Good morning, and welcome to Dover's Second Quarter 2025 Earnings Conference Call. Speaking today are Richard J. Tobin, President and Chief Executive Officer; Chris Woenker, Senior Vice President and Chief Financial Officer; and Jack Dickens, Vice President of Investor Relations. As a reminder, this conference is being recorded, and your participation implies consent to our recording of this call. If you do not agree with these terms, please disconnect at this time. Thank you. I would now like to turn the call over to Mr. Jack Dickens. Please go ahead.

Thank you, Stephanie. Good morning, everyone, and thank you for joining our call. An audio version of this call will be available on our website through August 14, and a replay link of the webcast will be archived for 90 days. Our comments today will include forward-looking statements based on current expectations. Actual results and events could differ from those statements due to a number of risks and uncertainties, which are discussed in our SEC filings. We assume no obligation to update our forward-looking statements. With that, I will turn this call over to Rich.

Thanks, Jack. Let's get started on Slide 3. Dover's second quarter results were strong, driven by excellent production performance, positive margin mix from our growth platforms, and carryforward cost actions taken in prior periods. Top line performance accelerated in the quarter on broad-based shipment growth in short-cycle components and outperformance over secular growth exposed end markets. Order trends continued to show positive momentum in the quarter, up 7% year-over-year, bolstering our confidence in the second half outlook, with the majority of our third quarter revenue already in backlog. And as an anecdote, July orders are tracking really well going into the back end of the third quarter. Margin performance in the quarter was exemplary with a record adjusted segment EBITDA margins above 25%, a result of prior period portfolio actions, positive mix from the growth platforms, and our rigorous cost containment and productivity actions. Adjusted EPS was up 16% in the quarter. Our solid operational results were complemented by ongoing capital deployment actions. We continue to invest in high ROI organic capital projects, including productivity and capacity expansion as well as targeted footprint optimization. During the quarter, we completed two acquisitions of attractive fast-growing assets within our high-priority Pumps & Process Solutions segment. Our balance sheet strength remains an advantage that provides flexibility as we pursue value-creating capital deployment to further expand our businesses in high-growth, high-margin areas. We are approaching the second half of the year constructively despite some macroeconomic noise, as the underlying end market demand is healthy and is supported by our sustained order rates. As a result, we are raising our full year adjusted EPS guidance to $9.35 to $9.55, which is up 14% for the full year at midpoint. Let's go to Slide 5. Engineered Products revenue was down in the quarter on lower volumes in vehicle services. We did see improving sentiment and vehicle services as the quarter progressed, most notably in North America where book-to-bill was north of 1%. Margin performance for the segment was up on structural cost management and productivity. Clean Energy & Fueling was up 8% in the quarter, led by strong shipments in clean energy components, fluid transport, and North American retail software and equipment. Margin performance was solid in the quarter, up 80 basis points on volume leverage, a higher mix of below-ground fueling equipment, and restructuring benefit carry forward. Imaging & ID was stable on growth in our core marking and coding business, partially offset with timing of textiles. Margin performance remains exemplary in the segment at 28% adjusted EBITDA margin. Management actions on cost to serve and structural cost controls continue to drive incremental margins higher. Pumps & Process Solutions was up 4% organically on double-digit growth in single-use biopharma components, thermal connectors for liquid cooling of data centers, and digital controls of midstream natural gas compression. Pumps posted solid results as well, and as forecasted, the long-cycle polymer processing equipment business was down year-over-year. Though coating activity improved in the quarter and book-to-bill was ahead of 1. Segment revenue performance, including the acquisition of SIKORA and volume leverage, drove margin improvement on excellent production performance and volume in secular growth exposed end markets. Revenue was down in the quarter in Climate Sustainability on the comparative declines in food retail cases and engineering services, which more than offset the record quarterly volumes in CO2 systems. Heat exchangers were up sequentially and year-over-year on record quarterly shipments in North America, where we are actively increasing capacity to accommodate growing demand tied to liquid cooling of data centers. Shipments of heat exchangers for installation in European heat market heat pumps were down slightly in the quarter but are expected to inflect positively in the second half of the year. Despite the lower top line, the segment posted 60 basis points of margin improvement against a difficult comp period on productivity actions and a higher mix of CO2 systems. I'll pass it on to Chris here.

Thanks, Rich. Good morning, everyone. Let's go to our cash flow statement on Slide 6. Year-to-date free cash flow was $261 million or 7% of revenue, up $41 million over the prior year as year-over-year improvements in operating cash conversion more than offset expected increases in capital spend on growth and productivity projects. We expect cash flow generation to accelerate in the second half of the year, in line with historical trends, as seasonal working capital liquidation in the third and fourth quarters should more than offset continued investments in productivity, capacity expansion, and cost structure optimization projects, which are expected to generate meaningful benefits into 2026 and beyond. Our guidance for 2025 free cash flow remains on track at 14% to 16% of revenue on strong conversion of operating cash flow. With that, let me turn it back to Rich.

Let me provide an update on bookings. In the second quarter, consolidated bookings increased by 7% compared to the previous year and also rose sequentially, indicating sustained momentum across our business. Year-to-date, our book-to-bill ratio is above 1 across all five segments, particularly in our highest margin and growing markets, which is encouraging as we enter the second half of the year. Moving to Slide 8, this slide outlines several end markets that are contributing to our growth forecast and the margins derived from end market data, customer forecasts, and our booking rates. We are optimistic about the prospects in the broader industrial gas sector, including cleaner energy and precision clean energy components, single-use biopharma elements, CO2 refrigeration systems, and inputs for liquid cooling applications in data centers, particularly our large heat exchanger business. We have made significant organic and inorganic investments in these areas, which remain top priorities for us moving forward. These markets currently represent 20% of our portfolio and are expected to yield attractive margin growth and double-digit expansion, as indicated by our standing at the end of Q2. Regarding our organic investments, they continue to be our main focus for capital deployment. We are proceeding and even speeding up several organic investments despite the current macroeconomic uncertainty. Some significant capital projects with high returns are scheduled for 2025. We are maintaining a balance between expanding growth capacities for our top platforms and making productivity and automation investments, such as consolidating rooftops. We noted in our press release that we are calculating these savings and will provide an update on the overall impact during our next quarterly call. Given the scale of these projects, we anticipate the savings to be substantial. This aligns with our annual goal to enhance non-revenue profit through fixed cost reduction strategies. Currently, we are in the midst of addressing footprint projects and reshoring efforts, with timelines in good shape. As Chris mentioned, these will be reflected in our cash flow and capital expenditure projections for the year. The timing is complex, particularly with plans to reduce operations, such as closing six rooftops. By Q3, we should have more clarity on when these benefits will start to materialize. While we might see a portion in Q4, the bulk of the non-revenue profit from these restructuring efforts will occur later. Thus, you can expect to see capital expenditures increase as we gradually implement these restructuring charges throughout the remainder of the year.

About $30 million.

This year's accounts reflect $30 million in savings, which explains the minimal revenue growth year-to-date. I believe the second half of the year will offer easier comparisons, and we are already seeing margin improvement, which significantly contributes to last year's progress. I anticipate next year will be similar, if not better. One of our major projects involves rooftop initiatives, which we expect to progress in the latter half of next year. Reviewing our annual margin expansion, we typically achieve close to 100 basis points each year. A substantial part of this stems from revenue mix and various actions within our portfolio, but a significant portion also arises from productivity improvements. Our business model is on track to enhance the portfolio, optimize the mix in individual segments, and establish productivity goals that include initiatives like rooftop consolidation and reducing fixed costs. I can't provide a specific number right now because I don't want to give an incorrect figure. However, we believe that at minimum, the benefits in 2026 will match what we're seeing in 2025, with the total expected to be larger. This is currently in process, and it's just a matter of whether we see it in 2026 or 2027. I apologize for deviating from the script, and I understand this may be frustrating. If we look at the margin improvement, it's due to a better mix, driven by 2025's productivity and other factors I mentioned. We're not expecting any margin reduction, and you can observe our organic growth rate for the year, particularly in the second half, is largely influenced by the acceleration of our growth platforms and the easier comparisons from the second half of last year. I will address questions shortly, and I'm curious about what exchange rates we should consider for the second half of the year.

Yes, we have a range of outcomes, but one of them was carrying forward current rates.

We analyzed the volatility from the first half of the year and applied that to the second half. I can't predict foreign exchange rates, so relying on current spot rates for the latter half of the year based on earlier volatility seems a bit overly optimistic. If the dollar and euro exchange rates remain stable, it could positively impact our revenue by about 100 basis points in the second half. We can discuss this more in the Q&A. Let's move on to that now. Jack?

Our first question will come from Mike Halloran with Baird.

Robert W. Baird & Co. Incorporated, Research Division A couple of clarifying questions. First, talk about pretty happy with the trajectory through the quarter. Tough organic order comps. But could you just give us a sense for how you thought things played out sequentially through the quarter relative to previous expectations? And frame how things have changed from your perspective going into the back half of the year versus not. It seems like you're at or above the trajectory you would have been talking about entering the year with the original guidance. Just had to deal with some volatility in the middle, but any context there would be great.

Generally speaking, despite the surrounding noise about tariffs and costs, our margin performance in the first half of the year exceeded expectations. However, as we start to compare against previous biopharma results, this has been a significant factor in our performance. The only area where we’re seeing less volume is in cryogenic components, primarily due to backlog issues that our customers have indicated are being pushed out. We had anticipated a stronger performance from our traditional refrigeration business, which is substantial, but margin variations across our portfolio affected results. Anecdotally, this business no longer dilutes our margins, but it is somewhat balanced by the performance of precision components and the data center business. As a result, our core Refrigeration expectations have been adjusted downward compared to our beginning-of-year outlook. That said, because our growth platforms positively impact margins, the effect is significant. The optical book-to-bill ratio shows $20 million for the quarter, which explains some of the discrepancies we noted, especially regarding the timing of shipments. Year-over-year, we are still seeing good performance regarding book-to-bill, and while we haven't finalized July results yet, our discussions suggest that booking momentum remains strong as we enter Q3.

Robert W. Baird & Co. Incorporated, Research Division So maybe you could bridge the first half to the second half or sorry, what's changed in the guidance is maybe the better way to put it?

Yes, we're ahead, right, on where we thought we would be, right? So all we're doing is rolling forward where we're kind of heading into the back half. Now, the question is, and we deal with this every year, we deal with at the end of Q3, we will look where we are on bookings momentum, and then we're going to decide what we're going to do in Q4 of whether we cut production performance and maximize cash flow for the year, but we won't make that decision until probably mid this quarter based on bookings momentum and backlog.

In terms of what has changed, the cautionary language regarding growth from last quarter has been removed. There has been a bit of movement in SIKORA and FX, but I don't want to attribute much to that. Ultimately, there hasn't been any significant change to the momentum that we discussed aside from the removal of the cautionary language.

Yes. Our EPS at the midpoint is 14%. We are targeting the higher end of the range, which is 16% year-over-year, placing us in the top quartile compared to our peers.

We'll take our next question from Chris Snyder with Morgan Stanley.

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

We are currently in a favorable position regarding total pricing and costs. We don't anticipate any significant challenges and have already implemented our pricing strategies. Therefore, we expect some margin improvement, barring any unexpected price cost issues. Our business model competes with smaller companies, which gives us the flexibility to adjust pricing or manage input costs more efficiently. Regarding market share, it’s too early to provide insights, especially considering the restocking dynamics at the start of Q1. Currently, we are focused on booking and shipping based on the existing demand conditions.

Appreciate that. And then maybe just a follow-up on some of the prior questions around the back half. So there's a lot of moving parts here with price, FX acquisitions. Could you just kind of maybe level set. What the guide calls for in volumes in the back half of the year and kind of how that compares to where volumes have been tracking out in the first half?

There are no significant changes. We have managed to offset some challenges. I mentioned Refrigeration and perhaps some issues with demand in vehicle services, particularly in the first half. There has been a shift, as I believe the first quarter in biopharma involved some restocking, evident from some market participants reporting this. Now that we are past that, the growth rate is likely to decrease in the second half of the year, especially in terms of comparisons, as biopharma and, to a lesser degree, thermal connectors have started to experience growth. Consequently, the relative outperformance may level off in the second half. Additionally, some businesses that were weaker in the first half are expected to recover. This will slightly impact consolidated margins, but not significantly.

Our next question will come from Steve Tusa with JPMorgan.

I wanted to explore the margins further. In the second half, you have a solid starting point. I believe you mentioned on the last call or in a follow-up with Jack that the total segment incremental would be just under $40 million due to the tariff situation. Given your current position as we enter the second quarter, it seems there’s potential for improvement beyond that. Could you provide some rough guidance on what you anticipate for total segment incrementals this year for 2025?

Yes, of course. There are total incrementals and then there are five business incrementals. As I mentioned, due to the growth rates between the first half and the second half, your incrementals will decrease because they are lower-margin businesses, unlike the strong start we had in DPPS. So, this will flatten out based on the relative contributions to those revenues. Ultimately, it's about the mix. Looking at Slide 11, we're expecting everything to increase, but the total incrementals will decline. That's our perspective. As you know, our portfolio is now more short cycle than before due to the impact of the longer cycle businesses, and there is substantial capacity in the market for most of our products. Therefore, lead times and visibility for the portfolio are a bit more challenging, and we are essentially estimating every 90 days how the cycles will play out. We don't manage the overall EBITDA margin of the portfolio; we focus on the contribution margin at the business level. While it could improve, my caution is based on the current forecast, where the relative contributions are more about mix than pricing or input costs. All of this is included in the full-year EPS.

It seems to me that you're trending around 22.6% in the first half. I believe your second half should be better than that seasonally.

You need to understand that if we think we can catch up on our backlog in the first quarter, we will reduce our efforts. We will clear out as much inventory as possible and maintain our production performance through 2026.

Okay. And then just one last question. You're going to be exiting, I think, like above a 5%, a mid-single-digit type of organic growth rate in the fourth quarter. You've talked about the cost savings. You got a little acquisition tailwind. I mean should we think about next year kind of the EPS algo being pretty similar to this year, maybe a little bit better?

I got to say, with the margin performance, I don't see any reason for that to come down, a full year of this incremental margin plus a bigger cost savings target roll forward, we're very excited about what the incremental margin on revenue is going to track to in 2026.

Our next question comes from Nigel Coe with Wolfe Research.

Rich, pricing obviously is really good, and it sounds like price is pretty much set here, no surcharge rollback, et cetera. I think the one business that is lagging behind is CST probably because demand is quite big there. But I'm just wondering if there's scope for pricing at CST to improve through the year.

Let me break this down. Currently, the CST is experiencing more absorption because the core business is at $20 million, which does not include Belvac volumes. We will need to wait for those volumes to return, and we are not forecasting them for the rest of the year. Previously, we had strong margins on heat exchanges during the peak demand for heat pumps in Europe, which is gradually improving as that market grows. This area typically has a 25% EBITDA margin, but we are not seeing that today. As the market picks up, it will do so for two reasons: heat pumps are coming back, although at levels significantly lower than their peak, and the data center segment of this business, which enhances our overall margins, is also recovering. At this point, we are managing our margins despite the challenges we faced and the slower-than-expected return of the traditional case business, which has a 20% EBITDA margin. The situation is primarily about the mix, and we have ample opportunity to improve it.

It's also a segment. We've made significant progress on structural cost improvements and are benefiting from favorable trends in our CO2 product line. We are observing some positive developments in that area as well.

The single biggest productivity project that we have on that Slide 9 is in that segment.

Okay. Yes. But the question is more about pricing. I think price was 0.2%...

It's all at the margin.

Okay. And then a quick question about biopharma. You mentioned the restocking in the first and second half. However, there has been some uncertainty, particularly in life sciences more than in biopharma. Are you noticing any delays in projects or similar issues, as we are hearing some concerns in those markets?

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

We'll move next to Andrew Obin with Bank of America.

So the question is, can you talk about any tariff uncertainty impact on orders in the quarter as best as you can tell? And what I'm trying to get to is that was there any pull forward or do you mainly see delays in pushouts?

More of the pushouts.

And is there a specific vertical or...

Yes. The non-CO2 segment of Refrigeration has seen fewer projects than we had originally planned due to customer discussions that have been pushed back. This is particularly evident in the retail consumer market, which is experiencing more pressure at this time. It's not surprising to see this trend in retail food. We view this as a kind of indicator. We're delivering CO2 systems at a strong pace, but those systems require cases, which accounts for the delay.

And then just a follow-up on the pushout. And did you also on cryogenic, is that LNG that's being pushed out?

Yes. Mostly. The entire system and infrastructure build is taking longer than we anticipated, and we are among the last components to be integrated, including transport. So it's still good, just not as strong as customer communications would suggest.

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

Yes. I mean, for our small portion of the billions of dollars going into it, yes. I mean, what's our growth rate on Thermal connectors year-to-date?

50.

50.

And SWEP?

Well, I'm sure the percentage may be high but it's smaller.

Smaller starting point.

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

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

Yes. As before, I believe the number will be larger. We just need to determine how much will be accounted for in 2026 and what the complete transition looks like for 2027. You will notice this in our capital expenditures and cash flow when we carry out the restructuring.

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

Yes. The footprint projects are challenging. Essentially, these involve constructing new factories, so we are very cautious about the timing. The returns will be significant; it's just a matter of how much we realize in 2026. Additionally, we can't categorize everything as restructuring since we need to maintain redundant capacity, which incurs additional costs while we complete these projects. However, in terms of our progress on the projects, we are ahead rather than behind. This is why we increased our CapEx forecast for the year to reflect that.

Right. So the dust should settle on all that as we exit '26, and we should see sort of full run rate in '27 and that's the number you're going to provide for us on the third quarter?

Yes. I'm going to give you a best estimate this coming quarter and then when the timing is.

Okay. Great. I just want to clarify the FX aspect one more time. Your previous revenue forecast of 2% to 4% assumed no FX impact, correct? Now, with the revised forecast of 4% to 6%, you have accounted for one point of FX, is that right?

Yes, that's correct. The way to look at it is that we are taking the average foreign exchange rate for the year to date and using that number for the second half.

We'll move next to Deane Dray with RBC Capital Markets.

Just want to circle back on this high-growth opportunity in data center. Can you size for us what it is today combined between the thermal connectors and heat exchangers, what percent of revenues? And would you ever set up like a dedicated team to go after this opportunity? I mean there's industry estimates that there's 9 years of backlog. It just seems like are you doing enough to capture your share of wallet?

I'm not going to monetize it for you, Deane, but I can tell you that we are the leaders in the connectors and probably co-leader in the heat exchangers for the market size. We've built out capacity and are building out capacity to accommodate what the projected volumes are. So I don't expect from a market share point of view that we're going to not be able to compete. I just think that we've got to be careful with this. We saw all those announcements about EV battery plants that turned out to be a lot lower. And I'm in no position to say. So we have dedicated teams for both those product lines. So we're known well. It's just very difficult to believe what the size of the capacity that's going to go in. I hope it's higher, right? But we are in front. We are over-capacitized in both those products.

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

Yes. If you refer back to Slide 10, it’s essential to our business model. We have removed several business lines or geographic areas based on long-term returns. This process is ongoing, and it raises the question of when to exit certain businesses, like our Environmental Services Group. While that segment was beneficial to our margin, we felt it wouldn't support our valuation goals. This is part of our strategy for portfolio management. We optimize the overall cash flow of the business and aim to shift into higher-margin areas of our portfolio when executed properly.

Our next question will come from Brett Linzey with Mizuho.

I wanted to come back to tariffs. You had previously sized at $215 million annualized. I think there was $60 million from just the one product line. You're looking to reshore. I guess, first, any update on the $60 million? And then more broadly, did you remark the tariffs back to the higher rates? Or did you let it flow throughout these lower levels for the balance of the year?

Yes, I wish we made paper clips because that would be simple. There's a competitive landscape and various positioning strategies involved, particularly regarding market share. In terms of reshoring, we are making good progress. After the close of Q2, we implemented some additional pricing changes due to business dynamics that I won't go into detail on. The key point is that when we have a competitive edge in a certain market, we should be able to set prices above our input costs. In hyper-competitive situations, we may need to adjust our approach. We believe that having annual productivity initiatives helps us mitigate market dynamics. We decided not to include a slide on this topic because we could debate it extensively. We don't foresee any significant additional challenges related to tariffs in the latter half of the year. You can observe our margin performance in the first half and our forecasts suggest that this trend will continue. Ultimately, it will be about comparing performance relative to the first half of the year.

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

With a margin of error of 100 basis points, we are currently tracking that would indicate after July that book-to-bill is going to be solid.

Our next question will come from Joe O'Dea with Wells Fargo.

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

We serve some very large customers for whom the cost of capital is crucial, among other factors. It's fair to say that there are significant projects on hold, awaiting a decrease in the cost of capital to improve their potential returns. Some of our customers are facing much higher tariff exposures than we are and are working to address that challenge, complicating the situation further. Typically, when you consider a mix of consumable and project businesses, they tend to behave similarly, with few exceptions. As I mentioned at the end of the second quarter and again at the end of the first quarter, there’s been noticeable hesitation in larger projects for various reasons. While this doesn’t mean these projects are canceled, there is a tendency for timelines to extend. For us, the second half of the year does not deviate significantly from our first half trajectory, although we have low expectations for retail refrigeration. With only six months remaining in the year, we expect some delays. However, since we operate across many sectors, the overall impact seems manageable, with macroeconomic uncertainty being the only major concern. We anticipate that the second half of the year will reflect a higher core growth rate due to our mix and comparisons from previous periods.

And then just a clarification related to that. So the revenue growth, the 2% to 4% going to 4% to 6%, that move is...

1 point of FX, 1 point acquisition, and then comps the other 2.

Okay. So you haven't removed the conservatism factor from a quarter ago. It's just the foreign exchange impact?

Yes, we have made changes optically, but the forecast remains largely the same. It depends on whether you consider the bottom quartile or the top quartile, as we've added back one point if it's at six.

We will take our next question from Julian Mitchell with Barclays.

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

Generally, yes. I think one potential risk is that we might misjudge foreign exchange rates and could end up with what the current spot rates are. Yes, it's in our lower-margin businesses, and it's worth noting that we achieved 25% EBITDA in consolidation, which came as a surprise not long ago. It's just a slight mix issue in relation to total revenue. I don’t believe we have left ourselves much room in Q4, but we discuss this every year. In a month or two, we will decide on our strategy. If we observe an increase in order rates during Q3 leading into Q4, we might ramp up production in Q4, which would be beneficial for our margins.

That's helpful. We can see the headline bookings number for the second quarter, and you mentioned July. The overall sense of demand in recent months suggests that the book-to-bill ratio in the second quarter may be slightly below expectations, but there is no cause for concern, and demand has remained fairly stable across your largest customer categories. Was there any indication of volume elasticity as prices began to rise, or anything that changed in the last couple of months?

We've analyzed the book-to-bill ratio in relation to seasonality. Historically, it's lower in Q2 and increases in Q3. However, we expected better performance from Refrigeration in Q2. We've removed our full-year forecast for Refrigeration, but not for the CO2 segment, which has shown improved margins. The standard case business is unlikely to meet our initial forecasts. Additionally, the portfolio seems to be more focused on short-term results than it has been in the past. We're not concerned about bookings for the quarter, as they are beginning to increase. Looking at the last five years, the current trends are consistent. We have had strong bookings, but we do consider the possibility that they may decrease in the latter half of the year as customers manage their inventory. Typically, we assess this in 90-day increments based on current data. However, given what we've observed in July, we are optimistic about the upward trend in bookings.

Our final question will come from Scott Davis with Melius Research.

Final question, I find it interesting that no one asked about M&A during this call. I believe the portfolio alone cannot sustain 16% EPS growth indefinitely without active mergers and acquisitions. I'm curious about the SIKORA deal and whether there are other similar opportunities out there. How do you approach this topic? Do you disagree with my point of view?

I'm glad you asked. At the end of the day, we often don't receive recognition for our capital deployment. We currently have nearly $400 million in revenue under Letter of Intent, which is a total of $400 million worth of revenue. Realistically, I can confirm we have about $50 million. Genuine mergers and acquisitions that are completed within 6 to 8 months are definitely possible. While we may not complete all of them, we certainly can execute some by the end of the year. Capital deployment is important to us, and it will reflect the trends we've seen over the last 5 years. There won't be any drastic shifts, but consistently driving up our portfolio's margins through M&A will be a key factor. There haven't been many deals available lately as many are waiting for a decrease in capital costs. However, most of the deals in our pipeline are proprietary and not part of auctions, which means they carry a low execution risk due to their size. Overall, I feel optimistic about the opportunities we have, even with fewer deals on the market.

Yes, I understand. I need to ask this question. You mentioned that 20% of your portfolio is experiencing double-digit growth, which is great, but I'm curious about what this means for the remaining 80%. The simple answer tends to be GDP, but not all segments can exceed the average. How do you view the other 80% overall? Alternatively, what do you believe the growth rate of your entitlement is in this new portfolio? It seems that Dover has undergone significant changes since you arrived.

I don't want to delve into the GDP aspect too much. What’s important to note is that four out of five of our platforms are driven by organic growth. This growth reflects our increased investment in R&D over the past six years. This is a testament to our efforts, which often gets overlooked in discussions. The only exception on Slide 8 is the clean energy component, which has been largely influenced by mergers and acquisitions, altering the dynamics of the former Fueling Solutions business. I won’t go through each one individually, but we are managing different business models. Some may seem stagnant, but that’s because we are intentionally exiting parts of those portfolios that are unlikely to achieve our desired value. If you review the Clean Energy business over time, removing the effects of acquisitions, you’ll see we voluntarily scaled back parts of that segment. The same applies to Refrigeration, where we stepped away from a couple of hundred million in revenue because it wasn’t yielding the returns we aimed for. This is why you see a notable increase in margins within that business compared to the past. I understand it may be challenging to interpret because it appears stagnant, but we have been purposefully reducing size recently to enhance portfolio value through improved margins. We are satisfied with our current businesses, and moving forward, you can expect to see the true organic growth rate as we continue to refine the portfolio.

Thank you. That concludes our question-and-answer period and Dover's Second Quarter 2025 Earnings Conference Call. You may now disconnect your line at this time, and have a wonderful day.