James

James, on behalf of Saree Broditsky, inquired about the fire service outlook for 2026, considering pent-up demand and the clearing of near-term headwinds, and asked about the confidence and potential risks associated with the early 2026 NFPA approval timing.

Answer

Steve Blanco, President and CEO, stated that 2026 fire service demand is expected to be consistent with 2025, with anticipated improvements in international markets, and expressed optimism for significant growth in 2027-2029. He also conveyed high confidence in the NFPA approval being issued no later than early 2026, acknowledging it's a government agency decision.

James, on behalf of Saree Boroditsky from Jefferies, inquired about the key factors driving the outperformance of water quality in high-growth markets this quarter, after underperforming in previous quarters, and the expected trajectory for these regions. James also asked about the drivers behind the strong high-single-digit recurring revenue growth and whether it is expected to continue outpacing equipment sales growth.

Answer

Jennifer Honeycutt, President and CEO, attributed strong high-growth market performance to China no longer being a drag, continued growth in Latin America, and double-digit growth from India and the Middle East, driven by a growing middle class, infrastructure development, and water/energy challenges. Regarding recurring revenue, Ms. Honeycutt noted strong growth from both equipment placements (printers, instruments) and their associated consumables, as well as increasing contributions from SaaS and annual revenue in software-based businesses like TraceGains and Esko. Sameer Ralhan, SVP and CFO, added that instrument business's finite life also contributes to recurring revenue.