RAL

Ralliant Corp

Next est. report 2026-07-30 · AMC

Humanoid '25: Sensing & Perception Humanoid '25: Tactile, Magnetic & Motion Sensors

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Overview

Ralliant Corp (RAL) designs and manufactures precision instruments and engineered products. Its Test and Measurement segment provides solutions for electronics

Ralliant Corp (RAL) designs and manufactures precision instruments and engineered products. Its Test and Measurement segment provides solutions for electronics and communications, while Sensors and Safety Systems offers power grid monitoring and critical defense systems. The company serves diverse industries including semiconductor, utilities, and defense, capitalizing on growth in electrification and defense. Q1 2026 revenue split was 39% Test and Measurement and 61% Sensors and Safety Systems.

What They Do (Plain English & Analogies): Ralliant Corporation designs, develops, manufactures, sells, and services specialized tools and systems that help engineers and technicians measure, monitor, and ensure the safety of critical operations. Think of them as providing the 'eyes' and 'brains' for complex machines and systems. For example, in their Test and Measurement segment, they make devices like advanced oscilloscopes, which are like super-powered stethoscopes for electronics, allowing engineers to see and analyze electrical signals to ensure new technologies work correctly. In their Sensors and Safety Systems segment, they create sensors and monitoring solutions that act like a nervous system for power grids, defense systems, and industrial equipment, detecting issues like temperature changes or pressure fluctuations to prevent failures and ensure safety. They essentially provide the precision technology that gives customers confidence that their advanced systems will perform reliably.
Very Brief History: Ralliant Corporation was incorporated in 2024, emerging as a standalone public company after being spun off from Fortive Corporation. Its operational roots, however, extend much further back, built from a collection of precision technology businesses that were part of Fortive and, before that, Danaher Corporation. Key milestones include Danaher acquiring Tektronix in 2007, Fortive's spin-off from Danaher in 2016 (including Tektronix and Fluke), and further additions like Qualitrol in 2016 and EA Elektro-Automatik in 2022, before Ralliant's independent launch.
"Street Stereotype": The 'street stereotype' for Ralliant is that of a newly independent company, spun off from Fortive, with a strong heritage of established precision technology brands. It is perceived as a focused provider of mission-critical technologies, particularly in high-growth areas like utilities, defense, and power electronics, leveraging its proprietary Ralliant Business System (RBS) for operational discipline and efficiency. However, initial investor interest has been somewhat limited, with shares underperforming shortly after its spin-off.
Subsidiaries On Linked In*: Tektronix — Product brand, likely operates as a distinct division/page; LinkedIn: tektronix
Keithley Instruments — Product brand, likely operates as a distinct division/page; LinkedIn: keithley-instruments
Sonix — Product brand, likely operates as a distinct division/page; LinkedIn: sonix-inc
EA Elektro-Automatik — Product brand, likely operates as a distinct division/page; LinkedIn: ea-elektro-automatik-gmbh
Qualitrol — Product brand, likely operates as a distinct division/page; LinkedIn: qualitrol
Gems Sensors — Product brand, likely operates as a distinct division/page; LinkedIn: gems-sensors
Setra Systems — Product brand, likely operates as a distinct division/page; LinkedIn: setra-systems
Hengstler Dynapar — Product brand, likely operates as a distinct division/page; LinkedIn: hengstler-dynapar
Anderson-Negele — Product brand, likely operates as a distinct division/page; LinkedIn: anderson-negele
Dover Motion — Product brand, likely operates as a distinct division/page; LinkedIn: dover-motion
Specialty Product Technologies — Product brand, likely operates as a distinct division/page; LinkedIn: specialty-product-technologies
Pacific Scientific Energetic Materials Company — Product brand, likely operates as a distinct division/page; LinkedIn: pacific-scientific-energetic-materials-company
Customer Sectors & Example Clients: Ralliant serves a diverse range of customer sectors including semiconductor, diversified electronics (e.g., mobility, renewable energy, consumer electronics, humanoid robotics), communications (e.g., AI, quantum computing), utilities (e.g., grid modernization), defense and space (e.g., mission-critical safety ignition systems), industrial manufacturing (e.g., smart factories), and critical environments (e.g., healthcare, life sciences, food, HVAC). Specific examples include the Pentagon for defense programs like FAD, PAC-3, and Tomahawk, and major semiconductor manufacturers and power utility companies globally.
New Customers / Segments They'Re Targeting: Ralliant is actively targeting and capitalizing on higher-growth secular demand across electrification and defense. They are focusing on customers whose innovation cycles are accelerating due to AI, particularly in data center infrastructure, advanced electronics, and the global power grid. This includes supporting new energy infrastructure through test and measurement solutions for grid-scale energy storage and advanced power systems for emerging applications like nuclear fusion. They are also essential for R&D engineers developing next-generation AI-enabled electronics, especially where power design and battery performance are key constraints. In defense, they are targeting modernization efforts, providing test and measurement solutions for the development and validation of advanced communications and power storage systems in R&D labs.
Supply Chain And Sourcing Geographies: Ralliant operates a global supply chain with 29 significant facilities, including 17 U.S. operations across 10 states and 12 facilities in other nations, with three in China. Historically, key operating hubs have been in the U.S. Pacific Northwest for test-and-measurement, New York for utility-monitoring activities, and various European sites for sensing and process instrumentation. They are expanding their precision sensor facility in Upstate New York. The company employs an enterprise strategic sourcing approach and a new group purchasing office to optimize costs across materials, maintenance, and facilities, and leverages lower-cost locations to optimize labor.
Sales Geographies And Expansion Plans: Ralliant sells its products globally. America is its largest region, accounting for over 55% of revenue, showing broad-based momentum. Western Europe and the rest of the world collectively represent approximately 30% of revenue, while China accounts for about 15% of revenue, driven by government-funded projects tied to AI and energy infrastructure. The company has customers in over 90 countries. While no explicit plans for expanding into entirely new geographies were disclosed, management is focused on capitalizing on existing high-growth opportunities within their current sales regions, particularly in electrification and defense.
How Key Themes May Help/Hurt: The buildout of 'Humanoid '25: Sensing & Perception' is expected to significantly benefit Ralliant. The company's Test and Measurement segment is already seeing 'humanoid robotics' as a driver for diversified electronics, indicating direct exposure to this theme. As humanoid robots become more capable and economically viable, the demand for advanced sensing, vision, and perception hardware, which Ralliant provides through its precision sensors and test equipment, will accelerate. Ralliant's solutions for advanced semiconductors, electronic systems validation, and precision power test are crucial for the 'brains' and 'nervous system' of these robots, enabling human-like reflexes and dexterous manipulation. The company's focus on AI-accelerated innovation cycles and electrification aligns well with the technological advancements driving humanoid development. However, the theme's bear risks, such as the absence of clear safety standards, macroeconomic headwinds impacting capital-intensive robotics investments, and geopolitical supply chain friction for critical components, could hurt Ralliant by delaying widespread adoption or increasing costs.

3 Main Long-Term Bull Details

Ralliant is strategically capitalizing on robust and higher-growth secular demand across electrification and defense, aligning its portfolio with long-term market tailwinds. 2. The company is driving significant margin expansion through its enterprise productivity program, targeting $50 million to $60 million of run rate annualized savings by 2028, which is expected to increase adjusted EBITDA margin to the midpoint of its through-cycle range. 3. Ralliant is committed to increasing capital returns to shareholders, with a target of approximately 50% of free cash flow returned through share repurchases and dividends, signaling confidence in its value creation potential.

3 Main Long-Term Bear Details

The absence of established safety standards for humanoid robots operating in public or unstructured environments poses a significant hurdle to widespread adoption, potentially delaying deployments and limiting market expansion for related sensing and perception technologies. 2. Macroeconomic headwinds, including general economic weakness and persistently high interest rates, could impact capital-intensive robotics investments and lease models, thereby delaying rollouts and reducing demand for Ralliant's solutions. 3. Geopolitical supply chain friction, such as potential export restrictions on critical components or increasing price competition in areas like LiDAR and optics, could pressure Ralliant's margins and disrupt the availability of key sensing and perception technologies.

Competitors And Differentiation: Ralliant faces competition from various companies across its diverse segments. In Test and Measurement, key competitors include Keysight Technologies, Rohde & Schwarz, and Teledyne LeCroy. In Sensors and Safety Systems, competitors include AMETEK, Megger, and Doble Engineering. Ralliant differentiates itself through its proprietary Ralliant Business System (RBS), which drives disciplined execution, consistency, and enterprise scale in operations, enabling profitable growth and productivity improvements. They also emphasize their portfolio's alignment with higher-growth markets like electrification and defense, leveraging long-standing customer positions, differentiated capabilities, and an 'engineer-to-engineer' approach to build trust and deliver innovative, high-quality products with unrivaled accuracy.
Recent Performance & What The Market'S Focused On: Ralliant started 2026 with a solid first quarter performance, reporting revenue of $535 million, up 11% year-over-year, with a book-to-bill above 1.1x. Both segments achieved 9% organic revenue growth. Adjusted EBITDA margin was 18.6%, and adjusted EPS was $0.57, both above guidance. The company raised its full-year 2026 outlook, with test and measurement growth expected to remain elevated and the defense backlog surpassing $1 billion. The market is focused on the company's ability to sustain sales growth, particularly given a projected slowdown in the back half of 2026 due to tougher comps and macro uncertainty, as well as the trajectory of its EBITDA margin expansion driven by the new enterprise productivity program. Investors are also closely watching the growth in defense and space, the expected inflection in utilities revenue, free cash flow generation, and the impact of capacity expansion investments.

Revenue Segments And Estimated Mix: Sensors & Safety Systems — Mix: ~60.6%; Source: Q1 2026 transcript; Trend: $324 million in Q1 2026, 9% organic revenue growth, robust demand across all end markets, defense & space organic revenue grew 21%
Test and Measurement — Mix: ~39.4%; Source: Q1 2026 transcript; Trend: $210 million in Q1 2026, 9% organic revenue growth, returned to growth after 3 consecutive quarters of sequential improvement, highest quarterly book-to-bill since 2022
Product Brands: TEKTRONIX
KEITHLEY INSTRUMENTS
SONIX
EA ELECTRO-AUTOMATIK
QUALITROL
GEMS SENSORS
SETRA SYSTEMS
HENGSTLER DYNAPAR
ANDERSON-NEGELE
DOVER MOTION
SPECIALTY PRODUCT TECHNOLOGIES
PACIFIC SCIENTIFIC ENERGETIC MATERIALS COMPANY

Bull / Bear Details

Ralliant Corp (RAL) demonstrates strong execution in Q1 2026, exceeding guidance and raising its full-year outlook, driven by robust demand in electrification a

Thesis

Ralliant Corp (RAL) demonstrates strong execution in Q1 2026, exceeding guidance and raising its full-year outlook, driven by robust demand in electrification and defense, and a recovering Test and Measurement segment. Strategic investments in capacity, an enterprise productivity program, and increased capital returns position RAL for continued profitable growth. While macroeconomic uncertainties persist, the company's alignment with high-growth secular trends and operational discipline support a compelling long thesis as of 2026-07-20.

Bull case

Ralliant delivered a solid Q1 2026, exceeding guidance with 11% reported and 9% organic revenue growth, and raised its full-year 2026 outlook. This performance reflects strong operating leverage and early benefits from productivity actions, indicating robust demand and effective strategy execution across its diversified portfolio, particularly as Test and Measurement returned to growth with a book-to-bill above 1.1x.
The company is capitalizing on higher growth secular demand in defense and electrification, with its defense backlog surpassing $1 billion and Defense & Space organic revenue growing over 20%. Targeted investments in capacity expansion for defense and utilities, coupled with AI accelerating customer innovation cycles in data centers and the power grid, provide durable, multi-year growth drivers.
Ralliant initiated an enterprise productivity program targeting $50 million to $60 million in annualized savings by 2028, with $10 million to $12 million in-year savings for 2026, aiming for significant adjusted EBITDA margin expansion. Additionally, the company is committed to returning approximately 50% of free cash flow to shareholders, including a $100 million accelerated share repurchase program in Q2.

Bear case

Despite strong Q1 results, Ralliant acknowledges ongoing macroeconomic and geopolitical uncertainty, which led to slightly down organic growth in Western Europe and the rest of the world. This broader market volatility could impact demand and potentially lead to supply disruptions in the second half of 2026, tempering overall growth and requiring a prudent approach to guidance.
The semiconductor business faces headwinds for the next couple of quarters due to lapping a large customer project from the previous year, impacting overall Test and Measurement revenue despite underlying strength. Additionally, higher growth in the Defense & Space segment, while positive for revenue, carries a dilutive mix impact on overall Sensors & Safety Systems segment margins due to lower average margins.
While Utilities posted record orders, revenue growth was softer in Q1 due to shipment timing, indicating potential quarter-to-quarter lumpiness in revenue conversion for this segment. Similarly, Q1 free cash flow was a step down year-over-year primarily due to seasonal timing, highlighting that strong operational performance may not always translate immediately to consistent cash flow.

Key Factors5 rows

Key Factor	Why It Matters	What To Watch	What It Signals	Where/How To Track	Free Alt Data	Paid Alt Data
Defense & Space Backlog Growth and Conversion	A growing and converting multi-year backlog in Defense & Space provides strong revenue visibility and indicates sustained demand in a high-growth market, supporting overall company growth and stability.	Total Defense & Space backlog value (current >$1 billion); organic revenue growth rate for Defense & Space in Q2 2026 and subsequent quarters; new program wins or significant contract announcements.	Bullish: Backlog consistently grows above $1 billion, and Defense & Space organic revenue growth remains double-digit or accelerates. Bearish: Backlog growth slows or declines, or organic revenue growth falls below double-digit expectations.	Company earnings releases, 10-Q and 10-K filings, investor presentations. Next earnings call for Q2 2026 results (likely late July/early August 2026).	USASpending.gov: Government contract awards for defense programs related to Ralliant's offerings. Defense industry news outlets (e.g., Defense News, Janes).	GovWin IQ: Detailed government contract intelligence and spending forecasts. Bloomberg Government: Federal contracting data and analysis.
Share Repurchase Program Execution	The company committed to returning approximately 50% of free cash flow to shareholders and announced a $100 million accelerated share repurchase for Q2. Execution demonstrates commitment to shareholder returns and can boost EPS.	Completion and details of the $100 million accelerated share repurchase program in Q2 2026; total capital returned to shareholders as a percentage of free cash flow in subsequent quarters; weighted average diluted shares outstanding.	Bullish: $100 million ASR completed as planned in Q2, and repurchases consistently meet or exceed 50% of free cash flow target. Bearish: ASR delayed or reduced, or repurchases fall short of 50% FCF target.	Company earnings releases, 10-Q filings (specifically the 'Share Repurchases' section), investor presentations, and earnings call transcripts. Next earnings call for Q2 2026 results (likely late July/early August 2026).	SEC filings (Form 10-Q, 10-K) for share repurchase activity.	FactSet/Bloomberg Terminal: Historical and real-time share repurchase data, share count analysis.
Test & Measurement (T&M) Book-to-Bill Ratio	As a short-cycle business, a T&M book-to-bill ratio consistently above 1.0x indicates robust demand, strong order intake, and signals future revenue growth for this segment, reflecting market health.	Test & Measurement segment's book-to-bill ratio in Q2 2026 and subsequent quarters; organic revenue growth for the Test & Measurement segment.	Bullish: Book-to-bill ratio remains above 1.1x. Bearish: Book-to-bill ratio drops below 1.0x.	Company earnings releases, investor presentations, and earnings call transcripts. Next earnings call for Q2 2026 results (likely late July/early August 2026).	SEMI Book-to-Bill Report (for semiconductor equipment, a proxy for a portion of T&M demand). Industry trade publications covering test and measurement equipment.	TechInsights: Semiconductor market analysis and equipment spending forecasts. Gartner: Market share and spending reports for test and measurement equipment.
Utilities Revenue Growth Alignment with Orders	Utilities posted record orders in Q1, but revenue was softer due to shipment timing. Monitoring revenue growth confirms if the strong order book translates into realized sales, indicating sustained demand and operational execution.	Organic revenue growth for the Utilities end market within the Sensors & Safety Systems segment in Q2 2026 and subsequent quarters; management commentary on shipment timing and backlog conversion for Utilities.	Bullish: Utilities organic revenue growth rebounds strongly in Q2 2026 (e.g., high single-digit or double-digit), aligning with Q1 record orders. Bearish: Utilities organic revenue growth remains soft or declines in Q2 2026.	Company earnings releases, investor presentations, and earnings call transcripts. Next earnings call for Q2 2026 results (likely late July/early August 2026).	Industry reports on power grid modernization and utility infrastructure spending. Government energy infrastructure initiatives.	S&P Global Platts: Utility industry data and forecasts. Wood Mackenzie: Power and renewables market intelligence.
Enterprise Productivity Program Savings Realization	The program targets significant annualized savings by 2028, with specific in-year targets for 2026. Realizing these savings is crucial for expanding adjusted EBITDA margins and improving overall company profitability.	Reported in-year savings from the enterprise productivity program in Q2 2026; progress towards the $10 million to $12 million in-year savings target for 2026 and the $20 million annualized run rate by end of 2026; adjusted EBITDA margin expansion.	Bullish: Reported in-year savings are on track or exceed $10 million to $12 million for 2026, leading to adjusted EBITDA margin above 19.5% in Q2. Bearish: Reported in-year savings fall short of targets, or adjusted EBITDA margin expansion is weaker than guided.	Company earnings releases, investor presentations, and earnings call transcripts. Next earnings call for Q2 2026 results (likely late July/early August 2026).	Company career pages/LinkedIn: Changes in G&A or cost of sales related job postings (e.g., supply chain optimization, process improvement roles).	Thinknum: Job posting analysis for specific roles related to cost reduction or productivity initiatives within Ralliant.

Key Reported Metrics, Reratings Triggers & Results3 rows

This segment is a significant growth driver with a multi-year backlog exceeding $1 billion. Sustained double-digit growth here indicates strong demand in a high

Key reported metrics
Metric	Last period	Why it matters
Defense & Space Organic Revenue Growth	>20%	This segment is a significant growth driver with a multi-year backlog exceeding $1 billion. Sustained double-digit growth here indicates strong demand in a high-priority market, contributing to overall revenue and stability.
Organic Revenue Growth	9.00%	This metric indicates the company's underlying business health and ability to grow without acquisitions. Strong organic growth, especially with raised full-year guidance, signals robust demand and effective strategy execution.
Adjusted Diluted EPS (Normalized)	39.00%	A key measure of profitability per share, normalized EPS growth reflects operating leverage, productivity savings, and efficient capital allocation, directly impacting shareholder value.

Key Questions

Can Ralliant sustain its elevated Test & Measurement growth and effectively convert its multi-year Defense & Space backlog to meet or exceed its raised full-yea

Can Ralliant sustain its elevated Test & Measurement growth and effectively convert its multi-year Defense & Space backlog to meet or exceed its raised full-year 2026 revenue guidance, especially given macroeconomic uncertainties and semiconductor headwinds?

Question 2: Will Ralliant successfully execute its enterprise productivity program to realize the targeted $10 million to $12 million in-year savings for 2026, driving adjusted EBITDA margin expansion towards its full-year guidance of 19.5% to 20.5%?
Question 3: Will Ralliant successfully execute the planned $100 million accelerated share repurchase program in Q2 2026 and consistently achieve its target of returning approximately 50% of free cash flow to shareholders, maintaining strong free cash flow conversion?

Earnings Transcript SummaryTable

2026-05-12 · 2026Q1 Earnings Call

3 Things Management Is Most Focused On	Call Takeaway & Tone	Prior Quarter'S Y/Y Growth By Segment	3 Things Analysts Most Pressed On (And Mgmt Responses)	Revenue Segments
1. Executing Profitable Growth Strategy: Management is focused on capitalizing on higher growth secular demand across electrification and defense, driven by disciplined execution. They highlighted Q1 results exceeding guidance and raised the full-year 2026 outlook, citing elevated test and measurement growth and a defense backlog surpassing $1 billion. 2. Driving Margin Expansion: The company initiated an enterprise productivity program targeting $50 million to $60 million of run rate annualized savings by 2028, with $10 million to $12 million in-year savings for 2026. This program, combined with strong operating leverage, aims to increase adjusted EBITDA margins to the midpoint of their through-cycle range by 2028. 3. Increasing Capital Returns to Shareholders: Ralliant is committed to returning capital to shareholders, having started share repurchases in Q1 and targeting approximately 50% of free cash flow for repurchases going forward. The Board increased the share repurchase authorization to $500 million, and a $100 million accelerated share repurchase program is planned for Q2.	The call conveyed a positive and confident tone, with management highlighting a solid first-quarter performance that exceeded guidance and led to a raised full-year 2026 outlook. Key takeaways included strong execution of their profitable growth strategy, particularly in electrification and defense, significant progress in driving margin expansion through a new enterprise productivity program, and a clear commitment to returning capital to shareholders. Management acknowledged ongoing macroeconomic uncertainties but expressed confidence in their operational discipline, new product innovation, and ability to capitalize on secular demand trends.	For the fourth quarter of 2025, Ralliant Corporation reported overall revenue growth of 1% year-over-year. The Sensors & Safety Systems segment grew 6% year-over-year, while the Test & Measurement segment experienced a 6% year-over-year decline.	1. Sales Growth Guidance for H2 and Semiconductor Business: Julian Mitchell (Barclays) questioned the implied slowdown in second-half sales growth and the outlook for the semiconductor business. Management (Tamara Newcombe and Neill Reynolds) explained that while Q1 Test and Measurement performance and orders were strong, they are being prudent with H2 guidance due to macroeconomic uncertainty and potential supply disruptions. They noted that underlying strength in semiconductors is robust, despite still lapping a large customer deal for another quarter. 2. Defense & Space Growth Trajectory and Sensing Segment Margins: Chris Snyder (Morgan Stanley) inquired about the potential for Defense & Space growth to accelerate with capacity expansion and the sustainability of 'above-target growth' beyond 2026. He also asked about the margin improvement in the Sensing segment despite mix headwinds from higher defense growth. Management (Tamara Newcombe and Neill Reynolds) clarified that the $1 billion backlog is multi-year (2-3 years) and they are continuously expanding capacity, with plans for physical expansion beyond 2028. They anticipate double-digit growth for Defense & Space in 2026 and beyond, but acknowledged that defense products have lower margins, creating a mix impact. Q1 margin improvement was attributed to volume leverage and early productivity benefits, noting that defense margins can be lumpy. 3. Diversified Electronics Trends and Full-Year Segment Margin Guidance: Piyush Avasthy (Citi) asked for more details on trends in autos and consumer electronics within diversified electronics and if the strong performance would continue. He also sought an update on full-year margin assumptions for Test and Measurement and Sensors & Safety Systems. Management (Tamara Newcombe and Neill Reynolds) stated that diversified electronics strength is linked to AI-related activities (data centers, robotics) and innovation in electronics, providing durability. For margins, they reiterated their Investor Day targets: overall Ralliant in the low to mid-20s, Test and Measurement in the mid-to-high teens, and Sensors & Safety Systems in the mid-to-high 20s, expecting T&M margins in the mid-teens to low 20s and S&SS in the mid-to-high 20s for the year, with some lumpiness in S&SS.	In the first quarter of 2026, Ralliant Corporation reported total revenue of $535 million, an increase of 11% year-over-year, with organic revenue growth of 9%. Both the Sensors & Safety Systems and Test and Measurement segments achieved 9% organic revenue growth. Within Sensors & Safety Systems, Defense & Space delivered more than 20% organic growth, and Industrial Manufacturing and Other grew mid-single digits organically. Utilities revenue growth was softer due to shipment timing, despite record orders. In Test and Measurement, Communications and Diversified Electronics both grew double digits organically. Semiconductor organic revenue declined high single digits, primarily due to lapping a large customer project from the previous year, but would have grown double digits excluding this headwind.

Transcript TidbitsTable

2026-05-12

About Expanding Eligible Market	About Competition	About The Broader Industry	Where Things Are Headed	Updates On Theme	Broader Themes Emerging	Bullish-Leaning Quotes (Short)	Bearish-Leaning Quotes (Short)	Hiring
Ralliant is capitalizing on higher growth secular demand across electrification and defense, with its portfolio increasingly aligned to these markets. AI is accelerating customer innovation cycles from data center infrastructure to advanced electronics and the global power grid. The company plays a critical role in the global power grid with precision sensors and predictive analytics, and supports new energy infrastructure through test and measurement solutions for grid-scale energy storage and advanced power systems for applications like nuclear fusion. Power and thermal challenges in data centers are addressed by Test and Measurement instruments for advanced semiconductors and electronic systems, and industrial sensors for cooling. As AI becomes physical, precision power test and measurement solutions are essential for R&D engineers developing next-generation AI-enabled electronics. In Defense, the company benefits from multiyear replenishment demand and modernization, supplying mission-critical ground, flight, and launch safety systems, and enabling development and validation of advanced communications and power storage systems through Test and Measurement solutions. The company is making targeted investments to expand manufacturing capacity in Defense & Space for programs scaling 2 to 5x historic levels, and plans to expand its precision sensor facility in Upstate New York to support further growth in Utilities. Diversified Electronics saw double-digit organic growth driven by humanoid robotics, energy storage, and advanced research. Customer CapEx investment increased in power-related semiconductors, especially in wideband gap applications.	Ralliant expects its RBS (Ralliant Business System) toolkit to continue serving as a competitive advantage, enabling customer innovation and operating efficiencies.	The broader industry is characterized by ongoing macroeconomic and geopolitical uncertainty. AI is accelerating customer innovation cycles across various sectors, including data center infrastructure, advanced electronics, and the global power grid. There is higher growth secular demand in electrification and defense, driven by long-term investment cycles. The power grid is a strategic imperative due to rising AI workloads and increasing global energy consumption, necessitating a more reliable and intelligent grid. Power and thermal challenges are extending into data centers, and AI becoming physical is making power design and battery performance key constraints. Defense modernization is increasing R&D activity. There are early signs of short-cycle recovery in industrial manufacturing and other end markets, with customers increasing investments in automation, semiconductor equipment, life sciences, HVAC, and data center cooling. Customer sentiment improved, driving orders in diversified electronics and communications. Customer CapEx investment increased in power-related semiconductors, particularly in wideband gap applications. China's growth was driven by government-funded projects tied to AI and energy-related infrastructure investments.	Ralliant is raising its full year 2026 outlook, expecting test and measurement growth to remain elevated and its defense backlog to surpass $1 billion. The company initiated an enterprise productivity program targeting $50 million to $60 million of run rate annualized savings by 2028, with $10 million to $12 million in-year savings for 2026, exiting the year at an annualized run rate of $20 million. They aim to complete remaining actions by the end of 2027, reaching the full savings target by 2028. This program, combined with strong baseline incremental margins, is expected to result in approximately 50% total incremental adjusted EBITDA margin through 2028, providing a clear path to the midpoint of their long-term EBITDA margin range. Ralliant is increasing capital returns to shareholders, targeting approximately 50% of free cash flow for share repurchases, and plans a $100 million accelerated share repurchase program in Q2. Organic reinvestment in capacity expansion for defense and utilities remains the top priority. The company will continue to monitor the M&A landscape for tuck-in acquisitions. The defense business is expected to maintain double-digit plus growth rates in 2026 and out-years. The semiconductor business is expected to face headwinds for the next couple of quarters due to lapping a large customer deal but has strong underlying strength and should be fully lapped by Q4. Utilities revenue growth is expected to recover after a one-quarter lumpiness due to shipment timing.	Sensing	AI acceleration of innovation cycles, electrification, defense modernization, humanoid robotics, energy storage, grid modernization and resiliency initiatives, and government-funded investments in AI and energy-related infrastructure.	Q1 results were above the high end of our guidance.defense backlog has now surpassed $1 billion.book-to-bill above 1.1x.Adjusted EBITDA margin of 18.6% and adjusted EPS of $0.57 were both above the high end of our guidance ranges.trailing 12-month free cash flow conversion was 105%.America is our largest region with over 55% of revenue and where we see broad-based momentum with 16% organic revenue growth.Defense & Space delivered more than 20% organic growth.Utilities posted record orders this quarter reinforcing the strength and durability of demand in this end market.Test and Measurement delivered a meaningful step-up this quarter.Test & Measurement also delivered its highest quarterly book-to-bill since 2022.Excluding this customer headwind, semiconductor organic revenue grew double digits.We have confidence in Ralliant's value creation potential.Underlying strength in semi across a broad set of customers.	Western Europe and the rest of world... were slightly down organically as pockets of recovery were overshadowed by ongoing macroeconomic and geopolitical uncertainty.While revenue growth was softer due to shipment timing.overall revenue decline due to the completion of a large customer project last year.free cash flow was $10 million, a step down year-over-year primarily due to timing.semiconductor organic revenue declined high single digits, primarily driven by lapping a large customer credit.there's also a lot of uncertainty in the environment.potential supply disruptions in the second half of the year.defense also comes with a little bit of -- just on the margin side, a little bit of a mix impact. Those defense products are at margins that are below the company average.you'll probably see a little bit of headwind on the overall headline number for semis for us, I think for the next couple of quarters.	Ralliant initiated an enterprise productivity program that includes simplifying its organization and how work gets done. Within G&A, the company identified ways to increase productivity through simplification, AI-enhanced workflows, and leveraging lower cost locations to optimize labor. More than 500 employees recently participated in a company-wide Kaizen event focused on growth and productivity. The company also mentioned higher post-spin employee costs in 2025, which were normalized for comparison.