Belden (BDC) 8 Feb 242023 Q4 Earnings call transcript

Ladies and gentlemen, thank you for standing by. Welcome to this morning's Belden Reports Fourth Quarter and Full Year 2023 Results Call.

Just a reminder, this call is being recorded. [Operator Instructions]

I would now like to turn the call over to Aaron Reddington. sir. ahead, go Please

Vice and XXXX for me Earnings and and Belden's everyone, Jeremy Belden's today us Fourth President Senior Chand; Ashish Quarter Conference CEO, and thank morning, CFO, joining Parks. you for are President Good Call. With

provide followed of our presentation a earlier issued earnings by will Q&A. then of business, financial our this overview online available reference review on press The these and currently will have we release slide detailed prepared We that a of strategic prepared morning and at will remarks are and Jeremy call. Ashish provide operating investor.belden.com. a presentation and results, our this release, transcript

presentation. in Slide Turning to the X

safe Act During Securities the management this certain XXXX. of forward-looking call, make provisions the Litigation harbor Private will Reform upon statements of reliance in

For today's more our annual report release Form most recent and information, XX-K. review on press please

non-GAAP Regulation GAAP presentation we call Additionally, our adjusted a will reference to during President In I or website associated our the Investor to reconciliation non-GAAP and financial our the Ashish the CEO, information. Chand. information communicate. call, now appendix contain of with over most management today's and turn section of the closely financial financial to accordance Relations the information will G,

We Aaron, today. everyone. you, Thank and joining good really us you appreciate morning,

about CEO forward excited shareholder value. As and I'm increase Much Belden. of this to we host anniversary this year, transform earnings been and call, I has we am and first as opportunity days away President have Belden past from accomplished the my going

we fourth and achieved X for a the full Let's of quarter summary major Slide turn accomplishments the to year XXXX. in

adjusted I reminder, today. will results As be referring to a

excellent a up team for me performance successful and moment Belden quarter the and thank take year. wrapping let a First, their

and high our drive demand end For EPS quarter, as exceeded transformation solutions to revenue and guidance incremental expansion. of continues margin our our the both the fourth

at million, Revenue EPS came $XXX for the and in $X.XX. quarter totaled

in stability X% orders sequentially quarter, increased fourth our the end by indicating For markets.

quarter, single-digit were and experienced many segments, the our relative I'm in that exceeding Automation headwinds. we our in results produced markets order sequential growth see both Industrial the experiencing stability to quarter fourth Solutions Importantly, Entering Solutions. Enterprise expectations. encouraged

wrapped Second, earnings share year, EPS we our year-over-year. XXXX, $X.XX, per to I up in achieve and earnings able were performed X another full-year of business well, as record record share we after of point that to years consecutive would transformational record achieving up per this marks X% out performance. like

destocking second up for to were our margins. of successful Despite challenges down execution, through demand XXX basis ended margins the X% we And at the XX.X%, full half EBITDA were year. points up robust in XX XX.X% Gross XXXX, and points was able a and margins only basis year-over-year. revenue our expand

capital Free cash business million, flat our priorities. consistent allocation flow deploying we is was capital with our for generating year are cash prior and Third, at the $XXX roughly total. the year flow meaningful with strong

steps With free high-return team the our in cash opportunities. took to ample reinvest flow,

over to M&A nearly $XXX our Further, repurchases. and million solutions For growth. we $XXX returned million year, shareholders, invested share enhance designed we strategic the through to mostly in strengthen

shareholders, more year, our last while reducing strategic around M&A approximately or shares, total the shares in share low and plans After remains our XX%. million execute with targeted XXXX, of repurchase program X.Xx. share net upon flexibility significant deploying leverage leaves Since X.Xx. X.X This over XXXX purchased leverage $XXX we outstanding staying financial to in repurchases, than our million the Over million shares has total X.X ratio approximately at us of outstanding. X% $XXX of our to shares purchase in by million returned the resulting

turn to X. please Slide Now

during reflect on our for wanted solutions to has Before made pause transformation. results year, and progress quarter we our and the dig deeper momentarily I Belden into the

those a to Belden, began business. new industrial in in For XXXX early transformation our we

objectives bring on customers feverishly in and engage the disparate needs solve data a with to different been then, ultimately Our products, were problems. focus Belden working Since add CICs, together invest we've internally main break opened way down barriers, solution to India in centers, recently. innovation fifth we our new which customer and to of skills the in scenes behind or just heavily

Our our With simplify and focus solution complex relationship key work verticals challenges. with solutions enhanced we to has customers. been deepen complex with centered around otherwise our strategy,

solutions we our runway the solutions, By Over the opportunity. much past high-quality for in a growth products marketplace. to on have years, provide see focusing we customer and are few more business and winning and working and grown meaningfully problems

transformation. past our share, the margins, has meaningful with market XXX our improvements in starting combined which led CAGR, led with Improved expansion expansion since our revenue point a improvements X% per which a cycles, to margins. gross admirably Over business margin earnings basis CAGR performed impressive EBITDA XX% in growth in has a our to in resulted

higher reconfigured growth products and and prioritized our been have have impressive. to value-added results and improve organic meaningful business and We the solutions,

you see revenue over years at our to changes look changes you will perform next business were these where to compared with If cycle underway, impact Belden and EPS expect our financials vividly. and new so and earnings. for with massive increased ago, ended see I'm similarly we XXXX record We the record today X a pleased to

priorities Slide From accomplished been X capital our action our during to allocation in much for past capital a a Finally, allocation has review transition. the of during perspective, turn cycle. please

no X divested and from solution longer our we underperforming strategy. First, aligned were with that businesses

result $X.X capital. a free sales, we those As combined approximately of with impressive our of cash flow, billion generated

the On where the invested. you were page, those funds side can see of right-hand

$XXX the First, dividends. repurchases years, to approximately last shareholders and million we returned through X over share

purchased by have approximately X $XXX our as million these shares we years past stock accelerated reduced buybacks over and in Our XX%. outstanding

been in the deploying with acquisitions the And million much a $XXX steady too leverage. Second, our past activity finally, of Belden total M&A has approximately capital. XX of had

past to leverage sort our we target, reduce strategy, to X a we achieved years. X.Xx reasonable our new As part more of these which

more return This shareholders. us provides like capital times to action to slide with acquisition priorities perfect speak is can to leverage how flexibility a in to our during invest future. business continue the expect our us see capital allocation these targets illustration in and operate lower of out attractive in Our you and

for our is turn These a summary to wins highlight Slide few please how the examples real-world quarter. of and solutions Now a marketplace. help of X wins strategy showcase the quick noteworthy our customer go-to-market in during evolving

side, in our First, on public with of the project networks Automation the transportation succeeded winning a one team in Germany. largest Industrial

a improve solve their we passenger of critical points tracking experience, in Our network solution position customer passenger and Working helped predictive comprehensive pain with to and develop having assets maintenance. real-time was with issues experience. Belden,

care pleased customer ultimately team an a we the also our our contract specific CICs not report consultants previous helps that and multiple to how CIC I'm awarding share us awarded end-to-end major and eliminating in solutions, marketplace. brought was top strategy a only with but a issues product the showcases our were to in This won very the Next, of customer and and with demo. and Belden provider. looking agreement This network solve Chicago of the our They their power million business suppliers on win well. of as solutions gain for highlights that as to key and $X solutions data health impressed

products are can market way, wins these key now operationally, in streamline down products products and are by I'm I performance. we for walls which we across and have XXXX enterprise discussed insight a we markets few segment examples will it more solutions the in path to This and work the proud working distribution are and true way Parks share move Solutions years same opportunity. operated changing. quarter partners. is our our past, things solutions Industrial financial fourth solution path our down to between to our as year the down into breaking in did bring limited By additional Belden lays and Automation of Jeremy provide as our Enterprise these is that request important hard sales. marketplace foundation our prior. to full how silos and Finally, for a previously, we comprehensive selling with team we that Broadband continue the gaining In traction walls the

comments start the year Thank the our the our balance and sheet a results flow with review XXXX, finally, you, outlook. discussion I for full followed of fourth Ashish. cash quarter and and by my performance; segment of will results, a

As a reminder, today. adjusted I results will referencing be

to XX% year-over-year end turn Slide quarter our of down in please XX% was exceeding review $XXX $XXX million. organically and Now high our presentation million, fourth decreased a guidance to results. for quarter of of the revenue X Fourth our

basis a reflecting compared to sequentially, XX% the Gross XXX with Enterprise organically. We industrial more points $XX X.XX, profit automation with million, revenues order fourth expanding margins of down at ended we were XX%. XX% upticks prior up stable were quarter quarter basis X% experienced revenue with XX in both expected, Solutions' margins in environment. organically points for the book-to-bill Orders decreasing in year. came segments. As softness EBITDA a to slight EBITDA with the and decreasing XX.X%

result a for as rate XX%, end Please that the in The $X.XX, favorable relative items. $XX the benefit $XX note targets. the that was tax to quarter tax tax in Net high million Decremental our the prior quarter. we for margins and was efforts income from our was line of continual expected, planning certain of second above $X.XX. the half EPS year guidance, million benefit range experienced period. down in a prior performed resulted $X.XX discrete guidance in of our with the

an basis organically prior decline to $X.X year a profit and expanding year. XXXX revenue X% compared turn full margins organically year and of Automation down please Solutions in points By Industrial experienced segment, billion. a in were decline XX.X%, experienced X% presentation our review XXX decreased Now X% X Enterprise Gross to organically. results. Slide was in for to Full our revenue X% year-over-year revenue the

that from income up record in is $XXX million year. to basis EBITDA to prior X% favorable continue the for the mix finally, And XX was up and solutions increased to year. business active product XX.X%. as in benefiting Net $X.XX, year-over-year we X% deliver EPS a the down million typically was prior margins from components. year to of consist $X.XX more $XXX up $XXX X% million, EBITDA with points higher-margin Our from

our for business Slide presentation to the results in the of review quarter. now Turning segment a for XX

by Orders with slowness performance quarter, the the of expectations. experienced markets segment impact were destocking. aligned lingering with our was soft For as continued combined our

Automation fourth the Industrial our Industrial segment down and prior down in year, Orders year-over-year. and sequentially XX% Solutions was revenue XX%. quarter, compared X% was For were down up XX% in Solutions the EBITDA to

in we destocking. to customer end quarter, the discrete experienced our weakness exhibit For particular continue which markets,

in Orders in revenue Enterprise XX%. quarter, X% X% the prior Solutions Enterprise down and was were to segment fourth up compared Solutions and was the EBITDA year-over-year. XX% For our sequentially down year, down

As as growth both destocking investment markets. Longer continue anticipate term, to and in Broadband up. customer Buildings the expected, cycle Broadband ramps we see in the meaningful Smart we

Now on XX to of a Slide segment full results for year. for the our review

Industrial year-over-year. For the full revenue decreased XXXX year segment, X% the Automation in by Solutions

discrete in and for EBITDA margins was offset mass revenue increased year-over-year year, transit XXX margins energy. basis to EBITDA including segment with full markets, by the were off Automation XX.X% For points. year process, other in manufacturing, Industrial million, by the growth expanding partially and $XXX

to now our Turning Enterprise segment.

XX.X% segment year full the most to moderate to customers saw EBITDA work decreased revenue a down continue XXXX, the Solutions prior to due the points were through lower by Enterprise segment, leverage. We year Solutions as end basis in our of year-over-year. volume XX.X% margins markets the X% year For compared inventory. XX in decrease for Enterprise in

for cash sheet to turn balance and XX our flow highlights. please Next, Slide

the XXXX. of at $XXX $XXX was fourth quarter quarter Our cash balance in and end million million to of equivalents the fourth compared cash the

X.Xx of financial the the EBITDA quarter. Our leverage debt was at to net fourth end

to we approximately As maintain going X.Xx before, leverage forward. of intend we communicated net

have of reasonable than XXXX. in the debt until much no level a We past maturities with lower

X.X%. of our In average fixed is approximately of rate addition, debt interest all with an

quarter, was $XXX our prior trailing slightly For XX-month flow just below cash levels. the year million, free fourth

opportunities through $XXX nearly high-return to million returned a We we liquidity invested we over million dynamic $XXX complementary businesses to and ample towards new environment. XXXX, continue and as even In manage in to deploy have shareholders.

our updated for Please to XX Slide outlook. turn

First, business. of provide X we at to nature a decided with short-cycle aligned quarter guidance have our the time

our times, on remain execution. focus these During challenging will

quarter, we year For customer quarter, headwinds. to and line demand prior destocking revenue to other down from to the anticipate challenges Relative slightly, with continue, fourth end the in normal stable with first temporary seasonal including the patterns. we expect be

that quarter you first If XXXX. would typically recall, continue and expect we for is our the trend quarter weakest to seasonally,

assuming in million my in the the to $X.XX. to and current adjusted would call $XXX $X $XXX quarter, prepared first range the to That market conditions of back expect sales For do I the we of EPS further, like turn not million deteriorate remarks. range Ashish. to concludes

Jeremy. reacting to uncertainties Stepping to destock. fourth with customers view with demand current the challenging environment to navigate. quarter you, Thank and was We continuing temporary the softness the back, many as economic

Over weakness, short back next we stability see through we see of on and we drivers are cycles revenue half secular the business will the the the term, higher hopeful in our to see side other uptick that expect in we year. remain and the after cycle. and of this get an in investment Long-term EPS

margins our can enhance can us few next execution the Over First, quarters, value. to you what shareholder expect to focus on managing expect from continue and to us? you

on at as in continuing working and achieve decremental the in time, have we invest balanced same to We to transformation will focus the solutions a past. margins whilst our incremental have

Second, drive to you on Enterprise base. products segment down barriers continue sales and our with enhanced expect world-class solution us across a can in Solutions customer to broader focus breaking leveraging the an our

investments swing first foremost, in healthy and us high-return on CICs we a capital to leverage organic cash come. to And quarters a our in and full and finally, you framework years allocation expect the and expect with into free means, in investing Our now can are continue flow opportunities. That growth. invest to gain

our that primary share with cycle, we through This primarily from look return After that X% seek past our our continue focus. enhance continue be will capital we finally, X% a And to will repurchases. will that, the to revenue Over bolt-on solutions acquisitions growth. offering. to organic delivered of shareholders, CAGR to we

our positioned well and portfolio sheet forward, Looking is our balance is strong.

moment possible. through challenges the for where We and gain share seize execute opportunities these to will continue to look operationally and

and a To thank questions. moment your the to concludes a through work. to your call Operator, your close, support recognize I for you remarks. continue take the our of and Thank would associates please environment. year. I open to appreciate would Belden hard for past prepared efforts challenging and our like this to contributions you quarter we That as like transform

first Stein question The the Instructions] [Operator William from Securities. Truist comes of with line

Great.

Let me congratulations offer surprisingly outlook my good results today. the and on

details weak if to that behind would still we we is really the little bit levels, cyclical you QX weakness talking as you about those saw yet in would aligns through and feel help? understand that with understand QX going to guidance, customer help And Your and still destocking highlighted and essentially believe are that nuances any trying us X normal now? me I'm seasonality it? a you're or odds me. positioning demand Or at

all, you, first words. thank of Will, Well, your for Sure. kind

down essentially. think go QX just period, with from seasonality. orders stable So across saw similar we normal X% So a the saw QX follow slightly we QX, X%, a as typically, pattern, businesses. sequentially the We right? growing we adjustment, about And will sequential QX with to

that terms stability. So extended of it's period of different nothing in

remember, its is when see that destocking would we first you if back 'XX phenomenon and the then this would the the peak previously see we in guided half, period of at Now normalization. half we

the think that expected but macro we we -- say and -- going other in including actually we say through I stable I are now, previously it's from don't no, destocking at us, process based direction. that PMIs can can the think we is have the we I what indicators So of right we are period level, think behind all as on heading the expected. destocking this And the different don't we

about helpful. you can there. I the hoping follow-up, the investment a CICs, talk bit of may. I'm That's pacing if Okay. One

that our you with at fifth CICs going relative of the relationship recently. revenue -- one have we anticipated the we should whether noted And expect more Are act? opened You the your these and channel your all forward? your through to channel changed

Yes. No.

you've X process. in that We finished for actually -- We you've build that think CICs, world. the yourselves. across one I big initially our CICs think we had announced it just of seen fact, I So so visited will

to that these in something some connected We planning mini will get big versions hubs. out are to smaller called CICs locations more format roll X --

-- Now in getting customers right? then a once and The phase elevation interesting, people validation familiar we first we've get Stuttgart, design. noticed it moves solution and gets And win where about and large first to this lot and the to rates or and with months second invest customers see as with CIC we've that is seen in success a massive what so, in or technology, they stage. our in really with time our XX it then it's testing

of most to value a they those our of they solution. infrastructure add that a have for didn't have demonstrate including channel did where could For customer those do They that not customers, partners, investments. our kinds complex

So the in have different CIC together, because element would has work bring customers over all which show those can really to they positive products previously, a about. actually how they that become can partnership talk and their now just they

I yes, turned customer a technology where example big update up a on in to and investment. great an just for talked out have ended with about We came we a contract. the then think visit, So regular CICs call a about the be earlier

this then brought and in by partner. customer -- So actually was a

very is And so that positive. dynamic

go We'll Loop Chris to next with Capital. Dankert

I down year-over-year I is first a guidance guess, the quarter for be as amount segments similar basis. assume calling on first both at a guidance off, we're here, to looking

that you just confirm that, would If could be helpful.

right, Chris. Yes, that's Yes.

talk of perhaps? getting it through you're on I still bigger that of perspective, $X just here. how to I'm here back unchanged, thinking there, the in picture from a Okay. the slide guess target the from seeing kind keeping target about Perfect. the Maybe And deck rationale

Yes.

driven continued still EPS belief fundamentals in by cycle. in in our about the is investments CICs $X it's by it's the we've ahead make our Previously, EPS in just It's at We talked CICs, And feel business. this and to the were So not through had also just about said we supported the target, we the the XXXX the longer-term the prior actually point the slightly XX%. 'XX, grow selling at would had R&D overall when Chris, solution question. it's in we articulated target. capabilities. product, that the we

in and cetera. 'XX CAGR there, ahead our buybacks, to 'XX be to were of with years multiple And once CAGR. phenomenon. And go. that current to off including bolt-on the in M&A, of we X% And the of this we we that course, get will levels cycle feel X had other side we et first we've investments XX% then pay organic We we half guidance, but of growth, share get to kind the in 'XX, have of this destocking handsomely of made still that need

here. So I believe the and investments a fundamentals on our can't it get just But market, may were be formula that simple there. not fact based so we'll linear, linear slightly the in we still previously, ahead articulate the we

know in appreciate goal, on couple I in market in center. data you're quick any how be yes, the lot great? terms to what then that me. comments seeing different But seeing excuse you're a data on of there's is. hear just what of last one of one center would indicators a comment I confidence glad that there's could in a and hitting maybe color. Yes, just still sneak And If I

Yes.

has do us business X for well that continued So reasons. to for

learning those were helping discussions, on like previous hospitality, not care, overly from focused build they even of areas approach data Obviously, part multiplied the kinds data to solutions market. of machine those on to probably overall focused out with for has advent finance, AI, we the bring more in remember were specialized market. health as the that and see we markets. you more markets in We need the centers. federal, And that customers hyperscale as of First, that

design to you more centers. some see customers data dynamics. just us have attractive. more But asking solutions and And if that now, pipeline, include coming inventory right given to us fairly it So our look the obviously continue we to recently, base downs data we and centers more as ups at level, at a had

luck Understood. Best of here. in 'XX

Thanks, Chris.

Delaney We'll Sachs. go Mark to next Goldman with

Yes.

where fourth levels? the much will visibility compared First in question reduced if direct the to around inventory you end to well. into customers inventory at How distributors in levels. of you do think quarter And as levels it you think direct have be and and normal distribution first customers inventory the was and

Yes. that Mark. I'll take one,

So inventory in down significantly pretty in was the the quarter fourth fourth quarter.

multi-quarter down a inventory as I we distribution. think at is process -- this as comes

think have the is reduction here really and at in you which then X distribution mind, I reduction in to the end there's customers. elements keep

builders, OEMs, machine users. other So end

that quarter, inventory. And bit was saw but amount little so I In give we related a you to think of exact an hard in quantify. to that's to fourth it's the the difficult a more number, fourth significant quarter reduction

and Got how it. question, to then looking better trying a just you're in levels And understand expense operating margins second at XQ.

I think implied EBIT XX.X% XX.X% about margins at midpoint. the to are

a think helpful not about would balance So OpEx better and up gross be you dollars And lower more onetime any in But of there, if repeat at temporary year, OpEx the to understand. in margins would that can XQ? be to suggest level. are I healthy anything the how provide that may specifics in throughout reductions around OpEx there's staying that margins gross holding absolute seem at to think pretty levels.

Yes.

pretty So to gross think, strong. be I continue margins, will

a bit You from little in lower. of because just may is to QX a gross margins tick QX see volume down the

from be there just So a lower volume an impact bit of will leverage.

OpEx On that continue targets the to we've pretty the closely to to given. we're hit side, going OpEx manage decremental

fourth the we'll so additional We the year. plans first productivity don't quarter. that took do a we the in And action reductions headcount to manage Remember, half of have tight. in

wouldn't OpEx, up be in we manage where QX. in to OpEx QX and going were we'll versus expect So I

Company. go The with We'll Garner Instructions] [Operator Reuben next Benchmark to

Buildings of sequential I movements an and Broadband both would and of sounds recover have we Broadband Industrial It an you year? the seeing similar expectation back later and last think earliest. kind noted snap that -- Automation maybe see Industrial in Can quarter, internal like Enterprise sort the that you're Smart fiscal probably expectation of first you'll Do you in Automation. still sort

view number we you chance general, coming if kind about the we've supply spending. hasn't though depend will federal we see seen -- at into of supply now, had one Reuben, of even had demand a had which a subscribers, right? support the in of the It I is the point anything, Broadband adding we've demand change We complex macro portion that The say that process, kind that encouraged a So you remember, And MSOs plans. is of That was thing in because to we capital some robust. deeper end the customer more talked they partner changed. reports noticeable their with, delve and complex if that posture and large we're no towards products these with from together, chains of are procurement sometimes timing. fine, the may on expenditure

little guided points the in this a timing few in markets. of end within had in previously don't us but It's percentage that there. we to seen strength anything we nothing a of takes away from expectations. at terms different So what Broadband see and bit here We've point, Broadband,

come cetera, business see give to first demand your we Broadband So feel question, we'll that answer some timing, Broadband given our in minor back end et simple we a expect follow still that. to and to changes

those in the are only Maybe QX in bit is benefit in a is more thing for Broadband that, your network. here, going seasonality mind significant I'll Reuben, because the products Yes. little the add that keep

spring, particularly that a quarter hit increase in strong not is volumes Once in QX we typically, see usually, So business. the Broadband. we

strong touched Jeremy, Okay. quarter a in a I The us bridge face margin on in the you get Great. was walk margin hopefully want this, much considering were but year-over-year sustain gross volume was? the we And of down kind gross if able you on of maybe of sort performance as those to the kind really a then, of line it as kind Can environment. levels basis, to top just of through possible. how

coming got for the in -- coming got leverage pressure from you've mean, I volumes negative sure, down. we've the Yes.

So the mix. we've those positive offset of that But on a is absorb amount got fixed -- smaller to is costs volume.

our been So is I highest-margin in think we've strong where products.

other held products. things as So the things that we're lower-margin some that switches selling at and products actives, in like it's really probably of the is, look at you our distributors, cable inventory solutions, the and of disproportionately and at if customers are reality some part

bulk of has impact the lower-margin in we've been some the products. that volume-wise seen So

think negative leverage, then by So positive but that's I you've got mix. offset

so able up And that's past the to how been months. through margins XX we've hold

UBS. Instructions] [Operator to We'll Rob go Jamieson next with

Congrats process, and for just this morning. on different mass a transit? maybe that solid detail full even little maybe appreciate provided discrete, year between the on you I have I energy fourth saw the results guidance in Industrial color all today. provide the you us guess quarter, me, and Solutions, just within Automation can you what across the end markets

Yes.

less because And by down largely robust environment by the 'XX. people second half that slowed extent is some in been phenomenon and destocking maybe driven noted, They where the discrete there this that people by even labor. projects discrete was obviously, plant. of some to or didn't of shortage either down as -- has of their the interest rate So projects. mentioned We of slowed to in enough the build some a reshoring operate have we've previously

we QX, in saw down. come So that

at If down sequentially were down over point, just orders X%. and -- about you POS remember, was XX% that almost actually

PMI show -- stabilize. indicators Now saw including the it's flattish. leading And that in we've right was thing seen Orders direction. indicators, sequentially. in that QX, whole were that heading POS up other X% about we

meanwhile, once more to markets significant where These cycle and a solution, tend and we is stable In side. other we more in on we discrete, this much So cetera. there. fairly pipeline is mass get transit, area mission-critical full number this come impacted, so mass an of phenomenon process -- focus et was providing it's think answer especially we in robust more our of be then because discrete But your have But we long don't growth to will They still have get expect some I high now. inventory question, a yes, inventory weakness And it to the so to did the term. back changes, see transit. engagements. it inventory linked Rob, by and

Perfect. That helps. And higher then one, like I guess, just a level. last

lot kind You the have update guess, then maybe about of software I things, thoughts talk you the customers. a like high-level on just success an and solution And that middleware about can and on through the talked a some outside conversions come solutions Horizon? maybe with or attacking customers your CICs for right there. door. bit KPIs other the just of made little the in you've investments Maybe that X

Yes.

a So things are there few happening.

all, on the of first CICs. So

typically, we success a a with network about get which now them in would want or actually they with Xx customer in it's is come address. more And their to then a We've term healthy. go at validation a might in seen would engage up a the we X/X So the about once eventually, when that be we fairly instances customers we data of our test to customer that complex CIC, and to rate So in customers a long customers for convert solution, seen walk heads engagement. Xx, that back kind more the a right? us, little the and where KPIs bit, that talk fairly to see typically, significant, idea we've change of invest

fault a experiencing about were to of and they take to able was it and time we in they revenues XXX lot their for we've So on And network. down and a minutes money XX average company that worked average. saving with find previously mentioned, their KPI fines. in we were better to through minutes saved the obviously, utility this example, took Spain, And on

a comes typically So data design customer better to walk network workflow it's and flow we and with them there. design. a back semi Each initially KPIs. We We interesting. then get

as our this, requests -- interesting connect we different doesn't AI and software. haven't together that's turned part commercialized to are for destinations testing Now data One machine into the is Belden bring than data application anything it we Horizon it's thing do been of sources And obviously, other we It most more It's it not learning it, how phenomenal the have really because which out doing. to sort with happening, neutral. different be of not a and connect we've and more sources way, now customers -- by of service, Horizon cleanse that. and Horizon very it's different experience and we had designed has incorporate data offering destinations. different with to to now -- are is yet to although more we not

those learning some get without an on and And imagine and form software into somebody example is, whole are out cloud where for devices we that be might may going a has layer, and AI has which terms I'd right? not injured, quote actually save learning. that too a worker and like always of So anything which with robotic be in much they're even there's they the stop arc to of Horizon, that's save arm our and as LLM they media because exciting can cobots but the going time of of in kinds that lot an applications, we arm robotic the edge latency the get increase the to journey otherwise, applications attention factory and machine us of with a ones a productivity. And in to turned they walking lives

the again, Customer the that. you thinking interesting impacted way. KPI making of So difference I big but software and getting is things right a lots in really think are happening, about it

Reddington time. Aaron for call any There I are would to questions closing back turn no like further to remarks. at the this over

and operator, thank call. joining you, today's for you, Thank Yes. everyone,

If at questions, any here IR you the have Belden. contact team please

e-mail Our investor.relations@belden.com. Thank you. is address

today's This call. does conference conclude

now disconnect. may You