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Operator: Hello, everyone. Thank you for joining us, and welcome to the Nordson Corporation First Quarter Fiscal Year 2026 Conference Call. [Operator Instructions] I will now hand the call over to Lara Mahoney. Please go ahead.

Lara Mahoney: Thank you. Good morning. This is Lara Mahoney, Vice President of Investor Relations and Corporate Communications. I’m here with Sundaram Nagarajan, our President and Chief Executive Officer; and Dan Hopgood, Executive Vice President and Chief Financial Officer. We welcome you to our conference call today, Thursday, February 19, to report Nordson’s fiscal 2026 first quarter results. You can find both our press release as well as our webcast slide presentation that we will refer to on today’s call on our website at www.nordson.com/investors. This conference call is being broadcast live on our investor website and will be available there for 30 days. During this conference call, we will make references to non-GAAP financial metrics.

We’ve provided a reconciliation of these metrics to the most comparable GAAP metric in the press release issued yesterday. Before we begin, please refer to Slide 2 of our presentation, where we note that certain statements regarding our future performance that are made during this call may be forward-looking based upon Nordson’s current expectations. These statements may involve a number of risks, uncertainties and other factors as discussed in the company’s filings with the Securities and Exchange Commission that could cause actual results to differ. Moving to today’s agenda on Slide 3. Naga will discuss first quarter highlights. He will then turn the call over to Dan to review sales and earnings performance for the total company and the 3 business segments.

Dan will also discuss the balance sheet and cash flow. Naga will then share a high-level commentary about our enterprise performance and provide an update on the fiscal 2026 second quarter and full year guidance. We will then be happy to take your questions. With that, I’ll turn to Slide 4 and turn the call over to Naga.

Sundaram Nagarajan: Good morning, everyone. Thank you for joining Nordson’s Fiscal 2026 First Quarter Conference Call. We entered 2026 optimistic about end market demand trends, and we achieved a record first quarter sales of $669 million. This is a 9% increase over the prior year and reflects 7% overall organic growth. Organic growth was broad-based across our segments with notable strength in our ATS segment, which grew over 20% compared to prior year due to momentum in the semiconductor end market. Solid execution and volume leverage drove strong profit performance for the quarter, increasing EBITDA by 8% and increasing adjusted earnings per share by 15% compared to prior year, both first quarter records. I would also like to highlight our free cash flow of $123 million and consistent cash flow conversion over 100% of net income during the quarter.

We strategically deployed this cash to repurchase shares, return dividends to shareholders and maintain our debt leverage while continuing to invest in the company. I’ll speak more about the enterprise performance in a few moments. But first, I’ll turn the call over to Dan to provide a detailed perspective on our financial results for the quarter.

Daniel Hopgood: Thank you, Naga, and good morning, everyone. On Slide #5, you’ll see first quarter fiscal 2026 sales were a first quarter record of $669 million, up 9% from the prior year first quarter sales of $615 million. Total organic sales increased 7%, driven by robust demand in Asia across most of our end markets. And while all of our segments contributed to growth, we saw particular strength in our advanced technology product lines, responding to growing demand in the semiconductor space. Favorable currency translation added an additional 4% to the top line in the quarter and was partially offset by the small divestiture that we completed in the fourth quarter of last year. Adjusted operating profit increased 10% year-over-year to $166 million, driven by increased SG&A leverage on the organic sales growth as well as benefits from the divestiture of our medical contract manufacturing business.

EBITDA was up 8% year-over-year at a first quarter record of $203 million. EBITDA margins as a percentage of sales were 30%, in line with the prior year as our sales growth was concentrated in Asia, where our gross margins are generally lower, particularly on system sales. As a result, we saw lower incrementals during the quarter, which we would expect to normalize over time. Looking at non-operating income and expenses. Net interest expense during the quarter was $23 million, a decrease of $3 million versus the prior year, driven by lower year-over-year debt levels and a stable to declining rate environment. Other income increased $19 million year-over-year, principally related to a non-cash gain on a minority investment. To give a little color on this since this is a new item, this relates to a small, but strategic technology investment that we’ve accumulated over a number of years.

The company we invested with completed an initial public offering in December of 2025 on the Korean Stock Exchange. As a result of this offering, we’re now required to mark this investment to market value each quarter. The initial gain that we recognized was $22 million in the quarter before tax. We’ve excluded this non-cash gain from adjusted earnings, and we’ll continue to treat future adjustments to mark-to-market as such going forward. Excluding this non-cash gain, year-over-year changes in other income and expense were driven by foreign currency contract fluctuations. Our tax expense on a U.S. GAAP basis was $31 million for an effective tax rate of 19%, inclusive of the impact of the non-cash gain that I just mentioned. Excluding this impact, our effective tax rate on an adjusted basis was 18%.

This result is slightly below our annual guidance range for fiscal 2026 due to some discrete benefits that hit in the first quarter, primarily tied to stock compensation. We still project our full year tax rate to be at the lower end of our initial guidance range of 18.5% to 19.5%. Net income in the quarter totaled $133 million or $2.38 per share. Excluding intangible amortization and the noncash gain, adjusted earnings per share totaled a first quarter record of $2.37 per share, $0.02 above the midpoint of our quarterly guidance and a 15% increase from prior year adjusted earnings per share of $2.06. This improvement in year-over-year earnings reflects solid operating leverage from the organic sales growth as well as benefits from the divested medical contract manufacturing business.

Now let’s turn to Slides 6 through 8 to review the first quarter 2026 segment performance. Industrial Precision Solutions sales of $327 million increased 9% compared to the prior year first quarter. Organic sales increased 3% compared to the prior year with a favorable currency impact of 6%. Growth was broad-based across most product lines with particular strength in Asia Pacific markets. Notably, demand for polymer processing and automotive product lines have stabilized as we expected. EBITDA was $110 million in the quarter or 34% of sales, down 2% over prior year, largely due to the geographic product mix of organic growth and the lower incremental leverage on foreign currency changes. Turning to Slide 7, you’ll see Medical and Fluid Solutions sales of $193 million were relatively flat compared to the prior year’s first quarter.

Organic sales increased 3% in the quarter, led by strength in our engineered fluid solutions product lines. Divested sales from the medical contract manufacturing business had a negative impact of approximately 4% compared to the prior year. The 3% growth was a slower start than we expected for the segment, but we remain confident in the mid-single-digit outlook through the year. It’s worth noting that the winter storms at the end of January did impact some of our production as well as some of our medical supply chain on a temporary basis. We estimate to the tune of about a 1% impact on our sales in the quarter. EBITDA for Medical and Fluid Solutions was $70 million or 36% of sales, which was an increase of 9% from the prior year EBITDA of $64 million.

EBITDA margin improved driven by the divestiture, organic sales volume and strong incremental performance. Now turning to Slide 8. You’ll see Advanced Technology Solutions sales were $149 million, a 23% increase, compared to the prior year’s first quarter. The 21% organic sales increase was driven by double-digit growth in electronics dispense product lines related to semiconductor applications as well as recovering demand for our X-ray systems. First quarter EBITDA was $33 million or 22% of sales, an increase of 43% compared to the prior year first quarter EBITDA of $23 million or 19% of sales. The improvement in EBITDA margin compared to the prior year reflects stronger sales volume and volume leverage. The team did an outstanding job of maintaining SG&A during the quarter as a result of sustainable operational and footprint changes that they made within their segment in prior years, guided by the NBS Next growth framework.

Finally, turning to the balance sheet and cash flow on Slide 9. At the end of the first quarter, we had cash on hand of $120 million and net debt was approximately $1.9 billion. Our leverage ratio of 2.1x remained consistent with year-end results and is in line with our long-term targets, allowing us to continue to strategically deploy capital and giving us plenty of firepower for acquisition of strategic assets. Our free cash flow generation was $123 million during the quarter, resulting in a 105% conversion rate on net income, excluding the non-cash gain. This represents the third consecutive quarter above 100% conversion despite the accelerated revenue growth we achieved. As noted on Slide 10, during the quarter, we invested $18 million in capital projects to drive future organic growth.

We paid $46 million in dividends to our shareholders and repurchased $82 million in shares on the open market. We also modified and extended our existing $1.2 billion credit facility. As part of that transaction, we consolidated a term loan coming due in fiscal 2026 into the new facility to provide greater overall financial flexibility to pursue strategic opportunities with no change in our total outstanding debt. At quarter end, we have about $800 million available under the new facility. So to summarize the quarter, we achieved high single-digit organic sales growth while maintaining our strong 30% EBITDA margins despite some geographic and product mix headwinds. Our cash conversion remains strong, allowing us to strategically deploy capital to sustainably grow the franchise and return value to shareholders.

Our team delivered on their commitments for the quarter and worked to grow backlog to position us for success in the second quarter. While market conditions have improved for most of our businesses, we remain balanced and vigilant for more meaningful recovery in select end markets, which is reflected in our updated guidance for the full year that Naga will cover in a moment. With that, let’s turn to Slide 11, and I’ll turn the call back to Naga.

Sundaram Nagarajan: Thanks, Dan. This strong first quarter performance has set the stage well for fiscal 2026. Now 3 months into the year, our end markets are playing out as we expected. Within IPS, investments in packaging and product assembly are sustaining. Precision agriculture investments continue to grow over prior year and automotive and polymer processing applications have stabilized. Medical end markets are returning to more normalized growth, and we expect to see these benefits continue as the year progresses. Growth in engineered fluid solution product lines is being driven by electronics and industrial applications. Within advanced technology, our dispense and surface treatment product lines for semiconductor application continue to drive growth, while our X-ray systems that ensure the quality of semiconductor packaging are starting to inflect.

Growth in general and automotive electronics is more muted, but there are early signs of growing capacity needs in these end markets. Because it is such an important growth driver, I want to take a moment on Slide 12 to remind our investors about why Nordson wins in the semiconductor space. Semiconductor applications account for approximately 50% of revenue in the ATS segment and drove the overall double-digit organic growth in the first quarter. ATS core competency is in the advanced packaging process of semiconductor manufacturing. Our precision dispense applications, including our market-leading Vantage and Spectrum S2 electronics dispense systems enable underfill and encapsulation applications that allow the stacking of increasingly small chips on printed circuit boards.

Our close to the customer model positions Nordson as a partner when customers start developing advanced manufacturing processes for semiconductor packages. Our technology enables these increasingly sophisticated manufacturing processes. Quality control of these costly and complex chips is also creating more opportunities for our test and inspection portfolio. Current investments are primarily in Asia Pacific, and we are well positioned across the semiconductor supply chain, both technologically and geographically as investments grow into other regions. Clearly, I am pleased with the momentum across our end markets and our ability to meet our customer needs. Turning now to our outlook, starting on Slide 13. We entered the second quarter with continued order momentum and increased backlog, up approximately 4% over the prior year.

Order entry momentum was broad-based in the quarter with strength in our ATS segment. These trends position the company to deliver second quarter fiscal 2026 sales in the range of $710 million to $740 million. Second quarter adjusted earnings are forecasted to be in the range of $2.70 to $2.90 per diluted share. Based on strong start to the year, the second quarter outlook and the current foreign exchange rate environment, we are increasing our full year guidance as noted on Slide 14. Sales are now expected in the range of $2.860 billion to $2.980 billion, which is an increase of 4.5% at the midpoint. The top end of our range assumes continued momentum from electronics end markets as well as modest improvement in our industrial and automotive product lines.

The bottom end of our guidance would assume some broader pullback in end market demand in the second half. While we certainly don’t see signs of that today, we still believe it is prudent to plan for this potential scenario. Adjusted earnings will be in the range of $11 to $11.60 per diluted share, which is an increase of 10% at the midpoint. As always, I want to thank our customers and shareholders for your continued support. In particular, I want to thank our Nordson employees who are passionate about meeting the needs of our customers. Our focus on innovation and operational excellence continue to position us well to serve our customers. With that, we will pause and take your questions.

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Operator: [Operator Instructions] Our first question comes from Jeff Hammond with KeyBanc.

Jeffrey Hammond: So really just want to — can we just unpack kind of the margin dynamics around this kind of systems geographic mix? And do you think that continues over the next few quarters? Do you see mix improving? Maybe what’s showing up in the order book that would support kind of a mix change or staying the same?

Daniel Hopgood: Yes. It’s a good question, Jeff. Yes, I would say, number one, if I step back, we saw very strong incrementals in our medical business, I would say, normal incrementals in our ATS business. Really, the primary segment where we saw the mix challenges was in IPS. But I think more importantly, what we would say is there’s been no fundamental change in the margin outlook for our business. We’ve always said 40% is kind of the normal ongoing incremental expectation for our businesses. There’s been no change in our gross margin profile. It’s really just a mix issue in the quarter. So we see things moving back to normal certainly as the year plays out.

Sundaram Nagarajan: And maybe just to add to it, if you think about our second quarter guide and our full year guide, both contemplates Nordson delivering strong best-in-class EBITDA margins like we have done in the past.

Jeffrey Hammond: And then can you just expand on kind of the slow start in medical ex, I think, the weather issues and just what you’re seeing that gives you confidence that, that business starts to pick up as you move through the year? And if you can just give us kind of underlying incrementals in that business if you exclude kind of the divestiture impact?

Sundaram Nagarajan: So we’ll take the incremental first, Dan go and then I’ll talk about the trends.

Daniel Hopgood: Yes. And as I said, incrementals were actually quite strong. I mean our incrementals all in are essentially off the chart. I think when you kind of strip out the impact of the CDMO divestiture, our incrementals are still north — well north of 50% in the quarter. So quite strong and reflective of a good strong outlook in that business. From a growth standpoint, I mean, I’d say our 3%, while it’s a slower start than we would have liked, part of that was weather related. We mentioned about 1% impact. But we’re, frankly, very comfortable with the mid-single-digit outlook kind of return to normal growth. We see strong underlying demand in the business and our backlog and our project activity with our customers. So it’s really just a slightly slower start and really not that much slower than we expected, not far off that mid-single digit if you adjust for the weather impact.

Sundaram Nagarajan: Maybe add additional color to it, Jeff, is that supply chains in the interventional businesses have stabilized. We see some pretty good movement in order entry momentum in our fluid component business. Our ongoing demand for the Atrion businesses look good. I would just remind you that the Atrion businesses are going to be lower than our interventional businesses. But all in all, if you take the current order entry and you take the backlog and take the healthy pipeline of customer projects, we feel pretty good about delivering on the mid-single digits for MFS for the full year.

Operator: Our next question comes from Mike Halloran with Baird.

Michael Halloran: Can we start on the ATS piece and maybe just give some more context to the moving pieces in the larger buckets there. The dispense piece, it seems like it’s tracking the right way, starting to see some signs on X-ray. Maybe broadly on the T&I piece, what are you seeing? And just maybe put it all together, talk about the 3 pieces, the order trajectory and where you’re the most confident?

Sundaram Nagarajan: Yes, sure. Overall, strong momentum on order entry as well as revenue shipments in the quarter for these businesses. Clearly, our dispense businesses were the strongest, and that is to be expected, right? If you think about our dispense businesses and their applications in these complex chip manufacturing processes driven by AI computing power needs of our customers, we see tremendous amount of investment going on in this business, and that is reflective of the revenue performance as well as the order entry. If you think about our T&I, you want to think about it in 2 pieces. One is our X-ray businesses and the other one is our what we call as AMI businesses. And so these are acoustic emission-based inspection techniques and optical techniques.

So if you think about the X-ray, we are beginning to see some pretty nice momentum in our X-ray business. Remember, last year, this business was a little bit down. We are beginning to see that business starting to inflect and feel really good about where we are. Think about these complex chips. These complex chips are now both combined logic and memory on the same stack. And so these are very expensive chips and yield rates are everything here. And so the test and inspection applications continue to expand for us in these manufacturing processes. And so we feel good about the long term, but also feel good about the near term where we are seeing these orders starting to inflect. One thing that is — we also have our AMI business, which is our acoustic emission business.

There, we are coming off of 2 really strong years of growth. We still have pretty decent growth planned for them this year. But in general, we feel really good about ATS segment, and that is reflected in our second quarter outlook. If you get into the second half, you need to remember that this business started to inflect in the second half of last year. The comps get a little bit difficult. But yet, based on what we can see in terms of backlog and order entry momentum, we feel still good about this year, this business being north of its long-term targets of mid-single digits.

Michael Halloran: And maybe you can just have the exact same conversation around the IPS segment, given all the moving pieces there?

Sundaram Nagarajan: Yes, sure. If you think about the IPS business, what we feel — the headline really is we returned to growth with IPS. We posted a 3% organic growth in the quarter, expect that we will do so in the rest of the year. That’s sort of what we contemplate in our midpoint of the guide. Investments in packaging and product assembly end markets are sustaining. We see — we continue to see growth in our Precision Ag or ARAG business in Europe and South America, where we are market leaders. Stable aftermarket demand. Remember, this is a business where we are — aftermarkets are a significant part of their revenue, which is north of 55% or so. Polymer processing and automotive end markets, we expect a nominal recovery through the year. They’re stabilized, but not meaningfully inflecting yet.

Daniel Hopgood: The only other thing I would add is as the growth that we are seeing — I’m sorry, go ahead.

Michael Halloran: I said the exact same thing. I apologize and said, go ahead.

Daniel Hopgood: Well, the only other thing I was going to add, Mike, is that the growth that we are seeing back to our kind of prepared remarks is largely in Asia today or in Asia Pacific. Again, that’s not just China, that’s broad Asia Pacific. And so opportunity, we’re still not seeing much inflection in the European and North American market demands. I think certainly, there’s some early signs, as Naga mentioned in his comments, but we’re really not seeing that yet. And I think also being very cautious to call when that’s going to happen.

Operator: Our next question comes from Matt Summerville with D.A. Davidson.

Matt Summerville: Just a quick follow-up. On the medical side of the business, can you just give a little bit more granularity as to the weather impact you saw in the quarter, which business line was impacted? And if you kind of normalize for that impact, what would the medical organic performance, medical-only organic performance have looked like in the quarter?

Daniel Hopgood: Yes. It was primarily in our interventional products and then also to some extent, in our fluid components, particularly some of our Atrion-related businesses. We had several businesses that have operations on the East Coast as well as supply chains that are East Coast based. And the long and the short of it is we lost a few days of production because we had literally operations that were mandated to be shut down because of the weather impacts. And so we estimated about a 1% impact. It’s — think of it as 2 to 3 days of production, very temporary in nature. We’re back up and obviously fully running, but did have an impact on our ability to deliver during the quarter, especially with that happening late in the quarter. So again, I think the simple math is 3% overall growth. Normalized, that would have been about 4% in the quarter without that late storm impact.

Matt Summerville: And then maybe if you can just comment on what you’re seeing from an M&A standpoint, multiples, potential deal sizes, actionability and where you see most activity across the company.

Sundaram Nagarajan: Just a reminder, in terms of our acquisitions, we continue to work our pipeline, pretty active pipeline. Lots of different opportunities they will pursue. What you don’t want to look at lack of announcements and relate that to lack of activity, right? Because we remain financially and strategically disciplined. The areas we are continuing to work on are continue to expand our medical component portfolio. We’re working on test and inspection opportunities and any core technology, any technology that would add to our core offering in industrial. So that is sort of the 3 areas that we are looking at and working on. Yes, the multiples look a little elevated in some cases. In some places, it look reasonable. I think for us, it is — we’re going to continue to be pretty disciplined around what we buy.

And our criteria has remained the same. We’re looking for businesses that would add to our growth portfolio, businesses that are differentiated, businesses that have strong technology plays. And from a financial perspective, we’re looking for Nordson-like gross margins. And maybe EBITDA was in the 20% range with meaningful opportunity to expand margins and an appropriate return. So all our criteria, both strategic and financial, remain the same. Healthy pipeline, continue to work on. lack of announcement shouldn’t be assumed for lack of activity or work on our part.

Operator: Our next question comes from Christopher Glynn with Oppenheimer.

Christopher Glynn: Just wanted to — you mentioned, I think, seeing some initial signs of the general electronics of ATS starting to show signs of life that pretty consistent with what we’re hearing from kind of adjacent companies or exposures to yours. But I just wanted to spend a minute exploring that topic.

Daniel Hopgood: Yes. I guess maybe just to add a little bit of color. I would say we’re not really seeing inflection in those businesses. I would say stable demand at low growth levels. I think the early signs that I would say we’re pointing to is — and you guys see the announcements as much as anybody else, you’re starting to see some of the semiconductor — I’ll say, the high-end semiconductor demand and investments seem to be trickling into the lower level electronics applications. If you think of memory and general electronics requirements, we’re starting to see announcements and discussions around capacity investments. We’re not seeing those yet, but certainly, those are early signs that we may see inflection coming at some point in the future. Right now, what I would say we’re seeing in those markets is stable demand at low growth rates.

Christopher Glynn: And then just want to explore also when emerging technologies in the semi application space start to hit you, say, in the case of both packaged optics, is that a meaningful opportunity? Is that down the line? Or are you seeing some early action derivative of that technology.

Sundaram Nagarajan: Are you talking about optical modules? Is that what you’re talking about, Chris?

Christopher Glynn: Yes, exactly.

Sundaram Nagarajan: Okay. Yes. That is an area of — we have some interesting products there that helps our customers manufacture those optical modules. It’s certainly an area that we are playing in, and it’s an area where we are beginning to see orders directly related to that.

Christopher Glynn: And last one for me. What was — as I recall from back in the past, it’s been a while, but FX can have a substantial impact on ATS, IPS margins. And they were certainly well below the steady state that you’ve delivered for a long time there. I know you talked about mix, but ahead of the call, I was certain it would be FX. So I just wanted to ask about that.

Daniel Hopgood: Yes. And we mentioned that as well. FX is certainly — if you think of the incremental performance for IPS, that’s certainly one of the items that impacts us. And the simple math I would give you is because FX was about a 6% positive impact on IPS sales. We — obviously, we don’t get the same incrementals on FX movements. In fact, we would give you the math of use a 25% to 30% range for a normal incremental on FX, both on the upside and downside. And so with 6% growth coming from FX at a lower incremental, certainly, that’s a contributor to the performance in the quarter.

Operator: Our next question comes from Robert Jamieson with Vertical Research Partners.

Robert Jamieson: Just really wanted to follow up quickly on that FX incrementals. Should we be assuming the same sort of incremental drop-through of those 25% up or down across the other segments as well for FX?

Daniel Hopgood: It varies a little bit by segment. But yes, generally speaking, that’s a good benchmark. And again, the only thing I would maybe caution you on is the outlook for the year, that FX impact will lessen at current rates as you saw FX rates improving throughout the year last year. So Q1, we get a pretty big lift, but that will lessen as the year plays out at current rates. But yes, the drop-through should be pretty similar. It moves a few points one way or the other, but not significantly different by segment.

Robert Jamieson: And then I just want to talk about full year guidance. Really solid performance in 1Q, nice 2Q guide. Just taking Naga’s comments, and I think it’s wise here to have a level of conservatism baked in. And hopefully, I’m reading those comments right. But what I’d like to kind of understand is what end markets and areas would you expect to outperform your base case estimates to get us at or above the high end of your sales range? Does it need to be an acceleration in like auto? I mean, I’ve been watching auto CapEx for 20-plus global auto OEMs. And even since December, we’ve seen auto CapEx revised higher by like 5% growth in ’26 from flattish in December. So would it be kind of like a mix of that plus more of an acceleration in some of the minimally invasive and specialty medical business? Would that be like kind of like a fair assessment if we were to — things — everything were to align and get us towards the high end of your guidance range?

Sundaram Nagarajan: Rob, thank you for your comments. That exactly mirrors our thinking. What we are trying to be is balanced and prudent in our thinking for the rest of the year. And in terms of the details of how we’re thinking about each of these end markets, I’ll have Dan talk to you about the high end and the low end.

Daniel Hopgood: Yes. And I’ll start with, frankly, I think the easier one. Medical, we see, as we mentioned, good ongoing stable growth in the mid-single-digit range. Is there potential for upside there? Potentially, but we’re not really — I would say that’s not a market that we expect to inflect further necessarily. If I think of what would drive the higher end, it would be exactly what you’re talking about, some further inflection in general industrial and automotive demand. And then the other key factor that I would say is if you look at our ATS performance, as we’ve highlighted a number of times, ATS deliveries being 70% systems tend to be lumpy. We’re not factoring in a 20% run rate and growth in this business. We know that there will be some lumpiness quarter-to-quarter. But one potential upside is if we see continuing ongoing strength in demand, that would be upside versus our kind of base case thinking.

Sundaram Nagarajan: Maybe let me just add one thing there, particularly on ATS. Some of the demand and the exact delivery depends on our customer, right? So we are part of somebody else’s large manufacturing supply chain that they’re bringing a process up to speed. So occasionally, there may be a pull ahead and sometimes a pullback. Postponing is the way to think about it. So think of our lumpiness also from a customer demand delivery requirement.

Daniel Hopgood: Yes, it’s a good way to think about it.

Robert Jamieson: No, that makes perfect sense. And then just one last one. Just I don’t see this being an issue for you all, but DRAM pricing, have there been any impacts? Or how much is that of like your bill of materials? Is it pretty de minimis? And then I guess another question would be, with just some of the capacity constraints there, could that be a potential opportunity for you all if — like on the back-end processes, if they need to increase capacity? Or am I not kind of on course there?

Sundaram Nagarajan: Robert, could you repeat your — the early part of your question before the pricing, we missed something there. We just…

Robert Jamieson: Yes. Sorry. So I was just talking about DRAM pricing, and I was wondering just with like memory costs going up, do you have any significant exposure there that would be related to margin?

Sundaram Nagarajan: Yes. We don’t have a significant amount of exposure, but we do have exposure in the memory space, in the traditional memory. And when there are capacity adds there, we will benefit.

Operator: Our next question comes from Andrew Buscaglia with BNP Paribas.

Andrew Buscaglia: Just wanted to check on — within ATS, I know you said about half of your sales tied to semis. But we’re seeing that test and inspection piece maybe start to recover with X-ray. Can you just talk a little bit about how — I know that your test and inspection stuff is quite niche. So I’m wondering what a cycle looks like for that side of your business? And is this X-ray piece sort of a precursor for a lift in that chunk of your ATS business?

Sundaram Nagarajan: Yes. If you think about our X-ray business, this is one is a little slower to recover when compared to our dispense business and when compared to our Acoustic Emission. And so if you think about year-on-year, our X-ray has some automotive exposure as well. the semi side of X-ray is doing really well and the auto is flattish is the way to think about it. Does that help the question that you asked?

Andrew Buscaglia: Yes.

Sundaram Nagarajan: Sorry, as automotive comes back, we will continue to see X-ray do well.

Andrew Buscaglia: On the MFS, you run into some pretty tough margin comps in the back half of the year. Can you just remind us I guess, is that something when you — when we come to lap that, you expect to expand off of such a high base? I mean there are pretty impressive margins you’re kind of running into? And maybe what — why would that be? What would lift that demand if you don’t — or margins if the demand is not really accelerating?

Daniel Hopgood: Yes. No, it’s a good question. And I mean, maybe I’ll even go back to our fourth quarter. We printed a very strong margin in the fourth quarter. And I think we made comments during that call that, that was a high point and not necessarily an ongoing run rate. And so we think margins in the MFS segment are very much sustainable in the 37%-ish range. And we may have some selective quarter-over-quarter comp issues like the fourth quarter where we had a really strong performance. But we think maintaining that margin performance and continuing to generate reasonable incrementals as we grow is very much attainable in the medical business. It’s worth pointing out, maybe just to reiterate, the divestiture that we completed in the fourth quarter is kind of a, call it, a onetime adjustment that impacts our ongoing margins. And so you’re certainly seeing that in the year-over-year margin comparisons in Q1, and you’ll see that through the year until we hit Q4.

Sundaram Nagarajan: And I think, Andrew, the most important part we, as a company, are focused on, and this message sort of reiterates across all of our businesses. In — given Nordson’s high gross margins, high best-in-class EBITDA margins, it is super important for our businesses to stay focused on growth at reasonable incrementals. So as you think about us, be it MFS, yes, the margins are pretty strong. But day in, day out, what our teams in the divisions are focused on is to drive organic growth, innovate, deliver products at the time the customer is asking us, have the best quality there is, meet our customers’ needs in the market where they need us to be, just being agile. That’s sort of how we are thinking about it. And I would say the margin is just a byproduct of all of the work, right? So that — if you want to think about us, I would think about above-market growth at reasonable incrementals. That’s what we’re focused on. That’s what you will see us deliver.

Operator: Our next question comes from Chris Dankert with Loop Capital.

Christopher Dankert: Just looking at the ATS segment, I guess I’m fully appreciating that a lot of that business is just lumpier by nature. But was any of that growth a pull forward around Lunar New Year? Or was that just kind of how the orders just happen to fall serendipitously?

Daniel Hopgood: Yes. No, nothing that we would say is tied to the Lunar New Year. In fact, to be honest, we’ve kind of looked at this and the Lunar New Year, it has a pretty de minimis impact, and we’ve kind of proven that out looking at history. So it’s really tied to, as Naga said earlier, customer demand requirements when they want the machines on their floor for installation into their broader lines. And what you’re seeing is reflective of, I would say, normal customer demand and requirements.

Sundaram Nagarajan: We do hear that our customers are investing for the demand, right? And so this increased demand for AI chip capacity is playing out, and it’s playing out in the packaging area right now. And that’s why you see our dispense business benefit. You start to see our X-ray business start to inflect. So this is based on what people are asking. And the lumpiness comes from our customer, both investment pattern as well as installation requirements. So…

Christopher Dankert: Yes. It was certainly encouraging to see the strong start to the year and the good shipments in 1Q here. So congrats on that. I guess as my follow-up, any comments on kind of the machine builder activity in core Europe and kind of what that demand has been within the IPS segment?

Sundaram Nagarajan: They seem to be pretty stable and our packaging business has had a pretty good quarter, expect to continue to have a pretty good quarter. If you think about the nonwovens business, we’re coming off of 2 years of incredible capacity adds. A lot of capacity adds for nonwovens came in the last year from a lot of our mid-tier OEMs based in Asia, building out in Africa, Middle East, India, so global middle income growth, still a big secular growth driver for this business, albeit reasonable low single-digit growth, stable aftermarket demand, all the things that makes this business great, still intact, still continuing to do well.

Christopher Dankert: Congrats on the nice start to ’26 year.

Operator: Our next question comes from Walter Liptak with Seaport Research.

Walter Liptak: Let me try one on the ATS segment. And if I’m recalling this right, in past positive cycles around consumer electronics for dispensing, the visibility was pretty short, like the customers would place orders and then you’d have to cycle through and ship very quickly already. And it sounds like with this kind of data center build-out for advanced chips that lumpiness is still there. Do you — can you help us understand, is there any differences between prior kind of consumer electronics-led cycles versus this one? Do you get any more visibility into the capacity that might be going in and those order lead times, if you can just comment.

Sundaram Nagarajan: The order lead times are not very different. But the size or the growth differences are — they are smaller rather than significantly huge chunks and then nothing. So I would say it has dampened. The amplitude of the cycle is dampened is maybe one way to think about it. But the order lead times are no different. But we have built in some new advantages here in the last couple of years. If you remember, this business went through a relocation of capacity to be in geographies where we are closer to our customer and where the customer needs us to be. So that has helped us to be able to respond to this lead time. The other is our NBS — next application within our factories certainly has improved our own on-time delivery capability.

We are consistently in the low 90s starting to march towards a 95% on-time delivery based on customer requirements. So this type of delivery capability that the teams have built over the last couple of years and having capacity where our customer needs us to be is a game changer for this business.

Daniel Hopgood: I’ll just add, by the way, I mean, your comment is spot on. If you think of our backlog, and this is why we think looking at our backlog quarter-to-quarter or year-over-year is a good indicator, we’re turning our backlog pretty quickly. As you think about our backlog, yes, we have some selected areas with longer lead times, but the majority of our backlog turns in the quarter. And so our starting backlog is really an indicator of current demand for Q2. To your point, we also have — we maintain robust pipelines. We know what we’re talking to our customers about on new projects. I think the piece that’s harder to pin down sometimes just because of customer requirements is when those turn into orders and delivery, which is dependent on when the customers need them for their factory floor.

Walter Liptak: And then you called out the wise Nordson Advanced Electronics winning. I wonder if — is there a win rate? Like — it sounds like you might be gaining market share here with some of the quick delivery. Is there a way of quantifying it with the win rate?

Sundaram Nagarajan: Walt, we don’t share that on the outside. I would definitely tell you our work around growth drivers in each of our businesses, including ATS, around focus on innovation, focus on delivery, having the best in quality and finally meeting where our customers need us to be in the market are 4 core growth drivers that each of our businesses are working on. And what you’re seeing in ATS, certainly, there is a market momentum, but to be able to leverage the full potential of the market opportunity, clearly, our teams are doing it. Fantastic job. And I think we’re getting rewarded for that in the market.

Operator: [Operator Instructions] Our next question comes from Brad Hewitt with Wolfe Research.

Bradley Hewitt: So IPS revenue was much better than typical sequential seasonality. Of course, you called out the strength in Asia Pacific. But just curious if you could elaborate a little bit more on what drove that strength in Asia. How much of that was a function of an easy comp? And then how do you think about growth by region for the year in IPS?

Sundaram Nagarajan: Yes. As I shared earlier in one of the answers, I would tell you, it is a broad-based demand that we are certainly seeing in IPS. IPS returns to growth, returned to growth in the quarter, expect to have a good growth for the rest of the year. Clearly, you can see growth in packaging, product assembly. Our Precision Ag business is also growing nicely. Polymer Solutions has stabilized. So there is some of that negative going away, right? If you think about polymers and automotive, where last year, we were dealing with still demand going down. That has stabilized. So from that perspective, the comps are better there. So it’s a combination of our businesses that were negative last year are stabilized. They’ve not inflected yet. But our businesses that are having good growth demand in packaging, product assembly and precision ag are contributing to the growth in this segment.

Daniel Hopgood: I think that’s maybe a good way to think about it, Brad, is what you’re seeing in our first quarter growth of 3% is really the underlying growth that we’ve been seeing in this segment, if not for the drag that we saw in the automotive and polymer space last year.

Bradley Hewitt: And then maybe switching over to the ATS side. Given AI demand continues to accelerate in recent months, does that give you confidence that perhaps your electronics business as a whole can outperform the mid-single-digit long-term outlook you discussed at the Investor Day?

Sundaram Nagarajan: I think it’s really important to remain balanced on this business. We have seen the cycle of this business. And that’s the space we play in, and we fully appreciate it, and we capitalize and fully participate in the market when the market is up. So yes, in years when there is going to be significant investment like now, we are going to see higher than the mid-single digit. But then through the cycle, we’re going to be in places where this business will go down. And that’s something you have experienced. You’ve seen us. So you want to think through the cycle, mid-single digit in the up cycle, certainly higher, right? And so that’s what we are experiencing now, and that’s what we are planning for and that’s embedded in our guide.

Operator: There are no further questions at this time. I will now turn the call back to Naga for closing remarks.

Sundaram Nagarajan: Thank you for your time and attention on today’s call. We have several upcoming investor events over the next month where our team would be happy to meet with you, including the Loop Industrial Conference on March 10 in New York, the Bank of America Conference on March 17 in London and at the APEX trade show in Anaheim, California on March 18, featuring our electronics product lines. Nordson is well positioned as a diversified precision technology company, our close to the customer model, proprietary and niche technology, diversified geographic and end market exposures, High level of recurring revenue and strong balance sheet are among the many attributes that make us a quality compounder. Have a great day.

Operator: This concludes today’s call. Thank you for attending. You may now disconnect.

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