Good morning, and welcome, everyone, to the IDEX Corporation Fourth Quarter 2025 Earnings Conference Call. Today's conference is being recorded. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. Simply press the star key followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. At this time, I'd like to turn the conference over to Jim Giannakouros, Vice President of Investor Relations. Please go ahead.

Good morning, everyone. And welcome to IDEX's fourth quarter 2025 earnings conference call. We released our fourth quarter financial results earlier this morning, and you can find both our press release and earnings call slide presentation in the Investors section of our website, idexcorp.com. On the call with me today are Eric Ashleman, President and Chief Executive Officer of IDEX, and Sean Gillen, our Chief Financial Officer. Today's call will begin with Eric providing highlights of our fourth quarter and full-year results, and a discussion of our current business outlook and strategies. Then Sean will discuss additional financial details and our outlook for 2026. 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 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. Before I dive in, I want to welcome Sean Gillen, who joined us in January as our Chief Financial Officer. Prior to joining IDEX, Sean served as CFO at AAR Corp for over seven years, and he brings extensive experience driving profitable growth, operational execution, and disciplined capital allocation. His expertise and track record of successfully implementing operational efficiencies, optimizing portfolios, and executing on strategic M&A fully complement IDEX's strategy. He's hit the ground running as he finishes up his first month of onboarding, and we look forward to benefiting from his leadership as we continue to shape and execute our enterprise strategy. Welcome to the team, Sean. I'm proud of the results the IDEX teams collectively delivered in the fourth quarter. We'll go into each of these in more detail, but we delivered organic sales growth and margin expansion for IDEX while also significantly expanding the order book within HST as we closed out 2025. These results show signs that our strategy is working and provide strong momentum as we enter our fiscal year 2026. I'd like to thank our teams around the world for their hard work, agility, and disciplined execution. Turning to slide three. We are progressing well through phase three of IDEX's purposeful evolution as we thoughtfully expand and integrate our capabilities in targeted advantage markets. With the support of our 8020 playbook, we are making this pivot both organically and through M&A. As a key element of this strategy, we built new scalable growth platforms that allow us to compound our efforts through cross-business unit collaboration. Please turn to slide four where I'd like to illustrate how this work is paying off within our HST segment. We've seen acceleration in order rates over…

Thanks, Eric, and good morning, everyone. I appreciate the warm welcome, and I'm thrilled to have joined the IDEX team. In my first few weeks, I am struck by the solid foundation of the IDEX franchise which is underpinned by a strong focus on 8020. I'm excited to work with this talented team embracing 8020, targeting key high-growth markets, and continuing to optimize our portfolio. All while maintaining a disciplined approach to capital allocation. With that, I'll turn to the financial results in more detail. All the comparisons I will discuss will be against the prior year period unless stated otherwise. Please turn to Slide six. As Eric mentioned, in 2025, IDEX delivered better than expected financial performance. Organic revenue growth of 1% came in as expected with strength in HST more than offsetting negative year-over-year performance at FSDP. Adjusted EBITDA margin expanded 40 basis points year over year, on positive price cost and productivity improvements, and adjusted EPS came in higher than our guided range in the fourth quarter. Overall, our orders grew 16% organically in the quarter. Our HFT segment reached a record high at $493 million with orders growing 34% organically in the fourth quarter. FMT orders grew mid-single digit and FSDP orders were flat year over year. Recall that we typically enter any given quarter 50% booked overall. However, the strong order activity and record backlog in HST gives us greater visibility and confidence in our outlook for that portion of the business. In FMT and FSDP, the rapid fulfillment nature of those businesses limit our visibility to approximately midway into a quarter. Touching on some of the more meaningful business demand trends in the quarter, we saw strong order activity in areas influenced by data centers. And for us, as Eric mentioned, that's in power,…

Our overall IDEX organic growth guidance balances approximate mid-single-digit growth for HST, and flat to slightly down outlooks for FMT and FSTP. Mirroring trends we experienced in 2025 and visibility afforded to us by HST's strong order book in the fourth quarter. Adjusted EBITDA margin is expected to be in the 26% to 27% range in 2026. While we expect solid leverage and margin expansion of perhaps 50 basis points improvement at HST this year, volume decrementals offsetting price cost and productivity is our base assumption for both FMT and FSTP. Regarding our effective tax rate, we expect it to be approximately 24% in 2026. Adjusted EPS guidance for 2026 is $8.15 to $8.35 representing low to mid-single-digit growth year over year. For 2026, we expect organic growth of 1%, adjusted EBITDA margin of approximately 24.5%, and adjusted EPS of $1.73 to $1.78 relatively flat year over year. As a reminder, the first quarter is typically our seasonally softest both from a top and bottom line perspective. Within FMT, businesses such as ag and water are impacted by the winter season, while FSTP and HST experience a reset of budget cycles for larger volume orders. Our initial outlook contemplates a typical low to mid-single-digit sequential increase in second-quarter sales with a more pronounced step up in earnings given higher volumes and normalization at the corporate expense line. Our current forecast reflects plans for 8020 informed reinvestment into our businesses to drive organic growth and continued execution to improve operational performance across all businesses. And lastly, we will maintain a balanced capital deployment plan near term skewing towards tuck-in acquisitions and returning capital to shareholders. Similar to 2025. With that, I'll turn the call back over to Eric.

Thanks, Sean. I'm on slide 12. We believe our strategies will drive increased growth in sustainable value creation for IDEX going forward. And our bookings in the fourth quarter are a strong indicator that our strategies are working. 8020 is at the heart of all that we do at IDEX, working across integrated business units is a meaningful expansion of our source code. Within our earlier walk through of HST Momentum, we've highlighted how 8020 choices can work powerfully for us to drive growth and margin at a single unit level, a collaborative small group a formal growth platform, and for a few powerful and select applications across the entire segment. 8020 analytics help us isolate the opportunity and align resources our tunable technologies allow us to quickly shift from a pressured to an advantaged area with relative ease. But it's really our teams and our culture that power this work. We carefully built and nurtured an open, engaged, and natural collaborative culture through all phases of our evolution. In fact, this work began formally before we began to apply 8020 to IDEX. Our value of trust, team, and excellence powered by a shared purpose of trusted solutions improving lives, helped our leaders unleash potential across business boundaries, with an ability to course correct as conditions warrant. We have more work to do as we move through phase three, but we're very pleased to see strong performance feedback in the areas where we've spent so much time and effort together. Look forward to sharing more of our story with you in the days ahead. 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 begin the question and answer session. If you have dialed in and would like to ask a question, please press 1 on your telephone keypad to raise your hand and join the queue. Our first question comes from Deane Dray at RBC Capital Markets.

Thank you. Good morning, everyone. Hey, Eric.

Hey, Deane. Really interested to hear your thoughts about the I don't I don't want to call it a disconnect because it's probably a lag effect here, but we finally got a PMI above 50 after eleven months. You have such an array of bellwether businesses that are usually synced to the type of inflection in the macro. You mentioned Bandit. But, just take us through how you see the demand outlook right now based upon what you have for day rates, you know, what do you see in the order size, are you getting any blanket orders. But this is really helpful to get down to that granular level, if we could, please.

Yeah. Sure. Well, look. We were happy to see that readout as well. But as we said in the, you know, in the comments here, and you know, we track about six or seven businesses that are really, really close to consumption. Rapid replenishment, you know, we'll take an order on a Monday, make it on a Wednesday, and ship it on a Friday. That's pretty typical. You mentioned a few of those businesses. Always look at them and see, you know, if they're moving together. That usually tells us we've seen some inflection. And so far, even through January, we've seen them be steady but we have not seen them inflect up yet. Now, of course, it was a, you know, weather-altered January. We'll see where things shape up in February and into March and as things warm up a bit. But as of now, happy to see the headline but don't really yet see the inflection. You know, and that's kinda the same story in the fourth quarter. Those kinda hung in there but didn't move around much. We mentioned some of the pressure sectors that we have. Those are being driven by different drivers. But I think for us, it's keeping an eye on it. As I said in my remarks, there's certainly chatter around the likelihood, you know, given the duration some of the things that are shaping up on the policy side. But haven't seen it yet. When we do, of course, as you know, we will tend to see it first. I think most importantly, you know, we can chase it without frankly, adding anything to the resource of the capital base. And our incrementals on that upside would be really, really good.

That's really good to hear. And just as a follow-up, I'd like to welcome Sean And I noticed you said $80.20, the requisite number of times. I know that's a full immersion, and it's gonna be ongoing here. But I'm most interested in hearing from you, Sean, is you're coming in with a fresh set of eyes. IDEX is one of the high-quality compounders, so it's you know, the opposite of a fixer-upper. But there's still items metrics that a fresh set of eyes probably sees that you have And just kinda talk us through where you are focusing, what kind of priorities that you think would be helpful for us to hear? Thank you.

Yeah. Appreciate the question. As you mentioned, I mean, a couple of observations early on, you know, the incredibly strong franchise that IDEX has, as you mentioned, underpinned by 8020 and everything. That is done here. And from my standpoint, I kinda look at it in a couple of ways. You have an incredibly strong franchise with really strong financial characteristics, and I'm talking EBITDA margin and the cash flow associated with that. Which affords us nice opportunities to allocate that capital to drive growth And as I look at it, I see a continuation of a lot of things that have happened here. And then helping around the edges in kinda M&A strategy and execution as we see this next kind of, you know, three-point o in IDEX. So a lot of good to work with and, you know, bring some of my skill set and some of the things I've done in the past to help continue to move the needle.

Great to hear, and best of luck.

We'll go next to Vladimir Bystricky at Citigroup.

Hey. Good morning, guys. Thanks for taking my call.

Sure, Vlad.

This is Maybe I don't know if I missed it, but can you just talk about how much price ended up contributing to top line overall in 'twenty five And then within your 1% to 2% organic growth outlook for '26, how much of price contribution is in that number?

Yeah. Happy to take that. So in fiscal year twenty-five, price was around 3%. In Q4, it was a little higher than that in that three and a half percent range. And then as you look into the current fiscal year twenty twenty-six and the guidance, we're kind of forecasting around a point to two one to 2% in terms of price contribution coming down from the levels of last year, but still additive overall.

Okay. So roughly flattish volumes overall across the portfolio with positive volumes in HST and some negatives in SSDP and SMT. Is that the right way to think about it?

That's exactly right.

Okay. Perfect. That's helpful. And then, I guess, you know, just stepping back, you know, obviously, you talked about capital allocation over the past several quarters and today here on the call. With the shift to bolt-ons versus larger acquisitions and more on buybacks, how should we think about the potential for incremental know, meaningful portfolio pruning, if you will, outside of the growth platforms.

I think right now, here in the short term, I mean, we're really focused on, you know, the cap the businesses that link to the capital that we deployed pretty aggressively over the last few years. Know, that's a look at our portfolio from top to bottom is always something that we're doing together as a team. I think on the divesting side, you know, nothing really, at least in the short term, that's beyond kind of the unit of measures that you've seen here more recently. You know, it's things that are associated with 8020 work both in a business unit or a product line spectrum. So I think most of our focus now is on capitalizing on growth, growth velocity, And then as I said in the remarks, specifically within some of the acquired business in HST taking advantage of some of the growth that's already on the board now and using it in some ways to fund some choices that we know we want to go make through a few of the recently acquired businesses. You know, how those are The run out and the disposition of those will play a part here but again in a more typical kind of smaller unit of measure here in the near term.

Got it. That's helpful. Eric. Thanks. I'll get back in queue.

We'll go next to Michael Halloran at Baird.

Hey. Good morning, everyone, and welcome, Sean.

Hi, Mike.

Hey. So can we just go back to the disconnect between the strength in orders and the building momentum you're seeing in the orders and the conversion to revenue. I know there has been at least some level of shift and you've as you've reshaped the portfolio, brought on some longer site cycle application. So maybe just refresh, the disconnect, and then I guess, when do you think that starts normalizing towards each other? Right? I mean, as you said in your prepared remarks, you know, relatively short cycle tends to convert quickly. So maybe just walk through those dynamics.

Yeah. So, I mean, if you're taking a look at how revenue is gonna kinda flow from Q4 into one and back into two, which is you know, things that we've talked about here. I mean, there's kinda two components of that on the top line side. One that's pretty typical and traditional for IDEX and one that's a little newer. So on the FMT side, we've always kinda had that dynamic. Largely associated with weather. And weather's impact in our water franchises and agriculture franchises specifically. And so you kind of see that Go a little lower in Q1. It comes back in Q2. And we have that same trend in the guidance that we have here looking forward into '26. There is a small component coming out of HST now that we also referred to. You know, we're we've got some larger orders that we're capturing here. Some of them are coming from, you know, markets that we're targeting that have more of a kind of traditional fiscal spend profile that has, you know, budgets running out in Q4 and people making sure that they spend those. You can see it in the big capture number for us in Q4, and honestly, some of that came in kinda close to the end of the quarter. If you look at just where lead times on the gear that we're gonna make kind of naturally fall out, it's not unusual to see some of it moving into Q2. That's how long it'll take to get moving. So places like our materials processing technologies business, you know, it's more sophisticated CapEx probably the place where you see it the most. And so I think starting to see a little bit of an HSE dynamic there as we continue to grow within some of these spaces. We'll probably add that component onto what we would typically see from the FMT weather-related side. It's not a lot. And frankly, think of it as a V, which is again, been kind of the typical IDEX profile. You'll see it here with the HST business as well.

Thanks, Ted. And then you know, maybe just the life science piece. Could you talk about what you're seeing there? And how your guide should shape out through the year and maybe put that in the context of what your client base is saying. And how they're expecting improvement through the year and kind of correlation points there, please?

Yeah. I think, you know, we saw in '25, it was kinda low single-digit growth. It was stable. It was predictable. Really, for us, kinda driven on the positive side by growth in pharma applications and then the derivations that make their way into our products. A little bit of pressure on the more academic research piece. Has that played out? The only real change there, the government shutdown, the prolonged nature of it in Q4 I think, you know, put a little pressure on that business at the end of the year and I think added a bit to the uncertainty, heading into '26. We think that'll normalize over time and we've kinda got the business still running forward at sort of low single-digit growth. Some open questions still remain on, you know, the piece related to China. The innovation, very, very strong with inside the business. Continue to work with customers on, you know, different products to support platform releases at a healthy clip. But we've got that dialed in at kinda continuing along at mid-single digits. And looking for different signs of inflection there. One specifically, I think, around some more certainty around where that academic research and support would be through the indirect lever of NIH funding.

Thanks, Eric. Appreciate it.

Thank you. We'll take our next question from Joseph Giordano at TD Cowen.

Hi, Joe.

Hey. So you kinda touched on this, but, like, you know, a year ago, when you were giving guidance for 2025, we got into a position where you know, full-year guidance looks fine. One q guidance looked very weak relative to where people were thinking. And it was you know, there was this need to have these kind of larger orders come through and some tough comps there now. If you think through the businesses that kind of play in that, and you kind of marry that with the orders that you saw in HST? Like, how is it know, how is how should we view this guide relative to those, like, you know, one Q4 q, progression differently than we did last year.

That's a great question, and we are in a different position. Exactly for the reasons that you talked about. So as an example, in HST, when you just look at backlog, kinda year over year, the difference with the exit last year from the year prior we've built over a $100 million of backlog. And while it you know, almost half of it is in the data center area that we talked about in the opening remarks, it's actually broadly applied elsewhere across HST. You see it coming from our materials processing technologies business. See it coming from the MSS franchises. We now have MicroLamb on the board. You know? So we've got really, really good order support here. Quite a bit more of it than we did at this time last year. Again, some of it, you know, cycles in the way I suggested around Q1 and then moves up again in Q2, but the assurance levels are quite a bit higher this year, especially in HST.

Perfect. And then if we talk about some of these newer markets like data center power, like, how large is that now? How large can it realistically get in, like, a year or two? And maybe can you speak to the capital intensity from your standpoint that is required to capitalize on this?

Yeah. I've kind of tackled it backwards. The capital intensity is actually not very different from what we typically do. It's light intensity. So think of this as a lot of critical subcomponents that we're making. We will just make more of them. On a lot of the same equipment that we have. Still pretty rare in IDEX. To be running more than two shifts anywhere. And so we've got an opportunity to flex the current capital base reasonably, and you shouldn't see a deviation there. Would have to add manpower, of course, and we are. You know? So that's something that our teams are working through, but nothing really significant on the capital side. In terms of where all this can go, I mean, that's an open question, obviously, for the whole sector. But, you know, we're playing in a number of different areas. We talked about, you know, behind-the-meter power. That's you're seeing a lot of that in the pneumatics area. That's kind of ramping as we go with you know, kind of a flagship customer during the year. But we've got a number of other areas or applications largely in the areas of thermal management, the discrete thermal management that we're working. We've got some optical switching and communications work, even in FMT, we've got some power gen support. Some of the technologies we have over there for more typical generators. So we're actually managing it This is one area that we're managing at a segment level. Just to make sure that we're coordinated across. We can see all the opportunities. To the extent we're working with similar customers, we're making sure we're coming together as one IDEX. So I think still room to run here. We're innovating a lot in the background. Very, very excited overall about the potential. As we said in the beginning here, won't need a lot of capital deployment to capitalize on it.

Thanks, guys. Appreciate it.

We'll take our next question from Matt Summerville at D. A. Davidson.

Thanks. Morning. Maybe could you dig into a little bit adding a little bit of geographic depth and talk about the order cadence that you saw in FMT, kind of the chem, O and G and ag side of the business? And then an HST industrial in auto. Just trying to understand you know, the a little more of the commentary around just not really seeing any sign of inflection. They just further punctuate that a little bit for us.

Yeah. Well, you mentioned some of the ones you mentioned are the more pressured sectors for us, you know, overall. So I'll speak specifically to those And I'll start with energy. We always have to scale that a bit in terms of the work that we do. We do mobility custody transfer there. We actually had a strong beginning of the year. You know, we saw a lot of truck builds and things and some optimism around the state of those markets. And I think as it played out, you take a look at where oil prices landed and some of the geopolitical stuff, that was out there, you know, we just saw a pause, kind of an unexpected pause in at the end of the year. So that really is micro exposure in the space for us. Have kind of a positive front half and a less positive second half. Now it has been a very, very cold winter, Ultimately, that typically helps that market down the road, so we'll see. The chemical side, you know, that's been pretty pressured throughout the year. You know, a lot of our exposure there is our probably lead franchise is European based. And so when we think of the state of European chemicals in particular, they really haven't been very strong. To be fair, the business is chasing international expansion. They've done really, really well in India. In our shared campus up there. But I think chemicals, we're waiting to see signs of just general recovery there. Agriculture is another. You know, that's we've been kind of in a multiyear cycle there. Our orders ebb and flow kind of cyclically around weather patterns. You know? So as just look at it, we have to look at year-over-year performance. Team is doing well, executing that business well. Certainly well-positioned, but we're still waiting for signs of recovery there. And I would say just broad industrial it's been pretty similar and kinda flattish throughout. I'd say the theme of the day is, you know, just enough orders coming through for maintaining the system, you know, replacing like-for-like components where we've had that share position for years if not decades. So that's all solid and has remained that way and held up that way in January. It's just a question of not enough expansion in more specific projects, people building out plants, and doing things that require just more confidence around customer commitments. You know, geographically, I would just say the, you know, the trends are not that different with the exception it's a smaller part of the business. But, you know, India, probably the head for us. North America, second. I would say Europe, third.

Thank you for all that color. I guess, with the order activity you saw in HST, is there a way to sort of parse out how much of that may have been kind of year-end budget flush slash blanket activity and realizing 34% may not continue. But are you still seeing that forward strength in inbound order momentum now is, you know, 2026. Is kinda kicked off. And then also, is there any incremental savings from the optimization left over to be realized in '26? Thank you, guys.

Sure. I'll take the first, and I'll let Sean weigh in on the second. Actually, January has been strong as well. So while there is some phenomenon there tied to year-end, pieces that that is not you know, that that is not the majority of what's going on here. A lot of it is just it's momentum that we frankly Seen building over the last year and a half. It was strongest here in Q4. We're very happy with what we've seen initially in January. And, while kinda data centers is the headline, the broad-based nature of it also lends itself to being something that's got good rhythm, good cadence, and we're expecting it to continue into the year.

And then on part two on the cost containment, as I mentioned in the remarks, we did realize about $60 million of cost savings in last fiscal year. And that was really kind of the full targeted amount. Those actions were taken early in the calendar year and so most of the benefit was realized last year. A portion of that was kind of more temporary in nature, so I would expect a portion of that, a portion of it was about $20 million in temporary temporary in nature. I expect that a little bit of that we allow to come back into the results this year. As we resource and invest in some areas, particularly the ones where we're seeing growth in the order volume that we've been talking about.

Understood. Thank you, guys.

Our next question comes from Bryan Blair at Oppenheimer.

Good morning, guys. Welcome, Sean. To get a slightly different angle on the know, the standout HST order strength? Eric, you just said that you know, data centers were the you know, the the highlights. Are you willing to speak to how much of Q4 order growth was AI-related versus other markets and applications? Just trying to frame, I suppose, dimensionalize the drivers there.

Well, you know, it is a little tricky because of the nature of the work that we do. While we have a lot you know, the things that we do in Nomadix are clearly linked to data centers. I would even argue a lot of what's driving nice positive growth in semiconductors is, you know, is tangentially related to it as well. I would be willing to say here is that is I kinda pointed to that backlog growth year over year. You know, just under half of it, we probably put in direct data center applications. But I would argue a lot of the other segments and pieces that are coming in, they're one or two steps over. You know, semiconductor is a segment for us. It has been strong, especially on the consumable side. A lot of it's supporting memory production. And then we've, you know, we think we're seeing some good things building as well on some of that you know, very, very critical componentry that we supply in the lithography. And so it's kind of all in within that same ecosystem. But let's say about half of the backlog build in very specific data center supported applications.

Okay. That's helpful color. It'll be great if we could drill down a bit more on municipal and industrial water. Trends and outlook there. Where did revenue and order growth shake out in Q4? Then looking forward, what drives your team's confidence in sustainable mid-single-digit type growth? Whether that be, you know, external or at a market level or in terms of your team's value prop and the ability to win in those

Yeah. Well, first, you know, just on the numbers side, you just called it. I mean, we had a strong Q4 in the municipal-facing water side that was double-digit growth. We've kinda got it mapped out at mid-single-digit plus going forward. And I think it comes back to the critical nature of the work that we do here. Very, very specifically, we're doing, you know, inspection, and analytics work. So we're helping municipalities understand the state of affairs underground and where they might need capital to be vectored in to correct it. You know? So, again, we're kind of at the lead tip of the spear, if you will, on, you know, putting capital work for infrastructure, refurbishment. You kinda need our diagnostics to be able to do it, both to put that capital to work then, frankly, you need it operationally as well. So whether it's significant weather events, and we've just seen another round of those, those stress infrastructure, it's our technology that helps you understand where it's coming from and how you go mitigate it really, really fast. So it's just a testament to the criticality of what we do. It's always been a nice piece of the business. It's made even more so now that more capital is being put to work, and we absolutely seeing that continue. One last piece. When you look at water for IDEX, I just always remind people there's a side of it that's related to high purity semiconductor work. For a while now, that's been offsetting some of these dynamics on the municipal side. We saw some nice orders growth there as well in Q4. And so we'll have less need to call that out as an asterisk we go forward and talk about water as a platform. All very encouraging.

Thanks again.

Our next question comes from Nathan Jones at Stifel.

Hi, Nathan. Let me start by saying I was late on the call. So if you've already answered my questions, tell me to read the transcript. I wanted to ask about the platforming strategy that, you know, you've been on for a year or two now. Maybe you could talk about what you're looking to accomplish with that in 2026. I know you had some restructuring expenses around that in 2025 that generated some cost savings. Are there any more of those kinds of things contemplated for 2026? Just any more color you can give us around that kind of

Yeah. Look. The optimization side, I'll let Sean take a handle at that. We got a little bit of it that flows over into the next year. He can take you through it. But the focus here is growth. I mean, so the whole idea is to get units working together in advantage markets and take the power of our innovation passion to solve customer problems and frankly, exponentially put it to work. We're seeing it work. So the growth that we're talking about here for IDEX overall, a lot of it in HSE it is disproportionately coming out of these platform environments and you can see it in applications where, generally, it's not just a single unit, but it's a couple units or a platform working together taking one piece of technology in one area and leveraging it onto another, Sometimes it's even just taking talent putting it to work to make sure we can free up capacity and assist your business. Go after data center volume, things like that. So it's this compounding power of putting things together that have long been IDEX assets putting them to work around markets that just have more favorable headwinds. So I think that's you know, that's the headline. That's the theme, and we're really happy to see it starting to bear a lot of positive fruit. We have it now, and we see it continuing as we go forward. Just got done talking about the water platform. That's made stronger because of all the technology that's now working together to provide that analytical output. When we talk about data centers, there's a number of units that are here. We actually have to coordinate it at the HST segment level. We've always had it in life sciences. To be honest, that's kind of where the original source code came from. So it's something that we're really excited about. I'll let Sean tackle a little bit more of the productivity flow through.

Yep. And just on that point on the cost piece, as I mentioned, last year you had about $60 million of savings related with cost actions. 40 of that are structural, right, that will just continue. Most of that was realized last year. You might have a little bit of bleed over into this year, some incremental benefits. And then the other $20 million was kind of more temporary in nature based on the environment. Now the environment is pretty similar, so we're gonna keep most of that cost out, but expect some of that we'd allow to come back into the business as we invest particularly in these areas where we're seeing growth.

But there aren't any incremental actions planned for 2026. Should request think about the guide. There's no kinda round two or anything like that on cost takeout.

Okay. I guess just a quick one on course productivity that is part of the business.

Got it. Then just a quick one on share repurchase. IDEX hasn't historically been a serial repurchaser that you did repurchase every quarter during 2025. Should we expect a continuation of that in 2026, and what's the plan for share repurchase 2026? And I'll leave it there. Thanks.

Yeah. Yeah. Good question. And so I think you should expect a similar level of activity that you saw in the second half of last year, which is around $75 million per quarter, that stepped up, as you mentioned, last year. The first part of last year was around $50 million a quarter. Stepped it up to around 75 in Q3 and Q4. I think that's probably the right assumption. As you think about this next year. You know, be different based on M&A activity, but that'd be kind of the base amount I'd have you think about.

Great. Thanks for taking the questions.

Our next question comes from Rob Wertheimer at Melius Research.

I had two, and I'll just do them both at once, if I may. Could you just share general thoughts around lithography drivers of that potential cycle? There's a lot going on obviously in various areas. And then secondly, may or may not wanna touch on this, but very strong pricing power in different aspects of data center build out. And do you have any thoughts on how your margin is trended, some of those orders flow into revenues? Thank you.

Sure. Well, on, you know, the lithography side, we have a you know, just to bracket it semi con business for IDEX is just a little under 10% overall. About half of that is consumable parts and things like filters and seals. And then kind of the other half is split between metrology. A lot of those are optics applications. And then the other half, so we're down to kind of small single digit. It's goes into this advanced lithography area that you're talking about. We only have so much exposure, and it tends to be at the very, very high end of the duty cycle. So as you know, we've been talking about it probably maybe disproportionately because one of our recent had some nice exposure here, and then we saw it you know, swing around quite aggressively because of some trade restrictions. Around that type of business. That's really kind of unchanged at this point. I think those boundaries are largely set. What has been more positively, here lately is, I think, just the general momentum around chip builds for either advanced AI some of the stuff related to memory for data center racks There's just a lot more activity and a lot more need for capital gear. So we have heard more positive comments. The only thing and some of those, you know, referencing order velocity and order capture, You know, these are high ticket items, and the lead times are very long. So for us, we have to kinda look at current inventories of components, where lead times might fall into build schedules, and things like that. Specifically around this part of the business. But we will generally be much happier with you know, positive momentum, positive headlines, and we've seen more for those for those reasons. You talked about pricing power specifically within data centers. I would argue with this is it doesn't really work differently for us than it does through much of the rest of IDEX. We, you know, we typically are entering with high critical items pretty low on the bill of materials. Know? So the work that we're doing here is not atypical for IDEX. And so the way that we think about pricing is material input come up and the recovery arguments that we make there. I wouldn't argue they're very different than they are anywhere else. Sure. The market is growing, and everything there is mission critical and delivering on those has to be know, has to be perfect. That's not different from all the business that we do on IDEX. So I think we have actually similar pricing dynamics. And as we have started to ramp up that business, the flow through on our business has been very good.

Perfect. Thank you.

And next, we'll move to Andrew Buscaglia with BNP Paribas.

Hey. Good morning, everyone.

Hi, Andrew.

Wanted to if you can parse out a couple of things within your segments. First off, with FMT, you know, I would think that this business would see strong accelerating orders in the event production recovery if that were to happen this year. Orders were okay this quarter, but my question is is is there anything that's changed or evolved within FMT that makes it that would make it act a little bit longer cycle over you know, its typical short cycle history. I just know, like, a lot of change in the last five years post-COVID. So wondering if you could comment on that.

Yeah. Nothing different within those markets. You know, these are franchises, some of which are over a 100 years old. The positions that we have with customers are you know, decades. And the work that we're doing, a lot of the business is like-for-like replacement. And that really hasn't changed. So if you just brought this down and started to think about it as a story, you know, today, we're seeing order rates that suggest if it's pumps in a factory that they're still running and they're running the same number of shifts and they still need the, you know, replacement, levels to be the same, if things were to vector up, would probably say that we're gonna put more maintenance on the shelf or we might expand you know, part back end of our plant, and we'd need more pumps. So that we're at we're we're kind of as we always have been, laid out there. Our fulfillment rates are the same. We're still know, have the same level of relationships, and, frankly, just share doesn't move around very fast in this market. So with acceleration, we would see really no different And what we should expect on our side in terms of both capture rates as well as really nice flow through on the incremental volume.

Yeah. Okay. And kind of a similar question with with an FM and HST. You know, I get sometimes I listen to the call. You get excited over portions of the business that seem to be doing well, data center, space and defense. Biopharma. And you do a little work on it, you realize you're kinda talking about percentage of sales or so or like that or in that ballpark. Maybe if you could bucket together these kinda higher growth areas between FMT and HST as a portion of those segments, could help? I don't know if you have an estimate then and how much we're about here when you kinda jumble it all together in each segment.

Well, I mean, you know, if we a lot of what we're referring to particularly on the growth and momentum side is in HST. And, you know, we were talking about this this morning. It is interesting that, you know, we made a mention here that the industrial and automotive side of HST is now 20%. And there were days long past where that was almost half of the segment. Our life sciences piece, you know, which is kinda life classic life sciences, analytical instrumentation, and pharma exposed markets, that's about a third. That, at one time, was a significant more significant piece of this as well. So the diversification of HST has come a long way. Over the last few years. And so if you think of kind of the markets that we've been talking about here, it's a significant percentage of HST We're talking about pneumatics with a lot of the data center explosion. Everything happening within the MS and MSS. I mean, that platform in Q4 was double-digit growth. And so we're just seeing nice broad diversification across these target advantage markets and you're seeing that kind of relative pie graph start to tilt in the right direction because of the capital that we've deployed there. And I think FMT is pretty similar profile than, you know, maybe the water growth has changed it to a slight degree, but that's long been kind of a broad industrial exposed area. Some discrete call outs in chemicals and agriculture, and we talked about some of the pressures we have there.

Yeah. Okay. Thank you.

And that concludes our Q and A session. I will now turn the conference back over to Eric Ashleman for closing remarks.

Well, thanks very much, and I want to thank everybody for joining today as we close out the year and launch into 2026. I really think today, three headlines and takeaways. Number one, our growth platform strategy is working. And it's really powered by the cross-business collaboration and innovation that we talked about through the questions today. Our strongest growth is coming out of our growth platforms. We're really, really happy with the work that's happening there and the things that lay ahead for us. Number two, HST as a segment overall is doing very, very well. The teams are working phenomenally across the businesses and across the units. You know, on the growth side and feel good about the margin expansion and some of the things we're gonna drive there as well in a focused way in '26. Then we've touched on it a lot. I think our industrial businesses are really well set up. To capitalize on growth, you know, at the first sign of inflection. I'll just remind you that when that when it does move, we will see it. We'll see it early, and we'll jump on it quick. And then the incremental performance as we do that will be very good. As we're able to chase significant upside without really any change to the resource capital base of the company. So with those headlines in mind, I wish you all a great day, and thanks for your support and joining us today. Take care.

And this concludes today's conference call. Thank you for your participation. You may now disconnect.