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A number of stocks fell in the afternoon session after investor caution spread amid concerns that the rally in artificial intelligence stocks might have created a bubble. After a fantastic run, many of those high-flying AI and technology stocks saw investors take profits: selling shares to lock in their gains. This is often called a "market rotation." Money is moving out of the red-hot tech sector (which some worry has become too expensive) and into other parts of the market that investors may currently deem more stable or reasonably-priced. There's a secondary reason for the cautious mood: The long government shutdown came to an end. Though it's typically interpreted as good news, it also means a flood of delayed economic reports will be released. For weeks, investors were "flying blind" without key updates on the economy's health, like inflation data and the jobs report. In typical "sell the news" fashion, investors may also be taking profits and selling in anticipation that the new data would potentially give the Federal Reserve reasons to slow or even pause future rate cuts.

A number of stocks fell in the afternoon session after investors continued to question how much more the superstar stocks can add to their already spectacular gains. 

A number of stocks fell in the afternoon session after markets continued to retreat, as investors re-evaluated the high valuations of stocks that benefited from the artificial intelligence boom. 

A number of stocks fell in the afternoon session after investors continued to question how much more the superstar stocks can add to their already spectacular gains. 

A number of stocks fell in the afternoon session after markets continued to retreat, as investors re-evaluated the high valuations of stocks that benefited from the artificial intelligence boom. 

A number of stocks fell in the afternoon session as investors continued to question how much more the superstar stocks can add to their already spectacular gains. 

A number of stocks fell in the afternoon session after markets continued to retreat, as investors re-evaluated the high valuations of stocks that benefited from the artificial intelligence boom. 

A number of stocks fell in the afternoon session after investor caution spread amid concerns that the rally in artificial intelligence stocks might have created a bubble. 

Shares of fiber laser manufacturer IPG Photonics (NASDAQ:IPGP) fell 2.6% in the afternoon session after markets continued to retreat, as investors re-evaluated the high valuations of stocks that benefited from the artificial intelligence boom. 

A number of stocks fell in the afternoon session after markets continued to retreat, as investors re-evaluated the high valuations of stocks that benefited from the artificial intelligence boom. 

A number of stocks fell in the afternoon session after investors continued to question how much more the superstar stocks can add to their already spectacular gains. 

A number of stocks fell in the afternoon session after investors continued to question how much more the superstar stocks can add to their already spectacular gains. 

Specialty insurance provider Fidelis Insurance (NYSE:FIHL) fell short of the markets revenue expectations in Q3 CY2025, with sales falling 5% year on year to $651.9 million. Its non-GAAP profit of $1.21 per share was 1% above analysts’ consensus estimates.

A number of stocks fell in the afternoon session after the broader U.S. stock market declined amid investor caution and a pullback in technology stocks. 

A number of stocks fell in the afternoon session after the broader U.S. stock market declined amid investor caution and a pullback in technology stocks. 

A number of stocks fell in the afternoon session after investors showed signs of fatigue with the AI-led rally, rotating out of high-valuation growth names. 

A number of stocks fell in the afternoon session after the broader U.S. stock market declined amid investor caution and a pullback in technology stocks. 

A number of stocks fell in the afternoon session after investors showed signs of fatigue with the AI-led rally, rotating out of high-valuation growth names. 

A number of stocks fell in the afternoon session after investors showed signs of fatigue with the AI-led rally, rotating out of high-valuation growth names. After a fantastic run, many of the high-flying AI and technology stocks saw investors take profits: selling shares to lock in their gains. This is often called a "market rotation." Money is moving out of the red-hot tech sector (which some worry has become too expensive) and into other parts of the market that investors may currently deem more stable or reasonably-priced. 

A number of stocks fell in the afternoon session after investors showed signs of fatigue with the AI-led rally, rotating out of high-valuation growth names. 

A number of stocks fell in the afternoon session after investors showed signs of fatigue with the AI-led rally, rotating out of high-valuation growth names. 

Networking technology giant Cisco (NASDAQ:CSCO) reported Q3 CY2025 results beating Wall Street’s revenue expectations, with sales up 7.5% year on year to $14.88 billion. Guidance for next quarter’s revenue was optimistic at $15.1 billion at the midpoint, 3% above analysts’ estimates. Its non-GAAP profit of $1 per share was 1.9% above analysts’ consensus estimates.

Cash-back rewards platform Ibotta (NYSE:IBTA) reported Q3 CY2025 results exceeding the market’s revenue expectations, but sales fell by 15.6% year on year to $83.26 million. On the other hand, next quarter’s revenue guidance of $82.5 million was less impressive, coming in 1.9% below analysts’ estimates. Its GAAP profit of $0.05 per share was significantly above analysts’ consensus estimates.

Shares of materials and photonics company Coherent (NYSE:COHR) fell 6.8% in the morning session after a major shareholder, Bain Capital, disclosed the sale of over $1 billion worth of its stock. 

Shares of solar power systems company SolarEdge (NASDAQ:SEDG) fell 13.1% in the morning session after peer Canadian Solar reported a significant drop in its third-quarter module shipments, raising concerns about a broader industry slowdown. 

Shares of streaming TV platform Roku (NASDAQ: ROKU) fell 5.6% in the morning session after its CEO and Chairman, Anthony J. Wood, sold a significant amount of company stock. 

Shares of beauty and waxing service franchise European Wax Center (NASDAQ:EWCZ) fell 4.3% in the morning session after the stock's negative momentum continued as the company reported third-quarter results that showed declining year-over-year revenue and a net reduction in its store count, signaling underlying business weakness. 

Shares of electric vehicle pioneer Tesla (NASDAQ:TSLA) fell 5.5% in the morning session after the stock's negative momentum continued as reports surfaced of a dramatic drop in its China sales for October. 

Shares of plant-based protein company Beyond Meat (NASDAQ:BYND) fell 6.9% in the morning session after analysts at Mizuho and Barclays lowered their price targets on the stock following the company's weak third-quarter financial report and poor future guidance. 

Shares of diversified solutions provider Matthews International (NASDAQ:MATW) jumped 8% in the morning session after it agreed to sell its Warehouse Automation business to Duravant LLC for $230 million. 

Shares of boat and marine products retailer MarineMax (NYSE:HZO) fell 5.4% in the morning session after the company issued a weak financial outlook for the 2026 financial year that overshadowed its third-quarter earnings beat. 

Shares of server solutions provider Super Micro (NASDAQ:SMCI) fell 5.9% in the morning session after reports revealed billionaire investor Philippe Laffont sold his entire stake in the company amid concerns about declining profitability and rising competition. 

Shares of theater company AMC Entertainment (NYSE:AMC) fell 3.2% in the morning session after an analyst note from Roth Capital highlighted persistent concerns about the company's financial health. 

Shares of gaming products and services provider Light & Wonder (NASDAQ:LNW) jumped 5.1% in the pre-market session after the company was added to the FTSE All-World Index. 

Shares of digital storytelling platform WEBTOON (NASDAQ:WBTN) fell 24.4% in the morning session after the company reported third-quarter results that missed revenue expectations and provided a weak forecast for the upcoming quarter. 

Shares of digital infrastructure provider Applied Digital (NASDAQ:APLD) fell 10.1% in the morning session after the company announced significant new fundraising plans that involved issuing new stock. 

Shares of online used car auction platform ACV Auctions (NASDAQ:ACVA) jumped 10.4% in the morning session after a director, Robert P. Goodman, disclosed a significant purchase of company shares worth over $5.1 million. According to filings with the SEC, Goodman acquired 912,408 shares of common stock at a weighted average price of $5.61. This large purchase by a high-level insider was seen by investors as a strong signal of confidence in the company's future direction. Such transactions often suggest that leadership believes the stock is undervalued or that positive developments are on the horizon, which can encourage other investors to buy shares.

Check out the companies making headlines yesterday:

3D printing company Stratasys (NASDAQ:SSYS) met Wall Streets revenue expectations in Q3 CY2025, but sales fell by 2.2% year on year to $137 million. The company’s outlook for the full year was close to analysts’ estimates with revenue guided to $555 million at the midpoint. Its non-GAAP profit of $0.02 per share was $0.02 above analysts’ consensus estimates.

Boat and marine products retailer OneWater Marine (NASDAQ:ONEW) reported revenue ahead of Wall Streets expectations in Q3 CY2025, with sales up 21.8% year on year to $460.1 million. The company expects the full year’s revenue to be around $1.88 billion, close to analysts’ estimates. Its non-GAAP loss of $0 per share was significantly below analysts’ consensus estimates.

Department store chain Dillard’s (NYSE:DDS) reported Q3 CY2025 results exceeding the market’s revenue expectations, with sales up 2.7% year on year to $1.49 billion. Its GAAP profit of $8.31 per share was 34.7% above analysts’ consensus estimates.

Global entertainment and media company Disney (NYSE:DIS) fell short of the markets revenue expectations in Q3 CY2025, with sales flat year on year at $22.46 billion. Its non-GAAP profit of $1.11 per share was 8.4% above analysts’ consensus estimates.

Beauty supply retailer Sally Beauty (NYSE:SBH) reported Q3 CY2025 results exceeding the market’s revenue expectations, with sales up 1.3% year on year to $947.1 million. The company expects the full year’s revenue to be around $3.74 billion, close to analysts’ estimates. Its non-GAAP profit of $0.55 per share was 16% above analysts’ consensus estimates.

Boat and marine products retailer MarineMax (NYSE:HZO) reported revenue ahead of Wall Streets expectations in Q3 CY2025, but sales fell by 1.9% year on year to $552.2 million. Its non-GAAP loss of $0.04 per share was 65.5% above analysts’ consensus estimates.

Household products company Spectrum Brands (NYSE:SPB) fell short of the markets revenue expectations in Q3 CY2025, with sales falling 5.2% year on year to $733.5 million. Its non-GAAP profit of $2.61 per share was significantly above analysts’ consensus estimates.

Personal care company Edgewell Personal Care (NYSE:EPC) beat Wall Street’s revenue expectations in Q3 CY2025, with sales up 3.8% year on year to $537.2 million. Its non-GAAP profit of $0.68 per share was 15.6% below analysts’ consensus estimates.

ScanSource’s third quarter results were met with a negative market reaction, as sales came in below Wall Street expectations and declined year over year. Management attributed the underperformance largely to continued weakness in Brazil and the effects of reporting more netted down revenue, particularly in the company’s Specialty Technology Solutions segment. CEO Mike Baur acknowledged that while some technology categories grew in North America, certain legacy areas remained in decline, tempering overall top-line momentum. Baur highlighted ongoing gross profit margin improvements and growth in recurring revenue, stating, “Each of our segments achieved year-over-year gross profit growth and higher EBITDA margins.”

Doximity’s third quarter results were marked by strong revenue and profit outperformance relative to Wall Street expectations, yet the market responded negatively. Management attributed the quarter’s performance to rapid adoption of AI-powered workflow products, integration of the Pathway acquisition, and a shift in customer upsell timing. CEO Jeffrey Tangney highlighted surging engagement with new features, particularly the AI scribe and DoxGPT tools, which saw user numbers rise sharply. CFO Anna Bryson emphasized that earlier and more evenly distributed upsells, driven by integrated programs, contributed to a higher portion of annual revenue being recognized in this quarter.

Palomar Holdings’ third quarter results were positively received by the market, as management credited robust premium growth and expanding margins to its diversified specialty insurance portfolio and disciplined underwriting. CEO Mac Armstrong highlighted the company’s broad mix of admitted and excess and surplus (E&S) property and casualty offerings, noting, “All our product groups, save for fronting, experienced double-digit growth in the third quarter.” The addition of new specialty lines, including crop and surety, further enhanced the company’s balanced risk exposure and earnings consistency.

Granite Construction’s third quarter saw a negative market reaction as the company’s revenue fell short of Wall Street expectations, despite double-digit year-over-year growth. Management attributed the quarter’s performance to strong execution in both the Construction and Materials segments, aided by recent acquisitions and improved project selection. CEO Kyle Larkin emphasized that increased aggregate and asphalt volumes, as well as effective pricing strategies, were key contributors to margin improvement. The quarter’s results also reflected ongoing success in integrating newly acquired businesses and operational enhancements in core markets.

Advanced Drainage’s third quarter was marked by margin expansion and robust execution, which led to outperformance relative to market expectations. Management pointed to strong growth in higher-margin Allied Products and Infiltrator segments, along with operational improvements and disciplined cost controls. CEO Scott Barbour highlighted the company’s ability to generate above-market growth despite a “challenging market environment,” citing successful material conversion strategies and the launch of new products as key contributors. Continued demand in nonresidential markets and resilient pricing also played a significant role in supporting results.

ePlus delivered a strong Q3, with the market responding positively to results that exceeded Wall Street expectations. Management attributed the outperformance to robust demand in security, networking, and cloud solutions, with CEO Mark Marron noting that security gross billings rose 56% year-over-year, fueled by customers investing in AI-driven infrastructure. Additionally, the company saw broad-based growth across customer segments and verticals, except for state and local government, which faced budget constraints. The successful execution of its automation initiatives and operational leverage also played a critical role in the quarter’s margin expansion and profitability.

Sunrun’s third quarter was marked by strong top-line growth, with management highlighting cost efficiencies and a rapid increase in storage adoption as key contributors. Despite exceeding Wall Street’s revenue expectations, the market reacted negatively, reflecting concerns over lower-than-expected GAAP earnings. CEO Mary Powell described the quarter as one where Sunrun “delivered higher unit margins and considerably more cash generation,” attributing performance to disciplined execution and a focus on storage-first strategies. Management acknowledged that while profitability improved, increased battery hardware and installation costs pressured margins.

Ducommun’s third quarter results met Wall Street’s revenue expectations but prompted a negative market reaction, with investors focused on the company’s sharply lower operating margin due to a substantial litigation settlement. Management attributed the quarter’s top-line growth to continued strength in the defense segment, particularly missiles and radar programs, which offset declines in commercial aerospace. CEO Stephen Oswald acknowledged ongoing commercial aerospace destocking as a key headwind, explaining, “We achieved this despite continued headwinds in our commercial aerospace business, which has been previously forecasted due to destocking at BA and SPR.” Adjusted margins improved, but the one-time legal charge dominated GAAP profitability.

Aerospace and defense company TransDigm (NYSE:TDG) announced better-than-expected revenue in Q3 CY2025, with sales up 11.5% year on year to $2.44 billion. On the other hand, the company’s full-year revenue guidance of $9.85 billion at the midpoint came in 1.1% below analysts’ estimates. Its non-GAAP profit of $10.82 per share was 7.6% above analysts’ consensus estimates.

RXO’s third quarter was marked by a significant margin squeeze and weaker-than-expected profitability, which led to a sharp negative market reaction. Management attributed the underperformance to a sudden tightening of trucking capacity caused by new regulatory enforcement actions, resulting in higher transportation costs that outpaced RXO’s contractual sale rates. CEO Drew Wilkerson acknowledged, “Buy rates increased faster than our contractual sale rates with no meaningful corresponding increase in accretive spot opportunities,” emphasizing how this dynamic compressed margins. The company also highlighted ongoing weakness in automotive freight and a muted demand environment as additional headwinds.

AerSale’s third quarter results were met with a significant negative market reaction, reflecting both a substantial revenue shortfall and profit miss compared to Wall Street expectations. Management attributed the underperformance primarily to the lack of engine or aircraft sales, a segment known to produce volatile quarter-to-quarter swings. CEO Nicolas Finazzo acknowledged that “the year-over-year decline was entirely driven by the absence of engine or aircraft sales in the quarter compared to 5 engine sales in the prior year period.” Despite this, management emphasized improved profitability within its core operations, citing stronger leasing activity and ongoing cost reduction efforts.

PAR Technology delivered a robust third quarter, with revenue and non-GAAP profit both exceeding Wall Street expectations and a positive market reaction following the release. Management cited software subscription growth and strong execution in hardware deployments as key drivers of the quarter. CEO Savneet Singh pointed to the success of enterprise-scale rollouts, notably with large quick-service restaurant clients, and highlighted the company’s operational discipline, saying, "Our commitment to a flat cost base also played out," resulting in improved operating leverage and ongoing cash flow gains.

Moderna’s third quarter was shaped by sharply lower demand for COVID-19 vaccines, yet the company delivered results above Wall Street expectations for both revenue and earnings. Management attributed the outperformance to rigorous cost discipline, with CEO Stéphane Bancel noting a 34% reduction in combined cost of sales, R&D, and SG&A compared to last year. The company also cited strong market uptake of its new COVID vaccine, mNEXSPIKE, and the impact of ongoing productivity initiatives. CFO Jamey Mock highlighted that cost reductions came from both operational efficiencies in manufacturing and prioritization across the R&D pipeline.

BILL’s third quarter results came in above Wall Street’s revenue and profit expectations, with management crediting strong execution and disciplined investment for the outcome. CEO René Lacerte highlighted the impact of new embedded partnerships and the rollout of AI-powered automation tools as key contributors to the company’s performance. The launch of BILL Cash Account and enhancements to the core platform further supported customer adoption, while a focus on operational efficiency drove profitability gains. Management emphasized that these strategic moves are designed to deepen customer engagement and expand BILL’s market reach.

Pangaea delivered a quarter that exceeded Wall Street’s expectations, supported by elevated shipping activity during the seasonal Arctic trade period and continued expansion of its integrated logistics platform. Management credited the integration of 15 Handysize vessels acquired from SSI, along with premium time charter equivalent (TCE) rates driven by its ice-class fleet, for bolstering performance. CEO Mark Filanowski highlighted, “We delivered TCE rates that averaged 10% above the prevailing market, supported by our niche ice class capabilities and long-term COAs.” The expansion into new port operations in Mississippi and Texas, as well as the execution of the company’s fleet renewal and capital allocation strategies, were also cited as key contributors to the results.

BD’s third quarter results were broadly in line with Wall Street expectations, reflecting resilience across most of its product portfolio even as certain market headwinds emerged. Management credited strong demand in Interventional, Biologics, and Advanced Patient Monitoring segments for supporting organic growth, while acknowledging that vaccine demand and subdued research funding weighed on parts of the business. CEO Thomas Polen highlighted the sequential acceleration in organic growth and pointed to high-margin product categories, such as PureWick and advanced tissue regeneration, as key contributors. Management took a cautious view on ongoing macro challenges, particularly in vaccine demand and biosciences research, emphasizing targeted investments and operational discipline.

HCI Group’s third quarter saw year-over-year revenue growth, though sales were below Wall Street’s expectations. Management attributed the quarter’s strong profit performance to operational leverage within its insurance business, a lower loss ratio, and disciplined expense management. Chief Operating Officer Karin Coleman highlighted favorable weather conditions in Florida, which contributed to a 22% loss ratio and improved combined ratio, while also referencing continued growth in the company’s real estate and technology segments. Management also pointed to the successful addition of new tenants at its Greenleaf Capital properties and the onboarding of a fifth carrier to the Exzeo insurance platform as meaningful operational achievements.

Mueller Water Products’ third quarter results were met with a negative market reaction, despite revenue and non-GAAP profits exceeding Wall Street expectations. Management attributed the quarter’s performance to robust volume growth in iron gate valves, hydrants, and specialty valves, as well as improved price realization. CEO Marietta Zakas highlighted manufacturing efficiencies and operational improvements as key factors behind the company’s expanded gross margins, noting, “Our team’s unwavering commitment and relentless focus on operational excellence and customer service enabled consolidated gross margin expansion of 500 basis points in the fourth quarter.”

Oscar Health’s third quarter results fell short of Wall Street’s expectations, reflecting persistent challenges in the individual health insurance market. Management attributed the underperformance mainly to increased market morbidity, which refers to a higher proportion of sicker individuals entering the risk pool, driven in part by Medicaid redeterminations and program integrity efforts. CEO Mark Bertolini described 2025 as a “reset moment” for the market, noting, “Overall risk adjustment data from Wakely in the third quarter show continued higher market morbidity, which we attribute to Medicaid lives entering the market and the initial impacts of program integrity efforts.” The company also pointed to disciplined cost controls and improved administrative expense ratios as partial offsets to these headwinds.

WillScot Mobile Mini's third quarter results were met with a negative market reaction as the company reported a year-on-year revenue decline, missing Wall Street expectations. Management attributed the weakness to a combination of headwinds, including accelerated cleanup of aged accounts receivable and lower delivery and installation revenues, as noted by CFO Matthew Jacobsen. CEO-designate Tim Boswell also cited ongoing softness in the Canadian market and slower-than-expected growth in newer business lines. Executive Chairman Worthing Jackman acknowledged the company’s recent underperformance, stating, "The company has fallen short over the last 2 years to deliver against expectations that it set and takes full responsibility."

Alamo Group’s third quarter was marked by a negative market reaction, as its adjusted earnings fell short of Wall Street’s expectations despite higher-than-anticipated revenue. Management detailed that Industrial Equipment maintained strong momentum, driven by ongoing demand in infrastructure and public works. However, operational challenges in the Vegetation Management division, particularly related to facility consolidation and persistent end-market weakness, weighed on margins and overall profitability. CEO Robert Hureau acknowledged the mixed results, noting, “While I’m not pleased with the results, I am optimistic and confident in the future performance of the company and the opportunities ahead.”

Fast-food chain Arcos Dorados (NYSE:ARCO) missed Wall Street’s revenue expectations in Q3 CY2025, but sales rose 5.2% year on year to $1.19 billion. Its non-GAAP profit of $0.71 per share was significantly above analysts’ consensus estimates.

Five9’s third quarter was marked by solid execution, with the company meeting Wall Street’s revenue expectations and delivering non-GAAP profitability above consensus. Management attributed the performance to accelerating enterprise demand for AI-powered solutions, with CEO Mike Burkland noting that enterprise AI bookings grew over 80% year over year. Additionally, the ongoing shift toward high-margin subscription revenue, supported by transformation initiatives and operational improvements, contributed to margin expansion and record free cash flow. While some short-term headwinds emerged in the commercial segment, the company emphasized its ability to adjust sales strategies and resource allocation.

Karat Packaging’s third quarter drew a negative market reaction, as non-GAAP profit came in below Wall Street’s expectations despite revenue landing in line. Management attributed the quarter’s results to robust volume growth and a favorable product mix, particularly in Texas and California, but acknowledged that higher import duties and tariffs significantly pressured margins. CEO Alan Yu highlighted the company’s ability to sustain gross margin levels by increasing domestic sourcing and maintaining operational flexibility, yet admitted that ongoing supply chain and cost challenges weighed on operating performance.

Privia Health’s third quarter results surpassed Wall Street’s expectations, yet the market responded negatively—a reaction management attributed in part to uncertainties surrounding the sustainability of recent performance gains. CEO Parth Mehrotra pointed to broad-based growth across both fee-for-service and value-based care, with notable momentum from new provider signings and higher attributed patient lives. Mehrotra highlighted strong execution in the Medicare Shared Savings Program and the company’s ability to drive operational leverage through expanding its provider network and entering new markets, stating, “This outstanding performance gives us confidence to raise our 2025 outlook.” CFO David Mountcastle added that operational improvements led to significant margin expansion, particularly in the company’s value-based care business.

Arlo’s third quarter results were met with a negative market reaction, despite the company delivering revenue and non-GAAP earnings that modestly exceeded analyst expectations. Management attributed performance to strong growth in paid SaaS accounts, the commercial launch of its Arlo Secure 6 platform, and a significant new product rollout that drove nearly 30% year-over-year unit sales growth. CEO Matthew McRae pointed to the company’s “record-breaking quarter for paid accounts and annual recurring revenue,” with a notable shift toward higher-margin service revenue. However, management acknowledged that product gross margins remained under pressure due to tariffs and promotional activity required to clear prior-generation inventory.

Titan International’s third quarter reflected solid execution in a challenging environment, but the market’s negative reaction highlighted ongoing concerns. Management pointed to steady year-over-year growth in the Agricultural (Ag) and Earthmoving/Construction (EMC) segments, with aftermarket demand and Latin American strength offsetting softness in OEM channels. CEO Paul Reitz emphasized, “Our Ag and EMC segments reported solid sales growth of 8% and 7%, respectively, compared with the prior year.” Despite improved operating margins, management maintained a cautious tone regarding persistent headwinds, including U.S. farmer income pressure and ongoing inventory adjustments.

Upland Software’s third quarter was marked by a sharp year-on-year revenue decline, reflecting the impact of earlier divestitures, yet the company reported results slightly ahead of Wall Street’s revenue expectations. Management attributed the quarter’s performance to progress in core organic growth, strong adjusted EBITDA margins, and new large-scale customer wins in its AI-powered product suite. CEO Jack McDonald pointed specifically to multimillion-dollar agreements with major technology and pharmaceutical companies and highlighted early signs that Upland’s intensified focus on enterprise AI adoption and product innovation is yielding results.

DXP’s third quarter was marked by strong sales growth, yet the market responded negatively due to profit shortfalls. Management cited robust end-market demand in segments like Innovative Pumping Solutions and Service Centers, with the water business contributing a larger share of revenue. CEO David Little noted that "our execution has resulted in both organic and acquisition-driven growth," but acknowledged that expenses rose more than expected due to increased investments in people, technology, and acquisition activities. Operating margins held steady, yet elevated spending weighed on non-GAAP earnings per share.