Gentherm (THRM) Q4 2025 Earnings Call Transcript

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Date

Thursday, Feb. 19, 2026 at 8 a.m. ET

Call participants

• President and Chief Executive Officer — William T. Presley
• Senior Vice President and Chief Financial Officer — Jonathan C. Douyard
• Executive Vice President, Chief Operating Officer — Gregory Blanchette

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Takeaways

• Record revenue -- $1.5 billion, representing a 2.9% increase; growth was 1.8% excluding foreign currency translation.
• Automotive new business awards -- $2.2 billion for the year, with $485 million secured in the fourth quarter; key wins included Ford F-Series and Mercedes-Benz high-volume platforms.
• Climate and comfort solutions revenue -- Increased 5.8% ex-FX, offset by a $28 million decline in other automotive products due to planned exits.
• Adjusted EBITDA -- $175 million (11.7% of sales) versus 12.6% prior year; driven lower by material costs, unfavorable mix, and footprint realignment costs, partially offset by operating leverage.
• Operating cash flow -- $117 million, up 7% despite inventory build for new program transitions.
• Capital expenditures -- $56 million, down from $73 million in the prior year.
• Net leverage -- Ended the year at 0.2 turns, indicating a strengthened balance sheet.
• 2026 revenue guidance -- Expected between $1.5 billion-$1.6 billion; midpoint represents approximately 3% growth ex-FX, outpacing an expected 1% decline in key market light vehicle production.
• 2026 adjusted EBITDA guidance -- $175 million-$195 million, implying a margin near 12%; footprint transition expected to be a 60 bps profit drag.
• 2026 adjusted free cash flow -- Expected at $80 million-$100 million with CapEx of $45 million-$55 million (approx. 3% of sales), yielding an estimated free cash flow conversion rate of 50%.
• 2027 preliminary revenue outlook -- Guided to $1.7 billion, up about 10% from 2026 midpoint; driven by automotive launches and adjacent market growth.
• Home and office segment -- Management expects revenue contribution between $50 million-$100 million by 2028, with margins above light vehicle but below Medical.
• Medical segment -- FDA 510(k) submission for the new ThermoFix system; revenue contribution expected in 2026 and cited as key to driving Medical annual growth into the high teens percentage range.
• Modine Performance Technologies combination -- Transaction expected to close by year-end; creates a $2.6 billion combined company with pro forma synergy–adjusted EBITDA margin of 13% and $25 million in identified near-term cost synergies.
• Growth targets -- Combined company targets $3.5 billion revenue and $500 million+ in earnings by 2030.
• Commercial synergy funnel -- Management cited a $100 million+ funnel, with more than half attributable to valves; none included in base assumptions, representing further upside.
• China market position -- Fourth quarter saw strong growth above market with both local and global OEMs; ended the year with 60% of awards in China from domestic OEMs.

Summary

Gentherm (NASDAQ:THRM) reported record revenue and new business awards while maintaining low net leverage and improving operating cash flow. Strategic actions included targeted exits from lower-margin products, rapid expansion into home and office and medical markets, and ongoing operational realignment expected to deliver incremental margin expansion by 2027. The pending combination with Modine Performance Technologies is anticipated to immediately diversify end-markets, create substantial cost and commercial synergies, and position the company for significant growth in power-generation and data center liquid-cooling applications.

• Management confirmed that home and office segment margins are above core automotive and accretive to total company results.
• The timeline for operational footprint realignment remains on track, with completion benefits expected to appear in the 2027 margin profile.
• Gentherm is leveraging long-standing automotive intellectual property to rapidly develop new medical products with reduced incremental investment.
• Future Medical product launches were previewed, with another announcement expected in early 2027 aimed at further segment growth.
• Valves business is noted as carrying above-company-average margins and anticipated to scale significantly post-transaction with Modine Performance Technologies.
• Management said, “expect to see a bit of a step-function change in 2027 from a margin perspective,” highlighting accelerating operating leverage as new program launches and cost efficiencies scale.

Industry glossary

• New business award: Binding commitments from customers—often automotive OEMs—for future supply, serving as a leading indicator of medium- and long-term segment revenue.
• Adjusted EBITDA: Earnings before interest, taxes, depreciation, and amortization, excluding certain one-time or non-operational items, used to assess normalized operating profitability.
• Free cash flow conversion: The ratio of adjusted free cash flow to adjusted net income or EBITDA, used to measure the effectiveness of cash generation relative to earnings.
• 510(k) submission: U.S. FDA regulatory filing seeking clearance for a medical device based on substantial equivalence to an already approved product.

Full Conference Call Transcript

During their comments, they will be referring to a presentation deck that we have made available on the Investors section of Gentherm Incorporated’s website. After the prepared remarks, we would be pleased to take your questions. I will now turn the call over to William T. Presley. Thank you, Greg, and good morning, everyone. Let us begin on slide three. During the year, we made significant progress on our long-term strategic initiatives while executing against our 2025 financial and operational priorities. To drive strategic growth, we provided a thesis early last year on the broad applicability of our technology beyond automotive. We purposefully broke out our technologies into four platforms: thermal management, air moving devices, pneumatic solutions, and valve systems, so that our commercial team could go out and kind of wet business with the technology in other markets. We provided updates on wins throughout the year to validate our hypothesis, and continue to believe this will drive growth going forward.

William T. Presley: Operationally,

Gregory Blanchette: we continued our work to strategically realign our footprint, which will continue through 2026, and despite the near-term headwinds, these actions will play a significant role in our margin expansion over time. During the year, we began laying the foundation to drive improved efficiency and performance across the organization through business process standardization, and the global rollout of our company operating system. We are starting to gain traction and reap benefits from stronger operational rigor. These improvements will drive better financial performance and cash generation, allowing us to deploy capital aligned with our strategic framework. To be clear, 2025 financial results are not of what Gentherm Incorporated can deliver as a business.

We remain focused on executing our plans to grow and increase margins. As we enter 2026, we are confident that we have the right plan established to drive performance. We are executing our strategic priorities to build a more resilient gender. Let us turn to slide four. I took this role with a strong belief that Gentherm Incorporated was at an inflection point to enter its next phase of growth by scaling its core technologies beyond its existing applications. And we have proven that ability in a short period of time. The team is focused on reigniting a profitable growth trajectory through both organic and inorganic opportunities.

In January, we announced a key part of transforming Gentherm Incorporated into a precision flow management company that serves diverse markets through our planned combination with Modine Performance Technologies, which is expected to close by the end of the year. This combination creates a $2,600,000,000 market leader positioned to grow to over $3,500,000,000 with a compelling financial profile and end-market diversification. I am confident that this is the right transaction at the right time for Gentherm Incorporated, and we will talk more about the benefits later in the deck. Turning to organic. When I first joined Gentherm Incorporated, I was impressed by the portability and scalability of our four core platforms.

We saw great growth potential in scaling our existing products and technologies with new markets, new applications, and nontraditional customers. We tested that thesis very quickly in 2025, and validated that Gentherm Incorporated products have broad applicability. Within months, we generated a commercial funnel totaling over $300,000,000 of lifetime revenue in markets outside of light vehicle. That funnel enabled us to successfully expand into commercial vehicles, powersports, and home and office. Beyond just winning awards, Genther began supplying product in rapid time to revenue markets. During the fourth quarter, we were selected by another leading global furniture brand supply our climate and comfort products, our momentum in this market is accelerated. Our first discussions in this market began in 2025.

We have already started manufacturing and delivery components in January, demonstrating shorter development cycles and rapid time to revenue compared to our automotive business. For our customers, these represent innovative, next-generation product offerings

William T. Presley: centered on wellness

Gregory Blanchette: a major and growing trend across these markets. For Gentherm Incorporated, we are leveraging our existing assets and core technologies to drive this incremental revenue growth with accretive margins. In Medical, we have prioritized reinvigorating our product life cycle roadmap. Refreshing the product portfolio remains a key focus and we are advancing these efforts by leveraging existing automotive intellectual property to accelerate innovation, improve time to market, and support sustainable growth within the segment. Earlier this month, announced our FDA 510(k) submission for a new innovative product. The way surgeries are performed is changing. Robotic positioning, which allows the surgeon to move the patient for better access, is becoming more common.

Our first-of-its-kind solution, the ThermoFix system, combines conductive, air-free patient warming with securement technology to help prevent both hypothermia and patient movement during procedures. Given our strong relationships and deep engineering capabilities, medical professionals came to us to help solve this unmet gap in the markets. The ThermoFix system will begin generating revenue later this year, and we expect this product to be a key contributor that accelerates Medical’s annual revenue growth into the high teens. This is the first new product on our roadmap, and we will continue to leverage Gentherm Incorporated’s core technologies to develop solutions for the medical market. These are just a few examples of how we are executing against our plans.

We said we would reposition the company for growth by taking our technology outside of light vehicle, and we provided several proof points in 2025. We are just getting started, and the combination with Modine Performance Technologies will play a key role going forward. We are taking bold, decisive actions that will position Gentherm Incorporated for sustainable, profitable growth. Turning to slide five. I am very confident in our path to improved financial performance. Though revenue has plateaued over the last few years, we have one high level of visibility to growth accelerating driven by strong automotive launch activity, and our pursuits in adjacent medical markets.

We have said before that we expect Gender’s growth trajectory to be mid-single-digit growth over market, and our belief in that has only strengthened. On margins, we consistently shared our views on the major levers driving future margin expansion. We are investing in footprint optimization, we are launching lumbar and massage comfort solutions at improved margins, and we will be able to leverage scale as growth accelerates. Our roadmap to delivering improved financial performance is clear. We are now well-positioned to deliver meaningful revenue growth and margin expansion. I will now turn the call over to Jonathan C. Douyard to review some business highlights and our outlook. John? Thanks, Bill. Now turning to slide six.

Our team delivered another strong year of automotive new business awards, finishing 2025 with $2,200,000,000, including $485,000,000 in the fourth quarter. For the year, these awards were highlighted by the Ford F-Series, high-volume platforms with Mercedes-Benz, and further adoption of our innovative pulse-based solution. These wins demonstrate the strength of our industry-leading technology. We defend existing business, launch innovative new products, and create new market opportunities. We generated record revenue of $1,500,000,000 in the year, which increased 2.9% compared to prior year, or 1.8% when excluding foreign currency translation. Automotive Climate and Comfort Solutions revenue increased 5.8% ex-FX, which was offset by declines in other automotive products of $28,000,000 driven by our previously discussed planned exits.

We continue to see strong growth of our market as we ended 2025, with fourth-quarter Climate and Comfort Solutions revenue outgrowing light vehicle by 820 basis points, excluding FX, with strong performance globally and across product categories. Turning to profitability, we delivered $175,000,000 of adjusted EBITDA in 2025, or 11.7% of sales, compared to 12.6% last year. The decrease was primarily driven by higher material costs, including unfavorable mix, as well as expenses related to our footprint realignment, partially offset by operating leverage. We generated $117,000,000 of operating cash flow, an increase of 7% compared to 2025. This was despite the fact that we were building inventory throughout the year to support the ongoing program transitions.

Capital expenditures for the year were $56,000,000, down from $73,000,000 in the prior year, as our team did a nice job focusing on assay utilization,

Jonathan C. Douyard: scrutinizing new capital expenditures.

Jonathan C. Douyard: As a result of our team’s efforts, we further strengthened our balance sheet and ended the year with net leverage

Jonathan C. Douyard: of 0.2 turns.

Jonathan C. Douyard: We continue to emphasize capital as a key business priority and believe we are well-positioned to generate increased levels going forward. I am confident that our increased financial rigor will drive improved results into 2026. Please turn to slide seven for a discussion on our guidance for 2026 and a preliminary revenue outlook for 2027. At this time, we have not factored in any impact regarding our planned combination with Modine Performance Technologies, which is expected to close by the end of 2026. We will provide better visibility on timing and impact as the year progresses.

For 2026, we expect revenue to be between $1,500,000,000 and $1,600,000,000, which is up approximately 3% at the midpoint when excluding slight year-over-year FX tailwinds. According to S&P Global Mobility’s mid-February 2026 report, light vehicle production in our key markets is expected to decrease approximately 1% for the year. This positions us to grow above market by mid-single digits in the year, consistent with our long-term view. We expect the impact of strategically exited businesses to decline to approximately $10,000,000 year-over-year. On margins, we expect adjusted EBITDA for 2026 to be in the range of $175,000,000 to $195,000,000, which implies a midpoint adjusted EBITDA margin of approximately 12%, or 30 basis points expansion year-over-year.

The ongoing footprint transitions will continue to be a profit drag, which we expect to be approximately 60 basis points for 2026. As we think about the 2026 cadence, we expect the second half revenue to be slightly stronger than the first half, driven by new program launches. On margins, we expect first quarter will be similar to prior year, with expected improvement throughout the year as the impact of contractual price downs is offset by material savings and productivity actions as the year progresses. We estimate that adjusted free cash flow will be in the range of $80,000,000 to $100,000,000, assuming CapEx is in the range of $45,000,000 to $55,000,000, or approximately 3% of sales.

This results in an adjusted free cash flow conversion rate of approximately 50%. While this marks an improvement from the last few years, we continue to believe there are opportunities to increase conversion to 60% or higher moving forward. In addition to 2026 guidance, we are also introducing a preliminary 2027 revenue outlook. Based on current visibility, we expect 2027 revenue of $1,700,000,000, up approximately 10% versus the 2026 midpoint guidance. This growth is supported by strong launch activities and adjacent market pursuits.

While we continue to believe that our Automotive New Business Award is a leading indicator of the long-term revenue of the business, we appreciate the challenge in connecting these awards to a near- to mid-term outlook given the lag in start of production and the varying program lives. In order to provide additional visibility to the revenue trajectory, we believe it is important to communicate revenue projections beyond the current year at this time, and we will continue to look for other opportunities to increase transparency moving forward. Overall, we believe that the strategic actions we are taking to accelerate growth and drive operating discipline provide us a clear roadmap for value creation as we move forward.

I will now hand it back to Bill for some further color on our recent announcement to combine with Modine Performance Technologies. Thanks, John. Moving to slide eight. Our combination with Modine Performance Technologies accelerates the execution of our strategic framework by expanding our technologies and capabilities in thermal and precision flow management. The combined company will have an attractive financial profile with revenue of approximately $2,600,000,000, pro forma synergy-adjusted EBITDA of 13%, and a strong balance sheet. We believe Gentherm Incorporated is the ideal home for Performance Technologies and will provide it with a renewed focus to drive growth in attractive markets, including power generation, heavy-duty equipment, and commercial vehicle.

This is a well-run organization that has a high-performing culture and a strong industrial leadership team in place. We expect continued strong execution upon closing.

William T. Presley: The team

Gregory Blanchette: brings a continuous improvement and lean mindset that Gentherm Incorporated is excited to leverage. Now, let us turn to slide nine. As we talked about on our January call, there are significant value creation opportunities with this transaction. First, we have identified actionable near-term run-rate cost synergies of approximately $25,000,000 through efficiencies in direct materials, indirect purchasing and logistics, as well as supported costs related to the overall company operating model. As we work closely with the team, we are looking to introduce additional cost savings initiatives that could increase the run rate over time.

That said, we believe the real power of this combination is in the product and end-market opportunities that are unlocked, and we have strong conviction that together we can greatly accelerate our growth path. This is an area where I have personally spent a significant amount of time, and I want to highlight a few specific examples. First, Modine brings established commercial relationships in industries that Gentherm Incorporated has not historically participated in, including commercial vehicle and heavy-duty equipment. Based on early discussions, we expect this will accelerate Gentherm Incorporated’s progress as we pursue these markets. Furthermore, Modine has footprint in regions like India, which Gentherm Incorporated has been evaluating over the past year as an area of potential expansion.

As one company, we will now be able to sell directly into these geographies without the need for incremental footprint investment. While we have high levels of confidence in those areas, the most value creation opportunities relate to product integration, particularly where Gentherm Incorporated’s valve technology has applicability. To be more specific, in markets such as power generation—and power generation for data centers specifically—Modine Performance Technologies has a leading position supporting the thermal needs of customers as they build out necessary infrastructure. As part of their solution, valves are required to regulate the flow of fluids and air through the thermal management systems of the power generation architecture, which Gentherm Incorporated, as a premier valves manufacturer, is able to supply.

In addition to supporting power generation needs, Gentherm Incorporated valves are mission-critical components with applications inside the data center as well. These are tangible and sizable opportunities that we will continue to develop together post closing. Merging Gentherm Incorporated and Modine Performance Technologies opens key new markets for Gentherm Incorporated’s product, including one experiencing significant growth. Together, our combined capabilities put us in position to capitalize on this expanding opportunity and rapidly scale our highly attractive valves business. On our January call, I highlighted that in a very short period of time, our collective team identified a commercial synergy funnel of over $100,000,000.

It is important to note that valves made up more than half of that number given their broad applicability, mission-critical nature, close adjacency to, and integration with the products that Modine Performance Technologies produces today. These are just a few examples from the initial work we have done, and we expect to significantly increase the funnel size once we close the transaction and are able to work together as one company. These product integration efforts will strengthen our ability to meet the rising demand for our combined mission-critical offerings. It is important to remember that none of these commercial opportunities were factored into our base assumptions and represent incremental upside to the transaction.

Together, we can accelerate each other’s growth path and margin improvement beyond what either could accomplish as a standalone business. We summarized the growth of Gentherm Incorporated and the power of bringing these two companies together on slide 10. We are charting a new course by creating a company that can grow substantially with differentiated and scalable core technologies. We see a clear path to generating $3,500,000,000 in revenue and more than a half billion of earnings by 2030, driven by our disciplined commercial strategies and continued focus on operational excellence. We are on a relentless pursuit to build a more resilient company. Wrapping up on slide 11, I want to reiterate my excitement about Genatherm’s future.

We remain confident in our growth trajectory and look forward to welcoming Modine Performance Technologies later this year. We are focused on closing the transaction, ensuring we hit the ground running on day one. We will update you on our progress throughout the year. As we enter 2026, our team is invigorated and operating with a clear focus on strategic priorities. We are acting with a strong sense of urgency to build on the momentum achieved in our adjacent market initiatives and margin expansion efforts. We are taking decisive actions to position Gentherm Incorporated for sustainable,

William T. Presley: profitable growth

Gregory Blanchette: and long-term value creation. With that, I will turn the call back to the operator to begin the Q&A session.

Operator: Thank you. We will now be conducting a question and answer session. You may press 2 if you would like to move your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing 1. One moment, please, while we poll for questions. Our first question today is coming from Ryan Ronald Sigdahl from Craig-Hallum Capital Group. Your line is now live. Appreciate Pardon, man.

Ryan Ronald Sigdahl: Appreciate all the commentary on the current business this year, but also going out to 2030. It is helpful from a pro forma standpoint. Want to start with the adjacent end markets, curious, knowing that there is a lot of synergy potential with the merger combination, but kind of how you view the next couple quarters, if you guys are continuing to lean in there, or if there is a better, more opportunistic wait-and-see on certain end markets once you are combined. And then second to that, if you are able to quantify the percentage of revenue in 2026 and 2027 for the expectations you gave that are representative of those adjacent markets?

William T. Presley: Yes. So I will start. Look, we will continue to lean into the adjacent markets. I would say home and office, which we previously called Motion Furniture—we are calling home and office as we are getting a lot of pull in that market—driven by trends in health and wellness. So we will continue to lean into that market and just put a little color on that. With the pipeline we have, with the engagements we have, we would expect that home and office would be contributing somewhere between $50,000,000 and $100,000,000 in revenue by 2028.

So very rapid time to revenue, and margins are, as we have discussed before, not quite at Medical, but above what we have in light vehicle. So accretive there. We will continue to lean into Medical. We announced the new product introduction this quarter and submitted the 510(k)s. We anticipate that product will begin contributing revenue this year. But look, that product is going to be a leading contributor, we believe, to doubling the size of the Medical

William T. Presley: business

William T. Presley: before 2030. And then we continue to see some traction in the other adjacent markets with our and comfort solutions for what we would call other mobility. So really around commercial vehicle. We are not slowing anything down, Ryan. The attractive part for us with the Modine Performance Technologies merger is it is a true, what I would say, accelerator for our plans to grow our valve business. Our valve business is very attractive to us. It is above company margins, and we want to scale that. And Modine Performance Technologies gives us a really nice runway to scale valves. John, anything else you want to add?

Just that we have historically said, I think, that the adjacent markets will bring one to two points of growth year-over-year. I think Bill’s comments are consistent with that. And so we are certainly not taking the focus off that as we look to close the Modine transaction. Helpful. Then on the

Ryan Ronald Sigdahl: footprint realignment, last quarter, it was substantially by 2026. Now it is completion in 2027. I guess, has there been a shift out from any of your expectations, from a timing standpoint and what all doing from an alignment standpoint? And then second point to that, as I look to 2027, you gave revenue, but not EBITDA expectations. I get a lot of moving pieces. But are you at least willing to say if margin expansion is expected to accelerate with that revenue growth acceleration, as a lot of this alignment and cost efficiencies start to flow through?

Jonathan C. Douyard: Yeah, Ryan. I would say no change to the timing of footprint transitions. And so we may not track to be done in 2026, with benefits coming in 2027. So if you look at the $1,700,000,000 number next year, which is 10% growth at the midpoint, we did not put out an EBITDA number, but we do expect to see the benefits of the footprint transition flow through, as well as the benefits of more favorable mix, both from pneumatics pricing as well as the adjacent market becoming a bigger piece. And so we would expect to see a bit of a step-function change in 2027 from a margin perspective.

Ryan Ronald Sigdahl: Bill, John, appreciate it. Thanks. Good luck, guys.

Jonathan C. Douyard: Thank you.

Operator: Thank you. Next question is coming from Matthew Butler Koranda from Roth Capital. Your line is now live.

Jonathan C. Douyard: Good morning, guys. This is Joseph on for Matt. Just thank you again for taking my questions. Just want to hop back on a previous clip. Question asked. You know, flow-through, I guess, for 2026 on the sales outlook coming in a little bit lower than expected. Just outside of the realignment on your footprint, is there any other incremental investments we are kind of factoring in for this year? Know, as we look at 2026, just to walk through it, right, I think the growth from a top line perspective being in the mid-single digit over the automotive industry volumes.

I think if you look at it from a productivity and gross margin perspective, we continue to make progress within the plans in terms of driving operational rigor. We continue to make progress in driving material savings to offset pricing. We do have the footprint headwind in the year, which will be relatively consistent with last year, but we did see that start to increase a little bit towards the end of the year and expect that to continue into 2026. I would say the only other dynamic out there would just be from an FX perspective. We do see some headwinds from the peso in particular, just how that has moved in the last couple months.

Other than that, we are not expecting any sort of incremental investments beyond the footprint piece and our continued focus on the adjacent market, which has really just been reallocating internal spend. Got it. Okay. Thank you. And then as you guys provided the 2027 guide, given majority of the core revenue is coming from automotive, where is the confidence coming from if you can just kind of highlight any key line items that you want to highlight for 2027. Excuse me. Yeah. Look, I would say we continue to have strong launch activity. So we are confident in our core automotive business, as we have been.

So we continue to see adoption and penetration of both our Climate Solutions and our pneumatic solutions. So we are confident there.

Matthew Butler Koranda: And then we are also

Jonathan C. Douyard: starting to see just some traction in the adjacent markets. Right? We will start getting contribution, as we said, from new product launches in Medical. We will start getting contribution more from home and office and the other things we have been working on. So we have very strong visibility. We are very confident in the 2027 revenue number. Okay. Thank you, Bill. We will go ahead and take the rest of ours offline. Thank you.

Operator: Thank you. Our next question is coming from Luke Junk from Baird. Your line is now live.

Jonathan C. Douyard: Good morning. Thanks for taking the questions. I wanted to start with maybe backwards looking in terms of China specifically. You cited strength across geographies in the quarter, just hoping we could double click on China and maybe back up and talk about just broadly your China positioning exiting 2025 and then in the near term, you know, just some turbulence from a production standpoint in China, just how you are thinking about it in terms of the setup for Gentherm Incorporated? Thank you. You want to take the first part? Yeah. I mean, we saw, I would say, really strong growth from a China perspective and really across Asia in the fourth quarter.

You know, I think the interesting thing, and I think we talked about this on a prior call, we actually saw strength with the global OEMs in China in the quarter as they increased take rates to expand to not just the passenger seat, but the

Luke Junk: the second row as well.

Jonathan C. Douyard: And so that changed some of the dynamics there. So we really saw very strong growth above market with both local and global OEMs. And I think we expect that to continue at least through the first half of this year. Yep. I would agree with that. And we did remain focused on rebalancing our mix to represent more domestic OEMs in China. We finished the year with about 60% of our awards in China were domestic. So good progress there. But, again, we remain focused on winning with the right business. We are not interested in buying top line growth. We will stay focused on shifting the mix.

As John said, we saw a big pickup from the global OEMs in China that was really driven by the China market having a high level of adoption of our products. So that will slow the mix-adjusted down a little bit, but does not change anything strategically that we are focused on. Yeah. And then just trying to near term, does that contribute at all to your comment that revenue may be a little more back half weighted? Or is that just really launch cadence? I would say that is more launch cadence.

Luke Junk: Okay.

Jonathan C. Douyard: Second, Bill, just hoping to dig into the ThermoFix patient safety system a little bit more. And, you know, assuming you do get FDA approval in the first half, just how quickly you can start to build out that business? I do not know to what extent you have kind of got potential awards in hand or now you have got a license to hunt. And then, you know, looking over the next few years, your comment that this is the bridge to Medical doubling by 2030, should we assume that there is more launches like this that are coming that kind of build to that expectation? Yeah.

So I would say we have already started the voice of customer and clinical work with the ThermoFix system. So we are already, what I would say, priming the pipeline, Luke, which is why we anticipate revenue starting this year. So, again, this will be a big driver towards us doubling the business by 2030. Adoption curves in Medical take a little longer, but we are already out there in front of that as feeling we will push that. You absolutely can expect more new product introductions. We anticipate another significant announcement sometime early 2027, and it will once again leverage technology that we have been utilizing in the automotive industry for 30 years.

So, again, it will be another minimal investment leveraging existing technology

Luke Junk: But, yeah, we will continue to refresh that product line.

Jonathan C. Douyard: Yeah. And then lastly, you mentioned opportunities within data center for valves and yeah. Just something to expand on that. Would that be liquid cooling, or just what would the application there be? Yeah. The application would be liquid cooling. That is an area we have to explore. I would just say in our work with Modine Performance Technologies on the power gen side, that was a market that we gained visibility into. It is not one we have been traditionally in. It is one that we are early in understanding. But Modine Performance Technologies gives us a lens and an avenue in, but there are true liquid cooling applications that require valve technology in data centers. Got it.

I will leave it there. Thank you. Thanks, Luke. Thanks, Luke.

Operator: Thank you. We have reached the end of our question and answer session. Ladies and gentlemen, that does conclude today’s teleconference and webcast. You may disconnect your lines at this time, and have a wonderful day. Thank you for your participation today.

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