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DATE

  • Thursday, July 24, 2025, at 9:30 a.m. EDT

CALL PARTICIPANTS

  • President and Chief Executive Officer — Richard J. Tobin
  • Senior Vice President and Chief Financial Officer — Chris Winger

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TAKEAWAYS

  • Orders: Consolidated bookings rose 7% year over year in Q2 2025, with positive sequential growth and year-to-date book to bill above one in all five segments.
  • Revenue Guidance: Management raised full-year adjusted EPS guidance to $9.35–$9.55 for FY2025, which is plus 14% at the midpoint.
  • Margins: Segment adjusted EBITDA margins set a record, exceeding 25% in Q2 2025, primarily due to portfolio actions and mix shift toward growth platforms.
  • Free Cash Flow: Year-to-date free cash flow reached $261 million for the first half of 2025, representing 7% of revenue, and increased by $41 million over the prior year period.
  • Segment Performance — Engineered Products: Revenue declined, mainly from lower vehicle services volume in Q2 2025, with margins increasing due to structural cost actions.
  • Segment Performance — Clean Energy & Fueling: Revenue in Clean Energy & Fueling increased 8% in the quarter, driven by shipments of clean energy components and North American retail fueling equipment, with margins up 80 basis points.
  • Segment Performance — Imaging & Identification: Achieved 28% adjusted EBIT margin for Q2 2025, reflecting management actions on cost and business mix; segment revenue was stable.
  • Segment Performance — Pumps & Process Solutions: Grew 4% organically, led by single-use biopharma components, data center thermal connectors, and natural gas compression controls; industrial pumps up, while polymer processing equipment declined.
  • Segment Performance — Climate & Sustainability Technologies: Revenue fell due to declines in food retail cases and engineering services, and increased heat exchanger shipments in North America.
  • Cost Actions: $30 million in roll-forward savings recognized in FY2025, with further benefits expected in 2026 and beyond from ongoing restructuring and footprint optimization.
  • Capital Deployment: Two acquisitions were completed in the Pumps & Process Solutions segment during Q2 2025, and management disclosed approximately $400 million in revenue under current letters of intent for potential M&A.
  • Growth Platform Exposure: Management indicated that markets tied to clean energy components, biopharma, CO2 refrigeration, and data centers represent 20% of the portfolio and are on track for double-digit growth.
  • Price Environment: Management reported that pricing is set, with no anticipated rollbacks or material headwinds from price/cost moving forward.
  • Foreign Exchange Impact: Updated revenue forecast for 2025 includes a 1-point benefit from FX, based on using average year-to-date rates for the second half.
  • Cash Flow Outlook: Free cash flow guidance maintained at 14%-16% of revenue for FY2025, anticipating acceleration in the second half due to working capital liquidation.

SUMMARY

Dover Corp. (DOV -0.07%) reported 7% growth in consolidated bookings in Q2 2025, and emphasized record adjusted segment EBITDA margins above 25%, reflecting mix improvement and cost discipline. Management raised full-year adjusted EPS guidance by 14% for 2025, supported by continued order momentum and robust backlog coverage for the coming quarter. Segment sales trends varied, with notable strength in Clean Energy & Fueling and specialized growth platforms, while revenue in vehicle services, food retail refrigeration, and certain polymer processing businesses declined, but segment margins generally advanced on productivity actions and restructuring savings. Ongoing footprint consolidation and operational initiatives are providing $30 million in recognized savings in FY2025, with additional gains expected in subsequent years. Capital allocation remains a priority, highlighted by active M&A discussions covering approximately $400 million in potential revenue and organic investments aimed at high-return projects in growth markets.

  • Richard J. Tobin said, Order trends continued to show positive momentum in Q2 2025, up 7% year over year. This bolsters our confidence in the second half outlook
  • Chris Winger confirmed Year-to-date free cash flow improved by $41 million, and forecast "cash flow generation to accelerate in the second half ... as seasonal working capital liquidation ... should more than offset continued investments" in productivity and capacity expansion.
  • Management identified that approximately 20% of the portfolio, including clean energy, data center, and biopharma components, as of Q2 2025 and drive attractive margin accretion and expected double-digit growth.
  • Restructuring and cost actions resulted in $30 million of savings this year, with the majority of incremental benefits from ongoing projects expected to be realized in 2026 or later.
  • Segment performance was mixed: Clean Energy & Fueling revenue rose 8% in Q2 2025 and Imaging & Identification maintained 28% adjusted EBIT margins, while Engineered Products and Climate & Sustainability Technologies posted lower revenues.
  • Recent acquisitions in Pumps & Process Solutions and approximately $400 million of M&A under letters of intent signal sustained focus on margin-accretive capital deployment.

INDUSTRY GLOSSARY

  • CO2 Systems: Refrigeration solutions that use carbon dioxide (CO2) as a refrigerant, valued for energy efficiency and low environmental impact.
  • Book to Bill: The ratio of new orders received (bookings) to products shipped and billed during a period; a value above one indicates growing backlog.
  • Footprint Optimization: Actions to consolidate or restructure manufacturing and operational facilities to improve fixed cost leverage and efficiency.
  • Thermal Connectors: Components used to transfer heat, particularly in data center liquid cooling applications.
  • Single-use Biopharma Components: Disposable products used in pharmaceutical manufacturing, particularly in processes that require stringent contamination control.

Full Conference Call Transcript

Richard J. Tobin: Thanks, Jack. Let's get started on slide three. Dover Corporation'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 a majority of our third quarter revenue already in backlog as an anecdote 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 end market 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. Engineered Products revenue is down in the quarter lower volumes in 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% in the quarter led by strong shipments of 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 marking and coding business, partially offset with timing of textiles.

Margin performance remains exemplary in the segment at 28% adjusted EBIT margins and 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 forecast to 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 Secora and volume leverage drove margin improvement excellent production performance, volume and secular growth exposed end markets. Revenue was down in the quarter in climate sustainability on the comparative declines in food retail cases and engineering services, which more than offset the record quarterly volumes in CO2 systems. Heat exchangers were up sequentially and year over year on record quarterly shipments in North America, where we are actively increasing capacity growing demand tied to liquid cooling of data centers. Shipments of heat exchangers for installation in European heat market heat pumps were 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.

Chris Winger: Thanks, Rich. Good morning, everyone. Let's go to our cash flow statement on slide six. Year to date free cash flow was $261 million or 7% of revenue, up $41 million over the prior year. As year over year improvements in operating cash conversion more than offset expected increases in capital spend on growth and productivity projects. We expect cash flow generation to accelerate in the second half of the year in line with historical trends as seasonal working capital liquidation in the third and fourth quarters should more than offset continued investments in productivity, capacity expansion, and cost structure optimization projects, which are expected to generate meaningful benefits into 2026 and beyond.

Our guidance for 2025 free cash flow remains on track 14% to 16% of revenue on strong conversion of operating cash flow. With that, let me turn it back to Rich.

Richard J. Tobin: Okay. Let me try as my I might on bookings. Let's give this one a whirl here. Here we provide more detail than usual. Although, I guess, the reaction is murky. In the second quarter. Q2 consolidated bookings were up 7% over the prior year. They were also up sequentially. Marking a continued momentum across our business. Year to date book to bill is above one across all five segments with particular strength in our highest margin and secular growth markets, an encouraging sign as we move into the second half. Let's go to Slide eight. Slide eight, which highlights several of the end market that are driving our consolidated growth forecast and our margin.

Between end market data and our customer forecast and our own booking rates, are encouraged by the outlook in the broader industrial gas complex with cleaner energy components and precision, sorry. Clean energy components. Single-use biopharma components, CO2 refrigeration systems, and inputs into liquid cooling applications of data centers, which includes our large heat exchanger business. We have made significant organic and inorganic investments behind these markets and they remain one of our highest priority areas for investment going forward I'll talk about in a minute. In aggregate, these markets now account for 20% of our portfolio and drive attractive margin accretion and expected double-digit growth. Which I think we're on track as of the close of Q2.

Let's go to nine. Our organic investments remain our highest priority of capital deployment. We are moving forward and, in fact, accelerating a number of organic investments despite the near-term uncertainty in the macro sentiment. Here, we show some of our most meaningful and high ROI capital projects that we're undertaking in 2025. You'll see a healthy balance between growth capacity expansions to behind some of our highest priority platforms as well as productivity and automation investments, including rooftop consolidations. So we put in the press release that we were telling up these savings and provide an update in our next quarterly call as to the absolute quantum of the savings roll forward benefit into 2026.

Suffice to say, given the scale of the projects, we expect the savings to be meaningful. This is in line with our goal each year to drive non-revenue profit generation through fixed cost reduction program. So we're kinda midstream. Let's deal with the footprint projects at the reshoring. We're in good shape in terms of the timing. As Chris mentioned, that is gonna be reflected in our cash flow or our CapEx projections for the year.

So the timing of it and some of these projects are quite complex when we talk about going from eliminating six rooftops, for example, By the time we get to Q3, we'll have an idea of the timing of the roll forward of these benefits that are not, like, you know, will we catch a bit of it in Q4? Maybe. But the vast majority of it will the non-revenue profit of this restructuring. So what you're gonna see between now and the end of the year is the CapEx inflect up and the restructuring charges come as we start to take down some of these operations. What was the total roll forward this year?

Chris Winger: About 30, about $30 million.

Richard J. Tobin: $3,030,000,000 of savings are reflected in this year's accounts and did and that's why you see with at least year to date, not a lot revenue growth. I think we've got easier comps in the second half of the year, but you see the margin accretion and meaningful contributor to some of those margins is last year's roll forward. I would expect that next year would be the same, if not better, The big ol' single the biggest single project that we have is one of the rooftop ones. We'll probably catch that in the latter half of next year.

But know, let's go to When we take a look at what we've taken every year in terms of margin expansion. I mean, it's close to a 100 basis points a year. A good portion of that is revenue mix a variety of things that we're doing in the portfolio, but a meaningful portion of that is let's call it productivity. And in our business model, continues in its current trajectory of improving the portfolio upgrading the mix within the individual segments We also look and put goals on the businesses of meaningful productivity of which a lot of it is things like rooftop consolidation and the reduction of fixed cost.

So can't give it to you now because I don't wanna give you a number that's incorrect, but I we think that at minimum, the benefit in '26 is gonna be the same. Oh, excuse me. The minimum that we're seeing in '25, it will be 26. But the total quantum is going to be larger. That's what's in the pipe. It's just a question of do we realize it in 2026 or '20 Okay. Now I got myself off the script. Sure. That's upsetting to everybody. You know what? I'll take slide 11 The bottom line is if you look at the margin accretion here, it's upgraded mix. I'm talking about 25.

Productivity, all the things I just talked about. There's the look for the back half of the year. So we're not calling for any margin dilution but you can see in terms of what our organic growth rate is the year, the back half largely because of the acceleration on our growth platforms and easier comps that we had to the back half of last year. That's why you see the organic growth. Estimate for the last year. We go to q and a in a second whether there's anything more meaningful there. Oh, I'm sure. What do we use for the back half for dollar or dollar euro in the back half? Yeah.

We have a range of outcomes, but one of them was carrying forward current rates. Right. So look. We back tested the volatility in the first half of the year. And then use that for the second half of the year, I find it I can't predict FX. So using prevailing spot rates for the whole back of the year, based on the volatility that we saw at the beginning there, think is a bit ambitious. And if FX rates at least dollar euro stays the same, then that's good for translation and maybe gives us a 100 basis points of increased revenue in the back half.

So I'm sure we can beat that to death in the Q and A. So why we go to Q and A?

Jack Dickens: Thank you. If you'd like to ask a question, simply press the star and then the number one on your telephone keypad. If you would like to withdraw your question, please press star two. We ask the participants limit themselves to one question and one follow-up question. Our first question will come from Mike Halloran with Baird.

Mike Halloran: Hey, good morning, everyone. Good morning.

Richard J. Tobin: Hey. Couple clarifying questions. First, talk about pretty happy with the trajectory through the quarter. You know, it's tough organic order comps, but could you just give us a sense for how you thought things played out sequentially through the quarter relative to previous expectations? And frame how things have changed from your perspective going into the back half of the year versus not? It seems like you're at or above trajectory you would have been talking about entering the year with the original guide. Just had to deal with some volatility in the middle, but any context there would be great.

Richard J. Tobin: I'd like generally speaking, with all the noise around tariffs and price cost and everything else, clearly, the margin performance through the first half of the year is slightly above expectation. Now having said that, you know, we're beginning to lap comps on biopharma and everything else. So that's a big contributor to the mix benefit. I think the only portion of the portfolio that is a little lighter in terms of volume would be cryogenic components because it seems to be a lot of notional backlog based on talking to our customer that's kinda sliding to the right, and I think that we commented that at the beginning there.

And I think the traditional refrigeration case business is behind, and that's a pretty big business. So that is we would have thought that revenue performance there would have been a little bit better, but because of margin mix across the portfolio, Anecdotally, that business is not dilutive to our margins anymore, but it's, you know, it's it's two for one a little bit between the precision components and the data center business. So overall, I mean, I think our expectation in core refrigeration is clearly now gonna be behind what we thought at the beginning of the year.

But because the growth platforms are so accretive to our margins, you know, 100 basis points there is 200 basis points on refrigeration. So optically on book to bill, it's $20 million, I think, the difference for the quarter between I guess, I should have stopped the last shipment of the month somewhere because then we would have been at one and then we won't be hammering that issue. Year over year on h one to the kind of on the sequential we're still up overall on book to bill. And as I said, we went and polled everybody because we haven't closed July yet, but nobody said that the momentum on bookings was poor.

So we're starting off Q3 on a bookings basis, and it looks good.

Mike Halloran: So maybe you could bridge the first half to the second half or sorry. What's changed in the guidance is maybe the better way to put it.

Richard J. Tobin: Well, I mean, we're ahead. We're ahead. Yeah. I mean, we're ahead. Right, on where we thought we would be. Right? So all we're doing is roll forward rolling forward where we're kinda head into the back half now. The question is, and we deal with this every year, we do deal with at the end of Q3, We will look where we are on bookings momentum, and then we're gonna make we're gonna decide what we're gonna do in Q4 of whether we will cut production performance and maximize cash flow for the year But we won't that make that decision till probably mid this quarter. Based on bookings momentum and backlog.

Chris Winger: If I put it in the context of what changed, though, it's you took away the cautionary language from last quarter on the growth. You had you had Secura. Maybe a little movement on FX. I don't I really wanna blame that, but bottom line. Yeah, bottom line is no real change to the momentum you would have been talking about other than removing the cautionary language?

Richard J. Tobin: Yeah. I mean, look. I mean, we're EPS at midpoint is 14%. You know, we're aiming towards the top of the range, is 16% year over year. Which will put us in time terms of top quartile to our comps.

Mike Halloran: Perfect. Yep. That's what was looking for. Thank you.

Operator: Thank you. We'll take our next question from Chris Snyder with Morgan Stanley.

Chris Snyder: Thank you. I wanted to ask about competitive in the market. You know, you guys have a lot of North America production. You guys compete against a lot of smaller competitors. Are there any verticals where you're starting to see share shifts or maybe it's still too early for that? And is there any change you're seeing in the price environment, you know, post the escalation? Thank you.

Richard J. Tobin: Okay. Well, I mean, clearly, on price total cost, in a positive position. So we would expect we don't see any particular headwinds coming. Either way, and we are pretty much out with our total pricing that we're putting out. So we expect some accretion in terms of the margin unless something unknown pops up in terms of price cost. Yeah. I mean, our business model is competing with smaller competitors and that allows us ability to either extract pricing or manage input costs probably more Can't say yet about share.

Because we won't because the dynamic of the restock at the beginning of the one had a lot of kind of restock in there, and now you're just basically booking and shipping based on current conditions of demand.

Chris Snyder: Appreciate that. And then maybe just a follow-up on of the prior questions around the back half. So there's a lot of moving parts here with price, FX, acquisitions. Could you just kind of maybe level set what the guide calls for in volumes in the half of the year and kind of how that compares to where volumes have been tracking out in the first half? Thank you. I there's no dramatic change. So we're we've made up kind of some headwinds. I've refrigeration. Maybe some headwinds in terms of demand. And vehicle services, at least in the first half.

There is amount of rotation because I think that Q1 in biopharma was probably a stat was that was a little bit of restocking. Just because you can see from some of the market participants that are calling for kind of there was a restocking in terms of terms of Q1, and now it's pretty the growth rate there is probably gonna come down in the second half of the year, at least in terms of comps because biopharma and to a lesser extent thermal connectors have e had begun to grow So the so the relative outperformance will kinda flatten out in the second half of the year.

And then some of the some of the businesses that have not been as strong in the first half will start to come back. That's mildly dilutive to consolidated margins, but not dramatically.

Operator: Thank you. Our next question will come from Steve Tusa with JPMorgan.

Steve Tusa: Hey, good morning.

Richard J. Tobin: Hi. So I just wanted to dig into the margins a little more. In the second half here, I mean, you're coming from a pretty good base. I think you had said on the last call or maybe in the follow-up with Jack that the total segment incremental would be below just below 40. Because of these, you know, tariff dynamics. I think where you are today, kind of the jumping off point of the 2Q, suggest something a little better than that. Maybe just some rough guidance around your what you would expect for total segment incrementals this year? For 25?

Richard J. Tobin: Yeah. Sure. I mean, there's there's there's total incrementals, and then there's five business incrementals. And I think, as I just said, because of the relative growth rates between h one and h two, your incremental is gonna come down because they're lower margin businesses as opposed to we got off to a really good start in DPPS, for example. So that's gonna just flatten out. Relatively based on the contribution of relative contributions to those revenues. But as you can see, so it's mix. At the end of the day. You know? When you look at slide 11, we're calling for everything to be up, but the but the incremental in aggregate is going to come down.

That's kind of what we're looking at. And look. We you know, you know this. I mean, we're a bit of a short the portfolio is more short cycle now. Than it was in the past just because of the contribution of the longer cycle businesses and because really, there's no lack of capacity in the market for most of the products that we have. So lead times visibility going forward on the portfolio is a little bit more difficult. So almost kinda guessing every ninety days. Of how cycle is gonna go. We're not gonna try to manage the toad the total EBITDA margin of the portfolio. We do it at the business level.

On contribution margin, but we don't try to do it at the total. So could it be better But I think the caution based on the forecast that we have today, of the relative contribution, it's more mix related than pricing or input or anything else. All of that is covered in the full year EPS.

Steve Tusa: Right. It just seems to me though that you're I think you're trending, like, 23.220.6%, something in that range first half. is my guess. Your second half just kind of seasonally should be better than On the second half. Well, well, I bet but you need what you need to understand, and I hope it's not the case, but if we look we'll dial down the it will flush as much inventory as we can and we think that we can catch up on our backlog in Q1, and keep that production performance for 2026. Okay. And then just one just one last question.

You're going to be exiting, I think, at like above a 5%, a mid single digit type of organic growth rate in the fourth quarter. You've talked about the cost savings, you got a little acquisition tailwind. I mean, should we think about next year kind of the EPS algo being pretty similar to this year? Maybe a little bit better? I gotta say I gotta say, you know, with the margin performance and I don't see any reason for that, to come down. You know, a full year of this incremental margin plus a bigger cost savings target roll forward, we're very excited about what the incremental margin on revenue is gonna track to in 2026.

Steve Tusa: Got it. That's that's not murky. That's crystal clear. Thank you.

Richard J. Tobin: That's yep. Touche. Alright. Next.

Operator: Thank you. Our next question comes from Nigel Coe with Wolfe Research.

Nigel Coe: Thanks. Good morning, guys.

Richard J. Tobin: Hi. So, Rich, pricing, obviously, you know, really good. It sounds like sounds like price is pretty much set here. No surcharge rollback, etcetera. I think the one business that is lagging behind is CST. Probably because demand is quite weak there. But I'm just wondering if there's scope for pricing at TST to improve through the year.

Richard J. Tobin: Let me see. Let me get a pull this apart here. Yeah. I mean, the CST is more absorption right now because the core the core business is 20. Core business is 20. 20 EBITDA. And that is with a lack of Bellemac, and I think we're just gonna have to wait for Bellvac volume to come back. And we're not even modeling that in at all for the balance of the year. And you were coming off a very big margin on heat exchangers, during the torrid days of heat pumps in Europe. That is slowly coming up as that market comes. That's a 25% EBITDA margin business. It's not there today. Right?

So as it ramps back up, and it's gonna ramp back up for two reasons that heat pumps are coming back, but they're way below they were with the peak. We don't have a ton of dilution there because the data center portion of that business, which is accretive as a product line, there comes back. So we believe right now, making that margin considering the headwinds we had to peak and the fact that we brought back the traditional case business the volume that we thought we were gonna have this year, which I mentioned before that is slow, that's 20% EBITDA margin. So it's just all mix. Right now. We've got plenty of room. To move it up.

Chris Winger: It's also a segment where we obviously we talked about we've done a lot of structural cost work. We've got a good tailwind from mix on our CO2 product line. So we see we're also seeing some positive trends there as well. And the single biggest productivity project that we have on that slide nine is in that segment.

Nigel Coe: Okay. Yeah. But the question is more about pricing. I think I think price was point two brands. It's it's all at the margin. Okay. Okay. And then a quick one just going back to biopharma. You talked about the first half, second half with the restocking, etcetera, but there has been a bit of noise in some of the biopharma more life science than biopharma. Just wondering, are you seeing any project pushes, etcetera, You know, because we are hearing a bit of noise in those markets.

Richard J. Tobin: Yeah. It's really hard for us. I mean, we look at the same people that you look at, their of ours. Remember that ours is more weighted towards in use product than it is for new builds. As long as the machines that have been delivered are out there and they're running, it's consuming our product. It's not on marginal build of new product.

Nigel Coe: Okay. Very clear. Thanks, Rich.

Richard J. Tobin: Thanks.

Operator: Thank you. We'll move next to Andrew Open with Bank of America.

Andrew Obin: Yeah. Good morning. Hi. So the question is, can you talk about any tariff on sort impact on orders in the quarter as best as you can tell? And what I'm trying to get to is that was there any pull forward or do you mainly see delays in push outs?

Richard J. Tobin: More of the pushouts.

Andrew Obin: And is there a specific vertical? Or

Richard J. Tobin: Yeah. I mean, it's on refrigeration. Not the non CO2 portion of refrigeration. Is been lighter. Of projects, that we had scheduled based on customer discussion slid to the right. And it which is not you know, at the it's the retail to the consumer portion of the market companies have more pressure at the end of the day. So to see it in retail food, is not surprising overall.

Andrew Obin: No. That look at it.

Richard J. Tobin: Yeah. And we look at it as a kind of a proxy. We're we're we're shipping CO2 at a robust rate. You need cases when you do those systems. So it's just a lag effect.

Andrew Obin: And then just follow-up on the push out. And did you also on cryogenic, is it LNG that's being pushed out?

Richard J. Tobin: Yeah. Mostly. The whole the whole system it's it's the infrastructure build is taking a little bit longer than we would have thought, and we're kind of some of the last things that go in there. Including transport. So Gotcha. It's still good. It's just not as robust as customer communication would led to.

Andrew Obin: Well, let me ask you a question about a business where they're probably a little bit more growth. What were bookings for data center exposed businesses and specifically thermal connectors and swap? You know, you're adding capacity in both. So Yeah. Fair to say you believe in the data center build out?

Richard J. Tobin: Yeah. I mean, for our small portion of the billions of dollars going into it, yeah, I mean, what's our growth rate on thermal connectors year to date?

Chris Winger: 50. 50.

Andrew Obin: And swap?

Richard J. Tobin: Well, I'm sure the percentage is very high, but it's it's small.

Andrew Obin: Okay.

Chris Winger: Smaller starting point. Right.

Andrew Obin: Alright.

Richard J. Tobin: Thanks so much.

Andrew Obin: Thanks.

Operator: We'll take our next question from Jeff Sprague with Vertical Research Partners.

Jeff Sprague: Hey, good morning, everyone.

Richard J. Tobin: Hey, Rich. One place where you did confuse me, and maybe I haven't had enough coffee this morning. But just on the on the restructuring, just to be clear, so you're you're saying the wraparound actions from last year's work is a is a $30 million benefit this year. And at this point, on the stuff that you're working on this year, you see at least $30 million next year. Is that's correct?

Richard J. Tobin: Yeah. As before, I think the number is gonna be bigger. We just wanna get the timing of how much is captured in '26 and what the full roll forward is into '27. Right. So you'll you'll be able to and you'll see it because you'll see it in our CapEx number you'll see it in our cash flow when we do the restructuring.

Jeff Sprague: And what is the, sort of the uncertainty in your mind and kind of tallying up the current actions? Obviously, you would have undertaken those with the return expectation. Is there some really big variability in how, you know, these projects really manifest or the fruit that they bear?

Richard J. Tobin: Yeah. They the footprint ones are difficult. I mean, these are building new factories at the end of the day. So we're very careful about the timing. It's not the return. The return is gonna be material. It's just much do we get in '26. And then, you know, you can't treat all of it as restructuring, so because you have to run redundant capacity, there's actually a negative cost as you're completing these things. But in terms of where we're tracking on the projects themselves, we're all I guess, we're more in front than we are behind. And that's why I think that we tipped up CapEx forecast for the year is to accommodate that.

Jeff Sprague: Right. So the dust should settle on all that as we exit '26 and we should see sort of full run rate in '27. And that's the number you're gonna provide for us on the third quarter.

Richard J. Tobin: Yeah. I'm gonna I'm give you a best estimate. Right. At the this coming quarter and then with the when the timing is.

Jeff Sprague: Okay. Great. And then, I'll just pick the nit on the FX just one more time so I'm clear. So your prior revenue forecast of two to four assumed no FX, I believe. Right? And the four to six now has one point of FX in it. Is that correct?

Richard J. Tobin: Yeah. Yeah. That's correct. But I've been the way to look at it's written down somewhere is basically taking average FX year to date and using that number for the second half.

Jeff Sprague: Mhmm. Yep. Okay. Alright. Thanks a lot. I'll leave it there. Appreciate it.

Richard J. Tobin: Yep. Thanks.

Operator: Thank you. We'll move next to Dean Drecht with RBC Capital Markets.

Dean Drecht: Thank you. Good morning, everyone.

Richard J. Tobin: Hi.

Dean Drecht: Hey. Just wanna circle back on this high growth opportunity. In data center. Can you size for us what it is today you know, combined between the thermal connectors and heat exchangers what percent of revenues And would you ever set up, like, a dedicated team to go after this opportunity? I mean, there's you know, industry estimates that there's nine years of backlog. It just seems like you know, are you doing enough to capture your share of wallet?

Richard J. Tobin: I'm not gonna monetize it for you, Dean, but I can tell you that we are the leaders in the connectors and probably co leader in the heat exchangers. For the market size. We built out capacity and are and are building out capacity to accommodate what the projected volumes are. So I don't expect from a market share point of view that we're gonna not be able to compete. I just think that we've gotta be careful with this. You know, we saw all those announcements about EV battery plants that turned out to be a lot lower. And I'm in no position to say. So we have dedicated teams for both those product lines.

So we're known well It's just very difficult to believe what the size of the capacity that's gonna go in. I hope it's higher. Right? But we are in front. We are over capacitized in both those products.

Dean Drecht: That's really helpful. And then if we start thinking about pump margins going forward, how much, like, I'll call it project selectivity, are you avoiding some lower margin business and just being able to get a mix up in terms of the types of platforms that you're now targeting?

Richard J. Tobin: Yeah. I mean, if you go back to slide 10, that's part and parcel kind of the business model. What we've gotten out of you can't see what we've gotten out of inside those individual segments, but we've exit quite a few business lines or geographies based on returns. Over time. So and that is something that never ends. And then it becomes a question of at what point do you exit businesses? Like, we exited Environmental Services Group that was actually accretive to our margin, but it just wasn't gonna carry the valuation. For us to do it. So that's kind of what we do on the portfolio side.

I think we the total cash flow of the business and then kinda if we do this correctly, rotate to higher margin portions of portfolio.

Dean Drecht: Great. Thanks for that color.

Richard J. Tobin: Yep. Thanks.

Operator: Thank you. Our next question will come from Brett Lindsay with Mizuho.

Brett Lindsay: Hey. Good morning, all. Wanted to come back to tariffs. You had previously sized it at $215 million annualized. I think there were $60 million from just the one product line you're looking to reassure I guess, first, any update on the $60 million And then more broadly, did you remark the tariffs back to the higher rates?

Richard J. Tobin: Yeah. I you know, I wish we made paper clips because it would be easy. Right? There's a competitive dynamic. There's positioning. You know? There's whether you wanna grab market share and everything else. I think in terms of the reshoring, we're on track there. We actually subsequently to Q2 close. I think we put in some more pricing there. Because of the dynamics of the business, which I won't get into.

It just gets to the point when you start trying to parse this across this portfolio When we have the advantage that particular market, we should be able to price in excess of any input costs If it's hyper competitive, then we're gonna have to mop it up terms of productivity actions. And that's why having those productivity actions every year is a little bit of a hedge for the dynamics of the marketplace anywhere. The reason we do put a slide there, we could argue this thing into the into the dust.

We don't think there's anything in the back half of the year that's an additional headwind as it relates to tariffs, and you can see the margin performance soothe the first half and our margin performance on the forecast that we think that dynamic will continue. At that point, it's just gonna be relative comps. That you see outperformance and underperformance relative to h one.

Brett Lindsay: Got it. Thanks. And then just to follow-up on the July order strength encouraging to see. Are there any specific segment drivers? Was it fairly broad based? And then I guess, is your assumption you'll you'll grow orders year over year in Q3, Q4 this year?

Richard J. Tobin: With a margin of error of a 100 basis points, please. Yeah. Right now, we're tracking that would indicate after July that book to bill is gonna be solid.

Brett Lindsay: Alright. Great. Thanks.

Richard J. Tobin: You're welcome.

Operator: Thank you. Our next question will come from Joe O'Dea with Wells Fargo.

Joe O'Dea: Hi, good morning. What When you think about the demand impact of elevated uncertainty and tariffs and just as you've had conversations with customers over the course of the last couple of months and talking to your business leaders, what is it that folks are now looking at most closely that would drive some relief from the uncertainty overhang on demand?

Richard J. Tobin: Well, I mean, we deal with some incredibly large customers that I'm sure cost of capital is important in a variety of other things. And so one could argue that there's some very large projects that are waiting for cost of capital to come down to make the projects return higher. There are some customers that have significantly higher exposure to tariffs than we do. Right? And then they're trying to manage that situation. So it's a it becomes a very big plethora. In any given year, when you have a mixed of kind of consumable businesses, project businesses. They tend to run the same. There's really Or '1 that you could sense Very few outliers.

And I said it at the end of Q2. some reticence in bigger projects because of a variety of different reasons. Doesn't mean the projects go away, but there's just a little bit of a drift to the right. In our particular case, nothing really changes in the second half than we from our first half trajectory because we're not you know I don't I don't think our expectations for retail refrigeration are gonna be the same. Right? There's only six months left, so that's gonna drift to the right. But you know, we have so many businesses with so many fingers and so many pies. There's no overriding nature other than just macro uncertainty.

But we seem to be doing reasonably well. Like I said, the back the second half of the year, is just an element of higher core growth rate just because of mix and comps.

Chris Winger: And then just a clarification related to that. So the revenue growth, the two to four going to four to six, that move is Again, one point of FX one point ax acquisition. And then comps, the other two.

Joe O'Dea: And so that is yeah. You're you haven't taken out the point of conservatism that you put in a quarter ago. It's it's FX. Well, I mean, optically, yes, we have. But you know, it is basically the same forecast in terms or one point depends if you wanna take bottom quartile or top quartile, but six, we add it back.

Joe O'Dea: Yep. Yep. Got it. Okay. Thank you.

Richard J. Tobin: Welcome.

Operator: Thank you. We will take our next from Julian Mitchell with Barclays.

Julian Mitchell: Hi, good morning. Maybe just wanted to understand, again, realize there's a lot of moving parts and so on. But is the broad brush organic sales growth assumption that you accelerated slightly from first to second quarter year on year on organic revenue firm wide. You have a gradual acceleration in the third and then a sort of larger step up in the fourth quarter? Is that the way to think about it? And I suppose the more back end loaded type ramps are at DEP and DCST.

Richard J. Tobin: Generally, yes. I think there's any conservative, you know, what you could call conservative in the back is we're going to get FX wrong and it's going to be what current spot is Yes. It's in our lower margin businesses. Which by the way, I mean, no one said anything that we hit 25% EBITDA in consolidation, which no one would have thought. Not too long ago. Yeah. It's it's just a little bit of mix. Relative to the total revenue. I don't think we did leave ourselves some room in Q4 but we talk about this every week. Gonna make a decision in another month or two what the strategy is gonna be.

If we see any acceleration in order rates during Q3 leading into Q4, we may take production performance up. In Q4, which is positive from a margin point of view.

Julian Mitchell: That's helpful. Thank you. And then just you know, you we can see the sort of headline bookings number for the second quarter, and you talked a little bit about July. Was the broad sort of sense of demand in recent months, you know, the book to bill suppose, in the second quarter maybe a touch below plan, but nothing, to get worried about. And overall demand was fairly steady across your sort of largest customer categories in recent months. I guess, there any sign of sort volume elasticity as price started to move up, anything like that, that sort of changed in the last couple of months?

Richard J. Tobin: Look, we've tried to pick apart this book to bill based on seasonality. And if you go back over time, it's actually down in Q2 and then ramps up in Q3. But I'm the only one that I would say is that from bookings, we would have thought in Q2 that refrigeration would have better been better. So we've taken out our full year forecast in refrigeration. Just the not the CO2 business because the margin was actually up. But on just the standard case business, I think it's running out of time to meet our expectations that was built into the forecast.

You know, and then the port as I mentioned before, the portfolio arguably is more short term today than it was in the past. And we're not worried about bookings in the quarter and the fact that it's it's begun to ramp up. If you back test that over the last five years, it's doing what it always would. So no, I don't think anything has changed in terms of booking You know, we always worry about we've had great bookings that does it just come down in the back half of the year as our customers clear the inventory? We don't generally well, we almost take it ninety day in increment. From where we are.

So based on what we see in July, we're encouraged by the trajectory of the bookings.

Julian Mitchell: That's great. Thank you.

Richard J. Tobin: You're welcome. Thanks.

Operator: Thank you. Our final question will come from Scott Davis with Melius Research.

Scott Davis: Good morning, guys.

Richard J. Tobin: Hey, Scott. Final question, last but not least, I hope. But, anyways Yeah. The we just went through an entire call, and no one asked about m and a, which I find kind of interesting because they're the portfolio itself, I don't think can drive 16% EPS growth forever. Without a healthy dose and velocity of m and a. So where you know, the SCOR deal looks interesting. Are there other Scores out there? Are there how do you guys kinda think about that? And do you disagree with my statement, I guess, too? Because I'm I'm glad you asked it.

Richard J. Tobin: Yeah. Look. I mean, at the end of the day, we never get any credit or cap for capital deployment. So that's just the way it is to a certain extent at all. I will tell you that we've got close to $400 million in revenue under LOI, meaning that we've got letter of intents on a total of $400 million worth of revenue Realistically, I can tell you I've got 50, but real m and a that gets consummated within six to eight months. We transact on all of them? No. But can we transact between now and the end of the year on it? Absolutely, we can.

So there, you know, there's a so capital deployment is important to us. Think the nature of our capital employment is going to be what you've seen over the last five years. So no big swings but part and parcel for us to continue driving the margin up of the portfolio and A is a factor. There's been not a lot of deals out there. So you know, this notion of what is customer expectation and the deals aren't coming to market because everybody's waiting for the cost of capital to come down, blah. But the deals that we have out there are pro for the most part, are proprietary deals. They're not auctions.

We're the nature of the businesses are low in execution risk because of the size of the deals. So you know, I feel pretty good despite the lack of deals coming to market. I like the ones that we've gotten to pipe.

Scott Davis: Yeah. Makes sense. I gotta ask this question. I mean, you mentioned, you know, 20% of your portfolio growing double digits, but it's several growth platforms that all make sense. But what does that imply for the other 80 And, you know, it simple answer is always g d but not all not all our children can be above average. So how do you think about the other 80% in aggregate? And I guess maybe a different way to ask questions. What do you think the what do you think your entitlement growth rate is in this new portfolio? Because it has Dover Corporation has changed a fair amount since you've been since you've gotten there.

Richard J. Tobin: Yeah. I mean, I wanna back into the GDP one. I, you know, I think what's important in terms of the platforms is four of the five are organically driven. So in terms of what that growth four out of the five is a reflection of that, actually have stepped up r and d over the last six years. So that's the fruits kind of our own labor. Which I think is sometimes lost in the conversation. The only one of those on slide eight that is largely driven by m and a is the clean energy component business. Which has changed the dynamics of the value of what was the fueling solutions business. So yeah.

I mean, gotta wanna go through them one by one, but we have different business models that we're running here. We're running some that looks like they don't grow, but it's us just exiting portions of those portfolios that just are never gonna reach the value we never want. So if you went back and looked over time, of the clean energy business and you take away the acquisitions that were made there, we willingly shrunk portions of that business. Same thing with refrigeration. We exited I would venture to say, a couple $100 million worth of revenue because it providing the returns that we wanted.

And that's why you see the margin accretion in that business go significantly higher than where it was in the past. So I know it's hard to read through because it looks like, hey. Wait a minute. This thing doesn't grow. But we've been up until very recently shrinking organically to willfully drive value within the portfolio by bringing the margins up. Which I think we like the businesses that we have now And I think go forward, you'll see the real organic growth rate as opposed to kind of us cleaning up the portfolio over time.

Scott Davis: That's that makes a ton of I appreciate the integrity of the answer and the honesty So thank you.

Richard J. Tobin: Thanks, Scott.

Operator: Thank you. That concludes our question and answer period. And Dover Corporation's second quarter 2025 earnings conference call. You may now disconnect your line at this time, and have a wonderful day.