Q2 2025 Powell Industries Inc Earnings Call
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Welcome to the Powell Industries earnings conference call.
To withdraw your question, please press star, then to [inaudible]
Please note that this event is being recorded.
Speaker Change: I would now like to turn the conference over to Ryan Coleman, investor relations. Thank you. You may begin.
Speaker Change: Thank you operator and good morning everyone. Thank you for joining us for Powell Industries conference call today to review fiscal year 2025 second quarter results. With me on the call are Brett Cope, Powell's chairman and CEO and Mike Metcalf, Powell's CFO .
Speaker Change: There will be a replay of today's call and it will be available via webcast by going to the company's website, Powellind.com or a telephonic replay will be available until May 14th. The information on how to access the replay was provided in yesterday's earnings release.
Speaker Change: Please note that information reported on this call speaks only as of today, May 7, 2025, and therefore you were advised that any time-sensitive information may no longer be accurate at the time of replay listening or transcript reading.
Speaker Change: This conference call includes certain statements, including statements related to the company's expectations of its future operating results that may be considered forward looking statements within the meeting of the private securities litigation reform act of 1995.
Speaker Change: Investors are cautioned that such forward-looking statements involve risks and uncertainties, and that actual future results may differ materially from those projected in these forward-looking statements.
Speaker Change: These risks and uncertainties include but are not limited to competition and competitive pressures, sensitivity to general economics and industry conditions, international political and economic risks.
Speaker Change: Availability and Price of raw materials and execution of business strategies. For more information, please refer to the company's filings with the Securities and Exchange Commission. With that, I'll now turn the call over to Brett.
Brett Cope: Thank you, Ryan, and good morning everyone. Thank you for joining us today to review Powell's fiscal 2025 second quarter results. I will make a few comments and then turn the call over to Mike for more financial commentary before we take your questions.
Speaker Change: Our second quarter marked another solid performance. The team across Powell delivered gross profit dollar growth of 33% on revenue growth of 9%.
Brett Cope: which translated into record earnings per diluted share of $3.81 in the quarter.
Brett Cope: The electric utility and commercial and industrial sectors remain growing bright spots for Powell, as compared to the prior year, they grew by 48% and 16% respectively.
Brett Cope: These two sectors have and will continue to become more meaningful contributors to our total results.
Brett Cope: New orders in the quarter totaled $249 million and increased of 6% compared to the prior year.
Brett Cope: New project activity was driven by our commercial and other industrial markets as well as the oil and gas sector.
Brett Cope: We booked two large projects in the quarter, one for a new Greenfield LNG facility to be located along the U.S. Gulf Coast. As we have shared on previous updates, the fundamentals and market outlook for this sector remain very encouraging.
Brett Cope: The other significant award this past quarter is for a large mining project in Canada for the production of Potash.
Brett Cope: This award underscores how our people and facilities are demonstrating the strength of Powell.
Brett Cope: Our investment in Canada has always been focused on building a diverse portfolio of customers across the sectors that we serve.
Each of these projects were approximately $50 million dollars.
Brett Cope: Our gross margin in the quarter was 29.9%, which reflects discipline, project execution, the benefit of close-outs, as well as continued operating efficiency across the business.
Brett Cope: Mike will discuss our margin outlook for the second half of the year, but more broadly, we remain encouraged by our second quarter margin results.
Brett Cope: On the bottom line, we recorded net income of $46 million in the second quarter, or $3.81 per diluted share, which was 38% higher than the prior year and a record quarterly earnings per diluted share for Powell.
Brett Cope: Our backlog remains strong at $1.3 billion. The overall composition, margin profile, and project schedules of our backlog remain very encouraging.
Brett Cope: We have revenue visibility well into fiscal 2027 and our order book is well balanced across the sectors we serve.
Brett Cope: In addition to our strong financial results in the quarter, we continue to make important strategic progress to expand and diversify our product portfolio.
Brett Cope: During the quarter, we commercially launched several new and innovative products.
The first is the grounding switch [inaudible]
Brett Cope: Widely used in international IEC switch gear designs, our new product will be the first to meet a new developing standard for the North American anti-market
Brett Cope: This product is mainly focused on industrial markets, such as oil and gas, but is an enhancement that we will ultimately seek to commercialize into all three of our major sectors.
Brett Cope: We've also received orders for a new compact substation that our team have engineered and recently introduced to the market.
Brett Cope: The Powell control aisle substation provides optimized workspace along with environmental protection for utility and unit substations.
Brett Cope: This configured-to-order, medium-voltage substation reduces the installed cost of the substation while providing our customers with a safe, environmentally protected aisle to service the switch gear.
Brett Cope: Our initial awards for this are a support of battery energy storage projects being developed and installed to support the utility grid.
Thank you.
Brett Cope: We also showcased our first design of a low voltage switch gear product specifically designed for the data center and associated commercial market.
Brett Cope: This product increases our ability to compete within the four walls of the data center where there are significant incremental content opportunities.
Brett Cope: We are also working towards adding the commercial infrastructure and the required sales channels necessary to better compete in this important vertical for Powell.
Brett Cope: The launch of these latest products serves as continued validation of the increased R&D spend that we have undertaken over the past several quarters and it monetizes an intellectual property that has been on our balance sheet for nearly two years.
Brett Cope: Most importantly, it furthers our aim of advancing our product centric strategy to improve the overall future mix of product versus project-based revenues.
Brett Cope: We have just completed and received our occupancy permits on the capacity expansion at our electrical products facility here at Houston.
Brett Cope: I am pleased to share that this investment is on time and was finished on budget
Brett Cope: This incremental capacity will play a critical role in advancing our key strategic priority to commercialize new products through organic investment in our R&D function.
Brett Cope: positioning us to better compete and capture greater share in all three of our key market sectors
Brett Cope: Manufacturing of both the station breaker that we launched last summer, and our new Power Control aisle substation will start in the third fiscal quarter.
Brett Cope: We will begin to recognize revenue through the balance of this year with more modest accretive additions in fiscal 2026.
Brett Cope: Looking ahead, the outlook for each of our end markets remains positive.
Brett Cope: The fundamentals for our oil gas and petrochemical markets support our expectation for continued strength in these sectors.
Brett Cope: Pacific to the fundamentals of the U.S. natural gas market, price spreads across global markets remain favorable and conducive to U.S. export activity.
Brett Cope: The funnel of energy projects that we are tracking continues to support our expectation for a strong cycle of Greenfield and Brownfield activity with generally a higher volume of projects that are either in process or currently being evaluated compared to the prior cycle.
Brett Cope: Activity within our commercial and other industrial market also remains healthy and includes activity within the data center market.
Brett Cope: Over the past few months, we have not seen any change or slowdown in activity within the data center market, and our efforts to further penetrate the data center market and expand the total content opportunity for Powell within this market sector are progressing well.
Lastly, the outlook for our electric utility market remains positive [inaudible]
Brett Cope: We continue our sustained and decade-long effort to drive success for Powell in each of our three home geographies, the US, Canada, and the United Kingdom.
Brett Cope: Overall, we are very pleased with our financial results in the first half of this fiscal year and confident in how we position Powell to grow in each of our three major sectors.
Brett Cope: Our volume expectation in each of these sectors remain a tailwind and we expect continued strong performance for the remainder of fiscal 2025.
Brett Cope: With that, I'd like to turn the call over to Mike to walk us through our financial results in greater detail
Thank you, Brett, and good morning everyone.
Thanks for watching!
Brett Cope: New orders booked in the second fiscal quarter of 2025 were $249 million, which was 6% higher than the same period one year ago.
Brett Cope: As we continue to focus on diversifying the business across sectors outside of our core, industrial oil and gas and petrochemical sectors.
Brett Cope: We continue to experience positive momentum across the utility and commercial and other industrial sectors with backlog in these sectors at 29% and 13% respectively of the total business backlog.
Brett Cope: With these end markets continuing to contribute to the solid order activity, in addition to the sustained commercial activity across most of our other core end markets, this combined to result in a 0.9 times book to bill ratio in the current quarter.
Brett Cope: As a result, we reported $1.3 billion of backlog at the end of the second fiscal quarter.
Brett Cope: 42 million higher versus one year ago and 29 million lower sequentially.
Brett Cope: Compared to the second quarter of fiscal 2024, domestic revenues improved by 5 percent.
Brett Cope: to $228 million, while international revenues were 33% higher, driven by increased project volume across our Canadian operations, as well as an increase in activity in the Middle East and Africa.
Brett Cope: In total, international revenues were up by $13 million to $51 million in the second fiscal quarter.
Brett Cope: From a market sector perspective versus the second quarter of fiscal 2024, revenues increased 48% and 16% in the electric utility sector and the commercial and other industrial sector respectively.
Brett Cope: Reflecting our ongoing strategic focus to expand our presence across these two end markets.
Brett Cope: Additionally, the light rail traction power sector experienced a substantial increase versus the second fiscal quarter of 2024.
Brett Cope: Growing by 122% or $5 million, albeit on a small revenue base as we continue to be very selective in this market sector.
Brett Cope: Across our core industrial end markets, the petrochemical sector and the oil and gas sector were lower by 13% and 3% respectively versus the same period one year ago.
Brett Cope: as we grow closer to completion of the large petrochemical and LNG megaprojects that were booked in fiscal 2023.
Brett Cope: Gross Profit increased by $21 million to 83 million in the second fiscal quarter versus just the same period one year ago.
Brett Cope: The Margin Rates exiting the backlog continued to benefit from the large projects nearing completion, which have continued to generate strong project closeouts during the quarter The Margin Rates, the Margin Rates, the Margin Rates, the Margin Rates
Brett Cope: Contributing roughly 275 basis points to gross profit as a percentage of revenue during the second fiscal quarter and approximately 125 basis points on a fiscal year-to-date
Brett Cope: Additionally, margins have also benefited from the strong volume leverage in exceptional operational execution across all of the manufacturing divisions globally.
Brett Cope: Given these solid fundamentals and based upon margin levels in the order book, we anticipate that margin rates through the remainder of fiscal 2025 should align with the reported margin levels through the first six months of fiscal 2025, excluding the impact of the aforementioned project closeouts.
Brett Cope: Darling, General, and administrative expenses were $22 million in the current period, higher by 1 million on a higher level of compensation expenses across the business versus the same period a year ago.
Brett Cope: SGNA is a percentage of revenue decreased 40 basis points to 7.8% in the current fiscal quarter on the higher revenue base and overhead management.
Brett Cope: In the second quarter of fiscal 2025, we reported net income of $46.3 million, generating $3.81 per diluted share compared to a net income of $33.5 million.
Brett Cope: or $2.75 per deluded share in the second quarter of fiscal 2024.
Brett Cope: During the second quarter of fiscal 2025, we generated $22 million of operating cash flow driven by higher earnings generated in the second quarter.
Brett Cope: partially offset by a negative working capital impact as we allocate capital to fund projects in the order book.
Brett Cope: Investments in property, plant, and equipment in the fiscal second quarter totaled $4.1 million driven in large part by the facility expansion at our electrical products facility in Houston.
Brett Cope: At March 31st, 2025, we had cash and short term investments of $389 million, compared to $358 million at September 30th, 2024, and $373 million at December 31st, 2024.
The company does not hold any debt [inaudible]
Brett Cope: As we move into the second half of fiscal 2025, we anticipate continued strength operationally based upon current factory utilization levels, project execution and backlog quality.
Brett Cope: That was standing the typical challenges of project timing and mix coupled with the current macroeconomic uncertainties. Powell is well positioned to continue delivering strong results, both financially and operationally for our customers and shareholders alike.
at this point we'll be happy to answer your questions.
Thank you.
We will now begin the question and answer session.
Brett Cope: To ask a question, you may press star 101 on your telephone keypad.
Brett Cope: If you are using a speakerphone, please pick up your handset before pressing the keys.
Brett Cope: If at any time your question has been addressed and you would like to withdraw your question, please press star, then two.
Brett Cope: At this time, we will pause momentarily to a similar roster.
John Bratz: Our first question comes from John Braatz from Kansas City Capitol. Please, please go ahead. Morning, Brett and Mike.
John Bratz: A couple of questions on the LNG outlook. First of all, the LNG award in this quarter, did that have anything to do with Trump unpausing the pause so to speak?
John Bratz: Uh, I honestly don't know for certain, but I would say overall, you know, if you look
Okay. Okay. And continue on that theme and I'm not...
John Bratz: All that close to the energy industry. But as some of the things that I read, they talk about
John Bratz: You know, maybe some lower energy prices tariffs adding to costs and so on and that
John Bratz: You know, before it was sort of a regulatory risk with the Biden administration now there seems to be some commercial risk on the returns or on the economics of LNG projects.
Speaker Change: Is that really an issue at this point, or do you see any commercial pause as the industry reacts to tariffs and additional costs that may be facing the industry?
Speaker Change: Yeah, it's a really good question and like you I read and
Speaker Change: in the last quarter or even the future work, where are they at in their FID status and selling out?
Speaker Change: Future Capacity to hit their high e-dates. I would say, generally,
it's
very robust, drive-forward sort of discussions. So, like...
Speaker Change: You know, whatever really is happening behind the scenes and their interactions with their customers would give me certainly an element of confidence that Mike and I and the management team are wanting to understand as much as you are in your question. And I would say today generally is very positive as we look forward.
Speaker Change: Okay, here. But any reason, you know, given all the insight that you're getting with your clients and so on that.
Speaker Change: That some of the projects, let's say they still make sounds, but they're going to be pushed a little bit to the right in terms of FID.
Speaker Change: I'm not sitting here today. It is a risk in the back of my mind because a terrorist and you think about, okay, what's going to happen on steel? When I think about the things we don't build, that they need to build on these large facilities, that is part of
Speaker Change: Really, you know, I'm sure I'll get a question today. I'm Capitol. We're actually thinking about another phase of investment at offshore to prepare, frankly.
Okay. All right. Thank you very much.
Yep.
Thank you.
John Frensrep: Your next question comes from John Franzreb from the SidoTN company. Please go ahead.
Good morning, guys, and thanks for taking the questions.
John Frensrep: I want to go back to Mike's statement about the gross margins, benefiting from the 275 basis points of closeouts.
John Frensrep: I'm curious about two things. One, given the demand environment, why can't you be more aggressive in pricing for gross margins? And two, what should we be thinking about as a normal?
John Frensrep: Closed-out contribution on a quarterly basis, or annual basis for that matter if you want to push it back farther, just so that we can get a bit of feel for it.
John Frensrep: Good morning, John . Thanks, Brett. Let me try to address the first one, and I'll turn it over to Mike on the close-out one. So on the market to man-side and pricing...
Speaker Change: We talk about this together. We certainly look for opportunities but the market has as we've kind of shared last couple of borders kind of hit a point where it's
Speaker Change: It's not getting any worse. It's not going backwards. It's kind of hit this area.
Speaker Change: a year and a half, two years ago it was sort of maintaining and that seems to be still the case today.
Speaker Change: You know, some of the capacities of our confeders have improved where they were at the worst point, if you will, through the pandemic.
Speaker Change: and they sort of leveled out last couple quarters. It has I think the potential to go back the way. It could become it could become more constrained.
Speaker Change: A lot of uncertainty in the macro environment for some of the markets that are smaller for Powell, maybe bigger for them If those start to go, I could see a scenario where that would go the other way and we're watching that for opportunity But right now it is more or less holding quarter of a quarter But right now it is more or less holding quarter of a quarter of a quarter
Yeah, and in general, I'll add in there, you know,
Speaker Change: As we've experienced over the last year or so, 1Q was a seasonal low, as you know, and we didn't see much in the way of project closeouts in 1Q, but
Speaker Change: the second half of fiscal 24 and this last quarter that we reported.
Speaker Change: a very strong project closeout that benefited the margin rate. This is also coupled with strong project execution and operational leverage that I...
Speaker Change: I mentioned in my prepared comments so as we look forward for the remainder of fiscal 25 we anticipate a similar exit rate from a margin perspective
Speaker Change: from Backlog, but acts the elevated level of project closeout gains. So, in the absence of any anomalies, as we look forward to the remainder of the year, I think a reasonable barometer for the margin rates exiting Backlog would approximate a normalized rate.
Speaker Change: in the range of 26 to 27% on a year-to-date basis.
Speaker Change: Yeah, I guess Mike that's what I'm kind of getting at that project should we ignore project close-up benefits is what I'm getting at because it seems to come up often enough that we shouldn't we should kind of be thinking about at least in the aggregate.
Speaker Change: Yeah, I guess in a just a calibrate on that, we are in a project business. There are inherent risks in these long lead projects and the project team has done just a phenomenal job retiring the risks on the risk register.
Speaker Change: So, you know, we have we have read the rewards of their hard work over the last year. If something goes the other way, you know, and it is a project business, it could, but we haven't seen that over the last year.
Brett Cope: Okay. Just a little bit on the capacity expansion. Can you kind of update us on how much of incremental revenue you would expect in 2025 and maybe an annualized basis as we think about 2026, Brett?
Brett Cope: So super, super excited and pleased with the teams performance on getting that expansion done on time. We have orders hit in the floor here this quarter. It'll be pretty small through the balance of the year, John , if you think about the
Brett Cope: It's sort of double, you know, low double digit type of business total orders hitting the floor but from a percentage of completion that will ramp up some engineering and early.
Brett Cope: Billed on the projects and then longer term. We think I think I'm sure this is the market before we anticipate next year sort of
Brett Cope: 20-40 million dollar range and creative as we watch projects and are successful in the market.
Speaker Change: And then, as I noted with John , brought from the earlier question in the last question.
Speaker Change: You know, we know the cycle of improvement with the land that we hold in
Speaker Change: and Reserve here in the Houston area. We've got three different facilities with acreage and we are looking hard at them.
Speaker Change: having chats with the board next few months on some points in capital there to make some further improvements.
Speaker Change: Yeah, very interesting. I think he's at all sure that that's surprising and good news. Yeah. Yeah, they are out there a couple of improvements and
This next one could be, could be sizable, so.
Speaker Change: Well, which I guess we'll just walk into the question and I asked you a less court or maybe the court before that, I don't recall, but you can't deny that the cash continues to swell, you know, $325 million, and even half of it.
Speaker Change: is deployed that still leads you with a sizable number relative to historic standards. What are the updated thoughts?
Speaker Change: Well, go back to your earlier question as we launch the new products. If a couple of these, I mean, hopefully we did really well in our design basis and understanding the market and start to catch fire.
Speaker Change: You know, we would be out looking at the footprint opportunities because we'll outgrow the space we just built and so we [inaudible]
Speaker Change: We understand what's out in the market, done a little workout there for existing buildings and crane usage. These are the product crane capacities are lower than some of the heavier things that we built traditionally here over the decades.
Speaker Change: We hope the former will be the opportunity, but in the meantime, for the things we do build on the substation side especially, you know, we have a land here, we've had it, we picked up the...
Speaker Change: The addition of 10 acres over to the products factory when we bought all that land, it's pretty clean and that's an option but then the offshore yard we picked up also that 10 acres.
Speaker Change: sitting out there. We did a small improvement a couple of years ago there, 150,000 square foot of lay down, but there's a lot more to go out there, and that's the land that we're kind of circling our heads around right now for fiscal Q3 to look at.
Speaker Change: I got it. And just one question, other question. You know, has the book considered stocks but at all? I'm just curious of what the discussions are around that.
Uh-oh!
Speaker Change: I think it's come up. I think we talked more about should we launch a buyback or on the funnel side, is there opportunity to use the equity side of the strength of the stock to do some things in the market for things that are in the funnel.
Speaker Change: You know, having more shares out there, I understand, you know, what that means and the conversations that are going on, especially with some of the shareholders, but...
Speaker Change: We want to thoughtly do it right to get the right return long term so.
Speaker Change: Okay, thanks to my questions, Brett, I'll get back in the queue.
Thank you for being here.
Thank you.
Speaker Change: The next question comes from Chip Moore from Roth Capital. Please go ahead.
Chip Moore: Good morning. Hey, thanks for taking the question. Maybe we may go back to another one on cash, guys. You know, I guess.
Chip Moore: position you're in. I get a lot of questions around why not consider a buyback just given where the stock is, where it's at. Are you signaling some of those organic things you see that you just talked about, or just so compelling, and that any updates on M&A potential as well?
Chip Moore: Yeah, hey Chip, morning, it's Brett. I'll start. Mike wants to jump in here. That is more or less the signal. I mean it's a healthy conversation with the board every quarter.
Chip Moore: I certainly understand the map of the potential buyback, but the flow is pretty low, but when you compare that for me against the work we've been hard at doing last two...
Chip Moore: to three years out in the market on the, I'll note the inorganic, but of course we're ramping up the organic side and just the time it takes to bring these things to market. Again, for the conversation and comment that Franzreb just asked.
Chip Moore: If these products go, you know, we've got a range of expectation for returning the market We're going to need some capital to go to work and we know we've done some base work, you know, to go pick up, say a light.
a light commercial space that would support rapid expansion.
Chip Moore: for us to be in a couple of years, but wouldn't be a three-year build-on in factory. We'll need to put the powder to work. So, that was sort of the basis all along, along with some other things that are going on on the M&A front. And so, into that point,
Chip Moore: As I've noted, the last two quarters we sort of took the longer term off off the board at the December report out. It came up last quarter and I will just tell you that the activity there continues to...
Michael Metcalf.
Chip Moore: The very active Mike and I and the team within the company are pretty heavily engaged now on a routine basis and I feel like it's moving along methodically very well.
Great. Now, that makes...
Speaker Change: Perfect sense. If I could ask just one or two more, I guess one electric utility growth really stood out, so maybe any more.
Chip Moore: Collar on what you're seeing there, moving forward and then you talked about data center and showcasing that low voltage product anymore insight you can give us on.
Chip Moore: potential there to get inside the four walls and how to think about time frames there. Thanks.
Thank you. Bye. Bye.
Speaker Change: So on the utility side, I love this business. I love talking to our investors about it. I love pointing out the fact that today is 25 to 30% of our revenue and that we intentionally set out this strategy to get credit for our team at Powell that have been working hard on this.
at
Speaker Change: especially, you know, in our home countries here as I noted in our prepared comments. And so we
Speaker Change: We are out grabbing this. We have a part of our organic development path on product development is targeted at increasing the Cheryl Wallet and that is 038KV space and we are amping of our efforts to build out our team members.
Speaker Change: in select geographies. And when you look at how the utilities say just take the US market.
Speaker Change: Fair to say ever in policy history and that's that's been a refreshing change for for both sides and given us line of sight into backing this desire to to be a better supplier to them and and develop solutions that are very specific to their needs in the future. So that has been a very possible momentum in the US and Canada and [inaudible]
and also the UK. On the data center market,
Speaker Change: You know, again, I mean, we're still, it's a smaller part of our growth part, but it's a, it's a high growth in terms of its, you know,
Thank you.
Speaker Change: with some nice name brand companies. So the engagement for us is exciting and this fixed pattern breaker design that we don't have, that we now have been through all the testing last quarter. We released it at a show.
Speaker Change: in the market with what we already had to go to war with in this market and so I think as we add
Speaker Change: People with capability and keep rounding out the products, I think our participation is to make this sticky and I think we're going to succeed.
Speaker Change: Great, that's very helpful, Brett. I mean, if I can sneak one last one in, just on tariffs, maybe a finer point. I guess one, any risk to margins, just on passing on some things, and then your sort of domestic positioning overall is that is strategic advantage.
Speaker Change: Cost Opportunities, Price Opportunities, they should be there for Powell. Now as you dig into, you know, when we build substations and we do major buyout, I'll point out like batteries. We don't, a lot, very few people of any, I think most batteries will come out of it.
Speaker Change: You know, Heddy's is kind of India and beyond that they're all going to come overseas. You know, your typical large lead acid battery for 500 pounds and there'll be multiple those in the substation.
Speaker Change: You know, as it kind of comes into cost materials maybe or things we can't see it'll leak in the inflationary, but I think over time we'll roll that out It's the big hitters that might come in short term when we'd look at the past list through
Got it. Got it. Okay. Appreciate the color. Thank you.
Thank you.
Speaker Change: Our next fall of question comes from John Franzreb from Cedotti & Company. Please go ahead.
Speaker Change: Yeah, just on the data center discussion, can you just tell us what kind of analyzed one rate you're at, and Brett, you said you expected to grow in a double digit pace on a go-forward basis, did I hear that correctly?
Thanks for watching!
Speaker Change: Well, when I look at the growth of the commercial and other industrial sector, it's growing, but it's, I don't know, we, you know, six years ago. Yeah, John , when we broke out the commercial and other industrial sector back in 23,
Speaker Change: If you looked prior to this data center wave that we're currently navigating through, it was roughly
Speaker Change: 6% of the total revenue and that's grown now to mid teens and that growth is really attributable to the data center vibes.
Speaker Change: So there are other things in that sector, John , but just like a note in last quarter, you know, they're not $50 million on LG jobs, but they are
Speaker Change: You know, for gear, when we sell gear only into a job, they're nice chunky orders that are improving as we better understand the market, better position, Powell, demonstrate to those clients and their engineering partners how we do things.
Speaker Change: So that process, that effort that we have to undertake for any client and any sector as we engage, it's...
It's starting to pay dividends, so. [inaudible]
Speaker Change: So I got this right, so data centers is mid-teens of total company revenue.
Speaker Change: and the trajectory is still expected to be at a double digit clip or am I overstating something?
Speaker Change: No, it's sub double digits. What I was alluding to is the increase from data centers went from six to, you know, mid teens, 15 or so. So, we're still, we're still sub.
Brett Cope: We're still in the single digits from data centers but to Brett's point that the market is is quite large and quite robust [inaudible]
Speaker Change: Okay, I just wanted to get in context. Thank you, Mike. Thank you, Brett. Appreciate it.
Take care.
Thank you.
This concludes our question and answer session.
Speaker Change: I would now like to turn the conference back over to Brett Cope for CEO for any closing remarks.
Thank you, Saugher.
Speaker Change: Mike and I are fortunate to work with the most talented group of people that you will find in the industry Thank you to our employees for their incredible contributions to our stellar results this past quarter
Speaker Change: I would like to also thank our customers for their continued trust and support of Powell. We have and will continue to recognize the importance of transparent agile execution and working to support critical project delivery milestones.
Paul is committed to your success
Speaker Change: Thank you to everyone for joining us this morning. We appreciate your continued interest to support and look forward to updating everyone next quarter.
Speaker Change: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.
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