Littelfuse (LFUS) Q3 2025 Earnings Call Transcript

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Date

Wednesday, Oct. 29, 2025, at 9 a.m. ET

Call participants

• President and Chief Executive Officer — Gregory N. Henderson
• Executive Vice President and Chief Financial Officer — Abhishek Khandelwal

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Risks

• Electronics segment margin -- Adjusted EBITDA margin for the Electronics Products segment decreased by 140 basis points in the third quarter of 2025, driven by lower power semiconductor volumes, and increased stock and variable compensation.
• Transportation segment margin -- Adjusted EBITDA margin for the Transportation Products segment declined by 220 basis points in the third quarter of 2025, impacted by lower volumes, higher compensation costs, and unfavorable tariff timing.
• Industrial segment margin -- Adjusted EBITDA margin for the Industrial Products segment fell by 310 basis points in the third quarter of 2025, due to unfavorable mix, and higher stock and variable compensation.

Takeaways

• Revenue -- $625 million, up 10% (7% organic), with the Dortmund acquisition contributing 2%, and currency effects adding 1%.
• Adjusted EBITDA margin -- Adjusted EBITDA margin finished at 21.5%, down 20 basis points, as volume expansion was offset by higher stock and variable compensation expenses.
• Adjusted EPS -- Adjusted diluted earnings per share was $2.95, up 9%.
• Operating cash flow -- $147 million in operating cash flow.
• Free cash flow -- $131 million in free cash flow.
• Cash and leverage -- $850 million cash on hand, with net debt to EBITDA at 0.9x.
• Shareholder returns -- $19 million returned to shareholders via cash dividend in the quarter.
• Electronics segment sales -- Passive product sales rose 19% organically; semiconductor products increased 5%.
• Transportation segment sales -- Flat; organic sales fell 2% but were offset by 2% positive FX; commercial vehicle sales decreased 3% organically.
• Industrial segment sales -- Grew 4% organically, supported by energy storage, renewables, and data center demand, but constrained by weak HVAC, and continued soft construction volume.
• Bassler Electric acquisition -- $350 million all-cash deal; $320 million net of $30 million in expected tax benefits; price equals 13.5x forecasted full-year 2025 EBITDA; net leverage forecasted to rise to 1.4x after close; accretive to adjusted EPS in 2026, targeting double-digit returns by year five post-close; expected closing by end of the fourth quarter of 2025.
• Forecast and guidance -- Fourth-quarter sales guidance: $570 million to $590 million; organic growth of 5% at the midpoint plus 2% contribution from Dortmund; EPS guide of $2.40 to $2.60, with a 60% flow-through at the midpoint; assumes a $0.40 headwind from compensation, and $0.15 from a higher adjusted effective tax rate.
• Design wins and pipeline -- Company-wide design wins are up double digits year to date in 2025; key battery charging application wins secured, with revenue expected in 2026.
• Sales force realignment -- Sales organization shifted from product-centric to market-facing structure, consolidating under three market-facing sales teams to strengthen customer engagement, and support full-portfolio solutions.
• Power semiconductor business -- Sequential growth from the second quarter to the third quarter, though still below prior-year levels; new leadership appointed to accelerate operational improvements and market focus.

Summary

Littelfuse (NASDAQ:LFUS) announced its acquisition of Bassler Electric for approximately $350 million, positioning the company to expand into grid and data center markets, and increase OEM exposure in industrial infrastructure. Management reported strong free cash flow conversion and noted record bookings—up over 20%—supporting confidence in ongoing revenue and earnings momentum. The company has shifted its sales model to a customer-centric structure, aiming to drive complete solution sales across end markets, and more effectively capture emerging opportunities.

• Henderson said, "design wins are up more than two times year over year to date" in the data center market.
• Khandelwal stated, "Fourth-quarter guidance assumes a neutral price-tariff impact," reflecting stabilization of tariff-related input cost pressures.
• Overall third-quarter growth was tempered by weaker residential HVAC and construction demand, as described by Henderson.
• Management expects amortization expense of $59 million for the full year 2025, interest expense of $34 million (with two-thirds offset by investment income) for the full year 2025, and a full-year tax rate between 23% to 25% for fiscal 2025.

Industry glossary

• Book-to-bill: The ratio of orders received to units shipped and billed, used to indicate demand momentum, especially relevant for semiconductor and electronics product cycles.
• Design win: A commitment by a customer to include a supplier’s product in a new program or system design, with revenue typically realized in future periods.
• Passive products: Electronics components such as fuses, resistors, and capacitors that do not require external power to operate.
• Flow-through: Percentage of incremental revenue that converts into profit, used for measuring profit leverage in earnings guidance.
• Hyperscaler: A company providing large-scale data center infrastructure, such as cloud service and AI computing providers.

Full Conference Call Transcript

Gregory N. Henderson: Thank you, David, and thank you to everyone joining us today. I wanted to start this morning with highlights on our third quarter and then provide an update on the progress we are making on our strategic priorities. As part of that progress, we are excited to announce the acquisition of Bassler Electric. I will speak more about the acquisition and how it fits into our long-term strategy in a few moments, but we look forward to welcoming the Bassler team to Littelfuse. Turning to our third quarter, we delivered revenue growth of 10% relative to the prior year driven by strong Electronics segment growth. We delivered Industrial segment growth despite mixed underlying market demand.

Finally, our transportation segment navigated well through a softer commercial vehicle market in the third quarter. Overall, our third quarter earnings results exceeded the high end of our guidance range, reflecting our team's commitment to operational execution. Looking forward, we expect solid fourth quarter revenue and earnings growth for the prior year, supported by our third quarter bookings which were up more than 20% versus 2024. Abhishek will discuss specific results and our outlook in more detail shortly. But I want to thank our global teams for their persistent hard work and efforts.

Now I want to share the progress we are making on our first strategic priority, which is to enhance our focus on future growth opportunities around the safe and efficient transfer of electrical energy. I wanted to start with the acquisition of Bassler Electric. Bassler provides essential and innovative electrical control and protection solutions for high-growth power generation and distribution markets. They are market leaders in grid and utility infrastructure and add significant new capabilities to Littelfuse in the areas of high voltage excitation and very high energy protection. In addition, as data centers have such significant power generation demand, Bassler has key exposure to local data center power solutions.

Bassler has a long history of selling complete solutions to a deeply embedded industrial customer base. They complement our industrial segment portfolio and their addition will broaden our OEM exposure, particularly in grid and utility infrastructure, where Bassler is a key partner to industry-leading innovators. We are confident the addition of Bassler will deliver long-term value for Littelfuse. Looking forward, strategic acquisitions will continue to be a key priority for us, supported by our strong balance sheet and cash generation. In addition to the acquisition, and across Littelfuse, we continue to see meaningful traction in our new business pipeline. Our teams are executing well, converting our growing funnel to future revenue opportunities.

Supporting this, our design wins are tracking up double digits year to date. As an example of our momentum, in the quarter we delivered a multi-technology design win for a market leader in a 400-volt battery charging application. This charging solution brings best-in-class safety and protection while delivering an optimized form factor and efficiency. Our solution utilizes our market-leading capabilities of passive semiconductor over-voltage protection, electromechanical overcurrent protection, and our power semiconductor technologies. Combined, our solution enables a more precise and efficient current flow while protecting against potential surges from the power grid. Importantly, this multiyear partnership will start production with revenue contribution in 2026.

Our second strategic priority is to provide more complete solutions for a broader set of our customers and to increase our engagement with our key customers and market leaders. To accomplish this in the third quarter, we formally realigned our sales structure to better serve our broad customer base with our market-leading technologies. As part of this realignment, we established three market-facing sales organizations with leaders who bring extensive experience and leadership across our evolving end markets. Our sales leaders will be supported by a realigned sales force that is now market-facing, customer-centric, and reinvigorated to engage our customers more frequently with our complete technology portfolio.

We see two key advantages to this realignment, which is a shift from our historical approach where Littelfuse sales teams were siloed in product-centric roles. One, we can now work more closely with our customers to help better understand and solve their technology challenges with our full product portfolio. Two, we can collaborate more meaningfully with our customers on their future technology roadmaps, which will better inform and ultimately shape our R&D efforts. We believe our sales evolution will enhance our visibility to our end market technology advancements and strengthen our long-term market leadership. While we are in the early innings of our go-to-market evolution, we are beginning to see signs of increased traction with customers.

This is best exemplified by our data center go-to-market strategy, where we were early to apply our new sales model. Our data center revenue continues to grow significantly while year to date our data center design wins are up more than 50% versus the prior year. We are capturing multi-technology wins with leading hyperscaler, cloud, infrastructure customers. We are also deeply engaged with market leaders that are building gigawatt-scale AI factories. And we are leveraging strong global collaboration and customer relationships through the data center ecosystem. Further, as we are more strategically focused on the leading customers in the data center market, we are sharpening our R&D efforts and building a strong pipeline around new products.

Turning to our third strategic priority, we are focused on driving operational excellence as we grow. Today, I wanted to highlight our power semiconductor opportunity. Enhancing our long-term growth and profitability positioning in this area is a leading priority for our team. Our power semiconductor capabilities are critical to the safe and efficient transfer of electrical energy. Importantly, when combined with our market-leading protection offering, our semiconductor technologies can provide us a unique value proposition. Our long-term goal is to deepen our engagement with power semiconductor customers, better utilize our footprint, and ultimately drive improved long-term execution. As part of this initiative in the third quarter, we announced the hiring of Dr.

Karim Hamed as the new leader of our semiconductor business. Karim most recently served at Analog Devices and brings a wealth of semiconductor industry technology and operational experience. And we are excited to have him as part of our leadership team. Taking a step back, we delivered a strong third quarter and are well-positioned to drive further momentum through year-end. We will continue to execute on our three strategic priorities as we aim to scale our company with the goal of delivering long-term best-in-class performance and returns. With that, I will hand the call over to Abhishek.

Abhishek Khandelwal: Thank you, Greg, and to everyone joining. I want to start by echoing Greg's sentiment as we are excited to announce the Bassler acquisition. Today, I will provide some details on the acquisition including financial metrics and the transaction timeline. October results followed by our fourth quarter outlook, we will end the call with Q&A. If you turn to slide seven, Bassler has demonstrated leadership in controlling, regulating, and protecting mission-critical equipment evolving power applications over the last 83 years. Their technologies and market position provide a distinct competitive advantage while their footprint is highly complementary to Littelfuse. The all-cash transaction is valued at approximately $350 million.

When adjusted for the present value of expected tax benefits of approximately $30 million, the net transaction value is roughly $320 million. This represents a 13.5 times multiple for forecasted full-year 2025 EBITDA. At closing, we anticipate our net leverage will be 1.4 times versus the current level of 0.9 times. We expect Bassler will be accretive to adjusted earnings per share in 2026 while we target double-digit returns in year five post-close. We expect to close the transaction by the end of the fourth quarter of 2025 and look forward to welcoming the Bassler team to Littelfuse. With that, please turn to slide eight for details on our third quarter.

As Greg mentioned, we delivered strong results with revenue at the high end of the guidance range while adjusted EPS exceeded the guidance range. Going forward, comparisons I will discuss will be relative to the prior year unless stated otherwise. Revenue in the quarter was $625 million, up 10% in total and up 7% organically. The Dortmund acquisition contributed 2% to sales growth while FX was a 1% tailwind. Adjusted EBITDA margin finished at 21.5%, down 20 basis points as solid volume expansion and operational leverage were offset by the impact of higher stock and variable compensation. Third quarter adjusted diluted earnings per share was $2.95, up 9%. We also delivered strong cash generation in the third quarter.

Operating cash flow was $147 million and we generated $131 million in free cash flow. Year to date, we have generated $246 million of free cash flow and our conversion rate is tracking at 145%, well above our long-term target of 100%. We ended the quarter with $850 million of cash on hand and net debt to EBITDA leverage of 0.9 times. In the quarter, we returned $19 million to shareholders via our cash dividend. Please turn to Slide 10 for our segment highlights. Starting with the Electronics Products segment, sales for the segment were up 18% versus last year, and up 12% organically. The Dortmund acquisition contributed 4% while FX contributed two points to growth.

Sales across passive products were up 19% organically, while semiconductor products increased 5% in the quarter. Within our semiconductor products exposure, protection product sales were strong while we observed soft power semiconductor demand. Sequentially, we delivered modest power semiconductor growth. Adjusted EBITDA margin of 24% was 140 basis points reflecting favorable year-over-year passive and protection volume leverage partially offset by lower power semiconductor volumes and higher stock and variable compensation. Moving to our Transportation Products segment on slide 11, segment sales were flat year over year as organic sales decreased 2% for the quarter but were offset by favorable FX contribution of 2% to growth.

In the passenger car business, sales were flat organically reflecting stable passenger car product demand offset by sensor declines. Commercial vehicle sales for the quarter decreased 3% organically as we observed softer end market demand across on-highway, off-road, and agriculture markets. For the segment, adjusted EBITDA margin of 16.8% was down 220 basis points. Our transportation segment margins were negatively impacted by lower volume, higher stock and variable comp, and unfavorable tariff timing. We remain pleased with our transportation segment margin trajectory through a dynamic end market backdrop. Year to date, our adjusted EBITDA margin of 18.2% is up 120 basis points. On Slide 12, Industrial Products segment sales grew 4% organically for the quarter.

Third quarter sales benefited from solid energy storage, renewables, and data center growth. However, we observed softer HVAC demand and continued soft construction volume in the quarter. Third quarter adjusted EBITDA margin was 20.7%, down 310 basis points driven by unfavorable mix and higher stock and variable compensation. While margins tracked lower in the quarter, we are pleased with the solid year-to-date margin performance, which is up 290 basis points. We will continue to balance profitability with long-term growth investments and remain confident in our long-term industrial segment growth trajectory. Please move to Slide 13 for the forecast. We entered the fourth quarter with a strong backlog and expect solid growth versus the prior year.

We expect typical seasonality given mixed conditions across transportation and industrial end markets. With that in mind, our fourth quarter guidance incorporates current market conditions, trade policies, and FX rates as of today. We expect fourth quarter sales in the range of $570 million to $590 million, which assumes 5% organic growth at the midpoint and two points of growth stemming from our Dortmund acquisition. We are projecting fourth quarter EPS to be in the range of $2.40 to $2.60, which assumes a 60% flow-through at the midpoint. Fourth quarter guidance also assumes an unfavorable impact from stock variable compensation of $0.40 and a $0.15 headwind from a higher adjusted effective tax rate.

Moving to Slide 15, for the full year 2025, we are assuming $59 million in amortization expense and $34 million in interest expense, two-thirds of which we expect to offset through interest income from our cash investment strategies. We are estimating a full-year tax rate of 23% to 25% and expect to spend $80 million to $85 million in capital expenditures. With that, operator, please open the call for Q&A.

Operator: We will now begin the question and answer session. Your first question comes from the line of Luke Junk with Baird. Luke, please go ahead.

Luke Junk: Good morning. Thanks for taking the questions. Maybe apologies, I missed part of the prepared remarks. Maybe if we could start with Power Semi. I think Abhishek, you mentioned that it did see some growth sequentially despite still being soft year over year. Can you maybe just speak to book-to-bill there, kind of the outlook into the fourth quarter in Power Semi and some of the puts and takes from a demand standpoint and then how you would expect any improvement to flow to margins as well? Thank you.

Gregory N. Henderson: Thank you, Luke. This is Greg. Maybe I will start and then hand it to Abhishek to give a little bit more color. But just kind of zooming out on Power Semi, we have talked about this before. I think our view on the Power Semi business is that it is strategically important from a strategic perspective. As part of our overall portfolio and part of our safe and efficient transfer of energy, actually, in the example I gave on the battery charging solution in the script, that is a protection solution and it uses our semiconductor protection or passive protection, but actually also uses power semiconductors as part of the overall customer solution.

And actually, Bassler also is a customer of Littelfuse today and actually has a lot of semiconductor content in their solutions for protection relays and in their excitation system. So semiconductors are an important part of our business. But I think as we have said before, we have had some issues internally from kind of an execution perspective. So if we talk about our strategic priorities as a company, on sharpening our focus and improving our go-to-market, improving our operational performance. And actually, all three of those apply to our semiconductor business as well. So we are working on sharpening the strategy and improving our execution. And so this is going to take some time.

But we are on the journey. And maybe I will hand it to Abhishek to give a little bit more color.

Abhishek Khandelwal: Yes. No, I think Greg covered it. But I think if you kind of think about my prepared remarks, Luke, and what I mentioned, if I think about our Q3 performance in our Power Semi business, Q2 to Q3, we saw sequential improvement. Right? Year over year, we are still down, but if you kind of think about our performance in Q3 versus Q2, we did see improvement in the quarter.

Luke Junk: Very helpful. Thank you. Just a quick one on the $0.40 stock comp. Is that an outsized impact in the fourth quarter? I know typically stock comp from a seasonal standpoint tends to be weighted. I think you said 2Q and 3Q this year. Just want to make sure I understand the bridge impact.

Abhishek Khandelwal: Yeah. Absolutely. I can walk you through it, Luke. So there are two things here. It is not just stock comp. It is also the impact of variable comps. So if you kind of think about our last year performance and where we ended the year, our teams did not get paid. So this is a reset back to paying a target. That is the majority of the $0.40 headwind. And then a small portion of that is just the year-over-year impact of stock comp.

Luke Junk: Got it. So if we just put it in different words, as we think into then into this into 2026, that especially the variable comp you should kind of normalize. Is that the right way to think about it?

Abhishek Khandelwal: That is absolutely correct. If you think about 2026, on a year-over-year basis, '26 versus '25, it would be normalized. But given our performance in 2024, like I said, we did not pay the variable comp piece of it. And so you saw a good guy in the P&L. And this year, you are just seeing it being reset back to target.

Gregory N. Henderson: So if you just to kind of build on that story then as you kind of think about our Q4 guide, at the midpoint, what you are really seeing is an EBITDA conversion of 60% on our top-line growth on a year-over-year basis.

Luke Junk: Very helpful. Thank you. And then lastly and apologies if I missed any comments on this. But Greg, just be curious to get your kind of incremental update on your efforts in data center both near-term opportunities hitting maybe things that can move quicker over the next quarter or two and then your progress getting designed into sockets on future architectures as well? Thank you.

Gregory N. Henderson: Yeah. Thanks, Luke. I think we continue to be excited about our momentum in data center, and we continue to make progress. And actually, we talked about in the call this sales realignment that we did across the business. We actually did this a little bit earlier in data center. And we are making progress. Design wins are up more than twice year to date. And I would say that data center is our growth in the quarter. Data center was a meaningful driver of overall growth in the quarter. So we are continuing. We have meaningful revenue now from Data Center based on activities that we have had in the past. We have improvement on our go-to-market strategy.

Our design wins are up. And with our improved focus from a go-to-market perspective, we are getting to our customers. We are working more closely with hyperscalers, with cloud computing companies, and starting to work more on our long-term R&D roadmap around that as well. So I think this is something that is the message I would say is it is delivering growth now. And we do believe that with our enhanced focus, it is going to continue over time.

Luke Junk: Great. I will leave it there. Thank you for all the color.

Gregory N. Henderson: Thanks, Luke.

Operator: Your next question comes from the line of Christopher Glynn with Oppenheimer. Christopher, please go ahead.

Christopher Glynn: Thanks. Good morning all. Just want to build on the last question on the data center comment. I think I heard up over 50% and up maybe doubled just on the last question. About the design wins. Just want to clarify that. And is that like a count of the design win instances or dollar value? Just trying to think of, you know, what that might imply for growth. What the design end to revenue kind of lead time is like. And maybe if we could clarify what the current scope of the data center business is for Littelfuse?

Gregory N. Henderson: Yeah. Maybe I will start with a little clarification. Thank you, Christopher, and then I will hand to Abhishek for a little bit more. But just to clarify, right, I think that what we are saying now in the quarter data center was a meaningful driver of our overall growth. I think that is the first thing I want to say. So that is kind of revenue in the quarter. Design wins being up, it is design wins that are up more than two times on a year-on-year basis. So basically, design wins this year, year to date, year on year versus a year ago.

And we track design wins as when things, you know, the timing of that varies a little bit. Right? So, you know, the timing of that varies. It is a little bit hard to predict just based on that one number. But I would say that data center is one of the markets. You know, if you compare to some of our markets like automotive or industrial, which take longer to go from design win to revenue, data center is just probably not surprising as a relatively faster market. So that is what I will say. And maybe I will hand to Abhishek to give a little bit more color on the relative impact of baseline.

Abhishek Khandelwal: Yes. So Christopher, thanks for your question. I think the best way to think about the data center growth is we kind of look at electronics segment performance. It is a good reflection of our data center exposure and that is where you see the real growth in terms of the segment being up 18%, 12% organic, passive products being up 19% organically. Right? Now we have not quantified the exact impact of data centers for us as a total company, but I would say it is high single digits.

Christopher Glynn: Great. Appreciate that. I am sure we will get a further deep dive in February. And then, you know, it sounds like the overall company is seeing some good momentum and new business opportunities. How is that funnel looking besides data center? I am curious at least especially for industrial where, you know, first half you had really outsized outgrowth and, you know, that moderated a bit. I do not know if there is some noise in any channels or just a real noisy quarter for resi HVAC. Which is well known. But curious about the scalability for industrial and the old funnel there. You know, as it pertains to maybe extending the outgrowth that you saw year to date?

Gregory N. Henderson: Yeah. Thank you, Christopher. Yeah. I think, let me just start by if we zoom out to the industrial segment, I mean, we had solid growth in the quarter, and actually, have had many quarters of solid industrial growth. In the quarter, growth was driven by markets that continue to see strong demand and do well, energy storage, renewables, data center infrastructure and actually some of our industrial business plays into data center infrastructure that continues to do strong demand. That said, as you note, we do have softer residential HVAC demand. And the construction MRO continues to be soft.

So that is kind of where there is a mixed performance and that is we do have exposure there, which has made maybe a little bit more muted performance on the industrial in the quarter. If you zoom out from eight quarters of growth and this continues to be a significant investment area and growth driver. You mentioned the Bassler Electric is an acquisition as well that brings significant kind of industrial exposure and that will be part of our industrial business.

Abhishek Khandelwal: And then just to add to Greg's commentary, just one last point I would point out is if you kind of look at the year-to-date performance for the segment, we are up 12% year to date. So that is another positive sign of growth in that segment.

Christopher Glynn: Appreciate that. Thanks, guys.

Abhishek Khandelwal: Thank you.

Operator: Your next question comes from the line of David Williams with Benchmark. David, please go ahead.

David Williams: Hey, good morning. Thanks for letting me ask the questions and congratulations on continued progress here.

Abhishek Khandelwal: Thank you, David.

David Williams: So Greg, you talked about realigning your sales force and breaking down some of the silos. Just kind of curious if you could provide a little more color there. I mean, you have talked about building engagement more deeply with your customers and what that means. But is there a way to kind of quantify what your expectations are and how we can kind of gauge that success?

Gregory N. Henderson: Yeah. I mean, I think, you know, it is hard at this point to quantify, but maybe I will help explain. Right? I think, historically, our sales organization was basically aligned with our products. And we had kind of these individual product organizations that had individual sales teams and the sales teams were representing our products. Even though as we have talked about, largely, our business is largely about the safe and efficient transfer of electrical energy. We often are selling to the same person of the customer. Give lots of examples actually in the script. Right?

The example I gave on the battery charging application had passive over-voltage protection, semiconductor over-voltage protection, power semiconductor solution, and passive circuit protection, that comes from at least probably three of our business units. And so in the past, we would have had three different sales teams trying to call on that customer for that solution. They actually even all called on that customer. So two things happen. One, we would miss opportunity because we would be selling a part of our solution as opposed to being able to sell the complete portfolio. So in some cases, more cases than not, we were missing opportunity because we were not bringing the full portfolio.

But other cases, we were also stepping on ourselves in front of the customer because we have multiple people. So we have realigned to have the this is kind of the fundamental change. The sales team is representing our customer, not our products. And we do believe that this is going to bring progress to us. We did this early on some of our e-mobility business and actually also in our data center business. We already see progress from where we had done that early. We have now done this across the Salesforce. So this is a change. It does you know, you have to you are we are in the process of that reorganization.

It is a change that is going to take some time. But we believe it is going to bring significant benefits because it puts us, as I said, first and foremost, we get to sell the portfolio we have more effectively. But secondly, it drives our R&D strategy to be more about where the markets are going. And making sure that we are developing the right products for where our lead customers are going. And this is really about focusing on aligning with those market leaders to make sure we are in the right position.

David Williams: Fantastic color. Thanks so much for that. And then maybe secondly, just on the tariff side, I know you mentioned it in the script. It seemed like it was a modest headwind, but are you seeing anything developing there in terms of do you think that growth is being tempered by tariffs or any delays? Just color maybe around the impact of that tariff.

Abhishek Khandelwal: Yes, absolutely. I can take that, David. So when I talk about the impact of tariff, what I am really talking about is if you kind of go back nine years and think about a 2Q call, we had some tariff timing in the quarter where we saw the benefit of where we saw the pricing, but the cost had not quite flushed with the P&L. That was about a $6 million tailwind in Q2. That was going to be a headwind in Q3. So when I talk about timing of tariffs, that is what I am referring to. And about $3 million of that hit our transportation segment, okay? So that is that.

Now if you kind of think about where we are today and the guidance for Q4, what we have baked in is a neutral price tariff impact for the quarter.

Gregory N. Henderson: Yes. And I would also say, I think, look, there is still noise that can happen, but I think the market dynamics of this have largely stabilized. We have talked before that we have a diversified manufacturing footprint. We try and more and more manufacturing close to our customers. So there is some impact, as Abhishek mentioned. But broadly speaking, we feel like this is somewhat stabilized in our customer base, and we do not see a major impact from it.

David Williams: Thanks again. Certainly appreciate it.

Operator: Your next question comes from the line of again Christopher Glynn with Oppenheimer. Christopher, please go ahead.

Christopher Glynn: Yes. Thanks. On transportation, wanted to just ask about the difference between the passenger vehicle fuses up 4% and the sensors down 18% organic. Is the sensor side still engaged in attrition exits product pruning there?

Gregory N. Henderson: Maybe I will start, and then Abhishek can give a little bit more color on the transportation business. But actually, if you zoom out actually in our core passenger products, we actually have actually had a reasonable quarter given the kind of passenger car builds and so forth. We had a reasonable quarter. But we do continue to have I would say, lower revenue and profitability in the Sensor product. So we talked before in the past about the fact that was a business that we were kind of realigning. We continue on that journey.

So I would say that if you put aside that Sensor product, which is not really a strategic focus of ours, the core passenger business actually did do pretty well, considering kind of the stable car build and some of the kind of EV slowness that we all see in the market.

Christopher Glynn: Okay, great. And then just back to the power semis and Dr. Hamed joining. So it sounds like you think you can get a lot more juice out of the power semi semiconductor strategy there. I guess, to benchmarking some of the other areas of the business perhaps. But could you comment on that as well as go into what the focus markets are? Is it a middle market strategy? And the scope of you know, what you visualize there to kind of Yeah. That is sort of the standard you envision.

Gregory N. Henderson: Yeah. Look. I mean, if you look in 3Q, for example, right, if you look at the performance of our Electronics segment as reported, right, the passive products were 19% and semiconductor products were 5%, right? And that semiconductor products is really because the power semis is not performing as well. The power protection semis is actually doing pretty well. So we I mean, we have some areas there where we are underperforming. It is really like I said before, I think for us, power semis is a microcosm of some of the bigger strategy that we have at Littelfuse. Right? The three strategic priorities. One, sharpen focus. So where we play and why we win.

And, we want to focus on the high growth markets. We want to focus on high energy density and growth markets, things like data center, grid, etcetera. So that is, I would say, the first thing that we focus on. Or other areas where we have strong performance, for example, like the medical market in our Power Semiconductor business. So first, it is about increasing that focus. Secondly, it is about making sure we are focused on the customer.

One of the sales realignment benefits we get actually is that we actually have a big pipeline for power semiconductors, but again, some of our sales teams that were representing the other businesses that those customers were not selling the semiconductor products. So we have opportunity with the sales realignment to improve our semiconductor position of customers, but then it also comes to about execution. Abhishek mentioned we mentioned in the remarks actually about in Abhishek's remarks about using our footprint more effectively. And so this is something that we are going to be focused on as well as optimizing our operational performance in power semiconductors. We believe that ultimately is going to drive both growth and profitability.

So it is kind of a microcosm of the bigger picture. But where we want to focus is where we have differentiated value and also where it fits into this broader strategy around safe and efficient transfer of optical energy.

Christopher Glynn: Great. Thanks for the color.

Operator: There are no further questions at this time. I will now turn the call back over to Gregory N. Henderson for closing remarks. Greg?

Gregory N. Henderson: Okay, great. Thank you. I just in closing, I have two things really. First, I want to just thank our global teams. We did have good performance. And secondly, I am really excited about Bassler. And so I am really excited to welcome the Bassler team and the Bassler business and taking significant growth opportunities for us in data center and grid and utilities. And finally, thank you all for joining our call. And we look forward to talking to you more and seeing many of you at the Baird Industrial Conference in Chicago in a couple of weeks.

Operator: This concludes today's conference call. You may now disconnect.

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