Vontier Corporation Common Stock

Good morning, ladies and gentlemen, and welcome to Vontia's fourth quarter 2025 earnings call. At this time, all lines are in listen-only mode. Following the presentation, we will conduct a question-and-answer session. If, at any time during this call, you require immediate assistance, please press star for the operator. This call is being recorded on Thursday, February 12, 2026, and a replay will be made available shortly after. I would now like to turn the conference over to Ryan Edelman, Volunteer Vice President of Investor Relations. Please go ahead.

Thank you. Good morning, everyone, and thank you for joining us on the call this morning to discuss our fourth quarter results. With me today are Mark Morelli, our president and chief executive officer, and Anshuman Agha, our senior vice president and chief financial officer. You can find both our press release as well as our slide presentation that we will refer to during today's call on the investor relations section of our website at investors.vontier.com. Please note that during today's call, we will present certain non-GAAP financial matters. We will also make forward-looking statements within the meaning of the federal securities laws, 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 risks and uncertainties. Actual results might differ materially from any forward-looking statements that we make today, and we do not assume any obligation to update them. Information regarding these factors that may cause actual results to differ materially from these forward-looking statements is available on our website and in our SEC filings. With that, please turn to slide three, and I'll turn the call over to Mark.

Thanks, Ryan. Good morning, everyone, and thank you for joining us. Let's get started with a quick walkthrough of the key takeaways from the quarter and the year, and why I'm confident we're entering 2026 on firm footing. The headline here is that we finished the year strong, strengthened our foundation, and built meaningful momentum across the portfolio. We delivered 5% core growth in Q4, led by high single-digit growth in both our mobility tech and environmental and fueling segments, underpinned by robust demand in our convenience retail and market. For the full year, organic sales grew nearly 4%, and EPS finished up 11%. Strong cash generation is one of the hallmarks of performance at Vontyr. And in 2025, we generated over $460 million in adjusted free cash flow, which equated to about 15% of our annual sales. Q4 adjusted EPS was at the high end of our guide, despite the impact of a one-time inventory reserve adjustment related to the Invenco acquisition and by higher healthcare costs at corporate. Underlying operational performance was in line with our expectations. 2025 was a year of strategic repositioning and strong execution. I'm proud of the discipline our teams demonstrated and what turned out to be a dynamic macro environment. We're now more focused and better aligned around our connected mobility strategy, which fundamentally enables profitable growth and underpins innovation across Frontier. We're consistently demonstrating the power of having a synergistic portfolio unmatched domain expertise, and global scale. We made significant progress on simplifying and focusing our organization. These actions unlock growth, enable us to be easier to do business with, and allow further efficiency across the organization. This next phase of simplifying our business will result in $15 million of incremental in-year cost savings, and Shuman will share more details on timing and phasing in his prepared remarks. We maintain a focus on innovation in 2025, deploying multiple new solutions and creating more durable competitive advantages. We're deploying unique value propositions that leverage integrated solutions and capitalize on strong secular tailwinds, including digitalization and the energy expansion. We're entering 2026 with good momentum, a stronger portfolio, and healthy balance sheet. We're well-positioned to deliver on our financial commitments and expect more benefits from our simplification efforts to drop through to the bottom line. As Inshuman will share with you, our guidance for 3% core growth and attractive operating margin expansion of 80 basis points at the midpoint is in line with the framework we shared with you in October. I'm confident in our ability to execute and to continue building sustainable above-market growth. Let's turn to slide four for a quick walkthrough on some of the high-level growth drivers by segment. Let's start with EFS. Fueling has been a dependable growth engine over the last two years, growing at roughly 6% organic tagger. Market growth has been broad-based with increased new site builds, retrofit activity, and equipment replacement all-driving investment. We see sustained high levels of capital investment for both above ground and below ground fueling equipment, particularly in North America. A recent industry report from NACCS shows that while the U.S. convenience store count remained relatively flat year over year, the number of fueling sites grew approximately 1%. An important takeaway from this is the larger national and regional change with whom we have majority share positions are growing at faster than average rates. Environmental sales finished the year with growth in the low teens, supported by strong upgrade activity for our connected automatic tank gauges and incremental share gains in submersible pumps with our new four horsepower offering. Both of these are a result of traction in new product development. For 2026, We expect growth to be in line with our longer-term targets of low to mid-single digits, despite the tougher compares, especially in the first half. Mobility Tech, and Invenco in particular, was another standout. Invenco closed the year with a revenue base of nearly $650 million, up 22% organically versus the prior year. This reflects strong demand for our innovative payment technologies including those that leverage our NFX microservices architecture, the rollout of new products, and discipline execution on a healthy order pipeline. Our new product introductions, FlexPay 6, vehicle identification system, and the NFX payment server all contributed meaningfully to our growth last year. We've also been expanding our integrated offerings, and in Q4, we rounded out our unified payment solution by launching an indoor payment terminal that shares software across all devices. I'll unpack unified payment in a moment because it's a strategic priority for us. The convenience retail end market is growing at a mid-single-digit TAGR, which is being fueled by strategic investments in food service and technology. Store formats are evolving to meet changing consumer needs and increase competition and, as a result, are becoming more complex and costly to run. Our innovative portfolio positions us well to continue delivering above-market growth in this end market over the medium and longer term. DRB's growth accelerated in Q4, driven primarily by improved pipeline conversion from ramping our new Caffeon software. The RV inflected positive in the second half and grew high single digits in Q4 almost entirely due to Pathion adoption. Customers who have upgraded are seeing growth in memberships, declines in churn, and mid-teens revenue growth on average. Repair solutions gained momentum as we got traction with growth initiatives. Sales grew sequentially in Q4 in what historically has been our slowest quarter. Our initiatives drove low double-digit growth for our diagnostic scan tools in Q4. On slide five, as I mentioned, I want to spend a minute on unified payment because it ties a number of themes together and will be a key enabler of the value creation flywheel for our customers. We shared this with some of you at our investor event last fall. Over the last decade, payment complexity has increased rapidly, more devices, tighter security requirements, and a growing need to integrate payment across fuel dispensers, car washes, and in-store point of sale and EV chargers. The biggest pain point customers face is payment certification. It consumes significant amounts of their OPEX budgets and scarce engineering resources. Certification costs can range from hundreds of thousands to millions of dollars annually, and those costs only rise as new offerings are added. Our unified payment solution addresses that head-on by delivering an integrated solution, including outdoor payment terminals for multiple devices, the NFX electronic payment server that links terminals to payment processors, and the indoor payment terminals we launch in Q4 that shares the same software as our outdoor devices. In other words, Customers can cover every transaction on their sites with a single common platform. That common software architecture materially reduces certification costs, feeds feature deployment, and delivers a seamless consumer experience. Additionally, it enables our customers to drive revenue growth through offerings like media and loyalty. Perhaps most critical for Vontir, all of these opportunities pull through additional equipment and recurring revenues. We recently entered in an agreement for a full unified payment solution with a global C-Store customer, one with whom we built a strong technology partnership, and their early feedback has been positive. With that, I'll turn the call over to Ann Schuman to walk you through the quarter's financial details and take you through our outlook.