Thank you, everybody. Chris Snyder, U.S. Multi-Industry Analyst. You know, super excited to be up here with Pentair and CFO Bob Fishman. Before we get into the Q&A, Bob's going to make a few opening remarks. All right. First, thank you, Chris, for the invitation. Excellent conference. Really, really enjoying it. Getting a chance to meet some great, great investors. For those of you who might be new to this story, Pentair is a pure-play water company. We help the world move, improve, and enjoy water. We do that through our three segments. The move business is our Flow business. Improve business is our Water Solutions. Think one-third resi, two-thirds commercial. We have our enjoy business, which tends to get most of the limelight, which is our Pool business. We've been on a transformation journey and successfully expanded our return on sales for quite a few years in a row now. We're looking forward to an inflection point as we turn the year into 2026 and start to build some of that top-line growth. That's a little bit about the Pentair story. Again, thank you for having us. Oh, absolutely. Can you just kind of maybe, starting off, go through the segments? You know, what are some of the demand trends you're seeing in the market, and what's the trajectory that you're seeing from here? Yeah. Let me go ahead and start with the Pool business. Think of our $4.1 billion of revenue in the $1.5 billion Pool business. It's an interesting business. We're the market leader. We primarily sell. 75% of our revenue is in the five Sun Belt states. We're skewed a little bit more towards that luxury end market with pool equipment. There's 5.5 million pools in the ground, on average age, 23 years old. A really nice business. About 20% of our revenue comes from new pool builds, 20% from remodels, and 60% from break/fix. This has been a year we'll hit our fifth consecutive quarter of growth in pool in Q2. Again, on an upward trajectory of expanding the top line and also growing the return on sales. When you think about the next business, we've got our water solutions business. Again, one-third residential where we sell, you know, water softeners. We sell point of use, point of entry filtration to customers within residential. Then two-thirds of the business is commercial where we sell filtration and ice equipment. Finally, our Flow business. Think about that as about a $1.6 billion business. A third is residential. Think small pumps. That'd be well pumps, sump pumps. Another third of the business is commercial and infrastructure. That's our larger pumps, fire suppression pumps, water supply, water disposal pumps. The final third is our industrial business where we sell filtration and separation technology, as well as a number of products that turn waste into value. I would say the one thing that knits the three segments together is our three technologies. We're very strong in the pump technology, about $1.5 billion of our revenue, about $1 billion in filtration and separation, and about $800 million in heating and cooling. That's a little bit more about our segments. Yeah, I appreciate that. Maybe looking at the pool business, clearly there was a lot of strength coming out of COVID. Now we're kind of correcting lower. Can you just talk about what you see in that market? What reasons are there to be optimistic that things could get better from here? Absolutely. For our residential businesses, we've had roughly two to three years of negative growth in those businesses. As interest rates have climbed, we've been faced with lower demand. We're hitting an inflection point here where there's roughly 57,000 new pool builds this year, which is significantly down from roughly 80,000 pre-COVID. It's probably the lowest year since 2009. We think we're at a point where, as interest rates start to come down, as consumers start to build homes and want swimming pools, we'll benefit from that trend. Is it more of a new home sale or an existing home sale? Which one of those two is typically a bigger driver of pools? A little bit of both. In terms of the new pool builds, that's about 20% of our revenue in any one year. 20% is remodel. When a pool gets to be about 15, 20 years old, you typically need to remodel the surface. With that, you often upgrade the pool pad. 60% is break/fix. You're replacing parts that break, whether it's discretionary or non-discretionary. Could be LED lighting, could be a filter, could be a pump. I appreciate that. One thing that's come up lately for the company is the gross margin opportunity. What do you see there as you look out forward? Yeah, so our company's been roughly $4.1 billion for the last couple of years. We've had to rely quite heavily on the transformation program. What we did about three years ago, we brought in some third-party experts to help us with sourcing savings, as well as pricing excellence. The other couple of pillars are operational footprint, think four-wall lean and automation, as well as going after some of our OpEx spend. We're really in the early to mid-innings in terms of driving that transformation program. We've driven roughly $190 million the last two years from a transformation perspective, and we've increased our margin pretty significantly through that. It's all enabled by our 80/20 initiative. 80/20 has really been an accelerator for our transformation. What we've done is we've done the intersection of our top customers with our top products, and we're focusing on removing the complexity in that 4% of revenue that sits in Quad 4 and over-serving our customers, our top customers that are in that Quad 1. That allows us, that gives us the lens by which we run the transformation program. Can you maybe talk about the 80/20 program a bit more? Typically these programs bring margin benefits, but early on there could be some revenue headwinds. Where are you guys in that transformation, and how do you see that 80/20 progressing forward? Yeah, that's the exciting part. We're virtually finished with the Quad 4 exit. We started the program about a year ago. We've seen a loss of about 2%- 3% of revenue, some last year, some a little bit this year, all built into our guidance. Now we can redeploy those savings and really focus on over-serving those top customers, giving them our best service people, improving the quality, the lead times, those types of things. When a product is built in one of our factories, we know it's going to a top customer. Being very focused on the metrics for those top customers is really enabling us to grow the revenue, which for us is really the main point of the 80/20 program, which is to drive growth through over-serving those Quad 1 customers. Yeah, you know, as you kind of think about being able to bring new products and new technologies to market and win more in those most important markets, is there any sort of technology or products that you would call out that are either proprietary or unique to Pentair? You know, that is just differentiation versus the competitor base. Yeah, it's a good question. It really sits, you know, within the pumps, the filtration and separation, as well as the heating and cooling. We have a number of strong products in that area. We continue to leverage that innovation across all three segments and even develop some breakthrough products. I'm thinking of things like whole-home filtration for our residential water or creating an effortless pool experience through using some filtration technology to go from what we call green to clean in a very short period of time. Yeah. I guess when we think about, maybe the tariff and the political landscape, the company has handled tariffs pretty well so far. We kind of continue just to see more and more. I guess maybe the questions I would have are, the latest 232 tariff expansion, does that have an impact on the business? Second, is there any pricing fatigue in the market? Maybe not due to the overall level that's being passed, but just due to the almost seemingly regular having to come back and get more price in response to these tariffs? Yeah, yeah. In order for us to have success in our P&L this year, we need the transformation to read through. To do that, we've had to utilize pricing to offset the tariffs. When we started the year, we had calculated the impact to be about $140 million, primarily because of that higher tariff from China. Back in Q2, we revised that to roughly a $75 million impact on tariffs for the company as the China tariff came down. We've done a good job to offset that with price. For example, pools went out with a price increase in both April and September to offset those tariffs. We also signaled in our last earnings call that because of some of the uncertainty around coppers uncertainty around the European Union, there could be another $10 million of headwind coming our way. As Q3 has played out here, our feeling is that the $75 million estimate is about what we're going to see. We haven't seen any significant impact associated with either 232, with India, with the European Union. A lot of it is netted together. I think we've done a good job of increasing prices where we needed to to offset the cost of tariff. Now we can again focus back on transformation and growing the top line to deliver the results that we need. No, I appreciate that. The other, you know, maybe disruption or impact that tariffs have had broadly on the economy is, or at least questions on, you know, was there a pull forward of maybe not end demand, I wouldn't think of the consumer, but either into the channel or onto someone's balance sheet, essentially. You know, what are your thoughts on that? You know, what can the company do to track that or monitor that? Yeah, we kept a close eye on that early in the year in terms of whether there was any Q1 pull forward associated with tariffs that were yet to be announced or still to come. I think we've done a good job of staying close to the distributors, to the dealers, to the end customers to kind of understand the landscape. I think the thing that's exciting about Pentair right now is while a lot of our income growth has been fueled by transformation, we see a lot more balance going forward. Each of our three segments has growth opportunities that are starting to show through here in Q3 and Q4. We finished the year with some momentum and get back to that story where we can grow the top line, grow the return on sales, but have that balance story going forward. Yeah, you know, any sort of sentiment or feedback when you talk to your channel partners, what's the sentiment? How do they see things shaping up? Yeah, I think that they understand why we need to increase the price. They're spending time getting closer to that end customer. So far, price has proven to be pretty sticky, but you can only increase price so much. That is why the transformation program is so important. Generally speaking, we're kind of back to historical norms across the business and poised for growth as maybe some of these different dynamics take place. Lower interest rates, people learning to live in a higher interest rate environment, all good for our business. Roughly 50% of our business is residential. We consider that business at sort of a low water mark going into 2026. 50% is commercial and industrial. I appreciate that. The company has talked about demand elasticity. I think it was in the one-for-one kind of range. Is that, are you kind of still seeing that in the market? Are you comfortable that that's kind of the right metric to use going forward? Yeah, typically that has not been the case. We've had the ability to raise price and also see some volume growth. I think that's what we're getting back to. We had started the year off pretty conservatively by saying that if, you know, price needs to go up X%, volume will come down. We just haven't seen that. That's been good for the business, good for the top line. As we move forward, you can expect to get back into that norm, more typical one to two points of price, two to three points of volume. I'm assuming you guys raised the volume guide by a point. I'm assuming that's why. Is it kind of a function of the consumer that you're selling to being on the higher end and feeling better? It's been helpful for us. You know, 75% of our business is break/fix. That creates a nice recurring revenue stream. Within the pool business, we tend to sell the higher-end pools where people are using more cash versus borrowing and needing to take advantage or being disadvantaged by those higher interest rates. Those have worked in our favor as well. I appreciate that. Maybe moving over to some of the cost savings and, you know, kind of transformation plan. You know, you guys had a lot of savings the last couple of years, you know, still coming through here in 2025. Can you kind of update us on that? What do you see out when you look into 2026? What are the biggest drivers of that? Yeah, so earlier this year, we talked about driving to 26% ROS by next year. That's fairly impressive when you compare it to, you know, back in 2020, we had a 17% return on sales. That transformation program has really benefited us. Again, continuing to focus on the complexity that exists because of our history. Pentair was built on a lot of acquisitions. We have close to 40 factories, a lot of SKUs, a lot of complexity. When I say we're in the early innings of the transformation, I really mean it. We've got lots of opportunity to continue to take cost out and be more efficient. I appreciate that. When we think about that 26% into next year and we think about what could cause it to be better or maybe fall short, is it really just a function of volumes, or are there other things that could cause the company to come in ahead or modestly below? Yeah, for us, you know, we really haven't built our transformation program on driving significantly more revenue. What could drive some upside is finally getting some of that volume increase, having that manufacturing leverage. That would certainly help. We'd also like to take some of those savings, though, and reinvest it back either in sales and marketing, various sales plays, R&D to continue to drive that top line. It feels like a hard time to achieve margin targets given all the cost inflation in the world. Is that a hindrance that it's maybe hard to get a margin on the tariff? On the tariff itself, you know, our goal is simply to offset the tariff through pricing and then to leverage all of the training and the expertise we've built up around the four pillars of transformation to drive that ROS expansion story. For us, we're getting pretty good at it. It's year three. As an example, within wave one and wave two of sourcing, we looked at motors, drives, electronics, castings, but without the 80/20 lens. Now that we've brought 80/20 in, we'll relook at the wave one, wave two of spend and continue to drive savings that way. Thank you. Maybe, if we could kind of turn over to the Flow business, can you talk about the drivers there, both maybe from like a cyclical perspective, but then also what are some of the secular opportunities in that market that kind of get you excited? Yeah, Flow is a really interesting, you know, $1.6 billion business. Again, it's a third residential, a third commercial infrastructure, and a third industrial. In our last earnings call, we guided Flow's growth this quarter to be mid-single digit. This is a business that's historically growing low single digits, and they're doing something right. For example, within commercial and infrastructure, they typically lead with the fire suppression pump, but they've expanded their offerings in terms of water supply and water disposal pumps in a particular building. They're starting to work with data centers as an example that have significantly more pumps than a normal office building. By expanding that footprint, looking outside to various different customers, there's a nice growth profile for the commercial and infrastructure business. Interesting. Is that, you know, you called out data center. Is that kind of liquid, is that like coming later because it's liquid cooling related, or has that been an opportunity that's been in the market, but that maybe you haven't gone after? It's really more something that's to come. It's early days for us to take advantage of these data centers and the cooling technology that they need with all of the pumps. For us to make a very small breakthrough in that is a very positive sign. That's a business that was very focused on cost reduction, on improving their profitability. Once they hit the business model, we've allowed them to go after some growth opportunities. You called out pretty good growth for Flow in Q2. I think if we look out longer term and compare it to your targets, I think you guys expect it to be one of the through cycle softer growth profiles. I guess, why is it that, is it the residential side? What's kind of holding the growth back there? Typically, that's been a GDP type grower. We've let them grow at kind of that level as we've reduced the complexity. Again, as they continue to transform their business and make it simpler, go after more standardized offerings, we're allowing them to go after more of the growth. You should see them growing faster than the overall market. Interesting. Maybe kind of coming back to a hot company level here, is there any places in the portfolio where you feel like tariffs are providing a competitive advantage, whether it's a certain big international players, maybe just low-cost Asia-based products coming in? Is there any impact from that? I think we've done a nice job through the sourcing work of really diversifying our supply chain. We've reduced our reliance on places like China over the years and will continue to do so. When you think about our $1.5 billion of spend, for sure, the majority of that sits in the U.S. 70% of our revenue is in the U.S., so we try to be close to the markets that we serve. I appreciate that. I guess maybe, flipping over to capital allocation, can you kind of outline the priorities there, what you're focused on? Yeah, capital allocation for me, it was a much easier job two years ago. We had just acquired Manitowoc Ice. We had levered up to 2.7x, and it was all about debt pay down. Because our free cash flow has been very strong, it's one-to-one with net income, we've been able to delever quickly. We're now down to 1.2x. We increased our dividend this year by 9%. It's the 49th year in a row that we've increased our dividend. We're a dividend aristocrat today, but next year, if we were to increase our dividend for the 50th year, we'd be a dividend king. Wow. Exciting from our perspective. We've also done more share repurchase this year than what we've done over the last couple of years. Very balanced in terms of staying investment grade, paying down the debt and delevering, increasing the dividend, doing more share buyback. Most importantly, as the M&A environment starts to get a bit better, we're looking at bolt-ons. We did a really nice acquisition in Q4 last year within the pool business, looking at heat pumps to expand our portfolio there. A nice 30% ROS business that we can then take and sell that product to other geographies. We just announced the deal. We haven't closed on it yet, but a business called Hydra-Stop that would fit within the commercial and infrastructure space would allow a lot more cross-sell opportunities as well. Really, we're looking at high-quality companies that we can take, put into our platform, and be able to drive that top-line growth. You know, when you think about what makes a high-quality company, is it like, you know, gross margin that you feel like you can leverage? Is it a technology? Is it a growth profile? We look at those two primarily, which is kind of what have they grown over the last five years and how consistently can they grow. We look at their return on sales and see, you know, how efficient they've been in terms of driving those revenue dollars. It has to meet certain parameters. The whole leadership team is paid on return on invested capital at Pentair. We've just gone from kind of 15% up to 16.5% last quarter. Our goal is to drive high teens ROIC to use our money wisely. It's a nice, you know, mix in terms of, you know, driving an effective use of capital. Appreciate that. When we think about M&A and bolt-ons, are there certain segments or even verticals within those segments that you are most focused on, and anything deserve the capital versus others? We think so. When we look at our businesses, we're primarily focused on the pool business, you know, where we could do M&A, and it's, you know, usually smaller companies there. We really like the commercial water space. Two of our crown jewels sit within commercial water, our Everpure filtration and our Manitowoc Ice. Adding to that, continuing to, you know, not only be good in ice and filtration, but also beverage dispense. Finally, commercial flow where we think we can, you know, take advantage of the pumps that we have today and grow that business. When I was looking at the 2024 Investor Day, one of the things that stood out was the pricing playbook that you guys laid out. There were multiple waves of implementation there. Can you talk about that pricing strategy? Where are we in the process and ultimately where is it going? Yeah, huge difference from even two years ago. We used to be very much cost plus in terms of our pricing strategy. Now we have a differentiated approach. We use our data analytics, we see where we have a competitive advantage, where we might not, and we price accordingly based on value. A lot of analysis goes into that. When we go out with a price increase, typically it's different by product line based on the value that we're able to give to the customer. How would you categorize industry price? Is it rational? Are you seeing anyone get more aggressive given that we're at the, I think you said earlier, the GFC lows? Is that changing people from being rational? I would say the pricing environment has been pretty, is returning back to an environment where you get a couple of points of price every year. Price was so different during the COVID years where we were covering significant inflation. Our goal with pricing is really just to cover inflation, the cost of the material plus any wage inflation that we see. You know, continue to over-serve our customers to drive the volume growth. Interesting. You know, one of the things you mentioned earlier was that it's a very exciting part of the 80/20 program because you're kind of moving out of those tier four exits. Yeah. Have you guys sized or any way for us to think about how material were those exits? Just as we kind of think about what a clean slate could look like. Yeah, for us, you know, when you look at the cost to serve, the variable costs are spread about 25% each in the four quadrants. You might have 60% of your revenue sitting in Quad 1, 25% cost to serve. You have the same 25% cost to serve for only that 4% of revenue. You've got hundreds, if not thousands of customers, products, and all the complexity. We're working our way through the journey of removing that complexity and redeploying that cost to serve up to that Quad 1. It feels to me, kind of from the outside looking in, that this is a market that appreciates innovation, will pay for technology, particularly at that higher end of the market. I guess as you guys think about bringing innovation and technology, how do you balance inorganic, go out and buy it versus just spending R&D and developing new products in-house? Yeah, we're constantly looking at the make versus buy and looking at the market window, how quickly we can get to market in those three main technologies that I talked about earlier. If we think we can develop it quicker with our engineers, we go for that. If we think there's a market opportunity that we need to seize on quickly, we'll look at acquisitions there. It's really a balanced approach across both of those areas. Is there any sort of M&A criteria that the company uses as guardrails or guideposts, whether it's an ROI metrics, multiples you want to pay, or any threshold there? Yeah, I mean, because we're all paid on return on invested capital, that tends to be the number one focus. In the early years, we want to cover our weighted average cost of capital. As we get to year three, four, and five, we really want to be driving towards that mid to high teens ROIC. Interesting. Is there any kind of technologies in the market that you think are interesting or are gaining traction that would be of interest to you? Or do you feel like you guys are pretty well covered there? You know, stay tuned for the next Investor Day. Again, it's all in that space of dealing with customers' main pain points. If you look at pool owners, it's about water testing and it's about an effortless pool experience. Anything we can do to improve those two areas are technologies that we're interested in. You know, one thing that I think is a little bit interesting, it's coming up a bunch at this conference on the residential market is that it doesn't seem, and correct me if you disagree, but it doesn't seem like, you know, resi construction, whether it's new home sales, existing home sales, they're not great, but they also haven't been great. We are seeing a lot of these consumer housing related verticals take a leg down in 2025. Why do you think that is? It's not like last year was a great backdrop either. Yeah, I can't really speak to what other companies are seeing. You know, what we're seeing is because of the break/fix business that we have, we can maybe weather the storm a little bit better and not get ahead of ourselves in terms of new pool builds or remodels. At some point here, people will learn to live within the higher interest rate environment. There's about a six to nine month lag between when mortgage rates go down and when people start reinvesting in their backyard. We're poised to take advantage of that at this higher ROS business model. The fact that we've been able to transform during these low revenue years, as the revenue starts to pick up, it'll be at that higher profitability level. Yeah, I mean, not to front run any Investor Days again, but is there, you know, you guys have this 26% ROS target. I'm assuming you don't think that that's the ceiling. Do you guys feel like there is opportunity beyond that? You know, I'm not expecting any numbers, but what kind of opportunities do you see as you look out longer term? Yeah, I'll use my favorite word. It's balance. It's balance. We've got to continue to drive that ROS expansion story at the same time, achieve that mid-single digit growth target for Pentair. If we do those two things, you're looking at, you know, double digit type EBITDA and EPS growth. You were kind of saying earlier, historically, there really isn't all that much elasticity. Maybe this isn't the right question, but I feel like businesses can generally toggle between growth and margins. How do you guys balance that? Is one more important than the other? Yeah, we've been on a nice path here of having our multiple improved over the last couple of years that we've executed well. We really do think that top line growth will be the next accelerator for Pentair. Now that transformation is really embedded in our culture and that we still have, you know, a nice sustainable runway, we're very focused on the growth initiative. For us, we're doubling down on growth, whether it's organic or inorganic, and really taking advantage of the fact that we're at a low water mark for a lot of our businesses and we're poised for growth as we move into 2026. I guess, maybe the last thing on that, clearly I think you can look at the data and see that we're in a very low point. Do you think that the path forward from here is just a function of consumer confidence getting better? Do you think it's just a function of interest rates getting better and everything follows that? Do you think things are so bottomed out that even if we stay in a similar macro backdrop of rates higher, tariffs, consumers uncertain, things could just improve off this base because this is kind of just significantly below trend? That's how we view it. If we were in a similar position when we started this year, and then all the uncertainty came with tariffs. If we can remove that uncertainty, even if interest rates tend to stay high, I think there will be growing consumer confidence and that's good for really all of our businesses. Thank you so much, Bob. Really enjoyed the conversation. Good. Thank you, Chris. Take care.