This morning, I'm Matt Sykes, the life sciences tools and diagnostics analyst at Goldman Sachs. I have the pleasure of welcoming Bob McMahon, CFO of Agilent, to the stage today. Bob, thank you very much for coming. Thank you. It's a pleasure to be here. Great. Maybe I'll let you kind of set the stage first and talk about your most recent results and sort of trends you're seeing in your business as we enter-. Sure the second half of this year. Yeah, we, you know, through the first half of the year, we're actually very pleased with the performance of the company. We actually had very solid results in the Q2, 9.5% core growth and actually 12% earnings per share. As I'm sure you're aware, we have ended up taking down the full year guidance by about 200 basis points, really based on what we saw late in the quarter in Q2, where the order volume just didn't materialize into actual purchase orders. We see that, you know, continuing into the second half of the year here. Our second half, we're experiencing and expecting much less growth on the top line, still expecting earnings per share to grow, some cost measures that we're taking. You know, a more, probably a more modest expectation in the second half of the year than even what we had at the beginning of the year, which we were expecting kind of a slowdown in the second half. Really, as some of it, a combination of very strong performance last year, but also just kind of taking it one step at a time here this quarter. With some of the volatility that we're seeing, you know, we're expecting even slower growth than what we had at the beginning of the year. Got it. I mean, we've seen broad-based, you know, negative earnings revisions across the tool space. Obviously, you talked about your guidance changes, and talked a little bit about what you're seeing. I know it's just been sort of a month. Yeah the results, but have things kind of, lined up with your sort of new expectations that you have for the rest of the year? Yeah, what I would say is, you know, no better, no worse. As we were assuming, you know, what we were seeing is the RFP activity and the activity with our customers continues to be high. What we're actually seeing is a longer conversion rate from that potential RFP or proposal ultimately to an actual binding purchase order. So that has continued. It hasn't lengthened any, but it hasn't snapped back either. Got it. You talked a little bit about at your breakfast this morning, sort of as the RFPs are building up… Mm-hmm there's been sort of this delay of not just the sales cycle, but also sort of the entire process. If things do ease up, and I don't have a crystal ball, so I can't tell you what the macro is gonna do, but if things do ease up, could we see that drop through? Yeah, I think, there's probably a couple of things that, you know, we're seeing, which are actually positives. One is, when we think about where we were this time last year, we had all-time high inflation, delivery times were extended, and it was a really difficult time to actually even procure some certain raw materials and particularly chips. Fast-forward to this year, you know, inflation has started to moderate, delivery times are back to kind of normal, and I think that that is actually, we've seen that, you know, benefit our customers as we were able to drive down some of our backlog and meet delivery times. What we're seeing from our customers is they're not telling us their budgets have been cut. I think they're just being more deliberate about the process. to your point, if in fact those budgets remain intact throughout, through the course of this year, there could be a, you know, more than historical budget flush at the end of the year. Now, that, based on our fiscal year, that could show up in our fiscal Q1 as opposed to the end of our fiscal Q4. but we'll certainly take that if it comes. Assuming the Agilent prudence is not baked into expectations at this point. That's correct. Okay. Okay. You touched a little bit on instrument demand, and that's been one of the key debates coming out of the most recent quarter. Maybe help us understand, because I think from the emerging biotech side, I think it's well understood, and I think expectations have been fairly managed. Mm-hmm With that customer segment. On the large pharma side, though, I think there's still some questions about what exactly is going on. Yeah In terms of the reluctance, reprioritizing of R&D budgets. Is it simply a delay that we need to work our way through, or is there something else going on there? Given your insight into that market, maybe you can help us understand that dynamic a little better. Yeah, that's a great question, and maybe to frame the size bar, pharma is our biggest end market. It's combined both with a small molecule, which is primarily a replacement cycle. That's about 60% of that. It's about 35% overall of Agilent's revenue. About 60% of that 35% is kind of small molecule, which is just a replacement, primarily in QA/QC, and so at best, that's a deferral of revenue. The other 40% is large molecule biotech. You mentioned kind of the situation, particularly with emerging biotech. That's about 10% of that 30%. More broadly, what we're seeing is just, I think a delay. I think it's a combination of a number of factors. We're not seeing one catalyst that's driving kind of this delay in the conversion cycle between proposals and purchase orders. We think it has something to do with just kind of general uncertainty in the macro environment. People are being a little more cautious, particularly on capital side, to see how things are playing out. We have heard, you know, potential discussions about trying to understand the Inflation Reduction Act, that may have impacts on some kinds of customers more than others, and seeing how that may play out. Obviously, that it's still up in the air with some of the legal actions that are happening as last week. I think there's also a potential element of, you know, if you think about emerging biotech, you know, one of the things that we've seen is the science is still there, particularly in some of these. Now what we're seeing is funding getting pulled back. I think you're starting to see some early stages of potential M&A activities for some of the larger biotech, which ultimately, I think is a good thing, you know, for Agilent, because where most of our business is in the, in the larger companies. They may be just looking to say, okay, maybe we want to fund a little more of that with cash, given that the interest rates are higher than us. That's not a reason not to invest in capital equipment, but I think there's a number of those factors that are kind of at play right now. Do you think, you know, one thing we've gotten from investors, just on the large pharma question is, over the past couple of years, during the COVID period, there was less, generally less M&A. A lot of the investments were focused organically, and therefore, maybe that inflated R&D budgets. Now we're shifting back towards M&A. Do you think there's an internal capital allocation at the large pharma that could be impacting purchases, or is that just too hard to call? I know I'm asking you to assume what they're doing, which is difficult. Yeah, yeah, I think it's probably. You know, I can't say that it isn't an, you know, potential. We haven't heard that consistently across our customer base. I do think that what we did see is, and we've talked about this, we actually had built this kind of into our thinking for at the beginning of the year, is particularly on the replacement cycle, that this business was in an accelerated replacement cycle. In 2018 or 2019 and 2020, we actually saw a pullback there, to first focus on biotech, large molecule, where you saw capacity expansion, and we saw that in strength in our business. You know, I think they did have extra, you know, excess cash. The fleet has been refreshing over the last, I would say, year and a half or so, and we were expecting it to moderate in the second half of the year. It's moderated more than what we expected, and I think it's all those factors potentially in play. Got it. Shifting to ACG, which has continued to perform- Yeah really well, an area of the business that we think is still underappreciated at Agilent. Can you kind of give us an update on that segment and what you're seeing from a service adoption standpoint, additionally, certainly around the dynamic of extension of instrument life... Yeah and what you're seeing from customers through increased service offerings, potentially? Yeah. We're you know, we're super bullish and excited about the Agilent CrossLab or service business. You think about, you know, capital on the instrument side, it's, you know, you look at it on an annual basis, but the beauty of the services, you look at the cumulative installed base. What we've been doing over the last several years has had a strategy to increase our attach rate of services and consumables when we actually sell an instrument. That number was roughly in the 20s, mid-20s, a couple of years ago. It's now over 30%. Each one point is a $30 million of incremental revenue on an annual basis that's highly profitable. One of the things that we're seeing is with all the strength that we've had in instruments over the last couple of years, those instruments are now coming off of warranty. With our strategy of putting that extended warranty on, you're seeing a nice growth and actually seeing our ACG business accelerate. It grew 13%, and it's been several years of double-digit growth, and there's two components to it. There's the service contracts, which I've been just talking about, but then there's the additional offerings to break fix, certainly on products that are off, not on contract. Actually, if you think about the, as a fleet ages, a fleet of instruments age, you actually will see higher service costs to maintain those instruments. That's certainly, it doesn't offset one for one, but we're seeing that, as the instrumentation gets a little older, and then adding new capabilities, in things like supply, supporting them from a, from a compliance standpoint, new software and services there. In addition, one of the things that we've been doing, and now it's a meaningful part of our business, is the enterprise service offering. This is actually going in and helping them manage their lab, not only just Agilent instruments, but the entire lab. you know, given our installed base, we feel like we've got a very strong competitive advantage there and continue to win, you know, some pretty good enterprise deals there. We think there's still a lot of growth left in ACG, our services business. When you think about that service attach rate being in the 30s, there's no reason that it couldn't be in the 40s and 50s. Some of our competitors are actually up in those ranges, so there's no reason that we shouldn't be able to get that in over time. Then as customers are looking for more productivity in the lab, one of the best ways is through our service organization. I actually think that that's a value, you know, pretty compelling value proposition for our customers. If we think about, when we get into, you know, pricing, there's also a stickiness of pricing there because they actually see the value with, you know, the service engineer there, and it's a great insight into actually our R&D engine about what problems they're trying to solve. Really excited about that, and we expect that to continue to be the, probably the fastest growing segment of our business. Given the dynamic of it never goes real high one quarter or real low. It's a nice steady grower, and from a predictability standpoint, we like that. Just following up on one of the last comments you made. We talked actually about it last year's conference, before we knew the macro environment was going to be what it is today. You talked about in a more, cost-constrained environment, the ability to save lab costs... Yeah ... based on your knowledge and your relationship with those labs, is actually quite important. Have you actually started to see that sort of value proposition resonate? Yeah, we have. -with customers? Yeah. Is that a revenue driver, or is that more of a customer loyalty stickiness driver? It's actually both. Okay. It starts with kind of the customer loyalty, because you're trying to help them manage. You know, at the end of the day, a lab is there to support a bigger function within the company. If it's a QA/QC, it's the last step before product gets released and then ultimately gets recognized as revenue. There's a lot of pressure on those folks to ensure that product and those systems stay up and running. If it's more on an R&D side, again, being able to run more productivity or more activities through those machines and instruments is important from a productivity standpoint. We are actually seeing that if you can go in there and help them manage, understand their asset utilization, which systems are running better than others, how do you actually level load that? That actually generates incremental revenue as well, because what you can do is you can help them not only manage the service, which is this enterprise service agreements that I've been talking about before, but you can also help them keep that uptime, and they'll be willing to pay for that. It's been a, it's a nice part of that business. I think one of the things that I think sets Agilent apart. If you think about an instrument, and an instrument can last, you know, anywhere from five to seven years, if it's a mass spec, maybe a little longer, if it's an LC. How often do you see the sales rep? Not, you know, you'll see them quite often, and then maybe once or twice a year, just kind of checking in. They see that service engineer throughout the course of that life, and that's a trusted partner that really helps them manage their lab, understand the value that Agilent can bring, and then, as I mentioned before, bringing that back into R&D or back into Agilent to help us with what are the new workflows that are potentially out there that the customers are looking to try to drive. You know, I'm sure we'll get into kind of PFAS. That's one of the ways that, you know, we were able to just launch a new workflow at ASMS earlier last week. You know, obviously, that's an emerging area of opportunity, but it's that cycle. Not only helping them with the economics of the lab, but also helping our R&D organization understand where our customers are going with the science. Got it. I was gonna ask this question a little bit later, but I think it's a better time to ask it now. Maybe talk a little bit about how Agilent's changed over time in terms of cyclicality. Yeah. Like, I believe the market still has the impression that Agilent is on the more cyclical end of the tool sector. However, you've got ACG, single cell, NASD, plus the industrial end market composition has changed a lot, which we'll talk about. Maybe give us some context around, say, Agilent 5+ years ago versus what it is today. Yeah. When you think about what, the company was much more instrument-focused and less focused on kind of the more resilient areas, now we're talking about pharma, I still think pharma is a resilient end market. With the consumables and services piece, probably about five years ago, it could have been closer to 55% of our business. Now it's over 60% of our business. While we've had a strong growth on the instrument side, if I think about that number going forward, it's only gonna increase more in services and some of the consumable side. I think also within the applied markets, what you're seeing is elements and pockets of, I'd say, secular growth drivers that didn't exist before. Our chemical and advanced materials market, which makes up about 20% of our overall end market revenues, a couple of years ago, was much more focused on chemical and the energy segment. In fact, we've made the change to advanced material to change the names because we were getting an over focus on, you know, 10% of that market or about 2% of the company on energy and exploration, and missing the point around these advanced materials, which is now 35% of the business. This is things like semiconductors, which I think we're seeing multiple evolutions or revolutions of newer technologies there, and certainly the electrification of not only cars, but other modes of transportation and clean energy. Those are things that are also being funded by the governments today, which five years ago, they weren't being funded by governments. You think about semiconductor, it's now a national security element, not only for the U.S., but for Europe as well. They're helping fund capacity expansion there. You're seeing the electrification of vehicles. You're also starting to see that through credits, you know, on vehicles and the trying to have greener energy. I think you're seeing a series of these secular growth drivers. We also talked about PFAS, which is an emerging one, that are actually driving even in the applied markets, I'd say more durable growth. As we think about our diagnostics in clinical and pharma business, it's been a bigger part of our business than it was, you know, five years ago. Got it. I think in 2020, instruments were about 42% of overall revenues, recurring 58%. That's moved up to sort of, 40 instruments today- Yeah. versus 60 recurring. Do you see yourself kind of keeping the 60/40 split? Or do you see that shift to more recurring revenue, you know, continue to progress? I mean, as ACG grows, that becomes a natural part of it. Just kind of talk a little bit about where you see that sort of recurring versus, you know, capital equipment, revenue mix going to. Yeah, we see that continuing to increase more on the consumables or the recurring revenue side over time. You know, it is one of the areas that we placed a lot of investment, both internally from an R&D perspective, but also from a capital perspective. We think about not only the ACG business or NASD business that shows up in the recurring revenue stream. The consumable side of the business. I would expect that to continue to grow. If I went five years out, you know, we don't have specific targets, but I would expect that 60% to be higher than that going forward. Now, we're not gonna let the side off the hook in terms of growth. What we're trying to do with that increased connect rate and those workflow solutions is actually drive more, we think about a customer lifetime value, increasing the customer lifetime value of our instrumentation. That is one of the main strategies that we've had over the last several years, and I think it's continuing to bear fruit, and there's still a lot of runway ahead of us there. Got it. Maybe shifting to China, which has been a popular topic. I'm sure you've gotten a lot of questions on it already. It's obviously an important growth driver for you and has been historically. We saw in the first quarter there was a stimulus impact, but it was very narrow. Yeah. It was more on the high end, where Agilent didn't participate as much. Could you talk a little bit about what you're seeing in the region, what your expectations are for 2023? Will we see some stimulus over the course of the year? Kind of what is baked into your expectations in regards to your China business? Yeah, it's a great question. Let me answer the last one first, because that's a $64,000 question. Yeah Is whether or not there's gonna be stimulus. We hope so, but we haven't built that into our plan. We've heard talk about that, typically when the government moves, they move fairly quickly, but we haven't tried to time that, and we're not that good. I would say, you know, from our standpoint, actually, the first half of the year was very strong. If you looked at the first half, it was probably 20% growth, it was 13% and 32%, Q1 and Q2. It benefited from last year easier comps because we had the Shanghai shutdown that impacted our business in April, latter part of March and in April, then we started seeing that ramp up in recovery in Q3 and Q4. We're expecting mid-single digit growth for the full year off that growth. That's down from where we expected. You know, I think a couple of fundamental factors are there, and we still think that China is going to be a growth market for us. We continue to invest in China. I heard the speaker earlier talk about in China, for China. Mm-hmm. That is real. We are seeing that. Now, we've had a presence in China for well over 20 years, and we're investing more in bringing on locally produced instrumentation. We made an announcement or an investment in December of 2021. It's supposed to come online at the end of this year, that we will make beyond just gas phase instrumentation or gas phase chromatography instruments. We continue to invest to actually be able to have that made in China. If we think about kind of the five year plans and some of their strategic priorities, our instruments are really critical for them to advance their national interests. Now, obviously, there's a lot of debate and discussion around the tensions between the U.S. and China, and certainly that doesn't help, but we haven't seen buying behavior change on the ground. I think one of the things that we've been doing is building that ACG business. One of the things that we talk about in terms of the local competitors, they're getting better, but they don't have the breadth, the depth of service capabilities that we have today. You know, a lot of our service is done through WeChat, the local, you know, version of kind of X for them. you know, as costs go up, and productivity becomes more of an important piece there, the ability to service that instrument and keeping it up is as important to a Chinese customer as it is for a, you know, a U.S. customer or a European. That's why I think we have a competitive advantage. We're not naive to think that they're not gonna continue to get better, and there certainly are pressures to drive more locally based manufacturing or sourcing of products, and that's why we're making the investments that we are. Obviously, by its nature, ACG is kind of local because the people are there. Then we have been building additional capabilities from our instrument manufacturing to build more of our capabilities across where it's needed. Got it. Maybe shifting to PFAS. It's funny, we actually wrote about PFAS when we initiated on Agilent. Yeah, you were one of the vanguards. 2020. The response was crickets at the time. No one cared. Now everyone's starting to care, and I think that it's a small market. Yeah I think we have to put the whole thing into context. Just given the regulatory dynamic. Yeah -that's occurring, given the fact that we're only really talking about water- Yeah right now, and there's a lot, there's food and cosmetics and other... Yeah areas where this could you talk about, first of all, like, what's the size of the market for instrumentation that's relevant to Agilent is first? Two, what do you think it's growing at? Three, sort of, where do you see the market share dynamics playing out, and how do you think Agilent wins- Yeah in PFAS moving forward? Yeah, it's a great question, and it's one of the things that we've actually been talking about almost the same time as you. Now people are coming around, and as you said, it's really an emerging opportunity, I think. So what are PFAS? There are thousands of these chemicals out there that are in everything, and they basically last forever. They don't degrade. So what the emerging science is what does that mean? They're in our bodies, they're and they end up staying there, in the water and so forth. Right now, it's about a $200 million market, growing double digits. We are by far and away, the leader. It's the same customers that we've had for a long period of time. It started in the environmental kind of area. Here in the U.S., it was done state by state, so there are various regulations that were done. There's now a proposal only for 6 of those 1,000 potential substances are being potentially regulated here, going through the FDA. As you say, there's a potential to see even beyond just kind of water testing. That's where the predominance of this is now. You're starting to see it in food, packaging, to worry about leaching into food and the requirements there, then, you know, other areas as well. We think this is very early stages. The government is funding it. You know, we think we're a leader here, and we'll continue to really focus on it. It's, you know, these are customers that we've had for decades. I would expect that to continue to grow over the next 5 to 10 years at that double-digit rate, notwithstanding some, you know, surprise. You know, the other thing I would just say on this is one of the catalysts, we talked about catalysts being regulation, which we're starting to see, funding from the government, which we're starting to see, and unfortunately, litigation, and you're starting to see that as well. There's a class action suit down in Florida that's talking about the level of these chemicals in municipal water supplies, which now you add all those things together, there will be a, I think, an increased testing requirement, throughout the course of the U.S., U.S. is actually kind of leading this, but, you know, Europe is not far behind, and I would expect Asia to follow suit sometime in the future as well. Got it. Maybe shifting a little bit more to financials on the margin side. In Q2, the operating margins were a little bit lower than expected since there was an unfavorable revenue mix. Maybe give us some insight into what you're seeing from a revenue mix perspective and just given we're kind of into Q3 for you guys. Yep. like, how are you seeing that play out? Yeah, if you looked at, you know, I would say, what happened in Q2? Because we still, you know, we hit the top end of our guidance, the margins were a little light, as you were saying. If you looked at our LSAG margins improved very nicely. Same with ACG. Both of those were very strong. Where we actually had some challenges was in our DGG business, we talked about the genomics market seeing some disruption. We saw it in Q1. We were expecting a Q2. It actually had a slightly greater impact than what we anticipated. What we're seeing there is that's a very profitable business for us, some of those customers have just been really struggling. We saw the revenue come down, and that was the negative mix impact that you were referencing. If I think about what we're doing going forward, if you look at the second half of the year, our expectation is that margins will improve. Now, that's through a lot of cost containment and efforts that we're doing internally. When we looked at taking our expectations down for the second half of the year, we also were saying, "Okay, well, what do we need to do to help manage the bottom line?" We're looking at certainly there's an element of compensation that automatically flexes there, but we're also looking at reducing costs to be able to drive, you know, continued margin expansion in the second half of the year, maybe even more so than we saw in the first half of the year. I'll just leave it at that. Yeah, I mean, I think this is also related on the pricing side. Yes. You know, I think for Q2, it was like 400 basis points of contribution, higher than sort of the 3% expected for the full year. The expectation would be that starts to come down. After a few years of pretty strong pricing, how do you see kind of pricing? Are we going back to sort of like the normal historical kind of pricing growth you guys got in the past? How do you see pricing over the course of 2023? Yeah, it's a really good question, and we better not. Yeah. I don't think so. I think what we've seen. Now, it's not gonna stay at these levels. You know, it will move with inflation, but I think what we've seen is we probably were in the 50 to 75 basis points of annual price improvement, kind of pre, in 2021, 2022 levels. I don't think it's gonna go back to that for a couple of reasons. One is, as we increase our attach rates and really focus on that productivity, those are the areas that are more sticky. I think we've gotten better at on pricing for value across our not only instrument fleet, but also our portfolio. I do think that it's not gonna stay at these elevated levels. We're still on track for about 3% this year. Now, to, we've been tracking at four, a little over four for the first half of the year. We had our last pricing, we had multiple pricing cycles last year, the last one being in July. We're gonna cycle through that this year. You, and we only did one this year at the beginning of the year in January, and we're not anticipating doing another one. We'll get back to that regular cadence of doing that. You know, the good news is, we've been doing this relative to trying to follow kind of inflation. You know, we are seeing, you know, inflation, slow down. That's actually been one of the nice positives. Costs are still going up. They're just not going up at the rate that we had anticipated at the beginning of the year. That's allowed us to be able to continue to drive productivity in our supply chain. Got it. Shifting to NASD, a nice growth in the quarter, continues to be a really good story for you guys, and you've talked about sort of the Train B, which you're getting pretty close to getting that, and then also the Train C. How are you thinking about capacity expansion, specifically for this market, just given the macro environment we're in? Has it kind of changed your view as to what you should do? I mean, you're basically building capacity simply to meet demand. Yes. Is that still the case, and how are you thinking about that business today? Nothing has changed our conviction in that business. You know, as we think about Train B and then Train C and Train D, that we announced back in January, we're still on track for going live with Train B here at the end of Q3, and then bringing it online, you know, this year. Then we've broken ground for Train C and Train D, and when we think about the number of molecules in this space that are in the clinic, it continues to grow. So, you know, we think that the short term, you know, impact from the macro standpoint is, in fact, that. It's short term. We think that the science here will continue to grow, and... If you think about the number of therapies that are being targeted at larger patient populations or larger therapeutic areas, it's gonna need, it's gonna warrant the larger volumes. We're about 50/50 today, commercial versus clinical. You know, three years ago, we were probably 90% clinical, and 10% commercial. Our expectation is that we'll continue to grow. Our job is to continue to build out a robust portfolio of customers and products, and we feel pretty good about that. I think the other thing is with C and D, which is important, is today, we predominantly have one modality, siRNA therapeutics. Increasingly, what you're seeing is not only larger patient populations there, but one of our trains in Train C and Train D, which will come in online in the 2026, 2027 timeframe, is a CRISPR line, so GMP-grade CRISPR. We have a small business today already through NASD. It's capacity constrained, and so what we're looking at doing is building a line there. We would have the ability to do not only siRNA, also antisense, which is kind of a related technology, with Train C, and then also CRISPR in gene editing. What we've got is an expansion of therapeutic or modalities to provide customers with, as well as seeing that clinical volume going up. We haven't seen any slowdown to date. Got it. maybe just talking about one of the commercial drugs you have in that, in that business, Pluvicto, which is Novartis' drug. Mm-hmm. It's had a bit of a slower uptake, nothing to do with the drug based on my understanding, more to do with the billing issues. Has that impacted the business at all? I mean, it sounds like you're diversifying-… Yeah ... from siRNAs, so maybe that's offsetting some of it. Maybe talk about Pluvicto's impact. Yeah, you know, I would say this. We are diversifying as part of the, you know, expansion of capacity. You know, as we get more commercial, obviously, we want those drugs to be successful in the marketplace. No one drug will determine the kind of the success or failure of our NASD business. You're right, it has nothing to do with the efficacy of the drug. I think they're still investing behind clinical trials and in trying to drive demand. It may have taken a little slower, but I think, you know, our view is that that's one of many compounds or products that we have and progress that we have in the pipeline as well as in production. I would say, you know, the beauty of having commercial is it allows you to run more efficiently in the facility. Long campaigns, we saw that actually in Q2. I don't draw the comparison that it was associated with that drug. What we were, if you have the ability to run the same molecule for long periods of time without having lot changeovers and so forth, it's very efficient for us and allows us to actually drive more capacity out. More products in- is a good thing long term. It does create more changeovers and so forth, and we've built that into our kind of plan going forward. Got it. Lastly, in the last minute we have left, just on capital deployment. M&A, you guys have talked about it. It sounded like in January, when we spoke, you're shifting more to public from private, just given the bid-ask spread in private. How are you thinking about capital deployment as it relates to M&A or organic? Yeah, you know, I think, you know, we've been benefited from very strong cash flows, healthy balance sheet. You know, we see the valuations coming down. We've been, I think, a disciplined acquirer, primarily in the private space, because I think we have an ability to offer maybe something else just in cash, and that's the one Agilent culture, which I think is important for founders to, you know, have a business that's in the right home. We continue to be aggressive. I think valuations are coming in. I think I mentioned, Bobby, then before we weren't even in the same building, now we're in a room. Yeah. I think, you know, we'll continue to see opportunities throughout the course of this year and into next to leverage our balance sheet. Great. Bob, we are out of time, but thank you very much. Thank you. It's a pleasure.