Good day, everyone, and welcome to the Xylem's second quarter 2024 results conference call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your telephone keypad. To withdraw your question, please press star, then two. Please note that this event is being recorded. I would now like to turn the conference over to Andrea van der Berg, Vice President of Investor Relations. Please go ahead. Thank you, operator. Good morning, everyone, and welcome to Xylem's second quarter 2024 earnings call. With me today are Chief Executive Officer, Matthew Pine, and Chief Financial Officer, Bill Grogan. They will provide their perspectives on Xylem's second quarter 2024 results and discuss the third quarter and full year outlook. Following our prepared remarks, we will address questions related to the information covered on the call. I'll ask that you please keep to one question and a follow-up, and then return to the queue. As a reminder, this call and our webcast are accompanied by a slide presentation available on the Investors section of our website. A replay of today's call will be available until midnight, August 6. Additionally, the call will be available for playback via the Investors section of our website under the heading Investor Events. Please turn to slide 2. We will make some forward-looking statements on today's call, including references to future events or developments that we anticipate will or may occur in the future. These statements are subject to future risks and uncertainties, such as those factors described in Xylem's most recent annual report on Form 10-K and in subsequent reports filed with the SEC. Please note that the company undertakes no obligation to update any forward-looking statements publicly to reflect subsequent events or circumstances, and actual events or results could differ materially from those anticipated. Please turn to slide 3. We've provided you with a summary of our key performance metrics, including both GAAP and non-GAAP metrics, with references to prior year segment metrics being made on a comparative basis, reflecting the change in segments as of the beginning of the year. For purposes of today's call, all references will be on an organic and/or adjusted basis, unless otherwise indicated, and non-GAAP financials have been reconciled for you and are included in the appendix section of the presentation. Now, please turn to slide 4, and we'll turn the call over to our CEO, Matthew Pine. Thanks, Andrea. Good morning, everyone, and thank you for joining us today. It's a pleasure to report the achievements of the Xylem team in the second quarter. As you've seen in this morning's release, the team delivered another very strong quarter, outperforming expectations on all metrics, with high single-digit organic revenue growth reflecting gains in both volume and price. The team also expanded adjusted EBITDA margin 170 basis points, and with that outperformance, we delivered adjusted EPS growth of 11%. The story of the second quarter is similar to Q1. On the demand side, our largest markets continue to be resilient. Internally, our outperformance is driven by increasingly disciplined operational execution by the team. This kind of performance momentum is only possible when the whole team is engaged and aligned to make a difference. I want to say a big thank you to the whole Xylem team for the dedication and drive they've demonstrated through the first half of the year. While there were a lot of highlights across the team, I particularly want to mention the standout performance in Measurement & Control Solutions. MCS segment revenue was up 26%, and EBITDA margins are up 700 basis points versus this time last year. The team is doing an outstanding job. Our first half performance is a reflection of the value creation direction we set early in the year and discussed at Xylem's Investor Day in May. That direction includes both resilient above-market growth and accelerated margin expansion. It's gratifying to see the kind of momentum reflected in our quarterly performance. In addition, our simplification initiatives and our work on 80/20 are progressing well and are set to pay off beginning in 2025. Turning to the integration of Evoqua, in late May, we passed the one-year anniversary of our combination with Evoqua. The combination continues to reveal its value. Cost synergies are well on track, and the team is looking to accelerate our pace wherever possible. And our commercial teams are successfully taking Xylem's combined capabilities to the many customers who will benefit from our integrated solutions, both in utility and industrial end markets. With Evoqua integration on track, strong momentum from the first half, resilient demand, and the team's increasing operational commercial discipline, we're raising our full year guide for both revenue and margin, increasing our EPS guidance $0.06 from the prior midpoint. In a moment, I'll provide an update on our high-impact culture and our leadership alignment, and also on our industry-leading 2030 sustainability goals. But first, I'm going to turn it over to Bill to double-click on the quarter's results, our financial position, and our outlook. Bill? Thanks, Matthew. Please turn to slide 5. Q2 was another great quarter, and I want to thank our entire organization for their amazing work. We outperformed against our guide across revenue, margin, and earnings per share. We continue to see resilient demand, and our backlog is at $5.2 billion, a modest decline from prior year as we execute on MCS past due backlog. Book-to-bill was approximately 1, supported by strength in water infrastructure, while organic orders were down 1% in the quarter, driven by project timing within MCS and WSS. Total revenues grew 26%, and organic revenue rose 9%, exceeding our guidance on a healthy combination of volume and price. Our performance was led by MCS and WSS, as we saw growth in all regions, led by double-digit growth in the US. EBITDA margin was 20.8%, up 170 basis points from the prior year. With productivity savings, strong volume and price, more than offsetting inflation, investments, and mix. This reflects incrementals of 28% on a consolidated basis and 50% on a pro forma basis. Our EPS in the quarter was $1.09, above the high end of our guidance by $0.04, and up 11% over the prior year. Our balance sheet is strong, with net debt to adjusted EBITDA at 0.7 times. Year-to-date free cash flow is up 200% versus the prior year, and conversion of 62% is strong given seasonality. This year-over-year improvement was driven by higher net income, offset slightly by increased CapEx, and we continue to benefit from improved working capital efficiency. Please turn to Slide 6. Measurement & Control Solutions had another great quarter, and again exceeded our expectations. MCS revenue was up 26%, driven by smart metering demand and backlog execution. However, due to project timing, orders were down 18% and book-to-bill came in under 1. We worked down past due backlog, and total backlog for MCS now sits at roughly $2 billion, a 12% organic decrease from prior year. We finished the quarter with impressive EBITDA margins of 23.4%, up 700 basis points versus the prior year and up 70 basis points sequentially. Margin expansion was driven by volume, price, productivity, and favorable mix, more than offsetting inflation. As a reminder, we continue to expect a margin headwind from mix in the second half as energy meters account for a larger portion of our sales. In Water Infrastructure, orders were up strong, 8% in the quarter, led by robust treatment demand. Revenue exceeded our expectations, with total growth of 22% and organic growth of 7%, driven by healthy demand across all regions and applications. Adjusted EBITDA margin for the segment was down 60 basis points, with roughly 40% pro forma incrementals. This decline was driven by inflation and acquisition, but was offset partially by productivity, volume, and price. Without the impact of acquisitions, adjusted EBITDA margin improved 40 basis points for the quarter. In Applied Water, orders were up 5% and book-to-bill was greater than 1, reflective of a few large project wins, which will ship next year. Revenues were down 4%, in line with our expectations, lapping strong comps on 12% growth in the second quarter of last year. Decline was primarily driven by softness in developed markets. Segment EBITDA margins declined 200 basis points year-over-year, but increased 100 basis points sequentially. Higher inflation and unfavorable mix was partially offset by productivity savings. Closing the segments with Water Solutions and Services. Orders declined 1% organically, driven by timing of large capital projects, offset by strength in dewatering. Organic revenue is up 12%, with healthy growth across most of the business. Adjusted EBITDA margin was strong at 23.8%, up 60 basis points and driven by volume, productivity, and price, offset in part by unfavorable mix and inflation. Two quarters into resegmentation, we continue to see synergy, momentum, and benefits for our customers in combining our service-based offerings. Now let's turn to Slide 7 for updated full year and Q3 guidance. Given our first half outperformance and both commercial and operational momentum, we are raising our full year guide. We are increasing our revenue guide by approximately $50 million, up from $8.5 billion. This reflects an additional 0.5 point of growth at the midpoint versus our prior guidance. That will put total revenue growth at approximately 16% and organic revenue growth at 5%-6%. The integration is going smoothly, and we continue to expect $100 million of exit run rate cost synergies in 2024, with the potential to accelerate by year-end. We are confident about driving further margin expansion with operational productivity and are raising our EBITDA margin guidance to about 20.5%. That represents 160 basis points of expansion versus the prior year, driven by higher volume, productivity, including cost synergies and price offsetting inflation. Our updated EPS guidance of $4.18-$4.28 reflects an increase of $0.06 at the midpoint. Free cash flow conversion for the year is now expected to be over 120% of net income. The full year outlook at the segment level remains largely unchanged, with the exception of MCS, which we now expect to grow at high teens due to our first half performance, versus our previous outlook of low teens. For the quarter, we anticipate revenue growth will be 3%-5% on a reported and organic basis. We expect third quarter EBITDA margin to be in the range of 20.5%-21%, up 70-120 basis points, driven by higher volumes, continued price realization, and productivity gains. This yields third quarter EPS of $1.07-$1.12. Our diversified portfolio of mission-critical products and services positions us well to address our customers' evolving needs, and we anticipate healthy demand across most end markets and applications. And we talked about our driving profitability through simplification efforts and our 80/20 implementations at the Investor Day in May. We are progressing well on those initiatives, and I want to reiterate our commitment to systematic margin improvement through operational excellence, supporting our long-term profitability framework. While we are closely monitoring the macro environment, including geopolitical, election uncertainty, and tariffs, our overall outlook for the year remains positive. With that, please turn to slide 8, and I'll turn the call back over to Matthew for closing comments. Thanks, Bill. I'd like to mention 2 events in the quarter that don't show up in the financial results, but are fundamental to Xylem's success and impact. First, in June, just a few weeks after our Investor Day, we gathered Xylem's global leadership team in Washington, D.C. This was the first time we had our top 150 executives in one room, spanning legacy Xylem and legacy Evoqua. It was an energizing 2 days of collaboration focused on the work of leadership, alignment, and culture. I've spoken before about culture as the fundamental how of Xylem, how we'll deliver stronger execution of our strategy, how we'll realize our aspirations, how we'll create our next chapter of Xylem's impact. You can see in our second quarter results that the team is already working well and winning. What our leadership summit reinforced was how much more value creation potential we have ahead of us with an aligned team and a high-impact culture. It was fantastic to see the team so engaged by the opportunities ahead of us. Last quarter also saw the publication of our annual sustainability report. We're very pleased to be tracking well towards our 2025 goals, but we took the opportunity presented by this year's report to set out our aspirations beyond 2025. We're raising the bar again by setting 2030 sustainability goals in three strategic areas. The first is decarbonization, reducing our own greenhouse gas emissions and enabling our customers to decarbonize. Secondly, is water stewardship, aimed at reducing water demand. And finally, we'll provide access to water, sanitation, and hygiene for 80 million people. All three strengthen our customer relationships and increase our impact. Before turning to your questions, I have one more special note. This is Andrea 's last quarterly earnings call at the helm of Investor Relations. We're happy to announce that Andrea is taking on a new role within Xylem, and it's an exciting new opportunity for her. Over the years, so many of you have told me you deeply value Andrea's energy, accessibility, and professionalism, and I've benefited from her insightful counsel and positive encouragement in every circumstance. So thank you, Andrea. Some of you have already met Keith Buettner, who's taking the reins as our investor relations leader. Keith has had great impact as the head of finance in Water Solutions and Services segment, having joined us with the Evoqua combination more than a year ago. He brings deep knowledge of the business to his leadership of IR, and I'm confident you'll enjoy getting to know Keith and will find great value in his insights and perspectives. With that, let's go to your questions. We will now begin the question-and-answer session. To ask a question, you may press star then one on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. And at this time, we'll pause momentarily for the first question. And our first question today will come from Dean Dray with RBC Capital Markets. Please go ahead. Thank you. Good morning, everyone. Hey, good morning, Dean. Hey, I'll add my welcome to Keith and wish Andrea best of luck, and thanks for all your help. Thank you, Dean. Hey, maybe we can start with 80/20, and I'll also make the observation, you can see 80/20 at work in your conference call prepared remark and slides and how much they've been slimmed down, and you get right to the point. So really appreciate that. So, 80/20, I know you say the payoff is likely a 2025 event, but we heard lots of specifics at the Analyst Day on the rollout. So any updates you can share? I know we're still in the early innings, but you had Applied Water, North America, initially, MCS initially. Any kind of early actions, and what can you share? Yeah. Thanks. No, no, happy to give an update. So again, the teams are progressing well. You know, like, like you said, we have three businesses in the thick of implementing the tool set. You know, North American AWS and North American MCS smart metering businesses. You know, they're a few months ahead of global transport. They kicked off in the second quarter, and we actually just had a kickoff for Applied Water in Europe that started on their journey last week. You know, AWS and smart metering have gone through their initial quads and quartile analysis, and now they're working through the meat of segmenting their businesses, you know, how they want to support their ongoing customer base, and then building their zero P&Ls, you know, really highlighting the appropriate level of resources they need to run those businesses. They've come out with, you know, some initial price increases. You know, again, those benefits, you know, take a little while to work their way through the backlog, so again, no material short-term benefit, but we see a significant pickup, you know, at the end of this year, leading into 2025, where we'll see a more material P&L hit, or pickup, excuse me. You know, the teams are focusing on communicating with their customers and how the tool set's gonna impact them, and really talking to their largest customers and how these changes will benefit them in the long term, really improving their overall experience with Xylem as we bring new product innovation to them faster, improve our delivery and quality to them. So a lot of excitement around the tool set externally for their customer bases. So progress continues. I think we're right on schedule, you know, again, confident in the value 80/20 is gonna bring and provide for us over the next several years, you know, really in line with what we highlighted in the additional impact the tool set's gonna have in the framework we laid out back in Investor Day. That's a really helpful update, Bill. Thanks. And given that most of the operating results today are either as expected or a little bit better, I can ask a broader industry question, if I could. Just implications on the Supreme Court overruling the Chevron doctrine. I know we're still in the early innings, but just any kind of high-level thoughts, what the ripple effects might be in PFAS remediation at the federal level, the Superfund timing? And look, I know it's not in your numbers, it's not in your three-year guide, but just the idea here is what might the implications be? And I can see that at the state level, that's where all the remediation efforts have been going in anyway, and the states like California are not waiting for the federal government to lead the way. Just from your perspective and insight, how do you think this plays out? Thanks for the question, Dean. You know, we didn't see this one coming. If you had asked us three months ago, this was not on our radar. So, you know, we're reacting to lots of different, you know, volatility out in the marketplace. But with, you know, the Supreme Court striking this down, the Chevron doctrine, it does introduce some uncertainty, and some regulations and federal laws are at the risk of being challenged, much like the EPA's final rule on PFAS, to your point. You know, additionally, beyond that, Dean, there's litigation ongoing already that's challenging EPA's cost estimates to use to set the MCL level, the maximum contaminant level, at four parts per trillion, as you're aware. And it's only gonna potentially, you know, push out what's already a long phase and timeline of 3 years to test and 5 years to mitigate PFAS. So, you know, to your point, we think ultimately the states are gonna fill in the gaps if a national PFAS regulation is reversed. We don't really anticipate that, but if it does, you know, you've got about 11 states today with that have MCL, you know, the maximum contaminant level for PFAS in drinking water already. You've got another 12 states that have some kind of PFAS regulation around either guidance, health, or notification levels, things of that nature, and that's over half the U.S. population. So, you know, while it may stumble a little bit out of the gates, and there's gonna be some challenges, that we're already seeing challenges in litigation, that's why we didn't bake it into our long-term framework. We just think it's too far out. But we stand ready to and well-positioned to partner with utilities, and we have partnered with utilities, as you know, and helping them manage this and other emerging contaminants. So, you know, more to come, but that's kind of what we think. That's real helpful. Thank you. Thank you. Our next question will come from Mike Halloran with Baird. Please go ahead. Hey, morning, everyone. Thanks, Andrea. Morning. Welcome, Keith. Hi, Mike. So just, just level setting some stuff here. If I look at, obviously, very healthy margins on the quarter, and, you know, Bill's earlier comment on the momentum there holds. But if you think about your demand commentary as well as how you're characterizing the second half of the year, it doesn't feel like much has changed from a, you know, trend, thought process, how you're guiding the second half of the year. Just, just want to clarify that and any, any thoughts around that. Yeah, Mike, no, no change to our expectations for the second half. You know, I think it's playing out exactly how we thought when we gave our update last quarter. Yeah, with the exception that we had some accelerated performance in MCS, which drove us to take up our full year guide. You know, we increased our full year revenue guidance up to 5%-6%, and some timing of capital projects in WSS that drove better results in the second quarter. You know, sequentially, Q3 looks a lot like Q2 from a dollars perspective, with just more challenging year-over-year comps really driving the lower implied organic growth rate. So, we're still confident and bullish in most of our end markets. You know, the macro noise that we highlighted, you know, is, you know, there's things out there, but, you know, from our perspective, we don't see a material impact or any signaling of expected slowdown for us. You know, MCS, there's still high demand for our smart metering products and our differentiated AMI network. You know, orders were down, but again, that's primarily just project timing. There's still a strong funnel of large deals in the U.S. and Europe, and we had several wins recently, you know, a really good one that leveraged a synergy sale with Idrica. So the team continued to do an excellent job of finding new projects and winning new business. WSS, again, you know, really strong growth, just really the timing of capital projects there, but they still have strong demand across, the legacy ISS and the dewatering business. You know, they had some orders lumpiness. Again, we had, you know, a huge, build-own-operate project last quarter. We have a couple more of those in the funnel that could, be realized in the orders here over the back half of the year. So, really nothing there that, is any concern, still bullish around kind of their high-growth verticals. Water Infrastructure, again, really strong performance on healthy demand, high single-digit orders with strong growth across all their regions. Treatment was up over 20% with some large project wins. You know, the transport business is one of our most differentiated business and continues to perform well. You know, so our developed markets and pretty much all our applications within WI are doing extremely well. AWS, obviously, is the one market that remains a little bit challenged. Again, it's our shortest cycle, most cyclical group of businesses, but you know, what we've seen there has been pretty consistent with our expectations, kind of low single digit. You know, the second half comps get a little bit easier, so they'll gradually get to a lower organic decline, and then some of the project wins that we highlighted in the prepared remarks will start to get them back on the road to growth in 2025. Great, super helpful. And then, you know, maybe some thoughts on how you think backlog tracks from here, and what normal looks like once you work through the past two backlog across a couple of segments, and how we think book-to-bill should track? Yeah, you know, I would say backlog is still really strong. You know, it declined slightly organically, and that's primarily just us continuing to work down the MCS past due backlog. You know, that's a tough one to forecast just 'cause of the lumpiness of some of the large projects within MCS, and again, just the new business opportunities within WSS on the build-own-operate. So, yeah, I think we'll bleed a little bit here as we progress the year, but still confident in kind of our long-term growth frameworks for the individual segments, getting into 2025. So I would say, you know, lumpiness probably, you know, gives us a little bit of caution to give you a specific number, but again, robust demand and outlook for most of our end markets. Bill, you mean bleed to a more normalized level because of the past due backlog normalization, or are you suggesting something different? No, exactly. That's spot on. Awesome. Great. Thanks, everyone. Appreciate it. Thank you. Our next question will come from Scott Davis with Melius Research. Please go ahead. Hey, good morning, everybody, and congrats, Andrea, on your, Good morning -on your move. Hey, guys, you didn't talk at all about capital deployment, which is, which is fine 'cause you still have Evoqua coming in. But is there a certain tipping point where you get more confident being able to do deals? Are we close to that? Are we there? Just some commentary would be helpful. No, good question. You know, again, like you mentioned, Scott, our first priority is to focus on the integration of Evoqua, and I think you can see from the results that we're doing a great job on both. You know, the cost synergies, they're tracking well, as well as the revenue synergies. You know, we have, Scott, built a lot of muscle on M&A over the past 18 months with the planning of Evoqua, now the, you know, passing 1 year of execution. So we've started to build that muscle in the organization, which is gonna help us going forward. Maybe the other thing I'd just reiterate, that I said at Investor Day, is that, you know, we've also put in place a, what I would call a strong bottoms-up process in our M&A kind of acquisition process to drive more consistent organic growth and deployment. I think that's gonna help us over the cycle. So obviously, you know, we just laid out the three-year framework. It's not gonna happen overnight, but I can tell you that we're very active, and we have a very strong pipeline that we're managing, and it aligns well to the value mapping that we just finished up. So, you know, again, we're gonna continue to run, you know, those targets through our decision criteria, that strategic fit. You know, financials has got to make sense. We're not gonna do anything silly. And really, you know, to your point, kind of organizational readiness, I think we're trending well. We've got good momentum and ready to execute our M&A pipeline. You know, some of it's just timing, but it is an important piece, as we outlined at Investor Day, to our EPS growth at mid-teens over the cycle. So, we're, you know, we're very active, but, you know, some of it's just timing, and we're still in early innings. Yeah. Good question or a good answer. Thank you. Thank you. And guys, I don't, I'm sure you don't want to give a lot of detail here, but you referenced the large project wins. I assume those are domestic. Are they related to mega projects? Can you give a little bit of color on kind of the scope and size historically versus how you kind of think about, you know, what large looks like? I mean, so many big- Yeah ... big semi plants to step outside of scope that we've never seen before. I'd love to get a little color from you on those projects, if you can. Yeah, I think, you know, back in Investor Day, we talked about data centers. That's starting to ramp up for us, and especially in our Applied Water business. But I think we're positioned uniquely too, Scott, in the fact that we also move water through pumping, we treat it, and then we also sense for it. So as we're winning these kind of data centers, we can offer a more turnkey solution, and we're kind of working at bottoms up, as well as some of the actual providers that are building the data centers themselves. So that's started to pick up some momentum. We had a nice win in Applied Water. We've had a couple actually, kind of at the, you know, $7 million-$10 million range, and so that's going well. Also, I'd say on the power transition, you know, we highlighted a big win last quarter with green hydrogen, and so, you know, the water needed for that over a 20-year contract is big. We've got some other ones that have you know, not kind of fit within the quarter that are in the pipeline, that we've got a lot of momentum around as well around power. And, you know, we see more and more consistency in the semiconductor space with microelectronics and the need for clean water. And a lot of these, you know, places have water scarcity issues, and so the water reuse is super important there. So, you know, I would say that, you know, some of these kind of high growth verticals, we're seeing momentum in big projects. We don't see that, you know, slowing. We see it only continuing. And it will be a little lumpy within WSS specifically, but, you know, we see good momentum and a good pipeline. Okay. Thank you, and congrats on the first couple quarters of the year here. Well done. I'll pass it on. Thank you. Our next question will come from Nathan Jones with Stifel. Please go ahead. Good morning, everyone. Good morning. I want to start off with some follow-up questions on MCS. Orders down in the quarter. I understand there's some lumpiness around that, but orders have been down, have declined a little bit the last couple of years, burning off some backlog, in 2023 and 2024. So maybe you could just talk about the, the visibility into the order pipeline that you have, to see that turn around and start, heading in the right direction to support growth. And with that, in, I know high single digits, the long-term kind of guidance here, but you, you are burning a fairly significant amount of backlog down in 2024. Should we expect the 2025 growth to be a little bit lower than the long-term average because you're comping against that backlog burn? Yeah, I'd, I'd start us out here and then maybe turn it over to Bill. We're, you know, again, just a reminder, we're still in, you know, fairly early innings to mid innings in AMI adoption, so there's a lot of runway out there. And although it doesn't always show up in orders, you know, we do, you know, obviously put some of the orders in backlog, and it's or some of the contracts in backlog, and how they convert orders can be a little lumpy. And just also a reminder that only 20% of that business is kind of big deals. 80% of it is book and ship, or what we call flow. But, you know, Nate, just looking at the pipeline that I see, we've got a lot of room for continued growth in that business, and we don't see it slowing down. It's just a matter of timing, more than anything. Yeah, no, our expectation next year is that it will be in line with our long-term framework. It's just, the backlog bleed to get us there, so maybe a little bit stronger before we get to kind of that high single digits at some point in time next year. Yeah, and I think you had asked a few calls ago about, you know, where we are in past due. We expect to be, you know, almost complete with the past due backlog by the end of the year, and probably wrap that up in Q1 of next year. So that burn is happening and obviously, you know, leading to the increased guide and MNCS revenue at the high teens. Second one I wanted to ask was on cash conversion. Obviously, it, you know, the, the guide's taken up to 100%, and I would think that 80/20 and the simplification initiative should have an impact on working capital, probably over the next at least couple of years, that maybe drives cash conversion higher than the long-term average as you simplify the business, take inventory out, work on receivables and payables and stuff like that. So any commentary you can give us on, on opportunities you're seeing in working capital as a result of these 80/20 and simplification initiatives? Thanks. Yeah. No, Nate, I think you're exactly right. That's a big part of the tool set. As you start to reduce a lot of the complexity of the product portfolio, we get a lot more efficiency through just faster moving inventory. Obviously, you reduce the complexity of, you know, a tremendous amount of long-tail customers, and your DSO improves from that perspective. So, I totally agree, we'll see some benefits. The team does a phenomenal job right now with our overall cash conversion, but I think 80/20 will be able to take it to the next level. But I think that will be on the back end of the P&L benefits that we get. So, you know, probably looking at, as you get through the implementation, you know, we said, hey, 12-18 months to realize the P&L benefits, it's probably in that 18-24 months. That's the second phase of simplification on the back end. Makes sense. Thanks very much for taking my questions. Thanks, Nate. Our next question will come from Joe Giordano with TD Cowen. Please go ahead. Hey, good morning, guys. Hey, good morning, Joe. Yeah, Andrea, thanks for everything. You've been a huge help. If anything happens at Water Infrastructure, we'll now know who to blame on it, so good luck to you. Thank you, Joe. It's been a pleasure. A lot of my questions have been asked already, but maybe if you could touch on, you know, since moving the service business and combining it with WSS, like, any, like, concrete kind of examples of how this is changing, like, conditions on the ground for you guys and leading to better results? Yeah, I can start us out. I mean, I think that, you know, obviously we did it for a few reasons. One is to increase our synergies, 'cause there is a lot of synergies when you now can move water and treat water. And so now we're able to go in with a turnkey solution, and we're already seeing probably that segment be the quickest to drive synergies, some of those we highlighted at the Investor Day. So, you know, also I'd say just a common tool set. You know, when you think about back office, we had two service companies when we put the two companies together. You know, the legacy of local business was much more mature, had good processes and tools, and now leveraging that across the entire services business has been a big help. And I think probably the biggest thing is, over time, will be our technician utilization, being able to utilize technicians across the entire portfolio. Now, everybody's not completely fungible, but, you know, say, a third to half of your technicians now can flex and do other types of work that they were doing before. And it also gives our AquaPros, is what we call them, a broader career path. So, you know, I'd say there's different aspects of how we're seeing it play out, but it's the fastest part of our revenue synergy right now, and it's working well. And then, if I can ask, maybe you talked about data center and stuff like that. If I think about, like, the large project pipeline at WSS and maybe also like general industrial-type exposure at Water Infrastructure, are you seeing any, like, bifurcation there? Because data center is definitely strong, but the commentary around large project activity in other sectors is kind of weakening. So I'm curious if you're seeing, like, puts and takes in any of those businesses there? Not really. I mean, data centers, I think, as I've mentioned, is not a huge part of our portfolio. It mainly shows up in applied water, although we've seen some synergies, you know, that we mentioned one of those in China at our investor day. But we've seen some other synergies where we're managing water at a data center as well as doing treatment. But, you know, it's not something that's gonna be a big swing for us, because it's not a large part of our business. But in general, we're seeing high growth verticals like, you know, pharma, life sciences, microelectronics, power, you know, continue to be really robust. And, you know, look, no matter what regulations are, you know, whatever's happening from that perspective, what's happening around climate and water scarcity is driving a lot of interest. I mean, we get-- I get phone calls all the time from leaders and CEOs in different parts of the world that are dealing with some real challenging stuff in terms of being able to keep their operations open or the quality of their water, because of, because of maybe saltwater intrusion, dealing with a different type of water they're trying to treat. So, we don't see any real slowdown. We're in, you know, really strong high growth verticals, and data centers is one that's not big for us, but we're gonna take advantage of it while it's hot. Thanks, guys. Thank you. Our next question will come from Andrew Kaplowitz with Citigroup. Please go ahead. Good morning, everyone. Andrea, thanks so much for your help. Thank you, Andy. So Matt or Bill, you mentioned inflation in water infrastructure and margin, that segment, after being up nicely in Q1, year over year, was down a bit in Q2. I know you said that acquisition, that was acquisition-related, but could you give more color into what you're seeing on the price versus cost side, particularly in that segment? Did anything materially change, or is it just lumpiness? And we know you have some China exposure in there, so maybe you could talk about the competitive environment in China. You know, for price cost was, was positive there. I, I think, you know, the, the biggest impact, and that's why we highlighted just the, the acquisition element, you know, second quarter last year, you know, during the short, time that APT was part of that segment, it had an unusually high margin, you know, it was in the low 20s versus its normalized rate of kind of the, the, the teens. So that was the biggest difference. You know, that- that's why we, you know, added in the pro forma margin expansion, you know, 40 bips, and just it was at 40% pro forma incremental. So fundamentally, the, the, the profit there is, is still strong. It sequentially improved. We expect- expect it to continue to sequentially improve as we progress through the back half and have year-over-year margin expansion. I would say from a water infrastructure perspective, you know, they do have probably the largest piece of our China exposure. You know, China's been a little bit lumpy. You know, for us, it's, yeah, actually, the first half, it's been positive from a revenue perspective. The orders were down, but we see kinda some of the larger projects, especially within treatment, continue to get delayed, just as I think China is trying to figure out the overall economic situation and how they're gonna fund several things across their investment framework. So, that's probably the one area we kinda are continuing to keep our eye on as things just seem to be perpetually shifting to the right. Very helpful. And then, you know, just maybe focusing a little more on applied water. Orders, as you said, look good. They were for long cycle projects. Maybe talk about the short cycle market as you see it. Is the business sort of, kind of bouncing along the bottom? What's the channel telling you? And you obviously mentioned the easier comparison in the second half of the year. So I know you talked about applied water returning growth in 2025, but, but could it do that before the end of the year? Yeah, I think, you know, third quarter still down, low single digits. Fourth quarter, you know, it's probably closer to zero, excuse me, zero. Again, it's relatively in line. I mean, sequentially, the dollar amounts, you know, it's the decline is largely seen in developed markets and primarily in our commercial and industrial space. Again, from a macro perspective, the institutional ABI has been negative for 16 consecutive months. You know, we continue to see manufacturing PMI, which are good indicators for us for that business. But I give the teams a lot of credit. You know, Matthew highlighted, you know, they're making their own luck. You know, they're leveraging their differentiated technology to win some of these larger projects to get back on a growth track into next year. Appreciate all the color. Thanks, Andy. Our next question will come from Bryan Blair with Oppenheimer. Please go ahead. Thank you. Good morning, everyone. Andrea thank you- Good morning, Bryan. very much for your help. Thank you, Bryan. Very solid quarter, and, MCS again, MCS margin again stood out. I'm sorry if I missed this detail, but Bill, you, you have called out and been very upfront about there being some mixed headwinds going into the, the back half with energy deployments. Are you willing to size that, you know, sequential headwind relative to the strength of, 1H? Yeah. I mean, we think it could be around 100 basis points in the back half, sequential decrease from where we finished the first half. Okay, understood. Appreciate that. I was hoping you offer a little more color on how treatment orders phased through the quarter. I think you cited around 20% growth there, so very robust for a business that tends to be a leading indicator. Any meaningful differences by region that you would call out? And how does treatment momentum influence your team's confidence in the back half outlook? Yeah, we've seen... This is Matthew, Bryan, and we've seen really good momentum and treatment across all regions. You know, like you said, we're up, you know, roughly 22%, for the entire business, and probably led by the US and emerging markets. And China, you know, as Bill pointed out, it's been a little bit weak. And actually, that was a little bit of bright spot, bright spot on orders themselves. We were up slightly, low single digits in China on treatment. So all in all, it's a really good indicator that, you know, capital continues to flow. You know, the funding, we see capital investment continuing and good momentum for, you know, treatment, which is a big part of, you know, not only water quality, but also scarcity of water. So we see those trends continuing. Very encouraging. Thank you again. Thank you. This concludes the Q2 earnings call. I would like to turn it back to Matthew Pine for any closing remarks. Thank you. We'll wrap it there. Thanks for your questions, and thanks for everyone who joined today. As always, we appreciate your interest in Xylem, and all the very best. The conference is now concluded. Thank you for attending today's presentation. You may now disconnect your lines at this time.