions, projections, or other statements about future events. Listeners are cautioned that these statements are subject to certain risks and uncertainties, many of which are difficult to predict and generally beyond the control of Pentair. These risks and uncertainties can cause actual results to differ materially from our current expectations. We advise listeners to carefully review the risk factors in our most recent Form 10-Q and Form 10-K. Please note that during the presentation today, we'll be making references to record financial results. These references reflect the time period post the invent separation in 2018, unless noted otherwise. Following our prepared remarks, we will open the call up for questions. Please limit your questions to two and re-enter the queue to allow everyone an opportunity to participate. I will now turn the call over to John.

Thank you, Shelly, and good morning, everyone. Thank you for joining us today. Please turn to the executive summary on slide eight. In queue three, we delivered sales growth in a record third quarter across adjusted operating income, return on sales, and adjusted EPS. Sales increased 3% driven by our pool and flow segments, adjusted operating income increased 10 percent, ROS expanded 160 basis points to 25.7 percent, and adjusted EPS rose 14 percent to $1.24. In September, we acquired Hydrostop, a leading specialty valve solutions provider for water infrastructure, for approximately $292 million in cash, or $242 million, net of the anticipated $50 million of tax benefits. This acquisition enhances our commercial flow business with a strong financial profile and strategic fit. We're excited to welcome the HydroStop team and their customers to Pentair. Year-to-date, we delivered record-free cash flow, and we repurchased $175 million of shares. Lastly, we're increasing our full-year guidance, driven by a strong third quarter and continued confidence in our execution. We now expect sales growth of approximately 2% and adjusted EPS of approximately $4.85 to $4.90, up 12% to 13% from 2024. Let's move to the strategic overview on slide nine. Over the last three years, our teams have successfully implemented our transformation initiative while continuing to drive strong execution leading to robust margin expansion. As we enter 2026, we feel confident that we've developed a flywheel that we expect will continue to drive efficiencies, opportunities, and profitability. Our 80-20 actions are well underway and show early signs of success in driving top-line growth. Our businesses are in various stages of implementation on this multi-year journey. We plan to share more insights with you on our 80-20 actions at an upcoming Investor Day. in March. We continue to invest in focused growth initiatives where we see great opportunities to drive near-term and long-term growth. We are also investing in innovation through digital and product technology. In addition to investing for growth, our strong financial discipline and free cash flow has enabled us to make strategic acquisitions that align well with our current businesses and provide a platform for growth. As a dividend aristocrat, we have raised our dividend for 49 consecutive years, and we will have continued to repurchase shares. Collectively, we believe this is a smart use of capital deployment to drive future sales and earnings growth. Let's turn to slide 10. We have delivered approximately $56 million in transformation savings year-to-date and are on track to reach approximately $80 million in 2025. I want to remind you that this performance is net of strategic growth investments and is in addition to the 174 million of net performance we drove in 2023 and 2024 combined. As I mentioned earlier, we believe transformation and 80-20 are creating a flywheel for continued sales growth and profitability. Let's turn to slide 11. There are several key themes that I wanted to share. We delivered another quarter of sales growth and double-digit earnings growth due to strong execution. We increased our full-year 2025 guidance driven by a strong Q3 and continued confidence in our strategy. We continue to build a foundation of optimal operational efficiency that we believe can be leveraged when volume returns to normal. We have a balanced water portfolio and a capital-light business model with 75 percent of our business going through two-step distribution and roughly 75 percent of revenue representing replacement sales. We have strong free cash flow, a solid balance sheet, and a balanced capital deployment strategy that we'll expect will accelerate earnings and ROIC. Before I hand the call out to Bob, I want to acknowledge that we announced this morning that Bob will be leaving Pentair effective March 1st, 2026. It embarrassed him a little by complimenting him on having been an outstanding partner to me and Pentair. Over his nearly six years of what will be 23 quarters of dedicated service, Bob has driven deep financial competency throughout the organization. It shows in our operating performance, the level of commitment to results from the team, our transformation progress, our cash flow and RIC performance, and of course, the total shareholder return that he has overseen as CFO. What makes Bob an even better teammate is his steady and measured communication style and his no-drama approach to challenges. We have seen tremendous operating performance throughout his tenure, despite us having had to deal with COVID, a period of supply chain instability, rapid inflation, and, of course, tariffs. Bob has led us through all of it with a bold leadership style and a sense of humor. Now, after nearly 60 quarters of being a public company CFO, he's moving on to his next chapter. Bob has built and developed a great financial team. As you get to know Nick, I'm confident you will see that he has a lot of Bob's skills, plus unmatchable energy and drive. Bob will oversee a smooth transition process through March 1st of 2026 and ensure that we do not miss a beat on our value creation journey. I will now pass the call over to Bob, who will discuss our performance and financial results in more detail. Bob?