Ralliant Corporation

Hello, my name is Donna and I will be your conference facilitator this morning. At this time, I would like to welcome everyone to Ralliant Corporation's third quarter 2025 earnings results 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 that time, simply press star then the number one on your telephone keypad. If you would like to withdraw your question, please press star two. I would now like to turn the call over to Nathan McKern, Vice President of Investor Relations. Mr. McKern, you may begin your conference.

Thank you, Donna. Good morning, everyone, and thank you for joining Rallion's third quarter 2025 earnings call. I'm Nathan McKern, Vice President of Investor Relations. Today, we'll walk through our third quarter 2025 results, highlight key operational progress, and provide an outlook for the fourth quarter. I'm joined today by Tammy Newcomb, our President and Chief Executive Officer, and Neil Reynolds, our Chief Financial Officer. Our earnings release issued yesterday and today's presentation can be accessed on the investor section of our website at Valiant.com. Please note that we'll be discussing certain non-GAAP financial measures on today's call. A reconciliation of these items to U.S. GAAP can be found in the appendix to our presentation. During today's call, and unless otherwise stated, we're comparing our third quarter 2025 results to the same period in 2024. During the call, we will make forward-looking statements including statements regarding events or developments that we expect or anticipate will or may occur in the future. These forward-looking statements are subject to a number of risks and uncertainties and actual results might differ materially from any forward-looking statements we make today. Information regarding these risks and uncertainties is available in our information statement filed with the SEC on May 28, 2025, and our quarterly reports on Form 10-Q filed with the SEC on August 11, 2025, and to be filed on November 6, 2025. With that, I'd like to turn the call over to Tammy.

Thank you, Nathan. Good morning. Welcome to Reliant's third quarter earnings call, our first reporting period as an independent public company. The team approached the post-spin separation with discipline and focus, stepping into new roles in implementing refined processes, all while delivering quarterly results that were at or above the high end of our guidance ranges. On today's call, I'll start with a brief overview of Ralliant and a high-level look at our financial performance. Next, I'll invite Neil to share deeper insight into our Q3 results, the Q4 outlook, and discuss considerations as we move into 2026. Then I'll be back to showcase progress on our profitable growth strategy, leveraging the Ralliant business system. Slide four highlights what makes Ralliant different. We stand at the forefront of precision, driving safety and breakthrough performance through advanced technologies that perform in demanding environments. Our solutions help ensure reliability, safety, and efficiency when failure is not an option. We continue partnering with our customers to unlock advancements that will change the world and have an impact for years to come. We develop and manufacture precision solutions globally across diverse end markets. Our portfolio of trusted brands has earned our customers confidence by delivering precise instruments, sensors, and safety solutions that enable faster customer innovation. As electrification, digitization, and AI accelerate the demand for high-performance, data-driven equipment, we meet these needs by serving customers in critical markets, such as utilities, defense, and electronics. What truly sets us apart is our people-first culture, ingrained in decades of precision, expertise, and the reliant business system. This has enabled us to solve our customers' toughest challenges in the many applications that we serve. earning customer trust and positioning us well for future growth. With that, let me provide the key takeaways from the quarter on slide six. First, all our financial results were at or above the high end of guidance ranges we provided last quarter, demonstrating our commitment to delivering results while executing our long-term strategic priorities. Second, We are delivering high growth in the utilities and defense end markets and sequential improvement in test and measurement and industrial manufacturing. Third, we are executing our levers to drive growth and innovation. This was demonstrated in the quarter as Tektronix launched two new high-performance precision instruments architected to be scalable platforms that will accelerate our new products roadmap. Fourth, we delivered significant free cash flow with a conversion rate above our long-term expectation of greater than 95 percent. And last, we progressed on our cross-savings program that we announced last quarter to deliver $9 to $11 million in annualized savings by the end of 2026. Drilling down into our Q3 financial results on slide seven, our revenue was above the high end of our guidance range we continued to deliver sequential improvement with 5 percent growth over Q2. This was driven by secular demand in several end markets and improved shipment execution, particularly in defense. We expanded adjusted EBITDA margins by 60 basis points sequentially to 20.4 percent, reaching the low end of our long-term through cycle target range that we communicated at investor day in June. Turning to slide eight, our growth has improved each quarter throughout the year across most regions. North America turned positive with 3 percent year-over-year revenue growth driven by exposure to our growing defense and utilities end markets. We also delivered sequential improvement with green shoots in industrial manufacturing and test and measurement. While Western Europe experienced a 6 percent decline, Largely driven by customer cautiousness, we remain actively engaged with customers and partners across the region. China is also down 6% year over year as we continue to see cautious demand amid geopolitical headwinds. China macro leading indicators have shown signs of recovery, but we expect continued pressure driven by export controls, tariffs, and an uncertain environment. China was a significant driver of test and measurement growth for Ralliant from 2021 through 2023, but selling conditions have changed. In 2024, we executed a restructuring of the team in China. Since then, we've been investing to capture new opportunities in other markets, such as India and Southeast Asia. While there are still puts and takes within each region, Our teams are focused on strengthening relationships and positioning ourselves strategically so that when spending resumes, we are ready to capture growth opportunities and accelerate momentum. I'll now invite Neil to go over our financial results and provide some insights on expectations for the balance of the year.