Note: This is an earnings call transcript. Content may contain errors.

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DATE

Wednesday, Oct. 29, 2025, at 9 a.m. ET

CALL PARTICIPANTS

  • Chief Executive Officer — Eric Ashleman
  • Chief Financial Officer — Akhil Mahendra

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RISKS

  • Organic sales in the Fire & Safety/Diversified Products (FSDP) segment declined 5%, reflecting "soft volumes across fire OEM rescue tools and dispensing."
  • Management explicitly stated that in FSDP, "disruptions in the funding environment and sluggish replenishment spend impacted our third quarter results. and temper our expectations for near to mid-term demand."
  • HST segment's more fragmented industrial market exposures resulted in "flattish" net performance, with management indicating there is "little evidence of near-term improvements."
  • Price realization "it's getting a little more difficult," according to Eric Ashleman due to "real pricing fatigue that is out there generally," as noted by Ashleman.

TAKEAWAYS

  • Organic Orders Growth -- Total orders grew organically by 7%, with HST reaching a record $390 million in orders, and both FMT and FSDP posted high single-digit organic order increases.
  • Organic Sales Growth -- Organic sales grew 5%, with positive contributions from price (3.5%) and volume; HST and FMT saw volume growth, while FSDP volumes declined.
  • Adjusted EBITDA Margin -- Expanded companywide by 40 basis points versus last year, driven by productivity gains, favorable price/cost, and cost containment.
  • Free Cash Flow -- Free cash flow was $189 million, down 2% year-over-year due to higher working capital; Free cash flow conversion was 123% of adjusted net income.
  • Cost Saving Initiatives -- Platform optimization and cost containment delivered $17 million in savings, with over $60 million expected for full-year 2025.
  • Segment Margins -- HST adjusted EBITDA margin rose 120 basis points year over year. FMT adjusted EBITDA margin improved by 90 basis points year over year, and FSDP adjusted EBITDA margin contracted by 200 basis points, largely from volume deleverage.
  • Share Repurchases -- $75 million deployed, $175 million year to date, with repurchase authorization raised to $1 billion in September 2025.
  • Dividend Policy -- $54 million paid in Q3, with a stated target payout of 30%-35% of adjusted net income (non-GAAP) via dividends.
  • Liquidity and Leverage -- $1.1 billion in liquidity at quarter end, Gross leverage at 2.1x, with intent to migrate below 2x in the coming quarters.
  • Full-Year Guidance -- Narrowed full-year adjusted EPS range to $7.86-$7.91, Guidance for 1% organic revenue growth, and Adjusted EBITDA margin guidance between 26.5% and 27.5% remains unchanged.
  • Major Market Drivers -- Municipal water, data centers, semiconductor MRO, pharma, and space and defense were cited as key sources of growth. Semiconductor lithography remains below prior-year levels.
  • Strategic M&A Outlook -- No large acquisitions expected in the near term; focus will be on smaller bolt-on deals and portfolio optimization.
  • Intelligent Water Platform -- High single-digit revenue growth was reported, with recent acquisitions (NextSight, Subterra) contributing to integrated offerings and software-driven analytics.

SUMMARY

Management outlined phase three of IDEX (IEX 0.04%)'s evolution, emphasizing integration of acquisitions to accelerate mid-single-digit organic growth aligned with secular trends. Capital deployment priorities shifted from large-scale M&A toward bolt-on acquisitions and expanded share buybacks, supported by high free cash flow conversion and a robust balance sheet. Executives highlighted key growth contributions from HST, Intelligent Water, and Material Science Solutions platforms, while acknowledging persistent weakness in FSDP and fragmented industrial exposures. Segment commentary signaled ongoing productivity initiatives, platform optimization, and an expectation to continue margin expansion, particularly in HST, despite "macro uncertainty," according to Eric Ashleman, who stated it is "not clear how and when broad external catalysts will line up to support more predictable and positive conditions."

  • Management described the company’s shorter lead-time business model, noting that approximately 50% of each quarter is pre-booked, which limits forward visibility.
  • Ashleman reported, "the decision process being elongated," and stated, "we don't see things being canceled" but customers are taking longer, especially on large orders; no signs of material inflection detected.
  • Price increases—primarily driven by policy and tariff announcements—accounted for the rise in price realization to 3.5%, which management said is "the high point for the year" and higher than any period in 2024.
  • Executives indicated further cost savings opportunities exist in future "infrastructure topology," such as consolidating rooftops, but cautioned that implementation would be paced to avoid operational disruption.
  • The share of revenue sourced from five thematic growth platforms now reaches approximately 50%, which management expects will "disproportionately fuel organic growth."
  • Management stated "divested four businesses" with lower potential to scale occurred alongside eleven acquisitions chosen for advantaged market exposure.

INDUSTRY GLOSSARY

  • Eighty-twenty (80/20): IDEX’s operational principle focusing 80% of resources on the top 20% of value-driving activities, used to prioritize execution, resource allocation, and portfolio optimization.
  • Platform Optimization: Ongoing integration and improvement of acquired businesses, seeking scale, cost savings, and margin enhancement through operational changes.
  • Material Science Solutions (MSS): A company segment integrating capabilities in forming, shaping, and coating materials to address advanced industrial applications, cited for driving growth and profitability above segment average.
  • Intelligent Water Platform: IDEX’s integrated water-management solution, combining hardware, analytics, and recent acquisitions (NextSight, Subterra) for municipal and high-purity applications.
  • Rapid Fulfillment Model: IDEX’s approach of short order-to-delivery cycles, enabling rapid response to customer demand and serving as a real-time indicator of economic activity across fragmented markets.

Full Conference Call Transcript

Eric Ashleman: 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 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 eighty-twenty 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 forty 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 IDEX culture and business approach, powered by an operating model with eighty-twenty as its heartbeat.

Eighty-twenty 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 twenty-first-century secular trends. Today, we are intensively deploying eighty-twenty 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 eighty-twenty 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. In 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 NextSight and Subterra, these businesses were a strong contributor of organic growth for IDEX in 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 Air Tech. Within our performance pneumatics group. The team continues to win as they support power gen 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 III 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 HSE 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 of effectively offsetting pressures within semicon lithography to drive performance. With eighty-twenty 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 advantaged 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 eighty-twenty are driving which notably improved Nuance 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.

Jim Giannakouros: The third key component of phase three of IDEX's evolution is balanced

Eric Ashleman: capital allocation. Akhil will get into more details here but after the last few years of accelerating larger M and A to build our 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 IDEX 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 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 in 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 advantaged 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 remained 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 mid-term 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 IDEX, we plan to continue to make our own luck through eighty-twenty 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.

And with that, I'll pass it over to Akhil to discuss our financials and our updated outlook in greater detail.

Akhil Mahendra: Thanks, Eric, and good morning, everyone. All the comparisons I will discuss will be against the prior year period unless stated otherwise. As Eric mentioned, in 2025, IDEX delivered strong financial performance. Organic revenue growth of 5% was better than we expected. With momentum in HST driving the outperformance. And adjusted EBITDA margin and adjusted EPS came in higher than our forecast for the company overall. Orders grew 7% organically in the quarter. Our HST segment reached a record high at $390 million and both FMT and FSDP posted high single-digit order growth in the quarter. While order activity was strong on a year-over-year basis, much was received and shipped within the quarter. Leaving overall backlog levels relatively flat sequentially.

And as a reminder, given the nature of IDEX's rapid fulfillment business model, we typically enter a quarter approximately 50% booked. Which limits our overall visibility. Touching on some of the more meaningful business demand trends in the quarter, we saw strong order activity within municipal water, data centers, semiconductor MRO, pharma, and space and defense. Semiconductor lithography remained below prior year levels. In life sciences, IDEX provides niche components for analytical instruments, we continued to see low single-digit growth. Finally, while we posted order growth in FSTP, this increase was largely due to timing of orders last year. FSDP order activity was subdued in the third quarter. Specifically in dispensing and fire and safety outside of The U.S.

Organic sales in the third quarter grew 5% with both positive price and higher volumes contributing versus last year's third quarter. Strong price execution across segments was the primary driver. While volumes increased in both our HST and FMT segments but declined in FSTP. IDEX adjusted gross margin contracted slightly or 10 basis points versus last year given unfavorable mix. These headwinds were largely offset by productivity gains across our businesses. Adjusted EBITDA margin expanded 40 basis points versus last year. Reflecting productivity gains, favorable price cost and volume leverage. These more than offset unfavorable mix. Our platform optimization and cost containment efforts yielded $17 million in savings in the third quarter.

These initiatives remain on track to deliver over $60 million in full-year savings. Free cash flow of $189 million decreased 2% versus last year, on higher working capital. Free cash flow conversion was 123% of adjusted net income. And we remain on pace to achieve our target of at least 100% free cash flow conversion for 2025. We ended the third quarter with strong liquidity of approximately $1.1 billion. And finally, we deployed another $75 million to repurchase IDEX shares in the quarter. Taking our total to $175 million for 2025. Continuing our acceleration of returning cash to shareholders as Eric noted earlier.

Now quickly, some color on our results by segment. I'm on slide nine. In 5% and revenue grew 10%. Volumes increased on strength in life sciences, space and defense, semiconductor consumables, pharma, and data centers. These areas more than offset year-over-year declines in semiconductor and industrial businesses. HST adjusted EBITDA margin expanded 120 basis points year over year given strong volume leverage platform optimization savings, cost containment actions and favorable price cost. These more than offset the dilutive impact of unfavorable mix. Turning to Slide 10. In FMT, organic orders increased 8% and organic sales increased 4%. Orders growth was supported by our intelligent water which delivered strong performance this quarter. With project timing and favorable prior year comps driving results otherwise.

Looking at our leading indicator, industrial order rates, they appear to be range bound. And notably without any strong indication for sustainable inflection in the near term. We also are seeing continued hesitation on larger orders from customers across most of our industrial end markets. FMT achieved adjusted EBITDA margin improvement of 90 basis points driven by favorable price cost and execution of platform optimization and cost containment actions. Please turn to Slide 11. FSDP organic orders increased 7% but organic sales declined by 5%. Orders benefited from continued growth within North America Fire OEM and growth in banded. Within dispensing, orders increased, but this was largely driven by timing.

Organic sales declined in the quarter, primarily due to soft volumes across fire OEM rescue tools and dispensing. While short-term headwinds impacted sales in fire and rescue, the broader outlook for these businesses remained steady. Albeit with limited catalyst for near-term acceleration as macroeconomic and geopolitical factors weigh on order activity. Dispensing volumes were also pressured. Reflecting the natural progression of the business' refresh cycle. As customers increasingly shift towards refurbishing existing equipment, rather than investing in new machinery, we anticipate continued softness in this area. FSTP experienced adjusted EBITDA margin contraction of 200 basis points mainly due to volume deleverage. This headwind was partially offset by platform optimization and cost containment actions and favorable price cost.

Jim Giannakouros: I'm on slide 12.

Akhil Mahendra: Let us turn to capital allocation for the quarter. As Eric mentioned, free cash flow generation remains strong allowing us to continue to allocate resources towards the areas we think will generate the returns. We drove $189 million of free cash flow after investment for organic growth, including CapEx spend of $15 million in the quarter. And IDEX has generated 97% free cash flow conversion year to date. We ended the quarter with strong liquidity of $1.1 billion including cash levels of about $600 million and revolver capacity of about $500 million. Our current gross leverage position sits at approximately 2.1 times.

And while we feel comfortable with our current leverage and liquidity position, we intend for our leverage to migrate lower and get to our typical target range of under two in the next several quarters. Our balance sheet provides financial flexibility to meet capital allocation priorities. As mentioned earlier, we accelerated our pace of share repurchases. We're purchasing $75 million shares in the quarter. And $175 million year to date. And in September, we increased our share repurchase authorization to $1 billion. We paid approximately $54 million in dividends in the third quarter and continue to target 30 to 35% of adjusted net income in dividends paid.

Regarding M and A, do not expect to pursue large acquisition opportunities in the near term after investing the establishment of our growth platforms over the last couple of years. Instead, we will be focused on bolt-ons and portfolio optimization in the coming quarters. Please turn to slide 13. We are narrowing our full-year guidance range to 7.86 to 7.91. Which remains within our previously communicated outlook of 7.85 to 7.95. This reflects continued strength in HST particularly within our advantaged markets. Data centers, space and defense, semiconductor MRO, and pharma which are helping offset pressure in our FSTP business stemming from funding disruptions and sluggish equipment replenishment spending. FFT continues to perform in line with expectations.

Contributing to overall portfolio stability. Both our organic growth expectation of 1% for the fiscal year 2025 and adjusted EBITDA margin expectation of between 26.5% and 27.5% remain unchanged. Our updated guidance reflects more of level load of sales between the third and fourth quarters. Reflective of the typical historical seasonal cadence at IDEX. Our strong third quarter results have positioned us well to deliver on the second half expectations we set this summer. With that, I'll turn the call back over to Eric.

Eric Ashleman: Thanks, Akhil. I'm on Slide 14. Where we highlight the key drivers of IDEX's shareholder value creation. As I mentioned earlier, we are squarely in the midst of driving phase three of our evolution. We are applying eighty-twenty to drive integration, operational improvement, and enhanced growth prospects across our high-margin growth platforms. We intend to remain very selective around bolt-on acquisitions to augment our organic efforts taking a balanced long-term approach to capital allocation supported by near-term intentionality. And as Akhil said, our current focus here is smaller bolt-ons, and returning capital to shareholders. In the past couple of years, we identified acquisition opportunities and pulled forward activity to more quickly establish attractive value-creating growth platforms.

We are now acutely focused on applying eighty-twenty to maximize their potential. We believe all this will drive meaningful EPS growth over the longer term driven by organic growth we can leverage and capital deployment amplifies IDEX's value creation potential for all stakeholders. We have outstanding and passionate teams and talent, a portfolio of highly critical and adaptable technologies in advantaged markets, and a culture of operational excellence and the heartbeat of eighty-twenty, which powers it all. Supported by a robust balance sheet that we leverage via a balanced and effective capital deployment philosophy.

We believe we are in a position of strength to deliver as a premier growth compounder as we close out the decade and head towards our next phase of evolution. That concludes our prepared remarks. And with that, I'll turn it over to the operator to take your questions.

Operator: Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press 2 to remove yourself from the queue. For participants using speaker equipment, it may be necessary to pick up their handset before pressing the star keys. One moment, please, while we poll for questions. Our first question comes from the line of Deane Dray with RBC Capital Markets. Please proceed with your question.

Deane Dray: Thank you. Good morning, everyone. Hey, Dean. Hey. I really appreciate that slide three on the evolution. And also just kinda giving us the near-term clarity on capital allocation portfolio optimization and so forth. That was a big help.

Eric Ashleman: Sure. Hey.

Deane Dray: This seems always appropriate, especially given that macro uncertainty, Eric, to have you give us your insight into the tone of business. You mentioned some order hesitation, but just you know, the metrics that you typically use, the day rates, you know, order size, some of the bellwether businesses? And can you also weave in whether there were have been any blanket orders? That's also a good indicator for us. Thanks.

Eric Ashleman: Sure, sure. Well really look, I think there's kind of two realities out there. There's those areas that we focus that are really contributing to our growth, Danielle, and those are dynamic and aggressive and exciting. And data centers and the things we're doing in water space I know you know well. So those kinda have their own rhythm of positive energy. Then you have kind of the broad economy next to it. And this is for us is a lot more fragmented. I'd say, you know, it's it's certainly stable. I don't it's not really inflecting one way or the other.

The way that we kind of pulse that as you know, is we line up about six or seven businesses We look at what we call their sort of you know, day rates. A lot of it comes through fragmented distribution. We watch them together. And if they ever move in the same cadence, it generally tells us we're approaching some inflection point, either positive or negative. As we've been monitoring those throughout the year, I'll actually take you through it. I'd say in Q1 leading up to the events of the spring around policy, those were stable, but they were a little higher than they are now. Then of course we went through the spring and summer periods of tariff announcements and policy stuff, and we had a we had a lot of things swinging back and forth.

That kind of resolved itself in July as we talked through on the last call. And now it's stable again. It's just a slightly lower level than it was the first quarter, and that kind of makes sense. There's an extra dimension of uncertainty hanging over everyone's heads here related to where policy direction might take us. So I think we're still looking for things to turn there. We monitor them every week. But as of now, very, very stable without inflection.

On the large order side, is not as big a part of the order flow for us but does tell us things, These would be discrete items where we actually know the end customer and how many they require and what they're actually building out. We just see the same kind of hesitancy. Know, we don't see things being canceled. We see the decision process being elongated. We'll typically kinda see the funnel move a little bit to the right. In terms of timing, of outcomes. You know, and largely we're capturing the orders we would expect. It's just taking longer. And so not really an inflection positive there either. But again, just that's kind of one world.

It's sitting next to another world that almost operates with an entirely different cadence because it's being driven by other forces that are not as affected by these things.

Deane Dray: That's all really helpful. And just as a follow-up, and then I'll hand it off. Just can you reference any of the bellwether businesses in particular? And, also, the impact of government shutdown on the fire business in particular?

Eric Ashleman: Yeah. Yeah. So the kind of bellwether business is a lot of them for us are in FMT. They're much more fragmented user base. Through indirect distribution. So you can think of places like gas Warren Rup, Viking, Over on the HST side, a business like Bandit, which does an clamps, there's a portion of that business that's pretty that's pretty fragmented as well through kind industrial applications. There's a few others. But that's generally the nature of what we're looking at. And the reason it's meaningful for us is, I mean, it's really, really rapid fulfillment.

As you mentioned. We can get an order on a Monday, make it on a Wednesday, and in service on a Friday. So it gives you a really good indication of what consumption actually looks like on the outside. And when those are constant, it generally tells us the system is working. People are fixing things, maintaining, replacing, like for like. When it starts to move, they're doing more work. They're running extra shifts. They might even be expanding the facilities. So that's kind of how we use it as a filter. Oh, and the and the government sorry. The government funding Yeah. Question. Really, that doesn't have the effect you might think.

The North American, fire and rescue markets are actually really good. They've been good for a while now. As you know, we do we've got kind of an enhanced automation offering there as well. That's kinda helping us grow above baseline entitlement. So what we're really seeing when we reference government, support it's more of a European and Far East issue. For us, that's China markets and some broader Southeast Asia. Typically, kind of this point back half of the year, start to move up a bit you get closer to the end of a budget cycle. And this particular year in both geographies, we didn't see that. In fact, it saw kind of turn the other way.

Think about it, Europe a lot of the funding over there, is being used for other purposes. You can think of like the European equivalent for FEMA. And sort of preparedness. So there's just not as much to go around, in our line of work. I just think in China, it's the continuation of a theme there. It's a desire to support more local industries, if you will, and be really, really careful on decision making around higher government spend at a time where the economy is just not as strong. But not as affected on The US side. It's not that direct a relationship.

Deane Dray: Yeah. Thanks for that clarification. I appreciate all the color. Thanks.

Eric Ashleman: Thank you, Dean.

Operator: Thank you. Our next question comes from the line of Mike Halloran with Baird. Please proceed with your question.

Mike Halloran: Hey, thank you. Good morning, everyone. Good morning, Mike. Hey. So no. Agree with Dean. I like those, four slides you put at the front that kinda laid things out. One question on it. Can you frame what this means from a growth perspective for the portfolio relative to history? I know that the 2010s, the growth was pressured by the eighty-twenty piece, but it was kind of that you know, three, 4% kind of range, all else equal on a reported organic basis. What does that look like on a forward basis normal environment or however you want to frame the growth algorithm today versus the previous decade before you embarked on stage three?

Eric Ashleman: Well, sure. I think, like, if you'd kinda track IDEX's historically, especially in that period or before, you'll see that we kind of tracked right along with industrial production or the ISMX index. I mean, almost one for one. It's very high correlation in those years. And so by doing this work, on the integrative side, bringing in frankly, higher levels of vitality in the technologies that we've acquired, a lot of it in HST, some of it in the water space, certainly captive within our growth platforms. What we're trying to do is move that fulcrum to the right. Starting to break from it now just because of the collective weight.

A lot of it being delivered in the HST segment. So if you think of that as historically something that's been kind of the lower side of low single digits is an entitlement, the industrial piece. We see that moving up and ultimately would like to get it sitting closer to mid single digits for the company. Kinda GDP plus. And really being just driven on the backs of two things, really the portfolio itself, the composition of just higher tech assets that are more in line with as I said on the call, the prepared remarks, twenty-first-century secular trends.

But at the same time, and I think this is important, a source code that we're writing in terms of how these technologies actually work together in a company like IDEX with tunable technology. And you really, really see that taking shape in the material science solutions platform that I outlined and its impact on a single business like Muon. You know, where actually you're seeing faster results because of the collaboration across the dimensions that we've outlined here. So it's it's those two things. It's assets coming on board the way we work those assets together. That then moves us off of kind of an industrial fulcrum to something closer to mid single digits.

Mike Halloran: That's helpful. Appreciate that. And then maybe the answer here is obvious. With some of the stuff you said in the early remarks. But you look back over the last seven or so quarters, orders have been positive. They've they've kinda trended if I take a really loose average in that three, 4% kinda range from an organic growth perspective. How do you think about the revenue levels can start more consistently normalizing towards that range? We've had a lot of moving pieces, quarter to quarter, for a while now. But just when do you think there's gonna be more of a consistent relationship between those things emerging?

Eric Ashleman: Well, I think I think two things gotta happen there. I mean, we you know, obviously, we're we're getting a lot of price too. So as you reference those numbers, what we're looking at is not just the organic rates, especially on the industrial businesses, but we're actually looking for the volume step up underneath it. And so I do think it's been a while now since that sort of base level industrial world started to move or inflect. So at some point when it does, I mean, we're going to be really, really well positioned to move on top of it. That's still an important part of the business, and it covers a lot of IDEX.

I think back to this theme of controlling what we can control and having more pieces available at our disposal to do it, that's the part that's more impactful and where we're spending all our time and energy. So stories like you see in the Material Science Solutions platform The work that I've referenced long ago about kind of how data centers are coming together in our pneumatic space. That's kind of leading the way for growth for us right now. Water, which, you know, on the municipal facing side, that was a high single-digit grower for us, here in this quarter.

And so having more of those cases and points put down and then ultimately Mott being part of that as well as we continue the exact same work there. I think it's those two components. It's an entitlement shift that I think is overdue. On the industrial side and then us just doing the work that I'm describing here on top of it.

Mike Halloran: Thanks, Eric. Appreciate it.

Akhil Mahendra: Thank you, Mike.

Operator: Thank you. Our next question comes from the line of Joe Giordano with TD Cowen. Please proceed with your question. Hey, guys. Good morning.

Eric Ashleman: Hi, Joe. Good morning.

Joe Giordano: Hey. I'm just curious, Eric. Like, when you if you just, like, step back now, like, after the kinda take in the last year, eighteen months or so, know, and you look at the deals you've done, you know, clearly, like, deals with positioned into the growth areas that you mentioned. But, like, at if I compare, like, what we've been acquiring to what we used to acquire like, was there a sense of, like and maybe we chase growth in a different way and did we get away from what made IDEX unique in terms of the positioning and the and the like, the visibility of these businesses?

Or I'm just curious how you would kinda post more in the whole, like, last two years here on the m and a side. Now that we're refocusing on 8020, like, as a specific mandate again.

Eric Ashleman: Yeah. Yeah. I appreciate the question. Why I think well, look. From a probably the most positive aspect, you know, the line of sight between the technology and the market access points we've acquired and areas of growth in the economy that are not affected by some of the things we've talked through. I think is really positive. Almost every single point we've referenced here in terms us making our own luck you can trace it back to areas very close to the businesses that we've acquired. So I think that part of the thesis I feel very confident about. Actual work being performed is not that different than I remember, you know, kind of the earlier days of IDEX.

Well, a lot of our traditional technology was pretty industrial in nature. Actual development and iterative innovation work that goes on there is very, very difficult and cutting edge. And so part of the thesis here really is to essentially set those same specification points now in emerging industries, be a part of that, be a partner with customers as they develop things and then solve problems that I think are honestly pretty equivalent to what we did back in the earlier industrial, times. But there's new markets and new worlds here that are available that we need to be a part of that'll be essentially annuity streams for us over the next decades here.

Are, you know, they're different assets. We do a lot more of the work in clean room environments than we used to do in traditional manufacturing. But the nature of engineering first rapid iteration, kind of a big capital d and a small r in R and D. I mean, that's classic IDEX. Then the ultimate business filter here that looks at delivering massive criticality at kind of low point of the bill of materials is just that's the sort of secret source code of our economic engine. That's constant as well. So I think it's you know, while it is an evolutionary shift and probably the newest nature piece of it is the way that we're collaborating cross borders within business, actually think that's reflective of just where the world is now as well. The kind of solutions they're asking us to solve some of the best customers that are out there, you know, they often demand, work that transcends a single business or a single technology. So we're setting ourselves up in a way that we can continue to participate with a world that's developing and evolving as well.

Joe Giordano: That's great color. And just kind of like an extension of that know, and I understand that policies can change, and they do change all the time from, like, a governmental.

But if we think about what's in place now, and if I was to, like, ask you to do kind of, like, a five year kind of growth outlook, looking for the number, but if you were to compare that now versus like, if I ask you five years ago, are any of, like, your businesses do you think, like, structurally differently positioned in a world where policy is kind of here, thinking some of the maybe some of on the on the med tool side and some of, like, the lab based clinical applications. Thanks.

Eric Ashleman: Well, look. I think there's no question in certainly the last five years, you know, things have changed in the pace of change is a lot faster than it used to be. So, you know, when I think of that from the highest level, think about businesses in a company that's agile and can move on a dime and being able to quickly rally around change. I think we're actually really, really well set up for that. I'll just give you a quick example. We highlighted a lot of great things going on in this, Material Science Solutions platform. Know, got some applications there on the data center side. They didn't even exist.

They really weren't, you know, on our horizon. Even a year, year and a half ago. And so they were a testament to the teams and the flat organizational nature of the way we run things and that autonomy of decision rights, those teams jumped on that kinda put a 100% effort on it, segmented it with eighty twenty, went out, put prototypes in front of people, and ultimately won the day very, very quickly. So I'll step back and say in a world of change, I do think we're very, very well set up just in terms of kind of how we run and lead IDEX, to go after that. Now there are specific places.

You mentioned one there on the life sciences side. And that's in a different space than it was years ago. But I think even there, the tunability of our technology allows us to respond to things very, very well. Life sciences today, there's absolutely some pressure on the kind of academic funding side of things. But there's a lot of strength on the pharma side, and we're able to tune resources and shift accordingly. So that ability to do that within kind of small to medium-sized, organizational construct and do it fast I do think sets us up for change sort of no matter what direction it takes us?

And then just from a, you know, kind of a trade policy perspective, which is sort of the big headline today that we're dealing with, remember, this is a really localized business model. We tend to iterate ideate, produce, source, make stuff, and sell it within the same geography. So it protects us a bit from, you know, unexpected shifts there on that side as well.

Joe Giordano: Thank you, guys.

Operator: Appreciate it, Joe. Thank you. Our next question comes from the line of Nathan Jones with Stifel. Please proceed with your question. Good morning, everyone.

Nathan Jones: Hi, Nate. Good morning. Guess I'll come from the other side of, of the platform. I mean, strategy and some of the acquisitions that have been made here. Questions have obviously been focusing on growth. I think there are opportunities for you guys to take some more cost out of those businesses, maybe combining some rooftops. I know you did side and the potential for reducing cost, expanding margins as part of this strategy as well. Thanks.

Eric Ashleman: Yeah. Well, look. That's that's kind of a classic part of how we drive value at IDEX. We're very good at operational excellence. We apply eighty-twenty to understand where resources are being well leveraged and where they're not. I'd kind of within a more recent framework take you through maybe three of the acquisitions so you can understand the work there. I'll go back a bit. In time, a few years ago, we bought Air Tech. You know, we did a lot of work. With that business.

We, at one point, we did a kinda president's kaizen event there and brought in most of the senior leaders of IDEX and helped out on a number of elements to make sure that they were set up to grow that business. Was happy to say when I went back a year later that their you know, you can see it's alive today, and they've taken that, and they've incorporated it into their business. And it's how they're able to grow at the level that they have. We've got some insight into the Material Science Solutions platform and Muon's specifically here. Whereas, you know, we took some cost actions there in Q3.

We see that at, we can appreciate it at full run rate. And as you can see now, we've got profitability above the consolidated HST levels. And are well set up now to lever it as we grow forward. And then more recently, and certainly at a different scale, the work we're doing with Mott it's the same thing. We're in there, and we're we're making calls on business. Where do we think the eighties are? Where are the 20s, how does this help us map resources accordingly? And we're doing a lot of work on the efficiency side. One of the highlights of Q3, as you know, MOD has a ramp kind of a nonlinear ramp to Q4.

They're gonna step up that business. Actually, actually, executed some of it early. Into the third quarter because of efficiency gains and some of the great work that team has done as well as the work on our side. More structurally, you know, we've long referenced, the work that we did around structural productivity and delayering and things like that at the platform level, that's part of it too. When we move from single businesses and kind of a classic IDEX sense that has all the back office and all the administrative things happening business to business, we combine them and they work together, we get back office efficiencies there.

So a lot of the things that are on the plate right now that's where it came from. And now we're seeing full run rate here in the third quarter, and we're it upticks a bit even into Q4.

Akhil Mahendra: Yes. Nathan, just maybe to put some numbers around it, right? Eric mentioned the dealerring and platform optimization efforts. And then we the second bucket was really cost containment efforts and actions that we put into place in the starting in the second quarter. And what you see today is we delivered $17 million across those two buckets. And the step up will be a few million dollars and run rating at about $20 million here in the fourth quarter.

Nathan Jones: Are there further opportunities for these kinds of restructuring savings? I think you've talked about maybe consolidating some rooftops as one of the things to do in the future. As part of, you know, combining these businesses, moving them closer together. Is this something that you know, you're likely to move on in 2026?

Eric Ashleman: Well, that's certainly a chapter that we'll take a look at. One of the one of the advantages when you put similar businesses together is you can absolutely look at your infrastructure topology and then ask questions around how to effectively lever that. I will say we haven't done as much of it, here this year because it that's a big variability element. As we've worked on some of the other aspects of eighty-twenty and bringing people together, particularly in a commercial and a technical way that's different, been a little careful not to superimpose more variability on top of it. And run the risk that any of that then manifests through to the customer base.

So that's a chapter to come. It's something that we'll certainly consider here, and we'll be thoughtful as how we layer it across so that it doesn't interrupt growth. But that is an open area of opportunity for us And certainly as we scale the company, we're always thinking of that because we wanna take some of that complexity out of the system.

Nathan Jones: Thanks for that. I guess my follow-up is gonna be around capital allocation. You know, specific change in priorities, I guess. Really this quarter with you know, I know you talked about m and a maybe taking more of a backseat now. Smaller deals, not the transformational deals. And you have repurchased shares each quarter this year. Increased the authorization. Is the is part of the plan here to be more of a serial repurchaser or stock going forward? I would imagine that you think the stock's probably well below intrinsic value right now, and IDEX has historically been a share repurchase or in that situation.

So just how we should think about share repurchase, both opportunistically in the short term and more as a long-term avenue for capital deployment? Thanks.

Akhil Mahendra: Yeah, Nathan. Let me just sort of walk you through that framework. Right? And first, I think it's important me to recognize the high-quality portfolio we've built, which actually enables us to generate strong free cash flow consistently that we're actually able to deploy right And you sort of called it out, M and A, there was a period of heavy investment for us. During our growth platform building phase and now we're focused on bolt-ons that are going to have attachment points to these growth platforms that we've built. And one of the greatest examples here that I have for you was in one of the slides was MicroLam, which we announced a quarter ago, right?

Its integration is going really well. It's sort of plug in very nicely platforms. Look, from a funnel perspective, our funnel is strong. We continue to cultivate proprietary ideas. And so we'll as those opportunities are available to us, right, we'll execute on them. And then as we think about excess cash flow, we'll continue to return that capital to shareholders. And that's through dividends. I do want to make sure that we spend a minute on that. That is sort of a policy that where we've grown our dividend here historically. We aim for 30% to 35 adjusted net income to be paid out from that front and then share repurchases, which as you mentioned, we stepped up.

So coming into the year, we had already stepped up the share repurchases because we were outside of that heavier deployment of capital towards platform building And so if you look at sort of how the numbers stack up, year to date we've returned about 80% of our free cash flow to shareholders. So as we think about this framework and look at what's ahead, especially us moving towards more bolt-on being able to add more things to the growth platforms. You'll see that excess cash being returned to shareholders.

Eric Ashleman: But I think, Nathan, long term also people to recognize, mean, that we've got some work in parallel. We're always thinking about where does IDEX go next. Other technologies are out there that could be interesting for us? Are there access points for markets? So that work continues, but it's of a longer duration. So we're now it's it's really important that we don't interrupt it. But we're gonna do two parallel tracks here.

We're thinking ultimately about deploying capital to the points of highest return I think right now for us, taking advantage of what we've purchased getting it to work together effectively, working on both the top and the bottom line, and driving a ton of value out of this space that we've acquired is absolutely a point of high return. Then, you know, this as we do that, returning cash and capital to shareholders, we've is we think if nothing else, a real signal and sign of the confidence we have in the long-term growth strategy for the company.

Deane Dray: Awesome. Thanks for taking my questions.

Operator: Thank you. Our next question comes from the line of Ryan Blair with Oppenheimer and Company. Please proceed with your question.

Ryan Blair: Thank you. Good morning, guys.

Nathan Jones: Hi, Brian. Good morning.

Ryan Blair: The Intelligent Water platform. Gotten a decent amount of airtime today. I think that's that's fair. Eric, as you as you called out, the team presented quite well. At WebTech. So wondering if you could offer some finer points on non-contribution in the quarter. And I think you would noted high single digit I don't know if that was a revenue or order expansion. A clarification there would be would be helpful. And then even more importantly, speak to the underlying demand trends visibility and growth prospects of the platform as we look to '26.

Eric Ashleman: Sure. The high single digits was on the on the revenue side. Orders were good as well. You know, we point out the municipal facing side because when we talk about water as a whole, we also have a piece of it that's, vectored towards high purity applications A lot of that's in kind of semi fab build out areas. So we want to make the distinction. But the bulk of it is municipally municipal facing. And it's mean, a great businesses. We're doing a job there that, is absolutely critical. We help people understand what's going on. Underneath the ground. These are environments, as you know, you don't wanna spend a lot of time in, And we've, you know, we've augmented that through acquisition as well.

So NextSight you know, it brought us some more critical inspection gear, and a lot of analytical intelligence. This is our most software intensive business in all of IDEX. We use it, you know, the two technologies together. Think of it as flow monitoring, flow detection. In very difficult environments. I assure you that's not an easy job to do. And then a data capture, portion of it that then sends it into an analytical framework which essentially allows us to help municipalities understand how the system is working. And so we present that information, all across, across the globe to customers essentially, if you think about it, there's two primary customers.

On the one side there's the operator side, trying to just run a good system day to day. But maybe even more importantly for us, we're actually supplying, that analytical input into capital specification engineers. And they're using it then to essentially vector capital, into larger scale projects and infrastructure build out. Without the work that we do, would be very difficult. So know, it's it's it's much more integrated than it was originally. We presented it that way at Weftech. It works that way in actual, fact. And here with the latest addition, Subterra, that allows us kind of to go in and untethered way a lot further. And extends our reach with a pretty simple device.

So we're really, really pleased with what we have there. It's great to see the growth is a reward, and we look for more in the future.

Ryan Blair: That's excellent. Appreciate the color.

Akhil Mahendra: And Q3 HST results were pretty encouraging overall. We know you're team's been navigating challenging market conditions for a while. And perhaps there aren't you know, stand up green shoots quite yet, but it seems like I guess, the aggregate demands, you know, outlook is at least gradually improving. Given the restructuring and optimization work your team has done, you know, how should we think about HST incrementals once we do get back to a more supportive demand environment? Hey, Ryan. It's Akhil. Yeah. I can take this one. Look.

I the way I would think about it is sorta an incremental standpoint, just given sort of the demand dynamics that you laid out, we did expect somewhere in that 35% to 40% incrementals. Again, as sort of those demand dynamics weren't there, right, we'd vector to the lower end of that. But that's sort of how we're thinking about with demand there to support, support the business.

Eric Ashleman: And I think as you said, and I want to highlight here, especially for the teams that are doing the work in HST, They had a really good year. I mean, this segment has grown orders, sales, and profitability each of the three quarters. That we've had here. They're going to step it up again in the fourth quarter. You know, again, the underlying markets are some of them are better than others in IDEX, but a lot of this is on the back of great work like we've outlined in MSS or in data center applications and AIRTEC and other places.

Akhil Mahendra: Appreciate the detail. Thanks again. Thanks, Brian.

Operator: Thank you. Our next question comes from the line of Vlad Vistrovici with Citigroup. Please proceed with your question.

Vlad Vistrovici: Good morning, guys. Thanks for taking my call. So maybe just going back to your commentary, Eric, on sort of the price versus volume dynamics that you've seen and you mentioned that you've been seeing strong price realization overall. So you give any color on what price actually contributed in 3Q and how you're thinking about pricing heading into '26, particularly if, you know, kind of a still sideways or sluggish demand environment in portions of the business? Linger? Yep.

Eric Ashleman: Yeah. Well, look. So price capture has increased, obviously, as we've gone through the year, much of it in response to the tariff announcements. So in Q3 we were about three and a half percent That's the high point for the year. That's higher than everything we had in 2000 and, '24. It's kind of starting to approach some of the levels at the tail end of '23, which was kind of the end of that big inflationary cycle. So it's increasing. And two things I would say about it.

One, always want to remind people here one of the reasons that we're able to do that and do it effectively it is a testament to the differentiation that we have in our technologies, the positioning of our business and the great work of our teams. I say that because, you know, I think as this goes on and the levels get higher, I think this is an area where it's getting a little more difficult. Think there's some real pricing fatigue that is out there generally. And I think this is where I appreciate the differentiation that we have in our business and our ability to kinda withstand that argument.

It goes back to the original business filter of the company of lots of criticality at a relatively low price point so that when our increases do hit, they're easier to rationalize than some others. So heading forward, I think, obviously, from a pricing perspective, a lot of it's gonna depend on where does policy go. So much of it has been a response to that. Know, kind of the base level pricing entitlement that does things like covers traditional inflation for us and others, You know, we've we're planning for that. We've got some of it out now as a kind of a preannouncement getting ready. So nothing really interrupting that side of the cycle.

The real open question is does policy become more aggressive? Does that then force us to go to even higher levels? And then ultimately, that's into an environment that I think is starting to have some real fatigue.

Akhil Mahendra: Yeah. And Vlad, I can put some, dimensions around sort of the 3.5% right I think you heard us talk about it earlier in the year. We came out with sort of traditional price of about a point and a half. And then in the second quarter, once we started to put you know, tariff pricing in place to be able to offset that incremental cost. We're now at about a 2% run rate, just to help you put some numbers around what Eric mentioned. And we expect that to continue here in the fourth quarter unless there's maybe a positive announcement here or it could go the other way just given you know, what's on the horizon.

So we're we're not accounting for that, but our intention is to continue to offset it. Given the remarks Eric made here.

Vlad Vistrovici: Okay. That's, that's helpful color. Helpful to understand. And then could you just maybe help me understand a little better kind of the cadence between 3Q and 4Q and whether you saw some shift in demand just given the upside here in 3Q with the full year largely reiterated? Just know, what's what's changed amongst the quarters?

Akhil Mahendra: Yeah. Look. I think if you go back when we were out here in the summer, right, we talked about, you know, sequentially two to three would generally be flat and there was that step up. And, and as we said in our prepared remarks, right, the teams did a really nice job executing with this backdrop. And you think about certain order, timing materialized earlier we anticipated, The eighty-twenty work that Eric mentioned with Mott and the operational improvement that we're seeing there. That left us with more of a balanced three to 4Q, which is more reflective of a historical pattern for IDEX overall.

We're in the 4Q, we still see a ramp in HSE but we've got line of sight to it. It's in our backlog. So we're we're pretty confident in being able to deliver on that.

Vlad Vistrovici: Great. Thanks, Akhil. Thank you.

Operator: Our next question comes from the line of Rob Jamieson with Vertical Research Partners. Please proceed with your question.

Rob Jamieson: Hey. Good morning. Thanks for all the color this morning. Just I know you're not going to give formal guidance on '26, but you know, can you provide us maybe a little bit of framework of how you're thinking about next year? Just you know, as you're trying to drive the business back to your historic mid single organic growth algorithm, like what are some of the key risks and opportunities that we should be thinking about and considering into next year?

Eric Ashleman: Yeah. Well, I mean, I think a lot of you know, still will come down to where's the what's the nature of kinda base level industrial entitlement because that's still covers a decent part of IDEX. So as we go through Q4, monitoring those bellwether businesses to see if there is some inflection That'll be a key input. For where we end up on a lot of IDEX on in terms of industrial coverage. Pricing dynamics will be important as well.

So know, as Akhil mentioned, where are we going to be between that ratio of kind of a lower figure, which takes care of our own inflation and then a higher figure which has to offset wherever policy may be at that point. Go into the calculus. And then the bulk of it really gonna come down to momentum and where we are in these individual areas where we're creating our own luck. So kind of each one of the five growth platforms, we're starting there. We're having those discussions now around what's in the funnel, what are we winning, when does it look like it's gonna come out. I those three pieces moving together how we'll be thinking about the year to come out. The last piece is in our control. The other two largely we are somewhat captive to how the world goes and how that shapes out given the diversified nature of the company.

But I you know, will be looking for signs of inflection as we go through Q4 certainly we'll be referencing those as we talk together.

Rob Jamieson: Great. Thank you. Thank you.

Operator: Our next question comes from the line of Walt Liptak with Seaport Global Securities. Please proceed with your question.

Walt Liptak: Hey. Thanks. Good morning, everyone. Just a quick follow on. On that last one, thinking about 2026. You know, I guess one, just on the organic revenue. You know, what's your feel at this point, if you can give us any, about, you know, are you cautious about 2026, or you're optimistic about the organic growth and especially given the platforms? And then maybe second, just help us think about the operating leverage that we should get when we're thinking about modeling 2026 EPS.

Akhil Mahendra: Yeah. Hey, Walt. It's Akhil. So, know, it's sort of just building on what Eric mentioned. Right? We'll we'll talk about guidance when we see here next. But just at a higher level, look, he sort of mentioned us monitoring the day rates We are short cycle, have limited visibility. So we are continuing to do the work around '26 and what that's gonna look like taking into account all the factors that Eric mentioned, The pricing dynamics, you know, us being able to make our own luck in the work that we're doing within our growth platforms, and then really some of this macro backdrop, right, around rapid fulfillment. We're going to continue to monitor that pretty closely.

But as you think about generally the incrementals, right, we sort of I mentioned I would say, you know, think of it as you know, on a consolidated basis, you know, 30 ish percent. Plus. Some are going to be higher here. So that is what we're gonna be looking at, from an incremental standpoint. We earlier in the call, right, we mentioned where HST would be So I think taken together, that should hopefully give you some level of guidance of where we expect, 26 incrementals to land.

And I would just say, Walt, to add on, the degrees matter here. So closer the world tends to tilt towards flattish, Our incrementals don't spring as well. You get a little bit of buoyancy in the system get that up around 3%, 4%. Things start to perform a lot better. So kinda where we are in that spectrum will matter as well around that point that Keehl mentioned.

Walt Liptak: Okay. Great. I appreciate the color. Thank you.

Akhil Mahendra: Thank you.

Operator: Thank you. And our next question comes from the line of Brett Linzey with Mizuho Securities. Please proceed with your question.

Brett Linzey: Hey. Good morning, Wanted to come back to the platform optimization savings in the cost containment. So the $60,000,000 I guess how should we think about any carryover into next year? And then how much would be maybe structural verse discretionary that would flex back up as, as these volumes might improve?

Akhil Mahendra: Hey, Brett. It's a Akhil. I'll I'll take that one. So as you think about the couple of buckets here, right? You got this platform optimization and dealer layering bucket. I would think of that as more structural in nature and that's going to achieve run rate. This quarter here. And so you'll see that moving forward. That was about the think of that as the $42,000,000 bucket that we had put forward here when we announced that on the back of our 4Q earnings earlier this year. And then you think about the second bucket that we talked about cost containment, again, that's also going to hit run rate here. That's more temporal in nature.

I would think of that one as you know, possibly coming back depending on the opportunity set that we're expecting to pursue here. We could make some of those investments to land those opportunities. So that's that $20,000,000 bucket for a total of 62. So that's how I would parse the two.

Brett Linzey: Okay. Great. I will, I'll leave it there. Thanks a lot.

Operator: Thank you. And we have reached the end of the question and answer session. I would like to turn the floor back to Eric Ashleman for closing remarks.

Eric Ashleman: Well, you. Thanks for joining today, and thanks for your interest and support in IDEX. I think, key takeaways here, certainly we're making our own luck with eighty twenty and a really broadly uncertain world. That Taking you through our evolution, I hope you can appreciate we built some, some real strong foundational assets. We've got some outstanding businesses, very strong teams and talent, a highly engaged and collaborative culture, and effective operating model powered by eighty-twenty, And now we've boosted our technical and commercial vitality through these strategic acquisitions and divestitures. And we're writing the source code for a new way of working together. As a team with scalable growth platforms.

Happy to see we're starting to put some growth points on the board there as we do that work together. We're confident overall that we'll continue to build momentum this work, focused work, as we move forward to drive value for all of our shareholders. And I really look forward to talking to you about it more in the quarters ahead. Thanks so much, and have a great day.

Operator: Thank you. And this concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.