Good day and welcome to the Emerson second quarter 2024 earnings conference call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the * key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press * then one on a touch-tone phone. To withdraw your question, please press * then two. Please note this event is being recorded. I would now like to turn the conference over to our host, Colleen Mettler, Vice President of Investor Relations at Emerson. Please go ahead. Good morning and thank you for joining us for Emerson's second quarter 2024 earnings conference call. This morning, I am joined by President and Chief Executive Officer Lal Karsanbhai, Chief Financial Officer Michael Baughman, and Chief Operating Officer Ram Krishnan. As always, I encourage everyone to follow along with the slide presentation which is available on our website. Please join me on slide two. This presentation may include forward-looking statements which contain a degree of business risk and uncertainty. Please take time to read the Safe Harbor statement and note on the non-GAAP measures. I will now pass the call over to Emerson's President and CEO Lal Karsanbhai for his opening remarks. Thank you, Colleen. Good morning. I'd like to begin by thanking Emerson's global team for yet again delivering very strong operating results. It is a testament of the strength of our people, the culture we are building, the portfolio we have created, and the value of the Emerson management system. I would also like to thank the Emerson Board of Directors for your continued support of the management team and to our shareholders for the trust you place in us. The second quarter was characterized by strong operating performance which exceeded our expectations. We continue to have confidence in the underlying market conditions driven by demand in the process and hybrid markets aligned with secular macro trends: energy security and affordability, sustainability, nearshoring, and digital transformation. The P&L execution was nearly flawless in the quarter. Underlying sales grew 8%, operations leverage at 54%, expanding EBITDA by 140 basis points to 26%, and delivering 25% EPS growth and 32% free cash flow growth. 2024 is the year of execution with no major portfolio moves planned, and through the first half, we feel confident and have raised our outlook for the year. We are energized about the power of our differentiated automation portfolio. Our NI team led by Ritu Favre continues to drive the integration plan and have again accelerated cost-out activities in response to a slower-than-anticipated market recovery. We will now deliver $100 million of synergies in 2024. Further, I'm excited about David Baker's appointment as CFO of AspenTech. Dave is an experienced global automation CFO and a 27-year veteran of Emerson. He will bring a degree of structure, forecasting accuracy, and work with Antonio Pietri to reinforce a diligent management process. Lastly, I remain excited about what we can accomplish at Emerson. Our technology stack, comprised of intelligent devices, control, and software, is highly differentiated in the marketplace, delivering scaled value to our customers. Further, innovation is alive and well at Emerson, and we continue to stretch the boundaries of the possible in automation. Please turn to slide three. Emerson and our board are committed to ongoing board refreshments, and today we have the privilege of announcing the newest member elected to our board of directors. Calvin Butler is the President and Chief Executive Officer of Exelon, the nation's largest utility company by customer count and a member of its board of directors. As part of Exelon and its operating companies, Calvin has held senior management roles in executive management, operations, corporate affairs, and regulatory and external affairs. He is a passionate advocate for community equity, and his unique expertise in reliable, clean, and affordable energy solutions will benefit Emerson as we continue to enable the energy transition and decarbonization for our broad customer base. He also has a local connection as he was born and raised in St. Louis and graduated with a law degree from Washington University's School of Law. Calvin will officially join our board on August 1st, 2024. This will expand Emerson's board to 12 members, half of whom are women or people of color. Having the right skills represented on Emerson's board is critical to our continued success, and we are excited to have Calvin join us. Please turn to slide four. The second quarter exceeded our expectations, and our strong results highlight our continued focus on execution. Sales, operating leverage, and adjusted earnings all exceeded Q2 expectations. Stronger volumes were driven by outstanding operational performance and more backlog conversion than expected. Price-cost and business segment mix were also more favorable than expected. Orders in the first half met our low single-digit growth expectations with a book-to-bill greater than one. For the first half, process and hybrid saw mid-single-digit growth while, as expected, discrete saw a decline of mid-single-digit. The demand environment for process and hybrid markets remains favorable. Discrete automation orders were down year-over-year on a tough comparison but were up sequentially low single-digits, and we now expect their orders to turn positive in Q4, a quarter delay from our original expectation. While not impacting underlying, Test and Measurement orders were softer than anticipated in Q2, down 15%. For the second half, we expect mid-single-digit underlying growth in orders and low single-digit to mid-single-digit growth for the full year, led by process and hybrid resilience with delayed discrete improvement. Test and Measurement continues to perform and delivered slightly better than expected Q2 results for both sales and earnings. The turn to positive orders in this business is now expected in the first half of 2025, two quarters delayed than our original expectation. We are seeing continued softness in transportation and semiconductor demand driven by constrained CapEx environment, while aerospace and defense is expected to be positive due to continued strength in government research and defense spending. This extended downturn enables another acceleration of synergy actions, and we now expect to realize $100 million of synergies in 2024, up from our prior expectation of $80 million as we pull in additional actions that will begin this quarter that were in the plan for 2025. Our differentiated portfolio is driving value creation for our shareholders. While we remain cautious on the timing of a recovery in discrete and hybrid markets, and we're slightly impacted by AspenTech's latest guidance revision, Emerson's first-half performance, stable process and hybrid demand, and additional self-help actions provide confidence to increase our full-year guidance. We are increasing our underlying sales guidance to 5.5%-6.5% and raising our adjusted EPS expectations to $5.40-$5.50. We remain focused on execution and integration this year, leveraging our Emerson management system, and we are energized as we look ahead at the strength of our new portfolio to deliver differentiated results. Our leading technology and exposure to secular growth markets paved the way for continued value creation. Please turn to slide 5. Emerson's Q2 exceeded guidance in underlying sales and profitability. Underlying sales for the quarter grew 8% with our process and hybrid businesses again exceeding expectations and better backlog conversion than initially expected. Energy security and affordability and sustainability commitments drove strong performance in energy, LNG, chemical, and power. Hybrid and market strength continued with life sciences project momentum in North America, Europe, and Asia, and robust metals and mining activity. Factory automation demand remains soft with continued weakness in China. Europe, Asia, and the Middle East were particularly strong in the quarter with persistent strength in process markets driven by energy transition and traditional energy markets. One noteworthy example is India, which has seen double-digit growth in five of the last six quarters, including this quarter, driven by broad economic expansion across multiple segments. Our growth platforms also continue to perform strongly with underlying sales of double-digit in the quarter. Our profitability continues to reflect the strength of our new portfolio. Gross margin has significantly improved since we started our portfolio journey when I took over as CEO in 2021. Gross margins at that time were in the low 40s, and in this fiscal year, we expect to achieve gross margins over 50%, nearly a 1,000 basis point improvement. In Q2, gross margin was 52.2%, a 430 basis point improvement from the prior year. Operating leverage was 54%, stronger than our expected low to mid-40s, again due to stronger volumes and favorable price-cost and mix. Adjusted EPS also came in ahead of plan at $1.36, $0.10 above the top end of our guide, and up 25% from 2023. Emerson generated free cash flow of $675 million, up 32% year-over-year. Michael Baughman will go through additional details on our results in a few slides. We are pleased with our Q2 performance and the persistent strength in our process and hybrid businesses, giving us additional confidence as we look to the rest of the year. Please turn to slide six. Our strategic project funnel continues to grow and now sits at $10.8 billion, up approximately $400 million from Q1, with our growth programs up by $300 million and representing nearly two-thirds of the funnel. The funnel growth is in line with a constructive CapEx environment for our process and hybrid customers. This also reflects our exposure to robust secular trends as the increase primarily came from projects supporting sustainability and decarbonization and energy security and affordability. In the second quarter, Emerson was awarded approximately $350 million of project content, with the increase in traditional energy stemming from the award of several large offshore vessels in Brazil. Our growth programs continue to demonstrate success, and I want to highlight three key project wins. First, Emerson and AspenTech were awarded an automation pilot project for a large chemical company in China. This is an important synergy win as the customer is developing a pathway to software-driven autonomous operations. The multi-year agreement is an integrated solution for Emerson and AspenTech software that will provide high-fidelity hybrid models and control automation for optimizing process operations based on real-time production data to increase product yield and reduce energy consumption. This example showcases the unique ability of the integrated Emerson and AspenTech portfolio to provide differentiated solutions for our customers. In the energy transition space, Emerson was selected to support Shell's proposed Polaris carbon capture project in Canada. Polaris, subject to final investment decision by Shell, would capture CO2 from the refinery and chemical plant located at the Shell Energy and Chemicals Park in Scotford, Alberta. Emerson is providing much of our leading technology, including instruments and valves. And finally, Emerson was chosen to automate a $4 billion manufacturing complex being built in Indiana by a large U.S.-based life science customer. Emerson will provide our leading DeltaV control systems and software portfolio, including a 5-year subscription agreement for our DeltaV MES. Please turn to slide 7. This is a transformative moment for the U.S. power industry as data centers are driving electricity demand increases not seen since the early 2000s. At the same time, power producers are retiring carbon-intensive assets in a drive to decarbonize their operations and investing in the resilience and optimization of the grid. The grid is also experiencing an unprecedented shift from the unidirectional grid of the past to a bi-directional, intelligent grid of the future, which will be increasingly supported by intermittent power sources. There are multiple factors driving this generational increase in U.S. electricity demand, and data centers alone account for nearly one-third of all new U.S. electrical demand. AI data center racks consume significantly more power than traditional data centers, with a search on ChatGPT consuming 6-10 times the power of a traditional search on Google. Hyperscalers are revising CapEx estimates upward and increasing annual CapEx significantly in 2024 and build their AI infrastructure. This is expected to continue for multiple years. The increase in demand is real, and it is happening today. Utilities in key regions across the U.S. are revising load growth estimates upward materially from recent years' estimates. Georgia Power issued a revised assessment in which projected load growth was 17 times greater than previously forecast, resulting in approximately 30% greater total winter peak demand for the 2030 to 2031 winter. Dominion Energy has been a key beneficiary of traditional data center growth and forecasting another tailwind for AI data centers, more than doubling their ten-year average annual summer peak load growth from 2022. The North American Electric Reliability Corporation recently put out their annual nine-year growth forecast, with new demand more than doubling from the prior year forecast. While Emerson does not have material content in data centers, Emerson is a key player in the power industry for generation, transmission, and distribution, all of which are set to be beneficiaries. Approximately 9% of Emerson sales are in power, and while we have a strong portfolio across our technology stack, I want to highlight the software and control layer, which is relevant across the power landscape from generation through transmission and distribution. The Ovation Automation Platform and Ovation Green Portfolio Renewable Solutions are purpose-built for power generation, greenfield build, and plant modernization applications. Together, our Ovation Automation technology and green solutions automate approximately 50% of North America and 20% of global power generation. Emerson's strategic project funnel in power is up 45% year-over-year, reflecting the emerging potential. I'd like to mention a key win from the quarter. Emerson was selected by a large Midwest utility to modernize nine sites with the latest Ovation hardware, software, and cybersecurity solutions. We were awarded based on our demonstrated ability to execute plant modernizations while ensuring safety, quality, and reliability, all vital and important in the power industry. With the increasing mix of generation sources and rise of distributed resources and microgrids, utilities must now also manage the integration of varying and bi-directional power flows. AspenTech's Digital Grid Management, or DGM, software also plays a critical role in managing the ever-increasing complexity of today's grid to maintain stability and control through real-time power management and demand-side management software. DGM is a strong participant in these markets, with approximately 40% share in North America and approximately 20% globally. The necessity of grid digitalization is driving investments in the advanced capabilities this software provides, with the market forecasted to grow in the high teens. Emerson's leading products and application expertise across the power landscape make us well-positioned to capture the coming investments, both in the U.S. and globally. And we are excited to watch the future of power generation, transmission, and distribution unfold. With that, I will now turn the call over to Michael Baughman. Thanks, Lal, and good morning, everyone. Please turn to slide 8 to discuss our second quarter financial results. Underlying sales growth was 8%, led by our process and hybrid businesses. Price contributed approximately three points of growth, slightly higher than expected due to the mix of our shipments this quarter. Growth was led by Europe, which was up 12%, and Asia, Middle East, and Africa, up 11%. The Americas also had solid growth, up 4%. Intelligent devices and software and control grew by 6% and 14% respectively. AspenTech sales increased significantly over the prior year, up 21% on an underlying basis. Discrete automation was down mid-single digits as expected due to continued market softness and against a tough prior year comp. Test and measurement, which is not included in the underlying measure, contributed $367 million to our net sales, exceeding expectations for the quarter on stronger backlog conversion. Backlog was essentially flat to the prior quarter at $7.55 billion. Adjusted segment EBITDA margin improved 140 basis points to 26%, and as Lal mentioned, gross profit margins of 52.2% contributed to this margin expansion. Leverage on volume, favorable mix, price, net material deflation, and productivity programs all contributed to the margin improvement. Operating leverage, excluding Test and Measurement, was 54%, exceeding expectations. Test and measurement adjusted segment EBITDA margin was 21.4%, above expectations driven by leverage on slightly higher sales volume, mix, and higher cost actions. Adjusted earnings per share grew 25% to $1.36, and I will discuss additional details on adjusted EPS on the next chart. Lastly, free cash flow improved 32% to $675 million, exceeding expectations driven by earnings and improved inventory levels. Acquisition-related costs, integration activities, and higher CapEx reduced the quarter's free cash flow by approximately $70 million. Please turn to slide nine. Adjusted EPS growth of $0.27 was driven entirely by operations as other non-operating items netted to zero. Software and control led the growth, contributing $0.18, and intelligent devices contributed $0.09. Overall, adjusted EPS grew 25% year-over-year to $1.36. Please turn to slide 10 for details on our updated guidance for Q3 and 2024. Underlying sales are now expected to grow 5.5%-6.5%, which raises the bottom of our February range. Our process and hybrid businesses are performing well and support the outlook for the rest of the year. We still expect underlying sales of our discrete automation segment to turn positive in Q4, and we are watching the orders' progression, which we believe is now delayed by one quarter. Reported net sales growth is expected to be 15%-16%, with Test and Measurement contributing approximately 10 points of growth or approximately $1.5 billion in sales, the low end of the February guide, offset by a half-point drag from FX. Incremental margins are held at low-to-mid-40s, which suggest mid-30s incrementals for the second half. The second half will see a change in mix with higher project-related shipments and changes in segment and geographic mix. Adjusted EPS is increased to $5.40-$5.50. Test and measurement is still expected to contribute $0.40-$0.45 as we accelerate synergy activities. We now expect to have $100 million of synergies realized this year. AspenTech lowered their guidance yesterday afternoon, and we have incorporated the latest revisions into our guide. We now expect AspenTech to deliver $0.30-$0.32 for the year versus the $0.32-$0.34 in our February guidance. Free cash flow performance in the first half of the year and our updated earnings projections support free cash flow for the year of approximately $2.7 billion. Share repurchase, dividend, and tax rate expectations are unchanged from February. For the third quarter, we expect underlying sales growth between 3% and 4.5% and leverage in the mid-30s due to the project and geographic mix I described earlier. Adjusted earnings per share is expected at $1.38-$1.42. And finally, Test and Measurement sales and earnings per share contribution is expected to be at similar levels we saw in quarter two as we watch orders carefully. Our first half performance exceeded expectations, and we are excited to continue delivering strong results. Our transform portfolio is meaningfully improved with higher profitability driven by gross profit margins above 50% and higher organic sales growth driven by secular trends. Our Emerson management system continues to drive operational excellence. With that, I'll turn it over to the Q&A portion of our call. We will now begin the question and answer session. To ask a question, you may press * and one on your touch-tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press * and two. At this time, it will pause momentarily to assemble our roster. The first question is from Scott Davis, Melius Research. Please go ahead. Hey, good morning, everybody. Lal and Michael Baughman and Ram and Colleen. Good morning, Scott. A lot of good detail in the slides, but I wanted to start with just a sense of the synergies that you're seeing and just get a little bit more color on what you're seeing, what you're getting as far as structural cost out, what may have to come back when revenues recover, and how we might think about what really that asset looks like in kind of a more normalized situation from a profit perspective. Yeah, Scott, I'll say a few words on that. Ram, add some color to this. First and foremost, we're very excited about the company. It's a far better company than we expected in terms of the quality of people, the quality of the technology, the loyalty of the customer base, and the opportunity to grow and expand as a leader in the industry. So we're very pleased. We have a great management team in place, and what we're most pleased about is the responsiveness of that management team to the market conditions. This is now being run as an Emerson company, and they've gotten ahead of the activities around cost takeout in a very diligent way. This was all laid out prior to close with the teams. So we're essentially working down a playbook. We now moved into some of the actions, as I referenced, that were outlined for 2025 that have been moved forward. But none of these are elements that we believe we necessarily have to add back. This is really driving around efficiency in the company and positioning it to the SG&A structure to be more competitive, a little leaner on a go-forward basis. Ram, if you don't mind. Yeah, and just to add to that, I think the balanced approach around G&A, the optimization of the go-to-market, optimizing and focusing the R&D efforts on critical growth vectors that are going to pay a lot of benefit for us as the market recovers. That's really what we've been focused on. Obviously, we are seeing opportunities in logistics and supply chain, which is additional to what we had originally planned. But net-net, the $185 million we've committed to is a programmatic approach that is divided across these four segments. We've been able to accelerate these actions just given the environment we're in, mostly because these were all well-planned out, and we are able to pull forward these initiatives given that they've been thought out and the teams are actioning them at a rapid pace. Yeah, that's helpful. Hey, guys, just to—I'm looking at slide 7 at the DGM and the Ovation. And give us a sense of how this upgrade cycle works. The power demand, obviously, and grid, I think we're all quite aware of what's going on there. But does it require and I mean, maybe just a little bit more color on how these two DGM and Ovation kind of do they integrate? Do they sell together? Is there any way to kind of get more benefit, I guess, from having the two assets versus the one? And it's a little bit of an open-ended question. I'm just trying to get a sense of the materiality in the upgrade cycle here. But maybe the best way to start with that is just to understand if those assets actually can integrate and work together and if that's a benefit to the utility. Thanks on that side. Yeah, I'll certainly be happy to comment. I think there's three very important elements. I think the element of materiality relates to the high growth in the outlook of projects and activity. We saw that 45% expansion in the funnel. We haven't seen that level of activity in power generation in a long time with a positive growth in North America, again, driven by the data center demand that we outlined. Secondly, inside of the generation capacity, there certainly are opportunities for optimization software. That is an area that really is untapped, and that's a synergy opportunity that exists between Ovation and AspenTech. And then thirdly, certainly the leverage of a strength in our utilities, the customer base, takes us outside the walls of the plants into the transmission distribution. Even though there are not technology synergies between DGM and Ovation per se, there certainly are significant customer synergies and credibility that has been built with Ovation that takes us into the transmission distribution software. Very helpful. Thank you. Best of luck this year for the rest of the year. Thanks, Scott. Thanks, Scott. The next question is from Nigel Coe of Wolfe Research. Please go ahead. Great. Thanks for the question, guys. Good morning. Hey. Good morning, Nigel. Good morning. So I just want to dig into the OpEx and leverage assumptions in the back half of the year. I think you said mid-30s on sort of mix changing. I think we've had this MRO mix now of 65% or so for the last couple of years. Are we starting to see that mix changing notably in the back half, maybe getting towards maybe, I don't know, 60% MRO? And do you expect this to continue in 2025? It feels like it should be, but do you think 2025 is more like a mid-30s, or do you still think you can maintain 40%-plus OpEx and leverage in 2025? Yes, Nigel. It's Michael Baughman. So as we look to the back half of the year, the mix change is meaningful, and you're correct. We've been at the 65% MRO, which is about where we were for the second quarter as well. That is going to drift down on us as we go into the second half. We also benefited this past quarter quite a bit from price. We'll continue to get the roughly 2% price, but it won't be the 3% we don't believe that we saw in the last quarter. So those are the big things. There's also a geographic mix element to this with the U.S. growth moderating relative to other geographies. And then if you start to think about the 54% that we printed this quarter versus what we're expecting in the second quarter, there was an uplift this quarter from AspenTech, which had a great quarter that will moderate in the back half of the year. So you need to put that into your thinking as you go forward as well. Okay. I'm guessing it comes in 2025, but if you do think that continues, I appreciate that comment. But on National Instruments, it just feels like so just to paraphrase the way you've set this up for the second half, third quarter looks pretty flat sequentially on sales. Call it 360-ish of sales, and then we're picking up towards 400 in the fourth quarter. I just want to verify that that pickup in the fourth quarter is entirely seasonal. I think when you go back in time, we typically see that coming through in that quarter. So it doesn't feel like we're taking a huge cycle call there. And then with the synergies, do we expect the margins to continue to move higher sequentially through the back half of the year? Yes. I think you summarized it well. Yeah. Yes. Sequentially, margins will be up. Correct. And generally, to your 2025 question, I mean, it's early for us to plan 2025, but at the end of the day, we don't expect leverage rates in 2025 to be materially different from what we're going to deliver in 2024. Okay. That's great. Thanks, guys. The next question is from Andy Kaplowitz, Citigroup. Please go ahead. Good morning, everyone. Hi, Andy. Well, I know you're still expecting mid-single-digit order growth in the second half after the -1% in Q2. So maybe you could discuss how you started off Q3 in April. Give us a little more color into visibility regarding the mid-single-digit growth in the second half. Do you have visibility in the process in hybrid staying at that mid-single-digit level? And then is the mid-single-digit organic growth kind of weighted to Q4 given the turn in discrete then? Yeah, certainly, Andy. Look, we're off to a great start in Q3. April over April of last year is up double-digit, 10% on orders. Certainly, end-of-three-month is certainly positive as well. So we flipped that to low single digits on the three-month basis, trailing three-month basis. So feel good about the start, feel good about the funnel and the conversion and the markets. And it's, again, driven by the process in hybrid environment across most of the world areas. Discrete, we're watching very carefully. As we said, we expect that to turn now a quarter later than originally expected, but we're seeing green shoots that started developing in March and into April, particularly in Western Europe, in Germany, around machine makers and some of the discrete industry. So optimistic start for the quarter. Again, gave us the confidence as we tested our businesses and worked our process that exiting the year in that mid-single-digit, low single-digit type of range on orders is very, very feasible. Lal, just a quick follow-up to that last comment. Did you just get a couple of larger projects in April? Is that kind of what happened to swing that? Nope. No, no. There's funnel conversion, Andy, but nothing exemplary there. Okay. And then maybe what are your customers telling you on the NI side as to sort of why the recovery is so delayed there? And if NI is still slower to turn than you currently expect, do you still have more flexibility to sort of continue to push the envelope on integration cost out? And ultimately, I know Ram said you're still targeting the $185, but could you do more than that? No, certainly. Look, I think the team has a great set of ideas on their walls in terms of opportunities to drive efficiency and productivity in the business. But we believe that ultimately, this is a growth business. And while we're doing this, we're driving investments in core technology programs so that we hit the ground running. We're working on customer demand. Both Ram and myself, alongside the management team at National Instruments, is well engaged with the customers. Ram will actually speak at NI Connect in a couple of weeks along with Ritu, which would be a pivotal moment for us and be a very successful event in Dallas, I believe, Ram, this year. So look, we're very excited about the potential in the business and this business turning positive in early 2025. Ram, a few words? Yeah. I think to answer your specific question as it relates to customer, what are we hearing from customers? Certainly, segments like the defense segment of what they call aerospace defense and government segment, positive. I think we're going to get into easier comparisons. Frankly, April was also a very good month given the expectations for T&M, which was positive for us. I think really the only two segments we haven't seen the turn, which is why we believe it's at least 1-2 quarter delayed in T&M is semiconductors and Asia. North America actually turned positive in April. Europe's turned positive. We feel good about the ADG segment, and we're cautiously optimistic about transportation. But the portfolio segment, particularly driven by Asia and then semiconductors, is where we still have to see recovery. We're watching that very carefully. Appreciate all the color, guys. Thanks, Andy. The next question is from Deane Dray, RBC Capital Markets. Please go ahead. Thank you. Good morning, everyone. Good morning, Dean. It just came up a couple of times in the prepared remarks, and maybe just if you could walk us through what's different? But you said that there was better backlog conversion than expected. So is this on because of a customer request? They want it earlier? That you were able to have better productivity of throughput? Just how did that differ from what the original plan was on the backlog conversion? Yeah. So Dean, simplistically, responsive supply chains. Our supply chains continue to improve. Our plant output has continued to improve, particularly in our measurement solutions business. There was backlog conversion and Test and Measurement as well. So the simple answer is we overshipped what we thought we would in the quarter, primarily because our supply chains responded much better, and lead times are down to pre-COVID levels, which is a very good sign for us. It tells you go ahead. Sorry, Dean. Just to build on that a little bit relatedly, those being two higher GP businesses helps the profitability in the quarter as well. Yeah. It tells you how far we've progressed on supply chain normalization, where that wasn't the first thing. I'm thinking that you were able to ship more. So that's all good news. And then just to follow up on the Test and Measurement, NATI, on the orders visibility, is there maybe some color on the demand and whether did you miss any orders? Was the demand out there and you missed orders, or is the demand not there? Are you engaged in any more selectivity? Just some color there would be helpful. No, we did not miss any orders. I think orders came in as per expectations. I think the way we've actually baked in the plan is even if orders stay flat to slight sequential growth from what we did in Q2, given the easier comparisons, will improve in the second half and then go positive into 2025. Certainly, as Lal mentioned, the green shoots in the defense part of their business, we've been very strong. We're starting to see projects unlock on the battery testing side from an EV perspective. So we're starting to see activity come through. Again, the one segment which hasn't seen the recovery, which typically we play in RF and mixed signal in semiconductors, the memory and the logic piece is not a big piece of our business. We expect that to come back first, followed by the activity in RF and mixed signal chip testing. So that recovery is really what's pushed out by 6 months. But outside of that, everything is coming in as expected. Great. Thank you. The next question is from Stephen Tusa, JPMorgan. Please go ahead. Hi. Good morning. Good morning, Steve. So I'm just trying to kind of calibrate the second half a little better. I think you guys typically, from a seasonal perspective, more or less accelerate sequentially as you move through the year. This year seems like it's a bit more kind of flat just from a quarter-to-quarter sales perspective and then with much less of a ramp from 3Q to 4Q. Anything on the top line seasonally that is not normal, is a little slower than usual on the core business outside of NI and outside of Aspen? No, Steve. Actually, and the way I see it is our second half versus first half will be up high single digit sequentially from a sales perspective. So it is consistent with the normal seasonality of how our core business minus NATI minus Aspen performs. Now, obviously, Aspen is lumpy, and that's in the underlying number. So that could mask the normal seasonality that we see. But in the core base Emerson operations, the second half, the first half is up high single digit sequentially from a sales perspective. I guess given the mix of MRO is so high today and the growth really isn't that strong, is the mix really changing that much? I mean, how much is the kind of lower margin project stuff going to be up in the second half more than MRO? You know what I mean? Can the mix change that much quarter to quarter? No, Steve. It doesn't. So look, we were at 65% in 2023. In Q2, we were at 64. So there was a point shift. That may move yet another point as we go through the year. But no, you're right. And the underlying strength of MRO in our process and hybrid business is still intact. And certainly, we go through the summer and approach the fall outages and STOs and turnaround opportunities. We look at that, at least from this point in time, rather positively as well. So that's what's going to play into this as we go through the second half, and hence gives us confidence also on that exit rate on orders for the year. Then just one last one on NATI. I haven't done the math on the 3Q guide, but is that down sequentially and then up sequentially in the fourth quarter? It looks to me like the revenue run rate now, at least for the second half versus 2Q, is basically flattish at around 370 or something like that. Is that the right construct for NATI in the second half? Flat Q3, sequentially up in Q4? Yeah. So it's bottomed. The revenues have bottomed there. Yep. Yep. Yep. Thank you. Thanks, Steve. The next question is from Joe O'Dea, Wells Fargo. Please go ahead. Hi. Good morning. Good morning, Joe. Can you dig in a little bit on the growth trends in measurement and analytical and final control? I mean, it seems like measurement and analytical, organic, low double digits, maybe even touch low teens this year, final control mid-single digits. Just some of the differences in those growth rates, what you're seeing on the measurement side versus what you're seeing on the final control side. So the measurement solutions this year, you're spot on there. It's going to grow faster than final control, primarily because that was the business that suffered the most from a backlog build due to lead times, that backlog's coming down. So the delta in growth rates between final control and measurement solutions from a sales perspective is purely that backlog dynamic. Order rates for both businesses, which is a signal of the underlying demand with both businesses being exposed to process hybrid markets, relatively the same mid- to high single digits. Got it. And then it looks like on AspenTech, the fourth quarter EBITDA is implied down something in the neighborhood of kind of $20 million year-over-year. Is that more revenue-related, margin-related? Just to understand, kind of line of sight into that if that's sort of ballpark what we're looking at. Yeah. So ballpark, that's what we're looking at. It is lumpy given the ASC 606, and we'll continue to work the Aspen fourth quarter. But at this point, yeah, it's forecasted to be down from Q3. Okay. Thanks a lot. The next question is from Brett Linzey Mizuho. Please go ahead. Hey. Good morning. Thanks. I wanted to come back to the power franchise. So I imagine there's an opportunity on the new build, but also the retrofits on the installed basis. Some of these LTSAs expire with some of your peers out there. Is there a way to frame the content per unit or megawatt and then any runway on some of the retrofits? Yeah. We'll give you some perspectives and some guidelines. On a 1,200-megawatt combined cycle plant, the project opportunity or KOB1 opportunity is approximately $20 million. It's $5 million in the control system, approximately $15 million of instrumentation and valves. The lifetime MRO opportunity over a decade is another $20 million of upgrades, and that lives through about a 10-year period. So it's very significant, and you can just calculate then off the megawatts depending on the size of the plant. So certainly, there are upgrade opportunities. That's a lot of what we're seeing in the revamps. We see also on the nuclear side extension of plant life, which is very meaningful for us, not just from an Ovation perspective with Westinghouse, but certainly from an instrumentation perspective and valve perspective. So all dynamics in the global power market are pointing very positive right now. Great. Very helpful. And then just on inventory levels, I know your channel dynamics are a little bit different than peers, but maybe you could just frame where you see inventories in some of those served channels. And specifically at machine builders, inventory levels, I think, are a bit elevated. But just curious what your assessment characterization is for the near term here. Yeah. For our Discrete business, our discrete automation business, I think inventory levels are certainly normalized in the channel, so we see no dynamics around that. The Test and Measurement business at NI, there is still some elevated levels of inventory in our Portfolio business-related channel partners distribution that should bleed out over the next quarter, which will be helpful for order rates in the Portfolio business to turn. But net-net, we don't see any major dynamics around channel inventory that would impact our orders momentum. Got it. Thanks for the color. The next question is from Julian Mitchell, Barclays. Please go ahead. Hi. Good morning. Maybe I just wanted to. Good morning. Good morning. Morning, Lal. Maybe just wanted to start off with the Discrete Automation business. Ram, you touched on the inventories at some of the customer levels just now being normal. So when we're thinking about your Discrete business, is it in the third quarter sort of flattish sales down a little bit year-on-year, and in the fourth quarter in Discrete, you're up year-on-year and sequentially? Is that the recovery slope? Yes, sir. Yes. Quarter-over-quarter, flat in Q3, slightly positive in Q4 is kind of how we're looking at orders. So recovery in the fourth quarter. Correct. And then for Test and Measurement, which is also exposed to the discrete markets but a different type of discrete market exposure, recovery into the first half of 2025, primarily because of the heavy play in semicon and a bigger Portfolio business in China. Two of those markets are seeing slower recovery than our broader discrete automation business within the core Emerson. That's helpful. Thank you. Maybe just on the Aspen side of things, Lal, you'd mentioned the CFO change and reiterated there's no big portfolio actions at Emerson this year. Maybe just characterize sort of with Aspen in general how you're thinking about your discussions with them on their capital deployment plans. I've seen them continue to do the share buybacks. When you look a little bit further out beyond this year, the appetite on kind of software acquisitions, please. No, sure. No, first, continue to be very excited about the partnership that we have with AspenTech. I do believe, Julian, that together, we have a highly differentiated tech stack that we bring to the customer base. And I think that's being highly substantiated by the synergy wins, the level of customer engagements that both Antonio and I have around the world. And we continue to believe in the premise that one plus one equals three here. In terms of the CFO, rightfully, I think you said it right. I'm excited from a perspective of the processes and structure that can be brought in. I think there'll be a really good working relationship between Antonio and David Baker. And he brings a lot of the Emerson management system into AspenTech with him, which we believe is important from an operating perspective. And then lastly, look, no. No comment on a go-forward. We're going to operate the structure as is, keeping in mind, Julian, that we're only in the second year of this journey, and we believe that there's value to be created out there in the structure. So for now, no change. Perfect. Thank you. Thank you, sir. The last question is from Andrew Obin, Bank of America. Please go ahead. This is David Ridley-Lane on for Andrew Obin. Just wanted to circle back. I know that there was some pull forward of orders last quarter. How did that if you kind of normalized first quarter and second quarter for that, what did that trend look like? And just to put a little finer point on it, should we be expecting low single-digit orders growth in the third quarter before stepping up in the fourth? Yes. So we were +4% in Q1, down 1% in Q2. So low single digits for the first half, greater than 1 book-to-bill. And then in the second half, you are right, low single digits in the third quarter and arguably the fourth quarter, which is at this point baked in better than the third quarter. Let's put it that way. Got it. Then on the sustainability and decarbonization project funnel, I know that's nearly doubled over the last 18 months. Are these projects kind of getting closer and closer to final investment decisions, kind of like the carbon capture win you cited with Shell this quarter? Yes. I mean, in certain segments like biofuels and carbon capture, the hydrogen projects, which are large, are probably slower movement through the funnel. But I think we see considerable activity globally, certainly big in Europe, here in North America as well. But the pace of progression of these projects through the funnel is varied depending on the segment. Very much. This concludes our question-and-answer session. I would like to turn the conference back over to the management for any closing remarks. Thanks so much for joining the call today, and we look forward to callbacks later this afternoon. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.