Welcome to Teledyne's Third Quarter Earnings Call. Here's our first speaker, Mr. Jason VanWees.

Good morning, everyone. Thanks for joining us. This is Jason VanWees, Vice Chairman of Teledyne, and I'd like to welcome everyone to Teledyne's Third Quarter 2026 Earnings Release Conference Call. We released our earnings earlier this morning before the market opened. Joining me today are Teledyne's Executive Chairman, Robert Mehrabian, President and CEO, George Bobb, EVP and CFO, Steve Blackwood, and Melanie Cibik, EVP, General Counsel, Chief Compliance Officer and Secretary. After remarks by Robert, George and Steve, we will ask your questions. However, our attorneys have reminded me that before we get started, all forward-looking statements this morning are subject to various assumptions, risks and caveats as noted in the earnings release and their periodic SEC filings. And of course, actual results may differ materially. In order to avoid potential selective disclosures, this call is simultaneously being webcast and a replay by webcast and island will be available for approximately one month. Here's Robert.

Thank you, Jason, and good morning, everyone. Our third quarter sales and operating earnings were the strongest in Teledyne's history. For the third quarter in a row, We're raising our full year 2026 sales and earning guidance. In January, we forecasted revenue of $6.37 billion, a 4.2% increase from 2025, and non-GAAP earnings of $23.65 per share. Our outlook for 2026 sales is $6.625 billion, a year-over-year increase of 8.3% and nearly double the growth rate projected in January. An earnings of $25.45 per share, which is a A $1.80 per share, or almost 8% higher than forecast in January, and a 16% increase compared to last year. For all of Teledyne, orders have exceeded sales for 12 consecutive quarters, and funded backlog is now approximately $5.3 billion. In the third quarter, Organic growth accelerated in our digital imaging segment and was led by sales of infrared detectors and subsystems for space and unmanned applications. Furthermore, each of our major commercial imaging businesses, such as industrial vision sensors and systems, as well as healthcare, increased year over year. Our third quarter performance reflected not only the strong execution of the backlog that we've been building for three years, but also the strength of our business portfolio and what Teledyne is today. A company with a broad set of sensors and vertically integrated platforms from space to deep sea. We also continue to enjoy robust free cash flow and recently, made $224.6 million of opportunistic stock repurchases at a weighed average price of approximately $607 per share. We did the same in 2025 and 2024 when we felt Teledyne was undervalued. During the past three years, We've deployed nearly $980 million to buy back shares of our company at a total weight average price of $479 per share. Regarding the pending acquisition of Verix, we were following the company for more than six years. As healthcare and life sciences markets began to recover earlier this year, We felt the timing was finally right for us to pursue and then announce this highly complimentary acquisition in the third quarter. The regulatory process is underway and there is a special stockholder meeting scheduled for October 28. We continue to anticipate closing early in 2027. Notwithstanding the stock repurchases and the pending acquisition, current leverage remains at the lowest level in six years, and we have more than ample flexibility to continue compounding earnings growth for years to come. George will now comment on the performance of our four business segments.

Thank you, Robert. In the digital imaging segment, third quarter sales increased 15%. and 14.3% organically due to well-balanced growth among our defense and commercial businesses. Sales of infrared detectors for space-based imaging increased more than 25%, as did revenue from infrared subsystems and cameras for our customers, unmanned air systems and unmanned maritime surface vehicles. In addition, segment sales increased in each of our larger commercial end markets. That is, sensors and cameras for industrial and scientific vision applications, X-ray products for healthcare, commercial thermography cameras, electronics for maritime navigation, geospatial sensors and software, and microelectromechanical systems, or MEMS. Finally, non-GAAP operating margin in the segment increased 376 basis points to 25.4%. In the instrumentation segment, which consists of our marine, environmental, and test and measurement businesses, Third quarter sales increased 1.9% versus last year. Overall sales of marine instruments increased 2%, primarily due to strong defense-related sales of interconnects for U.S. Virginia and Columbia submarines, as well as continued growth in the offshore energy exploration and production market. Sales of environmental instruments increased 7.1% due to increased sales of gas monitoring instrumentation along with more modest growth in sales of laboratory and life sciences instruments. Sales of electronic tests and measurement systems decreased 6.3% due in part to the timing of orders, which increased 18% year-over-year for a record book-to-bill ratio of 1.23. Instrumentation non-gap operating margin in the third quarter decreased modestly due to product mix, but was sequentially higher for the second consecutive quarter. In the aerospace and defense electronics segment, third quarter sales increased 4.3%. Growth in defense electronics of 7.4% was partially offset by lower sales in commercial aerospace. However, third quarter bookings were very strong in both the defense and aerospace markets, with a segment book-to-bill ratio of 1.29. Non-GAAP segment margin increased 86 basis points year over year, even though there was a greater mix of defense electronics which as a whole have a lower operating margin compared with commercial avionics. For the engineered system segment, third quarter revenue increased 7.8%, driven primarily by greater sales of marine and other manufacturing programs. Segment operating margin was largely flat with last year. I will now pass the call back to Robert.

Thank you very much, George. To conclude, Right now, virtually all of our businesses are moving in a positive direction simultaneously, and our growth remains balanced across many end markets and geographies, and not due to any singular, potentially fleeting market driver. Given our backlog, the pending acquisition of Verix, our strong balance sheet, and outstanding operating discipline, I'm already looking forward to 2027. I will now turn the call over to Steve.

Thank you, Robert, and good morning. I will first discuss some additional financials for the quarter not covered by Robert, and then I will discuss our fourth quarter and full year 2026 outlook. In the third quarter, cash flow from operating activities was $352.5 million, compared with $343.1 million in 2025. Three cash flow, that is cash flow from operating activities less capital expenditures, was $319.5 million, a third quarter record compared with $313.9 million in 2025. Cash flow increased due to favorable operating results in the third quarter of 2026 compared with 2025, partially offset by higher inventory purchases. Capital expenditures were $33 million in the third quarter of 2026, Thank you. Thank you. Now turning to our outlook, management currently believes that GAAP earnings per share in the fourth quarter of 2026 will be in the range of $5.68 to $5.83, with non-GAAP earnings per share in the range of $6.60 to $6.70. And for the full year 2026, we believe that GAAP earnings per share will be in the range of $21.71 Thank you, Steve. We would now like to take your questions. Rob, if you're ready to proceed with the questions and answers, please go ahead. Thank you. We'll now be conducting our question and answer session.

To ask a question at this time, you may press star 1 from your telephone keypad, and a confirmation tone will indicate your line is in the question queue. You may press star 2 if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, for our first question. Thank you, and the first question today comes from the line of Zachary Waljasper with UBS. Please receive your questions.

Hi, thank you for the question. My first question is around backlog. So total company backlog has grown sequentially every quarter so far this year. So with the trends you're seeing in unmanned space, can you talk about the visibility of the team's ability from a top line perspective heading to 2027? Because based on the awards you're winning now, I would assume they'll be delivered next year. And then my second question is around instrumentation. It sounds like from the prepared remarks, there's a bit of missed timing or a bit of a timing order. So is that just for test measurement or for the whole segment? Thank you.

Thank you, Zach. Let me take the backlog question first. I want to just take it on a larger scale. As we mentioned, the backlog right now stands at $5.3 billion. Of that, about 72% will be available for us as revenue in the next 12 months. To put that in perspective, that number is about half of the revenue that we enjoy for 2026. Now, the backlog in other areas, you know, it varies. But basically, a lot of our longer term defense and other areas, the backlog is for the full 18 months. and nine months of it being as I mentioned and overall we think if you look at the different segments even in instruments that George talked about and you just mentioned our book to bill is 1.07 so we feel pretty good about it even though the revenue may have been done in certain parts of that overall the pick up in our orders in Q3 points to a fairly favorable future.

Okay, great. Thank you so much.

Thank you, Zach.

Our next questions are from the line of Andrew Buscaglia with BNP Paribas. Please receive your questions.

Hey, good morning, everyone.

Good morning, Andrew.

I wanted to touch on Digital Imaging just seems like things have really accelerated and it seems really broad-based. But what changed Intracorder that made you exceed your expectations by so much? Was it on the defense side or is it more kind of commercial, commercial infrared stuff that really picked up?

Yeah, I think, Andrew, obviously we anticipated based on the orders we had. that we would do better than we initially thought, but obviously everything depends on execution. I think when you look at our digital imaging and you look at it both as what we call our historical digital imaging, which would be our Teledyne DALSA E2V, our imaging systems here, what we call Teledyne Scientific and Imaging, Those grew very nicely, primarily due to space. As you know, we do a lot of work in space with our infrared image sensors, and the whole missile warning and tracking system has been a really good domain for us. So that picked up. The other area, of course, is the unmanned systems, and that did very well, better than we thought. And then lastly, the commercial domain, which is machine vision, healthcare, microelectronics, mechanical systems. If you add them all up, they all did very well. And digital imaging book to bill as a whole, both what we call our legacy and FLIR, had a book to bill of about 1.22x. Things worked out across the board very well.

Okay, yeah. And maybe the next question on digital imaging margins. Can you talk about expectations around gross margin going forward given price-cost dynamics? And then it looks like R&D and SG&A are growing quite fast. I saw last year you guys were, you took out some costs, but those, So presumably those wouldn't be growing that way, but can you talk a little bit more about on the OpEx side what you expect from here?

Well, I'll let George talk about the cost structure because that's been a significant undertaking in the whole digital imaging domain, especially in what we call our historical digital imaging. All along we've said that FLIR is going to do better year-over-year, quarter-over-quarter, and it's finally arrived at a point where we feel very comfortable with the growth both in revenue as well as earnings. Overall, we're projecting robust growth in FLIR year-over-year of 12% and in defense as well as commercial domain. In terms of the cost structure, I'll let George, as I said, answer it. But I think what we're aiming for is to continuously improve our margins. And we started the year, just broadly, we started the year by saying digital imaging margins would grow about 150 basis points in Q2. Today, we've added another 61 basis points. So we're projecting for the whole year margins to grow 225 basis points. So with that, I'll pass this to George to talk about the cost structure.

Sure. So we did take cost out in 2025. We're getting the benefit of that as evidenced by the margins that we had here in Q3 up 180 basis points. And gross margins are up year over year, at least in the neighborhood of 100 basis points. Beyond that, R&D really wasn't up materially in the quarter. and I think the rest of the cost structure is fine. I think we're getting the benefit of the cost we took out and obviously the volume growth that we have.

I hope that answers your question.

Yes, thank you. The next question is from the line of Sheila Caigu with Jefferies. Please receive your question.

Yeah, hi. It's Adam Samuelson for Sheila. Good morning. Maybe the first question is on instrumentation. I know you talked about test and measurement kind of bookings improving and that giving you confidence on the outlook for the top line as you go into the fourth quarter. I'm wondering if you could comment on kind of the margin outlook there as we think about that mix maybe flipping more favorably within the segment. Should we think about that segment returning to year-on-year margin expansion? in the fourth quarter. Is there any way you think about the margin trajectory for that business as we move into 2027? Thank you.

Thank you, Adam. I'll pass this one back to George again.

Yeah, I think largely we continue to see sequential margin improvement as we go through the year. Quarter over quarter, I don't think we quite get back to 2025 margins in Q4. Having said that, based on the outlook for 2027, I feel good about the direction we're headed.

Got it. And then maybe just switching gears, I'll sneak one more in. Back in digital imaging on the unmanned side, any way to differentiate the demand for infrared subsystems for customer platforms versus your own? And any thoughts on is there any need for incremental capacity to support some of the demand growth that you're seeing there?

Yeah. First of all, Our subsystems have been the strongest of all of our defense programs. In the infrared and visible domain, our sensors, as you said, we supply to our own as well as other people. And that has grown substantially year over year. There are good reasons for that. One of them is obviously, as the demand is growing, the ability to meet the demand and the confidence that the customers have in a demand environment that you will be supplying and not get offline, because very, very important. The second thing is, of course, we're improving our product continuously. We have 12 micron, which detectors that we've been shipping. Now we've announced eight micron plus software additions, et cetera. On the bigger system, which would be our total defense system, we're looking at about a 10% growth, whereas in the subsystems, we're looking at multiple of them.

All right. That's a very helpful color. Thank you.

I'll pass it on.

For sure, Adam.

The next questions are from the line of Jonathan Siegman with Stifel. Let's just see through your questions.

Good morning. Thanks for taking my question. Congratulations on the nice balanced growth across the portfolio again. A question on the budget environment. Teledyne has some terrific exposure both in space and in drones and counter drone applications. Those are disproportionately funded by some of the reconciliation money, which there is some worries out there, maybe stalled out in the months ahead in Congress. As a supplier, what impact does that have on your business? What are your prime customers saying in terms of any impact on this powerful growth you're seeing? Thank you.

That's a very good question. Right now, as you mentioned, there's uncertainty in the budget. On the other hand, because of our longer-term programs that we've won, including the most recent one in the Golden Dome, we don't see an issue for us in 2027. Having said that, You know, there's other things that are happening that may change the outlook in 28 and 29. We don't know. On the other hand, right now, sitting where I am and where George is, we think we're okay in 2027 with all the uncertainties surrounding the budget as well as everything else that's going on in Europe and the Middle East.

Thank you. And if I could just slip one in on Varex, given we're used to looking at businesses that fly and blow up. Just can you understand you've looked at Varex for quite some time. Maybe could you talk a little bit about what attracted you to that business and maybe comment on some of the declines in revenue that business saw and why you're excited about it. I'd appreciate it.

Thank you. That's a very good question. First of all, we've been looking at that business for a long time, at least in the last six years, pretty actively. We wanted to buy pieces of that business before. We're not able to. But what happened is recently, as the whole arena of health care and products that they make began to recover. We thought it was an appropriate time for us to approach them, and that would be obviously in the recovery after the post-COVID era. And we were able to approach them. We were able to go through the process. They had a lot of other potential buyers that they were dealing with, and that's, by the way, detailed in their merger proxy. And in the end, we ended up with a friendly transaction. Why Verix? Very simple. We have healthcare products. We have x-ray detectors, but nothing like they do. We primarily focus on Ceramic metal oxide detectors with are small in size, cannot tolerate high energy, high X-ray energy levels like you have in oncology. They have a bunch of other detectors led by amorphous silicon that are uniquely designed for high energy oncology X-rays. Also, They have really different complementary products to us. And I'll end up with one thing that they have that's exciting to us, and that's their photon detectors, which can detect X-rays without having to go through an intermediate layer called scintillation. And that's very attractive to us because we've always wanted to get into that field, and they already have advanced in it. and we think while the revenue has been relatively flat, we think for us the opportunity is to improve margins like we've done in all of our acquisitions. I'll give you one example. Clear. We bought it at a multiple of 16.7 to EBDA. If you look at it today, In just four years, that's down to 13.7. And broadly, Teledyne has improved almost every acquisition that we've made and improved the margins. I would say on the average, we've made 13.5 times EBDA. And today, they're less than eight. So that's the other driver is we think we can improve it with our 80-20 programs. with not having the public costs associated with a smaller public company. So that kind of sums up the best answer I can give you at this time.

Great. Thank you. Congratulations on a nice final one for Jason to have his contributions on. Good luck with it.

Thank you.

The next question is from the line of Guy Hardwick with Barclays. Please receive your questions.

Hi, good morning. Robert, considering your pretty upbeat comments on the backlog, are you willing to give us kind of an early look as to what revenue growth potential could be in 2027, excluding the VARX acquisition? And just to say, and I ask my follow-up now, did digital imaging margins in Q3 benefit from any tariff reversals or refunds?

No. Refunds were really taken up in Q2, so it doesn't affect Q3. Let me start there. It's a little early for us to talk about 27. Matter of fact, we had our first cut of half of our businesses that George went through with our board. I think our momentum is there. I think we will improve next year again, whether it be at the level we did this year or projecting to do this year. I don't know. It's a little early. Improve, we will. That I can tell you. Thank you.

Thank you. The next question is from the line of Joe Giordano with TD Cowan. Pleased to see your questions.

Hey, guys. Good morning. So on the orders there, I mean, again, at the consolidated level, really strong, it's pretty similar number to what you had in dollars last quarter. I'm just curious if there's any parts of that where you feel like, you know, our customers ordering earlier or excessively because of, you know, worries about a budget or anything like that. I mean, I know your products are not like stocked in inventory typically or anything like that, but just curious if there's any parts of the business where you feel like There is a little bit of different order patterns for whatever reason.

Yeah, Joe, I don't think so. We haven't seen anything unusual. The backlog, the orders are broad-based across our products. We're not looking at any huge movements because of data centers or other things, so we feel comfortable about that. So that's the best answer I can give. We haven't noticed anything unusual across our portfolio.

Okay. And then on Verix, like I think I cut my phone cut out a little bit. You may have gotten into this a little bit on the last question. But on the growth side of Verix, I mean, you guys have showed the ability to cut costs out. And so I think people would expect that on the margin side. You mentioned it's been flattish. What do you do there? Is that just the market dynamic? I know you're probably not wanting to buy something that's wildly dilutive to the total growth profile of Teledyne. So what do you do there to stimulate that?

Yeah, I think first we're going to apply like we do in all of our businesses every single quarter, every single month. We're going to apply our 80-20 principles to Verix. What do we mean by that? We haven't done detailed analysis because obviously we're going through the process now. So the first thing in 80-20 is that's probably going to shrink revenue somewhat because we look at the 80% of the revenue that is substantially Available for us to improve margins. And there's 20% that goes to smaller customers that are diluted to earnings. And we do that across Teledyne. If you looked at Teledyne today versus four or five years ago, we've reduced the number of SKUs that we have by 50%. So we're going to do that first. So that might actually reduce our revenue a little bit at the beginning. But then we think after that, we think we'll get back to mid-size, mid-single-digit growth, like we do under normal circumstances across our own portfolio. And we obviously look for synergies where we can sell similar but different products to the same customers. So I think initially, revenue down a little bit, Margins up, gross margins up, almost first year accredit, and then as we go forward, grow the business like we've done every other acquisition that we've made.

If I could just sneak one more in, do you foresee Varex like the go-to-market strategy? Are they going to work independently from the offerings you already have? Is it two separate sales teams, or is this going to be like one face of Teledyne going to these same customers?

I think it's going to be one phase. That is very important because George really was the architect of what we call one teledyne. And it's not just across healthcare, but across all of our products. So when a market representative, a sales representative approaches a company, whether it's a defense company or a commercial company, They have the visibility of all of our products. And so somebody in defense might mention some of the products we have in the commercial domain. We're going to do the same thing with various. It's not going to be separate. It's got to be one Teledyne approach. Thank you. Thank you.

The next questions are from the line of Ron Epstein with Bank of America. Please proceed with your questions.

Good afternoon, good morning, guys. So, yeah, just quickly, I didn't hear much discussion around, how are supply chains holding up for you? You know, when we've gone to some of the recent trade shows, we've heard that there's shortages on things like printed circuit boards and some, you know, basic electronic components, given, you know, all the, how can I say it, capacity that's being thrown to the hyperscalers and the AI build-out that they're kind of like sucking up everything. How is that impacting you guys and how are you managing it?

Well, that's a very good question. Obviously, there's a lot of shortages. We have a dedicated team that works with our businesses that ensures that we get what we need to produce our products. The only problem that we see because of the shortages, the inflation, specific inflation to the different areas you mentioned is higher than normal. But we try and make up for that with price increases. This year we've been successful in enjoying probably one of our better price increases across our portfolio. So it's an annoyance from an inflation perspective, and sometimes you have a hard time getting specifically what you need, but we're very aggressively planning ahead with our suppliers, recognizing that some of the shortages would probably not last. Let's put it that way.

Got it, got it. Thank you very much.

The next questions are from the line of Noah Popernik with Goldman Sachs.

Please receive your questions. Hey, good morning, everyone.

Morning, Noah.

Jason, congrats on your announcement, and thanks for all the time you spent with us over the years. Always super helpful.

Thanks, Noah, and I'll see you in December, so I'm still here for now.

Yeah, appreciate that. Robert, given the diversification of your business as well as you guys have done over the years, there aren't there aren't that many quarters in any of the businesses that look like the last two growth rates in digital imaging. I guess it leaves me wondering how sustainable is that because what's happening in the defense verticals you feed into right now is pretty unique and at least for now seems fairly enduring. And I guess you kind of have that happening at the same time that your commercial Do you see these growth rates sustaining for a period of time or is this more the early pickup on easy compares?

Thank you, Noah. Very good question as usual. Difficult one to answer. Let me just say short-term and short-term 2027. We think that we're going to do better than we have historically. This year, as you know, we're looking at about 8.3%, 8.4% growth that's organic, which is higher. The organic, sorry, is about 7.5%, but it's higher than what we've enjoyed the last 15 years or so. I think that's going to sustain. Maybe not exactly at that level, but it's going to be better than low single digits, which we've been stuck on for a while. Mid to higher single digits is what we're anticipating. It's hard to say, but we have a balanced portfolio. We've intentionally worked very hard to balance our portfolio so that when things get tough, We survive and do well and things are going well. Some parts of our portfolio are trying like they are this year. I feel comfortable that we're going to do better than our historical, maybe not as aggressive as this year, but pretty close to it.

and then I also wanted to ask about the margin in that segment when it was under some pressure you would project when you expected it to be back to the level it's at now I guess now that it's here and it maybe has growth ahead of it but also pieces moving around under the hood is there a framework for how to think about The three to five year out or just the longer term profitability potential of digital imaging?

Yeah. In digital imaging, obviously, we've enjoyed significant margin improvement this year over last year. By the end of the year, we expect the total margin to go up 225 basis points. Our targets for every year across our portfolio is at least 50 basis points. This year we're going to enjoy closer to 90 basis points and that improvement really we just announced this quarter. Last quarter we were closer to 50, 55. So I think our target is to stay on that 50 and do what we can year over year to improve our margins and That goes to the heart of what George talked about. When necessary, cut costs. When things improve, don't put it back.

Okay. One last one. Just what's the implied fourth quarter total company organic revenue growth that's embedded in your revised guidance? I realize you raised the bottom line considerably, but it It seems like it would require organic growth that maybe looks a little conservative given you still have the easy compares.

I think 7% to 8% is the number we have in mind at the present time. It may be a little higher, but 7% to 8% for Q4. As we get into Q4, which we are now, things are looking pretty well. We just have to execute. Execution is As you well know, it's everything in our portfolio. So, 8% is a good number.

Okay. Thanks very much.

Thank you, Noah.

The next question is from the line of Robert Jameson with Needham Company. Please proceed with your question.

Hey, good morning. Thanks for taking my questions here. Just back on the 4Q guide as well, just with everything and the positive commentary around order books and books and bills. And then just looking historically, I got to go back to like 2015, 2016 to see sequentially when EPS was kind of like similar in three and Peter Fortu. So just wondering what's kind of embedded in your outlook and any puts and takes in the broader macro that you're considering that might be just keeping a little bit more cautious here on your guidance.

Yeah, I think if you kind of look back at those years, and by the way, we do all the time, what happened is By the end of fourth quarter of 2025, we started seeing some tax benefits, which, by the way, we're not enjoying today. So we're very hard at work making sure that we get those tax credits, but they play an important role, obviously, especially if we can move the IRS to do what it's supposed to do, make decisions. If we can do that, we might enjoy some tax benefits on top of everything else. But if you look back at what we call coming out of the hard years, simply what happened is we cut costs, as I mentioned before, George did, let's say in marine and other domains. But when markets turned up, we didn't put all that cost back. We had very good discipline. If we can do that again, that would sustain us for a while and our EPS will grow just like it did subsequent to the tough years that we had in the mid 2015 and 2016. So that's the best I can do in my answers. George, do you have anything you want to add? No. No, I guess not.

No, thank you. That's helpful. And then just can you update us on the unmanned outlook, just how much you expect to generate just on dollar growth for this year? I know you guys kind of bumped that up the last couple quarters, so just curious where that stands today. Thank you.

Yeah. Broadly, 15%. Year over year, 25 to 26. Just on man, if you put everything else in, with space, electronic warfare, missiles, and of course, underwater, if you do all of that, it's still double digits, it's 11.3, 11.5%. So while unmanned is doing really great, everything else in the portfolio seems to be moving up in double digits in that domain.

That's great. Thank you.

Thank you.

The next question is from the line of John Godin with Citigroup. Please receive your questions.

Hi. This is Bradley for John Godin. Thanks for taking my question. So I just want to follow up on Noah's question about the growth trajectory for digital imaging. I mean, 2Q3Q is strong, but I'm just trying to think for the potential outlook here, given that you called programs such as space sensors Missile Detection. These programs still seem to be in their infancy, so I'm just trying to think what the size and shape of this segment looks like over the fullness of time. Any comments you can give here would be appreciated.

Thank you. Let me just say, right now, from where we sit, George and I, we're looking at mid-single digits, maybe a little higher than that, 5% to 8%. It's too early right now. Right now we're working on 2027, and I've never been one to project beyond the year. I know some people would tell you, you know, three to five years, everything's going to be great, but that's not us because we don't see that far into the future. But I think single digits on the high side would be comfortable with that, and as we execute and as we compete with new programs, with things like our new drones, loitering drones that are armed with our new nano drones that you can release three of them simultaneously from a single platform and recover them with our ability to have an environment where all of our drones, whether it's ground-based or air, talk to one another. I think we feel comfortable with a higher single-digit growth.

Got it. Appreciate the cover. I'll keep that one. Thank you.

Thank you.

Thank you. The next question is found in the line of Joe Giordano with TD Cowan. Please proceed with your question.

Thanks so much, Rebecca. Just wanted to clarify something I may have heard wrong. Robert, I thought you said for DI for the year, you were thinking like eight point something percent. Is that a fourth quarter number or is that a full year number? Because if it's a full year number, I'm guessing it's not. Then it would mean like fourth quarter organic is barely up. I just wanted to clarify that.

Yeah, I think for the year, it's higher than that. It's organic is 10%. With 0.6 of acquisition, it's 10.6 closer to 11%. So if I said that, I may have misspoken. We're talking about the revenue for digital imaging around $3.5 billion.

That makes much more sense. Thank you.

Thank you, Joe.

Thank you. At this time, we've reached the end of our question and answer session, and I'll hand the floor back to management for any closing comments.

Thank you, Rob. I will now ask Jason to conclude our conference call.

Thanks, Robert. And again, thank you, Rob, for hosting the call. And if any of you have follow-up questions, please feel free to call me at the number in the earnings release or you have my email. So thanks, everyone. Bye.

This will conclude today's conference. You may disconnect your lines at this time. We thank you for your participation and have a wonderful day.