Bobby Zolper

Bobby Zolper of Raymond James asked if there were any variances in water quality pricing relative to Veralto's expectations. Zolper also sought Veralto's perspective on the attractiveness of water metering as a platform.

Answer

Sameer Ralhan, SVP and CFO, stated that pricing, in general, has been strategic, focusing on value creation through a combination of price and volume, with slightly higher pricing in PQI than water quality. Jennifer Honeycutt, President and CEO, confirmed that Veralto actively participates in the water metering business with mag meters in its micrometer segment, though it represents a smaller portion of overall revenue, and they evaluate the entire water value stream.

Bobby Zolper asked about any variances relative to expectations in water quality pricing and Veralto's thoughts on the attractiveness of water metering as a platform.

Answer

Sameer Ralhan (SVP and CFO) stated that pricing in general has been strategic, aiming to create value through a combination of price and volume, with PQI seeing slightly higher pricing than water quality. Jennifer Honeycutt (President and CEO) confirmed that Veralto considers the entire water value stream, including metering, and is actively in the metering business with mag meters, though it's a smaller revenue portion.

Bobby Zolper asked for context on what customers are saying about ARPA specifically, and if there's a sense of how much of that money has gone to metering.

Answer

CEO Ken Bockhorst stated very little ARPA money has gone to metering, emphasizing that macro drivers like labor availability, technology adoption, and non-revenue water conservation remain the primary budget drivers for utilities. Bobby Zolper also asked for a comparison to the 2011-time period when organic sales were down, and why that period is not relevant today. CEO Ken Bockhorst explained the significant technological changes since 2011, including the shift to battery-operated ultrasonic meters and radios, and the introduction of software, making manual reading and billing impractical. Bobby Zolper then clarified if the five-year forward view of high single-digit growth is organic or includes M&A. CEO Ken Bockhorst confirmed it is organic growth.

Bobby Zolper asked if the company's five-year forward view of high single-digit growth is purely organic or includes potential contributions from M&A.

Answer

Ken Bockhorst, Chairman, President and CEO, confirmed that the five-year forward view of high single-digit growth is organic.