Earnings call transcript: Mettler-Toledo Q2 2025 sees steady growth amid challenges

Mettler-Toledo International Inc. reported its Q2 2025 earnings, revealing a 2% increase in local currency sales to $983 million and a 5% rise in adjusted EPS to $10.09. Despite facing tariff impacts, the company maintained a strong market position with significant contributions from its Product Inspection segment. The stock price remained stable at $1,394.17, reflecting a modest 0.06% increase.

Key Takeaways

• Mettler-Toledo’s Q2 sales grew by 2% in local currency.
• Adjusted EPS increased by 5% year-over-year.
• Product Inspection segment saw an 8% growth.
• Tariffs reduced the operating margin by 130 basis points.
• Stock price showed a slight increase, remaining stable post-earnings.

Company Performance

Mettler-Toledo demonstrated resilience in Q2 2025, achieving a 2% growth in sales despite challenges from tariffs and market fluctuations. The company benefitted from strong performances in its Product Inspection segment and continued innovation in Process Analytics. This growth aligns with industry trends favoring technological advancements and onshoring in manufacturing.

Financial Highlights

• Revenue: $983 million, up 2% in local currency.
• Earnings per share: $10.09, a 5% increase year-over-year.
• Gross margin: 59.0%, decreased by 70 basis points.
• Adjusted operating margin: 28.8%, decreased by 120 basis points.

Outlook & Guidance

Mettler-Toledo projects a 3-4% local currency sales growth for Q3 and a full-year growth of 1-2% for 2025. Adjusted EPS is expected to range between $41.70 and $42.20, with plans to offset tariff impacts by 2026. The company remains optimistic about opportunities in bioprocessing and onshoring.

Executive Commentary

CEO Patrick Kaltenbach expressed confidence in the company’s ability to deliver solid earnings in 2025, emphasizing the strength of its diverse portfolio. CFO Shawn Vadala highlighted the company’s focus on controllable factors amid market uncertainties.

Risks and Challenges

• Tariff impacts continue to pressure operating margins.
• Market uncertainties in Europe and China pose potential risks.
• Supply chain disruptions could affect future growth.
• Competition in the life sciences sector remains intense.
• Currency fluctuations may impact financial performance.

Mettler-Toledo’s Q2 2025 earnings call reflected its strategic resilience and adaptability in a challenging market environment. The company’s focus on innovation and market expansion positions it well for future growth, despite ongoing economic headwinds.

Full transcript - Mettler-Toledo International Inc (MTD) Q2 2025:

Carli, Conference Operator: Good morning and thank you for standing by. My name is Carli and I will be your conference operator today. At this time I would like to welcome everyone to the Mettler-Toledo International Inc. second quarter 2025 conference call. All lines have been placed on mute to prevent any background noise. After the speaker’s remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press STAR followed by the number one on your telephone keypad. If you would like to withdraw your question, press STAR one. Again, we ask that you please limit your questions to one question and one follow-up. Thank you. I would now like to turn the call over to Adam Ullman, Head of Investor Relations. Please go ahead.

Adam Ullman, Head of Investor Relations, Mettler-Toledo International Inc.: Hey, thanks Carli and good morning everyone. Appreciate you joining us this morning. On the call with me today is Patrick Kaltenbach, our Chief Executive Officer, and Shawn Vadala, our Chief Financial Officer. Let me cover some administrative matters. This call is being webcast and is available for replay on our website at mt.com. A copy of the press release and the presentation that we will refer to on today’s call is also available on our website. This call will include forward-looking statements within the meaning of the U.S. Securities Act of 1933 and the U.S. Securities Exchange Act of 1934. These statements involve risks, uncertainties, and other factors that may cause our actual results, financial condition, performance, and achievements to be materially different from those expressed or implied by any forward-looking statements.

For a discussion of these risks and uncertainties, see our recent annual report on Form 10-K and quarterly and current reports filed with the SEC. The company disclaims any obligation or undertaking to provide any updates or revisions to any forward-looking statement except as required by law. On today’s call we may use non-GAAP financial measures. A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP measure is provided in the 8-K and is available on our website. Let me now turn the call over to Patrick.

Patrick Kaltenbach, Chief Executive Officer, Mettler-Toledo International Inc.: Thanks Adam and good morning everyone. We appreciate you joining our call today. Last night we reported our second quarter financial results, the details of which are outlined for you on page three of our presentation. We are pleased with our second quarter and experienced growth throughout most of our businesses despite challenging market conditions. Our team performed extremely well, and we continue to benefit from our innovative product portfolio and strategic programs. I am proud of our team’s agility as we continue to navigate uncertain market conditions and our ability to implement mitigation actions to counter the impact of tariffs. We delivered solid adjusted EPS growth in the quarter and continue to compete very effectively in this environment. However, global trade disputes and tariffs are still highly dynamic, and as you may have seen last night after our press release, the U.S. administration announced a significant increase in U.S.

tariffs on imports from Switzerland. If the tariffs stay at 39% on Switzerland, this would negatively impact yesterday’s EPS guidance for this year by approximately $0.40. We will continue to implement mitigating actions to fully offset tariffs next year. Looking further out, while we anticipate that many customers will remain cautious with their investments in the near term due to the global trade disputes and various governmental policy uncertainties, we are also very well positioned to benefit from increased investments in the future. We are confident that our unique global go-to-market approach and innovative portfolio will enable us to seize these opportunities. Let me now turn the call over to Shawn to cover the financial results and our guidance, and then I will come back with some additional commentary on the business and our outlook.

Adam Ullman, Head of Investor Relations, Mettler-Toledo International Inc.: Sean, thanks Patrick, and good morning everyone. Sales in the quarter were $983 million, which represented an increase in local currency of 2%. On a U.S. dollar reported basis, sales increased 4%. On slide number four, we show sales growth by region. Local currency sales increased 3% in the Americas, were flat in Europe, and increased 3% in Asia. Rest of the world local currency sales in China declined 2% during the quarter. Slide number five shows local currency sales growth by region on a year-to-date basis. On slide number six, we summarize local currency sales growth by product area for the quarter. Laboratory sales increased 1%, and industrial increased 4%, with core industrial up 2% and Product Inspection up 8%. Food Retail was flat in the quarter. Slide number seven summarizes our local currency sales growth by product area on a year-to-date basis.

Let me now move to the rest of the P&L, which is summarized on slide number eight. Gross margin was 59.0% in the quarter, a decrease of 70 basis points. Positive price realization and benefits from our sterndrive program were offset by incremental tariff costs and lower volumes. R&D amounted to $49.3 million in the quarter, which is a 3% increase in local currency over the prior year. SG&A amounted to $247.3 million, a 2% increase in local currency over the prior year. Adjusted operating profit amounted to $283.3 million in the quarter and was flat versus the prior year. Adjusted operating margin was 28.8%, a decrease of 120 basis points versus the prior year. We estimate the gross impact of tariffs reduced our operating margin by approximately 130 basis points. A couple of final comments on the P&L: amortization amounted to $17.6 million in the quarter.

Interest expense was $16.8 million, and other income amounted to $3.3 million. Our effective tax rate was 19% in the quarter. This rate is before discrete items and is adjusted for the timing of stock option exercises. Fully diluted shares amounted to 20.7 million, which is approximately a 3% decline from the prior year. Adjusted EPS for the quarter was $10.09, a 5% increase over the prior year. Incremental tariff costs were a gross headwind of 5% and a net headwind of about 1.5% in the quarter. On a reported basis in the quarter, EPS was $9.76 as compared to $10.37 in the prior year, which included a discrete tax benefit of $1.07. Reported EPS in the quarter included $0.24 of purchased intangible amortization, $0.14 of restructuring costs, and a $0.05 tax benefit related to the timing of stock option exercises. Slide number nine summarizes our year-to-date P&L.

Local currency sales were flat for the six-month period. Adjusted operating profit declined 6%, and our operating margin contracted 150 basis points. Adjusted EPS declined 1%, excluding the impact of 2023 shipping delays that benefited 2024 results. We estimate local currency sales grew 3% on a year-to-date basis. Operating margin declined 30 basis points, and adjusted EPS grew 7%. That covers the P&L. Let me now comment on adjusted free cash flow, which amounted to $409 million for the first six months, a 3% decrease on a per share basis due to lower earnings and higher bonus payments related to last year’s performance. DSO was 35 days, while ITO was 4.2 times. Let me now turn to our guidance for the third quarter and for the full year. As Patrick mentioned earlier, the tariff environment remains dynamic and may continue to change as you review our guidance.

Please keep in mind the following factors. First, yesterday’s guidance assumed U.S. import tariffs as well as the impact of retaliatory tariffs from other countries will remain in effect at recently announced levels prior to last night’s U.S. presidential executive order and assumed a 15% U.S. tariff rate on Swiss imports as of today, including the increase in Switzerland tariffs to 20% to 39%. First mentioned in last night’s U.S. presidential executive order, we estimate our incremental global tariff costs at approximately $95 million on an annualized basis, down from our May 2025 estimate of $115 million due to lower rates for China-U.S. tariffs, offset in part by the increase in Swiss tariff rates. We continue to make excellent progress with our mitigation actions and expect to fully offset these costs next year.

Geopolitical tensions are elevated and include the potential for new tariffs or retaliatory tariffs that we have not factored into our guidance. Second, while our second quarter results were better than expected, market conditions remain challenging with uncertainty related to trade disputes and governmental policies. We are not assuming market conditions improve during the second half of the year, although we will benefit from higher pricing compared to the first half of the year. Third, we assume foreign currency at current rates, which is a slight headwind to adjusted EPS in 2025 but is about a 1% benefit to reported sales growth in the third quarter and a 1% benefit for the year. Finally, please keep in mind that our third party logistics provider delays negatively impacted our Q4 2023 results by $58 million, nearly all of which was recovered in our Q1 2024 results.

For the full year 2025, this will reduce our sales growth by 1.5% and is a headwind to operating margin expansion of approximately 60 basis points and a headwind to adjusted EPS growth of approximately 4%. Now, turning to our guidance for the third quarter of 2025, we expect local currency sales to grow approximately 3 to 4%. Operating margin is expected to decrease approximately 130 basis points. At the midpoint of our range, we expect adjusted EPS to be in the range of $10.55 to $10.75, a growth rate of 3 to 5%. Included within the EPS guidance is a gross headwind of approximately 5% from higher tariff costs that we expect to offset with our mitigation actions. For the full year 2025, our local currency sales growth forecast is 1 to 2% or up 2.5 to 3.5% excluding the shipping delays.

Operating margin is expected to be down modestly excluding the net impacts of tariffs and prior year shipping delays. As mentioned earlier, the tariffs on U.S. imports from Switzerland at 39% were announced shortly after we provided yesterday’s 2025 adjusted EPS guidance of $42.10 to $42.60. If the Swiss rate remains at 39%, this will negatively impact our full year 2025 adjusted EPS by approximately $0.40 per share and reduce our EPS range to $41.70 to $42.20 compared to our May 2025 guidance of $41.25 to $42.00, which reflects EPS growth of 1 to 3% or 5 to 7% excluding the shipping delays. The EPS guidance, after adjusting for the higher Swiss tariff rates, includes 5% from incremental tariff costs versus the prior year that we expect to fully offset with mitigating actions for 2026. We will post an updated slide to our website after the call reflecting this information.

Lastly, I would like to share a few other details on our 2025 guidance to help you as you update your models. We expect total amortization, including purchased intangible amortization, to be approximately $73 million. Purchased intangible amortization, which is excluded from adjusted EPS, is estimated at $25 million on a pre-tax basis or $0.95 per share. Interest expense is forecast at $68 million for the year. Other income is estimated at approximately $11 million. We expect our tax rate before discrete items will remain at 19% in 2025. Free cash flow is expected to be approximately $860 million in 2025 and share repurchases are expected to be approximately $875 million. That’s it from my side, and I’ll now turn it back to Patrick. Thanks, Shawn.

Patrick Kaltenbach, Chief Executive Officer, Mettler-Toledo International Inc.: Let me start with some comments on our operating businesses. Starting with Lab, which grew slightly in the quarter, we saw good growth from pharma and biopharma customers which was offset in part by softer demand from academia, biotech, and chemical sectors. Our bioprocessing related sales remain strong and the outlook for the year is healthy for this piece of our business. We have a unique solutions offering for bioproduction and we can help customers across their entire workflow with our laboratory, process analytics, and industrial products. Our Process Analytics business has also introduced many new innovations like digital analytical sensors that have a strong and consistent digital signal that resists interference and can store critical data for audit-proof record keeping. We’ve also expanded our portfolio of single-use sensors that covers a wide range of measurement parameters.

Turning to our industrial business, we had growth in our core industrial business in the quarter despite challenging market conditions. While most end markets have generally remained soft, we have been active in capitalizing on our customers’ demand for our automation and productivity solutions. Our portfolio is well positioned to benefit from onshoring investments over the coming years and our team is focused on identifying potential new project opportunities as they emerge. Turning to Product Inspection, we again had stronger than expected performance this quarter amid challenging market conditions in the food manufacturing industry. Our recent innovations are providing customers a strong incentive to upgrade aging equipment. Given the significant reduction in total cost of ownership of what new solutions provide, we expect to deliver solid growth for the remainder of the year as our market share gains offset soft industry demand.

Lastly, Food Retail sales were flat for the quarter. Now let me make some additional comments by geography. Starting in the Americas, where growth was stronger than expected due to strength in our core industrial and Product Inspection business, we remain pleased that our refreshed portfolio of industrial solutions has supported solid market share gains during soft economic conditions. Market conditions for Lab remain mixed as academia and biotech sectors have been soft, offset in part by strength in bioprocessing. Turning to Europe, sales were flat for the quarter against solid growth in the year-ago period, especially for Laboratory, and we also had modest growth in Industrial. Finally, our Asia rest of the world results were better than expected in the second quarter. Our teams executed very well and delivered strong growth in Southeast Asia.

In China, underlying market conditions remain soft, and we do not expect much improvement in the second half of the year. We are pursuing growth opportunities in hot segments like e-mobility and renewable energy and GLB1s, and also looking to help customers meet more stringent quality control requirements in the 2024 Chinese pharmacopeia starting in October. We are also monitoring any potential stimulus in China this year and have not assumed anything in our forecast. Finally, I’d like to provide an update on our service business, which grew 4% in the quarter and 5% on a year-to-date basis. Our second quarter results were impacted a bit by timing issues, and we remain optimistic for good growth in the second half of the year. We are making good progress with our service growth initiative.

In summary, I’m extremely satisfied with our team’s performance and the strong results we have achieved despite challenging and uncertain market conditions. Our proactive tariff mitigation efforts will allow us to meaningfully offset incremental costs this year while also increasing the resiliency in our global supply chain. We will continue to leverage and evolve our global manufacturing footprint to increase our in-region production capabilities that will ensure continued resilience and agility. I’m also very pleased with how Spinnaker is enabling us to proactively support our customers as they adapt their operations. The demand for more resilient supply chains has intensified since the pandemic, representing significant growth opportunities for us across nearly all regions. Onshoring and the development of regional supply chains in the coming years will serve as critical growth drivers, especially as many companies have announced significant investment plans in the U.S.

Our strong and diverse portfolio enables us to support customers across the entire value chain, and we are uniquely positioned to benefit from the many new instrument plans that have been announced by the biopharma and other industries in recent months as companies establish new production facilities. We are uniquely positioned to benefit as life scientists. Overall represents about 40% of our revenue and we estimate around two thirds of that supports customers’ production and QA QC operations. In addition, approximately half of our global sales support our customers’ production processes with solutions in Process Analytics, core industrial applications, and Product Inspection, which will also benefit from onshoring opportunities and investments in other industries. Our market organizations are well equipped to identify and capitalize on these opportunities, empowered by an expanded toolkit of our recent wave of Spinnaker.

I recently spent several days with global leaders from around the world to discuss these opportunities and how we will leverage these new initiatives to reallocate resources to ensure we fully capitalize on our customers’ resiliency investments. Another key growth opportunity we are actively pursuing is the increasing need to replace aging equipment. After many years of deferred investments during the latter half of 2024 and early into this year, we started to observe a return to normal replacement cycles for lab equipment among many customers. However, trade and policy uncertainties appear to have again delayed many replacements. We believe there has been pent-up replacement demand across our business following several years of soft market conditions. As the business environment stabilizes with reduced uncertainty, we anticipate an increase in replacement spending over the coming years. Overall, we are confident in our ability to execute and deliver solid earnings in 2025.

We are also well positioned to uniquely benefit from the emerging growth opportunities associated with onshoring hot segments and equipment replacement. We will also maintain a well-balanced approach that emphasizes growth, innovation, and operational excellence. The focused execution of these initiatives will drive above-market growth and sustained margin expansion well into the future. Now this concludes our prepared remarks. Operator, I’d now like to open the line to questions.

Carli, Conference Operator: At this time I would like to remind everyone in order to ask a question please press star, then the number one on your telephone keypad. We ask that you please limit your questions to one question and one follow-up. We’ll pause for just a moment to compile the Q&A roster. Your first question comes from Dan Arias with Stifel.

Adam Ullman, Head of Investor Relations, Mettler-Toledo International Inc.: Hey, good morning guys.

Patrick Kaltenbach, Chief Executive Officer, Mettler-Toledo International Inc.: Thank you, Shawn. Maybe just on the adjusted EPS guide.

Adam Ullman, Head of Investor Relations, Mettler-Toledo International Inc.: That sounds like it’s now functionally $0.40 lower. Does that include some offset activities or is that the, you know, the gross impact and that’s just sort of the way that you think things will end up by the end of the year? I know you’ve had about 12 hours to think about it, so just what you think you do from here? Yeah, no, thanks, Stan, and appreciate the comment. Right now, that’s the gross headwind. Of course, there’s not a lot of time left in the year to mitigate this year. You can imagine we were already going through our list of additional mitigation actions already last night. We actually already have a really good strawman in terms of what we’re going to do. We’re actually very confident about our ability to mitigate it for next year from like a Q3 perspective.

There’s, you know, we really don’t see any impact at all or much at all, just given the nature of inventory levels that we have for the next couple of months. As we kind of look to Q4, there’s just not a lot of time here to mitigate it. Of course, we’ll try to do some things where we got a couple of ideas, but right now we think it’s probably more conservative just to assume the gross number. Okay, thank you.

Patrick Kaltenbach, Chief Executive Officer, Mettler-Toledo International Inc.: Maybe just on China, if.

Adam Ullman, Head of Investor Relations, Mettler-Toledo International Inc.: You put the tariff stuff aside to the extent that that’s possible, does visibility into demand look like it’s changing at all or at least stabilizing in some way such that a forecast one way or another has more confidence behind it? I mean, last quarter we were talking about the environment getting more uncertain. I’m just curious whether things have changed since then. I think before last night, I think yesterday, things created maybe some more uncertainty in the markets in terms of how our customers maybe react with uncertainty. Coming into this release, we actually were feeling increasingly more positive. We delivered, we thought, a very good quarter in spite of challenging market conditions. We saw really good execution throughout the organization. We saw modest growth with a couple of highlights in the portfolio during the second quarter.

As we started this year, we were probably a little bit more cautious on our industrial business. For us, that was one of the highlights of the quarter, both on the core industrial side. Product Inspection actually had a very good quarter. As we look to the second half of the year, we certainly didn’t anticipate that things were going to get worse. We were a little bit, I would say, cautious in terms of how we guided the second half of the year. If you cut through our guidance, we felt like the second half would be similar to the first half on a volume basis. We were encouraged by some stabilizing trends, particularly on the industrial side. If you look at the Laboratory side of the business, there’s still a little bit of a mixed picture.

Maybe I pause there and I can ask for some follow up there.

Patrick Kaltenbach, Chief Executive Officer, Mettler-Toledo International Inc.: Yeah, maybe Dan, if I should. Let me chime in a little bit here as well. Specifically on the question regarding China. In China, it became better in Q2 than we had guided. We also say for the second half of the year it will be again flattish and not a significant change. We don’t see a dramatic change in the underlying market conditions there. We compete very effectively with our portfolio and our team there. As I said in my remarks as well, we have not factored in any potential stimulus for the second half or beginning next year. We’ll see how that plays out. For now, I would say it’s stable and low volume, but there’s no significant change. Yep.

Adam Ullman, Head of Investor Relations, Mettler-Toledo International Inc.: Okay, very good. Thank you, guys.

Carli, Conference Operator: Your next question comes from Dan Leonard with UBS.

Adam Ullman, Head of Investor Relations, Mettler-Toledo International Inc.: Thank you very much. Can you elaborate further on where the strength is coming from in Product Inspection and comment whether your full year forecast for that business has changed?

Patrick Kaltenbach, Chief Executive Officer, Mettler-Toledo International Inc.: Yeah, I will start on the product portfolio a little bit. We spend over the last three years a lot of emphasis on really expanding our strategy to attack more also the mid range market. We spend a lot of energy on launching a lot of new innovative products both in the mid range and at the high end. Right now we are definitely winning market share in that space as an outcome of all the new products that we rolled out. I’m really happy with how the strategy played out there. Extremely well positioned around the world with this portfolio, we have new solutions for X-ray detection, metal detection, and checkweighing, and it really incentivizes our customers to upgrade their existing solutions and buy from us.

With the new mid range portfolio, we now also can tap into customers that wouldn’t have looked at us before as a potential supplier because we have been perceived as more as the only high end supplier. With that expanded portfolio, we get into more new accounts, certainly winning market share. For the second half of the year, we are also optimistic that it continues to grow. Correct me if I’m wrong, but I think a little actually.

Adam Ullman, Head of Investor Relations, Mettler-Toledo International Inc.: I think in the third quarter specifically, I think we could even do a little bit better than that. Our guidance contemplates mid to high single digit in the third quarter. Maybe just kind of stepping back for the year, we’re kind of looking at mid to high single digit for that business, which is up a little bit from what we thought before. I think last time we spoke, we were guiding to mid single digits. Really happy for the team. They’ve been working hard, executing really well. These new products are really well received by the market. It’s not like food manufacturing, which is a big end market. It’s a challenging end market, but we’re just doing very well here and pleased with the momentum. Appreciate that color.

As a follow up, what was the Process Analytics growth rate in the quarter and can you comment on the full year outlook for that business given your positive commentary on bioprocessing more broadly? Thank you. Yeah, we usually don’t break down that number, that business so specifically. Maybe I can give you some color. On the bioprocessing side, we actually did quite well in Process Analytics. We still saw good momentum. If you kind of peel it back a little bit, in the area of single-use technologies, we actually did extremely well, I’d say, in the quarter. Process Analytics also sells to other end markets like chemical, and so that kind of offsets some of that growth.

You look at it as a specific product line, but we feel good about the trends we’re seeing in our business and bioprocessing, and we feel like those trends should continue into the second half of the year. Got it. Thanks, Shawn.

Carli, Conference Operator: Your next question comes from Patrick Donnelly with Citi.

Adam Ullman, Head of Investor Relations, Mettler-Toledo International Inc.: Hey guys, thanks for taking the question. Maybe one on the 3Q guide, you know, encouraging to see you guys guide above the street. I don’t recall the last time that happened. It’s been a little while. Can you just talk about the confidence that you have there to do that? Again, would be helpful, Shawn, just to talk through what you’re thinking about each segment for the quarter. Did things get better where you felt again a little more confident in putting that number above where the consensus was relative to that typical Mettler conservatism that always seems to give you end up a little bit below. Yeah, sure. Maybe I’ll start by just walking through the guidance by business area and then I can make maybe a couple of comments after that.

If we look at our Laboratory business where our guidance is low single digit for the third quarter, if we look at our core industrial and our Product Inspection business, we’re guiding both of those businesses mid to high single digit in the quarter and third quarter. Retail would be down low single digit. If we look at geographically, we have the Americas up mid single digit, we have Europe up low single digit, and then we have China flat. When you step back from that, I think the thing that probably stands out is that we’re probably a little bit more optimistic in terms of our industrial businesses sitting here today versus where we would have been and probably where you would have been three months ago. I think it’s a combination of what we just talked about on Product Inspection.

It’s coming off a little bit better quarter in Q2 on the core industrial business, and when you kind of peel that one back, we also feel like we’re seeing really good trends in terms of automation and digitalization from our customers. If you really look at what’s growing, that’s an area that kind of stands out, which is a strength of our portfolio. I feel like we’re very well positioned for those opportunities. We’ve talked a lot about that in the past. There are elements of this business that also have projects, and as we look at some of that activity in the third quarter, what we can see in our pipeline also gives us some confidence here as well. Okay, that sounds good.

Patrick Kaltenbach, Chief Executive Officer, Mettler-Toledo International Inc.: Maybe just on the pricing.

Adam Ullman, Head of Investor Relations, Mettler-Toledo International Inc.: Side, always a nice lever for you guys to pull. Obviously, with everything going on on the tariff side, it’s probably even been more pertinent. Can you just talk about the conversations there? Again, it sounds like the Switzerland piece is a gross impact to your point, Shawn. Probably a little late in the year.

Patrick Kaltenbach, Chief Executive Officer, Mettler-Toledo International Inc.: To do too much on that.

Adam Ullman, Head of Investor Relations, Mettler-Toledo International Inc.: Can you just talk about pricing as a potential leverage, what the expectations are, what’s built into guide here, and the moving pieces as we think about pricing margins, that area. Yeah, sure. Yeah. Hey, so pricing always starts from my perspective, from our value proposition. Right. You know, we work real hard at continuously investing in innovation to make sure we can preserve and enhance that value proposition. When you go through times like this and you’re raising prices a little bit more, you always test that value proposition. What’s really kind of great from my seat is that we see really good reactions in terms of the marketplace. People understand it, and our sales force does a really great job of frankly articulating that value proposition.

If we look at the second quarter, our pricing was around 3%, which was in line with what we were expecting for the second quarter. For the second half of the year, we’ll probably be in the 3.5% or so kind of a range. It was a little bit dynamic because some of the pricing would have included some surcharges three months ago that we pulled back on with some of the rate changes over the last three months. When we look at the full year, last time we spoke, we probably would have been saying that we were going to grow 3% for the full year in terms of, well, price realization would be 3% for the full year. Sitting here today, we’ll still be in that 3% range, but maybe not the or so part. It’ll be a little bit lower going into next year.

As we think about the Swiss tariff rates, we’ll think about that. We’ll consider that. Of course, we have very strong value propositions on those products as well. We’ll try to do this in a balanced way for our customers as well, too. Frankly, we’ll also see how the situation plays out. I’m sure it’s going to be dynamic. I’m sure we’ll learn a lot more here over the next few months, too. Makes sense. Really helpful. Thanks, Shawn.

Carli, Conference Operator: Your next question comes from Vijay Kumar with Evercore ISI.

Adam Ullman, Head of Investor Relations, Mettler-Toledo International Inc.: Hi guys. Good morning and thanks for taking my question. Congrats on a nice execution here. Maybe, Shawn, my first question for you on EPS presumptions, as you look at back half heading into 2026, the, I guess the Swiss update that analyzed to a $1.60 rate in and I guess the assumption is you should be able to offset that, right? For next year, I understand for Q4, it’s too early, but for next year, should we think of that, of Mettler-Toledo’s ability to fully offset that? And related to that, fiscal 2026, I think some of your peers have made some comments on tax rates given R&D capitalization, how you think of a tax rate for next year. Yeah. Yep. Yep. Thanks, C.J. Hey, so just, I think you imply this with the question that the $1.60 would be approximately a full year number.

Just to make sure everyone gets the right numbers, we estimate the impact on our results this year, the gross impact at $0.40, and then as we kind of go into next year. You’re right, we do feel confident about our ability to mitigate the incremental portion for 2026. Of course, it’s still early to provide more guidance on 2026 at this point in time. We’ll update you guys on the next call. We do feel very good with our progress overall on our mitigation activities. Like I said earlier, we already have some actually really good ideas of how we would approach this one if it continues. In terms of taxes, we don’t expect, of course we’re still analyzing this, we don’t expect much benefit at all to our tax rate for next year. Sitting here today, I would continue to assume the 19%.

Of course, we’ll update you on the next call as we learn more and think about next year. Maybe the one benefit we do see is on the cash tax side, and that’s something that we’re studying right now. We should get some cash flow benefits out of this. That’s helpful. Shawn and Patrick, maybe one for you. You bring up about services, some timing issues. Are those coming back in the back half? Maybe just talk about what would happen in Q2 and expectations on a go forward basis. Yeah.

Patrick Kaltenbach, Chief Executive Officer, Mettler-Toledo International Inc.: Richie, let me chime in here a little bit and explain about Q2 again. Most of it was really a timing issue on some of the larger projects that we sometimes have in services. We are very confident about our second half growth that we will get back.

Adam Ullman, Head of Investor Relations, Mettler-Toledo International Inc.: To the growth we have.

Patrick Kaltenbach, Chief Executive Officer, Mettler-Toledo International Inc.: We have seen before. We have a strong growth program in place for service organization. We actually started already last year putting more service engineers up into the organization, strengthening the marketing organization as well, getting deeper penetration installed base because we see really good growth opportunity connecting stronger with installed base instruments. For the second half we are optimistic that we are getting back to growth. We have no indications that this is a major thing that we have seen in Q2. For the full year we’re still year to date we had 5% growth in services. That’s also very respectable number. I think our strategies work. Sometimes you have some timing on projects, spare parts and stuff like that. We don’t see this as a trend right now. We see really second half optimistic.

Adam Ullman, Head of Investor Relations, Mettler-Toledo International Inc.: Thank you.

Carli, Conference Operator: Your next question comes from Jack Meehan with Nephron Research.

Adam Ullman, Head of Investor Relations, Mettler-Toledo International Inc.: Hey, good morning everyone, and feel free, guys. Providing guidance as the tariff rates change in real time. Appreciate the incremental color you shared on that. One of the big topics we’ve been focused on with earnings is like pull forward dynamics. I was curious, you know, as you looked at the results in the quarter, whether you saw that in any of your businesses, how you went about assessing that.

Patrick Kaltenbach, Chief Executive Officer, Mettler-Toledo International Inc.: Yeah, thanks, Jack, for the question. Look, I mean, when we talk to all the sales leaders out there, we have no indications at the moment that there was any pull forward happening in Q2, and the market uncertainty there was out there to be, I think, why we saw the growth in Q2 is entirely based on the fact that we have an outstanding product portfolio and compete extremely well in these dynamic and challenging market conditions. Nothing that I could point to to say I heard in any of the regions or any other product categories that it would be a stopping or pull forward. Okay.

Adam Ullman, Head of Investor Relations, Mettler-Toledo International Inc.: In the service business, you talked about some timing dynamics in the quarter. Do you mind just elaborating on what that was, and are those coming back in the second half? Thank you.

Patrick Kaltenbach, Chief Executive Officer, Mettler-Toledo International Inc.: As I said, my comment before.

Adam Ullman, Head of Investor Relations, Mettler-Toledo International Inc.: You.

Patrick Kaltenbach, Chief Executive Officer, Mettler-Toledo International Inc.: Sometimes have this transition of the quarters. It’s mainly project related with some of the largest service projects they had. Some of it was spare parts, maybe the stronger spare parts consumption in the quarter last year in the same quarter. We have no indications that this is an underlying trend for the second half. We are optimistic in terms of the service demand that we’re seeing, the adoption of new services that we have outlined. Actually, our second half outlook remains stable.

Adam Ullman, Head of Investor Relations, Mettler-Toledo International Inc.: Okay, thank you.

Carli, Conference Operator: Your next question comes from Rachel Vatnsdal with JPMorgan.

Adam Ullman, Head of Investor Relations, Mettler-Toledo International Inc.: Hi guys, this is Casey on for Rachel. Thanks for taking our questions. Maybe the first one is just can you walk us through performance in Europe in the quarter relative to expectations? The flat growth there I think is a little bit below the low single digit growth you pointed us to in the guide. Maybe just parse out drivers by segment and the outlook in that region for the back half of the year. I think you said you expect Europe to grow low singles in 3Q. Thanks. Yeah. Hey, Casey. I’ll take that one. Europe was flat in the quarter. I think it was down a little bit from what we were previously guiding. The one area was, I’d say the Laboratory business was more flattish there, with the Industrial business up slightly.

If you look at the Laboratory business, one of the things we saw in the second quarter was a lot of uncertainty in the market, even with some of the things that were being announced in the U.S. from a tariff perspective at the beginning of the quarter. Some of those dynamics certainly affect other parts of the world in terms of how people are thinking about the timing of projects and things like that. We were not immune to that and we did see that in our European results. As we think about Europe for the rest of the year, I think I might have mentioned this already. We’re looking at low single digit growth for the third quarter and then to cap it off at the full year, our guidance would be flattish in Europe. Keep in mind that there’s this shipping delay topic.

If you exclude the shipping delay, I think European numbers would actually be up low single digit on a full year basis. Okay, got it. That’s helpful. Maybe just one on the onshoring piece. You talked a lot about it today and some of the recent pharma manufacturing build out announcements. You’ve talked previously about how Mettler-Toledo International Inc. is not necessarily involved in the initial build out of those facilities given your portfolio. Just curious on timing of when you would expect some of these CapEx announcements to eventually flow through into orders and revenue for you guys. Is it a 2026 upside driver or perhaps farther out? Thank you.

Patrick Kaltenbach, Chief Executive Officer, Mettler-Toledo International Inc.: I think it’s still early innings. I mean, there have been a lot of big announcements that have been made. I think our strong dream relies on the strong connection to the customers worldwide, the customer base we have worldwide, talking to customers and being in discussions about their reshoring or onshoring plans and making sure they understand the strength of our portfolio and how we can support them in these plans. It’s still very early. I mean, in 2026, we hope to see it really starting, and then we’ll expect some even more momentum in the following years. It’s very early.

Carli, Conference Operator: Your next question comes from Luke England Sergott with Barclays.

Adam Ullman, Head of Investor Relations, Mettler-Toledo International Inc.: Great, thanks for the question here. I just wanted to get some framework or some type of clarity on the replacement cycle that you guys talked about having pent-up replacement demand. Can you give us a sense of, like, you know, how overage the active install base is given all the uncertainty led to some pushouts and, you know, where you are in that upgrade cycle? I’m kind of just trying to figure out how, from what you’ve seen in the past, could this result in some type of snapback, or is it just that once customers get clarity, they’ll just start engaging in the upgrade cycle, and it’s just essentially a pause and a pushout, and you should see a more normalized recovery like you would in the past. Yeah. Hey, Luke, this is Shawn. Hey. Maybe I’ll start and I’ll let Patrick add some color if he wants.

When you step back, I like to remind people that if you think about pre-COVID, probably 80% to 90% of our business in the West, like the United States, North America, and Europe, was replacement. When we look at that and we look at the last few years, clearly we’ve seen customers not actively replacing their installed base. Part of that certainly could have been some acceleration that happened in COVID, but every year that we get away from COVID, from our perspective, we feel like that kind of plays into this thesis. Another thing is, if you look at last year, we felt like we were starting to see some initial signs of replacement cycle. If you think about some of the analytical instrument numbers we’re putting up in the second half of the year, we felt like there was maybe the beginning.

We didn’t call it a trend at that point, but we were certainly noting it in our comments. With the uncertainty this year, we kind of felt like people were pulling back and hesitating again. Now, getting into the data, it’s always hard to, you know, it’s hard to aggregate for such a thing. Our teams typically work on a more disaggregated basis when they work with the install base. Some of the kicking of the tires that we’ve been doing with the team certainly indicates an aging of the iBase. The timing of that, in terms of when we see it, the magnitude those things are, are still difficult for us to tell. A lot of the things that we do can be delayed for a little bit, which kind of plays into this topic. People can’t delay forever. We do feel like it’s something that will come back.

Our feeling is that as there is more certainty in the markets, that’s going to be the biggest driver and we’ll start to see things kind of come back to normal. Whether it comes back all at once or gradually over time, I think that’s still frankly to be defined as well as the timing.

Patrick Kaltenbach, Chief Executive Officer, Mettler-Toledo International Inc.: I think that’s an important point. Shawn, you should look at this as not the total stop of replacement that we have been seeing. It was a slowdown of the replacement cycle over the last several years. Once the certainty comes back, there will be an acceleration again of the replacement cycle. It’s not a snapback. It’s not like all of a sudden you will see one big spike replacement. It will be that customers get more confidence and then you will see an acceleration of the replacement.

Adam Ullman, Head of Investor Relations, Mettler-Toledo International Inc.: Right, right. Of course, the other thing that gets us a little excited is that we have that dynamic. We also have, you know, if you go back to my beginning comment, like 80, 90% of the West used to be replacement. I think going forward we’re going to have a lot more, you know, greenfield activity than we’ve had in the past too, with a lot of these, you know, onshoring topics as well as, you know, just a global trend towards more automated solutions, more digital solutions. These things are going to play well for our portfolio as well too. Great, that’s helpful. Last year, I guess, Shawn, talk a little bit about the 4Q margin step up from 3Q.

Patrick Kaltenbach, Chief Executive Officer, Mettler-Toledo International Inc.: Just help.

Adam Ullman, Head of Investor Relations, Mettler-Toledo International Inc.: Understand the underlying drivers there, especially in context with the tariffs and your mitigation aspects there, especially on the low to mid single implied growth. Just to make sure I understand your question, Luke, you’re talking Q4, what period? 4Q margin for this year. Yeah, for this year from 3Q. Yeah, yeah, yeah. We usually don’t give too much detail on the Q4, but of course you can kind of squeeze it out at this point of the year. If you look at the overall level of gross margin, it’s probably going to optically look similar to the third quarter. If you look at it, you have two things going on. One is we have a lot more volume in the fourth quarter than we do the third quarter.

This year we’re also, that would assume we have a lot more tariffs in the fourth quarter than we do the third quarter, assuming that the Swiss tariff rates remain at 39%. On a year-on-year basis, the fourth quarter margin would be down pretty significantly. It could be down in the 170, 180 basis point kind of range versus the prior year. Okay, great.

Carli, Conference Operator: Your next question comes from Tycho Peterson with Jefferies.

Adam Ullman, Head of Investor Relations, Mettler-Toledo International Inc.: Hey, thanks. Want to ask about bioprocessing. I know you said no pull forward to Jack’s question and you know, too early to kind of benefit from onshoring as you also noted, but you talked about kind of modest recovery last quarter. I’m just curious, you know, how you’re thinking about R&D spending the next couple quarters. You’ve got tariffs, MFN noise, obviously some negative headlines in cell and gene therapy. How do you feel about kind of baseline R&D spending for pharma in the near term?

Patrick Kaltenbach, Chief Executive Officer, Mettler-Toledo International Inc.: Yeah. Hey, Tycho, this is Patrick. Look, I mean, as you probably know, most of our exposure to biopharma is more bioproduction with a lot of the Process Analytics business, but also through AQCA solutions that we have for platforms. We’re not really strongly expanding exposed to R&D in that space. We see actually the potential for biopharma with all the indicated changes with the reshoring, onshoring pushing in the U.S. It will be actually very attractive for us because customers will build out manufacturing sites in the U.S. for existing products. They will continue then in that environment also to have QA/QC operations that we can equip with our lab solutions and industrial solutions. That’s the plus we are seeing right now, despite a potential impact on research might slow down given what we hear in the news.

The build out of manufacturing sites and QA/QC and everything that comes along with it will actually be a plus and will be a strong tailwind for us moving forward.

Adam Ullman, Head of Investor Relations, Mettler-Toledo International Inc.: Yeah, and just to make sure to kind of help everyone understand what is our exposure here, I think we might have said it in the prepared remarks, but if you think about it, about 40% of our global business is sold into life sciences broadly like traditional pharma, biopharma, et cetera. We estimate about two thirds of that is comprising manufacturing and QA QC labs, with the other third being more R&D and scale up. Even within that third, you know, we’re probably a little bit more weighted towards the late stage R&D. If you kind of like peel back the portfolio a little further on the early stage, that’s clearly where we have seen some softness like in the pipetting business, but I think we’re relatively less exposed there. I think it’s always one of our strengths. Right.

It’s like we serve all the way through the value chain and we’ve always been pretty good at being able to pivot where towards the growth opportunities that they present themselves. Okay, that’s really helpful. Then, you know, I guess similarly, I know U.S. Academic, you just cut out Tycho.

Carli, Conference Operator: Give me one moment, let me get his line back live. Mr. Peterson, your line is open.

Adam Ullman, Head of Investor Relations, Mettler-Toledo International Inc.: All right, thank you. Follow up, I want to ask on U.S. academic and government. I know it’s a low single digit % of revenues, but you know, there are green shoots here. NIH grants are starting to flow. As we think about, you know, the lab business in the back half of the year, could that be a source of upside? You know, any kind of budget catch up spend? Yeah, I mean, like you said, it’s not a significant exposure for us. You know, if you look at our U.S. academic and government business together, it’s only about 2% of our global sales. If it swings one way or the other, it’s not going to have a meaningful effect on our overall numbers. Any positive numbers is something that we’ll always take, but it’s not going to move the needle very much for us from an NIH perspective.

Our business, direct business to the NIH is closer to zero as a % of our business than it is one. It’s pretty insignificant. Understood. Thanks. Thanks, Tycho.

Carli, Conference Operator: Your next question comes from Michael Ryskin with Bank of America.

Adam Ullman, Head of Investor Relations, Mettler-Toledo International Inc.: Great, thanks for the question, Shawn. I want to make sure I’m in the right place on the tariff dynamics, just given how things are changing. You talked in the past about, and you kind of reiterated earlier, mitigating the majority of things as you get into 2026. I just want to be clear, is that mitigation that you’re taking on mitigation actions you’re taking proactively? Where I’m coming from is, you know, we’re still getting tariff headlines every day, as you’re painfully aware. If there’s, you know, is there sort of like a lag time you need to be able to fully mitigate? If there’s more tariff headlines in two, three months, could that spill over into 2026 or is that sort of a no matter what next year, don’t assume any tariff hit?

I don’t know if I can issue you an official guarantee here, but I think we feel very good about the things that we’re doing. I mean, you can imagine we have a lot of different work streams going on. Some of them have been short term in nature. Of course, you know, when you think about things like pricing, that’s a more shorter thing that we can implement quicker. We have a lot of things on the supply chain. Some of the stuff was already in motion coming into this year. Earlier this year, we accelerated a lot of projects as well. Patrick and I actually were just at our Tijuana facility earlier this week observing some of the activity there. I mean, the team’s just doing a wonderful job. It just shows the strength of the global culture of people working together. That’s just one example.

There’s just a lot of different things in terms of our global supply chain that we can optimize. Like I said earlier, we also had some additional ideas with this latest announcement. I think when you step back from all that, I think one of the attributes of the company and the culture has always been agility. Right. We recognize things are going to change. We don’t know which direction they’re going to change, but we always focus on what we can control, and we kind of lean into that agility gene when we need to. I just feel really great about the organization and that culture, and that’s what gives me probably the most confidence going forward. In terms of what we know today, we feel very good about our ability to offset things for next year. Okay.

For my follow up, I kind of ask along the same lines. Given the high Switzerland exposure for you, can you just sort of remind us what steps specifically you’re going to be taking to mitigate that? Like where the exposure hits. Yeah, I’ll just leave it at that. Yeah. I probably don’t want to get into too many details here, Dan, so it’s probably a little bit too early for us to talk specifically about it. I think we also need to talk to our organization a little bit first about what we’re going to do. All these things are a combination, it’s never going to be one thing. There’s going to be a combination of many different types of things that we can kind of pull on, and I think we’ll go through the process.

If this thing continues, we can provide maybe a little bit more color on our next call. All right, thanks.

Carli, Conference Operator: Your next question comes from Josh Waldman with Cleveland Research.

Adam Ullman, Head of Investor Relations, Mettler-Toledo International Inc.: Morning. Thanks for taking my questions. One for Shawn and then one for Patrick. Shawn, first a quick follow-up on Mike’s tariffs questions. What were the variables that drove the gross impact stepping down to the $60 million or the, I guess, $95 million with the Switzerland change last night?

Patrick Kaltenbach, Chief Executive Officer, Mettler-Toledo International Inc.: On the offsets, where do you find?

Adam Ullman, Head of Investor Relations, Mettler-Toledo International Inc.: You’re leaning in most to drive offsets to date? Has it been more price or has it been more supply chain and cost reduction focused? Yeah. In terms of the changes, certainly we had a big benefit from the Chinese rate coming down. If you think about that, our Chinese exports to the U.S. are approximately about 50%. You can kind of do some rough math on what it meant to go from a 145% rate to a 30% rate. Of course, that was offset a little bit in the last 12 hours by the Swiss rates going higher. I think the other rates, there was some puts and takes, but frankly just relative noise in the grand scheme of everything.

In terms of the mitigation things, the short term stuff for this year was a combination of, of course, we had some things going on in terms of the supply chain that we had already talked about. We hadn’t waited until the announcement on April 2nd, or yeah, I think it was April 2nd. We had already anticipated things, so we already had some good work streams going on on the supply chain side. We had worked on some things from a cost side as well, too. Of course, we also leaned into some pricing actions that we talked about. To put that in perspective, we started our year with guiding price realization in the 2% kind of a range. Now we’re kind of saying we’ll be in the 3% kind of a range. You can get a sense for magnitude there.

This will continue to evolve and the mix of what we do is going to change. You’re going to see increasing more on some of the topics, like when we start thinking about our supply chain optimization, we’ll start to get some of those benefits more fully as we go into next year.

Patrick Kaltenbach, Chief Executive Officer, Mettler-Toledo International Inc.: Got it.

Adam Ullman, Head of Investor Relations, Mettler-Toledo International Inc.: Okay. Patrick, on the demand side.

Patrick Kaltenbach, Chief Executive Officer, Mettler-Toledo International Inc.: Does it seem like visibility going into?

Adam Ullman, Head of Investor Relations, Mettler-Toledo International Inc.: Is the second half any better or worse than the visibility you felt you had either coming into the year, into the second quarter? Have order patterns become any more predictable as you’ve progressed into the year and, I guess, through the year and into July?

Patrick Kaltenbach, Chief Executive Officer, Mettler-Toledo International Inc.: Look, the visibility we have is really good with the systems we have in place. I would not say there has been a dramatic change in terms of the visibility in terms of anything that would indicate slowdown or acceleration of the business momentum. We are confident in our Q3 growth numbers based on what we see in our funnels and our leads and opportunities out there. That gives us confidence for Q3 also for the second half. You also have to appreciate that we have a pretty fast turnover of our products, usually our deal cycles are very fast.

Adam Ullman, Head of Investor Relations, Mettler-Toledo International Inc.: Sure. Thank you.

Carli, Conference Operator: Your next question comes from Douglas Anthony Schenkel with Wolfe Research.

Adam Ullman, Head of Investor Relations, Mettler-Toledo International Inc.: Hey guys, good morning and thank you for taking my questions. Just two cleanups at this point. It sounds like Q2 European softness was largely comparisons. I didn’t hear anything that suggested there was a fundamental change in demand patterns across all of your businesses. It also sounds like, switching geographies, that China is at least stable with current trends and maybe things are starting to get a little bit better. Building off of those observations, if Europe kind of returns to normal and starts to get a little bit better, and by normal, I mean what you’ve seen the last few quarters. If China starts to get a smidge better, would those be sources of upside to your implied fourth quarter revenue growth guidance? That’s the first question. Second is just on core industrial strength. You talked in your prepared remarks about strong demand for automation.

I’m just wondering if you could tell us a little bit more about that. Is there anything specific worth calling out in terms of where you’re seeing a pickup in demand, either in applications or by geography? Thank you. Thanks, Doug. Maybe I’ll start and I’ll let Patrick maybe handle the second part of that. In Europe, if you look at our guidance for Q3 in the second half of the year, we’re kind of in low single digit. Maybe there’s some upside there, but we also have a more challenging fourth quarter comparison there, even excluding this shipping delay topic. We’ll see how it plays out. I think there’s still some uncertainty in the market there. China, of course, is always a wild card.

Patrick Kaltenbach, Chief Executive Officer, Mettler-Toledo International Inc.: Right.

Adam Ullman, Head of Investor Relations, Mettler-Toledo International Inc.: I think we’ve all been waiting for that moment when we start to see things kind of pick up. There certainly has been a bouncing along the bottom theme here. I know that the team remains optimistic as we kind of look to the future. The question is, at what time do we start to see things pick up. I think it will be like the rest of the world. As more certainty is in the marketplace, we’ll start to see things start to pick up there. We feel like we’re well positioned there in terms of our business. We have a great China for China business, as you know. We also sell mostly to Chinese private companies as well there too. We also support them very well in terms of their needs, in terms of themes, in terms of the market segments that the governments are investing in.

We’ll see. You can tell from our guidance we’re still a bit cautious there for the rest of the year and we’ll see how things play out.

Patrick Kaltenbach, Chief Executive Officer, Mettler-Toledo International Inc.: On the core industrial, what we really see, what I’m excited about is this continued call for an improved call for automation, digitalization solution, especially the automation piece, where we see automation solution providers now calling a lot of portfolio on our innovations, and it’s actually across many end markets as we understand it. Pharma automation buildouts and automation opportunities with good momentum now in the United States, but also some interesting good recovery, for example, in China and then in Asia as well. That’s really for us really encouraging and promising moving forward.

Carli, Conference Operator: There are no further questions at this time. I’ll now turn the call back over to Adam Ullman for closing remarks.

Adam Ullman, Head of Investor Relations, Mettler-Toledo International Inc.: Thanks, Carly. Thanks, everybody, for joining us today. If you have any follow-up questions, please feel free to reach out. I hope everybody has a great, great weekend and we’ll talk to you soon.

Carli, Conference Operator: This concludes today’s conference. You may now disconnect.

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