Vontier Corp — Call Transcript 2026

Morning, ladies and gentlemen and welcome to the Vontier First Quarter 2026 Earnings Call. At this time, all lines are in listen only mode. Following the presentation, we'll conduct a question and answer session. If at any time during this call you require immediate assistance, press star zero for the operator. This call is being recorded on Thursday, May 7th, 2026. Replay will be made available shortly after. I'd like to turn the conference over to Ryan Edelman, Vontier's Vice President of Investor Relations. Please go ahead. Thanks. Good morning, everyone, and thank you for joining us on the call this morning to discuss our first quarter results. With me on the call today are Mark Morelli, our President and Chief Executive Officer, and then Anshooman Aga, our Executive Vice President and Chief Financial Officer. You can find both our press release as well as our slide presentation that we will refer to during today's call on the investor relations section of our website at investors.vontier.com. Please note that during today's call, we will present certain non-GAAP financial measures. We'll also make forward-looking statements within the meanings of the federal securities laws, including statements regarding events or developments that we expect or anticipate will or may occur in the future. These forward-looking statements are subject to risks and uncertainties. Actual results might differ materially from any forward-looking statements that we make today, and we do not assume any obligation to update them. Information regarding these factors that may cause actual results to differ materially from these forward-looking statements is available on our website and in our SEC filings. With that, please turn to slide three, and I'll turn the call over to Mark. Thanks, Ryan. Good morning, everyone, and thank you for joining us on the call this morning. Let's get started with a few high-level takeaways from the quarter. Vontier delivered solid sales and orders growth to start the year as we continue to gain traction on our Connected Mobility strategy. We're expanding our integrated offerings to capitalize on strong secular tailwinds across our end markets. Core sales grew nearly 2%, slightly ahead of our expectations, driven by strong performance in our Environmental & Fueling Solutions segment. Orders were up approximately 5% on a core basis, including strong demand for fueling equipment and key wins in retail solutions. Adjusted operating margin declined 70 basis points below our expectations, reflecting unfavorable mix and timing of R&D expenses. Importantly, the underlying fundamentals of the business are intact, and we are confident in our full-year outlook, as well as our ability to achieve the $15 million in savings related to ongoing simplification and 80/20 efforts. We're seeing meaningful momentum in our convenience retail end market, which strengthens our visibility and reinforces our confidence in the growth opportunity ahead. We have market-leading technologies that optimize our customers' operations, unmatched domain expertise to solve high-value problems, and best-in-class channels to market. Growth within this end market was led by Environmental & Fueling Solutions, with double-digit growth in both dispensers and aftermarket parts. Dispenser demand is strong, supported by the ongoing build-out and modernization of retail fueling infrastructure. The pull-through from advanced payment technology is helping to drive replacement and upgrade demand. As an example of this, we launched the next-generation FlexPay 6 outdoor payment terminal in the first quarter. While bolstering our cloud-connected, industry-leading payment security, it features a larger, flush-mounted touchscreen along with an integrated card reader and PIN pad. It also enhances our unified payment solution by offering a more interactive consumer interface that helps reduce transaction times and improves engagement at the pump. We're also seeing strong momentum for our innovative technologies inside the store. Retail Solutions, part of Invenco brand, delivered strong growth in payment, media, and point-of-sale systems. The convenience retail end market is resilient, even in uncertain economic backdrops. Over the last 25 years, this end market has consistently demonstrated durability through periods of volatility. Higher oil prices have historically been a net positive as higher fuel margins drive improved profitability for C-store operators, enabling them to prioritize modernization, food and beverage offerings, and invest in the consumer experience. Industry data suggests high retail fuel prices typically result in more frequent visits, which creates an opportunity for greater conversion for in-store sales as consumers place more emphasis on value. In prior cycles, higher fuel margins combined with the trade-down effect as consumers shift toward lower-cost C-store options have created tailwinds to generate more cash flow for C-store operators. In turn, we see robust capital expenditures for multi-year storefront build-outs and retrofits. This is particularly true of larger regional and national C-store chains, where we have higher share and they focus on delivering an elevated consumer experience. We're seeing this play out today. A good example is 7-Eleven's recently announced intention to remodel 7,000 stores across North America through 2030, standardizing around their more modern food and beverage-focused format. This is in addition to the 1,300 new sites they expect to build over that same time horizon. This kind of long-term investment reinforces the strength of the category and the opportunity for Vontier. This morning, we also announced an important step in our portfolio simplification strategy. We've announced an agreement to sell our global fleet telematics business, Teletrac, for a total purchase price that values the business at $220 million. The purchase price consists of $80 million in cash proceeds and a $100 million seller's note. Vontier will retain an approximate 30% equity stake in the business. We've outlined those details for you on slide four. The sale marks the completion of a successful multi-year turnaround of this business. At the time of our spin, Teletrac was churning out about 25% of customers with declining profitability and negative free cash flow. Since then, the team has meaningfully improved the business by launching a new platform, significantly reducing churn, accelerating ARR growth to mid-single digits, improving profitability, and generating positive free cash flow. This has been a major effort for the Teletrac team, and we're grateful for their contributions. We believe Teletrac is well-positioned for its next chapter of growth with better focus and access to capital under its new ownership. We expect this transaction to close in June and will deploy the cash proceeds consistent with our disciplined capital allocation framework with a focus on additional share repurchases and selective bolt-on acquisitions. Before I turn the call over to Anshooman, I want to reiterate our confidence in the full-year outlook. While the geopolitical backdrop added some uncertainty, demand trends remain constructive. We're also strengthening the foundation of our business to drive more profitable growth over time through commercial excellence and innovation and a relentless focus on execution. As we finalize remaining organizational changes and implement our cost actions, we still expect incremental savings to ramp in the second half of this year. Combined with disciplined capital deployment, we are confident in our ability to deliver double-digit EPS growth. With that, I'll turn the call over to Anshooman to walk you through a more detailed review of the quarter's financials and our outlook. Thanks, Mark. Good morning, everyone. Please turn to slide five for a summary of our consolidated results for the quarter. Total sales of $751 million and core sales growth of 1.7% were above our guide, driven by notable strength at Environmental & Fueling Solutions, with Mobility Tech and Repair Solutions generally performing in line with our expectations. As Mark mentioned in his remarks, adjusted operating profit margin fell short for the quarter, reflecting unfavorable mix and timing of operating expenses within both Mobility Tech and Repair. We expect full-year margins to be consistent with our previous guidance. Adjusted EPS was $0.80, up 4% year-over-year. Adjusted free cash flow was below our normal seasonal pattern and prior year. The timing of our semiannual bond interest payment of approximately $19 million was in Q1 this year versus Q2 last year. Additionally, Q1 had an extra payroll run compared to the previous year, along with higher incentive compensation driven by the strong performance in fiscal 2025. We expect several of these timing differences to level out during the year, and we expect free cash flow conversion of around 95%. Turning to our segment results beginning on slide six. Environmental & Fueling Solutions started the year off strong, benefiting from solid industry demand and an innovative product portfolio, driving higher new equipment and aftermarket activity. Total dispenser sales increased low double digits on a global basis, led by strength in North America. We saw notable bookings and sales strength from large national accounts, evidence of stable CapEx budgets. Segment margin was flat at nearly 30%, with volume leverage and ongoing productivity actions offset by less favorable mix. Moving to Mobility Technologies on slide seven. Core sales declined by about 1% as strong underlying demand for convenience retail technologies was offset by more than a $25 million headwind associated with higher shipments for our Vehicle Identification System, or VIS, in the prior year. Our commercial pipeline is robust, and we continue to win new business for integrated solutions, including orders for our unified payment point of sale and VIS offerings. The consolidated Mobility Technologies segment margin declined 260 basis points, driven by unfavorable mix and higher operating expense. On the OpEx side, we incurred higher R&D expenses in order to accelerate new product launches. At the same time, our cost out activities are ramping in Q2, giving us momentum for the back half of the year. On the mix side, product and geographic mix impacted margins in Q1, which we expect to recover in Q2 and the balance of the year. When you combine this with stronger volume growth and incremental benefits from our cost initiatives in the second half, we remain on track for solid margin expansion this year. Additionally, the divestiture of Teletrac will be accretive to margin performance for the segment and Vontier overall. Finally, turning to Repair Solutions on slide eight. Sales performance was in line with our expectations, with progress on our growth initiatives successfully offsetting pressure on technicians' discretionary spending. This was most notable in our tool storage, diagnostic, and power tools categories. Additionally, we are focused on quicker payback tools that improve technicians' productivity. The lower segment margin can be attributed to unfavorable product mix and a discrete bad debt reserve of about $2 million related to delayed collections caused by the implementation of the new financial system. We are making good progress in collections and would expect to recover a majority of this reserve over the next several months. Turning to the balance sheet on slide nine. Adjusted free cash flow of $28 million was impacted by the working capital items I highlighted earlier. We accelerated share repurchase in the quarter, buying back $70 million given the market dislocations. While we will maintain some flexibility on cash, given an increasingly actionable deal pipeline at current valuations, buybacks remain a very compelling use of cash. To address the $500 million bond maturity at the end of the quarter, we used about $200 million in cash on hand to repay a portion of the bond and issued a new 364-day term loan for the remaining $300 million at a relatively attractive spread. We ended the quarter with over $200 million in cash on the balance sheet and net leverage at 2.4x. Please turn to slide 10 to discuss our guidance for 2026 and Q2. Beginning with a look at our full year guidance. What is shown here is what our guide would have been prior to the Teletrac divestiture, the impact that divestiture will have on our P&L, landing on our official guide, which includes the removal of Teletrac's results in the last column of this table. Importantly, there are no changes to the underlying fundamentals of our previous guidance, and we are only adjusting our guide to reflect the removal of Teletrac. We are assuming the transaction closes in early June, which means we remove about seven months of contribution. Following this adjustment, relative to our previous guide, we lose about $110 million in sales, bringing the midpoint of our new range to just over $3 billion. Teletrac has little to no impact on our organic growth, but will be accretive to our margin rate by about 50 basis points. We now expect operating margin to expand by about 130 basis points to approximately 22.5%, which includes the contribution from the $15 million savings initiatives over the balance of the year. On a gross basis, the transaction will be about $0.05 dilutive to EPS for the full year. The interest received from the seller's note and the benefit from share buyback offsets that EPS headwind, so we leave our full year range unchanged at $3.35-$3.50. Our outlook for adjusted free cash flow conversion remains at 95%, representing around 15% of sales. Looking at our guide for Q2 on slide 11, we follow the same format. We expect sales in the range of $730 million-$740 million, with core sales down about 1% at the midpoint, which implies the first half at roughly flat in line with the initial outlook we outlined for you on the Q4 call. As you may recall, shipment timing of the Vehicle Identification System in the prior year drove high teens growth in Mobility Technologies along with 11% core growth for overall Vontier. This compare issue starts easing in the third quarter. Margins will begin to accelerate in the second quarter, expanding approximately 80 basis points, reflecting lower operating expenses. EPS will be in the range of $0.78-$0.81, including a $0.01 headwind from the divestiture. As we highlighted on our last call, the year-over-year organic growth rates will look better in the second half, accounting for first half compare issues at EFS and Mobility Tech and the timing of shipments on projects in backlog which favor Q3 and Q4. As always, we've included some other modeling assumptions on the right-hand side of the slide, which have also been updated to reflect the divestiture impacts on the top line and adjustments to below the line items. With that, I'll pass the call back to Mark for his closing comments. Thanks, Anshooman. We're encouraged by the start to the year and by the underlying momentum across our most important end markets. I'd like to thank the entire Vontier team for their hard work and dedication to delivering for our customers and each other. As we look ahead, one of the most important evolutions underway at Vontier is how we operate the business. Historically, we've operated largely through individual lines of business. Over the past two quarters, we've reorganized significantly from the customer back, streamlining operations, raising the bar on operational excellence, and becoming a more integrated enterprise. Today, our go-to-market strategy is deployed around three core end markets, convenience retail, fleet, and repair. This shift is simplifying how we operate and setting the foundation for greater scale over time. By aligning around our customers, we bring more depth and expertise to enable integrated solutions. We believe this customer-led model strengthens our competitive advantage, improves how we innovate and sell, and positions Vontier to deliver more consistent growth, margin expansion, and long-term value creation. We believe our Connected Mobility strategy is the right long-term strategy for Vontier, and we are focused on executing with discipline to convert that strategy into durable top-line growth, stronger profitability, and greater value for shareholders. We have strong leadership positions in attractive and resilient end markets that offer significant opportunities. That means we need to continue to drive commercial excellence while also maintaining a relentless focus on execution, simplification, and disciplined capital allocation. As we do this, we believe we are well-positioned to deliver on our commitments and create meaningful long-term shareholder value. With that, operator, please open the line for questions. Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press star followed by the number one on your touch-tone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press star followed by the number two. If you are using a speakerphone, please leave the handset before pressing any keys. One moment please for your first question. Your first question comes from David Raso of Evercore ISI. Please go ahead. Your line is open. Hi. Thank you. Two questions. One about the Mobility mix moving forward and also the use of the proceeds on the divestiture. On the margin mix, can you help us a bit how you're thinking about the various pieces within Mobility, the growth the rest of the year? Just that the margin of Mobility was a little bit lower than I would have thought, and you mentioned also some cost involved. Maybe if you could help break out that margin decline year-over-year, and again, how to think about the mix the rest of the year. Lastly, on the repo, the share count for the full year. It looks like maybe you are assuming, it depends on the, obviously, share price, but, you know, maybe another $75 million, $100 million of repo after the $70 million guide in 2Q. I just wanna make sure I'm thinking about that correctly. Thank you. Hey, David. Thanks for the question. For Mobility Technologies margins for Q1, there were really two items that impacted margins. One was mix and mix really was product, customer, and geographic mix played out differently versus our expectations and also historical norms. The second piece is higher R&D expenses in the tune of couple million, this was really accelerated spend on launch of new products. In the prepared remarks, Mark talked about the next generation FlexPay 6 product, which brings a lot of customer benefits that we launched, also the redesign of some of our printed circuit boards for the memory chip shortage, working around that drove the higher R&D expense. Coming back to the rest of the year for Mobility Tech, we've already seen in April the mix normalize back to what we would expect and our historical norms. Also on the OpEx, we're confident that we'll get our $15 million savings. Part of it is obviously in Mobility Tech, and we're seeing traction on some of those saving actions in Q2 as we speak. We feel pretty comfortable that for the full year, our guide for Vontier is unchanged other than the change for the divestiture of Teletrac. In terms of share buybacks, we've assumed about $150 million of buybacks for the year in the guide. We did $70 million already in Q1, so you can expect majority of the proceeds from the Teletrac divestiture would go towards buybacks. At the current share price, buybacks remain extremely attractive from a capital allocation perspective. Additionally, we'll be generating a significant amount of free cash flow for the rest of the year, so that does give us optionality that's not built into the guide. Okay. To be clear, the $150 million, you'll have $140 million done by 2Q, so there isn't much baked into the second half at the moment. Correct. All right. I appreciate it. Thank you. Thank you. Your next question comes from Julian Mitchell of Barclays. Please go ahead. Your line is open. Yes. Hi. I just wanted to start with maybe a longer term question. If I look at slide four, you know, you've done another divestment today alongside a bunch of portfolio changes that you put on slide four. I guess if I look at just the overall kind of history of this since it's spun out, you know, the PE, I think the first year after the spin was about 13, 14x. Now it's kind of nine or 10x. You know, operating margins for the company are about where they were five years ago. I wondered, you know, to what extent the management, the board are thinking about more radical portfolio options perhaps than, you know, shaving off one brand a year, adding another brand. Certainly the multiple doesn't seem to be reacting based on the last five years to these types of changes. Just wondered, you know, that again, that appetite to do something broader. Hey, Julian. This is Mark. Thanks for the question. Look, I think, the way we've internalized the strategy and the pieces of portfolio, I think we, you know, as a good example from the Teletrac one, you know, you get accretive margin. You're left with a growthier space with less spend on R&D and a better drop-through. I think when you take each piece incrementally, the portfolio is getting stronger. We constantly look at our strategy, I think as a step-by-step approach. I think the work we put in the Teletrac Navman enabled a good transaction here, and a better positioning for the overall portfolio. I think, you know, we constantly look at the portfolio. We constantly look at what are the next set of actions that we think will drive greater shareholder value. I think what we've got right now with the Connected Mobility strategy and, you know, a good backdrop with secular tailwinds from the majority of our portfolio here, that strategy is working. I think there'll definitely be a payoff as we continue to focus on that and improve the results. Great. Then maybe a short-term one. Certainly operating margins are guided to be up, you know, 80 basis points or so, sequentially, and, you have the expansion in Q2 year on year as well. Maybe just kind of flesh out, you know, how you're thinking about the segment level there. You know, particularly Repair, I guess. It looked like some of the headwinds you saw in Q1 in terms of, you know, lower price point tools, that may be something that persists over the balance of the year just because of consumer wallets and so forth. Thanks, Julian. That's correct. When you think of Q2 margins, our overall Vontier margins will be up 80 basis points. 20 basis points off that 80 basis points will be because of the Teletrac divestiture, core business up 60 basis points. That increase will be driven by Mobility Tech which will be at somewhere north of 120 basis points in terms of margin expansion. EFS will also have margin expansion to probably 80 basis points or so, maybe a touch higher. Then Repair, I expect, will be down year on year just as you mentioned, we're seeing a higher percentage of the portfolio on the lower price point, higher, quicker payback items being sold. There will be a little bit of margin pressure that'll continue into Q2. That'll start easing towards the back half of the year, where some of the mix, really coming into Q3, Q4, especially Q4 last year, was in line with what we're trending towards. That's great. Thank you. Thanks, Julian. Your next question comes from Andy Kaplowitz of Citigroup. Please go ahead, your line is open. Hey, good morning, everyone. Morning, Andy. Morning, Andy. Mark and Anshooman, just back to Mobility for a minute. I don't think the memory chip shortage under inflation's been getting better, but it sounds like you're comfortable around that issue for Mobility. I just wanted to sort of double-click on that. Obviously comps and Mobility get easier. I think last quarter you mentioned a number of wins though that ramp up in the second half. Is that still the case that you've got good visibility to ramp up? Maybe do you need DRB Systems to ramp up as well? Andy, I'll, you know, I'll give a little bit of color on the second half ramp. First of all, you know, the end market, you know, mostly tied to convenience retail, and I think our remarks there, you know, on the call is pretty resilient, and that certainly helps the Mobility Tech segment as well. When you look at it's not only a good compare or better compare for second half. You know, our seasonality is definitely the same. You know, sales at 48%, 52% that's our historical average. You know, good bookings, you know, clearly in the quarter were pretty solid. You know, when we go into April, we're also seeing really good bookings as well. I think, you know, to your point, we're getting, you know, better leverage for the second half. While we, you know, got a little bit better in Q1 on the revenue side and we've got, you know, cost takeout actions in place that'll carry through to the second half, you know, we feel pretty good about the setup. I'll just add, as you mentioned, the compare does get easier in the second half. If you go back to the prepared remarks, we had over $25 million headwind in Q1, and it's about the same in Q2 tied to the Vehicle Identification System, which eases into Q3 and is definitely gone by Q4. Importantly, bookings in Q1 were up 5% on a core basis at a Vontier level. Couple of those were larger projects combined for $15 million, and majority of that revenue based on our customer schedule is in the second half. We are feeling incrementally better for the second half as we continue to book, and how our compares also play out. Helpful color, guys. I think you explained the trade down effect coming from high oil gas prices when you were talking about the potential duration of the cycle for C-store CapEx and your EFS growth, and your EFS growth in general. Maybe you could give us a bit more color regarding how to think about EFS moving forward. I think growth was even higher than you'd thought for Q1. Does that higher growth actually continue given C-store behavior, such as what you mentioned with 7-Eleven? I think any color would be helpful there. Yeah, with EFS, we're very pleased with our team's performance. We remain bullish on a multi-year CapEx cycle that's playing through, and it's really driven by our innovation and our channel strength, which are both reading through. Dispenser shipments were up low double digits in North America, leading the way with especially strong national account bookings that we had in the first quarter. We expect dispensers will continue to play out strong for the year. We also expect strength in the build-out of convenience stores in North America to continue. Overall, we're feeling pretty good about the business in EFS, and we'll continue to see growth in line with what we're projecting for the year. Appreciate the color, guys. Thanks, Andy. Thank you. Your next question comes from Joe Ritchie of Goldman Sachs. Joe, your line is open. Hey, guys. This is Luke McCollester on for Joe. I'm just curious if you can share any early data points on customer reception from the new outdoor payment terminal. How does this product fit into the broader Connected Mobility strategy, and is this a replacement cycle product, or does it expand the addressable market? Luke, this is Mark. Thanks for the questions here. I think one of the things we showed in NACS in October, or the fall of last year was, you know, unified payment. This clearly extends our addressable market by providing a payment kit with more capabilities. Order at the pump is a great example of that. It is incrementally better than the FlexPay 6 that we recently launched, and the uptake from our customers has been quite favorable. I think this is an outgrowth of our Invenco acquisition, where we've been able to build off that through integrating that platform. I think we're seeing this also as an excellent example of the Connected Mobility strategy at work and differentiation that we can provide through launching new products, where we're getting really good uptake from it. Got it. Helpful. Then within convenience retailers, are you seeing any change in the pace of consolidation activity or capital spending plans there in light of the current geopolitical and macro backdrop? Does consolidation kinda tend to be more of a net positive or net negative? I think consolidation tends to go in our favor. The people that are net doing the consolidators is where we have higher share in the marketplace, and they tend to buy up some of the smaller players where we sort of split share in the market. We tend to get more out of that as our, as the folks consolidating the industry are consolidating off typically our technology platform. There's no real change to that. I think there's been a backdrop of consolidation that's been sort of ongoing, I would say, over the years. Would anticipate You know, of course, some of the prices have changed with interest rates and other things are ebbing and flowing. I think you could just look at it as a long-term trend where there's plenty of opportunity for consolidation over the next, you know, five years. On the CapEx trend. Awesome. Keep in mind, while our bookings might be shorter term from a book-to-bill perspective, our customers are really planning out two or three years in advance. They're going through their site acquisitions, permits, build-outs. They're really looking out two or three years from a CapEx plan. Oil price volatility doesn't really change their longer-term CapEx plans. Awesome. Thanks, guys. I'll pass it on. Thank you. Your next question comes from Katie Fleischer of KeyBanc Capital Markets. Please go ahead. Your line is open. Hey, good morning. Can we talk a little bit about the progress on the internal cost initiatives? I know that R&D is a focus there. Just how to think about incremental savings within that and potential upside kind of balanced against some of those higher R&D costs that you saw in Mobility Technologies this quarter? Hey, Katie. Thanks for the question. We are very confident on the $15 million in-year savings that we guided to last quarter. We're reconfirming that. About $1 million in savings played out in the first quarter. The Q2 number will be $3 million, maybe a little bit higher, the balance of it coming in the back half of the year. We're already through some of the savings plans, I think we're progressing really well to our plans. Q1 was a little bit higher in R&D, timing off the launch of some products. We talked about the new FlexPay 6 launch, also the redesign on some of the printed circuit boards related to the memory chip. We're trying to stay ahead of the supply chain issues on memory chips, and as a result, did some redesign work out there. Again, we're pretty confident in hitting our $15 million in-year savings target for the year. Okay. That's helpful. On Matco, when we think about those customers recovering, what's really driving the spend there? Is it just delayed CapEx purchases? Is it, you know, more customer activity that's driving higher in days? Just help us think about what it will actually take to see a flow through of spending from customers in Matco. Yeah. Katie, the backdrop on repair is relatively attractive. You know, the car park continues to age. It's about 12.8 years, going to 13 years, a lot more used cars are out there in the market changing hands. That's good for repair. The complexity for repair is good, the demand for tech and the wages are also strong. You know, we know from last year actually, shop visits were up. We, you know, that's a great, you know, underlying backdrop for repair. I think, you know, the issue that has been underfoot is that the consumer has, you know, represented the working class for the shop technicians that buy our tools, has, you know, had a harder time with their pocketbook. The areas that we're getting traction is in the areas of diagnostics and toolboxes, and we had a good, you know, run of that in the quarter, which is indicative there can be strength there. Then also more value-added items where they can get more productivity. You know, the technician gets paid based on a standard hour of work. If they can be more productive and, you know, we say, "Well, how does a toolbox help with these productivity carts that help them on the job site?" You know, those type things, there's good payback for them. As we continue to introduce and be more effective at selling those kind of things, even in a fairly rough backdrop, then we can have, you know, decent performance out of Matco. Okay. Helpful. Thank you. Your next question comes from Andrew Obin of Bank of America. Please go ahead. Your line is open. Hi, this is David Ridley-Lane on for Andrew. Just sort of thinking about the full year guide here, did your expectations on Mobility Tech, have they shifted a little bit? What are you thinking for organic growth for that segment for the year? Yeah. Mobility Tech, their growth for the year will be low to mid-single digits versus the mid-single digits we'd set, but it's really on lower intercompany sales. If you look, last quarter, we guided to north of $90 million of intercompany sales, and we dropped that down to $80 million. A part of it was, every year you update the transfer price, and we did that in Q1, where the transfer price, intersegment came down a little bit, and then there's a little bit of mix between FlexPay 4 and FlexPay 6 products also that we updated for. The underlying core business, no change to that. Okay. I'm surprised I'm gonna be the first person to ask this, but, the changes to Section 232 tariffs, IEEPA tariffs, can you just give us a round the world on what the impact of Vontier's going to be inside 2026 as you see it? Tariff remains a very dynamic environment, and there's we're continuously evaluating both where we are the importer of record and where our suppliers are the importer of record. We also are taking into account other dynamics that are playing out, for example, the memory chip pricing, oil and gas price, and the impact on transportation costs, transportation routes. Net of all of this, while a lot of pluses and minuses, puts and takes, there's no material change to our view for the year, just playing out on aggregate as we'd expected. Got it. Just since it's been mentioned a few times on the conference call, can you quantify just in broad brushstrokes, are memory chips like 1% of your total cost or is that? Do you have that number handy by any chance? Yeah. I'll give you last year's. Okay. Price or cost on memory chips because I think that's a little bit easier. The market's pretty dynamic. It's in the mid to high single digit million dollars. Got it. It's not material from an overall cost perspective, but it's every cost we control and manage to the best of our ability. Well, I know there's a way when you have a small item that's doubling or tripling or quadrupling in price, it sometimes catches up with you. Anyway, thank you very much. Thanks, David. Thanks. Thank you. Your next question comes from Robert Mason of Baird. Please go ahead. Your line is open. Yes. Good morning, guys. Wanted to see if you could just relative to the second quarter expectations on core growth, in the down 1%, kind of discuss how you think that may play out across the segments. The EFS business will continue to grow. We expect that'll be up low single digits for the quarter. Mobility Tech will be down low to mid-single digits on the compare issue. Just keep in mind the $25 million in shipments for the Vehicle Identification System order last year, both in Q1 and Q2. On Repair Solutions, we expect there'll be also low single-digit growth, maybe low to mid-single digit growth for the quarter in repair. Very good. Just a follow-up. Mark, just any quick thoughts on the decision to retain so, you know, minority stake in the telematics business and how, you know, we should think about how that plays out in the future as well? Yeah. Thanks for that question, Rob. Look, we're pleased on the transaction. It's the result of a multi-year turnaround, launching a new product technology into the space. I think we're getting real momentum in that space. I think retaining a minority ownership there also gives us some upside on the trajectory there. On the end of the year with strong bookings, they got past the 3G to 4G transition in Australia, which was a big headwind for them as well, and that's now in the clear. You know, we're optimistic also with more focus with the new owner and our partial ownership here and legacy knowledge of that business that we can unlock further value. Very good. Thank you. Thanks, Rob. Thank you. There are no further questions at this time. I'd now like to turn the call back over to Mark Morelli, Chief Executive Officer, for closing comments. Thanks again for joining us on the call today. We're off to a solid start in 2026. We're confident we can deliver above-market growth and in our ability to drive margin expansion and free cash flow. We're proactively managing the portfolio and staying disciplined on capital allocation all through the lens of creating shareholder value. We appreciate your continued interest in Vontier and look forward to engaging with many of you over the next several weeks. Have a great day. Ladies and gentlemen, this concludes today's conference. We thank you for participating and ask that you please disconnect your lines.

Speaker 9: Morning, ladies and gentlemen and welcome to the Vontier First Quarter 2026 Earnings Call. At this time, all lines are in listen only mode. Following the presentation, we'll conduct a question and answer session. If at any time during this call you require immediate assistance, press star zero for the operator. This call is being recorded on Thursday, May 7th, 2026. Replay will be made available shortly after. I'd like to turn the conference over to Ryan Edelman, Vontier's Vice President of Investor Relations. Please go ahead. Morning, ladies and gentlemen and welcome to the Vontier First Quarter 2026 Earnings Call. morning ladies and gentlemen and welcome to the vontier first quarter 2026 earnings call At this time, all lines are in listen only mode. at this time all lines are in listen only mode Following the presentation, we'll conduct a question and answer session. following the presentation we'll conduct a question and answer session If at any time during this call you require immediate assistance, press star zero for the operator. if at any time during this call you require immediate assistance press star zero for the operator This call is being recorded on Thursday, May 7th, 2026. this call is being recorded on thursday may 7th 2026 Replay will be made available shortly after. replay will be made available shortly after I'd like to turn the conference over to Ryan Edelman, Vontier's Vice President of Investor Relations. i'd like to turn the conference over to ryan edelman vontier's vice president of investor relations Please go ahead. please go ahead

Speaker 11: Thanks. Good morning, everyone, and thank you for joining us on the call this morning to discuss our first quarter results. With me on the call today are Mark Morelli, our President and Chief Executive Officer, and then Anshooman Aga, our Executive Vice President and Chief Financial Officer. You can find both our press release as well as our slide presentation that we will refer to during today's call on the investor relations section of our website at investors.vontier.com. Please note that during today's call, we will present certain non-GAAP financial measures. We'll also make forward-looking statements within the meanings of the federal securities laws, including statements regarding events or developments that we expect or anticipate will or may occur in the future. These forward-looking statements are subject to risks and uncertainties. Thanks. thanks Good morning, everyone, and thank you for joining us on the call this morning to discuss our first quarter results. good morning everyone and thank you for joining us on the call this morning to discuss our first quarter results With me on the call today are Mark Morelli, our President and Chief Executive Officer, and then Anshooman Aga, our Executive Vice President and Chief Financial Officer. with me on the call today are mark morelli our president and chief executive officer and then anshooman aga our executive vice president and chief financial officer You can find both our press release as well as our slide presentation that we will refer to during today's call on the investor relations section of our website at investors.vontier.com. you can find both our press release as well as our slide presentation that we will refer to during today's call on the investor relations section of our website at investors.vontier.com Please note that during today's call, we will present certain non-GAAP financial measures. please note that during today's call we will present certain non-gaap financial measures We'll also make forward-looking statements within the meanings of the federal securities laws, including statements regarding events or developments that we expect or anticipate will or may occur in the future. we'll also make forward-looking statements within the meanings of the federal securities laws including statements regarding events or developments that we expect or anticipate will or may occur in the future These forward-looking statements are subject to risks and uncertainties. these forward-looking statements are subject to risks and uncertainties Actual results might differ materially from any forward-looking statements that we make today, and we do not assume any obligation to update them. Information regarding these factors that may cause actual results to differ materially from these forward-looking statements is available on our website and in our SEC filings. With that, please turn to slide three, and I'll turn the call over to Mark. Actual results might differ materially from any forward-looking statements that we make today, and we do not assume any obligation to update them. actual results might differ materially from any forward-looking statements that we make today and we do not assume any obligation to update them Information regarding these factors that may cause actual results to differ materially from these forward-looking statements is available on our website and in our SEC filings. information regarding these factors that may cause actual results to differ materially from these forward-looking statements is available on our website and in our sec filings With that, please turn to slide three, and I'll turn the call over to Mark. with that please turn to slide three and i'll turn the call over to mark

Speaker 8: Thanks, Ryan. Good morning, everyone, and thank you for joining us on the call this morning. Let's get started with a few high-level takeaways from the quarter. Vontier delivered solid sales and orders growth to start the year as we continue to gain traction on our Connected Mobility strategy. We're expanding our integrated offerings to capitalize on strong secular tailwinds across our end markets. Core sales grew nearly 2%, slightly ahead of our expectations, driven by strong performance in our Environmental & Fueling Solutions segment. Orders were up approximately 5% on a core basis, including strong demand for fueling equipment and key wins in retail solutions. Adjusted operating margin declined 70 basis points below our expectations, reflecting unfavorable mix and timing of R&D expenses. Thanks, Ryan. thanks ryan Good morning, everyone, and thank you for joining us on the call this morning. good morning everyone and thank you for joining us on the call this morning Let's get started with a few high-level takeaways from the quarter. let's get started with a few high-level takeaways from the quarter Vontier delivered solid sales and orders growth to start the year as we continue to gain traction on our Connected Mobility strategy. vontier delivered solid sales and orders growth to start the year as we continue to gain traction on our connected mobility strategy We're expanding our integrated offerings to capitalize on strong secular tailwinds across our end markets. we're expanding our integrated offerings to capitalize on strong secular tailwinds across our end markets Core sales grew nearly 2%, slightly ahead of our expectations, driven by strong performance in our Environmental & Fueling Solutions segment. core sales grew nearly 2% slightly ahead of our expectations driven by strong performance in our environmental & fueling solutions segment Orders were up approximately 5% on a core basis, including strong demand for fueling equipment and key wins in retail solutions. orders were up approximately 5% on a core basis including strong demand for fueling equipment and key wins in retail solutions Adjusted operating margin declined 70 basis points below our expectations, reflecting unfavorable mix and timing of R&D expenses. adjusted operating margin declined 70 basis points below our expectations reflecting unfavorable mix and timing of r&d expenses Importantly, the underlying fundamentals of the business are intact, and we are confident in our full-year outlook, as well as our ability to achieve the $15 million in savings related to ongoing simplification and 80/20 efforts. We're seeing meaningful momentum in our convenience retail end market, which strengthens our visibility and reinforces our confidence in the growth opportunity ahead. We have market-leading technologies that optimize our customers' operations, unmatched domain expertise to solve high-value problems, and best-in-class channels to market. Importantly, the underlying fundamentals of the business are intact, and we are confident in our full-year outlook, as well as our ability to achieve the $15 million in savings related to ongoing simplification and 80/20 efforts. importantly the underlying fundamentals of the business are intact and we are confident in our full-year outlook as well as our ability to achieve the $15 million in savings related to ongoing simplification and 80/20 efforts We're seeing meaningful momentum in our convenience retail end market, which strengthens our visibility and reinforces our confidence in the growth opportunity ahead. we're seeing meaningful momentum in our convenience retail end market which strengthens our visibility and reinforces our confidence in the growth opportunity ahead We have market-leading technologies that optimize our customers' operations, unmatched domain expertise to solve high-value problems, and best-in-class channels to market. we have market-leading technologies that optimize our customers' operations unmatched domain expertise to solve high-value problems and best-in-class channels to market Growth within this end market was led by Environmental & Fueling Solutions, with double-digit growth in both dispensers and aftermarket parts. Dispenser demand is strong, supported by the ongoing build-out and modernization of retail fueling infrastructure. The pull-through from advanced payment technology is helping to drive replacement and upgrade demand. As an example of this, we launched the next-generation FlexPay 6 outdoor payment terminal in the first quarter. Growth within this end market was led by Environmental & Fueling Solutions, with double-digit growth in both dispensers and aftermarket parts. growth within this end market was led by environmental & fueling solutions with double-digit growth in both dispensers and aftermarket parts Dispenser demand is strong, supported by the ongoing build-out and modernization of retail fueling infrastructure. dispenser demand is strong supported by the ongoing build-out and modernization of retail fueling infrastructure The pull-through from advanced payment technology is helping to drive replacement and upgrade demand. the pull-through from advanced payment technology is helping to drive replacement and upgrade demand As an example of this, we launched the next-generation FlexPay 6 outdoor payment terminal in the first quarter. as an example of this we launched the next-generation flexpay 6 outdoor payment terminal in the first quarter While bolstering our cloud-connected, industry-leading payment security, it features a larger, flush-mounted touchscreen along with an integrated card reader and PIN pad. It also enhances our unified payment solution by offering a more interactive consumer interface that helps reduce transaction times and improves engagement at the pump. We're also seeing strong momentum for our innovative technologies inside the store. Retail Solutions, part of Invenco brand, delivered strong growth in payment, media, and point-of-sale systems. The convenience retail end market is resilient, even in uncertain economic backdrops. Over the last 25 years, this end market has consistently demonstrated durability through periods of volatility. Higher oil prices have historically been a net positive as higher fuel margins drive improved profitability for C-store operators, enabling them to prioritize modernization, food and beverage offerings, and invest in the consumer experience. While bolstering our cloud-connected, industry-leading payment security, it features a larger, flush-mounted touchscreen along with an integrated card reader and PIN pad. while bolstering our cloud-connected industry-leading payment security it features a larger flush-mounted touchscreen along with an integrated card reader and pin pad It also enhances our unified payment solution by offering a more interactive consumer interface that helps reduce transaction times and improves engagement at the pump. it also enhances our unified payment solution by offering a more interactive consumer interface that helps reduce transaction times and improves engagement at the pump We're also seeing strong momentum for our innovative technologies inside the store. we're also seeing strong momentum for our innovative technologies inside the store Retail Solutions, part of Invenco brand, delivered strong growth in payment, media, and point-of-sale systems. retail solutions part of invenco brand delivered strong growth in payment media and point-of-sale systems The convenience retail end market is resilient, even in uncertain economic backdrops. the convenience retail end market is resilient even in uncertain economic backdrops Over the last 25 years, this end market has consistently demonstrated durability through periods of volatility. over the last 25 years this end market has consistently demonstrated durability through periods of volatility Higher oil prices have historically been a net positive as higher fuel margins drive improved profitability for C-store operators, enabling them to prioritize modernization, food and beverage offerings, and invest in the consumer experience. higher oil prices have historically been a net positive as higher fuel margins drive improved profitability for c-store operators enabling them to prioritize modernization food and beverage offerings and invest in the consumer experience Industry data suggests high retail fuel prices typically result in more frequent visits, which creates an opportunity for greater conversion for in-store sales as consumers place more emphasis on value. In prior cycles, higher fuel margins combined with the trade-down effect as consumers shift toward lower-cost C-store options have created tailwinds to generate more cash flow for C-store operators. In turn, we see robust capital expenditures for multi-year storefront build-outs and retrofits. This is particularly true of larger regional and national C-store chains, where we have higher share and they focus on delivering an elevated consumer experience. We're seeing this play out today. A good example is 7-Eleven's recently announced intention to remodel 7,000 stores across North America through 2030, standardizing around their more modern food and beverage-focused format. Industry data suggests high retail fuel prices typically result in more frequent visits, which creates an opportunity for greater conversion for in-store sales as consumers place more emphasis on value. industry data suggests high retail fuel prices typically result in more frequent visits which creates an opportunity for greater conversion for in-store sales as consumers place more emphasis on value In prior cycles, higher fuel margins combined with the trade-down effect as consumers shift toward lower-cost C-store options have created tailwinds to generate more cash flow for C-store operators. in prior cycles higher fuel margins combined with the trade-down effect as consumers shift toward lower-cost c-store options have created tailwinds to generate more cash flow for c-store operators In turn, we see robust capital expenditures for multi-year storefront build-outs and retrofits. in turn we see robust capital expenditures for multi-year storefront build-outs and retrofits This is particularly true of larger regional and national C-store chains, where we have higher share and they focus on delivering an elevated consumer experience. this is particularly true of larger regional and national c-store chains where we have higher share and they focus on delivering an elevated consumer experience We're seeing this play out today. we're seeing this play out today A good example is 7-Eleven's recently announced intention to remodel 7,000 stores across North America through 2030, standardizing around their more modern food and beverage-focused format. a good example is 7-eleven's recently announced intention to remodel 7,000 stores across north america through 2030 standardizing around their more modern food and beverage-focused format This is in addition to the 1,300 new sites they expect to build over that same time horizon. This kind of long-term investment reinforces the strength of the category and the opportunity for Vontier. This morning, we also announced an important step in our portfolio simplification strategy. We've announced an agreement to sell our global fleet telematics business, Teletrac, for a total purchase price that values the business at $220 million. The purchase price consists of $80 million in cash proceeds and a $100 million seller's note. Vontier will retain an approximate 30% equity stake in the business. We've outlined those details for you on slide four. The sale marks the completion of a successful multi-year turnaround of this business. This is in addition to the 1,300 new sites they expect to build over that same time horizon. this is in addition to the 1,300 new sites they expect to build over that same time horizon This kind of long-term investment reinforces the strength of the category and the opportunity for Vontier. this kind of long-term investment reinforces the strength of the category and the opportunity for vontier This morning, we also announced an important step in our portfolio simplification strategy. this morning we also announced an important step in our portfolio simplification strategy We've announced an agreement to sell our global fleet telematics business, Teletrac, for a total purchase price that values the business at $220 million. we've announced an agreement to sell our global fleet telematics business teletrac for a total purchase price that values the business at $220 million The purchase price consists of $80 million in cash proceeds and a $100 million seller's note. the purchase price consists of $80 million in cash proceeds and a $100 million seller's note Vontier will retain an approximate 30% equity stake in the business. vontier will retain an approximate 30% equity stake in the business We've outlined those details for you on slide four. we've outlined those details for you on slide four The sale marks the completion of a successful multi-year turnaround of this business. the sale marks the completion of a successful multi-year turnaround of this business At the time of our spin, Teletrac was churning out about 25% of customers with declining profitability and negative free cash flow. Since then, the team has meaningfully improved the business by launching a new platform, significantly reducing churn, accelerating ARR growth to mid-single digits, improving profitability, and generating positive free cash flow. This has been a major effort for the Teletrac team, and we're grateful for their contributions. We believe Teletrac is well-positioned for its next chapter of growth with better focus and access to capital under its new ownership. We expect this transaction to close in June and will deploy the cash proceeds consistent with our disciplined capital allocation framework with a focus on additional share repurchases and selective bolt-on acquisitions. At the time of our spin, Teletrac was churning out about 25% of customers with declining profitability and negative free cash flow. at the time of our spin teletrac was churning out about 25% of customers with declining profitability and negative free cash flow Since then, the team has meaningfully improved the business by launching a new platform, significantly reducing churn, accelerating ARR growth to mid-single digits, improving profitability, and generating positive free cash flow. since then the team has meaningfully improved the business by launching a new platform significantly reducing churn accelerating arr growth to mid-single digits improving profitability and generating positive free cash flow This has been a major effort for the Teletrac team, and we're grateful for their contributions. this has been a major effort for the teletrac team and we're grateful for their contributions We believe Teletrac is well-positioned for its next chapter of growth with better focus and access to capital under its new ownership. we believe teletrac is well-positioned for its next chapter of growth with better focus and access to capital under its new ownership We expect this transaction to close in June and will deploy the cash proceeds consistent with our disciplined capital allocation framework with a focus on additional share repurchases and selective bolt-on acquisitions. we expect this transaction to close in june and will deploy the cash proceeds consistent with our disciplined capital allocation framework with a focus on additional share repurchases and selective bolt-on acquisitions Before I turn the call over to Anshooman, I want to reiterate our confidence in the full-year outlook. While the geopolitical backdrop added some uncertainty, demand trends remain constructive. We're also strengthening the foundation of our business to drive more profitable growth over time through commercial excellence and innovation and a relentless focus on execution. As we finalize remaining organizational changes and implement our cost actions, we still expect incremental savings to ramp in the second half of this year. Combined with disciplined capital deployment, we are confident in our ability to deliver double-digit EPS growth. With that, I'll turn the call over to Anshooman to walk you through a more detailed review of the quarter's financials and our outlook. Before I turn the call over to Anshooman, I want to reiterate our confidence in the full-year outlook. before i turn the call over to anshooman i want to reiterate our confidence in the full-year outlook While the geopolitical backdrop added some uncertainty, demand trends remain constructive. while the geopolitical backdrop added some uncertainty demand trends remain constructive We're also strengthening the foundation of our business to drive more profitable growth over time through commercial excellence and innovation and a relentless focus on execution. we're also strengthening the foundation of our business to drive more profitable growth over time through commercial excellence and innovation and a relentless focus on execution As we finalize remaining organizational changes and implement our cost actions, we still expect incremental savings to ramp in the second half of this year. as we finalize remaining organizational changes and implement our cost actions we still expect incremental savings to ramp in the second half of this year Combined with disciplined capital deployment, we are confident in our ability to deliver double-digit EPS growth. combined with disciplined capital deployment we are confident in our ability to deliver double-digit eps growth With that, I'll turn the call over to Anshooman to walk you through a more detailed review of the quarter's financials and our outlook. with that i'll turn the call over to anshooman to walk you through a more detailed review of the quarter's financials and our outlook

Speaker 2: Thanks, Mark. Good morning, everyone. Please turn to slide five for a summary of our consolidated results for the quarter. Total sales of $751 million and core sales growth of 1.7% were above our guide, driven by notable strength at Environmental & Fueling Solutions, with Mobility Tech and Repair Solutions generally performing in line with our expectations. As Mark mentioned in his remarks, adjusted operating profit margin fell short for the quarter, reflecting unfavorable mix and timing of operating expenses within both Mobility Tech and Repair. We expect full-year margins to be consistent with our previous guidance. Adjusted EPS was $0.80, up 4% year-over-year. Adjusted free cash flow was below our normal seasonal pattern and prior year. The timing of our semiannual bond interest payment of approximately $19 million was in Q1 this year versus Q2 last year. Thanks, Mark. thanks mark Good morning, everyone. good morning everyone Please turn to slide five for a summary of our consolidated results for the quarter. please turn to slide five for a summary of our consolidated results for the quarter Total sales of $751 million and core sales growth of 1.7% were above our guide, driven by notable strength at Environmental & Fueling Solutions, with Mobility Tech and Repair Solutions generally performing in line with our expectations. total sales of $751 million and core sales growth of 1.7% were above our guide driven by notable strength at environmental & fueling solutions with mobility tech and repair solutions generally performing in line with our expectations As Mark mentioned in his remarks, adjusted operating profit margin fell short for the quarter, reflecting unfavorable mix and timing of operating expenses within both Mobility Tech and Repair. as mark mentioned in his remarks adjusted operating profit margin fell short for the quarter reflecting unfavorable mix and timing of operating expenses within both mobility tech and repair We expect full-year margins to be consistent with our previous guidance. we expect full-year margins to be consistent with our previous guidance Adjusted EPS was $0.80, up 4% year-over-year. adjusted eps was $0.80 up 4% year-over-year Adjusted free cash flow was below our normal seasonal pattern and prior year. adjusted free cash flow was below our normal seasonal pattern and prior year The timing of our semiannual bond interest payment of approximately $19 million was in Q1 this year versus Q2 last year. the timing of our semiannual bond interest payment of approximately $19 million was in q1 this year versus q2 last year Additionally, Q1 had an extra payroll run compared to the previous year, along with higher incentive compensation driven by the strong performance in fiscal 2025. We expect several of these timing differences to level out during the year, and we expect free cash flow conversion of around 95%. Turning to our segment results beginning on slide six. Environmental & Fueling Solutions started the year off strong, benefiting from solid industry demand and an innovative product portfolio, driving higher new equipment and aftermarket activity. Total dispenser sales increased low double digits on a global basis, led by strength in North America. We saw notable bookings and sales strength from large national accounts, evidence of stable CapEx budgets. Segment margin was flat at nearly 30%, with volume leverage and ongoing productivity actions offset by less favorable mix. Additionally, Q1 had an extra payroll run compared to the previous year, along with higher incentive compensation driven by the strong performance in fiscal 2025. additionally q1 had an extra payroll run compared to the previous year along with higher incentive compensation driven by the strong performance in fiscal 2025 We expect several of these timing differences to level out during the year, and we expect free cash flow conversion of around 95%. we expect several of these timing differences to level out during the year and we expect free cash flow conversion of around 95% Turning to our segment results beginning on slide six. turning to our segment results beginning on slide six Environmental & Fueling Solutions started the year off strong, benefiting from solid industry demand and an innovative product portfolio, driving higher new equipment and aftermarket activity. environmental & fueling solutions started the year off strong benefiting from solid industry demand and an innovative product portfolio driving higher new equipment and aftermarket activity Total dispenser sales increased low double digits on a global basis, led by strength in North America. total dispenser sales increased low double digits on a global basis led by strength in north america We saw notable bookings and sales strength from large national accounts, evidence of stable CapEx budgets. we saw notable bookings and sales strength from large national accounts evidence of stable capex budgets Segment margin was flat at nearly 30%, with volume leverage and ongoing productivity actions offset by less favorable mix. segment margin was flat at nearly 30% with volume leverage and ongoing productivity actions offset by less favorable mix Moving to Mobility Technologies on slide seven. Core sales declined by about 1% as strong underlying demand for convenience retail technologies was offset by more than a $25 million headwind associated with higher shipments for our Vehicle Identification System, or VIS, in the prior year. Our commercial pipeline is robust, and we continue to win new business for integrated solutions, including orders for our unified payment point of sale and VIS offerings. The consolidated Mobility Technologies segment margin declined 260 basis points, driven by unfavorable mix and higher operating expense. On the OpEx side, we incurred higher R&D expenses in order to accelerate new product launches. At the same time, our cost out activities are ramping in Q2, giving us momentum for the back half of the year. Moving to Mobility Technologies on slide seven. moving to mobility technologies on slide seven Core sales declined by about 1% as strong underlying demand for convenience retail technologies was offset by more than a $25 million headwind associated with higher shipments for our Vehicle Identification System, or VIS, in the prior year. core sales declined by about 1% as strong underlying demand for convenience retail technologies was offset by more than a $25 million headwind associated with higher shipments for our vehicle identification system or vis in the prior year Our commercial pipeline is robust, and we continue to win new business for integrated solutions, including orders for our unified payment point of sale and VIS offerings. our commercial pipeline is robust and we continue to win new business for integrated solutions including orders for our unified payment point of sale and vis offerings The consolidated Mobility Technologies segment margin declined 260 basis points, driven by unfavorable mix and higher operating expense. the consolidated mobility technologies segment margin declined 260 basis points driven by unfavorable mix and higher operating expense On the OpEx side, we incurred higher R&D expenses in order to accelerate new product launches. on the opex side we incurred higher r&d expenses in order to accelerate new product launches At the same time, our cost out activities are ramping in Q2, giving us momentum for the back half of the year. at the same time our cost out activities are ramping in q2 giving us momentum for the back half of the year On the mix side, product and geographic mix impacted margins in Q1, which we expect to recover in Q2 and the balance of the year. When you combine this with stronger volume growth and incremental benefits from our cost initiatives in the second half, we remain on track for solid margin expansion this year. Additionally, the divestiture of Teletrac will be accretive to margin performance for the segment and Vontier overall. Finally, turning to Repair Solutions on slide eight. Sales performance was in line with our expectations, with progress on our growth initiatives successfully offsetting pressure on technicians' discretionary spending. This was most notable in our tool storage, diagnostic, and power tools categories. Additionally, we are focused on quicker payback tools that improve technicians' productivity. On the mix side, product and geographic mix impacted margins in Q1, which we expect to recover in Q2 and the balance of the year. on the mix side product and geographic mix impacted margins in q1 which we expect to recover in q2 and the balance of the year When you combine this with stronger volume growth and incremental benefits from our cost initiatives in the second half, we remain on track for solid margin expansion this year. when you combine this with stronger volume growth and incremental benefits from our cost initiatives in the second half we remain on track for solid margin expansion this year Additionally, the divestiture of Teletrac will be accretive to margin performance for the segment and Vontier overall. Finally, turning to Repair Solutions on slide eight. additionally the divestiture of teletrac will be accretive to margin performance for the segment and vontier overall. finally turning to repair solutions on slide eight Sales performance was in line with our expectations, with progress on our growth initiatives successfully offsetting pressure on technicians' discretionary spending. sales performance was in line with our expectations with progress on our growth initiatives successfully offsetting pressure on technicians' discretionary spending This was most notable in our tool storage, diagnostic, and power tools categories. this was most notable in our tool storage diagnostic and power tools categories Additionally, we are focused on quicker payback tools that improve technicians' productivity. additionally we are focused on quicker payback tools that improve technicians' productivity The lower segment margin can be attributed to unfavorable product mix and a discrete bad debt reserve of about $2 million related to delayed collections caused by the implementation of the new financial system. We are making good progress in collections and would expect to recover a majority of this reserve over the next several months. Turning to the balance sheet on slide nine. Adjusted free cash flow of $28 million was impacted by the working capital items I highlighted earlier. We accelerated share repurchase in the quarter, buying back $70 million given the market dislocations. While we will maintain some flexibility on cash, given an increasingly actionable deal pipeline at current valuations, buybacks remain a very compelling use of cash. The lower segment margin can be attributed to unfavorable product mix and a discrete bad debt reserve of about $2 million related to delayed collections caused by the implementation of the new financial system. the lower segment margin can be attributed to unfavorable product mix and a discrete bad debt reserve of about $2 million related to delayed collections caused by the implementation of the new financial system We are making good progress in collections and would expect to recover a majority of this reserve over the next several months. we are making good progress in collections and would expect to recover a majority of this reserve over the next several months Turning to the balance sheet on slide nine. turning to the balance sheet on slide nine Adjusted free cash flow of $28 million was impacted by the working capital items I highlighted earlier. adjusted free cash flow of $28 million was impacted by the working capital items i highlighted earlier We accelerated share repurchase in the quarter, buying back $70 million given the market dislocations. we accelerated share repurchase in the quarter buying back $70 million given the market dislocations While we will maintain some flexibility on cash, given an increasingly actionable deal pipeline at current valuations, buybacks remain a very compelling use of cash. while we will maintain some flexibility on cash given an increasingly actionable deal pipeline at current valuations buybacks remain a very compelling use of cash To address the $500 million bond maturity at the end of the quarter, we used about $200 million in cash on hand to repay a portion of the bond and issued a new 364-day term loan for the remaining $300 million at a relatively attractive spread. We ended the quarter with over $200 million in cash on the balance sheet and net leverage at 2.4x. Please turn to slide 10 to discuss our guidance for 2026 and Q2. Beginning with a look at our full year guidance. What is shown here is what our guide would have been prior to the Teletrac divestiture, the impact that divestiture will have on our P&L, landing on our official guide, which includes the removal of Teletrac's results in the last column of this table. To address the $500 million bond maturity at the end of the quarter, we used about $200 million in cash on hand to repay a portion of the bond and issued a new 364-day term loan for the remaining $300 million at a relatively attractive spread. to address the $500 million bond maturity at the end of the quarter we used about $200 million in cash on hand to repay a portion of the bond and issued a new 364-day term loan for the remaining $300 million at a relatively attractive spread We ended the quarter with over $200 million in cash on the balance sheet and net leverage at 2.4 x. we ended the quarter with over $200 million in cash on the balance sheet and net leverage at 2.4 x Please turn to slide 10 to discuss our guidance for 2026 and Q2. please turn to slide 10 to discuss our guidance for 2026 and q2 Beginning with a look at our full year guidance. beginning with a look at our full year guidance What is shown here is what our guide would have been prior to the Teletrac divestiture, the impact that divestiture will have on our P&L, landing on our official guide, which includes the removal of Teletrac's results in the last column of this table. what is shown here is what our guide would have been prior to the teletrac divestiture the impact that divestiture will have on our p&l landing on our official guide which includes the removal of teletrac's results in the last column of this table Importantly, there are no changes to the underlying fundamentals of our previous guidance, and we are only adjusting our guide to reflect the removal of Teletrac. We are assuming the transaction closes in early June, which means we remove about seven months of contribution. Following this adjustment, relative to our previous guide, we lose about $110 million in sales, bringing the midpoint of our new range to just over $3 billion. Teletrac has little to no impact on our organic growth, but will be accretive to our margin rate by about 50 basis points. We now expect operating margin to expand by about 130 basis points to approximately 22.5%, which includes the contribution from the $15 million savings initiatives over the balance of the year. On a gross basis, the transaction will be about $0.05 dilutive to EPS for the full year. Importantly, there are no changes to the underlying fundamentals of our previous guidance, and we are only adjusting our guide to reflect the removal of Teletrac. importantly there are no changes to the underlying fundamentals of our previous guidance and we are only adjusting our guide to reflect the removal of teletrac We are assuming the transaction closes in early June, which means we remove about seven months of contribution. we are assuming the transaction closes in early june which means we remove about seven months of contribution Following this adjustment, relative to our previous guide, we lose about $110 million in sales, bringing the midpoint of our new range to just over $3 billion. following this adjustment relative to our previous guide we lose about $110 million in sales bringing the midpoint of our new range to just over $3 billion Teletrac has little to no impact on our organic growth, but will be accretive to our margin rate by about 50 basis points. teletrac has little to no impact on our organic growth but will be accretive to our margin rate by about 50 basis points We now expect operating margin to expand by about 130 basis points to approximately 22.5%, which includes the contribution from the $15 million savings initiatives over the balance of the year. we now expect operating margin to expand by about 130 basis points to approximately 22.5% which includes the contribution from the $15 million savings initiatives over the balance of the year On a gross basis, the transaction will be about $0.05 dilutive to EPS for the full year. on a gross basis the transaction will be about $0.05 dilutive to eps for the full year The interest received from the seller's note and the benefit from share buyback offsets that EPS headwind, so we leave our full year range unchanged at $3.35-$3.50. Our outlook for adjusted free cash flow conversion remains at 95%, representing around 15% of sales. Looking at our guide for Q2 on slide 11, we follow the same format. We expect sales in the range of $730 million-$740 million, with core sales down about 1% at the midpoint, which implies the first half at roughly flat in line with the initial outlook we outlined for you on the Q4 call. As you may recall, shipment timing of the Vehicle Identification System in the prior year drove high teens growth in Mobility Technologies along with 11% core growth for overall Vontier. The interest received from the seller's note and the benefit from share buyback offsets that EPS headwind, so we leave our full year range unchanged at $3.35-$3.50. the interest received from the seller's note and the benefit from share buyback offsets that eps headwind so we leave our full year range unchanged at $3.35-$3.50 Our outlook for adjusted free cash flow conversion remains at 95%, representing around 15% of sales. our outlook for adjusted free cash flow conversion remains at 95% representing around 15% of sales Looking at our guide for Q2 on slide 11, we follow the same format. looking at our guide for q2 on slide 11 we follow the same format We expect sales in the range of $730 million-$740 million, with core sales down about 1% at the midpoint, which implies the first half at roughly flat in line with the initial outlook we outlined for you on the Q4 call. we expect sales in the range of $730 million-$740 million with core sales down about 1% at the midpoint which implies the first half at roughly flat in line with the initial outlook we outlined for you on the q4 call As you may recall, shipment timing of the Vehicle Identification System in the prior year drove high teens growth in Mobility Technologies along with 11% core growth for overall Vontier. as you may recall shipment timing of the vehicle identification system in the prior year drove high teens growth in mobility technologies along with 11% core growth for overall vontier This compare issue starts easing in the third quarter. Margins will begin to accelerate in the second quarter, expanding approximately 80 basis points, reflecting lower operating expenses. EPS will be in the range of $0.78-$0.81, including a $0.01 headwind from the divestiture. As we highlighted on our last call, the year-over-year organic growth rates will look better in the second half, accounting for first half compare issues at EFS and Mobility Tech and the timing of shipments on projects in backlog which favor Q3 and Q4. As always, we've included some other modeling assumptions on the right-hand side of the slide, which have also been updated to reflect the divestiture impacts on the top line and adjustments to below the line items. With that, I'll pass the call back to Mark for his closing comments. This compare issue starts easing in the third quarter. this compare issue starts easing in the third quarter Margins will begin to accelerate in the second quarter, expanding approximately 80 basis points, reflecting lower operating expenses. margins will begin to accelerate in the second quarter expanding approximately 80 basis points reflecting lower operating expenses EPS will be in the range of $0.78-$0.81, including a $0.01 headwind from the divestiture. eps will be in the range of $0.78-$0.81 including a $0.01 headwind from the divestiture As we highlighted on our last call, the year-over-year organic growth rates will look better in the second half, accounting for first half compare issues at EFS and Mobility Tech and the timing of shipments on projects in backlog which favor Q3 and Q4. as we highlighted on our last call the year-over-year organic growth rates will look better in the second half accounting for first half compare issues at efs and mobility tech and the timing of shipments on projects in backlog which favor q3 and q4 As always, we've included some other modeling assumptions on the right-hand side of the slide, which have also been updated to reflect the divestiture impacts on the top line and adjustments to below the line items. as always we've included some other modeling assumptions on the right-hand side of the slide which have also been updated to reflect the divestiture impacts on the top line and adjustments to below the line items With that, I'll pass the call back to Mark for his closing comments. with that i'll pass the call back to mark for his closing comments

Speaker 8: Thanks, Anshooman. We're encouraged by the start to the year and by the underlying momentum across our most important end markets. I'd like to thank the entire Vontier team for their hard work and dedication to delivering for our customers and each other. As we look ahead, one of the most important evolutions underway at Vontier is how we operate the business. Historically, we've operated largely through individual lines of business. Over the past two quarters, we've reorganized significantly from the customer back, streamlining operations, raising the bar on operational excellence, and becoming a more integrated enterprise. Today, our go-to-market strategy is deployed around three core end markets, convenience retail, fleet, and repair. This shift is simplifying how we operate and setting the foundation for greater scale over time. Thanks, Anshooman. thanks anshooman We're encouraged by the start to the year and by the underlying momentum across our most important end markets. we're encouraged by the start to the year and by the underlying momentum across our most important end markets I'd like to thank the entire Vontier team for their hard work and dedication to delivering for our customers and each other. i'd like to thank the entire vontier team for their hard work and dedication to delivering for our customers and each other As we look ahead, one of the most important evolutions underway at Vontier is how we operate the business. as we look ahead one of the most important evolutions underway at vontier is how we operate the business Historically, we've operated largely through individual lines of business. historically we've operated largely through individual lines of business Over the past two quarters, we've reorganized significantly from the customer back, streamlining operations, raising the bar on operational excellence, and becoming a more integrated enterprise. over the past two quarters we've reorganized significantly from the customer back streamlining operations raising the bar on operational excellence and becoming a more integrated enterprise Today, our go-to-market strategy is deployed around three core end markets, convenience retail, fleet, and repair. today our go-to-market strategy is deployed around three core end markets convenience retail fleet and repair This shift is simplifying how we operate and setting the foundation for greater scale over time. this shift is simplifying how we operate and setting the foundation for greater scale over time By aligning around our customers, we bring more depth and expertise to enable integrated solutions. We believe this customer-led model strengthens our competitive advantage, improves how we innovate and sell, and positions Vontier to deliver more consistent growth, margin expansion, and long-term value creation. We believe our Connected Mobility strategy is the right long-term strategy for Vontier, and we are focused on executing with discipline to convert that strategy into durable top-line growth, stronger profitability, and greater value for shareholders. We have strong leadership positions in attractive and resilient end markets that offer significant opportunities. By aligning around our customers, we bring more depth and expertise to enable integrated solutions. by aligning around our customers we bring more depth and expertise to enable integrated solutions We believe this customer-led model strengthens our competitive advantage, improves how we innovate and sell, and positions Vontier to deliver more consistent growth, margin expansion, and long-term value creation. solutions we believe this customer-led model strengthens our competitive advantage improves how we innovate and sell and positions vontier to deliver more consistent growth margin expansion and long-term value creation We believe our Connected Mobility strategy is the right long-term strategy for Vontier, and we are focused on executing with discipline to convert that strategy into durable top-line growth, stronger profitability, and greater value for shareholders. we believe our connected mobility strategy is the right long-term strategy for vontier and we are focused on executing with discipline to convert that strategy into durable top-line growth stronger profitability and greater value for shareholders We have strong leadership positions in attractive and resilient end markets that offer significant opportunities. we have strong leadership positions in attractive and resilient end markets that offer significant opportunities That means we need to continue to drive commercial excellence while also maintaining a relentless focus on execution, simplification, and disciplined capital allocation. As we do this, we believe we are well-positioned to deliver on our commitments and create meaningful long-term shareholder value. With that, operator, please open the line for questions. That means we need to continue to drive commercial excellence while also maintaining a relentless focus on execution, simplification, and disciplined capital allocation. that means we need to continue to drive commercial excellence while also maintaining a relentless focus on execution simplification and disciplined capital allocation As we do this, we believe we are well-positioned to deliver on our commitments and create meaningful long-term shareholder value. as we do this we believe we are well-positioned to deliver on our commitments and create meaningful long-term shareholder value With that, operator, please open the line for questions. with that operator please open the line for questions

Speaker 9: Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press star followed by the number one on your touch-tone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press star followed by the number two. If you are using a speakerphone, please leave the handset before pressing any keys. One moment please for your first question. Your first question comes from David Raso of Evercore ISI. Please go ahead. Your line is open. Thank you. thank you Ladies and gentlemen, we will now begin the question and answer session. ladies and gentlemen we will now begin the question and answer session Should you have a question, please press star followed by the number one on your touch-tone phone. should you have a question please press star followed by the number one on your touch-tone phone You will hear a prompt that your hand has been raised. you will hear a prompt that your hand has been raised Should you wish to decline from the polling process, please press star followed by the number two. should you wish to decline from the polling process please press star followed by the number two If you are using a speakerphone, please leave the handset before pressing any keys. if you are using a speakerphone please leave the handset before pressing any keys One moment please for your first question. one moment please for your first question Your first question comes from David Raso of Evercore ISI. your first question comes from david raso of evercore isi Please go ahead. please go ahead Your line is open. your line is open

Speaker 3: Hi. Thank you. Two questions. One about the Mobility mix moving forward and also the use of the proceeds on the divestiture. On the margin mix, can you help us a bit how you're thinking about the various pieces within Mobility, the growth the rest of the year? Just that the margin of Mobility was a little bit lower than I would have thought, and you mentioned also some cost involved. Maybe if you could help break out that margin decline year-over-year, and again, how to think about the mix the rest of the year. Lastly, on the repo, the share count for the full year. Hi. hi Thank you. thank you Two questions. two questions One about the Mobility mix moving forward and also the use of the proceeds on the divestiture. one about the mobility mix moving forward and also the use of the proceeds on the divestiture On the margin mix, can you help us a bit how you're thinking about the various pieces within Mobility, the growth the rest of the year? on the margin mix can you help us a bit how you're thinking about the various pieces within mobility the growth the rest of the year Just that the margin of Mobility was a little bit lower than I would have thought, and you mentioned also some cost involved. just that the margin of mobility was a little bit lower than i would have thought and you mentioned also some cost involved Maybe if you could help break out that margin decline year-over-year, and again, how to think about the mix the rest of the year. maybe if you could help break out that margin decline year-over-year and again how to think about the mix the rest of the year Lastly, on the repo, the share count for the full year. lastly on the repo the share count for the full year It looks like maybe you are assuming, it depends on the, obviously, share price, but, you know, maybe another $75 million, $100 million of repo after the $70 million guide in 2Q. I just wanna make sure I'm thinking about that correctly. Thank you. It looks like maybe you are assuming, it depends on the, obviously, share price, but, you know, maybe another $75 million, $100 million of repo after the $70 million guide in 2Q. it looks like maybe you are assuming it depends on the obviously share price but you know maybe another $75 million $100 million of repo after the $70 million guide in 2q I just wanna make sure I'm thinking about that correctly. i just wanna make sure i'm thinking about that correctly Thank you. thank you

Speaker 2: Hey, David. Thanks for the question. For Mobility Technologies margins for Q1, there were really two items that impacted margins. One was mix and mix really was product, customer, and geographic mix played out differently versus our expectations and also historical norms. The second piece is higher R&D expenses in the tune of couple million, this was really accelerated spend on launch of new products. In the prepared remarks, Mark talked about the next generation FlexPay 6 product, which brings a lot of customer benefits that we launched, also the redesign of some of our printed circuit boards for the memory chip shortage, working around that drove the higher R&D expense. Hey, David. hey david Thanks for the question. thanks for the question For Mobility Technologies margins for Q1, there were really two items that impacted margins. for mobility technologies margins for q1 there were really two items that impacted margins One was mix and mix really was product, customer, and geographic mix played out differently versus our expectations and also historical norms. one was mix and mix really was product customer and geographic mix played out differently versus our expectations and also historical norms The second piece is higher R&D expenses in the tune of couple million, this was really accelerated spend on launch of new products. the second piece is higher r&d expenses in the tune of couple million this was really accelerated spend on launch of new products In the prepared remarks, Mark talked about the next generation FlexPay 6 product, which brings a lot of customer benefits that we launched, also the redesign of some of our printed circuit boards for the memory chip shortage, working around that drove the higher R&D expense. in the prepared remarks mark talked about the next generation flexpay 6 product which brings a lot of customer benefits that we launched also the redesign of some of our printed circuit boards for the memory chip shortage working around that drove the higher r&d expense Coming back to the rest of the year for Mobility Tech, we've already seen in April the mix normalize back to what we would expect and our historical norms. Also on the OpEx, we're confident that we'll get our $15 million savings. Part of it is obviously in Mobility Tech, and we're seeing traction on some of those saving actions in Q2 as we speak. We feel pretty comfortable that for the full year, our guide for Vontier is unchanged other than the change for the divestiture of Teletrac. In terms of share buybacks, we've assumed about $150 million of buybacks for the year in the guide. We did $70 million already in Q1, so you can expect majority of the proceeds from the Teletrac divestiture would go towards buybacks. Coming back to the rest of the year for Mobility Tech, we've already seen in April the mix normalize back to what we would expect and our historical norms. coming back to the rest of the year for mobility tech we've already seen in april the mix normalize back to what we would expect and our historical norms Also on the OpEx, we're confident that we'll get our $15 million savings. also on the opex we're confident that we'll get our $15 million savings Part of it is obviously in Mobility Tech, and we're seeing traction on some of those saving actions in Q2 as we speak. part of it is obviously in mobility tech and we're seeing traction on some of those saving actions in q2 as we speak We feel pretty comfortable that for the full year, our guide for Vontier is unchanged other than the change for the divestiture of Teletrac. we feel pretty comfortable that for the full year our guide for vontier is unchanged other than the change for the divestiture of teletrac In terms of share buybacks, we've assumed about $150 million of buybacks for the year in the guide. in terms of share buybacks we've assumed about $150 million of buybacks for the year in the guide We did $70 million already in Q1, so you can expect majority of the proceeds from the Teletrac divestiture would go towards buybacks. we did $70 million already in q1 so you can expect majority of the proceeds from the teletrac divestiture would go towards buybacks At the current share price, buybacks remain extremely attractive from a capital allocation perspective. Additionally, we'll be generating a significant amount of free cash flow for the rest of the year, so that does give us optionality that's not built into the guide. At the current share price, buybacks remain extremely attractive from a capital allocation perspective. at the current share price buybacks remain extremely attractive from a capital allocation perspective Additionally, we'll be generating a significant amount of free cash flow for the rest of the year, so that does give us optionality that's not built into the guide. additionally we'll be generating a significant amount of free cash flow for the rest of the year so that does give us optionality that's not built into the guide

Speaker 3: Okay. To be clear, the $150 million, you'll have $140 million done by 2Q, so there isn't much baked into the second half at the moment. Okay. okay To be clear, the $150 million, you'll have $140 million done by 2Q, so there isn't much baked into the second half at the moment. to be clear the $150 million you'll have $140 million done by 2q so there isn't much baked into the second half at the moment

Speaker 2: Correct. Correct. correct

Speaker 3: All right. I appreciate it. Thank you. All right. all right I appreciate it. i appreciate it Thank you. thank you

Speaker 9: Thank you. Your next question comes from Julian Mitchell of Barclays. Please go ahead. Your line is open. Thank you. thank you Your next question comes from Julian Mitchell of Barclays. your next question comes from julian mitchell of barclays Please go ahead. please go ahead Your line is open. your line is open

Speaker 5: Yes. Hi. I just wanted to start with maybe a longer term question. If I look at slide four, you know, you've done another divestment today alongside a bunch of portfolio changes that you put on slide four. I guess if I look at just the overall kind of history of this since it's spun out, you know, the PE, I think the first year after the spin was about 13, 14x. Now it's kind of nine or 10x. You know, operating margins for the company are about where they were five years ago. Yes. yes Hi. hi I just wanted to start with maybe a longer term question. i just wanted to start with maybe a longer term question If I look at slide four, you know, you've done another divestment today alongside a bunch of portfolio changes that you put on slide four. if i look at slide four you know you've done another divestment today alongside a bunch of portfolio changes that you put on slide four I guess if I look at just the overall kind of history of this since it's spun out, you know, the PE, I think the first year after the spin was about 13, 14 x. i guess if i look at just the overall kind of history of this since it's spun out you know the pe i think the first year after the spin was about 13 14 x Now it's kind of nine or 10x. now it's kind of nine or 10x You know, operating margins for the company are about where they were five years ago. you know operating margins for the company are about where they were five years ago I wondered, you know, to what extent the management, the board are thinking about more radical portfolio options perhaps than, you know, shaving off one brand a year, adding another brand. Certainly the multiple doesn't seem to be reacting based on the last five years to these types of changes. Just wondered, you know, that again, that appetite to do something broader. I wondered, you know, to what extent the management, the board are thinking about more radical portfolio options perhaps than, you know, shaving off one brand a year, adding another brand. i wondered you know to what extent the management the board are thinking about more radical portfolio options perhaps than you know shaving off one brand a year adding another brand Certainly the multiple doesn't seem to be reacting based on the last five years to these types of changes. certainly the multiple doesn't seem to be reacting based on the last five years to these types of changes Just wondered, you know, that again, that appetite to do something broader. just wondered you know that again that appetite to do something broader

Speaker 8: Hey, Julian. This is Mark. Thanks for the question. Look, I think, the way we've internalized the strategy and the pieces of portfolio, I think we, you know, as a good example from the Teletrac one, you know, you get accretive margin. You're left with a growthier space with less spend on R&D and a better drop-through. I think when you take each piece incrementally, the portfolio is getting stronger. We constantly look at our strategy, I think as a step-by-step approach. I think the work we put in the Teletrac Navman enabled a good transaction here, and a better positioning for the overall portfolio. I think, you know, we constantly look at the portfolio. We constantly look at what are the next set of actions that we think will drive greater shareholder value. Hey, Julian. hey julian This is Mark. this is mark Thanks for the question. thanks for the question Look, I think, the way we've internalized the strategy and the pieces of portfolio, I think we, you know, as a good example from the Teletrac one, you know, you get accretive margin. look i think the way we've internalized the strategy and the pieces of portfolio i think we you know as a good example from the teletrac one you know you get accretive margin You're left with a growthier space with less spend on R&D and a better drop-through. you're left with a growthier space with less spend on r&d and a better drop-through I think when you take each piece incrementally, the portfolio is getting stronger. i think when you take each piece incrementally the portfolio is getting stronger We constantly look at our strategy, I think as a step-by-step approach. we constantly look at our strategy i think as a step-by-step approach I think the work we put in the Teletrac Navman enabled a good transaction here, and a better positioning for the overall portfolio. i think the work we put in the teletrac navman enabled a good transaction here and a better positioning for the overall portfolio I think, you know, we constantly look at the portfolio. i think you know we constantly look at the portfolio We constantly look at what are the next set of actions that we think will drive greater shareholder value. we constantly look at what are the next set of actions that we think will drive greater shareholder value I think what we've got right now with the Connected Mobility strategy and, you know, a good backdrop with secular tailwinds from the majority of our portfolio here, that strategy is working. I think there'll definitely be a payoff as we continue to focus on that and improve the results. I think what we've got right now with the Connected Mobility strategy and, you know, a good backdrop with secular tailwinds from the majority of our portfolio here, that strategy is working. i think what we've got right now with the connected mobility strategy and you know a good backdrop with secular tailwinds from the majority of our portfolio here that strategy is working I think there'll definitely be a payoff as we continue to focus on that and improve the results. i think there'll definitely be a payoff as we continue to focus on that and improve the results

Speaker 5: Great. Then maybe a short-term one. Certainly operating margins are guided to be up, you know, 80 basis points or so, sequentially, and, you have the expansion in Q2 year on year as well. Maybe just kind of flesh out, you know, how you're thinking about the segment level there. You know, particularly Repair, I guess. It looked like some of the headwinds you saw in Q1 in terms of, you know, lower price point tools, that may be something that persists over the balance of the year just because of consumer wallets and so forth. Great. great Then maybe a short-term one. then maybe a short-term one Certainly operating margins are guided to be up, you know, 80 basis points or so, sequentially, and, you have the expansion in Q2 year on year as well. certainly operating margins are guided to be up you know 80 basis points or so sequentially and you have the expansion in q2 year on year as well Maybe just kind of flesh out, you know, how you're thinking about the segment level there. maybe just kind of flesh out you know how you're thinking about the segment level there You know, particularly Repair, I guess. you know particularly repair i guess It looked like some of the headwinds you saw in Q1 in terms of, you know, lower price point tools, that may be something that persists over the balance of the year just because of consumer wallets and so forth. it looked like some of the headwinds you saw in q1 in terms of you know lower price point tools that may be something that persists over the balance of the year just because of consumer wallets and so forth

Speaker 2: Thanks, Julian. That's correct. When you think of Q2 margins, our overall Vontier margins will be up 80 basis points. 20 basis points off that 80 basis points will be because of the Teletrac divestiture, core business up 60 basis points. That increase will be driven by Mobility Tech which will be at somewhere north of 120 basis points in terms of margin expansion. EFS will also have margin expansion to probably 80 basis points or so, maybe a touch higher. Then Repair, I expect, will be down year on year just as you mentioned, we're seeing a higher percentage of the portfolio on the lower price point, higher, quicker payback items being sold. There will be a little bit of margin pressure that'll continue into Q2. Thanks, Julian. thanks julian That's correct. that's correct When you think of Q2 margins, our overall Vontier margins will be up 80 basis points. 20 basis points off that 80 basis points will be because of the Teletrac divestiture, core business up 60 basis points. when you think of q2 margins our overall vontier margins will be up 80 basis points 20 basis points off that 80 basis points will be because of the teletrac divestiture core business up 60 basis points That increase will be driven by Mobility Tech which will be at somewhere north of 120 basis points in terms of margin expansion. that increase will be driven by mobility tech which will be at somewhere north of 120 basis points in terms of margin expansion EFS will also have margin expansion to probably 80 basis points or so, maybe a touch higher. efs will also have margin expansion to probably 80 basis points or so maybe a touch higher Then Repair, I expect, will be down year on year just as you mentioned, we're seeing a higher percentage of the portfolio on the lower price point, higher, quicker payback items being sold. then repair i expect will be down year on year just as you mentioned we're seeing a higher percentage of the portfolio on the lower price point higher quicker payback items being sold There will be a little bit of margin pressure that'll continue into Q2. there will be a little bit of margin pressure that'll continue into q2 That'll start easing towards the back half of the year, where some of the mix, really coming into Q3, Q4, especially Q4 last year, was in line with what we're trending towards. That'll start easing towards the back half of the year, where some of the mix, really coming into Q3, Q4, especially Q4 last year, was in line with what we're trending towards. that'll start easing towards the back half of the year where some of the mix really coming into q3 q4 especially q4 last year was in line with what we're trending towards

Speaker 5: That's great. Thank you. That's great. that's great Thank you. thank you

Speaker 8: Thanks, Julian. Thanks, Julian. thanks julian

Speaker 9: Your next question comes from Andy Kaplowitz of Citigroup. Please go ahead, your line is open. Your next question comes from Andy Kaplowitz of Citigroup. your next question comes from andy kaplowitz of citigroup Please go ahead, your line is open. please go ahead your line is open

Speaker 1: Hey, good morning, everyone. Hey, good morning, everyone. hey good morning everyone

Speaker 8: Morning, Andy. Morning, Andy. morning andy

Speaker 2: Morning, Andy. Morning, Andy. morning andy

Speaker 1: Mark and Anshooman, just back to Mobility for a minute. I don't think the memory chip shortage under inflation's been getting better, but it sounds like you're comfortable around that issue for Mobility. I just wanted to sort of double-click on that. Obviously comps and Mobility get easier. I think last quarter you mentioned a number of wins though that ramp up in the second half. Is that still the case that you've got good visibility to ramp up? Maybe do you need DRB Systems to ramp up as well? Mark and Anshooman, just back to Mobility for a minute. mark and anshooman just back to mobility for a minute I don't think the memory chip shortage under inflation's been getting better, but it sounds like you're comfortable around that issue for Mobility. i don't think the memory chip shortage under inflation's been getting better but it sounds like you're comfortable around that issue for mobility I just wanted to sort of double-click on that. i just wanted to sort of double-click on that Obviously comps and Mobility get easier. obviously comps and mobility get easier I think last quarter you mentioned a number of wins though that ramp up in the second half. i think last quarter you mentioned a number of wins though that ramp up in the second half Is that still the case that you've got good visibility to ramp up? is that still the case that you've got good visibility to ramp up Maybe do you need DRB Systems to ramp up as well? maybe do you need drb systems to ramp up as well

Speaker 8: Andy, I'll, you know, I'll give a little bit of color on the second half ramp. First of all, you know, the end market, you know, mostly tied to convenience retail, and I think our remarks there, you know, on the call is pretty resilient, and that certainly helps the Mobility Tech segment as well. When you look at it's not only a good compare or better compare for second half. You know, our seasonality is definitely the same. You know, sales at 48%, 52% that's our historical average. You know, good bookings, you know, clearly in the quarter were pretty solid. You know, when we go into April, we're also seeing really good bookings as well. Andy, I'll, you know, I'll give a little bit of color on the second half ramp. andy i'll you know i'll give a little bit of color on the second half ramp First of all, you know, the end market, you know, mostly tied to convenience retail, and I think our remarks there, you know, on the call is pretty resilient, and that certainly helps the Mobility Tech segment as well. first of all you know the end market you know mostly tied to convenience retail and i think our remarks there you know on the call is pretty resilient and that certainly helps the mobility tech segment as well When you look at it's not only a good compare or better compare for second half. when you look at it's not only a good compare or better compare for second half You know, our seasonality is definitely the same. you know our seasonality is definitely the same You know, sales at 48%, 52% that's our historical average. you know sales at 48% 52% that's our historical average You know, good bookings, you know, clearly in the quarter were pretty solid. you know good bookings you know clearly in the quarter were pretty solid You know, when we go into April, we're also seeing really good bookings as well. you know when we go into april we're also seeing really good bookings as well I think, you know, to your point, we're getting, you know, better leverage for the second half. While we, you know, got a little bit better in Q1 on the revenue side and we've got, you know, cost takeout actions in place that'll carry through to the second half, you know, we feel pretty good about the setup. I think, you know, to your point, we're getting, you know, better leverage for the second half. i think you know to your point we're getting you know better leverage for the second half While we, you know, got a little bit better in Q1 on the revenue side and we've got, you know, cost takeout actions in place that'll carry through to the second half, you know, we feel pretty good about the setup. while we you know got a little bit better in q1 on the revenue side and we've got you know cost takeout actions in place that'll carry through to the second half you know we feel pretty good about the setup

Speaker 2: I'll just add, as you mentioned, the compare does get easier in the second half. If you go back to the prepared remarks, we had over $25 million headwind in Q1, and it's about the same in Q2 tied to the Vehicle Identification System, which eases into Q3 and is definitely gone by Q4. Importantly, bookings in Q1 were up 5% on a core basis at a Vontier level. Couple of those were larger projects combined for $15 million, and majority of that revenue based on our customer schedule is in the second half. We are feeling incrementally better for the second half as we continue to book, and how our compares also play out. I'll just add, as you mentioned, the compare does get easier in the second half. i'll just add as you mentioned the compare does get easier in the second half If you go back to the prepared remarks, we had over $25 million headwind in Q1, and it's about the same in Q2 tied to the Vehicle Identification System, which eases into Q3 and is definitely gone by Q4. if you go back to the prepared remarks we had over $25 million headwind in q1 and it's about the same in q2 tied to the vehicle identification system which eases into q3 and is definitely gone by q4 Importantly, bookings in Q1 were up 5% on a core basis at a Vontier level. importantly bookings in q1 were up 5% on a core basis at a vontier level Couple of those were larger projects combined for $15 million, and majority of that revenue based on our customer schedule is in the second half. couple of those were larger projects combined for $15 million and majority of that revenue based on our customer schedule is in the second half We are feeling incrementally better for the second half as we continue to book, and how our compares also play out. we are feeling incrementally better for the second half as we continue to book and how our compares also play out

Speaker 1: Helpful color, guys. I think you explained the trade down effect coming from high oil gas prices when you were talking about the potential duration of the cycle for C-store CapEx and your EFS growth, and your EFS growth in general. Maybe you could give us a bit more color regarding how to think about EFS moving forward. I think growth was even higher than you'd thought for Q1. Does that higher growth actually continue given C-store behavior, such as what you mentioned with 7-Eleven? I think any color would be helpful there. Helpful color, guys. helpful color guys I think you explained the trade down effect coming from high oil gas prices when you were talking about the potential duration of the cycle for C-store CapEx and your EFS growth, and your EFS growth in general. i think you explained the trade down effect coming from high oil gas prices when you were talking about the potential duration of the cycle for c-store capex and your efs growth and your efs growth in general Maybe you could give us a bit more color regarding how to think about EFS moving forward. maybe you could give us a bit more color regarding how to think about efs moving forward I think growth was even higher than you'd thought for Q1. i think growth was even higher than you'd thought for q1 Does that higher growth actually continue given C-store behavior, such as what you mentioned with 7-Eleven? does that higher growth actually continue given c-store behavior such as what you mentioned with 7-eleven I think any color would be helpful there. i think any color would be helpful there

Speaker 2: Yeah, with EFS, we're very pleased with our team's performance. We remain bullish on a multi-year CapEx cycle that's playing through, and it's really driven by our innovation and our channel strength, which are both reading through. Dispenser shipments were up low double digits in North America, leading the way with especially strong national account bookings that we had in the first quarter. We expect dispensers will continue to play out strong for the year. We also expect strength in the build-out of convenience stores in North America to continue. Overall, we're feeling pretty good about the business in EFS, and we'll continue to see growth in line with what we're projecting for the year. Yeah, with EFS, we're very pleased with our team's performance. yeah with efs we're very pleased with our team's performance We remain bullish on a multi-year CapEx cycle that's playing through, and it's really driven by our innovation and our channel strength, which are both reading through. we remain bullish on a multi-year capex cycle that's playing through and it's really driven by our innovation and our channel strength which are both reading through Dispenser shipments were up low double digits in North America, leading the way with especially strong national account bookings that we had in the first quarter. dispenser shipments were up low double digits in north america leading the way with especially strong national account bookings that we had in the first quarter We expect dispensers will continue to play out strong for the year. we expect dispensers will continue to play out strong for the year We also expect strength in the build-out of convenience stores in North America to continue. we also expect strength in the build-out of convenience stores in north america to continue Overall, we're feeling pretty good about the business in EFS, and we'll continue to see growth in line with what we're projecting for the year. overall we're feeling pretty good about the business in efs and we'll continue to see growth in line with what we're projecting for the year

Speaker 1: Appreciate the color, guys. Appreciate the color, guys. appreciate the color guys

Speaker 2: Thanks, Andy. Thanks, Andy. thanks andy

Speaker 9: Thank you. Your next question comes from Joe Ritchie of Goldman Sachs. Joe, your line is open. Thank you. thank you Your next question comes from Joe Ritchie of Goldman Sachs. your next question comes from joe ritchie of goldman sachs Joe, your line is open. joe your line is open

Speaker 7: Hey, guys. This is Luke McCollester on for Joe. I'm just curious if you can share any early data points on customer reception from the new outdoor payment terminal. How does this product fit into the broader Connected Mobility strategy, and is this a replacement cycle product, or does it expand the addressable market? Hey, guys. hey guys This is Luke McColle ster on for Joe . this is luke mccolle ster on for joe I'm just curious if you can share any early data points on customer reception from the new outdoor payment terminal. i'm just curious if you can share any early data points on customer reception from the new outdoor payment terminal How does this product fit into the broader Connected Mobility strategy, and is this a replacement cycle product, or does it expand the addressable market? how does this product fit into the broader connected mobility strategy and is this a replacement cycle product or does it expand the addressable market

Speaker 8: Luke, this is Mark. Thanks for the questions here. I think one of the things we showed in NACS in October, or the fall of last year was, you know, unified payment. This clearly extends our addressable market by providing a payment kit with more capabilities. Order at the pump is a great example of that. It is incrementally better than the FlexPay 6 that we recently launched, and the uptake from our customers has been quite favorable. I think this is an outgrowth of our Invenco acquisition, where we've been able to build off that through integrating that platform. I think we're seeing this also as an excellent example of the Connected Mobility strategy at work and differentiation that we can provide through launching new products, where we're getting really good uptake from it. Luke, this is Mark. luke this is mark Thanks for the questions here. thanks for the questions here I think one of the things we showed in NACS in October, or the fall of last year was, you know, unified payment. i think one of the things we showed in nacs in october or the fall of last year was you know unified payment This clearly extends our addressable market by providing a payment kit with more capabilities. this clearly extends our addressable market by providing a payment kit with more capabilities Order at the pump is a great example of that. order at the pump is a great example of that It is incrementally better than the FlexPay 6 that we recently launched, and the uptake from our customers has been quite favorable. it is incrementally better than the flexpay 6 that we recently launched and the uptake from our customers has been quite favorable I think this is an outgrowth of our Invenco acquisition, where we've been able to build off that through integrating that platform. i think this is an outgrowth of our invenco acquisition where we've been able to build off that through integrating that platform I think we're seeing this also as an excellent example of the Connected Mobility strategy at work and differentiation that we can provide through launching new products, where we're getting really good uptake from it. i think we're seeing this also as an excellent example of the connected mobility strategy at work and differentiation that we can provide through launching new products where we're getting really good uptake from it

Speaker 7: Got it. Helpful. Then within convenience retailers, are you seeing any change in the pace of consolidation activity or capital spending plans there in light of the current geopolitical and macro backdrop? Does consolidation kinda tend to be more of a net positive or net negative? Got it. got it Helpful. helpful Then within convenience retailers, are you seeing any change in the pace of consolidation activity or capital spending plans there in light of the current geopolitical and macro backdrop? then within convenience retailers are you seeing any change in the pace of consolidation activity or capital spending plans there in light of the current geopolitical and macro backdrop Does consolidation kinda tend to be more of a net positive or net negative? does consolidation kinda tend to be more of a net positive or net negative

Speaker 8: I think consolidation tends to go in our favor. The people that are net doing the consolidators is where we have higher share in the marketplace, and they tend to buy up some of the smaller players where we sort of split share in the market. We tend to get more out of that as our, as the folks consolidating the industry are consolidating off typically our technology platform. There's no real change to that. I think there's been a backdrop of consolidation that's been sort of ongoing, I would say, over the years. Would anticipate You know, of course, some of the prices have changed with interest rates and other things are ebbing and flowing. I think you could just look at it as a long-term trend where there's plenty of opportunity for consolidation over the next, you know, five years. I think consolidation tends to go in our favor. i think consolidation tends to go in our favor The people that are net doing the consolidators is where we have higher share in the marketplace, and they tend to buy up some of the smaller players where we sort of split share in the market. the people that are net doing the consolidators is where we have higher share in the marketplace and they tend to buy up some of the smaller players where we sort of split share in the market We tend to get more out of that as our, as the folks consolidating the industry are consolidating off typically our technology platform. we tend to get more out of that as our as the folks consolidating the industry are consolidating off typically our technology platform There's no real change to that. there's no real change to that I think there's been a backdrop of consolidation that's been sort of ongoing, I would say, over the years. i think there's been a backdrop of consolidation that's been sort of ongoing i would say over the years Would anticipate You know, of course, some of the prices have changed with interest rates and other things are ebbing and flowing. would anticipate you know of course some of the prices have changed with interest rates and other things are ebbing and flowing I think you could just look at it as a long-term trend where there's plenty of opportunity for consolidation over the next, you know, five years. i think you could just look at it as a long-term trend where there's plenty of opportunity for consolidation over the next you know five years

Speaker 2: On the CapEx trend. On the CapEx trend. on the capex trend

Speaker 7: Awesome. Awesome. awesome

Speaker 2: Keep in mind, while our bookings might be shorter term from a book-to-bill perspective, our customers are really planning out two or three years in advance. They're going through their site acquisitions, permits, build-outs. They're really looking out two or three years from a CapEx plan. Oil price volatility doesn't really change their longer-term CapEx plans. Keep in mind, while our bookings might be shorter term from a book-to-bill perspective, our customers are really planning out two or three years in advance. keep in mind while our bookings might be shorter term from a book-to-bill perspective our customers are really planning out two or three years in advance They're going through their site acquisitions, permits, build-outs. they're going through their site acquisitions permits build-outs They're really looking out two or three years from a CapEx plan. they're really looking out two or three years from a capex plan Oil price volatility doesn't really change their longer-term CapEx plans. oil price volatility doesn't really change their longer-term capex plans

Speaker 7: Awesome. Thanks, guys. I'll pass it on. Awesome. awesome Thanks, guys. thanks guys I'll pass it on. i'll pass it on

Speaker 9: Thank you. Your next question comes from Katie Fleischer of KeyBanc Capital Markets. Please go ahead. Your line is open. Thank you. thank you Your next question comes from Katie Fleischer of KeyBanc Capital Markets. your next question comes from katie fleischer of keybanc capital markets Please go ahead. please go ahead Your line is open. your line is open

Speaker 6: Hey, good morning. Can we talk a little bit about the progress on the internal cost initiatives? I know that R&D is a focus there. Just how to think about incremental savings within that and potential upside kind of balanced against some of those higher R&D costs that you saw in Mobility Technologies this quarter? Hey, good morning. hey good morning Can we talk a little bit about the progress on the internal cost initiatives? can we talk a little bit about the progress on the internal cost initiatives I know that R&D is a focus there. i know that r&d is a focus there Just how to think about incremental savings within that and potential upside kind of balanced against some of those higher R&D costs that you saw in Mobility Technologies this quarter? just how to think about incremental savings within that and potential upside kind of balanced against some of those higher r&d costs that you saw in mobility technologies this quarter

Speaker 2: Hey, Katie. Thanks for the question. We are very confident on the $15 million in-year savings that we guided to last quarter. We're reconfirming that. About $1 million in savings played out in the first quarter. The Q2 number will be $3 million, maybe a little bit higher, the balance of it coming in the back half of the year. We're already through some of the savings plans, I think we're progressing really well to our plans. Q1 was a little bit higher in R&D, timing off the launch of some products. We talked about the new FlexPay 6 launch, also the redesign on some of the printed circuit boards related to the memory chip. Hey, Katie. hey katie Thanks for the question. thanks for the question We are very confident on the $15 million in-year savings that we guided to last quarter. we are very confident on the $15 million in-year savings that we guided to last quarter We're reconfirming that. we're reconfirming that About $1 million in savings played out in the first quarter. about $1 million in savings played out in the first quarter The Q2 number will be $3 million, maybe a little bit higher, the balance of it coming in the back half of the year. the q2 number will be $3 million maybe a little bit higher the balance of it coming in the back half of the year We're already through some of the savings plans, I think we're progressing really well to our plans. we're already through some of the savings plans i think we're progressing really well to our plans Q1 was a little bit higher in R&D, timing off the launch of some products. q1 was a little bit higher in r&d timing off the launch of some products We talked about the new FlexPay 6 launch, also the redesign on some of the printed circuit boards related to the memory chip. we talked about the new flexpay 6 launch also the redesign on some of the printed circuit boards related to the memory chip We're trying to stay ahead of the supply chain issues on memory chips, and as a result, did some redesign work out there. Again, we're pretty confident in hitting our $15 million in-year savings target for the year. We're trying to stay ahead of the supply chain issues on memory chips, and as a result, did some redesign work out there. we're trying to stay ahead of the supply chain issues on memory chips and as a result did some redesign work out there Again, we're pretty confident in hitting our $15 million in-year savings target for the year. again we're pretty confident in hitting our $15 million in-year savings target for the year

Speaker 6: Okay. That's helpful. On Matco, when we think about those customers recovering, what's really driving the spend there? Is it just delayed CapEx purchases? Is it, you know, more customer activity that's driving higher in days? Just help us think about what it will actually take to see a flow through of spending from customers in Matco. Okay. okay That's helpful. that's helpful On Matco, when we think about those customers recovering, what's really driving the spend there? on matco when we think about those customers recovering what's really driving the spend there Is it just delayed CapEx purchases? is it just delayed capex purchases Is it, you know, more customer activity that's driving higher in days? is it you know more customer activity that's driving higher in days Just help us think about what it will actually take to see a flow through of spending from customers in Matco. just help us think about what it will actually take to see a flow through of spending from customers in matco

Speaker 8: Yeah. Katie, the backdrop on repair is relatively attractive. You know, the car park continues to age. It's about 12.8 years, going to 13 years, a lot more used cars are out there in the market changing hands. That's good for repair. The complexity for repair is good, the demand for tech and the wages are also strong. You know, we know from last year actually, shop visits were up. We, you know, that's a great, you know, underlying backdrop for repair. I think, you know, the issue that has been underfoot is that the consumer has, you know, represented the working class for the shop technicians that buy our tools, has, you know, had a harder time with their pocketbook. Yeah. yeah Katie, the backdrop on repair is relatively attractive. katie the backdrop on repair is relatively attractive You know, the car park continues to age. you know the car park continues to age It's about 12.8 years, going to 13 years, a lot more used cars are out there in the market changing hands. it's about 12.8 years going to 13 years a lot more used cars are out there in the market changing hands That's good for repair. that's good for repair The complexity for repair is good, the demand for tech and the wages are also strong. the complexity for repair is good the demand for tech and the wages are also strong You know, we know from last year actually, shop visits were up. you know we know from last year actually shop visits were up We, you know, that's a great, you know, underlying backdrop for repair. we you know that's a great you know underlying backdrop for repair I think, you know, the issue that has been underfoot is that the consumer has, you know, represented the working class for the shop technicians that buy our tools, has, you know, had a harder time with their pocketbook. i think you know the issue that has been underfoot is that the consumer has you know represented the working class for the shop technicians that buy our tools has you know had a harder time with their pocketbook The areas that we're getting traction is in the areas of diagnostics and toolboxes, and we had a good, you know, run of that in the quarter, which is indicative there can be strength there. Then also more value-added items where they can get more productivity. You know, the technician gets paid based on a standard hour of work. If they can be more productive and, you know, we say, "Well, how does a toolbox help with these productivity carts that help them on the job site?" You know, those type things, there's good payback for them. As we continue to introduce and be more effective at selling those kind of things, even in a fairly rough backdrop, then we can have, you know, decent performance out of Matco. The areas that we're getting traction is in the areas of diagnostics and toolboxes, and we had a good, you know, run of that in the quarter, which is indicative there can be strength there. the areas that we're getting traction is in the areas of diagnostics and toolboxes and we had a good you know run of that in the quarter which is indicative there can be strength there Then also more value-added items where they can get more productivity. then also more value-added items where they can get more productivity You know, the technician gets paid based on a standard hour of work. you know the technician gets paid based on a standard hour of work If they can be more productive and, you know, we say, "Well, how does a toolbox help with these productivity carts that help them on the job site?" You know, those type things, there's good payback for them. if they can be more productive and you know we say "well how does a toolbox help with these productivity carts that help them on the job site?" you know those type things there's good payback for them As we continue to introduce and be more effective at selling those kind of things, even in a fairly rough backdrop, then we can have, you know, decent performance out of Matco. as we continue to introduce and be more effective at selling those kind of things even in a fairly rough backdrop then we can have you know decent performance out of matco

Speaker 6: Okay. Helpful. Thank you. Okay. okay Helpful. helpful Thank you. thank you

Speaker 9: Your next question comes from Andrew Obin of Bank of America. Please go ahead. Your line is open. Your next question comes from Andrew Obin of Bank of America. your next question comes from andrew obin of bank of america Please go ahead. please go ahead Your line is open. your line is open

Speaker 4: Hi, this is David Ridley-Lane on for Andrew. Just sort of thinking about the full year guide here, did your expectations on Mobility Tech, have they shifted a little bit? What are you thinking for organic growth for that segment for the year? Hi, this is David Ridley-Lane on for Andrew . hi this is david ridley-lane on for andrew Just sort of thinking about the full year guide here, did your expectations on Mobility Tech, have they shifted a little bit? just sort of thinking about the full year guide here did your expectations on mobility tech have they shifted a little bit What are you thinking for organic growth for that segment for the year? what are you thinking for organic growth for that segment for the year

Speaker 2: Yeah. Mobility Tech, their growth for the year will be low to mid-single digits versus the mid-single digits we'd set, but it's really on lower intercompany sales. If you look, last quarter, we guided to north of $90 million of intercompany sales, and we dropped that down to $80 million. A part of it was, every year you update the transfer price, and we did that in Q1, where the transfer price, intersegment came down a little bit, and then there's a little bit of mix between FlexPay 4 and FlexPay 6 products also that we updated for. The underlying core business, no change to that. Yeah. yeah Mobility Tech, their growth for the year will be low to mid-single digits versus the mid-single digits we'd set, but it's really on lower intercompany sales. mobility tech their growth for the year will be low to mid-single digits versus the mid-single digits we'd set but it's really on lower intercompany sales If you look, last quarter, we guided to north of $90 million of intercompany sales, and we dropped that down to $80 million. if you look last quarter we guided to north of $90 million of intercompany sales and we dropped that down to $80 million A part of it was, every year you update the transfer price, and we did that in Q1, where the transfer price, intersegment came down a little bit, and then there's a little bit of mix between FlexPay 4 and FlexPay 6 products also that we updated for. a part of it was every year you update the transfer price and we did that in q1 where the transfer price intersegment came down a little bit and then there's a little bit of mix between flexpay 4 and flexpay 6 products also that we updated for The underlying core business, no change to that. the underlying core business no change to that

Speaker 4: Okay. I'm surprised I'm gonna be the first person to ask this, but, the changes to Section 232 tariffs, IEEPA tariffs, can you just give us a round the world on what the impact of Vontier's going to be inside 2026 as you see it? Okay. okay I'm surprised I'm gonna be the first person to ask this, but, the changes to Section 232 tariffs, IEEPA tariffs, can you just give us a round the world on what the impact of Vontier's going to be inside 2026 as you see it? i'm surprised i'm gonna be the first person to ask this but the changes to section 232 tariffs ieepa tariffs can you just give us a round the world on what the impact of vontier's going to be inside 2026 as you see it

Speaker 2: Tariff remains a very dynamic environment, and there's we're continuously evaluating both where we are the importer of record and where our suppliers are the importer of record. We also are taking into account other dynamics that are playing out, for example, the memory chip pricing, oil and gas price, and the impact on transportation costs, transportation routes. Net of all of this, while a lot of pluses and minuses, puts and takes, there's no material change to our view for the year, just playing out on aggregate as we'd expected. Tariff remains a very dynamic environment, and there's we're continuously evaluating both where we are the importer of record and where our suppliers are the importer of record. tariff remains a very dynamic environment and there's we're continuously evaluating both where we are the importer of record and where our suppliers are the importer of record We also are taking into account other dynamics that are playing out, for example, the memory chip pricing, oil and gas price, and the impact on transportation costs, transportation routes. we also are taking into account other dynamics that are playing out for example the memory chip pricing oil and gas price and the impact on transportation costs transportation routes Net of all of this, while a lot of pluses and minuses, puts and takes, there's no material change to our view for the year, just playing out on aggregate as we'd expected. net of all of this while a lot of pluses and minuses puts and takes there's no material change to our view for the year just playing out on aggregate as we'd expected

Speaker 4: Got it. Just since it's been mentioned a few times on the conference call, can you quantify just in broad brushstrokes, are memory chips like 1% of your total cost or is that? Do you have that number handy by any chance? Got it. got it Just since it's been mentioned a few times on the conference call, can you quantify just in broad brushstrokes, are memory chips like 1% of your total cost or is that ? Do you have that number handy by any chance? just since it's been mentioned a few times on the conference call can you quantify just in broad brushstrokes are memory chips like 1% of your total cost or is that ? do you have that number handy by any chance

Speaker 2: Yeah. I'll give you last year's. Yeah. yeah I'll give you last year's. i'll give you last year's

Speaker 4: Okay. Okay. okay

Speaker 2: Price or cost on memory chips because I think that's a little bit easier. The market's pretty dynamic. It's in the mid to high single digit million dollars. Price or cost on memory chips because I think that's a little bit easier. price or cost on memory chips because i think that's a little bit easier The market's pretty dynamic. the market's pretty dynamic It's in the mid to high single digit million dollars. it's in the mid to high single digit million dollars

Speaker 4: Got it. Got it. got it

Speaker 2: It's not material from an overall cost perspective, but it's every cost we control and manage to the best of our ability. It's not material from an overall cost perspective, but it's every cost we control and manage to the best of our ability. it's not material from an overall cost perspective but it's every cost we control and manage to the best of our ability

Speaker 4: Well, I know there's a way when you have a small item that's doubling or tripling or quadrupling in price, it sometimes catches up with you. Anyway, thank you very much. Well, I know there's a way when you have a small item that's doubling or tripling or quadrupling in price, it sometimes catches up with you. well i know there's a way when you have a small item that's doubling or tripling or quadrupling in price it sometimes catches up with you Anyway, thank you very much. anyway thank you very much

Speaker 8: Thanks, David. Thanks, David. thanks david

Speaker 2: Thanks. Thanks. thanks

Speaker 9: Thank you. Your next question comes from Robert Mason of Baird. Please go ahead. Your line is open. Thank you. thank you Your next question comes from Robert Mason of Baird. your next question comes from robert mason of baird Please go ahead. please go ahead Your line is open. your line is open

Speaker 10: Yes. Good morning, guys. Wanted to see if you could just relative to the second quarter expectations on core growth, in the down 1%, kind of discuss how you think that may play out across the segments. Yes. yes Good morning, guys. good morning guys Wanted to see if you could just relative to the second quarter expectations on core growth, in the down 1%, kind of discuss how you think that may play out across the segments. wanted to see if you could just relative to the second quarter expectations on core growth in the down 1% kind of discuss how you think that may play out across the segments

Speaker 2: The EFS business will continue to grow. We expect that'll be up low single digits for the quarter. Mobility Tech will be down low to mid-single digits on the compare issue. Just keep in mind the $25 million in shipments for the Vehicle Identification System order last year, both in Q1 and Q2. On Repair Solutions, we expect there'll be also low single-digit growth, maybe low to mid-single digit growth for the quarter in repair. The EFS business will continue to grow. the efs business will continue to grow We expect that'll be up low single digits for the quarter. we expect that'll be up low single digits for the quarter Mobility Tech will be down low to mid-single digits on the compare issue. mobility tech will be down low to mid-single digits on the compare issue Just keep in mind the $25 million in shipments for the Vehicle Identification System order last year, both in Q1 and Q2. just keep in mind the $25 million in shipments for the vehicle identification system order last year both in q1 and q2 On Repair Solutions, we expect there'll be also low single-digit growth, maybe low to mid-single digit growth for the quarter in repair. on repair solutions we expect there'll be also low single-digit growth maybe low to mid-single digit growth for the quarter in repair

Speaker 10: Very good. Just a follow-up. Mark, just any quick thoughts on the decision to retain so, you know, minority stake in the telematics business and how, you know, we should think about how that plays out in the future as well? Very good. very good Just a follow-up. just a follow-up Mark, just any quick thoughts on the decision to retain so, you know, minority stake in the telematics business and how, you know, we should think about how that plays out in the future as well? mark just any quick thoughts on the decision to retain so you know minority stake in the telematics business and how you know we should think about how that plays out in the future as well

Speaker 8: Yeah. Thanks for that question, Rob. Look, we're pleased on the transaction. It's the result of a multi-year turnaround, launching a new product technology into the space. I think we're getting real momentum in that space. I think retaining a minority ownership there also gives us some upside on the trajectory there. On the end of the year with strong bookings, they got past the 3G to 4G transition in Australia, which was a big headwind for them as well, and that's now in the clear. You know, we're optimistic also with more focus with the new owner and our partial ownership here and legacy knowledge of that business that we can unlock further value. Yeah. yeah Thanks for that question, Rob. thanks for that question rob Look, we're pleased on the transaction. look we're pleased on the transaction It's the result of a multi-year turnaround, launching a new product technology into the space. it's the result of a multi-year turnaround launching a new product technology into the space I think we're getting real momentum in that space. i think we're getting real momentum in that space I think retaining a minority ownership there also gives us some upside on the trajectory there. i think retaining a minority ownership there also gives us some upside on the trajectory there On the end of the year with strong bookings, they got past the 3G to 4G transition in Australia, which was a big headwind for them as well, and that's now in the clear. on the end of the year with strong bookings they got past the 3g to 4g transition in australia which was a big headwind for them as well and that's now in the clear You know, we're optimistic also with more focus with the new owner and our partial ownership here and legacy knowledge of that business that we can unlock further value. you know we're optimistic also with more focus with the new owner and our partial ownership here and legacy knowledge of that business that we can unlock further value

Speaker 10: Very good. Thank you. Very good. very good Thank you. thank you

Speaker 8: Thanks, Rob. Thanks, Rob. thanks rob

Speaker 9: Thank you. There are no further questions at this time. I'd now like to turn the call back over to Mark Morelli, Chief Executive Officer, for closing comments. Thank you. thank you There are no further questions at this time. there are no further questions at this time I'd now like to turn the call back over to Mark Morelli, Chief Executive Officer, for closing comments. i'd now like to turn the call back over to mark morelli chief executive officer for closing comments

Speaker 8: Thanks again for joining us on the call today. We're off to a solid start in 2026. We're confident we can deliver above-market growth and in our ability to drive margin expansion and free cash flow. We're proactively managing the portfolio and staying disciplined on capital allocation all through the lens of creating shareholder value. We appreciate your continued interest in Vontier and look forward to engaging with many of you over the next several weeks. Have a great day. Thanks again for joining us on the call today. thanks again for joining us on the call today We're off to a solid start in 2026. we're off to a solid start in 2026 We're confident we can deliver above-market growth and in our ability to drive margin expansion and free cash flow. we're confident we can deliver above-market growth and in our ability to drive margin expansion and free cash flow We're proactively managing the portfolio and staying disciplined on capital allocation all through the lens of creating shareholder value. we're proactively managing the portfolio and staying disciplined on capital allocation all through the lens of creating shareholder value We appreciate your continued interest in Vontier and look forward to engaging with many of you over the next several weeks. we appreciate your continued interest in vontier and look forward to engaging with many of you over the next several weeks Have a great day. have a great day

Speaker 9: Ladies and gentlemen, this concludes today's conference. We thank you for participating and ask that you please disconnect your lines. Ladies and gentlemen, this concludes today's conference. ladies and gentlemen this concludes today's conference We thank you for participating and ask that you please disconnect your lines. we thank you for participating and ask that you please disconnect your lines