Question · Q4 2025
Christine Raines inquired about the factors driving the expected step down in Adjusted EBITDA margin for 2026, including revenue, headcount, innovation investments, and strategic programs. She also asked for CapEx and free cash flow assumptions given the innovation ramp.
Answer
CFO John Gallagher stated that the 30-32% Adjusted EBITDA margin guidance for 2026 reflects continued discretionary investments in R&D for MIDD, platform unification, and new software launches/enhancements, similar to 2025. He mentioned identifying $10 million in cost avoidance for 2026 to manage these investments. Regarding CapEx and free cash flow, Gallagher explained that these metrics are not guided, but capitalized expense levels in 2026 are expected to be similar to 2025, primarily driven by R&D investments in software development and platform enhancements.
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