Greetings and welcome to the Fortive Corporation Second Quarter 2024 Earnings Call. At this time, all participants are in the listen-only mode. A brief question-and-answer session will follow a formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Elena Rosman, Vice President, Investor Relations. Thank you. You may begin. Thank you, Diego. Thank you, everyone, for joining us on today's call. With us today are Jim Lico, our President and Chief Executive Officer, and Chuck McLaughlin, our Senior Vice President and Chief Financial Officer. We present certain non-GAAP financial measures on today's call. Information required by Regulation G is available on the investor section of our website at fortive.com. Our statements on period-to-period increases or decreases refer to year-over-year comparisons unless otherwise specified. During the call, we will make forward-looking statements, including statements regarding events or developments that we expect or anticipate will or may occur in the future. These forward-looking statements are subject to a number of risks, and actual results might differ materially from any forward-looking statement that we make today. Information regarding these risk factors is available in our SEC filings, including our annual report on Form 10-K for the year ended December 31st, 2023. These forward-looking statements speak only as of the date that they are made, and we do not assume any obligation to update any forward-looking statements. With that, I'd like to turn the call over to Jim. Thanks, Elena. Hello, everyone. Thank you for joining us. I'll begin on slide 3. Our second quarter results showcase strong execution across our businesses, allowing us to deliver earnings and free cash flow at the high end of our guidance, with 90 basis points of adjusted operating margin expansion and 9% adjusted earnings growth, despite revenue at the low end of our guidance. Our performance continues to reflect our ability to adapt to the low-growth environment and deliver differentiated financial results, enabled by FBS-led innovation and productivity actions. Our leadership positions across durable growth markets are reflected in upside performance in advanced healthcare solutions and continued momentum in intelligent operating solutions, positioning Fortive well for the future. As we look ahead, we are excited to see the acceleration of our innovation and new product launches, delivering more value for customers and sustained growth for Fortive. We are confident in our updated outlook for the year, reflecting strong growth in our recurring revenue businesses and continuing our track record of mid-single digit through cycle core growth and compounding earnings and free cash flow by double digits in 2024. Turning to slide 4, I'll provide an overview of our second quarter and year-to-date results, as well as what we're seeing as we look ahead. Second quarter revenues were up 2% with flat core growth. Acquisitions contributed 3 points to growth, partially offset by a foreign exchange headwind. Strong operational execution contributed to record second quarter adjusted gross and operating margins and earnings per share of $0.93. Year-to-date, we achieved 100 basis points of adjusted operating margin expansion and double-digit earnings and free cash flow growth on 3% revenue growth. Turning to what we are seeing across our businesses, Intelligent Operating Solutions and Advanced Healthcare Solutions continue their momentum, benefiting from durable and recurring revenue, as well as new product introductions aligned to secular growth drivers. This demonstrates the success of our capital deployment strategy in these segments, where we continue to focus our bolt-on efforts to further enhance growth. Across Fortive, our recurring revenue is now 42% of our portfolio, growing low double-digit year-to-date. We expect that pace of growth to continue in the second half. Government spending delays broadly contributed to revenue coming in at the low end of our second quarter guide, primarily driven by delayed military and government R&D projects impacting Tektronix, as funding continues to be prioritized to production-related programs and slower Job Order Contracting growth at Gordian as they lapped government stimulus funding in 2022 and 2023. Orders at Precision Technologies were down in the quarter as expected, and book-to-bill was stable at 1.0. Consistent with our prior outlook, we expect orders to return to low single-digit growth in the third quarter. However, our updated 2024 revenue outlook does reflect a slower-than-expected recovery in certain end markets in PT in the second half of the year. We are offsetting lower revenue with new productivity actions and have reflected the delay in Global Minimum Tax implementation in our tax rate guidance for the year. Chuck will cover the outlook for the rest of the year in more detail shortly. Lastly, our free cash flow performance continues to differentiate with industry-leading free cash flow margins, allowing us to repurchase 2 million shares in the second quarter and continue that pace the remainder of the year. Turning to slide 5, I will provide more detail on second quarter segment performance, as well as our expectations for the full year. Intelligent Operating Solutions total revenue growth was 4%, with core up 3%. Acquisitions were favorable, partially offset by an FX headwind. Adjusted operating margins were down slightly versus the prior year, although up approximately 400 basis points on a 2-year stack, with strong price realization and volume growth more than offset by growth investments. Additional highlights include: Fluke revenues were up low single-digit plus, including mid-single-digit industrial products and double-digit ARR growth in the quarter, a strong proof point of our efforts to make the business more resilient. Fluke's bolt-on acquisitions, Solmetric and Azima DLI, continued to outperform, contributing to Fluke's growth in the quarter. EHS grew low single-digit, paced by recurring revenue contributions, including strong SaaS and iNet growth, partially offset by slower product sales at ISC. IOS grew mid-single-digit or mid-teens on a two-year stack, with continued normalizing growth at Gordian and lapping the wind down of pass-through revenue at ServiceChannel. IOS maintained its pace of high single-digit SaaS growth, and we expect to see that reflected in accelerated core growth in the second half. For the full year, we expect the IOS to deliver mid-single-digit core growth with approximately 100 basis points of adjusted operating margin expansion. Precision Technologies was down 1.5% in the quarter, with core decline of 6.6%. Acquisitions net of divestitures contributed six points to growth, partially offset by FX. Adjusted operating margins were down slightly year-over-year, with lower core volumes almost fully offset by productivity benefits, favorable price, and M&A. Additional highlights include: Tektronix core revenues was down mid-teens as revenues normalized to bookings. We saw push-outs of large Mil-Gov projects in the Americas and slower recovery in China, partially offset by mid-single-digit services growth. EA has seen large EV mobility and battery expansion projects push out, reducing its revenue outlook for the year to approximately $130 million. While sales cycles are longer for these large projects, EA has seen a doubling of the sales funnel on smaller run-rate projects across industries, validating the go-to-market synergies with Tektronix and positioning the business well for 2025 and beyond. Sensing was down mid-single digit in the quarter, with continued strength in utility grid, food and beverage, and healthcare end markets more than fully offset by weaker industrial and factory automation demand. Lastly, Pacific Scientific delivered another quarter of mid-teens core revenue growth driven by robust demand. We finished Q2 with a stable 1-to-1 book-to-bill and are expecting revenue to return to growth in the second half. For the full year, we now expect PT growth down low single-digit, with adjusted operating margins approximately flat. Advanced Healthcare Solutions revenue growth was 3%, with core growth of 5%, partially offset by unfavorable FX of approximately 2%. Adjusted operating margins expanded 260 basis points, with strong volume, price realization, and productivity benefits more than offsetting growth investments. Additional highlights include: ASP, Censis grew mid-single-digit, driven by double-digit consumables growth enabled by the successful North American channel transition at ASP and new doors and cross-sell expansion at Censis. Fluke Health Solutions was up low single digits, with double-digit dosimetry services growth. Provation grew low single digits, lapping a large prior-year licensing win, while SaaS revenues up nearly 50% in the quarter. Given the strong first-half performance, we now expect AHS full-year core growth to be at the high end of mid-single-digit, with over 150 basis points of adjusted operating margin for the year. Moving to slide 6, several short-cycle industrial markets served by our Precision Technologies segment faced headwinds in the second quarter. We saw continued customer caution weighing election and macro uncertainty, contributing to OEM and channel weakness and further CapEx-related project delays. North American revenues were up slightly, benefiting from mid-single-digit growth at IOS, driven by strong industrial and software growth, mid-teens growth in healthcare consumables, and continued strength at PacSci, partially offset by lower Tektronix revenues. In Europe, we saw revenues normalized to bookings, with a mid-teens decline at PT, partially offset by low single-digit growth in IOS and low double-digit growth in healthcare. Core revenue in Asia was down low single-digit, driven by slower government spending and distributor destocking in China. Japan was up mid-single-digit or better in all segments, and in India, we saw slower growth given election uncertainty impacting project timing at Tektronix. Core growth for the quarter largely centered on our high-growth markets, excluding China. These regions have now eclipsed China in size and account for approximately 14% of sales. Looking ahead, we expected improvement in core growth in the back half of the year, driven by favorable order rates, as well as continued strength in AHS and software. With that, I'll turn it over to Chuck to talk through our updated third quarter and full-year guidance. Thanks, Jim, and hello, everyone. Turning to slide 7, I will provide our Q3 outlook, as well as an updated outlook for the full year. For the third quarter, we anticipate revenue growth of 3%-4.5%, with core growth of 2%-3.5%, driven by continued momentum in IOS and AHS and roughly flat core growth at PT. Adjusted operating profit margin is estimated at approximately 27%, up over 100 basis points year-over-year. Adjusted diluted EPS guidance of $0.92-$0.95, up 8%-12%, and free cash flow is expected to be approximately $360 million. For the full year, total growth is now expected in the range of 3%-4%, approximately 1.5% lower than the prior guidance, driven by the revised outlook at Precision Technologies and further FX headwinds. Core growth is now expected to be in the range of 2%-3%. Adjusted operating profit margin is still expected to be in the range of 27%-27.5%, up 100 to 150 basis points year-over-year. Note, we have offset roughly half of the operating profit shortfall related to the lower revenue with productivity actions. And as a result, we are still expecting to average 60% incremental margins given the proactive restructuring we did coming into the year. The other half of the earnings offset is coming from a lower effective tax rate, now expected to be approximately 12% for the year. As a result, we are raising our adjusted diluted EPS range to $3.80-$3.86, up 11%-13% year-over-year. Looking at the right side of the slide, you can see the benefits of our portfolio transformation, improving the through-cycle durability and growth rates of the portfolio. Fortive's continued growth is enhanced by an increasing level of recurring revenue and our focus on innovation, which I'll highlight on the next slide. Over the last eight years, we have been intentional about building a proven toolset around how we prioritize and develop new products, bring them to market faster, drive greater returns on R&D investments, and deliver differentiated value for our customers. We have several examples of how our increased innovation velocity is contributing to core growth, with a pipeline of new products, including in Q2, Fluke launched its new EV Charging Station Analyzer, which allows technicians to perform multiple tests with a single tool. FAL recently launched the Gordian Cloud platform, an integrated cloud-based capital planning tool, and Accruent's Space Intelligence, a comprehensive real estate planning and space management optimization platform. In PT, Tektronix continues to enhance its oscilloscope platforms, bringing more power analysis tools to the engineer's bench. They recently launched the 4 Series B with more powerful processor systems to speed up analysis for power converters being designed for a broad range of industrial applications. At ASP, new innovations are also enhancing core growth. They recently secured U.S. FDA approval on a new steam monitoring biological indicator, which allows them to ramp up sales on this product in the second half of the year. FBS is driving success as we identify and expand into new growth markets, speed innovation cycles, and maximize investment returns across all three operating segments. For example, we reduced the amount of sustaining engineering spend as a percentage of the total by roughly 20% and redeploying the savings to fund future growth with new products and software features. As a result, we have created a funnel of over $1 billion in new market and revenue opportunities, roughly 3x what it was just three years ago. AI has also been a key enabler to our success, although we are still in the early innings. We created our vision several years ago with the establishment of The Fort, our incubation hub and center of excellence for AI and machine learning. Coupled with our partnership with startup studios Pioneer Square Labs, we test new AI ideas developed by our operating companies. In Q2, our teams incubated 7 new growth ideas, some of which are likely to become new Fortive products, while others potentially new startups. In summary, we view R&D as a high-return investment and a critical driver of our improved through-cycle growth, operating leverage, and return on invested capital. With that, I will turn it back to Jim to provide an update on our long-term target. Thanks, Chuck. I'll continue on slide 9. Our revised full-year outlook yields double-digit adjusted EPS and free cash flow growth in 2024 and keeps us well on track to achieving our long-term targets. While we have seen both tailwinds and headwinds since we first issued those targets, you have also seen how we've adapted to the lower growth environment in 2024 and still raised our earnings guidance through the year. This is a testament to our culture of continuous improvement and our relentless focus on delivering for shareholders in any environment. We also still expect to generate over $8 billion in free cash flow in the next five years, which allows us to further accelerate earnings growth and shareholder returns through disciplined and accretive capital deployment. Our priority remains bolt-on acquisitions to existing growth platforms in areas of demonstrated strength, while also enhancing returns to shareholders. We continue to believe share repurchases are a good use of capital, and we expect buybacks in the range of 5-6 million shares for the year, consistent with our recent track record. Further, we announced our first dividend increase in 2023 and plan to continue to grow our dividends in line with earnings and free cash flow. With a powerful combination of the Fortive Business System and disciplined capital deployment, we think the best is yet to come, with an opportunity to roughly double our adjusted EPS and free cash flow over the next five years. I'll wrap up now on slide 10. With a strong start to the year and track record of improved through-cycle performance, our continued strategy to build a more durable company is playing out, as evidenced by our strong growth in recurring revenue businesses. We're confident in the achievement of our revised 2024 outlook, which demonstrates the benefits of durable growth drivers and tailwinds from innovation investments, while de-risking the areas of protracted recovery. Our free cash flow generation continues to be robust, underscoring the differentiation of the Fortive business system and the compounding capability of our portfolio. By executing the Fortive formula for value creation, we are poised for higher returns on invested capital. The deals we've done since our inception continue to get better, and we remain disciplined on further capital deployment to enhance value creation. With that, I'll turn it to Elena. Thanks, Jim. That concludes our formal comments. Diego, we are now ready for questions. Thank you. We will now be conducting our question-and-answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we pull for questions. Thank you. Our first question comes from Scott Davis with Melius Research. Please state your question. Hey, good, I guess, morning to you guys, Jim and Chuck and Elena. Hi, Scott. Hey, Jim. I wanted to dig in on R&D a little bit. Is it fair to say you're seeing the impact of R&D on the margin line, but not on growth yet? Or is there any way to kind of tease that out a little bit? Yeah, sure. I think really both. What we tried to highlight, and obviously we did last quarter as well, is to give a sense of, one, how FBS is really moving a portion of our sustaining engineering capability into innovation. That obviously has a long-term compounding effect. But we've been doing that for several years now. And I think some of the examples that we talked about that Chuck had in the prepared remarks are certainly evidence of better growth. Fluke's durability here is certainly part of their engagement in our new product development process. We talked about the FDA approval on a product at ASP. That takes a little longer in healthcare to really see that. Certainly on the gross margin front, because we're pretty disciplined about making sure that products that we launch, if they're replacing products, they replace them at better gross margins, which is really more value to the customer. And then you're seeing also in a number of the places where we've got tailwinds relative to growth, part of that is certainly an innovation story. Okay. Makes sense, Jim. And I'm just looking at slide 9. I'm trying to figure out what's implied here on capital deployment. Can you get to your five-year with buybacks? Is that this white part that's capital deployment upside? Is that buybacks plus M&A? Could it be entirely buybacks? Is it possible to get there with the current plan? Yeah. Scott, this Chuck clearly we've already done some M&A, but we do include buybacks as part of our capital deployment. So we think that that with the bolt-ons that we did in the fourth quarter and what we'll likely do going forward, we still think that we have landslide to that accretion in 2025. Okay. Best of luck, guys. Thank you. I'll pass it on. Yeah. Thanks, Scott. Our next question comes from Julian Mitchell with Barclays. Please state your question. Julian. Hi. Hi. Good morning, Jim. Maybe just first off, so just trying to understand the sort of revenue guide for third and fourth quarter. So I think last year your sales were down low single digits sequentially in Q3 and then up mid-single digit in Q4 sequentially. It looks like this year you're assuming you're sort of flat sequentially Q3 and then up mid-single Q4. But I guess versus last year, you have a smaller backlog today, and there's more macro uncertainty, I think it's fair to say. So maybe help us understand sort of the confidence in that revenue outlook, please. So Julian, I'll make a couple of comments first. What we've got in here is basically normal seasonality, maybe even a little bit less when you just look at the percentage in the first half versus the second half. And also, as you go forward from Q3 into Q4, obviously we've got IOS and AHS really showing up as we would expect. And then we've de-risked PT going through there. But we think that we've got a pretty reasonable breakout between both of those quarters in terms of the revenue. Hey, Julian, I would just say on a two-year stack basis, they look pretty similar from where we've been. So that gets into the comp question. We do think we will see orders grow here in PT in the second half. So I think it's an important distinction is that we will see some of that's comps, obviously. So we will see a little bit of order growth in the second half, and we're confident in that happening. That's helpful. Thank you. Then just a follow-up, looking out to the fourth quarter on slide 12. You have that very hefty margin increase dialed in there sequentially going from 27 to 29 plus. Again, when we look at sort of last year's fourth quarter, I think the PT margin was flat. If we're looking at sort of some of those sequential moves, I guess, what gives us that confidence on that very large sequential increase? Is it all top line, or is there something coming in around cost savings, anything else perhaps that's really pushing up that margin so much sequentially? So when I look at it from going from Q3 to Q4, we've got about the same dollar step up going there. And that's falling through sequentially. Usually, I don't love sequential margins, but about 60% falling through from Q3 to Q4 to get to those margins. And that's really approximately the same dynamic that we demonstrated last year in terms of going up that sequential incrementals from Q3 to Q4. And that's what we've got built in here. So nothing other than that is really about the top line. A little different if you go by segments, but I think you can see it's really just the top line step up is the biggest piece of it. And that overall yearly incremental at 60%, we think shows pretty well. I think it speaks to, as we said in the prepared remarks, the proactive restructuring that we did at the beginning of the year, the continued productivity actions that we've taken throughout the years we've seen things. I think it gives us confidence in that sort of margin expansion. If you think about first half of the year, we're about 100 basis points of margin expansion in the first half. So a really good launch point in which to get to. And as Chuck described, the incremental is very similar to what we've seen in previous years. Great. Thank you. Thank you. Our next question comes from Nigel Coe with Wolfe Research. Please state your question. Thanks. Good morning, everyone. Morning. Good afternoon. So Chuck, I think you mentioned PT flat organically in Q3. And that's obviously a big improvement from down 7%. I don't understand the two-year stack, but when we look at the sequential, I think it's up 3% PT Q over Q, which again is unusual. So I'm just wondering, some of these delays you called out to military and government, you're assuming that comes back in the third quarter. And then maybe on top of that, just talk about what we've seen in the channel, sell in versus sell out. Are we seeing some big impacts right now? So I think you're right. There's a bit of a step up, mostly from probably a big deal that moved from Q2 to Q3. Otherwise, I think you'd see PT revenue looking about flat. And that's the single biggest difference. As Jim mentioned, we expect bookings to return to positive growth in Q3. And I think that also helps. And then you click down, we've got a couple of businesses in PT, Qualitrol, Anderson, and EMC, name three, that are actually helping with that step up as well. I would just add, Nigel, that on the inventory level, we do see distributor inventories are largely pretty normalized across all the regions, which does give us confidence in the order rates returning to growth in the second half. Okay. That's helpful. Thanks, guys. And then a quick one on EA, the 130. I mean, I don't think we're shocked by the EV and battery project delays, but I think the impact on revenues is surprising. And I think the second half is lower than the first half. I'm just wondering to what extent do you think you've now de-risked that outlook and sort of how much battery EV revenues are remaining right now in EA? Yeah. We don't have a lot. We really de-risked EA at this point. I think we've seen for a few quarters we had always come into the year knowing that EV in particular would be low. But we did have a number of projects in the funnel that customers were fairly confident that those would happen in the year. As we progressed through the year, those have gotten pushed and pushed. And so we've decided to just mostly de-risk all of that out of the year. So we really, unfortunately, that's not going to be in the year, but those orders have not disappeared. What we're really seeing is we haven't seen the step up in some of the other aspects, broader battery storage as an example. So we're really on track. We're actually ahead of the game on our synergy opportunities in the funnel. We'll see a little bit. Certainly, that's probably going to be a 2025 aspect too. I think the net-net on all that is, Nigel, is we've de-risked the year. We continue to see the industrial logic of the deal strategically, product technology, all of those things. But certainly, we're putting in a little bit of a pause from a customer investment perspective. We continue to believe those will happen sometime in 2025. Okay. Very helpful. Thanks, Jim. Thanks, Nigel. Our next question comes from Steve Tusa with JPMorgan Chase. Please state your question. Hey, guys. How's it going? Hi, Steve. Can you just talk about just more of the industrial software parts of the portfolio, putting Provation aside? Just broadly, you're seeing there, I mean, you mentioned a couple of businesses and their growth rates. What's the total growth rate for those businesses and any theme you're seeing there on customer budgets, perhaps going to more direct AI applications as opposed to ones that are going to weave it in over time? Yeah. Steve, we had a very good quarter for software. So if we were to think about FAL as an example, mid-single digit in the quarter, but ARR was up high single digits growth. So we still believe FAL will be high single digit for the year. We had a little bit of a dip at Provation after a couple of years of what we would call accelerated growth, more on the recurring part of the business. Generally, we've seen a lot of budget flush relative because of stimulus in 2022 and 2023. We didn't see as much of that flush in this year, but we have a number of new customers starting in the second half of the year, particularly in the federal world. So we really feel good about Gordian in particular as we get in. Accruent continues to improve. Their order growth rate has been very good for the first half of the year. ServiceChannel is very good as well. We see that inflecting in the second half of the year. Really, a couple of points because we were good and we were high single digit in the first quarter, I think. So if we just take FAL in general, our gross dollar retention is at 99%, very strong. Our net dollar retention is 102, 103. We've seen some really we're probably not seeing, to your question, maybe a little bit of new logo distancing than what's normal. But as we mentioned in the prepared remarks, both Gordian Cloud and our Space Intelligence at Accruent, we've now got even better innovation into the market in both those businesses. So we think the demand environment for those opportunities is really good as well. So we feel good about that. On the Intelex side or EH&S side, we continue to see good SaaS growth at Intelex as well. So we're again in a high single digit range. So we're in a good place here. And quite frankly, I think we're creating some great opportunities for us into the future with a number of innovations that we're excited about, both in the second half and into 2025. Then lastly, you guys are doing a pretty good job of delivering on expectations. But it looks like there's a bit of upside needed in consensus to hit that, your long-term target next year. When would you kind of reevaluate that, the 450 number, or act to get there, whether it's kind of paying down debt? Or when would we kind of reevaluate that EPS target? Because the street right now is obviously comfortably below that and not moving very much. Yeah. I mean, I think we've always thought 450 is both aspirational and but achievable. We talked about the confidence in the prepared remarks. We've certainly got some tailwinds and headwinds. A number of the tailwinds we talked about, like healthcare and the new product innovation, and certainly some of the software businesses I just described, a little bit of headwind. But there's a couple we've talked for a couple of quarters now that there's a few ways to get there. The buyback, maybe a little bit of accelerated on the buyback front. Obviously, M&A, EA is going to be a little bit of a headwind. But our bolt-on, the other 4 bolt-ons we did last year are all accelerated and are over-delivering as well. So yeah, we'll certainly update that number. But as we said, and we've said continually, if I think about the starting point of the year, we're going to beat our EPS this year. But we're going to get there a little differently than we anticipated in January. But what we know to be true is we're still going to beat that original EPS target. No matter what, we'll always have tailwinds and headwinds, and we'll certainly give an update on that as we get closer to 2025 for sure. Great. Thanks a lot. Thank you. Our next question comes from Jeffrey Sprague with Vertical Research Partners. Please go ahead with your question. Yeah. Hello everyone. Hey, hello. I hope everybody's doing well. Hey, I just wanted to put a finer point on Tek specifically, make sure at least I have it dialed right, maybe for the benefit of others also. Just can you just clarify what is the expected performance for Tek specifically for the year and what was it previously in terms of year-over-year revenue decline? Just on the core growth at Tek, we now expect it to be down a low double digit in terms of revenue. Previously, we had expected it to be down mid-single digit, mid-single digit plus. Yeah, Jeff, just a little bit of color on that, probably. I would say the two things that have really changed, one, we described some of that Mil-Gov business moving out. And after moving a few times, we decided to take some of that out. The second piece is, in China, we're not seeing the recovery in China we had anticipated. As you know, the Chinese government had put a number of incentives into play in the back half of the year or the end of the first quarter. One of those around replacement investments, we thought would get more traction in the economy, and it hasn't. So it's really those two things that are the big changes relative to what we've seen. So as Elena just said, we're going to be down low double digit. If we step back for three years, that's still going to average a mid-single-digit growth over a three-year period. We'll still be even with that number of mid-single-digit. Then maybe just, I don't have all the comps in front of me. I'll dig them out after the call. Just on the progression into the remainder of the year for Tek, you said orders are expected to be up. Will that convert relatively quickly the revenues? How would you expect the revenues to kind of play sequentially off this Q2 level? I would say on a year-over-year basis, our expectation for Tek core year-over-year is it's going to be down in that low single, I'm sorry, in that low double digit range for Q3 and Q4. There's a slight uptick as obviously some of the orders that we've already seen in Tek will turn to revenue. But it's really still a down, call it low double digit in both Q3 and Q4 on a core basis. We are seeing some longer cycle aspects of the business that are setting up for order rates or shipments in the late part of the year and early part of 2025. Got it. Thanks. We'll leave it there. Appreciate it. Thank you. Our next question comes from Deane Dray with RBC Capital Markets. Please state your question. Thank you. Good day, everyone. Hey, Deane. Hey, I want to circle back. It's related to Steve's earlier question, but we're hearing more issues in the software side about risks of churn and disintermediation by some cheaper AI-enabled products. This has come up on other calls. Are you seeing any issues and maybe specifically for Accruent and ServiceChannel? Thanks. We're not. In fact, both Accruent and ServiceChannel are going to accelerate through the year from a core growth perspective. So this is always dated back to our workflow strategy, Deane, in many respects, where we really were working really hard in our assessments of businesses that we wanted ones that had real vertical expertise, some of which was built on our hardware experience. And so we've got real opportunity to provide some AI solutions into our workflows as well. We mentioned Gordian Cloud is a good example. We now bring together all of Gordian's solutions into one cloud offering. So we feel really good about the position of those businesses. We are always looking for competitive threats, no matter whether it's AI or any other competitive threat. I also think the scale positions that we've got in some of those places, while they're nichy, they're good positions. FAL, we're the number 1 player in the market, as an example. Provation would be the same. So moving to the healthcare side of the house. So I think we're in a good place to take advantage of AI. We mentioned the prepared remarks, seven new ideas that we're working through in the business relative to just this last quarter with our partnership with Pioneer Square Labs. So we're going to continue to really look for AI as a solution set. But to your specific question, we've not seen any disintermediation or competitive threat at this point. Great. That's really helpful. And then one for Chuck. Maybe just give us some color and context around the lower tax guide for the second half. What's driving that? Is that mix? Is there anything one-off like a reversal of an accrual? Just if you could share that. Well, there's always a lot of things going on in tax, Deane. But the big thing by far here is the move out of the Pillar Two for us. The minimum global tax rate isn't going to impact us this year. And so that pushed out, and that's the single biggest thing. Thank you. Thanks, Deane. Thank yo u. And our next question comes from Joe Giordano with TD Cowen. Please state your question. Hey, Joe. Thanks for taking my questions. How would you respond to someone who says that you guys are being a little bit late to the party in some of these cuts to some of the cyclical markets? When I see Tek, this is 2 quarters in a row, but some of your competitors have been that I think you're arriving at the right place. Just are you getting there a little bit slowly? And then with EA, I believe we were talking almost 200 at the beginning of the year, right? And now we're at 130. So how would you respond to that kind of comment? Yeah, I think we're closer to 185, 190-ish, I think. But that's probably close. Some of that's FX. I wouldn't say relate to the party. But obviously, what we've seen is some things that are abnormal to what we've seen in the past. As an example, even last year when orders were tough, that Mil-Gov segment was really strong. We've got a multi-million dollar repeat order that we did in the second quarter of last year that has moved into the second half, and we've cut in half. So that's an unusual we had a real good line of sight to that. That's a piece of the move. The other is we've typically seen, I think, over 20 years, the Chinese government's actions get traction. So I think those things maybe are a little unique to us, but maybe not. So I think we've certainly been prepared for it from a cost perspective, and that's why you still continue to see the strong margin and EPS growth for the year. But I think at this point, it's appropriate getting into the year with six months left to take stock of where we're at. And that's our story. If I'm thinking on M&A now, I'm guessing you guys you just did a big deal, and you're buying back some stock. But if your M&A from here is going to be a little bit closer to home, closer to existing assets, how are you thinking about where you want to go near term? Is it more about, "Hey, this is something that's under pressure. We can get a good deal, but there might be downside"? Or are you more inclined to pay higher for something that is moving in the right direction and you feel more confident with the near-term growth outlook? What's that calculus like internally? Well, I take stock of what we've done over the last several years. We typically do 1-2 deals a year from a bolt-on perspective. But when you think about the recurring revenue that we have now, 42% of sales growing at low double-digit, all of that is acquired assets. So we're really seeing the benefit and the resiliency of the acquisition strategy that we've had. And now that we've built these foundations, those 4 bolt-ons that we did last year, all into the workflows and growth platforms that we have today, we just see that we're seeing the benefit of that. And so those are real strong opportunities for us. We'll continue to do that. But again, we're going to be selective. And while we remain busy on things, you're not seeing a lot of deals transacted this year thus far. I think that's because you continue to see seller interests very often not aligned with buyer interests. So we'll continue to be disciplined. We're in a great position, given the number of deals we did in 2023, to continue to work on those and make them a great part of Fortive. We have the deals that were in 2019 and 2020 and 2021 that you're seeing the benefit of play out in 2024 for us. Thanks, guys. Thank you. Our next question comes from Jamie Cook with Truist. Please state your question. Hi, good morning. Thanks for the questions. One, just on your guide for Europe and for Asia, you maintained your core growth guide for both of those geographies. However, sales core growth deteriorated in the second quarter relative to the first quarter for both of those regions. So just trying to understand confidence level or is there a recovery expected in the back half of the year? And then my second question, not to be nitpicky, but the IOS margins were down 20 basis points year-over-year. You still had core growth. You had positive pricing. You are maintaining your guide for the year. But was there any nuance in the second quarter that drove the margins down year-over-year? Thank you. Thanks, Jamie. Maybe we're tagging this with Chuck. Yeah, I mean, we brought Europe down a little bit. It's a little bit within the low single digit framework. So it's down a little bit from where we're at. We see healthcare has been really good in Europe, and we see it continued. So there's some pieces of Europe that have remained pretty good. So on a core perspective, we brought it down a little bit. North America will be our highest growth region this year for sure. And that just speaks to all the parts of the business within North America where a greater chunk of our recurring revenue is. And on the IOS margins. Well, IOS margins are in like 34% or so, down nominally with a little bit of mix. But on a 2-year stack, I think they're up 300 basis points. So we're very happy with those margins. And I would expect that you will continue to see that margin expansion continue at the normal rate in Q3 and Q4. Sorry, just to follow up, you didn't answer on Asia. The guide is maintained even though Asia got worse. It doesn't sound like China's getting better. China got worse within the guide for sure. The rest of Asia is a little bit better. So I think where we stand now, China's now just about 10% of our sales in our high-growth markets. Ex-China are now 14% of our sales. So we've really got a we're seeing good growth. We mentioned the prepared remarks that India was a little slow in the quarter, but we see good India growth the rest of the year as one example. So we just think the other parts of Asia will we mentioned the prepared remarks that Japan was pretty good. So we think the other parts of Asia will hold up as they have in China. But we did, as part of our de-risking, particularly in PT, we did take China down for the year. Thank you. Thank you, Jamie. Thank you. And our next question comes from Rob Mason with Baird. Please state your question. Yes, good morning. Just wanted to see if you could comment on your pricing outlook for the balance of the year. A couple of your segments saw a step up, AHS and IOS saw a step up in pricing during the quarter and just how you're thinking about pricing for the balance of the year? Hi, yeah. Hey, yeah. Hey, Rob. We're thinking overall 2%-3%, a pretty good number. And that's been coming down, the amount of price versus last year and the year before. But what we're seeing about now is what I'd expect to see in the second half. Keep in mind that healthcare, we work very hard to be able to get price into our contracts, and you're starting to see that. So I think that pretty much holds going forward, but in that 2%-3% range in the second half. Just a follow-up around EA. I'm curious, Jim or Chuck, just how are you thinking about what's possible, the potential in terms of capturing synergies, some of the commercial synergies you've talked about as you go into 2025? Yeah, against if we end up at $130 million in revenue this year, and you talked about that funnel maybe doubling in smaller orders, what kind of contribution maybe we'd be thinking about? Well, we'll see what the number ends up being because some of it will be what we end up transacting here at the end of the year. But that number is we think somewhere in the neighborhood of $10 million-$20 million right now and growing. So that's the funnel. So as we won't collect all of that funnel. But that funnel is starting to build here. So we feel good about it. We're ahead of the game. Let's see where we transact the remaining part of the year and as we get into next year. But I think what we've seen, and as mentioned before, is the technology is good. Customers like the business. We haven't seen very little cancellations from orders. It's just, as we know, a number of the customers have just delayed their investment cycle. But we still believe new battery chemistries are critical to battery storage. Data center battery storage is still going to be really important. EV mobility eventually will come back. So a number of the long-term growth drivers are still there. But we certainly are seeing a momentary lapse in some of the customer investments for sure. I see. Thank you. Thank you. Our next question comes from Andrew Kaplowitz with Citigroup. Please state your question. Hello, everyone. Hi, Andy. Jim, you mentioned the 60% incrementals for the year, which is obviously quite good and partially based on the restructuring you did coming into the year. But what does that kind of performance tell you for how you might be able to bridge toward that 450 next year? Do you still see a good likelihood of above-average incrementals next year if healthcare, for instance, continues to recover and your short-cycle businesses do start to come back? Yeah, and this Chuck, what we see, first of all, we've got two segments, IOS and AHS, that are really on a good path into what we wanted them to be in 2025. And then, as you noted, we did productivity and cost savings out last year. And we'll be doing more of that in the back half of this year. It's not as dramatic, but to get onto the right glide path into that 2025 number. So we'll alter, spend less, and slow the rate of the spending in there, and then take a little bit of cost out, particularly in PT. Got it. It's interesting. No questions on AHS. They must be doing something right. Let me just ask you then, consumables out double digits, hospitals seem to be recovering in the U.S. Does this seem like an extended period now of good growth for AHS? And how are you performing in terms of improving the ASP business in China? Yeah, the ASP business has been on a good run for several quarters. Obviously, we had some noise with the North American channel transition and the exit of Russia and a number of things. When you look across the now the last several years, we've had some good growth, and we believe strongly that that's the benefit of the business. We're just now getting the innovation funnel going, right? We mentioned the steam sterilization product that we just launched, which is a 7-second BI. We're in a really good place from an innovation front. We'll start to get that innovation flywheel moving. The team has done a great job from a commercial success perspective. So we think ASP is an important part of the transition in health. On the backs of Censis's SaaS revenue growth, we mentioned on the prepared remarks that Provation SaaS business was up over 50%. So we've got a number of good things. And obviously, we continue to improve the margins. The fall-through, as you described in the previous question, is good there. So we think we're on a good run here. There'll always be some puts and takes, but we feel good about it. We feel good about where we're at. And the team is doing a really nice job from an execution perspective. Appreciate the color. Yeah. Thanks, Andy. Our next question comes from Joe O'Dea with Wells Fargo. Please state your question. Hi. Thanks for taking my question. Can you just sort of characterize a little bit what you've seen over the past three months when we talk about EA? I think on the sort of sensing side within PT, you also noted some softer trends in industrial and factory automation demand. Really, you're trying to understand the degree to which there were expectations for things to get a little bit better, and that just hasn't happened as things pushed to the right, or the degree to which things kind of softened sequentially over the course of the quarter, and then what you attribute that to. So any color there would be helpful. Please stand by. We need to just reconnect the speakers. Stand by, please. Thank you for your patience, ladies and gentlemen. We'll continue with the question and answer session. Go ahead, Mr. O'Dea. Hi. Thanks a lot. I just thought you hated my question, but I'll try again. So. Sorry about that. No worries. Basically, just wanted to understand trends over the course of the quarter. I think we see kind of the reset on expectations of EA, I think, in prepared remarks you talked about within PT and the sensing side, a little bit of softer activity in industrial and factory automation. And so I wanted to understand whether what you saw over the course of the quarter was sequential softening or if it was more a matter of earlier expectations for things to get better, and that's just kind of pushing out to the right. So overall, just how you would characterize those trends over the course of the quarter? Yeah. Obviously, in the IOS, I would say healthcare was good throughout the quarter. IOS, obviously, with the software businesses, those are pretty consistent throughout the quarter. Fluke on the POS front actually got better in June. So that was, we haven't talked about Fluke, but we had a very good quarter with Fluke and should have a good year with Fluke. Our industrial business, the industrial group business at Fluke, was actually up mid-single digit in the quarter. So we feel good about some of the trends there. That's a decent front on the non-CAPEX side of our business. What we really saw in most cases was really the larger projects moving. So we tend to close those later in the quarter because of the nature of some of the way that business transacts. Mil-Gov tends to be a little later in the quarter. And we just saw those things pushed to the right. Now, some of those things have been pushing for a few, as an example, on the EA front, some of those projects were being pushed from previous quarters. So the de-risking really came out of really three things. Number one was seeing those projects continue to get pushed and now maybe being out of the shipment window at Tek, maybe more broadly, a little bit more slower OEMs in some of the sensing businesses. And I would say finally is just the China recovery being pushed out. Those three things. And so I would say what falls into your expectation versus just what we saw, most of it was things we saw. Maybe the one expectation front probably is the China aspect where we thought China might get better here in the quarter, and it hasn't. Now we anticipate that recovery is going to be slower through the year. That's helpful color. Then just related in the conversations you're having with customers and as they sort of push things to the right a little bit, what you're hearing from them in terms of why are they doing that? What are they waiting for? How much of it is kind of macro and election and interest rates or other things that they're paying attention to and waiting on some spending as a result? Yeah. Yeah, Yeah, I would call it a combination of uncertainty related to maybe geopolitical, a little bit. That's kind of a global point, so not as much a U.S. point, but certainly around the world. That's probably part of it. And I think some of it is macro uncertainty. Obviously, PMI is starting to recover, but maybe not around the world as quickly as possible. And so I think people certainly decided to hold off a little bit. And certainly on the Mil-Gov front, that's got a government spending aspect to it, uncertainty of what the defense budget's going to be. And obviously, much of the defense spending is going towards production-type things. And the one thing you can delay is the R&D investments. And so a lot of that pushing out of the Mil-Gov piece is that R&D investment that is much more easy to push than obviously the production side of things. That's helpful. Thank you. Thank you. Thank you. There are no further questions at this time. I'll hand the floor back over to Jim Lico for final comments. Thank you. Diego, thank you. Thanks, everyone, for being on the call. We appreciate your patience as we switch phone lines here in Everett. We'll try to figure out what's happened there. Obviously, we've got plenty of time for follow-up calls and opportunities to catch up to give you more clarity as to what we're talking about today. As we said in the prepared remarks, we feel the portfolio we've built a lot of resiliency. You see that, as I mentioned, on the recurring revenue growing at low double digits. We feel strongly about the importance of de-risking the year while at the same time really being able to drive double-digit EPS growth, double-digit free cash flow on a little bit lower revenue than we anticipated. We feel good about where we're at right now strategically. As we talked about the number of points we made on the call, we are seeing some market things, but obviously, our share position and our continued ability to innovate has never been greater. And so we feel the portfolio is in good shape to do that on a continuous basis. Look forward to talking to everyone on follow-up. And if we don't see you before the fall, have a great summer. Thank you. Thank you. This concludes today's conference. All parties may disconnect. Have a good day. Have a good day.