Ecolab (NYSE:ECL) reported third-quarter financial results on Tuesday. The transcript from the company’s third-quarter earnings call has been provided below.
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Summary
Ecolab Inc. reported 7% organic sales growth for Q3 2026, with significant contributions from core businesses and new growth engines.
Organic gross margin was maintained despite high commodity cost inflation, while organic operating income margin expanded to 19.6%.
Ecolab’s Life Sciences segment saw 17% organic sales growth, driven by bioprocessing, and aims to achieve $1 billion in sales with a 30% operating margin in the coming years.
Ecolab Digital continued its rapid expansion with a 34% increase in sales, emphasizing customer demand for operational visibility and real-time action capabilities.
Global High Tech grew organic sales by 63%, fueled by data center cooling and circular water for microelectronics, with an aim to reach $4 billion in sales by 2030.
The company plans to focus on expanding its field sales force and enhancing service offerings to drive growth in its Institutional segment.
Looking ahead, Ecolab expects 2027 organic sales growth at the upper end of the 5% to 7% range, with a 20% adjusted operating income margin.
Management expressed confidence in achieving long-term adjusted EPS growth of 12% to 15% in 2027, supported by strategic investments and operational efficiencies.
Full Transcript
OPERATOR
Greetings and welcome to the Ecolab Third Quarter 2026 Earnings Release Conference Call. At this time all participants will be in listen-only mode. A question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero from your telephone keypad. As a reminder, this conference is being recorded at this time. I’ll turn the conference over to Andy Hedberg, Vice President, Investor Relations for Ecolab.
Thank you, Andy. You may begin.
Andy Hedberg (Vice President, Investor Relations)
Thank you. Hello everyone and welcome to Ecolab’s third quarter conference call. With me today are Christophe Beck, Ecolab’s Chairman and CEO, and Scott Kirkland, our CFO. Our discussion of our results, along with our earnings release and the slides referencing the quarter’s results, are available on Ecolab’s website at ecolab.com/investor. Please take a moment to read the cautionary statements in these materials, which state that this teleconference and the associated supplemental materials include estimates of future performance.
These are forward-looking statements and actual results could differ materially from those projected. Factors that could cause actual results to differ are described under the Risk Factors section in our most recent Form 10-K and in our posted materials. We also refer you to the supplemental diluted earnings per share information in the release. With that, I’d like to turn the call over to Christophe Beck for his comments.
Christophe Beck (Chairman, President and CEO)
Thank you so much, Andy, and welcome to everyone joining us today. I’m really super proud of what the team delivered. Once again on our last call, we described Q2 as a transition period as we managed higher commodity costs within the quarter. The third quarter marked an inflection point for Ecolab. Our core businesses strengthened, our growth engines accelerated, and together they drove 7% organic sales growth. But just as important, every business outperformed its end market, demonstrating the power of our One Ecolab strategy.
Despite significant commodity cost inflation, we maintained organic gross margin as our teams continue to create more value for our customers, win new business, and manage supply chain costs very effectively. This will remain a critical focus in the quarters ahead as commodity costs are expected to remain high. Through continued pricing execution and disciplined supply chain management, we expect to continue to offset the impact of higher commodity costs.
Our productivity also strengthened as we leverage the investments we’ve made in our One Ecolab Growth initiative. As a result, organic OI margin in the quarter expanded to 19.6%, accelerating organic OI growth to 11% beyond our reported results. The performance of the underlying business was even stronger as we absorbed additional amortization and interest costs from our recent M&A. On a pro forma basis, including the operating performance of CoolIT and Ovivo, Ecolab’s Q3 sales would have grown high single digits and adjusted EPS would have grown mid-teens.
These results reflect the strength of our core businesses and how our growth engines are materially accelerating Ecolab’s growth algorithm. One Ecolab is making a difference across the company. We bring our water, hygiene, health and digital solutions together with our field expertise to deliver best-in-class performance for customers at scale. We help customers improve business outcomes and operational performance while using fewer resources. That creates differentiated value for customers, strengthens relationships and helps us win new business.
Since launching One Ecolab, we generated over $400 million of sales growth with our largest 35 customers, only capturing more than a 10% incremental share of our targeted $3.5 billion growth opportunity with these customers. You can see this clearly in Food & Beverage, which accelerated to 8% organic growth with broad-based growth across dairy, protein and beverage against stable end market demand. Now, as we bring our integrated water and hygiene solutions, customers look to Ecolab to help protect food safety while improving operating performance and environmental impact. We connect cleaning, sanitizing and circular water management solutions to help customers achieve all three.
At the same time, Nalco Water also strengthened, accelerating to 5% growth. We’re winning in the manufacturing and institutional markets as we bring our end-to-end water management capabilities to customers around the world. Paper and Heavy Industry Water also returned to solid growth. In these businesses, strong new wins and improved pricing are helping us outperform, with stabilizing end markets. Now more than ever, these customers look to Ecolab to help them produce higher quality products while significantly reducing operating costs and environmental impact, which is the Ecolab model.
As we all know, Institutional and Specialty performance remained consistent despite industry trends that continue to get tougher, including restaurant foot traffic that declined mid-single digits in North America. So while I’m pleased with what our team is doing, I’m not satisfied with our results. Given the proven value we bring to customers and the strengths of our offering, we should be outperforming the industry by a much wider margin and growing much faster.
New innovations like Tiche IQ, Aqua IQ and Kitchen IQ combined with our global service capabilities deliver what our customers need most: improved guest experience, labor automation and lower operating costs. So we’ll be shifting gears to deliver even more value to our customers. We will be expanding our field sales power, maximizing our service offering across our hospitality and food service segments, and bringing our technologies together through our One Ecolab model to drive higher solution penetration.
Our growth engines are also accelerating. Life Sciences continued to drive very strong share gains with organic sales growing 17%. Bioprocessing again led our performance as customers advance drug molecules from development into commercial manufacturing. Our opportunity grows with that. Last month we started up our latest Life Sciences plant in China, positioning us extremely well to meet growing customer demand across Asia for the years to come.
These investments are helping us win where breakthrough technologies, quality and reliability are super critical. We’ve been building this major growth engine for a few years, investing in commercial and technical expertise, breakthrough innovation and additional capacity. With this critical investment, our Life Sciences business is soon approaching $1 billion in sales and delivering the performance we committed to you: double-digit sales growth and OI margins that are on a trajectory to expand to 30% over the next few years.
As a result, the return from our acquisition of Purolite is strong and the NPV we expect to realize from this acquisition is actually greater than we had initially forecasted. I love how this business is performing and even more where it’s heading. Ecolab Digital also continued to grow rapidly with sales up 34%. Customers increasingly want visibility into their operations and the ability to act in real time. Ecolab 3D and our expanding IQ solutions across Water, Institutional, Life Sciences and Pest connect unique data insights with our global field expertise to deliver best-in-class customer performance. Pest Elimination is a great example of how we’re using breakthrough digital technologies to deliver superior customer outcomes and growth for Ecolab.
At the same time, in the third quarter, Pest sales growth accelerated to 8%, driven by strong new business wins from our One Ecolab growth platform and Pest Intelligence. Pest Intelligence today connects over 800,000 devices around the clock. Monitoring and predictive insights help our team identify issues sooner and target service more precisely. We combine those insights with local expertise to help deliver nearly a 99% pest-free environment for our customers versus the 94% which is the industry standard.
And with $3 billion of additional cross-sell opportunity, we’re actually just getting started. Global High Tech, now Ecolab’s largest growth engine, continues to accelerate, growing organic sales by 63%. Growth remains very strong across both data center cooling and circular water for microelectronics as AI infrastructure rapidly expands around the world. At the heart of AI is water. Water is required to produce, to power, and to cool chips. Ecolab’s leading innovation, expert service and digital capabilities help the world’s leading tech companies maximize their growth and performance across the value chain.
Our recent acquisition in Global High Tech adds complementary strength to this leading business. CoolIT is off to an incredible start within Ecolab, more than doubling its sales with very strong profitability. Its leading liquid cooling capabilities address a critical need as advanced computing becomes more demanding. We have already fully integrated Ecolab 3D Trasar liquid monitoring technology with CoolIT’s CDU platform and we’re excited about what we can now deliver to customers through one integrated liquid cooling platform.
Ovivo is also performing very well, delivering strong double-digit growth versus pre-acquisition sales. Its mission-critical ultra-pure water systems and on-site expertise provide semiconductor manufacturers with the purest water on earth. Together we can deliver unique circular water solutions that improve chip quality and production yield while recycling more than 80% of the water used in a fab. And no one can truly do that today. Global High Tech significantly strengthens Ecolab’s long-term growth and margin potential.
Last quarter we outlined our ambition for Global High Tech to grow more than 25% annually, reach $4 billion in sales by 2030 and deliver 25% operating income margin. This growth platform alone adds more than 2 percentage points to Ecolab’s sales growth algorithm one year after closing. This is just one example of how we’re building a higher-growth Ecolab and we look forward to sharing more at our investor day next month. The acceleration we see today is the result of the organic and M&A investment we’ve made over the last several years to strengthen our core business and build new growth engines. As our growth engines become a larger part of the business, our mix shifts towards faster-growing markets with attractive margin potential. Our growth engines win using the same proven operating model as our core businesses, providing mission-critical anchor technologies and consumables that deliver best-in-class operating performance for customers.
This is fueling faster, more durable sales growth, faster earnings growth and strong returns for shareholders. We’re entering 2027 with momentum and confidence in our ability to deliver another very strong year. We expect organic sales growth to grow at the upper end of our 5% to 7% target and Ecolab’s adjusted operating income margin to reach the 20% that we promised. Adjusted EPS growth is expected to accelerate in the second half of next year as we lap M&A transaction impact and operating performance continues to accelerate.
That provides a clear path to meet or exceed our long-term adjusted EPS growth target of 12% to 15% in 2027. In closing, the third quarter marked an inflection point for Ecolab. Our core strengthened, our growth engines accelerated and all our businesses outperformed the end market. We’re leveraging the power of One Ecolab to build a higher-growth company with the same durable and consistent core. We have a strong foundation, increasing momentum and a tremendous opportunity ahead. I want to thank our global team for making that possible and for the value they deliver to customers every single day.
Thank you for your continued trust and your investment in Ecolab. I’ll now turn it back to Andy for Q&A.
Andy Hedberg (Vice President, Investor Relations)
Thanks, Christophe. That concludes our formal remarks. Operator, would you please begin the question and answer period?
OPERATOR
Thank you. We’ll now be conducting the question and answer session. We ask you please limit yourself to one question so others will have a chance to participate. If you have additional questions, please rejoin the question queue. To ask a question at this time, you may press star one from your telephone keypad, and a confirmation tone will indicate your line is in the question queue. You may press star two if you would 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 our first question is from the line of Tim Mulrooney with William Blair. Please proceed with your question.
Tim Mulrooney (Analyst)
Christophe, good afternoon. Congrats on the strong quarterly performance.
Christophe Beck (Chairman, President and CEO)
Thank you, Tim.
Tim Mulrooney (Analyst)
So I was hoping we could talk a little bit more about your high-tech water business in a little more detail. The legacy business, you know, that accelerated to 60% plus organic growth, that’s a major step up from the first half. It more than doubled. Again, can you talk about what you’re seeing in both of those businesses that’s driving the strong growth there? And also, as you progress towards that $4 billion target, I wonder if a 30% CAGR is the right number to use based on what you’ve seen over the last couple of quarters. Thank you.
Christophe Beck (Chairman, President and CEO)
Thank you, Tim. Love that question and especially that business. It’s obviously early. For us, we own CoolIT now for almost three months, Ovivo for a little bit less than a year, and we’ve been starting our high-tech business just a few years ago. So pretty early, pretty new, but probably one of the best businesses that we have with the best growth potential as well ahead. We’ll talk more at Investor Day in a few weeks. But I like a lot where we’re positioned right now for a few reasons, with the best technologies—and we clearly worked hard at it—with the best team.
We’ve been building that as well for a long time. But most importantly, we offer what the industry truly needs, and especially now in that environment, which is best performance and the lowest impact on communities and nature. We’ve seen that become a big topic in the media and in all the discussions we have now. If I unpack that a little bit: in microelectronics—and we’ll talk more about it at Investor Day—ultra-pure water is becoming a critical component. It was less the case in the past because purity drives the chip performance for the most advanced chips that are available on the market today. And at the same time it drives yield in manufacturing, which means that the microelectronics manufacturers can produce more chips coming out of their fabs, which is very critical.
Today it’s roughly 60% to 70% for the latest chips, and we’d like to move that up much closer to 100%, you can imagine how much money that represents when it’s really well done. At the same time, the amount of water that’s required to produce those chips is immense. So water circularity is absolutely essential. And this is what we do at Ecolab. Bringing together Ovivo and the capabilities of Ecolab in water circularity are providing something that no one else can truly deliver today.
Similar in data centers: performance drives power required, and power drives heat. And that level of heat can only be extracted through direct-to-chip liquid cooling, which is what CoolIT does. Interestingly enough, water is the best heat extractor. But hot water is pretty hard to manage. The good news is it’s what we master really well at Ecolab. At the same time, water usage and power usage questions in data centers have become a top topic in all the discussions today.
That’s impacting obviously the growth for the tech industry, creating political challenges as well. Our approach is really helping tech companies build data centers the way we call it done the right way, which means zero water, less power, and at the right places. And that’s not including what we do for power, which is providing the electricity for data centers. That’s a business where we’ve been really strong for decades, and today this business is also gaining steam.
So you’re right, we’re very well positioned. We’re even better positioned than what we thought a year ago. We’ll share more at the Investor Day when we get together in a few weeks. But I really like how we’re positioned around performance of chips and data centers, making sure they can be done with the least amount of water and done in ways that are cost-competitive for the customers that we serve, which is the typical Ecolab offer. It will require investments—obviously we’ve demonstrated that in M&A, but also in technology—so we’ll make sure we invest in order to fuel this growth in the future as well.
At the same time, what’s also important is to remain very agile because nobody knows exactly the shape of that curve in the years to come. I want to make absolutely sure that we are benefiting from the infrastructure build, but at the same time we’re most importantly driven by the recurring nature of both of those businesses. So yes, the targets we’ve set out there for me are more achievable than ever. Let’s talk more about how much better we can get when we get together in a few weeks.
OPERATOR
Thank you. The next question is from the line of Manaf Patniek with Barclays. Please proceed with your question.
Ronan Kennedy (Analyst)
Hi, good afternoon, this is Ronan Kennedy, I’m from Manaf. Thank you for taking our questions. You’re now expecting 2027 organic growth at the upper end of the 5% to 7% range. How should we think about the price-volume algorithm underpinning that assumption both for the full year and then anything to be particularly mindful of in terms of first-half and second-half dynamics, particularly as I think surcharge pricing starts to lap at the half-year mark and the move to structural, and then your expectations for volume contribution and build throughout the year?
Christophe Beck (Chairman, President and CEO)
Thank you, Ronan. So talking about 2027, it’s obviously a little bit early right now, but I want to give you a little bit of how I’m thinking about it, and we’ll go more in detail when we get back together at Investor Day mid-November. What was first most important to me: I made a commitment to you that we would get to these 5% to 7% organic growth, we would get to the 20% margin, and we would deliver these 12% to 15% earnings-per-share growth in 2027.
I’m glad that the commitment that we’ve made, we will be delivering it in 2027. And if the key question is how much better we can be, this is a question I truly like, and that’s why we get together in a few weeks—to talk about how 2027, but most importantly the years beyond 2027 as well, look with all the investments, the new portfolio we have, and how the world around us is turning into an opportunity as well. When I think today about 2027, I think it’s going to be a very strong year. It’s going to be an even stronger year than what we have or will be delivering in 2026. The best way to think about it is our underlying earnings growth is in this mid-teens type of growth. That’s true today if you strip out the cost of amortization and interest, and then you have the Nalco amortization coming off as well in 2027. So think about this mid-teens type of growth for earnings.
If you look at the first half of next year and the second half of next year, they will be different mostly because of transaction costs and Nalco amortization, but the base of this mid-teens growth of earnings will remain fairly stable. The way you can think about it: it’s kind of mid-teens earnings growth for 2027; you’re going to have roughly a 5 percentage point headwind in the first half and a 5 percentage point tailwind in the second half when you consider those one-time external factors that are not directly related to the operating business.
When I think about the top line, and that’s assuming obviously that the inflation of DPC is kind of leveling out at some point, the first half of the year is going to be stronger in pricing and volume is going to be still in this 1% to 2%, and then the second half volume is going to be faster—kind of 2% to 3%—and pricing is going to be a bit lower because you’ll be lapping what we did in 2026 in the second half. So underlying growth, it’s reasonable to think this strong top line: 1% to 2% volume, 5% to 6% pricing, and then the bottom line at this mid-teens type of growth—thinking of those two parts of the year but underlying more or less stable at top and bottom line.
OPERATOR
Our next question is from the line of Ashish Sabhadra with RBC Capital Markets. Please proceed with your question.
Ashish Sabhadra (Analyst)
Thanks for taking my question. Really strong momentum in Life Sciences, and you talked about the new facilities going live in China over the last month. How should we think about the tailwinds from those? And then maybe just one quick question: there were some negative headlines around one of the drug companies around an mRNA vaccine. Have you seen any impact from a demand perspective? Thank you.
Christophe Beck (Chairman, President and CEO)
Thank you, Ashish. First, no negative news or impact from what you’re describing to our business. That’s not going to impact us, good or bad, generally. When I think about Life Sciences, for me it’s probably one of the best stories in our company’s history, and we know the intent here: pharma, and especially biotech, is closely related to this tech revolution that we’re experiencing right now because it’s an industry that’s going to be one of the first and best beneficiaries of that tech revolution. Drug development gets a major boost; new drugs are going to be developed much quicker. That’s all good news.
So as GHT, or Global High Tech, keeps accelerating, I think it’s going to help ultimately as well our Life Sciences business. It’s a great business. It’s been a hard business to build over the past few years, as we all know. But I really like where we are today and, as mentioned in my open, we’re exactly where we wanted to be—just a few years later than expected. But overall our investment thesis when we acquired Purolite is totally intact and, if anything, we are ahead of that curve, and I feel really good about that.
Why am I constructive and optimistic about this business? It’s because we have the best technologies—we had to, because we were the smallest in the industry—and our teams have done unbelievable work in innovation. We have the best team that’s very agile as well, to be very close to those customers, being the one that can really respond very quickly to their evolving needs. At the same time we’re bringing water and contamination control together, which is an Ecolab play that we’ve executed in many different industries, as you know, and no one else can do that, which is pretty unique for our company.
So the 10% to 12% top-line growth I think is a good base in terms of top-line trajectory for our future. When I think about the earnings, as I’ve said, my objective is to reach the 30% operating income margin in the next few years—I feel really good getting towards that. It’s mostly related to the pace of investments; the underlying margins are really strong in that business. It was especially strong in the third quarter because we were also lapping a maintenance period that we had in 2025, so a year ago.
So we won’t have that type of earnings growth continuing in the quarters to come, but solid top-line growth in this 10% to 12% steady trajectory, and really an operating margin that ends up at 30% in the next few years, as we have promised—and really happy with what the team is delivering here.
OPERATOR
The next question is from the line of John McNulty with BMO Capital Markets. Please proceed with your question.
John McNulty (Analyst)
Yeah, good afternoon. Thanks for taking my question. So, wanted to dig into the high tech organic growth maybe a little bit deeper. You know, your 2Q level was a pretty strong 29%. This quarter it was 63. So you kind of doubled even the 2Q levels, I guess. In terms of what you would attribute that growth to, is it more the shift that we’re seeing from data centers toward liquid cooling and some of the benefits that you’re getting there, or is it kind of early signs of now you have the CoolIT sales team in force and you’re kind of integrating the, you know, kind of a total, you know, unified platform and that’s helping to grow some of the legacy business, I guess. Can you help us to parse that out a little bit?
Just because it seems like it’s been even faster than kind of the general data center growth that we’ve been seeing.
Christophe Beck (Chairman, President and CEO)
Thank you, John. It’s a very good story, for sure. And no, there’s no cross-sell yet between the different businesses. We’ve integrated those businesses as well. Just for perspective, our data center business and CoolIT is now integrated and, by the way, led by the leader of CoolIT. And the same is true on microelectronics, where we’ve integrated with Ovivo, and the leader of Ovivo is the leader as well of our microelectronics business. Very good story from a setup perspective, but that happened in the last few weeks, so there’s not much cross-selling that has happened so far.
That’s going to come in the near to mid-term future, which is really good. So, the growth that we have today is not driven by cross-selling, but that’s going to be a major opportunity going forward. Today, the growth that we have—yes, the shift to direct-to-chip cooling is helping us because the technologies that we had prior to those acquisitions are more in demand. It’s about fluid management, which means 3D TRASAR. It’s about coolants, which is something that we master quite well as well.
And it’s about services as well, because those tech companies are looking for partners who can help them get the job done, especially in a steady-state manner—not just the build-out, but operating the data center afterwards and making sure that the cooling-as-a-service is as well managed as it can be. Just as a side note, when you think about it, you need four minutes of cooling disruption to kind of destroy the chips that you have in a data center. So the cooling is becoming super critical for those operators. What we do is becoming more important. Sixty-three percent is not going to be the steady-state growth—planning quarters are not all created equal—but I like a lot where we are now. If you have a strong, steady legacy business on top of the two new acquisitions that we’ve made, it’s a pretty good mix of things that we have here.
Which is why, as mentioned before, I feel really good with the commitments that we’ve made, and we’ll work hard to exceed them.
OPERATOR
Thank you. Our next question comes from the line of David Begleiter with Deutsche Bank. Please proceed with your question.
David Begleiter (Analyst)
Good afternoon. Christophe, on CoolIT. Can you discuss your visibility in this business into next year in terms of sales growth? Obviously we’re going to double sales this year, which is a phenomenal performance. I suspect maybe it’s a little bit less next year. Any further insight would be helpful in terms of ’27 sales growth for CoolIT. Thank you.
Christophe Beck (Chairman, President and CEO)
Thank you, David. We will share more when we get together, but the fact that our first lap together for the first year—obviously since we closed in July, but if we look at the whole year in 2026—more than double the business of what we had in ’25 on a pro forma basis, obviously, is a good way to start, keeping in mind that it was a smaller business back then. So the growth rates are obviously slowing down as well as you keep moving, even though you add some significant dollars to the base business.
We feel really good about the trajectory. If anything, we are ahead of what we had planned a few months ago, which is a good sign for it. It’s a shorter cycle of business than microelectronics that need a few years to build—data centers are more quarters than years—so you have a bit less visibility than what you have in microelectronics, which, by the way, is going really well as well. So on the CoolIT data center piece, when I look at the next few quarters, I feel good, especially compared to what we had expected and committed—slightly ahead of what we had planned. We’ll give you more visibility to that when we get together in the next few weeks, but so far looks really good for ’27.
OPERATOR
Our next question is from the line of Seth Weber with BNP Paribas. Please proceed with your question.
Seth Weber (Analyst at BNP Paribas)
Hey, good afternoon. Just following up on that question. Can you talk about your expectations as to whether you will need to add capacity for CDUs or cold plates, and can you just give us an idea what your lead times look like on the CDUs? Thank you.
Christophe Beck (Chairman, President and CEO)
Good question. It’s something that we used to do. We had plans to build capacity for CDU and cold plates manufacturing and 3D TRASAR technology and coolant as well. That was true a few months ago—it’s even more true today because we apparently might need more capacity than what we had planned. Kind of a good problem to have. Our base will remain in Calgary, where our business is based and will be based in the future. But in a typical Ecolab manner, we want to produce and supply as close to customers around the world as possible. So we will keep expanding capacity not just at the center in Calgary but as well closer to our key customers around the world. It’s going to serve a dual purpose: getting more capacity to supply a high-growth business, but at the same time getting closer to our customers in a very Ecolab manner to manage resilience as well as we can, because we know the world is a bit complicated out there.
OPERATOR
The next question is from the line of Lawrence Alexander with Jefferies. Please proceed with your question.
Lawrence Alexander (Analyst)
So just want to confirm, in case there’s any upside surprises on inflationary pressure next year, that you see the 20% margin target as doable regardless of the environment.
Christophe Beck (Chairman, President and CEO)
Yes. The world is a bit different than what we had expected, but I see no reason not to deliver the 20% in 2027. I feel really good about that. The path to get there is and was different than I had planned a year ago. But that’s been true for the last six years—I’m not totally surprised that the world is not always following our plans or my plans. I feel really good about the 20% for next year. My focus is really, what’s next? Because once we’ve delivered the 20%, we’re not going to stay at 20%. We have many of our businesses that are already north of 20%. My objective is to bring everybody north of that and get closer to the next milestone, which we will share as well in the next few weeks. I feel good about the trajectory that we have, and the annual increase that we had committed to a while ago—we’ll stick to it. There will be no major surprise for all of you.
It’s going to be a good story.
OPERATOR
Our next question is from the line of Vincent Andrews with Morgan Stanley. Please proceed with your question.
Vincent Andrews (Analyst)
Thank you. Maybe just to circle back on the Institutional business. Christophe, you made in your prepared remarks some comments about wanting to do better there. Obviously, tough environment with the foot traffic. But could you just give a little more detail on the new initiatives you want to put in place there? I thought I heard something along the lines of you wanted to do more cross-selling and just make sure that the customers were getting the full value that you were offering.
So I don’t know if that was more about getting more volume, price or mix, or just what it was that you were going to put in place over the next 12 months to improve the performance.
Christophe Beck (Chairman, President and CEO)
So, Vincent, it’s a traditional place to be in one of our most traditional businesses, where we continuously need to reinvent ourselves. You remember as we went through COVID, we had to refocus on labor automation for our customers because they had lost most of their employees and they had a hard time to get them back. And when they got them back, it was at a higher salary—so not exactly the best mix for an industry that doesn’t have very high margin.
That was really our point of focus and it’s worked really well. That’s how we developed all those IQ solutions—AquaIQ, DishIQ, and so on—over the last few years, and it’s worked really well. It’s driven very nice top line as well as the margin performance in that business. So I like that business a lot. Our key opportunity in Institutional—in INS, or Institutional Services more broadly, serving retail, serving quick serve as well at the same time—is to accelerate the growth in a market that is not growing. So we’re getting together here as a team—we did it the past few months—and saying, okay, how do we double down on what we have in order to gain share in the market? That’s a volume play, obviously, but also a value-price play as we capture the benefits that we’re generating for our customers, our share of the benefit, as we’ve always done.
So the value-price approach here. The three things I mentioned: The first one is we will rebalance sales and service in our team. On one hand, we will double our salespeople power in North America—that’s the feet on the street, the people serving our customers and selling new customers. The second one, when I think about how we serve our customers in the various segments—restaurants, hotels, quick serve, retail—we do it in a fragmented way today; we’ll do that in an integrated way tomorrow, which allows us to get more efficiency in service, which allows us to deploy more of those efficiencies into the selling arm of our organization.
And the third is what you mentioned: to integrate the proposition to our customers, where we integrate hygiene, water, pest, intelligence, audits that we provide to our customers in a form that is much more integrated for them. We’re still developing what that exactly means, but when you think about what we’ve done in Food & Beverage, we’ve demonstrated that it works really well bringing hygiene and water together. So that’s the direction that we’re taking in Institutional as well—using a playbook that has been really successful in the company in other types of businesses.
OPERATOR
The next question is from the line of Patrick Cunningham with Citi. Please proceed with your question.
Patrick Cunningham (Analyst at Citi)
Hi, good afternoon. Maybe just coming back to global high tech. I think you already alluded to some of the differences in the sales cycle there. But in terms of initial equipment sale versus recurring margin profile and perhaps the amount of customization, how much does that differ between massive hyperscaler deployment, multi-tenant facilities, and next-generation fabs?
Christophe Beck (Chairman, President and CEO)
So two different industries. Obviously here in both cases we’re trying to really evolve these businesses much more into a recurring type of business. Interestingly enough, the market evolution helps us do that. If I just unpack the two, first with data centers, the chip generations are shifting to the next generation much quicker than they used to. A few years back, it was a few years you could use the same chip and then you change to the next generation.
Now we’re talking about less than a year and you get the next chip generation. Which means that when you change the chips within an existing data center, you need to change the whole cooling system — cold plates, coolant, control systems, CDUs as well. And then you become a much more recurring business, which is much more an Ecolab type of business as well. Which is the core reason why we like that business beyond the growth opportunity. Obviously it’s a model that we’re very used to, and that’s why we integrate all those components where it’s cooling as a service, fully integrated.
We’re not the provider of individual pieces of equipment. We are provider of cooling end to end, committing to performance, committing to a cost, and committing to reliability as well by providing the best service. So very naturally this business becomes a much more Ecolab-like type of business. When you shift to microelectronics, it’s a bit similar actually. You have a little bit of a larger part of infrastructure built at the beginning of a new fab. But once the fab is built, you need to provide all the 3D TRASAR technology, all the service that we have on site as well, adjusting to the new chip evolution generation at the same time. And you get into a new recurring model as well at the same time. But yes, the cycles of the two businesses are different.
Data center is kind of months/quarters, and the fabs microelectronics business is more quarters and years, but I kind of like as well that balance which provides stability and predictability in what we do.
OPERATOR
Our next question is in the line of Eric Vois with Evercore ISI. Please, your question.
Eric Vois (Analyst at Evercore ISI)
Good afternoon, and thanks. You highlighted that Ecolab Digital grew 34%. How much of that acceleration is software versus enabling hardware, and maybe how does that mix affect recurring revenue growth and margins going forward? Thank you.
Christophe Beck (Chairman, President and CEO)
So, good story in digital. Honestly, I think that we could do much better going forward, interestingly enough. It’s more software than hardware today. I think that it will have to be more balanced going forward. But what I really like is that our digital business has been built on our industrial businesses with 3D TRASAR, as you know, and in other businesses, more legacy Ecolab. We have much less today. The highest growth we have is in Institutional and Services and in Pest Intelligence as well, which is very good news because we rebalance across all the various segments that we have.
And when I think about it, today we connect less than 100,000 locations out there with all the services that we can provide. And when you know that we have close to 3 million locations around the world, that shows the type of runway that we have ahead of us. So it will be a combination of hardware, with recurring rent or lease as we would do in these machines in a restaurant, for instance, and software and data consumption as well at the same time.
Where it’s exactly going to land in terms of share, I don’t know, but it will be pretty equal going forward.
OPERATOR
The next question to the line of John Roberts, Mizuho. Please, receive your question.
John Roberts (Analyst at Mizuho)
Thank you. I think of pest elimination as the leading indicator for your digital deployment. When should we expect revenues to accelerate there for margins to start improving?
Christophe Beck (Chairman, President and CEO)
So first, we’ve had some acceleration in pest elimination, from 7% in the second quarter to 8% in the third quarter. I like what I’m seeing here. It’s early on that journey. We’ve deployed 800,000 devices out there, as mentioned in my open. That’s the beginning of the story, it’s not the end of the story. And we have millions of devices out there in tens of thousands of locations that we need to deploy. This will drive growth ultimately and it will drive much better margins because the model is going to change.
As I’ve shared with you in past conferences or at Investor Day as well, today 95% of the devices or the traps that we check are empty and 5% have activity, as we call it. With the connection to the cloud, we will go only to the devices that have an activity, which means we will have a much better operating performance, which will help us serve the customer better — hence the 94% pest relocation to 99% pest relocation. And at the same time, that will unlock a lot of margin that we can reinvest in sales, in innovation, and obviously in bottom-line margin as well.
So I expect it to take a year or two to get fully deployed around the world with Pest Intelligence. That will require the upfront investments that we are doing right now. But I feel really good about the top line accelerating and the margin expectations to rise as well because of the model evolution that we make. But it’s going to take a year or two to get to the steady place.
OPERATOR
The next question in line of Jeff Zekauskas with J.P. Morgan. Please, receive your question.
Jeff Zekauskas (Analyst)
Thanks very much. I think you said your organic sales growth in your Global High Tech business was 63% and maybe the base is 100 million. So that would be 63 million in growth, which is 1.5% on your previous year’s consolidated bill. And in your Global Life Sciences business, it looks like you grew, I don’t know, maybe you grew your volumes 10%, which is maybe another 70 basis points. So it seems that all of the volume growth that Ecolab achieved this quarter came from the Global High Tech group and the Life Sciences group.
Is that fair, and is that a function of some contraction in the Institutional business and a little bit better growth then in Water in volume terms?
Christophe Beck (Chairman, President and CEO)
I’m not sure I totally followed all your math, Jeff, but I’ll take the time to do it. But the bottom line is that, yes, in Institutional you have a slight volume decline, which is not totally surprising in a market that is in decline. But that’s why I like the overall view on Institutional and Services to get to the 3%. All the other businesses are actually having positive volume growth and pricing. So it’s been quite broad-based, the volume growth, which is what I really like.
That’s why I mentioned it as well in my open — it’s not one or two businesses being High Tech and Life Sciences. The other ones in Water are doing really well. F&B is doing well as well. And on top of it, one thing that we need to mention is something I’m not spending too much time explaining, but we spend quite a bit of time managing, which is the impact of the Middle East. That is roughly one point as well of growth, which is obviously a headwind in what we deliver. So when you look at it overall, the 2% volume growth net of what’s happening in the Middle East is pretty good, especially the fact that it’s so broad-based, with one exception being in Institutional that slightly declines.
OPERATOR
The next question from the line of Matthew DeYoe with Bank of America. Please, receive your question.
Matthew DeYoe (Analyst)
Thanks. I wanted to just ask, with CoolIT closed, what do you think a reasonable revenue per gigawatt of compute installed capture rate is targetable for the pro forma business? And we’ve seen a few reports now about poor coolant management at some of your competitors. Is this too small of a sample size? Does this just strengthen your pitch, or do you think ultimately there’s an opportunity to extract more value from TRASAR deployment? Because it feels like it’s a pretty dynamic backdrop, obviously with a lot of growth, and yield management could be more than maybe just a token revenue opportunity.
So how do you think about pricing that effectively?
Christophe Beck (Chairman, President and CEO)
So, a few elements in your question. First, dollar per megawatt installed is still something that we’re trying to figure out as a total number when we bring the whole Ecolab for data centers. I don’t have a final number for you, but as I mentioned when we announced CoolIT — and closed CoolIT, by the way — CoolIT is multiplying by three to five times the dollar potential we had as a legacy business. But that was directional. The three to five times, I want to have a number that’s much more solid, and we’ll keep working on it and share it with you once we have something that is more fine-tuned.
As mentioned, we’re early on that journey — three months that we’ve been together with CoolIT — so I don’t have the most detailed number that I’d like to have, but we will have it. Now back to the other question of the reliability of the service. I can’t talk about what our competition is doing out there, but almost all, if not all, of our competitors are providing or selling individual pieces of equipment or equivalent, as you mentioned. And someone has to put it together, someone has to make sure that it works well together, and someone has to maintain it because things obviously are evolving on a day-to-day basis in that industry.
We position ourselves in a very Ecolab manner, where we say we’re not the provider of individual pieces of equipment; we are provider of end-to-end solutions in cooling when we talk about data center today. And that’s very different, and that’s why we’ve brought the whole 3D TRASAR technology not just for the coolant but also for the CDU. We’ll think about how it connects to the cold plate, everything in between as well. And ultimately, to be in a place where we can commit to performance, cost, and environmental impact, which is the way Ecolab has always been selling as well to customers.
We’re doing it the same in that industry today. It’s an industry that’s not used to such an approach, but we’ve experienced that before in other industries. It is showing a very high interest in our approach here because it’s removing one of their concerns — because we will be providing a cooling performance that’s integrated not just short term but long term as well at a predictable cost, which is exactly what they’re looking for. We’re the only ones doing it that way, and I think that’s a huge competitive advantage we have here because it’s a huge moat as well at the same time.
OPERATOR
Our next question is in the line of Josh Spector with UBS. Please, receive your question.
Josh Spector (Analyst)
Yeah, hi, good afternoon. I wanted to ask two things kind of together. One, just on pricing. In prior quarters you talked about getting to a 5% to 6% run rate. Do you still see pricing accelerating into fourth quarter? Because your top-line guidance is pretty similar. And then, related with that, how do you see the incremental margins in Water, given you had very strong volume growth or organic growth, but the incrementals were kind of below our expectations?
Is there a catch-up in fourth quarter linked with pricing?
Christophe Beck (Chairman, President and CEO)
So two different questions. They’re related, obviously. So Josh, first, when I think about volume and price, very short term Q3, Q4 as I’ve said, it’s kind of volume one to two net of Middle East, obviously. And then is pricing these 5 to 6%? I think Q4 is going to be kind of similar to what we’ve seen in Q3, at the same time working on operational performance—or productivity, to take a different term as well—at the same time. So I like how we’re managing margins as an organization.
As I mentioned a few months ago as we published our second quarter, well, it took us in the past two years to get our margins back to where they used to be when inflation was hitting out there. It was the first year to capture the dollar, then the second year to capture the margin back. Well, we’ve done that in one quarter in the second quarter; we’ve done it again in the third quarter in an inflationary environment that was higher than what we had in Q2.
I think it’s going to be slightly higher in Q4 as well. But all in all, it’s going to be a very similar story to what we’ve seen in Q3. Now, if I look at the water margin, it’s been a nice improvement in Q3. It’s going to keep improving. But as we know, it’s a business that’s more impacted by DPC fluctuations than other businesses, like high tech that has almost no DPC because there’s almost no chemistry in that business, or life science, or pest intelligence. Every business is a little bit different. Water is more impacted by it, but has demonstrated it can manage that very well short term.
So it’s going to keep improving. Nobody knows exactly where the market is going from an inflation perspective, so we’ll adjust. If it keeps going higher, we will manage it. My assumption right now is that it’s at a high level today; it’s going to stay at that high level till the end of next year. That’s the base assumption I’m taking here. And we know how to manage it. We’ve demonstrated in Q2, we’ve demonstrated in Q3, we keep demonstrating that in the next few quarters, and if it goes up and down, we’ll adjust as well accordingly. And we know that at some point, well, DPC is going to go down and we’re going to maintain our value price because it’s anchored on the performance that we’re delivering to customers. And that’s going to help us improve our base margin for all the businesses, as we demonstrated all the time as well at the same time.
So kind of three advantages here. One is that we can control our margins within a quarter. Second, we can improve our net margins after the cycle, as we’ve demonstrated as well in the past. And third, it’s going to help earnings, obviously, the moment that the cycle is going to go the other way. Those are all positive news ultimately for us and for investors.
OPERATOR
Next question from the line of Mike Harrison with Seaport Research Partners. Please proceed with your question.
Mike Harrison (Analyst)
Hi, good afternoon. I wanted to see if we could revisit a couple of the assumptions that you’ve told us to think about in our models. First of all, the CoolIT $0.20 per quarter EPS headwind— is that more or less where it was in the third quarter, and how should we think about that $0.20 of headwind tracking over time? And then the second piece is the Life Science margin. I think you told us to assume high-teens margin, and you did about 23%. So should we update our view there and assume that maybe instead of high teens it’s low 20s in the near term?
Thank you.
Christophe Beck (Chairman, President and CEO)
Great questions, Mike. And our CFO Scott was dying to get the question, so I’m just going to pass it to him for this round.
Scott (Chief Financial Officer)
Yeah, I’ll give Christophe a break, Mike. So as we said in the release, if you look at the impact of CoolIT, the interest amortization, it was about a 10% headwind in Q3, so Q4 will be a little bit more, about 12%, because you have an extra month because of the lag of the international business. So you’ll have about a 12% drag in Q4. And then as you think going forward, as Christophe talked for next year, his math there was that base EPS for the full year at this mid-teens level.
But because of the CoolIT amortization, interest annualization, the first half partially offset by the now-going amortization, you have this -5% and then this +5% in the second half. So that’s how to think about it through 2027. And then as you think about the life sciences, as Christophe talked about, that business is doing really well. The margins are really strong, especially given the growth in the bioprocessing businesses. But all those businesses performing very well. Our expectation on this business right now is because we’re continuing to invest in this business. So the underlying margins are higher, more similar to what you saw in Q3, but expect Q4 margins to be in this mid-teens, mid- to high-teens level.
Christophe Beck (Chairman, President and CEO)
This business is going to be a solid-margin business down the road, and not so many years down the road as we committed. I know that it’s not been an easy buildup over the last few years, and I’m really pleased to see that we are back to the trajectory that we had planned initially in our investment thesis. So ultimately that we can return to shareholders what we promised when we acquired Purolite. And I will not budge out from that.
OPERATOR
Our next question is from the line of Andrew Whitman with Baird. Please proceed with your question.
Andrew Whitman (Analyst)
Yeah, great, thanks. I just wanted to have you expand a little bit on some of the comments you made earlier on the high tech business. I think, Christophe, you’re talking obviously 63% organic growth. That’s good. You mentioned that going forward, don’t expect 63. I think you said not all quarters are created equally, and that makes sense. As I understand it, some of this business is, as you mentioned, services—where you’re doing professional services, consulting, helping your customers manage the heat, manage the water.
It’s not all just product sales like I think a lot of people assume. Is that a lumpier part of the business? Those consulting services—are they more in demand maybe when you’re opening a new data center than they would be on an O&M basis? If you were to say, I just am kind of curious as to what can drive a quarter like this and maybe what was unusual about it. If you could just talk about how services might play into that. Thanks.
Christophe Beck (Chairman, President and CEO)
So a few things, Andy. When we talk about consulting, there’s nothing new. That’s not the way we position it. Obviously when we do a plant assessment in a brewery—that we’ve done for a very long time; I’ve been 20 years at the company—we did it when I started here. It’s really to understand what we’ve got: how much water is being used, how much energy is being used, how much waste is created, what’s the quality of the food, and so on, really to understand what’s the starting base, how does it compare to the best plants out there, and developing a plan for the customers to reach the next level of performance.
We do the same in hotels, we do the same in hospitals, we do the same in every industry that we serve. So that’s the very traditional approach to customers in the company, as you know—you’ve been following us for a very long time. And data centers are no different. It’s just that they are usually new when we serve them; it’s not an existing data center. There are some of those, obviously, but for the most part those are new data centers. So we sit together with the builder, with the developer—being a colocator or being a high-tech hyperscaler company; a little bit of a different approach—but in the end it’s more or less the same thing, where we get together and try to understand what are they trying to accomplish, what can we provide in order to get the right heat extraction at the right cost, at the right level of reliability, while minimizing the impact on the environment and, in the case of water, to get to water neutral. Calling it water neutral because it’s not that you have no water in the system; it’s just a circular system that you have within the data center.
So that’s kind of this consulting piece that you’re talking about, which, by the way, is part of the overall program. So it’s not a big driver of revenue afterwards. It’s an evolving proposition. Today it’s being sold a little bit the old-fashioned way where it’s 3D Trasar technologies for cooling towers or coolant, depending on the technology that’s being used; the coolant that’s based on 3D Trasar technology and what we do for CDUs and for cold plates and every technology that you have in between.
But ultimately it’s to sell that cooling as a service—ideally that we can charge much more like a subscription versus an individual piece-by-piece type of equipment. But that’s a journey that we need to get through as we’ve done in other businesses, and I feel really good for the path that we are on on this one. Now to your point of the higher growth in some quarters: well, it depends on the deliveries that we have since we’re still on that journey of making sure that it gets invoiced as an integrated proposition. If you have more data centers that are getting started to operate in one quarter, you get higher sales, and if you have a little bit less the next quarter, you’re going to have less of those sales as well. But the 30% overall global high-tech trajectory of growth that we’ve talked about—this is the baseline, as I’ve expressed over the last 12 months, and that’s the baseline.
So I think that from here it’s just going to get better when we take a year-over-year view. And I don’t really care if every quarter is the same or not, because they will be different for the reasons I just mentioned.
OPERATOR
Our next questions are from the line of Jason Haas with Wells Fargo. Please proceed with your question.
Kika Dantico (Analyst)
Hey, this is Kika Dantico on for Jason. Thanks for taking my question. On the pricing discussions you’re beginning to have for 2027, can you just outline how those are going and if clients are generally receptive for additional price increases? Obviously alongside the surcharge, are you seeing any pushback that could lead you to be more at the lower end of the 2 to 3% annual range, obviously outside of this surcharge? Thanks.
Christophe Beck (Chairman, President and CEO)
Thanks, Keegan. The 2 to 3—that’s in steady state. Honestly, I’m not totally sure when the steady state is going to come back. Right now we’re much more in this 5 to 6%. As mentioned a little bit earlier, that was true for the third quarter, that’s going to be true for the fourth quarter, and it’s probably going to be true for the first half of next year and probably even a little bit more than that as well. When it’s going to come back to the 2 to 3, I don’t know and I don’t really care, honestly, here.
We’ll adjust as we need to while providing incremental value to our customers in order to make sure that we can get the value price that we deserve while doing it the right way for our customers, that net-net they get a positive outcome of the financial equation that they have together with us. Do they like pricing? No. They would prefer, obviously, having 100% of the upside without having to pay for it. Well, that’s not exactly the way life works. But at the end of the day, when I talk to customers, I’m really pleased with what I’m hearing in the sense of saying you guys are very high-touch in what we’re doing—being in life science, in food and beverage, in restaurants, in high tech, wherever that is. You’re not a big share of our spend, usually a few percentage points.
So we’re okay to pay more premium for a service that ultimately is not only helping us keep operating, but driving better operational performance in our operations as well at the same time. And that’s why our value price approach has been so steady, sticky, and so reliable for the past few years. And nothing is going to change in the years to come.
OPERATOR
Our next question is from the line of Kevin McCarthy with Vertical Research Partners. Please proceed with your question.
Kevin McCarthy (Analyst)
Yes, thank you, and good afternoon. Christoph, in listening to your remarks today, you seem to be quite pleased with all of the significant acquisitions that you’ve done in recent years: Purolite, Ovivo, CoolIT. And so I’m tempted to ask, as you look at M&A opportunities in the private market today, are there additional high-growth, high-margin properties that you think might fit quite well under the Ecolab umbrella, or should we expect deleveraging to be squarely in focus over the next, call it, a year or so as you digest CoolIT?
Christophe Beck (Chairman, President and CEO)
It’s the latter, Kevin. It’s really two things. First of all, it’s really to integrate those two companies, Ovivo and CoolIT, extremely well. This is something that we’ve done over and over again over the years. We’re really good at it, but we need, absolutely, to have the right focus, dedication, resourcing in order to make sure that it happens as we have planned and committed. So this is priority one, making sure that Ovivo and CoolIT are perfectly well integrated, that we have those two businesses, data centers and microelectronics, really keeping growing and accelerating, as we’ve discussed today and over the past few calls.
This is priority one, and obviously that’s leading the deleveraging, getting closer to the two times that we talked about. This is my one big priority that I have in front of me now. To your question of opportunities out there in our key businesses, we keep nurturing them. We’re very active on the market, building those relationships, understanding what’s out there, what are the good, what are the ones that are less good. We’ve been really good at it for a very long time. That’s how we ended up with those two, by the way, as well. So I like the pipeline, but there’s nothing imminent that’s going to happen because I’m going to focus on the two priorities I mentioned before.
OPERATOR
Thank you. Our final question is from the line of Scott Sieberger with Oppenheimer. Please proceed with your question.
Scott Sieberger (Analyst)
Thanks very much, Christophe. For the past few quarters, Heavy Industry and Paper have been areas of softness, but both inflected to organic revenue growth in the quarter, so kudos there. How sustainable is that looking? And just curious, outside of the Middle East, are there any other areas of the business now that you would cite under pressure, or are you looking pretty good across the portfolio?
Christophe Beck (Chairman, President and CEO)
It’s been pretty good, but I’m always a little bit paranoiac. I’m paid for that. This is my role: to think ahead, to look around the corners, to be ready for things that we didn’t plan for. And I’ve had plenty of practice the last six years. I don’t know if it’s a good thing or an unfortunate thing. I really like it. And we’ve done really well as a company navigating a difficult environment while delivering exceptional performance. So what I like the most in our company today is really this breadth of performance. We have a very strong portfolio. Some are growing faster, much faster than others, but we have no business that’s really in a troubled situation. All of them have upside potential. That can be true in high tech and that can be true in Institutional, as we talked before, which is the magic of this company that I really like, because ultimately you have a real strong portfolio.
You have a company with a lot of key growth opportunities in front of us, like high tech, like life science, like best intelligence, but also in our core businesses like Food and Beverage, bringing hygiene and water together. We talked about Institutional as well at the same time. And the third component that I really like is the fact that we face less risk of market disruptions out there, being in tech areas or in different areas, because of the very well-balanced portfolio that we have. Our ability as a team as well to react to external factors, being inflation, being supply disruption — we’ve demonstrated we can do that. So ultimately we are exactly in the place I wanted to be, and that’s why I’m talking about this inflection point.
As a company, we have strong, consistent base performance. As a company, we have very good growth opportunities, and even bigger than we thought, in front of us. And third, we are very resilient. We know how to manage things that nobody planned for, including us. And we deliver net performance that keeps getting better. And that’s why I feel that 2027 is going to be an even better year than 2026, and our future is going to be at a very different level of performance than what we’ve seen in the past.
A pretty good story.
Andy Hedberg (Vice President, Investor Relations)
Great. That wraps up our third quarter conference call. This conference call and the associated discussion slides will be available for replay on our website. Thank you for your time and participation. Hope everyone has a great rest of your day.
OPERATOR
This will conclude today’s conference. You may disconnect your lines at this time. Thank you for your participation.
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