Steve Tusa

Steve Tusa sought clarification on whether Q1 orders momentum is expected to sustain the 5-6% range seen in Q4. He also questioned the lower operational EPS contribution in Q1 2026 ($0.05) compared to the full-year guidance ($0.50), asking if there were specific reasons for weaker incrementals aside from the software impact.

Answer

President and CEO Lal Karsanbhai confirmed that Q1 orders momentum should sustain the 5-6% range. CFO Michael Baughman explained that the Q1 operational EPS is impacted by a tough comparison to Q1 2025, which benefited from strong discretionary cost containment and project closeouts, resulting in a high EBITDA margin.

Steve Tusa sought confirmation that first-quarter orders would sustain the 5-6% momentum seen in Q4. He also inquired about the reason for the weaker Q1 EPS incrementals from operations ($0.05) compared to the full-year projection ($0.50), excluding the software impact.

Answer

Lal Karsanbhai (President and CEO) confirmed that Q1 orders are expected to sustain the momentum. Michael Baughman (EVP and CFO) and Lal Karsanbhai explained that the lower Q1 incrementals are due to a tough comparison with Q1 2025, which benefited from strong discretionary cost containment and favorable project closeouts, resulting in 265% leverage.

Steve Tusa of JPMorgan Chase & Co. asked about the intra-quarter trend for orders in Q3 and sought clarity on the growth outlook for the software business into fiscal 2026, particularly concerning any challenging comparisons for AspenTech.

Answer

President & CEO Lal Karsanbhai stated that MRO bookings were consistent throughout the quarter, with some timing variations on large capital projects, but no underlying weakness. COO Ram Krishnan confirmed that AspenTech's ACV growth is expected to remain strong, in the high single to double-digit range, with no concerning comps anticipated for next year.

Steve Tusa asked about the performance of Fortive's Facilities and Asset Lifecycle (FAL) software business, including any construction-related drags and how customers are treating IT spending in this area, also inquiring about FAL's organic growth in the quarter.

Answer

President and CEO Olumide Soroye highlighted continued growth in the FAL platform, with strong pull-through from ServiceChannel, especially with AI-powered work order insights. He noted that customers view facilities software as a valuable way to scale AI impact. Gordian's planning and capital planning software also performed well, separate from procurement. CFO Mark Okerstrom stated that FAL's total growth in the quarter was 'helpful to the fleet average.'

Steve Tusa inquired about the performance of Fortive's Facilities and Asset Lifecycle (FAL) software business, specifically asking about construction-related pressures, IT spending trends, and the impact of AI on customer budgets. He also requested the total organic growth rate for FAL in the quarter.

Answer

Olumide Soroye, Fortive's President and CEO, reported continued growth in the FAL platform, with strong pull-through for ServiceChannel, especially with new AI-powered work order insights. He noted that customers view facilities software as an effective way to scale AI impact, leading to strong IT spending in this area. Gordian's planning software also performed well, with new product launches contributing to growth. Mark Okerstrom, Fortive's CFO, stated that FAL's total growth in the quarter was helpful to the fleet average.

Steve Tusa of JPMorgan Chase & Co. questioned the rationale for the new, simplified guidance policy and asked if the company's approach to bolt-on M&A has changed.

Answer

CFO Mark Okerstrom explained the simplified guidance aims to focus on the multi-year value creation plan. CEO Olumide Soroye detailed a more disciplined M&A approach, emphasizing a dynamic balance between buybacks and accretive bolt-ons, with elevated strategic scrutiny and a focus on proprietary deal cultivation.

Steve Tusa of JPMorgan Chase & Co. questioned the company's new guidance philosophy of not providing a specific organic growth forecast. He also asked about the company's approach to bolt-on M&A, probing whether there was a reset in the process or a change from Fortive's historical strategy.

Answer

CFO Mark Okerstrom explained that providing only annual adjusted EPS guidance is intended to simplify investor communications and maintain focus on the company's multi-year value creation plan. CEO Olumide Soroye detailed a 'very different' capital allocation strategy, emphasizing a dynamic balance between share repurchases and accretive bolt-on M&A, all subject to elevated financial and strategic scrutiny. He noted they are 'open for business' but will maintain a very high bar for deals.

Steve Tusa asked for an update on customer retention, specifically if it's improving sequentially and if Otis still targets an increase year-over-year. He also inquired if the acceleration in repair and stable maintenance would lead to an overall acceleration in services revenue growth for Q4, potentially from 6% to nearly 7%. Finally, he sought clarification on the new equipment margin decline, questioning if it was 150 basis points or 130 basis points.

Answer

Judy Marks, Chair, CEO, and President, Otis Worldwide Corporation, indicated that retention has very slightly improved, but it's a long-term journey with no anticipated step-function improvement, emphasizing ongoing investments in customer focus. Cristina Méndez, EVP and CFO, Otis Worldwide Corporation, projected Q4 services growth to be around 6%, with repair accelerating to 10% or above, but modernization growth moderating to 10% due to the calendarization of China's bond execution. Ms. Méndez clarified that the new equipment margin decline for the full year is expected to be approximately 130 basis points.

Steve Tusa, MD and Senior Equity Analyst at JPMorgan Chase, inquired about the sequential improvement in Otis's maintenance retention rate and whether a year-over-year increase is still targeted for year-end. He also questioned the expected services revenue growth for Q4, anticipating an acceleration towards 7%, and sought clarification on the full-year new equipment margin decline.

Answer

Judy Marks, Chair, CEO, and President, stated that retention has "very slightly improved," emphasizing that rebuilding trust and improving retention is a continuous, day-to-day effort rather than a sudden step function. Cristina Méndez, EVP and CFO, projected Q4 services growth to be around 6%, with repair accelerating to 10% or above, but modernization growth moderating to 10% due to the calendarization of China bond projects. She clarified that the full-year new equipment operating margin decline is expected to be 130 basis points, not 150 basis points.

Steve Tusa from JPMorgan Chase & Co. asked for clarity on how Otis is positioned for the next year based on its backlog, particularly in China, and sought confirmation that China orders are expected to improve sequentially.

Answer

Chair, President & CEO Judith Marks confirmed that China orders are expected to improve sequentially. She contrasted the outlook, stating that while the new equipment backlog in China will be down entering 2026, the backlog in the Americas is strengthening (up 5%), Asia Pacific is up double-digits, and the rest of the world ex-China is growing strongly.

Steve Tusa from JPMorgan Chase & Co. inquired about the outlook for 2026 based on the current new equipment backlog in China and sought confirmation that Chinese orders are expected to improve sequentially.

Answer

CEO Judith Marks confirmed that China orders are expected to improve sequentially. She provided a global backlog overview, stating the Americas backlog is up 5% and Asia Pacific is up double-digits, positioning them well for 2026. However, she noted that while China's modernization and service backlogs will be up, the new equipment backlog will be down entering next year. She also contextualized that China now represents about 10-12% of global revenue.

Steve Tusa from JPMorgan Chase & Co asked about the pricing breakout by segment for the quarter, the puts and takes on margins for next year, and the visibility on the bottoming of the Aclara and grid infrastructure drag. He also questioned if other businesses were being crowded out by heavy T&D investment.

Answer

Bill Sperry (EVP and CFO, Hubbell Incorporated) stated that pricing for the quarter was in line with the 3% full-year range and reasonably balanced between segments. He deferred detailed 2026 margin guidance but noted the long-term framework includes investments and wraparound price. Gerben Bakker (Chairman, President and CEO, Hubbell Incorporated) added that price-cost-productivity would continue to be managed. Bakker explained that grid automation's future projects would be less lumpy and more predictable, focusing on MRO and public power. Sperry and Bakker debated the 'crowding out' point, concluding that while T&D investment is strong, distribution also shows healthy growth, and Hubbell is well-positioned across all three markets.

Steve Tusa asked for the breakout of pricing by segment for the quarter. He also questioned the puts and takes on margins for next year, including the impact of restructuring costs and any potential crowding out of distribution investments due to heavy T&D spending.

Answer

Bill Sperry, EVP and CFO, stated that pricing for the year was in the 3% range, reasonably balanced between segments. He deferred detailed 2026 margin guidance to the January call but noted the long-term framework includes 25-30% incrementals, implying continued investments. Gerben Bakker, Chairman, President, and CEO, added that price-cost-productivity management would continue. Regarding Aclara/grid infrastructure, Bakker noted it's now more MRO-based with smaller, more predictable projects. Sperry and Bakker debated the 'crowding out' effect, concluding that while T&D spending is high, growth is expected across all three markets, and Hubbell is well-positioned regardless of where investment dollars flow.

Asked for specifics on price realization in Q4 and the assumption for 2025, the nature of pricing discussions with VIP utility customers, and the expected earnings seasonality for Q1 2025.

Answer

Price realization in Q4 was slightly over 1% overall, higher in Electrical than Utility. For 2025, pricing discussions with customers are constructive and proactive, focused more on timing than feasibility, especially concerning potential tariffs. For seasonality, Q1 2025 EPS is expected to be in the low 20s percentage of the full year, similar to 2024, though the Q1 organic growth rate will be slightly below the full-year guide.

Steve Tusa asked for a breakdown of the price versus mix components in Carrier's CSA residential business for the third quarter. He also sought clarification on whether non-data center applied equipment in CSA was still showing growth.

Answer

CEO David Gitlin specified that for Q3, the breakdown in CSA residential was 3% price and 8% mix. He confirmed that non-data center applied equipment in the Americas was indeed up in the low teens during the quarter.

Steve Tusa of JPMorgan Chase & Co. asked for a breakdown of the price and mix components within the low double-digit increase for residential in Q3, specifically how much was attributed to price versus mix. He also sought clarification on whether non-data center applied equipment in CSA was still up in the quarter, given the overall applied business growth.

Answer

CEO David Gitlin clarified that for Q3, the residential price/mix breakdown was 3% price and 8% mix. He confirmed that non-data center applied equipment in CSA was indeed up in the low teens for the quarter.

Steve Tusa of JPMorgan Chase & Co. sought a detailed breakdown of the assumptions for the U.S. residential and light commercial businesses in the fourth quarter, particularly in the context of the company's full-year 20% adjusted EPS growth forecast.

Answer

SVP & CFO Patrick Goris specified that Q4 residential sales are forecasted to be down about 15%, with volume down approximately 23% against a very tough prior-year comparison. Chairman & CEO David Gitlin added that light commercial is expected to be flattish in Q4, benefiting from an easier comp and encouraging recent trends in orders and demand from small and medium businesses.

Steve Tusa of JPMorgan Chase & Co. questioned the trend in Building Automation (BA) margins, noting their strength in recent quarters but a slight weakness in Q3, asking about the moving parts and the outlook for 2026. He also inquired about any plans to change pension accounting and reevaluate the earnings format before the Aerospace spin-off.

Answer

CFO Mike Stepniak expressed satisfaction with BA's performance, attributing Q3's margin dynamics to mix between projects and products, and projected continued sequential margin expansion into 2026. Chairman and CEO Vimal Kapur reinforced BA's alignment with Honeywell's growth and margin expansion strategy, expecting other businesses to follow suit in 2026. Mike Stepniak confirmed that pension treatment is on the agenda for 2026 discussions to simplify reporting and improve visibility, but no specific announcement is ready.

Steve Tusa inquired about the trend in Building Automation (BA) margins, noting their strength in recent quarters but a slight weakness in Q3, and asked for the outlook into 2026. He also asked about potential changes to pension accounting and the reevaluation of the earnings format.

Answer

Mike Stepniak, Senior Vice President and Chief Financial Officer, expressed satisfaction with BA's performance, attributing Q3's margin dynamics to mix between projects and products, with sequential margin expansion expected into 2026. Vimal Kapur, Chairman and Chief Executive Officer, reinforced that BA's performance aligns with Honeywell's growth and margin expansion strategy. Mike Stepniak confirmed that pension accounting changes are on the agenda for 2026 to simplify reporting.

Steve Tusa of JPMorgan Chase & Co. sought to clarify the full-year margin guidance, asking if the Building Automation segment margin was approaching 28% for the year. He also asked about the status of the financial contingency that was put in place last quarter.

Answer

SVP & CFO Mike Stepniak noted that Building Automation incrementals are very high, especially on the product side. VP of Investor Relations Sean Meakim suggested 28% was likely aggressive for the full year but within the business's capability. Chairman & CEO Vimal Kapur confirmed BA would be the highest margin business in 2025. Regarding the contingency, Mike Stepniak stated that while they have better visibility, pluses and minuses (stronger BA, softer energy projects) leave them in a similar net position as last quarter.

Steve Tusa from JPMorgan Chase & Co. asked for clarification on the full-year margin guidance, specifically if the Building Automation segment margin was expected to approach 28%. He also inquired about the status of the tariff-related contingency hedge mentioned in the previous quarter.

Answer

VP of Investor Relations Sean Meakim stated that while a 28% full-year margin for Building Automation is aggressive, the business is capable of achieving it. Chairman & CEO Vimal Kapur confirmed it will be Honeywell's highest-margin business in 2025. Regarding the contingency, SVP & CFO Mike Stepniak said the company has better visibility and confidence in the current guide, as puts and takes (softer long-cycle projects, better short-cycle orders) have balanced out.

Steve Tusa asked for an update on Vertiv's long-term margin outlook, specifically regarding the 25% target by 2029, the expected incremental margins (30-35% range), and how tariffs or new project types like modular work might impact these incrementals.

Answer

David Fallon, CFO of Vertiv, confirmed that the path to the 25% long-term margin target by 2029 remains intact, with an expectation for incremental margins in the 30-35% range. He acknowledged that tariffs created some noise in 2025 but anticipates that 2026 will not face tariff headwinds, potentially even seeing a tailwind, and that the company expects to remain within the target incremental margin range.

Steve Tusa questioned Vertiv's long-term margin outlook, specifically if the company remains on track for its 2029 target of 25% adjusted operating margin, and the expected incremental margins, considering tariff impacts and investments in modular work.

Answer

CFO David Fallon confirmed that the path to the 25% long-term margin target by 2029 remains intact, with long-term incremental margins assumed to be in the 30-35% range. He acknowledged tariffs as a significant headwind in 2025 but expects to be back on track, noting that growth investments are made upfront for future returns.

Steve Tusa of JPMorgan Chase & Co. asked about the 2026 margin outlook, questioning if it could be a more 'normal' year for margin expansion given the strong expected exit rate for 2025.

Answer

CEO Giordano Albertazzi responded that the direction coming out of 2025 is encouraging for the company's long-term margin trajectory. He affirmed that Vertiv's long-term margin objectives remain correct, suggesting alignment with the idea of continued improvement.

Steve Tusa of JPMorgan Chase & Co. inquired about Vertiv's margin outlook for 2026, noting the strong implied exit rate for 2025 and asking if next year could represent a more normalized margin environment despite ongoing investments.

Answer

CEO Giordano Albertazzi responded that the company's trajectory exiting 2025 is encouraging for its long-term goals. He affirmed his confidence in Vertiv's previously stated long-term margin objectives, suggesting 2026 would align with that path.

Steve Tusa asked for quantification of the over-absorption benefit in Q3 and the expected under-absorption hit in Q4. He also inquired if Lennox was observing any competitors getting out of line with price competition, particularly with online pricing or attempts to gain market share.

Answer

CFO Michael Quenzer stated there was no significant absorption benefit or hit in Q3, but Q4 will see an impact, noting that 15-20% of COGS are factory costs. CEO Alok Maskara clarified that Q3 was neutral, with the full hit expected in Q4. Alok Maskara stated the industry remains competitive with account-by-account battles, but OEMs have generally maintained pricing for tariffs. He reiterated that online skirmishes are more between contractors and consumers, with no significant change in OEM competitive behavior beyond the low-margin R&C business.

Steve Tusa asked for quantification of any over-absorption benefit in Q3 and the expected under-absorption impact in Q4. He also inquired about any signs of competitors engaging in aggressive price competition or market share grabbing, beyond Lennox's decision to exit low-margin R&C business.

Answer

CFO Michael Quenzer clarified there was no significant absorption benefit/hit in Q3; the impact will be in Q4, noting that 15%-20% of COGS are factory costs. CEO Alok Maskara confirmed Q3 was neutral on absorption as production was ramped down, with the full hit in Q4. On pricing, Alok Maskara stated the industry remains competitive but OEMs have maintained pricing for tariffs and A2L. Online skirmishes are between contractors and consumers, not OEMs and contractors, with no significant change in competitor behavior beyond Lennox's decision to exit low-margin R&C business.

Steve Tusa from JPMorgan Chase & Co. sought to clarify the full-year cost inflation figures, asking how much of the total impact has been booked year-to-date. He also asked about the timing of when recent price increases were fully reflected in Q2 results.

Answer

CFO Michael Quenzer clarified that of the total expected cost increase for the year, about $80 million was incurred in the first half. CEO Alok Maskara added that the new pricing was not fully effective for the entire quarter, stating it was booked 'midway through the quarter' as the product mix shifted more to R-454B and the tariff-related pricing took effect.

Steve Tusa inquired about the Pool segment's margin performance, noting a weaker-than-expected productivity trend and a challenging comparison to the prior year. He also asked about the observed pickup in Pool volume, interpreting it as a potential sign of life for replacement of the aged installed base, and how Pentair is balancing this volume growth against pricing strategies.

Answer

CFO Bob Fishman confirmed that the company is on track for its $80 million transformation savings target, with Pool's ROS expected to rebound in Q4 despite a challenging Q3 comparison. He highlighted strategic investments in Pool for future top-line growth, including sales plays, new products, and digital solutions, aiming for an effortless customer experience. CEO John Stauch added that Q3 Pool performance felt more predictable, with stable new pool builds and aftermarket conditions, and expressed encouragement for a volume-based growth plan next year with prices holding. He noted that price read out is approximately 4% for the company and 5% for Pool, with Pool's 7% guide comprising 5% price, 1-2% from the Gulfstream acquisition, and flat market volume.

Steve Tusa asked about the weaker-than-expected productivity in the Pool segment margins, the full-year outlook for the company, and whether the picking up volume in Pool indicates a bounce in replacement of the age-installed base, and how this is balanced against pricing.

Answer

CFO Bob Fishman addressed the transformation commitment, Pool's ROS rebound in Q4, and the strategic investment in Pool for future top-line growth. CEO John Stauch added that Pool's Q3 felt more predictable, with stable new pool builds and aftermarket, and that prices are holding. Bob Fishman further clarified Pool's price and volume contributions for the year.

Steve Tusa of JPMorgan Chase & Co. asked for clarification on the timing of price realization, specifically whether the full impact of recent increases was reflected in Q2 results. He also inquired about the outlook for Q4 and any specific caution embedded in the guidance for that period.

Answer

EVP and CFO Bob P. Fishman confirmed that the full run-rate of pricing actions was not seen in Q2 and would accelerate in Q3 and Q4, alongside higher tariff headwinds. He added that the Q3 guide contains more caution, with Q4 expected to be more about channel partners positioning for the 2026 season, pending potential interest rate reductions.

Steve Tusa sought confirmation on the key components of the full-year profit bridge, including productivity savings and inflation, and asked for channel feedback regarding potential tariff-driven demand destruction in the Pool segment.

Answer

CFO Bob Fishman confirmed the analyst's assumptions for the profit bridge were correct, including $80 million in net productivity and a price increase of around 5% to offset tariffs. CEO John Stauch noted that there has been no significant channel feedback on demand destruction yet, adding that the 80/20 strategy has streamlined communication with key distributors, who have been notified of the phased price increases.

Steve Tusa from JPMorgan Chase & Co. asked for an updated outlook on pricing for the remainder of the year and into next year. He also inquired about the potential timing for large U.S. investment projects to materialize into orders.

Answer

CFO Christian Rothe stated that full-year price realization will be 2%+, up from the initial 1% forecast, partly due to tariff-related actions. For next year, he expects to continue realizing price. CEO Blake Moret noted that while the funnel for large capacity projects is significant for next year, the timing depends on customers gaining cost and demand certainty, with recent wins shifting toward Rockwell's core industries like life sciences.

Steve Tusa of JP Morgan asked about the pricing outlook for Q4 and the next fiscal year, and inquired about the timing and potential triggers for the release of large U.S. capacity investment projects.

Answer

CFO Christian Roethe projected full-year price realization at 2%+, partly due to tariff-based actions, and expressed confidence in continued price realization next year. CEO Blake Moret noted that large project releases are pending greater cost certainty for customers, particularly around tariffs and demand. He believes a calmer trade environment and the new tax bill's benefits for smaller manufacturers will help accelerate these investment decisions.

Steve Tusa from JPMorgan Chase & Co. asked for clarification on the Electrical Americas organic backlog growth and whether total electrical orders on a TTM basis were expected to turn positive. He also asked if the new production capacity impact is reflected in the second-half guide.

Answer

CEO Paulo Ruiz confirmed the 17% backlog growth in Electrical Americas. CFO Olivier Leonetti clarified that TTM orders for the total electrical sector had already turned positive. Ruiz affirmed that the impact of new capacity is factored into the second-half guidance, with six projects ramping up in H2 2025 and more to follow in 2026.

Steve Tusa of JPMorgan Chase & Co. asked for a broad assessment of the current electronics cycle and inquired about the potential impact of new 'direct to the Board' chip manufacturing processes on DuPont's content.

Answer

Jon Kemp, President of the Electronics division, described a mixed cycle with growth currently driven by AI applications while consumer markets remain weak. He noted that DuPont is well-positioned for new chip assembly technologies due to its broad portfolio spanning chip fabrication and advanced packaging.

Steve Tusa of JPMorgan Chase & Co. requested an overview of the current electronics cycle, including the status of consumer market recovery, and asked about the potential impact of new chip assembly methods on DuPont's content.

Answer

Jon Kemp, President of the Electronics division, described a mixed environment where AI is the primary growth driver, while other markets show early signs of stabilization. He views new assembly technologies as an opportunity, given Qunity's end-to-end portfolio which facilitates deeper customer collaboration on system integration.

Steve Tusa from JPMorgan Chase & Co. asked for a breakdown of the price and mix expectations for the residential business in the second half. He also sought to reconcile the $150 million revenue headwind with previous estimates of pre-buy activity and questioned the slight deceleration in services growth.

Answer

EVP & CFO Chris Kuehn clarified that second-half residential price/mix is expected to be in the low-double-digit range, with volumes down. Chair & CEO Dave Regnery explained the $150 million headwind includes both elevated channel inventory of $100-125 million and the lingering impact from the cylinder shortage. Regarding services, Regnery stated he was very happy with low-teens growth and pointed to accelerating connected solutions as a key future driver.

Steve Tusa of JPMorgan questioned the second-half margin outlook, suggesting the implied incremental margins seemed conservative, and asked about the potential EPS growth algorithm for 2026 given current momentum and cost savings.

Answer

President and CEO Richard Tobin clarified that aggregate incremental margins are expected to moderate in the second half due to a business mix shift toward relatively lower-margin segments. For 2026, Tobin expressed strong optimism, stating that a full year of current margin levels combined with a larger roll-forward of cost savings will drive very attractive incremental margins on any revenue growth.

Steve Tusa of JPMorgan Chase & Co. asked for the embedded assumption on foreign exchange impact and for more detail on the specific areas of weakness within the consumer electronics market.

Answer

CFO Anurag Maheshwari clarified that the full-year FX headwind is now expected to be about $0.05 per share, with the impact concentrated in the first half due to year-over-year hedge benefit comparisons. CEO William Brown added that consumer electronics demand is softening from a strong first half, with the slowdown seen across TVs, tablets, phones, and notebooks.

Steve Tusa asked for color on Q2 organic growth expectations and inquired about any potential impact from government pressures on higher education organizations.

Answer

EVP and CFO Jason Conley projected Q2 organic growth would accelerate from Q1, with the Network segment improving to mid-singles and TEP to the high-single-digit range. President and CEO Neil Hunn stated that government education funding levels are not expected to be cut, merely administered differently via block grants, and they have seen no slowdown at the customer level.

An analyst from JPMorgan Chase & Co. inquired about the expected progression of the CH-53K and Gulfstream programs within the 2025 outlook and the anticipated ramp-up of AEC segment margins from the 6% exit rate to the guided 13.5% range for 2025. A follow-up question addressed the free cash flow outlook for 2025 after a strong 2024.

Answer

CEO Gunnar Kleveland stated that the 2025 plan reflects current performance projections, with a long-term goal for AEC margins to reach the mid-to-high teens after adjusting for GIS cost allocations. CFO Robert Starr clarified that the Q4 EAC adjustments reflect the best estimate for go-forward margins embedded in the 13.5% outlook. Regarding cash flow, Starr projected a range of $90 million to $120 million for 2025, with an internal target to convert over 90% of net income to free cash flow.

The analyst sought confirmation that the margin guidance adjustment was solely due to FX and asked if Altair's strength in aerospace, which contrasts with a competitor's weakness, indicates direct market share gains.

Answer

The CFO confirmed that the margin guidance change was entirely due to foreign exchange impacts. The CEO stated that while not pointing to a specific competitor, he believes Altair is gaining market share in aerospace and is performing well regardless of broader market trends.