Terrific. Great. Welcome, day two of the TD Cowen Global Healthcare Conference, 46th annual. I'm Dan Brennan. I follow tools and diagnostics. Pleased to be joined here on the stage with the management team of Agilent. To my immediate left, I have Adam Elinoff, who's the Chief Financial Officer, and to his left, Tejas Savant, who's VP of IR. Gentlemen, welcome.
Thank you.
Great. I'm gonna turn it over to Adam for a brief introduction. We'll dive into Q&A.
Sure. First of all, thank you for having us. Really excited to be here. We had a solid start to the year with high single-digit growth in our three largest end markets, which translated to Q1, 4.4% core growth, which unfortunately was impacted by winter weather in the U.S., and that was during the last week of the quarter. Adjusted for the weather, core revenue growth, operating margins, and EPS all would've been above the midpoint of our guide. As I mentioned, our three largest markets had strong growth, and that's pharma, CAM, and clinical and diagnostics, all with favorable secular tailwinds. In pharma, you have MFN clarity, you have GLP-1s ramping, as everybody knows, siRNA modality taking off, and then the reshoring, which we have coming in 2027.
Clinical and diagnostics, we have an aging population and then unfortunately increasing incidence of cancer, which drives test volumes. On CAM, we see strength in the semis, and that's really driven by AI and memory shortage which is driving the current semi demand, and then also there's reshoring happening there. The next thing I talk about is our innovations, which are really resonating with our customers. That's the Infinity III, the Pro iQ LC-MS, excuse me, Altus Bio Inert columns, and they're all driving share gains across our business. Per all the data, Infinity III is driving gains in LC across all major geographies. The GC platform is a definitive leader, and that's just starting its replacement cycle, so that's exciting. The Altura columns are getting a fantastic response from our customers.
Of course, we're the market leaders in siRNA, and we have our unique capabilities at BioVectra. I just wanna highlight here is that we're really set up for success. We have our innovative products and services, which I've already mentioned, plus more to come this year. We have a superior commercial team, with strong connections to customers, which is a unique advantage for us. We have solid financial discipline, which persists. The Ignite operating system, which really brings it all together.
I continue to be very confident we're gonna be able to deliver our full year guide, which is 4%-6% core revenue growth, 75 basis points margin expansion at the midpoint, 10% operating profit growth, and then EPS growth of 6%-8%, which would be 9%-11% excluding the tax related changes that happened this year. Overall, we're in a good place. I'm very excited.
Terrific. All right. Well, good intro. Maybe just kicking off with the growth outlook. 4%-6%, I think you've talked about on the fiscal 1 Q call, excuse me, that you've got the same view of the end markets, but there is a kind of underlying growth acceleration, at least when you do like a stacked growth analysis in the back half. What kinda drives that growth acceleration?
Yeah. It's interesting that everyone called that on the call. There's the positive business factors which I just talked about in the preamble, but it's also very. It's in line with our historical cadence through the year. If you look at this year, we're about 49%, 51% first half, second half, and that's aligned with our historical bias. That's really just a function of how fiscal calendars and the spend patterns of our customers.
Mm-hmm. Wall Street's.
I wanna say that, Dan, is, you know, in the last, 10 years, there's only been one occasion where the second half was lower than the first half for us.
Mm-hmm. Right.
This is really very typical, sort of revenue split, if you will, between the first and the second half of the year.
I was gonna say, Wall Street's, you know, kind of intoxicated on beats, right? Momentum, upside surprise, obviously. When you think about the guide, which customer groups or product areas would offer the big swing factors to the guide, do you think?
Yeah. There's 3, and we've been highlighting them since the beginning of the year. 1, improvement in spend on the midcap biotech. 2, our Academia & Government customers. 3, China. I'll just walk you through those and the dynamics we're seeing in the market right now. In small and midcap biotech, we have relatively small exposure, but we're encouraged by what we see in the marketplace, and now that has to translate into customers actually spending. If you look at it, the total biopharma financings were $11 billion in January, which is a record. It's a 2-year high. We have a looming patent cliff, which is driving M&A in large cap pharma, and those factors should start to drive a ramp in midcap spend.
That said, that hasn't happened yet, but, you know, we have the green shoots there and the underlying drivers are there. A&G growth could come in better than our low single-digit decline, and that's really gonna be driven by a couple of things and what gives me hope there is the NIH budgets. If you look at that came in in line with the Street expectations, which were flat. That came in as expected. There was the NIH, or excuse me, the court case with the 15% cap was struck down, that should also help drive incremental spend in A&G.
What we're seeing in the marketplace is that has yet to filter through as the labs are continue to be conservative in their spend, really focused on kind of continuing core operations before making incremental investments. That said, we anticipate that that would change over time and that would drive some upside. The last piece is China. We saw strong results in China in the first quarter, so that was 6% year-over-year growth. Part of that is driven by, you know, the Lunar New Year timing. The other piece that excites me is there was a small GACC stimulus that happened, and we want an outsized share of that, and we're the leader in multinational companies.
That factor there, you know, is a good sign, but then if you think about the SAMR stimulus, if that comes later in the year, we believe we're well-positioned to win more than our share.
Okay. Maybe moving over to CapEx deployment. Obviously a question you got on the call, and I'm sure you get in meetings. Balance sheet's in great shape. Padraig and the management team have been focused on a willingness to go bigger and an interest in doing deals, right? Automation, informatics, two of the areas are in automation software. This idea of a large transformative deal has caught certainly investors' attention just to understand kind of how big you guys would go and, you know, what the financial implications would be. I know, Adam, on the call you talked about being very-
Very
...very disciplined.
Yes.
There was a debate. Great, that makes sense. You know, they're really not gonna take a big swing, but at the same time, you guys could be very, very, very disciplined and do a big deal, and you think it's the right deal. Long way of saying, how do we think about M&A?
Sure.
the size of the deal and the financial discipline?
Sure. It's a great question, and we've been getting it a lot. The first piece is, and I always start here because it's really important, is our capital allocation priorities aren't changing. We're gonna prioritize investments and growth through internal innovation, M&A, and then strategic capacity expansion. Then we're gonna continue to do return excess capital to shareholders, and that's in the form of a growing dividend as well as share repurchases. The other piece I called out in the call was we like our organic business, and we don't require a transformative deal to achieve our growth ambitions.
Mm-hmm.
That hasn't changed. We recognize that transformative deals come with their own unique complexities, including more challenging integrations, which drives an even higher bar. While we have a wide aperture, transformative deals are very few and very far between, and we're not currently prioritizing that type of opportunity. Okay? What I would say though is as we look at M&A, you know, we're gonna continue to maintain our disciplined approach. We're gonna make sure anything we do is aligned to our enterprise strategy. We're gonna focus on growth opportunities where we have the right to win, where we can successfully integrate them, and that we pay the right price. Which what that means is we're delivering cash on cash returns above our hurdle rate, and that it's adding incremental value to shareholders. I can just go a little bit further.
Sure.
If you don't mind. The types of M&A targets we're looking at. We're really focusing on increasing our services and our recurring revenue mix. That's software, automation, specialty CDMO niches we're looking at, as well as high growth adjacencies. You know, we have a strong platform, and so this focus on M&A is not about just doing something to get bigger, is we have that strong platform. We know that we can leverage it to drive incremental growth for shareholders and add incremental value for customers if we use that platform. I just conclude with, we're also making incremental investments in our internal growth and innovation, you know, driving productivity, and that's really around digital capabilities, AI, expanding our CDMO capacity. We have trains C and D coming online next, early next year in Colorado.
Our consumables manufacturing capacity. We continue with all of this to in turn return excess capital to shareholders. It's not a must-do, it's we believe, you know, we're the right buyer, and we have the right platform to make acquisitions, but we're gonna be very, very thoughtful about it.
Terrific. Maybe just one more. Is the initial interest or kinda commentary around, you know, interest in a big deal or willingness to do a big deal, like does that emanate from... I know when I spent time with Padraig traveling, you know, Ignite, and he felt really good about what Ignite allowed Agilent to do. I mean, you guys are in a good position. A devil's advocate would say, "Oh, things are wrong with the base business," or, "They're not feeling as confident about the next 5 years, so they need to do a big deal." Just maybe the genesis of, you know, the interest in the big deal, kinda how you would characterize that.
Yeah, no, it's a great question. I'm really glad you asked that question. One, I do think we feel confident in the abilities of the company, the ability to integrate through Ignite. That said, we don't need to do a big deal, number one. Number two, I think what we're doing and what we're saying is we're keeping a wide aperture because we're looking and you know, I think as investors and shareholders, we'd wanna make sure that we were looking when things came our way. That said, we don't have a need to do it at all.
Mm-hmm.
Like I said, it's not a focus or it's not a priority right now. You know, I think while it's been a hot topic, you know, I think just having a wide aperture is what's causing the noise.
Terrific. Terrific.
Dan, the other thing I would add is like, look, we both know that it's a highly fragmented industry, and there's clear economies of scale over time, right? It's really about balancing what makes sense for us at this point, versus kinda like, you know, being able to be a, you know, consolidator in the space over the long term, right? That's something we are very clear-eyed about. Like Adam just mentioned, I mean, there's pros and cons with every asset that we look at. That's really how we, you know, want to sort of stay disciplined, stay focused, with that sort of long-term theme of consolidation.
Okay.
Mm-hmm.
Maybe just on some of the segments, maybe pharma. You know, the LC replacement cycle, you know, Adam, you called out a couple of the, you know, momentum that you're seeing with some of the products. Still sounded like, you know, we're early in that. How would you characterize the ability to continue to grow high single digit growth for that LC?
You take that one.
Yeah. I mean, what I'd say, Dan, is a couple of things, right? As you mentioned, really good momentum on the LC side, high single digit growth, you know, outperformed some of our peers out there as well in the quarter. Really, I mean, as we think about the replacement cycle, it's three things, right? I mean, there's an extended period of underinvestment, meaning you have a lot of older fleets out there. The second piece is, you know, CapEx conditions are turning more and more favorable as time goes by. They're normalizing, if you will. Then, you know, innovation, right? That comes with our Infinity III. I mean, that really kinda like pushes some customers over the edge. There's a compelling reason to upgrade.
As those three come together, that's really what drives the cycle for us. You know, Padraig he's not a baseball guy, so he likes to think in rugby terms.
Mm-hmm.
he kinda talked about, you know, being in the first quarter. I mean, a baseball analogy would be probably like that third inning.
Mm-hmm.
That's kinda where we are. The way to frame it would be think of this as 200 to 300 basis points of incremental LC instrument growth relative to that low to mid-single digit, but with an opportunity to be faster than that amount, like in the near term here at this stage of the replacement cycle.
Mm-hmm.
There's a long runway to go and, you know, on that point, look, I mean, we also have a GC cycle, which is, you know, shallower slope, longer duration. It's really a dual-pronged exposure to the replacement cycle dynamic here for us.
Mm-hmm. Maybe just on NASD, you know, Adam, we talked about the upside drivers. You mentioned the 3. NASD wasn't mentioned. Just we had it pegged around 10% growth in the first quarter. I know you're talking about mid-teens. Just like what was the number in 1Q, and what's the visibility on that mid-teens growth for this year?
Yeah. We don't split, excuse me, we don't split out our CDMO business, but the CDMO business as a whole was low double-digit growth.
Mm-hmm.
As we think about the year, you know, one, the cadence of the different orders kind of roll through at different times.
Mm-hmm.
The nature of the two, of the NASD facility, you know, that's largely booked through the year.
Mm-hmm.
We're really excited about that and keep getting incremental demand, so we're very excited about where that's going and with the new train C and D coming online.
Mm-hmm.
It was the perfect investment at the perfect time. BioVectra, which has more of a clinical skew, ramps through the year.
Mm-hmm.
The cadence of those orders have a different pattern than NASD.
You know, in terms of the sales funnel there, I know when I travel with management, it sounds like, you know, the extension of the therapeutic indications that are, you know, NASD is being or that, or that modality is being used for could actually drive a decent potential acceleration in growth in the coming years. How do you think about the sales funnel on NASD as we look out beyond this year?
We're very excited about it. I mean, look out in the clinical world of the number of siRNAs out there, and we're clearly the leader in that modality. We're very excited about that funnel and because we're at the leadership position, because we built the extra capacity, we're in a great place to capitalize on it.
Okay. The kinda risks, I know the day that there was some news, I know Tejas asked the management team, sent out like a nice script on enzymatic ligation. Do you still get questions on that? Like how do investors get comfortable with the risks there?
Yeah, I think, as people sort of digested the news, Dan, like initially there was a little bit of, you know, misunderstanding, if you will, around whether this is a threat for, you know, our NASD prospects longer term. Actually, I think it's quite the opposite. Frankly, I mean, what enzymatic ligation does is that it allows Alnylam or other customers eventually to really tap into larger patient populations, right? This is a good thing for the industry as a whole, and as Adam just mentioned, we are the primary sort of CDMO vendor of choice in siRNA. Now, part of it is capacity, but part of it is our phenomenal track record in siRNA, in terms of just the clinical stuff, but also being able to grow with our customers and help them commercialize successfully.
I mean, at this point, we are booking work in 2027. I mean, train C will come on-online and, you know, good line of sight to how we're gonna fill that up over time as well. In terms of, you know, what role we play in that enzymatic ligation world, I mean, there's a couple of things to really sort of take into account, right? The first thing is that for the current sort of crop of molecules out there that are already commercial, like enzymatic ligation is not gonna supplant like solid-phase synthesis.
The second piece is, it's not gonna affect any of the manufacturing protocols that Alnylam has in terms of their commercially launched drugs and is only applicable to their future clinical programs. Those are all, you know, essentially this is a late 2027 and into 2028 dynamic. Probably the most important bit is even when they're doing it via enzymatic ligation, they still need BioVectra manufacturing, which is something that we're going to help them with. There have been certain questions over the past couple of months around, are the economics the same, right? The answer to that is, there's a couple of things that I would point to. It's still early days, but there is kinda like technical know-how around being able to reduce the cost structure in BioVectra manufacturing.
The other aspect is if you do it at scale, there is no sort of theoretical limit on how comparable the margins could be on that process. You know, we feel very confident in our role as a key supplier, even in that sort of enzymatic ligation world.
Okay. Maybe just rounding out a couple questions on pharma. GLP-1s, I forget, like is that quantified? I know one of your you know, your key competitor quantifies the impact. Just remind us the size of that business and how does the move to orals impact that? We did a big report on GLP-1s, we would think that would be favorable to you guys.
I mean, so a couple of things. So just for context, Dan, I mean, GLP-1s last year were about $130 million in revenue for us. Again, you know, dual-pronged exposure there. About half of it is on the analytical tool side. The other half of it is, you know, BioVectra on the CDMO side of things. You know, GLP-1s, you know, very solid 50% growth in the first quarter here. Really, I think the way we think about it on a sort of that, your question on, you know, orals versus injectables, we're modality agnostic, right? I mean, if you think about sort of where we play there, I mean, essentially on the injectable side of things, they rely on our tools for characterization, for QC, for lot release stuff.
You think about sort of on the oral side of things, the impurity analysis, dissolution, solid, you know, dose QC, stability, automated analytics, all of those things play to our strengths. I think it's a little bit early to put a finer point on what that steady-state mix will be between, you know, orals versus injectables. A little bit of it depends on who you ask. From our perspective, we are actually well-positioned for any combination of orals versus injectables as long as patient populations continue to ramp, right? I think people forget a little bit in all the noise around this that, you know, obesity sort of GLP-1 penetration rates and obesity indication are still pretty low, right?
Mm-hmm.
The other piece is the labels will also expand over time if the data holds up, right? As those two things happen, whether it's orals or whether it's injectables, we'll stand to benefit in either scenario.
Maybe jumping over to the chemical side of the business. You had a solid first quarter, 9% growth. You talked about this advanced material, 20% growth, Adam, you alluded to the semiconductor business. This came up on our marketing trip with you last year. A few investors called it out. Just kinda walk through a little bit of, I think, just the spectroscopy. Like, what are you serving in semis? How meaningful is that, what kind of a growth driver could that be?
Yeah. Just as I said at the beginning, one, we're very excited about it, and we have a leadership position. Our spectroscopy and our GC-MS tools are critical assets for the semiconductor industry. We're suppliers to ensure the quality of the raw materials, and that helps them drive yields, and then we analyze the fabrication process for chemical variants. We're important in the manufacturing process and obviously, as the demand expands, then that pushes demand for our products. There's the ongoing reshoring, which continues to help us. As there's a push to localize manufacturing in semis, there's that continued shortage, that helps us because there's a continued demand for our atomic spectroscopy tools.
Over time, you know, we expect it to grow and be a continue, an important part of our business. You know, we're the number 1 in the CAM market. Once again, we don't guide to our semiconductor growth specifically, but we assume CAM will grow in the mid-single digits for the full year.
Right. Even connected to that, you grew 9% in the first quarter. Is it comps? Like, what's what causes the deceleration down to mid-single?
I guess it would be there's a couple things. I don't know that we're necessarily calling for a deceleration. I think we just had a very strong Q1. Some of that is also related to the Lunar New Year and the timing in China, right?
Mm-hmm.
The other piece is just the nature and the timing of when our customers do their buying.
Mm-hmm.
You know, we're gonna continue to watch and see how it goes, but, you know, we continue to be excited about it.
I mean, I'd say, Dan, a couple of other things, right? Just to frame it a little bit for you. I mean, essentially 2/3 is chemicals, 1/3 is advanced materials, and out of that advanced materials, roughly about 1/2 is really our semiconductor and related exposure. On a whole company basis, it's like 3 or 4 points, essentially, give or take. We're seeing a lot of strength there. We are by far the market share leader in that niche. You know, you have this AI-driven sort of memory chip shortage dynamic. You have the reshoring dynamic helping as well, which we think are durable trends. On the other side, to your point on comps, in the back half of the year, it is high single-digit, right? Comps for CAM.
We are baking in a little bit of prudence there. I mean, you know, these end markets can be a little bit quick to change versus, you know, pharma or diagnostics and clinical, for example. There's, there's a combination of prudence and tougher comps that sort of, you know, as part of our, you know, give or take, like, high-end to mid-single-digit expectation for the rest of the year.
Mm-hmm. Okay. Maybe just on margins, just kind of walk through. You got the 75 basis points. You've had, you know, performance base pay. You're having Ignite. Just kinda unpack that 75 basis points and kind of how confident are you in delivering that?
Yeah. We feel confident about delivering it, through the year. There's a couple pieces. It will ramp through the year, and the biggest factors in that are, one, the tariffs. We mitigate the tariffs by the second half of the year, as we've talked about for a long time. The second thing is the price-volume leverage that you see. Then the third is the Ignite savings. You'll see that starting to roll through even more and increasing, through the second half of the year. You know, we feel very confident about delivering and, you know, and we're excited about how all the pieces are actually in place.
What would happen if, you know, your guide's 46, what happens if you come in like 6 or 7 or you beat? Does that drop through? Do you reinvest the business? Like, how much of that, you know, would accrete to earnings and upside?
I mean, it's, we're always balancing incremental investments, and we have a lot of great opportunities. At the same time, we recognize that it's important to return capital to shareholders.
Mm-hmm.
I would say, you know, we take a balanced approach to that.
Mm-hmm
...because we have so many great opportunities to invest in, we're really taking a long-term view of investing in the right innovation. As you know, our business is driven by, you know, the right products, making sure that you have the right innovation, new NPIs coming out. I wanna make sure that we're focused there. As Tej just mentioned, AI and digital, you know, there's so much opportunity. We're taking advantage of it now, but you can always do more and go faster. That's where, you know, if the opportunity arises, you know, we'll take it.
Maybe just zooming back out for a sec. I mean, you kinda led off the opening comments and you mentioned MFN and pharma, and then you highlighted biotech as maybe an upside driver. Just broadly on pharma, downstream's pretty stable, right? You do have some more discovery businesses too. You know, and that's the part the preclinical business has been really weak. Just kind of MFN Pharma, how much do you, like, do you think that was a drag last year? How much could it help this year? I mean, it's hard to put a finger on it, but, you know, you have a big sales force that's out meeting with these customers. Just wondering about Pharma's tone, if you will.
Yeah, I mean, I think the MFN clearing event was very important.
Mm-hmm.
I think last year that was a big holdover, and everyone was waiting to see because that could have been devastating to the industry. As you know, any capital expenses, any expenses, and investments pharma companies make, or any company makes for that matter, depends on stability.
Mm-hmm.
I think that was a big clearing event for pharma.
Mm-hmm.
What we're seeing is that is actually translating into sales, and you saw in the performance of the first quarter that that did translate. We would anticipate, you know, that that should continue to translate through the year, and we're hearing from our customers, you know, that they're feeling good. Once again, you know, the where we keep watching is that small and mid-cap because that's another opportunity, and we're always looking, you know, to outperform, and that's a place where we can.
Maybe on, like, on instruments, what, like, what have you guys assumed? I know you have the recurring business, consumable service, and you have instruments obviously is a decent part of the business. Is there a number in kind of that you've laid out for instruments for the year or just help us think through 'cause I assume that would be, like, an important lever of Pharma started to feel better, right?
Yeah. A couple things on instruments is so one, you know, it's we're in the instrument replacement cycle, which is helping.
Mm-hmm.
Tejas laid that out in great detail. The other piece is as we think about kind of that reshoring opportunity, that presents another opportunity, and we see that, you know, starting to materialize into orders toward the end of the year.
Mm-hmm.
That's another exciting opportunity. Tejas, have we laid out a direct guide?
I would say, Dan, I mean, we don't guide specifically to instruments, but in the context of this year's guide, there isn't much of a delta between instruments and the rest of the portfolio. They're both like mid-single digit-ish.
Mm-hmm.
That's a little bit better on the instrumentation side because of the replacement cycle point that Adam mentioned.
Mm-hmm.
That's how I would characterize it. Not really much to, you know, choose in terms of group deltas between instruments and the rest of the portfolio in the context of this area.
Maybe just circling back to 1 Q. Adam, you mentioned at the beginning, absent the weather, you guys would have come in above the midpoint. Like, we just took the $10 million and divided through by last year's revenue base, and it was basically 60 basis points. You grew 4.4, would've been 4.4 plus 60, 5%. Great. You hit the midpoint, it appeared, and that's good. Quarter-over-quarter, you know. You know, again, as we started off, like investors, the market gets intoxicated. Like, "Oh, you died here, you're gonna beat." You've been beating 2 points, two points, two points every quarter. Now it's, like, more in line. It just raises, oh, is something changing in the demand environment? I don't know. How would you characterize that? Weather is...
Is that math right, 60 basis points, or was there a bigger drag on the weather such that maybe the 5% you guys would have come in above that?
What I would say is this, you know, we've characterized kind of the, what you see from the weather as, you know, the $10 million. There's also services that didn't happen. There's orders that didn't happen, but it's hard to characterize those because you can't prove a negative. There was more there because people couldn't get to their labs, you know, service visits couldn't happen, be scheduled, things like that. There's likely more there.
Mm-hmm.
overall, what I would say is, you know, the performance for the quarter was in line with where we guided.
Mm-hmm.
You know, we see all of our large markets humming along.
Mm-hmm
We continue to be optimistic. You know, we'll see how the rest of the year goes, but I'm optimistic and excited about where we're going to go.
Okay.
I mean, just to add a little bit of a finer point there, right?
Yeah.
If you just do the math on even the 10 versus where we reported, you get to sort of, you know, above the midpoint of our guide. Then you look at sort of the ANG shortfall, if you will. We'd guide it to down mid, we were down 8%.
Mm-hmm.
That gets you to essentially at or above the high end of our guide.
Mm-hmm.
That's how I would think about it, in terms of, you know, that high end versus where we ended them.
Could, you know, we were chatting earlier, but I mean, the balance sheet's in great shape. Just speak to, like, free cash flow, like how you guys think about that right now. I mean, you've got a lot of investments that you're ongoing, but just, you know, when you think about your kind of cash flow dynamics this year, next year, going forward, like, what's the, you know, where are you guys in that investment cycle, if you will?
A couple things that are unique about this year and last year as well, but continue this year for our free cash flow and our free cash flow conversion is, you know, one, you know, our CapEx as we're investing, you know, in trains C and D, and that's our NASD investments. That's hitting this year's CapEx, and that obviously weighs in on your free cash flow. The second piece I'd point out is, you know, we've, we're undertaking a significant transformation of the company. That transformation is gonna add substantial value, and we've talked about that for a long time.
What you're seeing is some of those investments in that transformation, as well as some of the restructuring charges associated with, you know, generating those, some of the efficiencies that you'll see in the margin. Overall, you know, the free cash flow is where we would've anticipated it to be. We're in an investment stage right now, and, you know, transformation requires incremental investments. I wanna assure you we're paying very close attention to it. We're very thoughtful about it, and we're making sure that all of these investments and all of these activities ultimately generate incremental growth and incremental returns.
Terrific. Well.
I mean, just one quick point of clarification there. If you look at our typical free cash flow seasonality, 1 Q actually was slightly better than expected.
Mm-hmm. Got it.
You know, look, I mean, our operating profit is also going to be slightly more back-half weighted, very slightly, right? That will probably be reflected in the free cash flow line as well in terms of a more back-half weighting there.
Got it.
1Q itself, we actually came in a little bit better.
Okay
... versus our typical free cash flow seasonality.
Terrific. Well, with that, we're out of time. Gentlemen, thank you for being here.
Yeah. Thank you.
Hopefully everyone in the audience benefited, and have a great rest of the conference.
Thank you for having us.
Appreciate it.