Hello, my name is Nicky, and I will be your conference operator this morning. At this time, I would like to welcome everyone to Reraldo Corporation's second quarter 2026 conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during that time, simply press star, then the number one on your telephone keypad. If you would like to withdraw your question, please press star, then the number two on your telephone keypad. I will now turn the call over to Ryan Taylor, Vice President of Investor Relations. Mr. Taylor, you may begin your conference.

Ryan Taylor Taylor Good morning, everyone. Thanks for joining us on the call. With me today are Jennifer Honeycutt, our President and Chief Executive Officer, and Samir Al-Han, our Senior Vice President and Chief Financial Officer. Today's call is simultaneously being webcast. A replay of the webcast will be available in the Investor section of our website later today under the heading Events and Presentations. A replay of this call will be available until August 7th. Yesterday, we issued our second quarter, 2026 earnings news release, earnings presentation, prepared remarks and supplemental materials, including information required by the SEC relating to adjusted or non-GAAP financial measures. These materials are also available in the investor section of our website, www.Feralta.com under the heading quarterly earnings. Reconciliations of all non-GAAP measures are also provided in the appendix of the webcast slides. Unless otherwise noted, all references to variances are on a year-over-year basis. During the call, we will make forward-looking statements within the meaning of the federal securities laws, including statements regarding events or developments that we believe or anticipate will or may occur in the future. These forward-looking statements are subject to a number of risks and uncertainties. including those set forth in our SEC filings. Actual results may differ materially from our forward-looking statements. These forward-looking statements speak only as of the date that they are made and we do not assume any obligation to update any forward-looking statements except as required by law. And with that, I'll turn the call over to Jennifer.

Thanks, Ryan. I want to start by thanking our 17,000 associates for their efforts in delivering an excellent second In Q2, total sales grew 7.6% year-over-year, adjusted EPS increased 19.4%, and we generated robust free cash flow of $328 million. We delivered 4.2% core sales growth, led by water quality at 5.7% and PQI at 2%. As expected, core sales growth in both segments accelerated sequentially from Q1 to Q2. We expect year-over-year core sales growth to continue accelerating in the second half to approximately 5% to 6%. Based on our Q2 performance and momentum across the portfolio, we raised our full-year adjusted EPS guidance to $4.35 to $4.43 per share, representing 12% to 14% growth year over year. We continue to advance long-term value creation through strategic bolt-on acquisitions, including last week's acquisition of Alpha UV and India-based leader in UV water treatment solutions. I'm excited to welcome our new associates from Alpha UV to Veralta. And we also continue to opportunistically repurchase our shares. So far this year, we have repurchased over 5 million shares for approximately $480 million, or just over 2% of the company. overall i'm proud of our team for their outstanding execution through the first half of the year and focus on our critical few accelerating growth optimizing cost and executing disciplined capital allocation looking ahead with a strong balance sheet and robust cash generation we remain focused on compounding long-term shareholder value through high quality growth ves driven execution and disciplined capital allocation. That concludes my prepared remarks, and at this time, we're happy to take your questions.

Thank you. And at this time, if you wish to ask a question, please press star 1 on your telephone keypad. You may remove yourself from the queue by pressing star 2. In the interest of time, please limit to one question and one follow-up question. We will take our first question from Dean Dray with RBC Capital Markets. Please go ahead. Your line is open.

Good morning, everyone.

Good morning, Dean.

Hey, we continue to really like this highly efficient release of your prepared remarks and, you know, really crazy busy earnings season. It's just such a great innovation. So thank you for doing that again, and hopefully it's a best practice as far as working. So my first question, can we start with the core revenue guidance that's implied, and you referenced it here this morning, the impressive 5% to 6% for the second half, maybe unpack the drivers and your degree of confidence in this acceleration. Thanks.

Yeah, thanks for the question, Dean. And it's great to have you leading off today, but before answering your question, I just want to say that we are grateful for your decades of thoughtful analysis within both water and industrial markets. I think all the way back to when Danaher acquired Hock and VideoJet, where I was working at Hock at the time when we had our investor conference out there. I think you were one of the first analysts that I met. So we wish you all the best in your next chapter.

Thank you, Jennifer. It's been a great run, and I appreciate all the support and insight you and the team have provided me over the years. So thank you for those comments. But I still have my questions. Thank you.

Yes, yes. We're getting to your question right now. So, you know, obviously we saw some sequential acceleration between, you know, Q1 and Q2. We feel really good about the momentum coming out of the first half of the year and the durability of the growth drivers here in the second half. I'll just cite two key drivers in each segment. I think in water, our industrial market demand continues to be strong. And this is really on the back of, you know, the data center demand and the associated ecosystem there, including power, mining, and semiconductor. Secondly, for water, we've got ongoing scarcity, clearly exacerbated by climate change, which is propelling water recycling and reuse, giving us good opportunity to sell solutions into that space. For PQI, we continue to see strong demand for digital workflow solutions as CPG brands look to improve product compliance, traceability, and time to market. And we see ongoing steady demand for our marketing and coding solutions, clearly supported as well by easier comps in the fourth quarter.

So based on where the funnels were at the end of Q2, we feel really good about the momentum and confident in the second half guide for core sales growth and maybe dean i'll just add one more point as you look at the second half core growth of five to six percent we expect it to be led by volume with pricing moderating slightly but still be at or slightly above the high end of the range so this will be a volume story in the second half of the year great to hear all that and then just a second question on capital allocation it's been really nice to see the balanced approach I mean, you've been opportunistic on some bolt-on acquisitions and the buybacks coming through. Samir, can you just give us a sense of how you're looking at these opportunities? What does the funnel look like? You've made some pretty obvious accretive deals here. What's that pipeline look like? In the meanwhile, can you do more buybacks? Thank you.

Thanks, Dean, for that question. Yeah, as you kind of look at the capital allocation kind of a framework, Dean, there's really no change. Our first bias is, of course, towards M&A to create long-term value, and we will be opportunistic on the buyback side. And if the valuation state, there's a disconnect between the free cash flow generation of the company and the public market value. We will be out in the market from a share buyback perspective. But otherwise, from M&A's side, the funnels are pretty good, Dean, on both sides of the house.

So we're in active cultivations and pretty actively looking at things. but as you don't have any is episodic so we'll stay patient and disciplined great and again thank you for your kind words and I wish you all continued success thank you Dean thank you our next question comes from Scott Davis with Milius research please go ahead hey good morning everybody Jennifer Samir Ryan morning Scott I guess with Dean leaving I'm gonna have to actually learn what the water business is finally I used to just call him if I needed help so maybe he'll be kind enough to give me his home number and I'll just call him in future quarters so anyways he will be missed by us as well he was a great colleague and friend but anyways guys getting back to business the you you talked you talked a little bit about the opportunity around data center power gen semi-fabs i think it's reminding in there too is there any way you can kind of size that if you combine those or or even help us understand the you know the the anything about really how that that how we can think about the tam and those business or opportunities or or how um how how big of a potential tailwind that may be to your um to your top line in industrial water

treatment hey scott as you're going to look at um overall it's um you know the demand that then the revenue that you're giving from the data centers under in the associated ecosystem uh it's still a small number from on the high-tech side but overall it's you know from a country perspective it's becoming pretty interesting as we're going to move forward but at the broader level it's still a little small number uh at this point so we've been out public with that number yet i mean you can think of you know chemtreat solutions in there to be you know strong double digit growth, right?

That team has been firing on all cylinders. It is still a smaller part of our overall business, but continues to be a really, really good grower along with some other sort of industrial reshoring and nearshoring activities. So we're seeing lifts kind of across the board.

Okay, fair enough.

And then you guys in the past quarters kind of talked about this cost out uh plan um given kind of the recovery you're seeing in some of your markets is there maybe you can update us on on what you're planning on doing there and uh the timing and and such yeah the program is on track uh scott um so you're well on our way on you started executing some things impact as far as the savings are concerned in this year we're going to see a very small lift maybe in q4 that's baked into the guide to very small number we're talking few millions at this point the biggest benefit we'll see is in 27 but overall there's no change um as far as if you're referring to any lift in the business and is that impacting the cost optimization program

absolutely not we're fully committed and progressing well okay best of luck i appreciate it thanks thanks scott thank you we will move next with jeff sprague with vertical research please go ahead hey thanks good morning everyone um give you just uh two quick ones from the uh first on the uh on the volume pickup that you expect in the back half um you see that being led by equipment or consumables can you maybe unpack that a little bit it's a combination of both jeff on the water side is going to be pretty balanced across both sides but pqi side is

pretty interesting. If you look at the PQI side, there are three building blocks. The first one is going to be driven by the digital workflow solutions. Over there, as you know, we book and, you know, based on the ACVs of the contracts that we've been booking, they have pretty good solid visibility into the second half recovery in the digital workflow solutions. Marking and coding continues to be very strong. So the year-over-year comp is going to look very good as you're going to look at what, you know, the Q4 impact last year. And then on the color validation and certification instrumentation side, we started seeing the funnels improving and the velocity improving over there as well. So we should start seeing an uplift in the second half of the year. So when you look at both on the PQI side and the water quality side, it's pretty broad-based. It's not tied to any product line.

And then when you look at your price capture, you know, actually it's very solid, in my opinion, for a business that's not metals intensive and I don't think had a lot of sort of pair-related pressure. Is that, you know, primarily reflective of price capture in consumables, or how are you doing on the equipment side in terms of getting some incremental price?

Yeah, I mean, our philosophy is, you know, every product has to earn the right to be in the portfolio, so we take a balanced approach, and it's, you know, we've been surgical about where and how and how much we increase price Obviously, we look to cover, you know, inflationary impact, impact of tariffs, et cetera. But you see balanced price read-through on both consumables and equipment. It's a little bit higher on consumables, given the captive nature of those products.

Right. Great. Thank you.

Thanks, Jeff.

Thank you. our next question comes from mike halloran with birth please go ahead your line is open hi morning everyone good morning so thanks a couple here so just can we talk a little bit about back half margin progression what the assumptions are and then the help you can give by segment and how that tracks to the quarters yeah mike as you're going to look at the margin side we will start we'll see a sequential improvement um on the margin right is in the guidance we kind of laid that out that we should expect roughly 25 bits of margin expansion in Q3 and for the whole year it's going to be 25 to 50. So Q4 we're going to see a nice margin uplift especially in the PQI side because that's where we saw some of the impact from the fixed cost absorption side and the line moves and duplicate production lines that we had on the marketing coding side. So think about margin expansions to roughly 25 bits in Q3 and for the full year 25 to 50 basis point. So Q4 will be north of 50, as you can think.

Any nuance by segment there?

Q4 will be largely led by PQI, but on the water side, it's going to be steady on what we've seen so far.

Thank you. And then just on the PQI side of things, you know, talk about what you're seeing on the equipment side and that headwind debating on the packaging and color side into the back half of the year, and maybe touch on what you're seeing on the workflow solutions that gives you the confidence and the acceleration and the, you know, frankly secular opportunity you're seeing on that side.

Yeah, so we've got a decent ramp in NPQI here in the second half. It's really driven by three things. The first is we're seeing strong demand and bookings of our digital workflow solutions with the integration of ESCO trace gains and now Global Vision. We also see steady demand and marking and coding that's bolstered by an easier comp in Q4. And we do see recovery in our packaging and color equipment. We exited Q2 with better funnels and stronger service growth. So we've got good confidence in kind of the second-half acceleration of core growth there. We also have a number of new product launches that have come to market here for PQI as a function of our increased investment at the time of spin. So flywheel of innovation is accelerating. We've got a number of good innovations coming to market. Thank you. Appreciate it. Thanks, Mike.

Thank you. So our next question comes from John McNulty with BMO Capital Markets. Please go ahead.

Thanks for taking my question. Maybe just a quick one on the pricing side. I think, Samir, you've said back half you're not assuming much in terms of further price acceleration.

I guess is that a function of the comps are a bit tougher or is that a function of you just don't see the need for it at this point just given that cost may have stabilized i guess how should we be thinking about about pricing as we kind of progress through the rest of the year yeah thanks thanks john for that question first of all i think on the pricing we expected it pretty strong right you know even in the second half we should expect the pricing to be slightly above the high end of the range so overall from an absolute basis uh you know we're still expected to be pretty good as far as the moderation point that i said earlier from acute Q2 to Q3 and Q4. Really, John, that is a comp. It's a lapping up. As you know, we introduced price increases last year when the tariffs started happening, and then we had our regular annual price increases in as well. So in the first half of the year, we have seen impact of both. And as we're going to get into Q3, we'll get back to our normal price increases. Got it. Okay, fair enough.

And then maybe just to dig a little bit deeper into the data center opportunities and how you're targeting that. I know we saw earlier, I guess, in the second quarter, there was a new partnership with Dow and some of their chemical solutions for the data center opportunities. I guess, should we be expecting further types of partnerships, and how are you looking to grow out that business? What are the avenues that you can take? And also, I guess, can you speak to potential M&A opportunities that you might see that help further target that market for you? Thanks.

Yeah, great question, John. Yeah, we continue to engage in partnerships across the enterprise. We're excited about our partnership with Dow to help serve liquid cooling applications and data centers. But this is normal course of business for us as we look to extend our value into these high growth areas. You know, relative to other applications and so on you know look we can't talk about anything specifically that's in the funnel but we like how we're positioned here and as far as you know m a and partnerships are concerned you know we're gonna we're gonna look to our power alley of serving the operating environment of the customer's workflow where you know there's a good sticky razor razor blade kind of relationship um and uh you know we are uh the right custodian to deliver the kind of value that those customers want so i think we uh we're well positioned here we're looking at lots of things uh and uh you know you'll know when we know as far as any assets that come into the portfolio is a function of uh of that yeah thanks very much for the color thanks john good bet thank you we will move next with nathan jones with stifle please go ahead morning everyone good morning i guess i'll start um in the packaging and color side of the business you talked about

Esco Trace Games and global and the impact that they're having together, can you maybe talk a little bit about how you're leveraging each one in order to generate better sales and how that factors into the outlook of in the second half? And then you mentioned in your scripts environmental monitoring workflows, which I think plays into in situ and OTT, and maybe how they fit together to drive additional sales as well. So maybe just sales synergies around the acquisitions, I guess is the short way to ask it.

Yeah. So, you know, obviously we continue to stitch together assets here that deliver more value to the consumer product goods digital workflow. And, you know, everything from sort of package design integrity through compliance, regulatory, compliance, ingredient traceability, checking for accuracy of the print that's actually rendered on the package you know all of those things are are critical workflows um for brand owners and to the extent that they can be seamlessly integrated uh is where the real volume or the real value is is derived uh in fact we've uh at our most recent trade show esco world was able to demonstrate, you know, packaging design changes that normally span months into weeks and in some cases down to a few days. So there's real value in that workflow just in terms of sticking those things together. Bear in mind that, you know, Global Vision has been a longstanding partner of ESCO, and so the integration of those solutions is pretty straightforward. But TraceGains is also providing real value to this workflow in terms of ingredient traceability, you know, regulatory changes, and making sure that products are fit for purpose and meet all the regulatory fares and compliance requirements. So, yes, we are seeing good value there. We see good brand uptake of those solutions, and we see that accelerating here in the back half of the year. Relative to your question in the environmental workflows, yes, we are speaking to the combination of in situ and our products. And as we had mentioned previously, the two of those really fit together like Legos. One is strong in analytical quantity. One is strong in analytical quality. So quantity and quantity are both covered in those environmental workflows. And they provide important intelligence here for the integrity of water as it comes into the influence into water treatment plants. So knowing what is coming, how much is coming, whether it's clean or dirty, are all critical factors, particularly as you get more environmental aberrations, and severe weather events and so on. So integration is progressing well there, and we're liking what we're seeing.

And really just one thing on the environmental side, Nathan, I'll add is you're going to look at the synergy numbers that we've talked about on the commercial side when we announced the deal. In the early days, the team is executing phenomenally well, and they'll be well ahead on the commercial synergy side numbers-wise.

Thanks for that. Excuse me. Thanks for that. I guess the follow-up question. just a housekeeping one i guess around margins you had um the tariff refunds in uh in each segment can you talk about what the margin expansion was ex the ieper refunds and i think the guidance and it can um contains no more i the refunds in it uh any chances that there will be more uh coming ahead thanks yeah thanks nathan for that question as you look at the the refund side effectively we got roughly 16 million tennis shows in pqis 6 million in water quality overall impact of the kind of refunds on the margin expansion on the adjusted op was 110 basis points so excluding

that the margin effectively came in pretty much in line with the guidance Nathan overall as a company and for each segment as well so really no surprises on the margin side and as far as as the future goes in the second half of the year you're actually right we have not included any further benefit from tariff refunds in the second half but based on you know the filings that we have done luckily we can have another two cents per sharecraft and impact benefit but you know the timing is highly uncertain so we've not added that to our guidance for the second half thanks for taking the questions thanks david thank you we will move next with andy kaplowitz with city

group. Please go ahead.

Good morning, everyone.

Good morning, Andy.

Jennifer, can you give us a little more color on how to think about the mix of water quality moving forward? For instance, how big is your overall industrial exposure at this point? Is it getting as large as your municipal exposure? And it looks like you're saying that industrial markets are growing at least in high single digits. It seems like it's more broad-based growth outside of data centers. So can you talk about the durability of that growth moving forward?

Yeah, we're really pleased with our industrial growth. And if you look at our overall water business, about 50% of our water revenue comes from industrial applications. So it's really quite significant. Most of that industrial revenue comes from North America. And so we're really seeing the benefits not only of, you know, these discrete vertical markets like data centers and the feeder industries there, but also in the nearshoring and the reshoring efforts. So, you know, we see, you know, growth being catalyzed here by strength in those industrial markets. That said, we've got, you know, plenty of analytical instrumentation and, you know, products and services that go into that space. But the municipal markets are also holding up well, right? As a reminder, 60 percent of our revenue is recurring revenue. We sit in the operating side of the customer's plant where, you know, they're looking to, you know, make sure that they insulate themselves from any points of failure along their, you know, along their value chain there. So being integral to the operating environment, making sure that we help customers avoid critical points of failure allows us to continue to see really sticky business there on the municipal side. And the other 40% really is revenue associated with, you know, continuing to upgrade, you know, equipment and deploy new technologies and so on. So I think it's really balanced across the portfolio. Certainly, there's a higher driver of growth coming from our industrial markets, but muni's holding up really well as well.

Jennifer, maybe I can double-click on the muni markets because obviously we get, and I'm sure you get asked the question a lot. I think you've called it steady. You know, you reminded us of the recurring growth. Can you continue to grow in that business, you think, over the next several quarters, years? You know, I do hear, like, municipalities worried about tight budgets. Can you do that? Can you continue to grow in a more tight budgeting environment?

Yeah, I mean, the way to think about this is the budgets for operating a water plant are not elective, right? Water plants have to continue to operate, treat their water, because communities and industry is relying on that water. So we don't see real aberrations or fluctuations in federal funding. Obviously, you know, utilities, municipalities are going to be judicious with their spend. But we absolutely believe that we can continue to grow and grow at mid-single digits or better in this space. Bear in mind with, you know, new technologies, more efficient ways of running plants, more software deployed to get, you know, intelligence out of how well that system is running. Those are all opportunities for continued growth.

Yeah, Andy, as you're going to think about our muni business, right, definitely on the analytics side is where you see the consumable side. But let's not forget on the Trojan side, we have pretty nice exposure on the muni to our Trojan business. And the bid activity that you see in the wastewater side, especially at the muni, is pretty, pretty solid.

So overall demand, as you're going to think, in the growth of our muni business, you should look at both angles, both from one from the analytic side from the heart side at the same time from a trojan business as well which has been growing pretty nicely appreciate all the call guys thank you thanks thank you we will move next with ryan conners with north coast research please go ahead great thanks for taking my question i wanted to talk about chemtreat a little bit you've talked about pricing various points in the call but it looked like we were going to get some relief there in terms of input cost headwinds oil prices had come down seems like that volatility has

picked back up can you just talk in more detail about the specific price cost dynamics in chemtree i know you mentioned the teams firing on all cylinders from a top line perspective but can you talk about price cost and margins with the volatile raw materials here in chemtree yeah ryan it's going to take over the country side you're actually right look in the country We've been working very closely with the customers, given some of the chemical inputs to see how we kind of make sure we can preserve the margins and get the right value for the solution that we deliver to the customers. Overall, as you kind of think about in that business, the dynamic, yes, some of the pass-through can move with the pricing. But at this point, frankly, we have not seen any sort of a change as yet. Our goal is to make sure when the input side is so volatile, we're preserving the dollar margin. So that's one of the biggest focus for us as we're going to think about. And the discussions with customers that the Chemtreaty is having is pretty real-time. I mean, we've got phenomenal digital solutions to make sure our sales teams are fully armed to have those discussions.

Got it. Thank you. And then one more on the PQI side. Just curious whether, you know, we've had this really high-profile recall situation with the cyclospora infections with the lettuce outbreak. Just curious whether, for your teams there, whether that type of situation creates an uptick in kind of interest and selling opportunity for people to get, when something like that is front-page news like that, whether that's kind of an opportunity for a bit of an uptick in interest and opportunity.

Yeah. Great question. The answer is absolutely, and while cyclospora is the latest public health risk, you know, any kind of bacterial or parasitic outbreak is not actually uncommon. You can go back to E. coli and peanut butter, botulism and infant formula, right? These kinds of episodes happen, and our PQI franchise is ideally positioned with ESCO, Trace Games, and Global Vision providing integrated workflows. to help with regulatory compliance, ingredient traceability, and packaging accuracy, while our coding and marking businesses aid in the date, lot code, and distribution traceability. So it's an end-to-end solution really for brand owners to ensure that they have product that is safe for public consumption. So, you know, together our portfolio of solutions really provides that source-to-shelf intelligence to make sure that brand owners can protect public health.

Thanks for your time. Thanks, Ryan.

Thank you. Our next question comes from Andrew Krill with Deutsche Bank. Please go ahead.

Good morning, everyone. Could you give us an update on what you're seeing on electronics inflation, including memory, you know, with all of the demand on those products from data centers is there anything you know very unusual from a cost perspective or availability perspective and can you remind us where which products are most exposed to those um in beralta thanks no thanks and a great question um our exposure in the electronics scene really comes to our instruments where we you know do use memory we do use boards uh these costs overall when you kind of step back andrew a pretty small fraction of the cause uh we're definitely seeing high prices

just like everybody else in the industry and frankly broader economy but the impact of the world level at this point is not material and from our perspective look the procurement teams are working pretty actively i wouldn't say that at this point we have had any issues of sourcing it's a matter of pricing but it's a small number that we are able to pass through at the same time look this is where from the r d team's perspective they are looking at things as well as to how we can design and optimize things in a higher memory of higher semiconductor price environment as well so those actions are helping mitigate the impact as well so it's not a material impact of the world the level is a punchline okay great very helpful uh and then switching gears the alpha

uv deal um you know i think didn't get a ton of air time so maybe can you just give us some more on like the growth rates i believe the prepared remarks said double-digit growth this year is that sustainable um and maybe any help on margins now and where they could go as you use you know ves and integrate the company thanks yeah we uh we're really happy to welcome alpha uv into the portfolio this is a highly synergistic addition to our trojan business which continues to expand our footprint globally alpha itself has a strong portfolio of competitive fit for purpose solutions

along with an established commercial presence in india and you can think about this as being you know, a similar type of transaction relative to Aquafetus, which is the UV business we acquired in Europe, and part and parcel to the geographic expansion that Trojan is doing. I think Alpha also gives us an opportunity to expand in other high-growth markets with their portfolio. So, So, you know, Trojan, Aquafetus, and Alpha all sort of fit together nicely to cover a variety of UV treatment applications, you know, high flow, low flow, different kinds of water matrices and so on. And so, again, small business in India, but a double-digit grower, and we do believe that that's sustainable going forward. Thank you. Thanks, Andrew. Thanks, Andrew.

Thank you. We will move next with Andrew Buscaglia with BNP PowerBuff. Please go ahead.

Hey, good morning, everyone.

Good morning, Andrew.

So you guys sound rather positive, I think, on the past acquisitions you've made. I know that you paid some rich multiples for them, and people are looking for signs of synergies coming through. So would you say that they are tracking ahead of your expectation in terms of either growth or synergies? And can you just give us a little more color on that, please?

Yeah, we've been really pleased with the deals that we've brought into Veralta since spin. And I think what you see is we've accelerated in terms of deal volume, both in number and overall relative size. It's been balanced between, you know, PQI and water. We really like the spaces that we're in with both of those segments, and I would say, you know, the vast majority of these deals have provided near-term synergies around sales acceleration and, you know, combining product portfolios, going to market with joint sales teams and the like. So we certainly, at least to date, have really focused on accelerating our overall growth profile, and these deals are doing exactly that. But there is opportunity, clearly, for ongoing cost optimization and, you know, getting more margin out of these different assets. And that's all baked into integration plans and transition going forward. But we're really pleased with what we've seen in the top-line growth acceleration.

And, Andrew, you're seeing that in the guidance, right, and the confidence that we have in the second half of that as we're going to move forward. you know, part of that is driven by the growth profile of the transactions that you've done.

Yeah. Yeah, exactly. That's fair enough. Thank you. Yeah, I know everything's kind of picked over at this point, so I wanted to ask a little more of a higher level question. I get questions on, you know, your data center exposure and water, but I think there could be an interesting AI angle and PQI.

I'm wondering if you see AI changing demand for things like inspection and marketing and coding um we're seeing this in some other adjacent uh industries i cover as well but um yeah what's your take at this point on on ai influencing pqy yeah you've seen that look as andrew as you know as part of the global vision we um laid out a little bit about that as well right so in the in a digital workflow solutions more so uh you we are definitely seeing that we are offering uh the ai application it can take kind of a layer kind of an applications on top the solution that we provide to the customer so you're definitely seeing more on the digital

workflow solution side of the pqi i mean it's going to be expanding more and more and we're making the investments even organically and from our talent perspective on that side as well so we're already offering products on that side to the customers yeah and global vision is squarely in that space right um right you know what global bridge vision brings to the table is a deterministic inspection engine right and it's it's designed to produce the same answer every time because in regulated workflows you know brand owners don't can't tolerate any room for error so these are reliable repeatable processes um with proprietary data sets that will render the the accurate answer every time, right? So, and, you know, the ESCO, you know, trace gains and global vision teams are, you know, effectively all working together to employ AI throughout that workflow because it will allow more mistake proofing and faster time to market while meeting regulatory requirements and traceability criteria yeah interesting okay thanks jennifer you're not thank you we will move next with brian lee with coleman sachs please go ahead hey good morning

everyone thanks for squeezing me in um i know a lot's been covered so so maybe a quick one from me and i'll uh i'll take these offline i'm just on high growth markets you know uh maybe some comments around the outlook there, potential for further reacceleration and growth. I know that North America and Western Europe have been really strong throughout the year on a relative basis, so if you could maybe touch upon kind of what you're seeing out there and the forward outlook for the high growth markets. Thanks.

Yeah, so high growth markets were relatively flat. We see a little bit of a tale of two cities here between PQI and water. For our China business, we've got strong growth in PQI, and we've got a little bit of shrink on the water side. We'd say Latin America as well continues to see good order rates, but sales are a little bit down year over a year and they're improving sequentially, I think we see underlying demand that remains strong, but we do see some timing delays in projects that are there. So, again, you know, we continue to watch and, you know, focus on execution between these different markets around the world. And, you know, we're pleased with what we see in recovery in China for QQI, still waiting for water to, you know, recover there in terms of traction. And then we're watching Latin America closely.

Appreciate the call.

You bet. Thanks, Brian. This is Ryan Taylor. We appreciate everybody that was able to engage with us on the call. At this time, we have hit our time limit, our 45 minutes for the call. so we're going to have to cut it off here. As usual, I'll be available for follow-ups throughout today and over the course of the next several days. We thank everybody for joining us, and we'll talk to you next time.

Thank you. This brings us to the end of today's meeting. We appreciate your time and participation. You may now disconnect.