Get started again. We've got Gates Corporation with us today, which we're very excited about. Ivo Jurek, who's the CEO. Ivo, as I walk over to you, you've been a mainstay at this conference for a long time, which we very much appreciate. So the temptation to ask you is, why is this year different than the last couple of years, right? Like, you know, it seems like there's some green shoots out there, maybe even more than green shoots. I think you just reported earnings, so I won't ask you about orders, you know, for the last two days. But at the same time, I think you talked about four out of seven of your major markets growing, only one modestly decreasing, markets such as personal mobility and data center driving you.
So it seems like 2026 could be a stronger growth year, yet you forecast 1%-4% organic growth. So maybe talk about what the puts and takes there.
Yeah, I think it's a good way to open it, Andy, and thank you for having me and Gates here at the conference. Look, you know, when you kind of look back for maybe the last couple of years, I think both in 2024 and 2025, we have seen some positive earlier incursions of, you know, PMI, some sentiment shifting around, and in both years, kind of ending up with a little bit of a head fake and, you know, overcoming some more impediments.
So when you kind of fast-forward maybe to end of 2025 and the quarter that we've just reported, I would say that we have seen a slow and steady build-up in kind of more positive picture across some of our, you know, larger industrial OEM markets, commercial construction, less bad behavior in ag in particular. And exiting 2025, we've reported reasonably good strength in order intake, as you indicated. What’s really different, I think, in my mind, is that for us to see more foundationally based recovery of our business, we need to see an industrial OEM strengthening order trends, and we have seen that.
So I think that's a good early indicator. I think when you combine that with kind of three years of really tough, macro background, which is highly unusual, right? You have to go kind of all the way back to World War II to see that type of behavior. And then you start seeing maybe early formation of a little more constructive PMI. You know, it starts to feel like maybe things are improving. I think it's early in the year. As we indicated, yes, our markets are anticipated to be better this year than they were last year. Some of them already are. So, you know, you now have more than one data point that would tell you, things potentially are forming to be much more supportive in 2026 than we have seen in 2025.
Ivo, when you say, like, industrial OEMs look a little better, like, any sort of examples will you talk about?
Yeah. Look, we have seen much stronger trends in commercial construction equipment builders. We have seen better ag OEM order trends. You know, we have reported, actually, our ag business was up, high single digits in Q4. You know, that, that's taking into account that those OEMs are still reporting pretty negative numbers. So, you know, we are doing some things better, maybe than the market. So we are outperforming the markets, as we have indicated in our call, and, you know, we're certainly quite pleased. Now, when you combine that with super strength in personal mobility, you know, we have had really another year of good end market support in automotive replacement side of our business. So, the aftermarkets are doing really, really well in the auto side.
You know, we still see positive trends. Car fleet that is aging, it's still growing. You know, cars are keeping. People are keeping their cars longer, they're servicing them better. You know, nothing that we do is, you know, of choice. I mean, if you know, we make critical, mission-critical applications, support application, mission-critical applications, so you will have to replace those components when they fail. You know, those are all positive things that are happening there.
Got it. And, you know, we talked on your Q4 call about some distributors having carefully managed their inventory. I think that was specific to your industrial aftermarket business. So maybe comment broadly on how you characterize channel inventory today, and what are you seeing versus-- sell-in versus sell-out, and whether you see potential need for channel restocking if PMI were to get better?
Yeah. Look, you know, I'm not really concerned with the performance or the behavior of the industrial aftermarket channel inventories, simply because it was kind of more seasonal, not really something that is, you know, kind of a consistent level of the stock. I think that the channel partners, you know, they frankly didn't have a great year last year, and so there was no real reason to pre-position yourself for 2026. You have an opportunity to have a really good 2026, and, you know, my sense is that as PMI strengthens and frankly, as the industrial OEM businesses strengthen you know, that benefits nicely, the industrial aftermarket channel partners.
And so my sense is, as you continue that to recover, as you continue to see the PMI signals to get healthier, I think that you will start seeing that the inventories are getting replenished maybe more aggressively than they have been over the last three years, and you should be setting yourself up for a nice rebound in performance in the aftermarket on the industrial side.
Yeah, that would be interesting. So I want to go back to your last Investor Day, I think, was 2024, right? You had talked about sort of various ways to outgrow industrial production. You mentioned then on a baseline of 2%, industrial production growth, that Gates could grow 3%-5%, through programs such as Eco-Innovation, Chain-to-Belt , you know, personal mobility. So, maybe talk about rate the progress you've had in these areas. We talk about personal mobility a lot. We don't talk about these other things that much, so I'm just curious where you are in this stuff.
Yeah. So I think that, you know, let me not spend a ton of time on personal mobility, because I think that we have demonstrated that that algorithm is working really well. It's very healthy. We continue to penetrate much more meaningfully that space, and we certainly believe that that's a long-term trajectory of growth for us. And as we have highlighted over the next, you know, three years, we anticipate to deliver kind of mid- to mid-20s to 30% compound annual growth rate. So that's very healthy from a, you know, $140 million -ish base. On industrial Chain-to-Belt , look, we're doing some really good things there.
We feel that, as we are approaching cost proximity to the cost of industrial chain, that opens up the opportunities in, I think, in a similar fashion that we see in personal mobility. So we are quite optimistic that that will start adding a really nice growth for us. We have demonstrated a really nice performance in our automotive aftermarkets. We have grown that business very steadily. Actually, you know, in a way, it was a nice chunky growth in 2025, and we certainly believe that the long-term trajectory of that business remains to be kind of GDP plus in addition to some market share gains around the edges. So that, you know, that offers a good opportunity for us to, you know, to add to our growth rate.
What I'll say is that during that 2024 CMD, we did take into account that we anticipated to have more positive end market backdrop. And if you think about it, Andy, while we haven't really delivered exactly at the growth rate, I think that we have grown in line with our high multiple multinational industrial peer set. On average, we have grown as well as they have. You know, that is in addition to continuing to do a selective participation in our auto OE segment. While we continue to grow the business, we are improving the quality of our portfolio, our mix, and we continue to grow at the rate of some of our, you know, peer group, competitors.
Yeah, and your margins have come up pretty significantly, so that's kind of what I want to ask you about. There was, as you remember, a couple of quarters ago, some confusion around, you know, what you were saying about your margin in 2027. So maybe let's try to clear it up again here. So if I'm interpreting your 2026 adjusted EBITDA margin guidance correctly, it looks like you should be exiting the year around 24% margin, and your 2027 target, I think, right now is 24.5%. So, like, I know growth is a huge variable here, but let's say you deliver the middle of your organic growth range, 1%-4% in 2026. It looks like you set up to well achieve that 24.5%. Anything I'm saying there that I'm not right or, yeah?
No, I don't think so, Andy. I think that, you know, we have a couple of rather large projects that we have undertaken that are a bit of a headwind for us in the first half of this year. I mean, obviously, we've spoken about the deployment of the ERP in Europe, which has actually gone quite well. We have some footprint realignment projects that we are working on that we anticipate will be completed in the first half of the year. That will be a benefit and accretion to second half of the year. We have committed that we will be exiting the year at 23.5% EBITDA margin, which is the lower end of what we have forecasted during the CMD in 2024.
During the CMD, we also have anticipated that over that period of time, we will see 500-600 basis points of organic growth through that three-year period of time. Now, obviously, that has not happened because of the end markets, but we have yet still delivered a rather significant margin expansion, and we are hitting the bottom end of our range at that negative kind of end market backdrop. So we are exiting, I think, we are troughing the end market macros. We are exiting that troughing environment at record level of profitability near record level of margins, and we are very, very bullish about our ability to not only deliver on what we have committed, but frankly, probably overachieve, if you take into account that our first 12 months-- incremental margin opportunities kind of in that 45%-50% fall through kind of from that second half of this year onwards.
So I wanted to ask you about that, 'cause I think, you know, you've got separate programs, right? One is delivering 50 basis points of material savings from here. I think you've been pretty bullish on that, and then 100 basis points of footprint optimization savings. I think that they're both supposed to contribute to the 2027 target. So I know you said you've got- you had $10 million so far from footprint work, that's gonna impact this year, but then obviously it's got to ramp up from there. So, how do you think about these programs?
Yeah, the programs are performing quite well. Actually, the material cost savings and, you know, and some of the efficiency projects like 80/20, and some other restructuring that we have, that we have continued to do through the cycle, have created bigger benefits than what we have anticipated, taking into account that we have been able to offset that lack of growth through the end market backdrop. So I think that I'm quite pleased with that. I think that our footprint optimization, I think on the call, Brooks has indicated that we feel, you know, quite confidently that, you know, in the second half of the year, it may be $10 million+ .
That will ramp up into 2027, and we anticipate that, you know, in the first half of 2027, we'll deliver another $10 million on that project alone. So we have-- You know, we're in a really good shape, and 2027 certainly should be a year of terrific performance. But we're also quite pleased with how we have framed our guidance for 2026. You know, we don't need to skip necessarily over 2026. I think 2026 is going to be quite an, quite an okay year for us.
Time goes fast enough, Ivo.
Yes, it does.
Yeah. So maybe just digging into 80/20 just a little bit more, maybe how much more runway do you have in the journey on 80/20? And, you know, how do you think about 80/20 in terms of, like, an annual margin tailwind? Like, how do you think about that?
Yeah, look, I think that 80/20 is a long-term journey for us. I think we have, you know, we have done quite a bit of work on the front end. You know, if you think about this project as front to back, and I think that that's a really right way to think about it, we are just starting. You know, we're kind of in the middle of a journey for us on, you know, on taking 80/20 into our factories, into the back end. So I think that there's a ton of opportunity to work through there. I do think that going through the ERP implementation in Europe, that will give us some incremental opportunities to drive some more efficiency in our European footprint and, you know, how we manage our business there, in addition to just driving 80/20.
So, I do think that you have a good runway for, you know, for a number of years ahead. And, you know, when I think about our business, you know, I don't-- You know, somebody asked me this question: "What- when you get to 24.5%, do you think that that's kind of the end of the journey?" I said, "No, that's not the end of the journey. That's kind of the next train station that we, you know, we are planning to stop by. And then we'll continue to drive the train forward.
Yeah, that makes sense. Then just maybe honing in on this quarter, Q1 2026, I think you talked about 2%-2.5% organic revenue decline in the quarter. I think 500 basis points of having, right, from two fewer business days in the selling season, and then your European implementation, Europe. So, you know, being an analyst, I'll exclude it, and I'll be like: "Oh, your underlying growth is pretty good compared to how it's been." So, like, why is it pretty good? Is it because Europe has been trending better lately, as you talked about? You talked about construction, and ag, and personal mobility. Are those markets starting to really pick up? You know, maybe what's in that underlying, you know, 3% growth or whatever it is, 2.5%-3%?
Yeah, by the way, Andy, thank you for actually doing the fundamental work. So, you know, we actually have a very, very, I think, doable guide. We have no ramp-up in second half of the year. If you think about it and you carry forward the 2.5% of our organic growth, that's kind of what it is for average of the year.
Yeah, yeah.
You know, one would assume that, certainly, if our thesis plays itself out, you should start seeing further acceleration in the second half as the recovery takes hold. Presently, you know, again, strong performance in personal mobility, that's almost 100 basis points of growth that we are delivering on the enterprise. You're gonna have a little bit of pricing, certainly, and improvements in, in ag and commercial construction in the industrial OE side. Europe has been doing better. I mean, we have grown in Q3 and Q4. Interestingly enough, I think that Europe is performing rather, you know, rather well for us.
And I think you, you certainly, sense a degree of, kind of relief in from the European customers and certainly from our European teams. And look, our Asia business has been doing quite well. We've been growing in China nicely. I think we have probably differentiated our performance versus our peer set. East Asia and India, you know, I think that they are kind of at a inflection point of delivering some sustained level of growth as well. So things just feel better.
So, Ivo, I don't know if anybody on this stage today said the words Europe and well together, so maybe you can talk about why Europe is performing well for you guys. You know, is it the market? Is it something you guys are doing?
Yeah, look, I think that our team is executing really well in Europe. And, you know, we've, you know, we're focusing on things that are within our control. Look, I don't control what happens in the macros, and they are what they are. We've got to deal with that. But, you know, we have had tremendous growth in personal mobility in Europe. I mean, our personal mobility in Europe has grown at, like, 75% rate. You know, that's an--
They do like to, they do like to ride their bicycles there, right?
They do like riding their bicycles there, and the adoption of the Gates drive is rather significant in Europe. I think that, you know, we have been doing a really good job in automotive aftermarket in Europe. So that's been performing well. Look, the industrial businesses are recovering. I mean, similar to what we have seen in the U.S. I would say that maybe Europe is a little bit ahead in ag and commercial construction recovery. Ag has been, you know, quite bad in Europe since 2023. So, you know, we feel better about what's happening in Europe.
Maybe the same question on China, Ivo, 'cause again, I think you've generally been outperforming in China for a while, versus other U.S. multis, so, I think you expect continued growth in China. So what does Gates do better than peers in China? Is it the same thing there? What's the outlook? I think you talked about the outlook a little bit for the rest of Asia.
Yeah, look, I think we have a terrific team, and we have had a very focused strategy to build our industrial footprint. If you look at our business in China over the last 10 years or so, since I have been at Gates, we have very dramatically retooled our portfolio. We have diversified the applications that we participate in. We have been able to take a nice amount of market share. We have built rather significant automotive aftermarket presence. You know, today, we, we are the number one market shareholder in China, of the products that we manufacture in the automotive aftermarket. So our business in China is nicely diversified, and, you know, it continues to perform, perform well. It's a large industrial economy, and, you know, we like what we do there.
And then, I'm gonna open it up to the audience in a second, but I wanted to follow up on ERP more specifically. I think you talked on the call about ERP being a 140-150 basis points drag on EBITDA margin in Q1, 50 basis points in Q2. So can you remind us where you are in terms of European implementations in general? So once you get through this European implementation, the first half of 2026, what's left or what's next on ERP?
Yeah, I think that that was kind of the last large piece for us. We were operating in Europe on, you know, very legacy, obsolete systems that were coming out of support. We needed to de-risk it, so we've decided to go and launch SAP. About 2.5 years ago, we have deployed the SAP finance module. We felt like we have kind of had at least phase one covered, so we got a good experience with it in Europe. Meanwhile, we have launched a bunch of SAP applications in Asia. Those worked well and ran well. This was a rather large-scale project. It was a big bang. We have gone live early in February.
You know, kind of one of these things, right? You kind of push the button and see if the engine starts. Engine started really well. You know, we are taking orders, we are shipping, we are dropping manufacturing orders, we are making things, we are transitioning things from factories to DCs and back and forth. We are invoicing. You know, there are days that are really good, there are days that are less efficient. And so the drag is really more associated with the cost of support to get back to a standard operating efficiency.
But presently, you know, we feel quite well about where we sit. The team has done a terrific job, and, you know, while there are still efficiency issues to work through, we are able to do all the functions that we need to do, and we needed to do as you restart on a new system. I certainly don't envisage that there'll be another implementation of any size anytime soon. We got all regions basically operating on reasonably good systems at this point in time.
Got it. It's good to know. Any questions from the audience? Anyone? Anyone want to ask a question? Okay, so maybe if I dig into the businesses a little bit more, Ivo. So, let's talk personal mobility again. So it was up, you know, greater than 25% for you last year. You talked about the business compounding at high 20s, 30% to 20%. So can you remind us of the size of the business today for Gates? And then when you're thinking about these elevated growth rates, I mean, we just talked about Europe. Is that the region that stands out, or other regions, like, where does personal mobility have the best traction?
Yeah. So, look, the personal mobility business is about a $140 million business. That is, that's, presently, it's about 3%-3.5% of total company revenue. So, you know, it's not, you know, super large, but it's, it's a nice size. We have committed that we anticipate the business to be about $300 million by 2028. We surely are on the trajectory to be able to deliver that. You know, this business really took off in Europe about three or four years ago, before we started seeing some of the stock with, you know, post COVID.
The business has completely re-accelerated back at those very high growth rates. We see good growth in Asia as well, and we have a ton of opportunity with that business in North America, as North America is embracing you know, a little better quality e-bikes in particular. So, you know, we feel that, you know, for us, it's a penetration story, and we are competing against non-traditional competitor, industrial chain.
Right.
We think that we have a better technological solution for electrified two-wheel application. And so, you know, now we are getting, Andy, to a point where we feel we are on the cusp of mass adoption. And we have done that through two things: number one, we have demonstrated this is a better solution than chain, and two, by very focused execution on innovation to drive the cost of our drive to near cost proximity to industrial chain. And, you know, we are approaching that level of performance, and you see a pretty broad-based adoption of that solution.
There's still no real competition in belts, right? For personal mobility, correct?
Not, not real competition. Gates' got basically, you know, the vast majority of the market share against--
Which is conversion from Chain-to-Belt that you need, right?
It's a penetration.
Is that just happening a little faster in places like Europe than the U.S., you know, is that--
It is because the solutions in Europe are. People actually do care about the quality solution. They want low maintenance, and, you know, the price points have been a little bit higher there. As we are approaching the cost parity, it opens up doors to much broader penetration. And look, I mean, we do have some interesting, you know, we do have some interesting applications. I mean, I think if you go for anybody that shops at Costco, you can go to Costco site, and you can buy your kids' bike with Gates drive. You know, we are starting to get to a level where that cost is no longer the inhibitor.
It's an interesting question, Ivo, 'cause it's like you are, I mean, I remember you as the premium product in most respects, right? So how do you balance, like, competing in, I hate to say it, the U.S. is a lower cost market, right? But like, how do you balance that and still be premium? Can you do it? You know.
Absolutely. I think that the solution is still a premium solution. I think that the belt drive is a premium solution to an industrial chain. I think what we have done is we have continued to innovate in a way that gives us still a premium capability through development of a new technology. And the technology, I think, is now getting broadly adapted, and you will-- You know, you will have an opportunity to support, you know, kind of the mid-market products all the way up to the super premium applications.
Got it. So moving on to data centers, I know it's also a small business for Gates, but you seem pretty positive that getting to $100 million-$200 million by 2028, liquid cooling adoption, additional TAM . So if I think about your products, do they need to- do they have to be specced in by customers? Like, how does it work? And are there particular customer regions that you view as better opportunities for Gates within data centers?
Yeah. So, first of all, it's a brand-new set of applications for our company, right? We really have not participated in that part of the technology. And so we've had to start with developing a technical expertise in what problem are we trying to solve. And I think that, you know, we have not only understood the problem, I think that we have developed a specific set of solutions that differentiate us from our main competitors. And we have developed a front end, sort of professionals in the commercial applications, as well as the engineering applications, to be able to go and work across the spectrum of customer base to get our products designed in. So, you know, to your questions, look, we, you know, we have projects with hyperscalers, we have projects with server manufacturers and, you know, design products into server cooling in racks.
We have projects with the large infrastructure providers. We have, you know, we have projects that we supply our hoses and our couplings. We have projects where we supply our water pumps, and we have projects where we supply our water pumps and our hoses, and our couplings. So, full spectrum of portfolio. And look, we have talked about a business that we won with a hyperscaler, that, you know, that's being fulfilled through an Asian ODM. We have a number of nice project awards with large server manufacturers for integration. We're working on specs that will get us into the critical infrastructure. So, you know, it's quite positive.
I talked on a Q release about the fact that, you know, our sequential order growth rate in this segment, in the data center segment, grew nearly 400% sequentially, 700% year-on-year. Our revenues have increased, you know, 4x or 5x in 2025, and we anticipate the revenue to grow in a multiple of 2025 in 2026. So we continue to demonstrate the trajectory of that growth. And, I think as a team, as an organization, we are quite confident that we will get to that $100 million-$200 million of revenue by 2028.
Yeah, that's great to hear. So maybe to some of your larger businesses, Industrial Off-Highway, it's the second largest business behind the Aftermarket. And, you know, we talked about it a little bit. I know commercial construction is driving and things like that. You know, is it global, it's getting better? Like, is it more construction than anything else? Like, you know, you said ag was a little bit better in Europe, so any more color there to be able?
Yeah, look, we started to see a little better performance in commercial construction kind of towards the end of Q3. We have seen continuation of that trend in Q4. So I think commercial construction is recovering. Ag, as I said, has done reasonably better in Europe. We have now started to see inflection in North America as well. Ag has been, actually quite okay in Latin America. in 2025. So, you know, if you have kind of three of the larger economies that are doing okay, you know, I feel a little more optimistic about it not being a drag in 2026 and being accretive to our growth.
Yeah, that's good to know. And then auto aftermarket, it's always kind of a steady eddy. It's your largest end market. So maybe talk about the trends you're seeing there. Obviously, the global car park continues to get older. That should be helpful to you. So level of visibility and anything you're doing differently in that vertical to outperform the markets.
Yeah. Well, we have been outperforming the markets over the last several years. That is a large, important market for us. The trends, as you indicated, are very good, right? The car park grows, the car park is aging. People are trying to take care of their cars more better, I guess, is the right choice of words. So that's an opportunity for us to continue to deliver the GDP-plus growth. But then the-- You know, while we represent this business as GDP-plus business, we are not satisfied with GDP-plus performance, even in this market.
We wanna outgrow the market materially, and we've demonstrated we can do that. I mean, we have onboarded a large customer in the U.S. in 2025. We believe that we still have opportunities globally to continue to add nice chunks of revenue. And so, you know, if we can just grow kind of, you know, 2x GDP, I think we will be quite satisfied. Are we gonna be able to do that every year? I don't think so. But, you know, we will, we will have years where we're gonna get some chunky, meaty wins.
Are there prospects out there like that for 2026 or?
Yes, there are prospects like that in 2026. But we also-- You know, we've added a, you know, that new account that we've added in 2025, you know, that was meaty, but I think that there's, you know, there's a large opportunity to continue to scale that participation. I think that, you know, there's still lots of opportunity in automotive aftermarket.
Got it. Then maybe diversified industrial's been a little hard to get a read on. It's pretty big, too, almost 20% of your revenue. So maybe, I know you're expecting growth in the market in diversified industrial for 2026, so maybe talk about what's driving that growth in 2026. I think you might have been down in the 4Q, so.
Yeah. So look, diversified industrial, I think, is really well torqued towards PMI. You know, when you start hearing, you know, anecdotes, I mean, even from our, you know, from our peer set, right, you know, whereas Rockwell, you know, when, you know, Parker is indicating, you know, pretty good strength in factory automation, those are all drivers of our revenue sources as well. So, you know, we are certainly closely monitoring the PMIs. We believe that the market is improving as well. But, you know, I would like to see more validation on the PMI side before we kind of go and declare victory on strength in diversified industrials.
Auto OEM is just gonna be like, high single digit company , and kinda just, kinda be the--
You know, I think so. Look, the auto OE business that we have is a really good business. We make good money on it. We will continue to practice selective participation. We don't really spend lots of resources on that business. That business generates nice amount of free cash flows and good profitability. And while it's there, we will, you know, we will have it. We will not be chasing any, you know, any business in that set of applications. We are really focused on growing our industrial businesses. And remember, we shrunk that business now to about 8% of revenue, and that's been doing well. You know, the industrial businesses haven't done well. So when the industrial businesses start re-accelerating, that will naturally continue to compress that participation.
Yeah.
You know, we really have an aspiration to be a broad industrial company, not being, as I say, just overtorqued to auto applications.
Got it. So let's shift to cash flow and balance sheet, because you mentioned cash flow. I think you had a good cash flow year in 2025. You know, you're guiding to +90% in 2026. You know, free cash flow does tend to be a little lumpy for you guys at times, so maybe talk about what's different now that supports consistency moving forward.
Yeah. Look, I would actually say that our cash flow, while it has been lumpy, it's been lumpy because we have been making significant investments into our business. We are investing in the front end. We are investing in new plant and equipment. We have done quite a bit of restructuring. So net, net- net, I think that we are kind of at a proximity to 100% free cash flow conversion as a person of adjusted net income. In 2026, again, we are forecasting +90%, and that's while we are spending more on CapEx and more on cash restructuring, right? So as those abate, and we anticipate that those will abate in 2026, you know, we have a very high degree of confidence that we'll get back on a consistent, consistent trajectory of +100% free cash flow conversion. And, you know, that, that just gives us lots of options. This is a business that generates ton of cash.
And, you know, we are very happy with our performance. Again, I would, you know, I would say that we have yet to gain, outperform our peer sets in 2026, 2025. So, you know, I think that that just gives us lots of optionality to deploy that cash, whether or not it is through, you know, share repos or, you know, now maybe being more thoughtful about M&A.
Yeah. So you ended 2025 with a net leverage under 2x, 1.85x, I think it's the lowest it's been since you became public. So how are you thinking about capital allocation in the current environment? You know, can we see you lean into buybacks more if you don't do deals? Like, how are you thinking about it?
Yeah, look, I mean, we have exited the year with over $800 million of cash on our balance sheet. So we have about, you know, slightly under $200 million of buyback authorization. We've returned $105 million of cash back to shareholders through buyback in Q4 alone. We generated a ton of free cash flow in 2026, or are forecasted to. So, you know, I anticipate that we will be more active, whether or not, again, it is in buyback. I mean, our stock is reasonably inexpensive as a, you know, comparison to some of the, some of the peers so that we, that we comp ourselves against. So I think that that still is a good opportunity for us to do that.
But I will say that, you know, we are significantly ahead of the game of what we have committed, on deleveraging, the financial deleveraging. That now gives us that opportunity to look at M&A more aggressively. There are some good assets available that I think could be very highly accretive to, to be added to our portfolio.
Could you do a transformational deal, or are you looking more at bolt-ons?
I think that we need to earn the right to do a transformational deal, and I think that we will start with things that we know a lot about, so something that is very near our core business, and gives us a meaningful opportunity to add decent amount of revenue and profitability. You know, I don't think necessarily you need to do a transformational deal, but you can still do a reasonably sizable transaction that's actually meaningful to your level of profitability, and will be highly accretive in terms of the capability.
For sure. Okay, so last question, Ivo. So I've asked you this every year: What are the top two or three innovations and structural changes affecting your company over the next five years? And are there any emerging industry trends that are perhaps being overlooked in the current discourse?
Look, I'm always surprised at finding new applications through adaptation of the core technology that we have developed. So if you think about it, you know, while I don't necessarily believe that the whole electrified propulsion of vehicles have played differently than what I have believed, I think I've been pretty consistent believer that there's gonna be room for it but it will be just another option that a consumer is going to have. You know, we've developed some interesting technology for the application in those vehicles.
And we've taken that, that application, and we are now adapting it into data centers that we would have otherwise not been able to support. We are, you know, we are developing a number of new applications of the technology into personal mobility, where we're gonna continue to broaden our ability to become more integrated provider of drive systems. You know, I think that a lot of technology is evolving, but what we're also finding out is that there's fundamental need for our products.
As technologies evolve and, you know, new adoptions are being brought to the forefront, that just offers more opportunities for companies that provide foundationally sound technologies that are just required on daily basis and we don't really think about them. So I would say that, you know, the bigger surprises for me from a technology perspective is how we can continue to branch out and see significantly better future than the past 115 years that we have experienced. I'm really super excited about what's ahead of us, and I do believe that the best times are ahead of our company, not behind.
Awesome. Well, it's a good time to stop. Ivo, thank you very much.
Thank you.