Greetings, and welcome to the third quarter 2025 IDEX Corporation Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the phone presentation. If anyone should require operator assistance, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Jim Giannacoros. Thank you. You may begin.

Good morning, everyone, and welcome to IDEX's third quarter 2025 Earnings Conference Call. We released our third quarter financial results earlier this morning, and you can find both our press release and earnings call slide presentation in the investor relations section of our website, idexcorp.com. On the call with me today are Eric Ashleman, President and Chief Executive Officer of Idex, and Akhil Mahendra, our Interim Chief Financial Officer and Vice President of Corporate Development. Today's call will begin with Eric providing highlights of our third quarter results and discussion of our current business outlook and strategies. Then Akhil will discuss additional financial details and our updated outlook. Following our prepared remarks, we will open the line for questions. But before we begin, please refer to slide two of our presentation, where we note that comments today will include forward-looking statements based on current expectations. Actual results could differ materially from these statements due to a number of risks and uncertainties which are discussed in our press release and SEC filings. As IDEX provides non-GAAP financial information, we've provided reconciliations between GAAP and non-GAAP measures in our press release and in the appendix of our presentation materials, which are available on our website. With that, I will turn the call over to Eric.

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 the third quarter of 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 80-20 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 40 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 80-20 as its heartbeat. 80-20 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 21st century secular trends. Today, we are intensively deploying 80-20 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 80-20-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, advantaged 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've talked about our build-out of the Intelligent Water platform, Expanded in the last few years with the acquisitions of Nexite 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 AirTech within our performance pneumatics group. The team continues to win as they support PowerGen 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 three 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 HST's 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 effectively offsetting pressures within semi-con lithography to drive performance. With 80-20 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 advantage 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 80-20 actions are driving, which notably improved Muon's profitability in the third quarter to above HST segment average. The MSS platform is well position to drive profitable growth going forward. Please turn to slide six. The third key component of phase three of IDEX's evolution is balanced capital allocation. Akhil will get into more details here, but after the last few years of accelerating larger M&A to build out growth platforms, our current focus is on optimizing our business portfolio, tuning our capabilities in a never-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 the second half of 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 materials-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 and 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 remain 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 midterm 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 80-20, 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. With that, I'll pass it over to Akil to discuss our financials and our updated outlook in greater detail.

Thanks, Eric, and good morning, everyone. All the comparisons I will discuss will be against the prior year period, unless stated As Eric mentioned, in the third quarter of 2025, IDEX delivered strong financial performance. Organic revenue growth of 5% was better than we expected, with momentum in HST driving the outperformance. An 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, where IDEX provides niche components for analytical instruments, we continued to see low single-digit growth. Finally, while we posted order growth in FSDP, this increase was largely due to timing the 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 a 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. Pre-cash flow of $189 million decreased 2% versus last year on higher working capital. Pre-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 the first three quarters of 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 9 in HST organic orders grew 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 lithography 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 costs. These more than offset the dilutive impact of unfavorable mix. Turning to slide 10, in FMT, organic orders increased 8% and organic sales increased four percent orders growth was supported by our intelligent water platform 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%. that. Orders benefited from continued growth within North America, Fire OEM, and growth in Bandit. 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 remain steady, albeit with limited catalysts 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's 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 de-leverage. This headwind was partially offset by platform optimization and cost containment actions and favorable price costs. I'm on slide 12. 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 highest returns. We drove $189 million of free cash flow after investments 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 attend 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 percent of adjusted net income in dividends paid. regarding M&A we do not expect to pursue large acquisition opportunities in the near term after investing in 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 786 to 791 which remains within our previously communicated outlook of 785 to 795. This reflects continued strength in HST, particularly within our advantage 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 25 and adjusted EBITDA margin expectation of between 26.5% to 27.5% remain unchanged. Our updated guidance reflects more of a 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.

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 80-20 to drive integration, operational improvement, and enhance 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 80-20 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 that 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 advantage markets and a culture of operational excellence and the heartbeat of 80-20, 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.

Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 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 Dean Dray with RBC Capital Markets. Please proceed with your question.

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

Sure.

Hey, 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 the metrics that you typically use, the day rates, order size, some of the bellwether businesses, and can you also weave in whether there have been any blanket orders? That's also a good indicator for us.

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, and those are dynamic and aggressive and exciting, data centers and the things we're doing in water and space I know you know well. So those kind of have their own rhythm of positive energy, And then you have kind of the broad economy next to it. And this is, for us, is a lot more fragmented. And I'd say, you know, it's certainly stable. 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. And so as we've been monitoring those throughout the year, I'll actually take you through it. I'd say in kind of Q1 leading up to the events of the spring around policy, you know, those were stable, but they were a little higher than they are now. And, of course, we went through the spring and summer periods of tariff announcements and policy stuff, and 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 in 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, which is not as big a part of the order flow for us, but does tell us things, you know, 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. You know, we don't see things being canceled. We see the decision process being elongated. We'll typically kind of 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, you know, 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 macro forces that are not as affected by these things.

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?

Yeah, yeah. So the kind of bellwether businesses, a lot of them for us are in FMT. There's much more fragmented user base through indirect distribution. So you can think of places like GAST, Warren Rupp, Viking. Over on the HST side, a business like Bandit, which does clamps. There's a portion of that business that's pretty fragmented as well through kind of 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. So we can get an order on a Monday, make it on a Wednesday, and it's 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 sorry, the government funding 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've got kind of an enhanced automation offering there as well that's kind of helping us grow above baseline entitlements. 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. You know, typically at kind of this point back half of the year, they start to move up a bit as 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 it kind of turn the other way. If you think about it, in 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 not as much to go around in our line of work. And I just think in China, it's the continuation of a theme there. It's a desire to, you know, 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 U.S. side. It's not that direct relationship.

Thanks for that clarification. I appreciate all the color.

Thank you, Dean.

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

Hey, thank you. Morning, everyone. Good morning, Mike. Hey, so, no, I agree with Dean. I like those four slides you put at the front that kind of laid things out. One question on it. Can you frame what this means from a growth perspective for the portfolio relative to history? You know, I know that the 2010s, the growth was pressured by the 80-20 piece, but it was kind of that, you know, 3%, 4% kind of range, all else equal on a reported organic basis. What does that look like on a forward basis in a normal environment or however you want to frame the growth algorithm today versus, you know, the previous decade before you embarked on stage three?

Well, sure. I think if you kind of track IDEX historically, especially in that period or before, you'll see that we kind of have 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. And we're starting to break from it now just because of the collective weight, a lot of it being delivered in the HST segment. And 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. You know, we see that moving up and ultimately would like to get it sitting closer to mid-single digits for the company, so kind of 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 prepared remarks, 21st 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, we're actually, you're seeing faster results because of the collaboration across the dimensions that we've outlined here. So it's those two things, it's assets coming on board and the way we work those assets together that then moves this off of kind of an industrial fulcrum to something closer to mid-single digits.

That's helpful. Appreciate that. And then, you know, maybe the answer here is obvious with some of the stuff you said in the early remarks. But, you know, you look back over the last seven or so quarters, orders have been positive. They've kind of trended, if I take a really loose average in that 3%, 4% kind of range from an organic growth perspective. how do you think about when the revenue levels can start more consistently normalizing towards that range? You know, we've had a lot of moving pieces quarter to quarter for a while now, but just when do you think there's going to be more of a consistent relationship between those things emerging?

Well, I think two things got to happen there. I mean, we, you know, obviously we're getting a lot of price too. So as you reference those numbers, you know, what we're looking at is not just the, you know, 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 and 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, you know, 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. You know, the work that I've referenced long ago about kind of how data centers are coming together in our pneumatic space, you know, 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.

Thanks, Eric. Appreciate it.

Thank you, Mike.

Thank you. Our next question comes from the line of Joe Giordano with TD Cowan. Please proceed with your question.

Hey, guys. Hi, Joe. Hey, I'm just curious, Eric. Like, when you – if you just, like, step back now, like, after the – and kind of take in the last year, 18 months or so, you know, and you look at the deals you've done, you know, clearly, like, interesting deals with – positioned into the growth areas that you mentioned. But, like, if I compare, like, what we've been acquiring to what we used to acquire, like, was there a sense of, like, maybe we chased growth in a different way, and did we get away from what made IDEX unique in terms of the positioning and, like, the visibility of these businesses? Or I'm just curious how you would kind of postmortem the whole, like, last two years here on the M&A side, because now that we're refocusing on 80-20, like, as a specific mandate again.

Yeah, yeah, I appreciate the question. Well, I think, well, look, from 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 of 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. The actual work being performed is not that different. I remember, you know, kind of the earlier days of IDEX. While a lot of our traditional technology was pretty industrial in nature, the 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 will be essentially annuity streams for us over the next decades here. 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 and R&D, I mean, that's classic IDEX. And then the ultimate business filter here that looks at delivering massive criticality at a 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, I 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.

That's a great caller, and just kind of like an extension of that, you 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, I'm not looking for the number, but if you were to compare that now versus like if I asked 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, you know, thinking some of the – maybe some of the – on the MedTool side and some of, like, the lab-based clinical applications?

Well, look, I think there's no question in certainly the last five years, you know, things have changed, and 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, I 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. You know, we highlighted a lot of great things going on in this material science solutions platform. You 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 it's a testament to the teams and the flat organizational nature of the way we run things and autonomy of decision rights. Those teams jumped on that, kind of put 100% effort on it, segmented it with 80-20, 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 you know that's in 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 in 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 a, you know, 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, uh, same geography. So it protects us a bit from, you know, unexpected shifts there on that side as well. Thank you guys. Appreciate it, Joe.

Our next question comes from the line of Nathan Jones with Stiefel. Please proceed with your question.

Good morning, everyone. Hi, Nathan. I guess I've come from the other side of, uh, of the platforming 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 costs out of those businesses, maybe combining some rooftops. I know you did some headcount reductions earlier in the year. So maybe if you could just talk about it from the other side and the potential for reducing cost, expanding margins as part of this strategy as well. Thanks.

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 80-20 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. You know, I'll go back a bit in time. A few years ago, we bought AirTech. You know, we did a lot of work with that business. At one point, we did a kind of 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. I was happy to say when I went back a year later that they're, you know, you can see it. 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, you know, insight into the material science solutions platform and Muon specifically here, you know, where, as you know, we took some cost actions there in Q3. 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 making calls on business. Where do we think the 80s 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, Mott has a ramp, kind of a nonlinear ramp to Q4. They're going to step up that business. They actually executed some of it early into the third quarter because of efficiency gains and some of the great work that 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 operational or structural productivity and de-layering and things like that at the platform level. That's part of it, too. And when we move from single businesses in kind of a classic IDEX sense that has all the back office and all the administrative things happening business to business, and 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 it upticks a bit even into Q4.

Nathan, just maybe to put some numbers around it, right, Eric mentioned the dealering and the platform optimization efforts. And then the second bucket was really cost containment efforts and actions that we put into place 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.

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 combining these businesses, moving them closer together. Is this something that you're likely to move on in 2026?

Well, that's certainly a chapter that we'll take a look at. 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 that's a big variability element. As we've worked on some of the other aspects of 80-20 and bringing people together, particularly in a commercial and a technical way that's different, we've 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-up area of opportunity for us, and certainly as we scale the company, we're always thinking of that because we want to take some of that complexity out of the system.

Thanks for that. I guess my follow-up is going to be around capital allocation, you know, specific change in priorities, I guess, really this quarter with, you know, I know you talked about M&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 part of the plan here to be more of a serial repurchaser of 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 repurchaser 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.

Yeah, Nathan, let me just sort of walk you through that framework, right? And first, I think it's important for 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&A, there was a period of heavy investment for us during our growth platform building phase, and now we're focused on botons that are going to have attachment points to these growth platforms that we built. And one of the greatest examples here that I have for you, it was in one of the slides, was MicroLAM, which we announced a quarter ago, right? It's integration is going really well. It's sort of plugged in very nicely into the MSS 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, you know, we spend a minute on that. That is sort of a policy that where we've grown our dividend here historically. We aim for, you know, 30% to 35% adjusted net income to be paid out from that front. And then shareable purchases, which, as you mentioned, right, we stepped up. So coming into the year, you know, we had already stepped up the shareable purchases 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, right, year to date, we've returned about 80% of our free cash flow to shareholders. So as we think about, you know, this framework and look at what's ahead, especially us moving towards more bolt-on, you know, being able to add more things to the growth platforms, you'll see that excess cash being returned to shareholders.

But I think, Nathan, you know, long-term, I also want people to recognize, I mean, that we've got some work in parallel. We're always thinking about, you know, where does IDEX go next? What other technologies are out there that could be interesting for us, other access points for markets? So that work continues, but it's of a longer duration. So it's really important that we don't interrupt it, but we're going to 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 base that we've acquired is absolutely a point of high return. And then, you know, as we do that, returning cash and capital to the shareholders, we think is, if nothing else, a real signal and sign of the confidence we have in a long-term growth strategy for the company.

Awesome. Thanks for taking my questions.

Thank you. Our next question comes from the line of Ryan Blair with Oppenheimer & Company.

Please proceed with your question.

Thank you, Cornigus.

The intelligent water platform has gotten a decent amount of airtime today. I think that's fair. Eric, as you called out, the team presented quite well at WEFTEC. Wondering if you could offer some finer points on contribution in the quarter. I think you noted high single digit. I don't know if that was a revenue or order expansion. A clarification there would be helpful. And then even more importantly, just speak to the underlying demand trends, visibility, and growth prospects of the platform as we look to 26.

Sure. The high single digits was on the revenue side. Orders were good as well. You know, we point out the municipal facing side because when we talk about water platform 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 municipal facing. And it's, I mean, they're 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 want to spend a lot of time in, and we've augmented that through acquisition as well. So NextSite, 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, and 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 the globe to customers. And essentially, if you think about it, there's two primary customers. On the one side, there's the operator side that's 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, that would be very difficult. So, you know, it's much more integrated than it was originally. We presented it that way at WEFTEC. It works that way in actual fact. And, you know, here with the latest addition, Subterra, you know, that allows us kind of to go in in an untethered way a lot further and extends our reach, you know, with a pretty simple device. So we're really, really pleased with what we have there. It's great to see the growth as a reward, and we look for more in the future.

That's excellent. Appreciate it, Coyle. And Q3 HST results were pretty encouraging overall. Paul, we know your team's been navigating challenging market conditions for a while, and perhaps there aren't standout green shoots quite yet, but it seems like, I guess, the aggregate demand outlook is at least gradually improving. Given the restructuring and optimization work your team has done, how should we think about HST incrementals once we do get back to a more supportive demand environment?

Hey, Ryan, it's Akil. Yeah, I can take this one. Look, the way I would think about it is sort of from an incremental standpoint, just given sort of the demand dynamics that you laid out, we'd expect somewhere in that 35% to 40% incrementals. And, 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 the business.

And I think, as you said, and I want to highlight here, especially for the teams that are doing the work in HST, yeah, they've 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, and 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 backs of great work like we've outlined in MSS or in data science applications and Air Tech and other places.

Appreciate the detail. Thanks again.

Thanks, Brian.

Thank you. Our next question comes from the line of Vlad Vistrovicki with C Group. Please proceed with your question.

Good morning, guys. Thanks for taking my call.

Thanks, Brian.

So maybe just going back to your commentary, Eric, on sort of the price versus volume dynamics that you've seen, and you mentioned, you know, that you've been seeing strong price realization overall. So, do 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?

Yeah. 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. And 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 2024. And 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, I 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 businesses, 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. I think there's some real pricing fatigue that is out there generally, and I think, you know, this is where I appreciate the differentiation that we have in our businesses and our ability to kind of 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 going to depend on where does policy go. So much of it has been a response to that. Kind of the base level pricing entitlement that does things like covers traditional inflation for us and others. You know, we're planning for that. We've got some of it out now as kind of a pre-announcement 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, you know, ultimately, that's into an environment that I think is starting to have some real fatigue.

Yeah, and Vlad, I can put some dimensions around sort of the three and a half percent, 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, you know, we're now at about a two percent 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 be a positive announcement here, or it could go the other way just given, you know, what's on the horizon. So, we're not accounting for that, but our intention is to continue to offset it just given the remarks Eric made here.

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

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 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 than we anticipated. The 80-20 work that Eric mentioned with Mott and the operational improvements that we're seeing there, that left us with more of a balanced 3-4Q, which is more reflective of a historical pattern for IDEX overall. In the 4Q, we still see a ramp, you know, in HST. but we've got line of sight to it. It's in our backlog. So we're pretty confident in being able to deliver on that.

Thanks, Akil. Thank you. Our next question comes from the line of Rob Jameson with Vertical Research Partners. Please proceed with your question.

Hey, good morning. Thanks for all the color this morning. Just I know you're not going to get 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-digit organic growth algorithm, like, what are some of the key risks and opportunities that we should be thinking about and considering into next year?

Yeah, well, I mean, I think a lot of it, you know, still will come down to where's the, what's the nature of kind of base-level industrial entitlement, because that still covers a decent part of IDEX. So, you know, 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 in terms of industrial coverage. Pricing dynamics will be important as well. So, you know, as Akil 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? That'll go into the calculus. And And then the bulk of it is really going to 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 going to come out. So I think those three pieces moving together is 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, you know, we will be looking for signs of inflection as we go through Q4 and certainly we'll be referencing those as we talk together.

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

Yeah. Hey, Walt, it's Akhil. So, you know, sort of just building on what Eric mentioned, right, 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 going to look like, taking into account all the factors that Eric mentioned, right, the pricing dynamics, us being able to make our own luck in the work that we're doing within our growth platforms, and then really just some of this macro backdrop around rapid fulfillment. We're going to continue to monitor that pretty closely. But as you think about generally the incrementals, I mentioned, I would say think of it as 30 on a consolidated basis, 30-ish percent plus. some are going to be higher here so that that is what we're going to 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 you know 26 incremental saline and I would just say well to add on you know the the degrees matter here so you You know, the closer the world tends to tilt towards flattish, you know, our incrementals don't spring as well.

You get a little bit of buoyancy in the system and get that up around 3%, 4%, things start to perform a lot better. So kind of where we are in that spectrum will matter as well around that point that Keel mentioned.

Okay, great. And I appreciate the color.

Thank you.

Thank you. And our next question comes from the line of Brett Lindsay with Zuhu Securities. please proceed with your question.

Hey, good morning, all. I wanted to come back to the platform optimization savings and the cost containment. So the $60 million, I guess, how should we think about any carryover in the next year? And then how much would be maybe structural versus discretionary that would flex back up as these volumes might improve?

Hey, Brett, it's Akhil. 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, you know, that's going to achieve run rate, you know, this quarter here. And so you'll see that moving forward. That was about the, you know, think of that as the $42 million 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 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 million bucket for a total of 62. two. So that's how I would parse the two.

Okay, great. I'll leave it there.

Thanks a lot.

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

Well, thank 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 80-20 in a really broadly uncertain world, that taking you through our evolution. I hope you can appreciate we built some real strong foundational assets. We've got some outstanding businesses, very strong teams and talent, a highly engaged and collaborative culture, an effective operating model powered by 8020. 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 within scalable growth platforms. And I'm 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 through this focus 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.

Thank you, and this concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.