Thank you, Andrew. Good morning, and welcome to AMETEK's Third Quarter 2025 Earnings Conference Call. With me today are Dave Zapico, Chairman and Chief Executive Officer; and Dalip Puri, Executive Vice President and Chief Financial Officer. During the course of today's call, we will be making forward-looking statements, which are subject to change based on various risk factors and uncertainties that may cause actual results to differ significantly from expectations. A detailed discussion of the risks and uncertainties that may affect our future results is contained in AMETEK's filings with the SEC. AMETEK disclaims any intention or obligation to update or revise any forward-looking statements. Any references made on this call to historical results will be on an adjusted basis, excluding after-tax acquisition-related intangible amortization and excluding acquisition-related costs. Reconciliations between GAAP and adjusted measures can be found in our press release and on the Investors section of our website. We'll begin today's call with prepared remarks, and then we'll open it up for questions. I'll now turn the meeting over to Dave.

Thank you, Kevin, and good morning, everyone. AMETEK delivered outstanding results in the third quarter with double-digit growth in sales, orders, operating profit, and diluted earnings per share. Organic sales growth was strong in the quarter, leading to outstanding margin expansion and earnings well ahead of our expectations. Given these excellent results and our outlook for the remainder of the year, we are increasing our full-year earnings guidance. Now let me turn to our third quarter financial results. Sales were a record $1.89 billion, an increase of 11% from the third quarter of 2024. Organic sales were up 4%, acquisitions added 6 points, and foreign currency translation was a 1-point benefit. Orders were also very strong in the quarter with overall orders up 13% to a record $1.97 billion and organic orders up 7%, leading to a record backlog of $3.54 billion. Our operational performance in the quarter was excellent with strong margin expansion and double-digit earnings growth. Operating income in the quarter was a record $496 million, an 11% increase over the third quarter of 2024. Excluding the impact of recent acquisitions, margins were 27%, up 90 basis points versus the prior year. EBITDA in the quarter was a record $592 million, up 11% versus the prior year, with EBITDA margins an outstanding 31.3%. This operating performance led to record earnings of $1.89 per diluted share, up 14% versus the third quarter of 2024. Now let me provide some additional details at the group level. First, the Electronic Instruments Group. EIG delivered outstanding operating performance in the third quarter with strong margin expansion and operating margin levels that reflect the differentiated nature of our products and solutions. EIG sales were a record $1.25 billion, up 10% from last year's third quarter. Organic sales were flat. Acquisitions added 9 points and foreign currency was a 1-point tailwind. EIG operating income was $360 million, up 6% versus the prior year. Operating margins, excluding the impact of recent acquisitions, were 30.4%, up 50 basis points versus the prior year. The Electromechanical Group had an excellent quarter, delivering outstanding sales growth, record operating income, and sizable margin expansion. EMG's third quarter sales were a record $646 million, up 13% versus the prior year. Organic sales were up 12% and foreign currency was a 1-point tailwind. Growth was broad-based across all EMG businesses in the quarter. EMG's operating income in the third quarter was a record $164 million, up 25% compared to the prior year. EMG's operating margins were up sharply to 25.4%, a 250 basis point increase from the third quarter of 2024. Our results in the third quarter and thus far this year are a powerful demonstration of the AMETEK growth model in action. Our distributed operating structure and embedded operational excellence culture has allowed our businesses to quickly react to changing market dynamics and deliver excellent results. While there is still macroeconomic uncertainty, given the ongoing trade conflicts, AMETEK is well positioned. We are seeing positive inflection in our Automation & Engineered Solutions markets, along with continued strength across our Aerospace & Defense businesses. Additionally, we are managing a growing pipeline of opportunities within our Power businesses and are benefiting from the strong secular trends driving that market. We are also seeing some improved visibility across our Process markets. Although as noted, we are closely monitoring the trade dynamics and impact on demand timing. Our recent acquisitions, FARO, Virtek, Kern, and Paragon are integrating very well into AMETEK and delivering strong results. As Dalip will cover, we have significant balance sheet flexibility, providing us with ample firepower to deploy on strategic acquisitions. Lastly, our operating model continues to shine with our colleagues doing an outstanding job leveraging our global infrastructure and operating systems to drive outstanding performance. Thank you to all colleagues for your tremendous efforts. Now switching to capital deployment. As noted, our integration efforts with recent acquisitions are progressing very well. Strategic acquisitions continue to be a core element of our growth strategy and the primary focus for our capital deployment. We are managing a strong pipeline of attractive acquisition candidates and expect to be active in pursuing strategic opportunities going forward. Complementing our proven acquisition strategy is a consistent commitment to investing in our businesses to best position them for long-term success. For 2025, we now expect to deploy an incremental $90 million toward organic growth initiatives with this investment focused primarily on research and development, sales, and digital marketing initiatives. The tangible results of this focus are clear with our third quarter Vitality Index, a strong 26%. The benefits of these investments coming to fruition can be seen in the many new product innovations across the company. I wanted to highlight a few of these new product innovations, the first one from our Virtek Vision business. Virtek Vision is a leading provider of 3D laser projection and quality control inspection systems for critical aerospace and industrial applications. Virtek recently introduced a new AI-powered camera and software monitoring system that complements its advanced 3D laser projection system, further advancing their intelligent real-time inspection capabilities. The IRIS AI Inspection camera addresses customers' critical need for improved quality control and real-time documentation in complex manufacturing workflows. The AI-powered camera captures and documents every step of the build process, creating a complete digital record for each part. A notable feature of this new solution is the ability for users to create custom AI inspection models that can automatically detect anomalies, allowing for real-time process corrections. With this new product launch, Virtek makes powerful digital manufacturing tools intuitive and operator-friendly, helping customers improve quality and productivity. Our NSI-MI Technologies business, the global defense tech leader in advanced RF and microwave test and measurement solutions, is also doing an outstanding job developing highly differentiated custom solutions for their customers' critical applications. NSI is aligned with strong secular growth themes tied to advancements in satellite systems, autonomous vehicles, and defense systems and as a result, are seeing excellent demand for their advanced measurement solutions. NSI's recently introduced new product, the Vector Digital Receiver, advances their antenna, radome and electromagnetic field measurement capabilities, directly supporting the development of next-generation communication systems and advanced sensors for air, land, space, and sea applications. I also wanted to congratulate our Rauland business on an impressive recent industry recognition. Rauland is a global leader in advanced clinical communications and workflow solutions for hospitals and health care systems worldwide. For the second consecutive year, Rauland has won the prestigious MedTech Breakthrough Award for Best Clinical Administration hardware device. This award recognizes Rauland's Responder platform for its critical role in addressing key challenges in modern health care, such as nursing shortages and clinician workload stress. The new Responder Enterprise Converge simplifies and coordinates care by improving direct staff-to-staff and patient-to-staff communication, which leads to faster response times, enhanced patient safety, and better staff efficiency. This recognition underscores Rauland's technology leadership and its commitment to developing solutions that empower health care professionals and improve patient outcomes. This is a fantastic example of how our businesses are translating their technological innovation efforts into market-leading award-winning solutions for our customers. Finally, an update on the global trade environment. The situation continues to be very fluid and ever changing. We remain vigilant in monitoring developments and proactively managing potential impacts. As we have discussed, our businesses continue to execute their well-defined mitigation plans, which include targeted pricing, strategic supply chain modifications, and utilizing our global manufacturing footprint to adapt to changing demand patterns. Our teams also continue to leverage our U.S. manufacturing presence to support global customers adapting their own supply chains. AMETEK's culture and decentralized operating structure remain key advantages, providing flexibility to implement these actions quickly and effectively. Our proven playbook for navigating these uncertain environments continues to serve us well, and our teams are executing effectively. Now turning to our outlook for the remainder of the year. We continue to expect full-year sales to be up mid-single digits on a percentage basis compared to 2024. Given our strong third quarter performance and outlook for the fourth quarter, we are increasing our earnings guidance for the year. Diluted earnings per share for the year are now expected to be in the range of $7.32 to $7.37, up 7% to 8% versus the prior year. This is an increase from our previous guidance range of $7.06 to $7.20 per diluted share. For the fourth quarter, we anticipate overall sales to be up approximately 10% with earnings in the range of $1.90 to $1.95 per share, up 2% to 4% versus the prior year. Fourth quarter earnings growth would be 6% to 9%, adjusting for last year's lower-than-normal tax rate. To summarize, AMETEK delivered an excellent third quarter with strong sales and orders growth, robust margin expansion, and earnings well ahead of our expectations. Our businesses continue to execute exceptionally well, delivering our differentiated technology solutions across a diverse set of niche markets. The durability of our operating model and our strong cash flow provide us with the flexibility to navigate through challenging market conditions and continue to proactively invest in our businesses and in strategic acquisitions. As a result, we remain firmly positioned to deliver long-term sustainable growth and create value for our shareholders. I will now turn it over to Dalip Puri who will cover some of the financial details of the quarter, then we'll be glad to take your questions.

Thank you, Dave, and good morning, everyone. As Dave noted, AMETEK had an excellent third quarter with strong growth and outstanding operating performance. This allowed us to deliver several financial records as well as double-digit growth in orders, sales, operating income, and earnings per share in the quarter. Now let me provide some additional financial highlights for the third quarter. Third quarter general and administrative expenses were $28 million, or 1.5% of sales, essentially in line with last year's third quarter. Third quarter interest expense was $23 million. Third quarter other expense was $17.9 million, with the increase versus last year's third quarter primarily due to one-time acquisition-related costs for FARO Technologies. As I noted during our previous earnings conference call, we are excluding one-time acquisition-related costs from adjusted earnings. This approach will be consistently applied to future acquisitions, ensuring comparability and clarity in our non-GAAP financial reporting. The effective tax rate in the quarter was 17.2%, down from 18.8% in the third quarter of 2024. The reduction was driven by a lower effective international tax rate. For 2025, we now anticipate our effective tax rate to be between 18% and 18.5%. As we have stated in the past, actual quarterly tax rates can differ dramatically, either positively or negatively from this full-year estimated rate. Capital expenditures in the third quarter were $21 million. We expect capital expenditures to be approximately $150 million for the full year, or about 2% of sales. Depreciation and amortization expense in the quarter was $103 million. For the full year, we expect depreciation and amortization to be approximately $425 million, including after-tax acquisition-related intangible amortization of approximately $210 million, or $0.91 per diluted share. Operating working capital in the third quarter was 18.9% of sales, a slight improvement from the third quarter of 2024. Operating cash flow was $441 million in the quarter, and free cash flow was $420 million. Free cash flow conversion was a strong 113% in the quarter. For 2025, we expect free cash flow conversion of approximately 110% to 115% of net income. Total debt at September 30 was $2.5 billion, up from $2.1 billion at the end of 2024 due to the acquisition of FARO Technologies. Offsetting this debt was cash and cash equivalents of $439 million. At the end of the third quarter, our gross debt-to-EBITDA ratio was 1x, and our net debt-to-EBITDA ratio was 0.9x. We continue to have significant financial capacity and flexibility with over $2 billion in cash and available credit to support our growth initiatives and our capital deployment strategies. In the third quarter, we demonstrated this financial flexibility by deploying approximately $920 million on the acquisition of FARO, $150 million on share repurchases, and $71 million in dividends, all while maintaining our financial capacity and a conservative balance sheet with gross leverage around 1x. The share repurchases in the quarter resulted in approximately 800,000 shares of our common stock being repurchased in the open market. In summary, AMETEK delivered an excellent third quarter with strong top line growth, robust margin expansion, outstanding earnings growth, and a meaningful increase to full-year earnings guidance. Our differentiated technology portfolio, our global manufacturing capabilities, along with our strong cash flow and balance sheet provide us with the foundation to successfully execute our growth strategy and to continue delivering exceptional results.

Thank you, Dalip. Andrew, could you please open the lines for questions?

Our first question comes from Deane Dray with RBC Capital Markets.

That was really good earnings quality, cash flow, and margins. So congrats to the team. Maybe we can start with the tour of your key platforms and regions and what stands out in particular. It looks like Paragon really had a strong quarter as well.

Yes, Paragon had another strong quarter. I'll provide an overview, starting with our Process market segment. Overall sales increased in the low teens for Process, mainly due to contributions from recent acquisitions, while organic sales experienced a slight decline. We remain optimistic about the strong pipeline of activity in our process end markets. Despite ongoing trade uncertainties causing slower decision-making and delays, project activity is robust, and visibility is improving in key markets. For the full year, we anticipate overall sales for our Process segment to rise in the mid- to high single digits and expect organic sales to remain flat to down slightly. Moving on to Aerospace & Defense, our businesses delivered another excellent quarter with organic sales up in the low double digits. Growth is strong and well-balanced across commercial OEM, aftermarket, and defense segments, and we continue to secure content on new programs and expand across various platforms. We expect sales for our A&D businesses to grow in the high single digits for the year. Our Power & Industrial businesses also performed well in the third quarter, with both overall and organic sales rising in the mid-single digits. We have revised our forecast and now expect full-year organic sales for Power & Industrial to increase in the low to mid-single digits, driven by demand in grid modernization and electrification applications, particularly for the power needs related to AI data centers. Specifically, our IntelliPower business, which offers uninterruptible power systems for data center microgrids, is well-suited for the demanding conditions and reliability needs of such applications. Other AMETEK divisions are also exploring ways to apply their technologies in this market, and we've seen initial successes with IntelliPower and our RTDS simulation systems. Lastly, the Automation & Engineered Solutions business had another excellent quarter with high single-digit organic sales growth and robust order growth, with notable strength from Paragon Medical. We are maintaining our forecast for mid-single-digit organic growth for the year. Regarding geographies, sales in the U.S. were up in the mid-single digits, while international sales saw a low single-digit increase, with strength in Europe offset by challenges in Asia. In the U.S., we experienced broad-based strength. Europe grew in the low double digits, driven by our automation, EMIP, and MAD businesses. Asia presented a mixed picture; we faced a mid-single-digit decline primarily due to China, but excluding China, Asia saw mid- to high single-digit growth. Despite the challenges in China, we are optimistic about the momentum in various regions around the world.

That's a great update. Just last one, and it's related to the last point, Dave. Any comments about tariffs, the offset? And is that what's driving the softness in China as well?

Yes, I believe the main factor is the need to renegotiate tariffs within the pricing structure. Our Chinese customers are approaching government entities for higher prices to cover our products, which is causing delays. Additionally, there are complexities in shipping related to timing the tariffs for better pricing. However, we remain competitively strong in this market, as there are few viable competitors for the majority of our products, allowing us to maintain high margins. We have solid customers and a strong team in the region, and while there may be delays, we are confident about our long-term position.

And our next question comes from the line of Matt Summerville with D.A. Davidson.

I was wondering if you could maybe double-click a little bit on Paragon. Obviously, that business had been a little bit of a source of concern for some coming out of the gate with the whole medical destocking. So can you give a little bit more granularity on the type of organic sales performance and order growth you saw and kind of remind us how we should think about the go-forward organic algorithm for that business as well as maybe how it's trending from a profitability standpoint relative to what your view would have been when you bought it?

Excellent question, Matt. I mean just to remind everybody, Paragon, single-use and consumable surgical instruments and implantable components and attractive medtech markets with good long-term growth rates, very good long-term growth rates. So these are mid- to high single-digit long-term growth rates, growing markets, excellent engineering capability, and numerous new product wins provide upside for years to come. And they just had another excellent quarter. I mean the EMG orders led the company, and they were substantially up, and Paragon led EMG. So it was another quarter of just outstanding double-digit plus-plus orders. And we're in a situation now where we're probably about a little more than halfway done with the restructuring that we're doing. So that's happening, and there's some plant closures involved with that, and I don't want to get into a lot of details, but the cost structure is being reduced. And at the same time, all of that's happening, we're winning new programs and phasing them in, and we were out there about a month ago to see everything, and it's really going great. The margins are now in line with AMETEK's margins, and we think there's more upside. So we think this business is going to be a 35-plus EBITDA business. And when we're done working on it, which will take another year. But I couldn't be more pleased with what's going on with the deal. It's outstanding work by the entire Paragon team. I hope some of you can get out there sometime because they're quite an impressive manufacturing facility that we visited last month, and we're very bullish, very bullish on what's happening at Paragon.

And then maybe just as a follow-up, you expressed, I think, a couple of times in your prepared remarks, a little more optimism with respect to process. Can you just peel back an additional layer and give a little bit more granularity on sort of end markets and whether or not you feel like there's a flush for lack of a better word, that's going to happen here as it relates to maybe some pent-up demand?

Yes, it's an interesting dynamic, and it's perceptive of you to notice that, Matt. We observed that Process improved across most markets and geographies, except for China, where it did not see gains. There are tariff repricing negotiations ongoing, but in all other areas, the trend is positive. We are gaining more visibility, and I believe that as this business begins to recover next year, we are well-positioned for success due to our controlled cost structure and new product innovations. Therefore, I expect Process to have an outstanding 2026.

And our next question comes from the line of Andrew Obin with Bank of America.

I think I missed three slides on nuclear. Apologies for the joke. Can you discuss the fantastic quarter? Can you elaborate on the strength in Europe? Can you also comment on the verticals and geographies? It was a pleasant surprise to hear that.

Our teams in Europe are seeing very positive developments. We've noticed improvements in several areas. For instance, our Dunkermotoren business and Automation segment performed exceptionally well. The Paragon components in Europe also did remarkably well, as did our Materials Analysis division that provides analytical instruments to the research sector. Additionally, our Aerospace business remained solid. Overall, the consistent positive performance across various sectors in Europe drove our growth, which increased in the low double digits. We are very pleased to see this strength.

That's terrific. And maybe could you talk about order numbers was another positive surprise in the quarter? Can you just talk about the progression of the order patterns throughout the quarter? And frankly, what happened in October? Did you sustain the momentum into the year-end?

October is not finished yet, but I can share some early insights. Overall, September was our strongest month of the quarter and year, showing significant growth in both sales and orders. It indicated strong momentum, and while October is still ongoing, the performance so far is solid. I checked the numbers before this meeting, and we are not seeing any slowdown in orders.

And our next question comes from Chris Snyder with Morgan Stanley.

I wanted to ask about the Q4 top line guide, up 10% but Q3 was up 11%. And I thought that we were going to see maybe more M&A contribution in Q4, which would then imply like an organic step back versus an easier comp. So I guess, am I just helping unpacking of the organic and the M&A and even, I guess, maybe the FX as we kind of build into that 10% number for Q4?

Yes, I believe it will be around 10%. We might do slightly better or worse, but we feel confident. The acquisitions contribute to a mid- to high single-digit growth, leading us to that 10% figure. Given the trade dynamics, we have a range for earnings, but we are very confident about Q4.

I was just going to say that on the foreign exchange side, we're obviously a very global business, but we're primarily dollar-centric. So as a result, we're not expecting any foreign exchange impact on the top line in Q4 or on the bottom line. And as you've seen in the past quarters, we're very insulated from FX volatility. So that shouldn't be a factor.

Got it. I appreciate that. I wanted to ask about the Industrial & Power business, which showed better organic growth in Q3 and you guys raised the guide. Is this all data center power tied? Or are you seeing positive rate of change on more of the industrial kind of typically focused businesses?

I would say it's primarily the Power sector that is performing well. We're seeing strong demand in backup power systems and microgrids, as well as solar racks. Additionally, we sell to the nuclear industry, which is also investing in power systems. The backup power system sector in the U.S. is thriving. Furthermore, as I mentioned last quarter, RTDS specializes in real-time simulations for resilient, high-performance power additions to the grid. They are the go-to company for expanding power capabilities and are collaborating with hyperscalers to determine the necessary power reductions for data centers. Those are the two areas where we have significant traction. The Industrial sector is stable and not a hindrance, but the potential for growth lies in the Power sector. It's worth noting that a substantial part of our Power business involves traditional transmission and distribution infrastructure. As the U.S. needs to enhance its T&D and develop local microgrids, we are well-positioned to take advantage of this opportunity.

Our next question comes from Julian Mitchell with Barclays.

Maybe I'd start with the FARO business. And if you could help us understand kind of the progress there in terms of organic trends. I understand it's still in the sort of acquisition calculus, but maybe help us understand any movement there around sort of organic orders and sales and how you feel about that sort of trending into next year, please?

Yes. As you know, FARO will not be reflected in our organic numbers until we have owned it for a year. However, FARO achieved its targets both in revenue and profits, having a very strong quarter. The integration is progressing well, and we have an excellent team at FARO. To remind you, FARO specializes in 3D metrology and digital reality solutions, and we are a leader in several niches within that market. This acquisition is a great strategic fit with AMETEK and our Creaform business. The teams are actively developing new products and exploring new channels, and I am very optimistic about their potential. Currently, everything in terms of the acquisition integration looks positive. Dalip and I recently spent time with the team, and we are very pleased with the progress. Although FARO will not yet contribute to organic numbers, they did meet their sales and profit commitments for the quarter.

And then just my second question would be around, I guess, 2 parts. One is on the Process Industries side. I think it's still sluggish right now, but you sounded more optimistic on next year. So I just wondered if there's something you've seen turning in the orders in the Process Industries side. And secondly, in the U.S., good growth. I wondered if any government shutdown effects weighing in recent months.

I'll take the government shutdown first. I mean, so far, to be honest, it hasn't been much of an issue for us. Obviously, if it continues for an extended period, it might become a bigger issue. But it's really a non-event at this point. You talked about Process orders. Yes, they're definitely trending up. Process orders are trending up in all areas and the one distinction was the China part of the business. And China is heavily part of it is research too. So there's an academia research element to it and the China business. But in other areas, it's all trending up. And we have told you before, we have a good pipeline of new orders, and we'll make money when power and when the organic growth comes back because that business is powerful. You haven't followed us for a long time, but the Process business is a powerful business. And so I don't know when it's going to turn up, but when it does, we've run it in the right way, and we keep investing in new products, and we've got the capability what our customers need, and it's going to eventually turn and be positive on the contribution margin basis for sure.

And our next question comes from the line of Rob Wertheimer with Melius Research.

You've touched on some of the dynamics here, but it's still a little bit interesting, the broad-based, I think you said growth across EMG versus EIG on core growth. And I wondered if you might simplify for us whether that's geographic, end market, selling cycle. Maybe just your thoughts on that gap, which is wider than some others.

Yes. The key point to understand, Rob, is to look back at the pandemic. We experienced a supply chain crisis, particularly affecting our specialized OEM products, which are not sold directly to the end-user as they are in EIG. This was primarily an EMG issue with specialized products. During that time, demand surged as everyone tried to stock up to meet their customers' needs, resulting in order volumes of 18% to 20% for several quarters. Subsequently, we entered a destocking phase where companies adjusted for excess inventory, and that destocking is now complete. Consequently, we are seeing the effects flowing through the EMG business, impacting areas such as Paragon, our EMIP businesses, and our automation businesses. Additionally, the aerospace segment within the EMG group is performing well. All these areas are performing strongly, which explains the overall increase. It's important to note that we did not experience a destock in EIG, but we did in EMG, and we are currently navigating through that situation.

That was perfect. And then I just wanted a little mini teach-in on uninterruptible power supply where you mentioned some of the crossover in data centers. I don't know how much business you had in data centers before and whether this is a fully nimble shift to capitalize or some of that, but a little bit less. I'll stop there.

We have hundreds of millions of dollars invested in uninterruptible power supply systems, primarily sold to critical sectors like nuclear power plants and offshore oil rigs, where failure is not an option. This segment has been strong for us over a long time. One of our products is widely used across the naval fleet, and we've adapted it for the data center market. Data centers require robust, mission-critical solutions, and we're seeing demand for high-quality products that offer enhanced durability. Currently, we have a backlog exceeding $25 million for that product and an additional pipeline of around $30 million. There's also another product in the simulation systems space where we're gaining traction, as customers are willing to invest in our advanced technology. Our teams have skillfully identified promising opportunities to grow within our current technologies while maintaining our unique AMETEK offerings. We aim to avoid low-margin sales in highly competitive markets. Although our base is currently modest, we anticipate significant growth in this segment.

And our next question comes from Andrew Buscaglia with BNP.

So some of your positive commentary is very interesting. Some companies are still talking about just like kind of customer hesitation to spend and ongoing delays, especially in Automation. So maybe like what are your conversations with customers like that seem to be a little bit different or where you're seeing a little more confidence? Yes, but just could you talk a little bit more about that and elaborate?

The automation market has traditionally been a strong area for AMETEK, and we selectively choose our customers who value our performance. There was a downturn in the market due to the pandemic and supply chain issues, and we had discussed this in previous quarters. We identified the low point last quarter and expected this trend, so it's not surprising to us. I can't comment on conditions in other sectors, as I would need to investigate further. However, things have unfolded as we anticipated, and we have openly discussed our expectations. Overall, it aligned with our projections.

I believe your customers are becoming more comfortable with the tariff situation and we have more clarity compared to six months ago.

I think that's true, Andrew. I think that's true.

Okay. Yes. Interesting. I don't know if you said or you mentioned your price versus cost or how that shook out this quarter?

Yes. Pricing offset inflation and tariffs. So we're very happy with that. So our price offsets total inflation and tariffs, and we had a positive spread on top of that. So we have a highly differentiated nature of the AMETEK product portfolio. We have leadership in these niche markets around the globe. And as we talked about today, these are mission-critical products. That's the nature of our products, and we invest a lot in R&D, and we're doing a good job of servicing our customers and at the same time, offsetting some of the negative events from inflation and tariffs and with a positive spread.

Our next question comes from the line of Nigel Coe with Wolfe Research.

I wanted to just dig into the Automation. I think you called out high single-digit organic growth there, David. Obviously, the comps there are quite easy, but it's still quite strong growth. So I'm actually wondering, could you maybe just parse out what you're seeing? I mean, I think a lot of that's in Europe, inventory adjustments versus end market demand? Any end market color, customer demand would be really helpful.

Yes. We've discussed for several quarters how the European market has been slow. We've highlighted our strong position with German machine builders. The situation has been evolving, and I believe it's improving. One thing to note is that when discussing automation, it's important to differentiate between discrete automation and process automation. We are involved in factory automation, but our primary focus is on discrete automation, where speed and precision are crucial. We cater to customers in various sectors, including medical and precise research equipment. This segment is comparable to the S&P 500 in terms of end markets but features the most accurate equipment, primarily within discrete automation. While factory automation may still be lagging, discrete automation remains robust for us, and we offer top products in this area. Our customers are returning, we experienced strong performance this month, and we are recovering from previous destocking. I understand your point about easy comparisons, but that's the current situation.

Yes, I was trying to understand how much of the current situation is due to easy comparisons from destocking versus a genuine change in customer demand. I'm not sure if you have the sell-through data available. My second question relates to the EMG margins, which have shown impressive momentum at 25%. This is nearing the peak margins we've seen in the past for EMG. With the addition of Paragon, what do you anticipate the margin target for EMG will be moving forward?

I think Paragon gives us the opportunity to increase it further. And when we sit down and we talk about that business, we'll set a target for next year. But certainly, I would expect we have the capability to have record margins in EMG going forward.

And our next question comes from the line of Robert Jamieson with Vertical Research.

Congrats on the quarter today. Just want to get your overall view on overall short-cycle exposure. Last quarter, you talked about short cycle bottoming. Just curious how you're thinking about this as we head into next year, what you saw in the quarter and what you're seeing so far in early 4Q?

Yes. Yes. When we talk about our business, we're more of a mid-cycle than short cycle, just maybe a little change in just to make sure we're on the same page. But yes, I think this is a result of the pandemic, the supply chain crisis, and I think that we're in an upward trend now. I think it's still early to talk about next year, but these automation, these EMG areas and MedTech, they're solid and Aero & Defense remain strong. So it feels really good on some of these businesses with solid positions, and we are winning businesses. We are winning new share for these businesses. So EMG is kind of firing on all cylinders now. So.

Great. I would like to know if you can provide an update on the M&A pipeline, specifically any areas that you are particularly interested in. Any information on that would be helpful.

Our pipeline is very strong, and we are actively exploring several high-quality deals. Our capacity to fund these deals is robust, and we continue to be disciplined in evaluating our returns on capital, which has been our approach for a long time. The pipeline consists of a diverse range of deals of various sizes across all end markets we currently operate in. Our teams are working harder than ever on these opportunities, and I believe we can enhance our performance through the M&A aspect of our growth strategy, along with our strong balance sheet and cash flow positions. This is an opportune time for us. By leveraging our operational excellence and M&A capabilities, I aim to drive performance over the next couple of years.

Our next question comes from the line of Joseph Giordano with TD Cowen.

This is Michael on for Joe. So I wanted to unpack the A&D performance. Previously, you mentioned high single-digit organic in the quarter, related content growth in that area. Is that content growth mainly related to FARO? And then can you just maybe unpack for us expectations for a normalized growth range for A&D going forward? You had several years, whether it's on the EIG side or EMG side of high single-digit growth. So just trying to understand how to map that going forward.

First of all, FARO is not part of the A&D segment, so it has no impact on A&D performance. In the quarter, we experienced organic growth in the low double digits. For the year, we are still confirming high single-digit growth. Regarding the truck segment, we saw a balanced performance; the commercial OEM and aftermarket areas were both very strong, and the defense markets were robust as well. We are continuing to win additional content on programs that will help us move forward. Although we are not discussing next year's performance at this moment, I believe the Aerospace group's backlog is strong, and they have solid positions on key programs, which gives us a positive outlook.

And our next question comes from the line of Scott Graham with Seaport Research.

Congratulations on the quarter, Dave. I wanted to maybe step back in 40,000 foot this. And I know when you came on board back 8 years ago, one of the big things that you were going to champion was an improvement in the front end and the top line focus as opposed to what has historically been more of a kind of margin lean, let's put it that way. I know you've done a lot of things internally, but it's been sort of an up and down industrial environment. So I was just hoping you indicated just now you won some business I know A&D has been a good market for you since that time. But again, Industrial, other areas have been up and down. Would you see now that winning of business starting to spread out into other end markets given the work that's been done on top line initiatives on a going-forward basis as the industrial economy improves?

It's an interesting point. If you had a couple of years with PMIs below 50, I can't recall the last time that occurred. At an investor conference, someone mentioned it has never happened. I believe we are very well positioned for growth across all our businesses. As the industrial economy recovers from nearly 2 to 2.5 years of negative PMI, I think we'll see improvements. I've been with AMETEK for 35 years and have served as CEO for 9 years. During this time, we've averaged 4% organic growth. Right now, with 4% organic growth, double-digit performance on the top line, and double-digit orders and earnings, this is essentially what we've achieved over the last 9 or 10 years, and even further back. We have a consistent model and a strong team dedicated to it. I believe we'll participate even more significantly in organic growth as the industrial economy improves.

I'll now hand the call back over to Vice President of Investor Relations and Treasurer, Kevin Coleman, for any closing remarks. Thank you again, Andrew, and thanks, everyone, for joining our call today. And as a reminder, a replay of the webcast can be accessed in the Investors section of ametek.com. Have a great day.

Ladies and gentlemen, thank you for participating. This does conclude today's program, and you may now disconnect.