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President and CEO Aaron P. Jagdfeld explained that the new large megawatt diesel generators target data centers and other C&I markets. He confirmed the go-to-market strategy leverages the existing direct sales and service network built for telecom customers. Jagdfeld highlighted in-house customization as a key differentiator, enabling better control over quality, cost, and lead times compared to competitors.

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President and CEO Aaron P. Jagdfeld explained that while he would not provide a discrete TAM figure, long lead times from existing suppliers indicate ample market opportunity. He highlighted that Generac's brand, global footprint, and aftermarket support capabilities are key strategic advantages. Jagdfeld noted that the U.S. certified products will begin shipping late in the year, resulting in a minimal sales contribution for 2025, but dialogues with data center customers are already encouraging.

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President and CEO Aaron P. Jagdfeld confirmed that HSB revenue growth is expected to be slightly above the high-teens forecast for the overall residential segment. He noted that activations returned to growth in Q3 and should accelerate in Q4. Regarding margins, Jagdfeld stated the current drag from energy technology is 350-400 basis points and reiterated the goal of reaching breakeven by the end of 2026, driven by new products like Power Cell 2 and the ecobee ecosystem.

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President and CEO Ronald Konezny attributed the Annual Recurring Revenue (ARR) growth to two primary levers: attaching software and services to create a full solution, and offering a subscription-based model similar to Ventus. He confirmed the channel is embracing this model. Regarding inventory, Konezny stated the situation is improving, affecting a smaller group of customers, and noted that weaker revenue in the APAC region was also a factor.

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Executive James Loch explained that the shift from one-time to recurring revenue is an expected part of Digi's strategy, causing some noticeable transfers. Regarding Q2 guidance, Loch stated that Q1 benefited from a highly favorable product mix that boosted gross margins to a level not expected to be repeated in Q2, which is the primary driver of the slight EBITDA decline.

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President and CEO Ronald Konezny confirmed the fiscal 2025 outlook is impacted by both the strategic shift towards recurring revenue and the discontinuation of legacy product lines with supply chain challenges. He clarified the company aims to be net debt-free by the end of calendar year 2025, driven by continued cash flow from inventory reduction and lower interest payments.

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Executive Christopher Tucker confirmed that annualizing the current forecast for Maritime Solutions and applying a low double-digit growth rate is a reasonable approach for 2026. He attributed strong Utility margins to a favorable mix toward the higher-margin Doble business and specific products within it. For A&D, margin drivers included favorable program mix, price realization, and strong Navy business. He also detailed that pro forma leverage was ~2.2x at closing and is expected to fall below 2.0x by year-end, providing specifics on interest rates and debt paydown plans.

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Executive Bryan Sayler explained that Doble's strength is durable, driven by broad utility capital investments in grid modernization and is not a one-time event. Executive Christopher Tucker attributed the margin outperformance to strong leverage in A&D as it clears backlog and favorable product mix at Doble, which flowed through to the full-year EPS guidance. Bryan Sayler confirmed that divesting VACCO would be 'strongly accretive' to margins for both the A&D segment and ESCO overall. Christopher Tucker added that the company is in the 'mid-to-late innings' of working through past-due commercial aerospace backlog, with positive impacts on working capital already materializing.

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CEO Bryan Sayler stated that ESCO prudently forecasts Boeing build rates below published figures and is confident it can offset any potential slowness with work from other customers. CFO Christopher Tucker confirmed that when guidance is updated for the SM&P acquisition, it will detail impacts like amortization and other costs. He added that there is no significant seasonality to flag for the SM&P business at this time.

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CEO William Burns expressed confidence that the price increases, which are consistent with competitor actions, will stick but noted they were a necessary step to offset tariffs. He clarified that while demand visibility has improved, overall uncertainty has increased due to the global trade environment, though customer projects continue to move forward.

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CEO William Burns explained that while the backlog is solid, uncertainty around budgets and customers staging deployments over longer periods tempers expectations for large deals. CFO Nathan Winters added that channel inventory levels are well-balanced globally, with sell-in and sell-through aligned.

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CEO William Burns explained that Zebra typically has about six months of visibility into large projects. This planning cycle involves discussions on device needs, use cases, and solution selection. He noted that while the cycle is predictable, final deployment timing can vary. He expects to gain more visibility for H1 2025 during Q1 2025, mirroring the pattern seen in 2024.

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Chairman and CEO D.G. Macpherson stated that while private brands are more China-centric, the exposure is not dramatically different from many national brands. He believes the biggest risk is potential supply shortages in key categories, not a major profit impact from brand shifting. He added that Grainger is positioned to gain share through the cycle but is waiting for more clarity on the tariff situation before making aggressive moves.

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Chairman and CEO D.G. Macpherson explained that the shift to a volume metric was due to significant dislocation in the price component. He noted that the 2025 guidance is at the low end of the range because the company is slowing its seller coverage expansion to ensure better execution. Regarding government spending, he stated that the majority is state and local, with the federal portion being primarily military, which is not expected to see a negative impact.

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SVP and CFO Dee Merriwether noted that resilient market pricing was stronger than initially anticipated, while market volume was likely flat to down, against which Grainger achieved positive volume growth. Chairman and CEO D.G. Macpherson pointed to relative revenue growth versus competitors and positive customer feedback on the value Grainger provides as evidence of successful share capture.

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CEO Gerben Bakker stated that while priorities can shift, the overall upward revision of IOU budgets is encouraging, with strength in both transmission and distribution. He noted that historically, spending peaks tend to move out, sustaining the investment cycle. EVP & CFO Bill Sperry added that the M&A pipeline remains active and that general economic volatility has not created a 'chill' in the type of deals Hubbell pursues.

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CEO Gerben Bakker explained that while they don't track SKU-level install rates, discussions on customer CapEx budgets and observed growth in the public power market provide confidence that underlying demand is growing. On M&A, CFO William Sperry announced a small, ~$70 million bolt-on acquisition and described the overall pipeline as robust, reaffirming Hubbell's intent to be an active investor. He declined to comment on specific market rumors.

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CEO Gerben Bakker explained that while they don't track SKU-level install rates, discussions on customer CapEx budgets and observed growth in the public power market give them confidence that underlying market demand is growing. CFO Bill Sperry announced a small, recent bolt-on acquisition in the Electrical segment and described the overall M&A pipeline as robust, but declined to comment on specific market rumors.

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Executive Ronald Knutson explained that April sales trends were slightly tempered compared to Q1 but sequentially flat. He noted Lawson faces tougher comps in H1 2025, while Gexpro Services faces easier ones. Knutson attributed about 40% of Lawson's organic sales decline to tough military comps but highlighted improving sequential monthly sales. Executive John King added that while new sales rep productivity is slower than hoped, it is improving monthly, supported by investments in CRM and other tools, and is a key focus for driving higher structural margins.

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Executive John King attributed Gexpro's recovery to improving end markets like renewables and semiconductors, which are now benefiting from prior investments in acquisitions. Executive Ronald Knutson added that October sales were consistent with Q3 and that he expects the company to maintain a double-digit EBITDA margin in Q4 despite fewer selling days.

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CEO Robert Willett highlighted that logistics saw its fifth consecutive quarter of double-digit growth, driven by investments from large e-commerce players focused on enhancing productivity in existing facilities. CFO Dennis Fehr confirmed that OpEx discipline is a lasting initiative, stemming from prior reorganizations, and stated that the company will remain 'laser-focused' on managing costs to ensure OpEx grows slower than revenue.

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CEO Robert Willett confirmed the Logistics business grew 20% in 2024, driven by broad momentum from global e-commerce leaders and regional providers, signaling a return to capacity expansion. CFO Dennis Fehr highlighted OpEx discipline, noting that full-year 2024 operating expense growth of 6% was below revenue growth of 9%, and the company expects OpEx growth to remain below revenue growth in 2025.

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CEO Robert Willett confirmed strong, broad-based momentum in Logistics, with the market recovering from prior overcapacity and Cognex having good visibility on future projects. He noted the '$1 million a week' booking rate for the emerging customer initiative is gross margin accretive but will take several quarters to reach the 30% operating margin target. CFO Dennis Fehr added that the program is expected to become accretive to overall numbers next year.

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CEO David Gitlin explained the light commercial guidance was reduced because Q1 was surprisingly weak and Q2 had not shown a recovery, attributing the softness to delayed spending by small/medium businesses and on K-12 projects. Regarding the Google partnership, he described it as a win-win to enhance grid resilience by using Google's AI and analytics to intelligently manage HVAC load during peak hours, creating value for Carrier, Google, and utility partners.

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CFO Patrick Goris provided the comparison, noting that channel movement was down in the low-teens in Q4 2023, making for a favorable comp. CEO David Gitlin firmly stated that nothing has changed regarding their expectation to realize a 10% price increase on the new 454B units versus the older 410A models, expressing confidence that the pricing will stick despite market chatter.

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CEO David Regnery stated they have not seen evidence of tariffs causing project delays, noting that for complex, long-cycle applied projects, potential tariff costs are just one of many factors. Strategically, Regnery said the company will remain nimble and believes its 'in-region, for-region' strategy for both manufacturing and leadership provides a significant competitive advantage in a more protectionist environment.

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CFO Chris Kuehn explained that while Q1 EPS contribution is guided slightly ahead of the historical average, the full-year cadence reflects headwinds from transport and the residential pre-buy being concentrated in the first half, with an expected recovery later in the year. CEO Dave Regnery clarified that the channel investments, including a recent one in Belgium, are a continuation of their long-standing, opportunistic strategy of acquiring their independent commercial HVAC distributors, noting few of these opportunities remain.

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CEO Dave Regnery stated that the strength is broad-based, with Americas Commercial HVAC orders up nearly 20% for the year across almost all verticals. He highlighted that the pre-order pipeline is also extremely strong, giving him confidence for Q4 and 2025. Regnery confirmed that verticals like office have strengthened through the year and reiterated that the company is not over-indexed on any single vertical, with teams effectively pivoting to where growth opportunities exist.

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President Aaron Nahmad described the company's pricing technology as providing 'infinite' possibilities for analysis, allowing for dynamic adjustments across products and customer segments to optimize margins. Executive Barry S. Logan quantified the recent trend, stating that domestic business saw mid-single-digit growth thus far in the current quarter, with margins also 'behaving well'.

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Executive Paul Johnston projected the main transition to A2L would occur in Q2, with the goal of selling through most 410A inventory by the end of 2025. He noted that while gross profit dollars will increase with A2L, the percentage might not move much initially. Executive Barry S. Logan added that Watsco's digital platforms, like OnCall Air, are crucial for educating customers and smoothing the transition.

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EVP Barry S. Logan stated the co-investment disclosure was to reconcile year-to-date performance and highlight the collaborative effort to regain market share, noting the impact will linger in Q4 but dissipate next year with new product launches. President Aaron Nahmad reinforced the strength of the OEM partnership. Executive Paul Johnston and CFO Rick Gomez confirmed the inventory increase is a strategic pre-buy of 410A systems before the manufacturing cutoff, which will alter normal inventory seasonality for the next few quarters.

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CEO Alok Maskara clarified that two mid-single-digit price increases were implemented. The first offsets indirect tariff impacts like commodity costs, while the second, announced last week, offsets direct tariff impacts. Regarding the volume outlook, he noted it reflects an expected slowdown in new home construction, anticipated Q2 destocking, and general conservatism due to macroeconomic uncertainty.

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CFO Michael Quenzer confirmed the 10% average price increase on R-454B products but explained it dilutes to a mid-single-digit full-year mix benefit as the new products will phase in over time. CEO Alok Maskara added he is optimistic competitors will follow with price adjustments. Michael Quenzer also confirmed that the reported home volume outlook reflects a net mid-single-digit headwind.

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CEO Alok Maskara confirmed that the magnitude of the pricing/mix tailwind is unchanged and that the company's conviction in realizing it, along with associated share gains, is now higher. He noted a slight shift toward minimum SEER value-tier products but stated there has been no meaningful change in the repair versus replace dynamic, though it remains a watch item.

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CFO Holden Lewis attributed the staggered timing of price increases to the time required for customer conversations, as Fastenal's model is not based on simply 'flipping a switch.' CEO Daniel Florness added that the actions are heavily focused on fastener products due to steel tariffs. On gross margin, Florness gave a philosophical response, stating that while defending the margin percentage is a historical practice, the primary goal during this period is to act as a true supply chain partner, creating optionality for customers and doing right by all stakeholders, which ultimately benefits shareholders long-term.

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CEO Daniel Florness explained that improving eCommerce for unplanned spend involves stocking more SKUs in distribution centers for better availability and margin, and enhancing the website to show supplier inventory levels and provide detailed order tracking. CFO Holden Lewis addressed gross margins, stating that while Q1 typically increases over Q4, he expects a flattish gross margin for the full year 2025 as the product and customer mix drag is expected to moderate.

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CFO Holden Lewis attributed the improvement overwhelmingly to new customer acquisition rather than the macro environment, calling it an 'accumulated impact' of contract wins. CEO Dan Florness elaborated on the long-term strategy of adding customer sites and building infrastructure to analyze the business on a customer-by-customer basis, suggesting a future shift in how they report on growth.

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CFO Kristen Actis-Grande stated the March price increase was small, covering items where MSC is the importer of record from China, and that the situation remains fluid pending supplier information. President and COO Martina McIsaac detailed the sourcing mix and playbook. CEO Erik Gershwind addressed the growth initiatives, confirming they are on track with encouraging leading indicators like new customer acquisition, and that no areas are behind plan.

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CFO Kristen Actis-Grande provided a detailed bridge for Q2 OpEx, expecting it to be flat sequentially, and outlined full-year headwinds from personnel costs, D&A, and acquisitions. CEO Erik Gershwind explained that the Q2 ADS guidance is heavily weighed down by a difficult year-over-year comparison in December's final week, and that the outlook for January and February is more aligned with Q1 performance.

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CEO Erik Gershwind and CFO Kristen Actis-Grande clarified that the top five end markets represent about half of the business, with machinery and equipment being the largest. Actis-Grande provided Q1 guidance, expecting a 40.8% gross margin and an $8 million sequential step-up in OpEx. She also noted a further small OpEx increase is expected from Q1 to Q2 due to salary inflation.

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EVP and CFO David Schulz explained that the new segment disclosure complies with a recent SEC regulation requiring the reporting of key segment expenses. He also clarified that the 2025 EPS guidance assumes only two quarters of preferred stock dividends, as the company intends to fully redeem the preferred stock in June. The redemption will be funded by cash, existing credit facilities, or a new note, with the interest expense outlook being largely agnostic to the method.

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President and CEO Rob Saltiel responded that the primary focus for 2025 is deleveraging to reach the company's target leverage ratio of 1.0x to 1.5x. However, he noted that strong cash flow could allow for both debt reduction and shareholder returns, a decision the Board will address early next year. Regarding SG&A, Saltiel explained that the company is conducting a thorough review of all costs, including headcount and services, to hold or reduce SG&A in 2025 to improve EBITDA margins.

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Executive Kent Yee detailed the acquisition timeline, noting 7 deals closed year-to-date with 2 more expected by Q1 2025, and provided color on the newest water and vacuum pump acquisitions. He gave monthly sales-per-day data to frame the Q4 outlook while acknowledging seasonal softness. Yee also confirmed that seller valuations remain reasonable and explained the refinancing would keep run-rate interest expense stable while providing capital for growth. Chairman and CEO David Little affirmed the goal of maintaining 10%+ adjusted EBITDA margins, driven by growth investments and accretive acquisitions. Regarding divestitures, both executives acknowledged it's a consideration but emphasized DXP's identity as a long-term 'buy-and-hold' acquirer, which is a key differentiator in the market.

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Executive Kent Yee detailed the acquisition cadence, noting 7 deals closed year-to-date with 2 more expected by Q1 2025, and described the two most recent as smaller water and vacuum pump businesses. He provided a monthly sales-per-day trend but cautioned on Q4 seasonality. Yee also clarified that quarterly interest expense should remain stable post-refinancing and that seller valuations are reasonable. CEO David Little affirmed the goal of maintaining double-digit adjusted EBITDA margins, driven by growth investments and accretive acquisitions. Regarding divestitures, both executives acknowledged it as a consideration but stressed DXP's identity as a long-term 'buy-and-hold' acquirer.

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