Donaldson, a leading manufacturer of air and liquid filtration systems, has built a narrow moat around its large installed equipment base, coupled with a razor-and-blade business model that continues to generate flow relatively stable, high-margin recurring revenue from spare parts and consumables. The company generates a growing share of its sales from proprietary solutions, which benefit from higher margins and higher customer retention rates. As a result, recurring revenue has grown steadily from approximately 50% in 2012 to 65% in fiscal 2022. We expect this trend to continue, as the company continues to grow its new business segment. life sciences, both through organic investments and acquisitions.