Jatin Khanna

Jatin Khanna, on behalf of Jerry Revich at Goldman Sachs, asked about the impact of tariffs on the business in Q2 and Q3, and also inquired about the initial customer response to the recently closed Inspection Technologies acquisition.

Answer

CEO Rafael Santana confirmed that while the tariff situation is fluid, Wabtec does not expect an impact on its 2025 guidance due to proactive cost and pricing actions. CFO John Olin added that guidance includes all tariffs levied through Q2. Regarding the acquisition, Santana reported a very positive response from both customers and employees, highlighting the business's quality and its potential to improve reliability.

Jatin Khanna, on for Jerry Revich at Goldman Sachs, asked about the financial impact of tariffs in Q2 and Q3 and the customer response to the recently closed Inspection Technologies acquisition.

Answer

CFO John Olin and CEO Rafael Santana clarified that tariffs are not expected to materially impact 2025 earnings, as the effects are being managed through pricing actions, cost controls, and a high level of U.S. sourcing. Santana added that the customer and employee response to the Inspection Technologies acquisition has been very positive, with excitement around its potential to improve asset reliability.

Jatin Khanna asked for an characterization of the current M&A pipeline and management's optimism about making a significant acquisition in the next 12 to 18 months.

Answer

President & CEO Mark Skonieczny responded that while the company always evaluates opportunities, its foremost capital allocation priorities are organic investment and share repurchases, which he described as a compelling value return for shareholders. He stated the company will remain opportunistic regarding M&A but the primary focus is internal.