Robert Jamieson

Robert Jamieson asked about the stage of customer expansion in the AI ecosystem, comparing it to prior cycles like 5G, and the sustainability of AI trends to 2028 and beyond, and inquired about Keysight's capital allocation priorities for 2026, including M&A pipeline and valuation environment.

Answer

President and CEO Satish Dhanasekaran stated that AI will have a material impact on innovation across end markets, with the acceleration in technology adoption expected to continue. He noted that while customer expansion has occurred, Keysight is still largely servicing U.S. hyperscaler demand, with sovereign investments and new AI use cases intersecting other businesses largely ahead. EVP and CFO Neil Dougherty reiterated that organic growth is the number one priority, followed by balancing capital return (including a $1.5 billion stock buyback authorization) and M&A, with immediate focus on integrating recent acquisitions while rebuilding an M&A funnel.

Robert Jamieson asked about the expansion of Keysight's AI customer base, seeking to understand if the company is still in the early innings of this growth, similar to prior cycles like 5G, and if the trends are sustainable out to 2028 and beyond, particularly as AI moves from data centers to edge and access layers. He also inquired about Keysight's free cash flow prioritization for fiscal year 2026, covering M&A, organic reinvestment, and buybacks, as well as the current M&A pipeline, valuation environment, and desired asset types.

Answer

Satish Dhanasekaran, President and CEO, affirmed that AI will have a material impact on innovation across end markets, and the acceleration in technology adoption is expected to continue. He believes Keysight is still in the early innings of AI customer expansion, as current demand is largely US-based hyperscaler-driven, with sovereign investments and new use cases (AI intersecting with other businesses) largely ahead. Neil Dougherty, Executive Vice President and CFO, stated that Keysight's priorities remain unchanged: organic growth investment is paramount, followed by balancing capital return to investors and value-adding M&A. The immediate M&A focus is on capturing value from the three recently closed acquisitions, while rebuilding a funnel of future opportunities. Satish Dhanasekaran added that the board has authorized a $1.5 billion stock buyback.

Robert Jamieson of Vertical Research Partners asked what the PowerArtist and Optical Solutions acquisitions bring to Keysight's EDA portfolio and inquired about the timeline for 6G to become a meaningful revenue contributor.

Answer

CEO Satish Dhanasekaran explained that the acquisitions are highly complementary, with optical solutions fitting well with Keysight's RF and high-speed digital leadership, and power analysis IP being critical for future designs. On 6G, he noted that while commercialization is years away, R&D activity is growing and will build on an evolutionary path from 5G Advanced.

Robert Jamieson asked about investments being made to accelerate growth in the software and services business. He also followed up on AI, asking about test applications beyond high-speed interconnects.

Answer

CEO Satish Dhanasekaran highlighted software and services as a key strategic focus, noting double-digit growth in the simulation business, which will be bolstered by pending acquisitions. On AI, he explained that Keysight's role extends beyond interconnects to solving mission-critical scale-up and scale-out challenges in digital infrastructure, including software emulation to identify performance bottlenecks in AI data centers.

Robert Jamieson inquired about investments being made to accelerate growth in the software and services business and asked about AI-related demand beyond interconnect testing, such as in emulation software.

Answer

CEO Satish Dhanasekaran highlighted software and services as a strategic priority, noting double-digit growth in the simulation business, which is being bolstered by M&A like the ESI acquisition. Regarding AI, he explained that Keysight is addressing mission-critical digital infrastructure challenges, including providing software emulation solutions to help customers identify performance bottlenecks in AI data centers.

Robert Jamieson of Vertical Research Partners inquired about the potential benefits to the communications business from BEAD funding in H2 2025 and any associated political risks. He also asked about Keysight's historical strategies for managing tariffs and trade policy shifts in the APAC region.

Answer

Executive Satish Dhanasekaran explained that while Keysight benefits from government funding, its broad customer base means it is not heavily dependent on any single program like BEAD. Regarding trade policy, he stated that Keysight has proven agile in adapting to restrictions and is prepared to capitalize on potential manufacturing shifts to Southeast Asia if new tariffs are enacted, similar to past reshoring trends.

Robert Jamieson from Vertical Research asked if the new segment structure would make Sensata more nimble for organic reinvestment and quicker capture of opportunities, particularly given the focus on winning with the right products and customers, and also inquired about any new learnings from Stephan's recent global travels.

Answer

CEO Stephan von Schuckmann confirmed that the new structure is precisely intended to enable more nimble organic reinvestment and opportunity capture, driven by unique segment opportunities and strong leadership. He also shared that his travels reaffirmed confidence in Sensata's strong teams and capabilities, particularly in Japan and Korea, which provides a solid foundation for value creation and growth.

Robert Jamieson asked about changes to the global sales team's process that enabled recent wins in China, and inquired about the total addressable market, margin profile, and guidance for the leak detection business.

Answer

CEO Stephan von Schuckmann explained the sales team is now more selective, focusing on Chinese OEMs with strong growth potential both inside and outside of China. He sized the North American and European leak detection markets at ~$150M each. CFO Andrew Lynch added the product is at or near normalized Industrial margins and expects low-to-mid single-digit outgrowth in Q3.

Robert Jamison with Vertical Research Partners followed up on FX incrementals, asking if the 25-30% drop-through applies across all segments. He then inquired about the full-year guidance, specifically what end markets or areas would need to outperform base case estimates to reach the high end of the sales range, mentioning auto CapEx and medical business acceleration. Lastly, he asked about Nordson's exposure to DRAM pricing and potential opportunities from increased memory capacity.

Answer

Daniel Hopgood, EVP and CFO, confirmed that the 25-30% FX drop-through is a good general benchmark across segments, though it varies slightly, and the FX impact will lessen throughout the year. Sundaram Nagarajan, President and CEO, and Daniel Hopgood explained that reaching the high end of guidance would require further inflection in general industrial and automotive demand, and continued strong, less lumpy performance in ATS. Sundaram Nagarajan stated that Nordson does not have significant exposure to DRAM pricing but would benefit from capacity additions in the traditional memory space.

Robert Jamieson followed up on FX incrementals, asking if the 25% drop-through applies across other segments. He also inquired about the drivers for reaching the high end of the full-year guidance, specifically if it would require acceleration in auto or specialty medical. Lastly, he asked about the impact of DRAM pricing on Nordson's bill of materials and potential opportunities from capacity constraints.

Answer

Daniel Hopgood, EVP and CFO, confirmed that the 25-30% FX drop-through is a good benchmark across segments, though it varies slightly, and the FX impact will lessen later in the year. Regarding guidance, Sundaram Nagarajan, President and CEO, emphasized a balanced approach. Daniel added that the high end would be driven by further inflection in general industrial and automotive demand, along with continued strength in ATS, while medical is expected to maintain stable mid-single-digit growth. Sundaram also stated that Nordson does not have significant exposure to DRAM pricing but benefits from capacity adds in the traditional memory space.

Robert Jamieson from Vertical Research Partners asked about the bridge from the midpoint of the full-year EPS guidance (9% growth) to the upper end of the long-term target range (10%-12%), inquiring if it would be driven by operational execution, share repurchases, or upside in end markets. He also asked about the sustainability of recent strong free cash flow conversion and working capital improvements.

Answer

Daniel Hopgood, Executive Vice President and CFO, explained that achieving the upper end of the EPS target would come from stronger growth in the base business and potential acquisitions, which are not factored into the current guidance. He affirmed that working capital improvements are sustainable and offer further opportunities, expecting continued strong cash flow performance.

Robert Jamison asked about the bridge from the 9% midpoint of the full-year EPS guidance to the upper end of the 10%-12% long-term target range, considering operational execution, share repurchases, and market upside. He also inquired about the sustainability of recent strong free cash flow conversion and working capital improvements.

Answer

CFO Daniel Hopgood explained that bridging to the upper end of EPS guidance would involve stronger growth in the base business (beyond the 3.5% midpoint) and potential additive acquisitions, which are not currently factored into the guidance. He confirmed that working capital improvements are targeted, sustainable, and offer further opportunities, leading to expectations for continued strong cash flow performance.

Robert Jamieson followed up on the EA impairment, asking about the timing of revised expectations, the proportion of impact from industry forecasts versus EA-specific issues, the competitive landscape in high power electronic load and supply test, and whether EA's differentiation is holding. He also requested more information on data center activities within the Test and Measurement communications segment, including whether it's power or signal-side, and the sizing of data centers and defense/government within that communications bucket.

Answer

Neil Reynolds (CFO) reiterated that the EA write-down was triggered by changes in EV subsidies and subsequent write-downs by large auto OEMs over the past couple of quarters. Tami Newcombe (President and CEO) added that while the automotive opportunity is smaller, EA's technology is being redirected to other energy storage applications. For Test and Measurement communications, Tami Newcombe clarified that 70-80% is aerospace and defense, with the remainder directly to hyperscalers. She noted that AI data centers broadly create additional electronic test and measurement opportunities across various components.

Robert Jamieson of Vertical Research Partners inquired about the weakness in the automotive and EV end markets within Test and Measurement, asking about the geographic concentration and workflow impact. He also sought to quantify the size of the automotive business for the company.

Answer

President and CEO Tami Newcombe clarified that the automotive exposure is predominantly in EVs and batteries, concentrated in Europe, and that the weakness impacts the entire workflow from R&D to production. She noted the market is stabilizing at a lower level. She quantified the automotive end market as being in the 5% range of total company revenue.

Robert Jamieson asked for an update on AMETEK's overall short-cycle business experience and outlook for next year, and later inquired about the M&A pipeline and areas of interest.

Answer

David Zapico, Chairman and CEO, clarified AMETEK is more mid-cycle than short-cycle, noting an upward trend after years of negative PMIs, with solid performance in automation, med tech, and aerospace & defense, and new business wins. He stated the M&A pipeline remains very strong with high-quality deals across existing end markets, emphasizing disciplined returns and AMETEK's capacity to fund them, aiming to differentiate performance through M&A and operational excellence.

Robert Jamieson, a Senior Equity Research Analyst at Vertical Research Partners, asked for AMETEK's overall view on its short-cycle business experience, particularly after previously discussing a bottoming, and sought an update on the M&A pipeline, including areas of interest and deal sizes.

Answer

Chairman and CEO David Zapico clarified that AMETEK's business is more mid-cycle than short-cycle and is now in an upward trend, with solid performance in automation, medtech, and aerospace & defense. He noted the company is well-positioned for growth as the industrial economy improves. Regarding M&A, Zapico stated the pipeline remains very strong with numerous high-quality deals across all existing end markets, varying in size, and confirmed significant financial capacity and discipline in pursuing strategic opportunities.

Robert Jamieson asked what scenario would be required for the company to reach the high end of its full-year EPS guidance. He also requested more detail on the performance and second-half outlook for the Test and Measurement business, particularly concerning AI-related drivers.

Answer

Executive Chairman Robert Mehrabian stated that hitting the high end of guidance depends on the performance of the short-cycle businesses. CEO George Bobb added that the Test and Measurement business grew 5.5% organically in Q2, its third straight growth quarter, driven by protocol analyzer sales for high-speed applications like PCI Express, which is tied to AI. He expects the business to be up low-single digits for the full year.

Robert Jamieson asked what scenario would be required for the company to reach the high end of its full-year EPS guidance. He also requested more detail on the performance and outlook for the Test and Measurement business.

Answer

Executive Chairman Robert Mehrabian stated that hitting the high end of guidance depends on the continued performance of the short-cycle businesses. President & CEO George Bobb reported that the Test and Measurement business grew 5.5% organically, its third consecutive quarter of growth, driven by strong sales of protocol analyzers for high-speed communications and AI-related applications. The full-year outlook for the business is for low-single-digit growth.

Robert Jamieson asked what scenario would be required for Teledyne to reach the high end of its full-year EPS guidance. He also requested more detail on the Test and Measurement business performance and its second-half outlook, particularly around AI-related drivers.

Answer

Executive Chairman Robert Mehrabian stated that hitting the high end of guidance depends on the performance of short-cycle businesses. CEO George Bobb added that the Test and Measurement segment grew 5.5% organically in Q2, its third straight growth quarter, driven by protocol analyzer sales for high-speed applications. The company expects low-single-digit growth for the full year in this segment.

Robert Jamieson of Vertical Research Partners asked for clarification on the tariff rate assumptions in the guidance, the company's capital allocation priorities between deleveraging and buybacks, and end-market trends in the test and measurement business.

Answer

Executive Chairman Robert Mehrabian clarified that the guidance assumes a blended tariff rate of about 15% across the portfolio. On capital allocation, he stated that acquisitions are the clear priority, with share buybacks being opportunistic and reserved for periods when the stock price is unusually low. He described the test and measurement business as a high-margin but cyclical market, driven by high-end oscilloscopes and protocol analyzers.

Robert Jamieson from Vertical Research Partners asked about the drivers of margin performance in both the Industrial and Smart Infrastructure segments. He also inquired about learnings from the combined solutions sales force and sought details on free cash flow management.

Answer

CFO Jeremy Parks attributed the strong overall margin to favorable mix and strong performance in the Industrial segment, while the sequential margin dip in Smart Infrastructure was mainly due to lower revenue leverage. CEO Ashish Chand noted that the combined sales force is finding that customers prefer a multi-step journey to IT/OT convergence, which is slower but creates stickier relationships. Parks added that the focus for free cash flow is on EBITDA growth and targeted capital investment, aiming to move free cash flow as a percentage of revenue closer to 10%.

Robert Jamieson inquired about the macroeconomic assumptions embedded in the Q1 guidance, specifically in relation to recent PMI data. He also asked for a reminder of Belden's typical quarterly revenue seasonality throughout a normal year.

Answer

CEO Ashish Chand explained that the Q1 guide is prudent, reflecting seasonality and short-term uncertainty, which may delay the positive impact of improving macro factors like PMI. CFO Jeremy Parks outlined the typical seasonality, noting Q1 is the annual low point, followed by a significant rebound in Q2, with Q2, Q3, and Q4 revenues being broadly similar, absent any major changes in market conditions.

Robert Jamieson from Vertical Research Partners asked about the gross margin outlook for the Smart Infrastructure business as volumes recover and requested a performance breakdown of the underlying markets within both the Smart Infrastructure and Automation Solutions segments.

Answer

CFO Jeremy Parks stated that Belden expects gross margins to improve by 50 to 75 basis points annually, assuming mid-single-digit growth, with the company targeting 25-30% incremental EBITDA margins. CEO Ashish Chand added that Smart Infrastructure is seeing a pickup in activity from cable operators upgrading to DOCSIS 4.0. For the Automation segment, he clarified that excluding the weak discrete vertical, the segment grew in the mid-single digits, driven by strength in the process and energy verticals, while mass transit remained stable.

Robert Jamieson of Vertical Research Partners asked about the focus of the Walmart Robotics acquisition work (software vs. hardware) and the status of international expansion conversations.

Answer

CEO Rick Cohen explained that the Walmart Robotics solution will be accelerated by applying Symbotic's existing hardware and software, and the combination of the two companies' technologies is what excited Walmart. On the international front, he mentioned recent European tours and time spent in Mexico, where he sees a huge opportunity due to less mature supply chains, creating demand for Symbotic's palletizing solutions for both large and small stores.