Q2 2025 EMCOR Group Inc Earnings Call

All lines have been placed on mute to prevent any background noise. After the speakers' prepared remarks, there will be a question and answer session. If you would like to ask a question. During this time simply press Star then the number one on your telephone keypad.

If you would like to withdraw your question. Please best bump piece I will now turn the call over to Andy Backman, Vice President of Investor Relations. Mr. Backman, you may begin.

Thank you Andrew and good morning, everyone and welcome to <unk> second quarter 2025 earnings conference call for those of you joining us by webcast. We were at the beginning of our slide presentation that will accompany our remarks today.

His presentation will be archived in the Investor Relations section of our website at Amcor group Dot Com with me today are Tony Guzzi, Our chairman President and Chief Executive Officer, Jason <unk>, Chief Financial Officer, and Maureen <unk> Executive Vice President Chief administrative officer, and General Counsel today's call Tony will provide comp.

On our second quarter and discuss our Rps, Jason will then review the second quarter and our numbers before turning it back to Tony to turn and discuss our guidance before we open it up for Q&A.

Before we begin as a reminder, this presentation and discussion contains certain forward looking statements and may contain certain non-GAAP financial information on slide two of our presentation describes in detail. These forward looking statements and the non-GAAP financial information disclosures.

Marriage, everyone to review both disclosures in conjunction with our discussion and accompanying slides.

And finally as a reminder, all financial information discussed during this morning's call is included in our consolidated financial statements within both our earnings press release issued this morning and in our Form 10-Q filed with the Securities and Exchange Commission and with that let me turn the call over to Tom.

Thanks, Andy and good morning, and welcome to our second quarter 2025 earnings call and I'll be speaking to page four.

I'm going to cover upfront here some of the financial highlights for the second quarter, then I'm going to provide some commentary of what has gone well through the first half of the year.

Jason is going to cover the quarterly financials in detail.

We had an excellent second quarter first half of 2025 in the second quarter, we earned $6 72, and diluted earnings per share and we generated revenues of $4 3 billion that represented a quarterly record and a 17, 4% increase from the prior year period.

Ranju: Good morning. My name is Ranju, and I'll be your conference operator today. At this time, I would like to welcome everyone to EMCOR Group's second quarter 2025 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speakers' prepared remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star, then the number one on your telephone keypad. If you would like to withdraw your questions, please press the pound keys. I will now turn the call over to Andrew Backman, Vice President of Investor Relations. Mr. Backman, you may begin.

Good morning. My name is renju and I'll be your conference operator. Today at this time I would like to welcome everyone to MCO group second quarter 2025 earnings conference call.

All lines have been placed on mute to prevent any background noise.

We achieved exceptional operating margin of nine 6% and had operating cash flow of $194 million.

We exited the second quarter with very strong <unk>.

After the speakers prepared remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star, then the number 1 on your telephone keypad,

Remaining performance obligations, a record $11 9 billion, which represents an increase of two 9 billion year over year and one 8 billion from December of 2024, we continue to be disciplined capital allocators and for the first six months of 2025, we spent just over.

If you would like to withdraw your questions, please press the pound keys.

Andrew Backman: Thank you, Banju, and good morning, everyone, and welcome to EMCOR's second quarter 2025 earnings conference call. For those of you joining us by webcast, we are at the beginning of our slide presentation that will accompany our remarks today. This presentation will be archived in the Investor Relations section of our website at emcoregroup.com. With me today are Tony Guzzi, our Chairman, President, and Chief Executive Officer; Jason Nalbandian, EMCOR's Chief Financial Officer; and Maureen Mericio, Executive Vice President, Chief Administrative Officer, and General Counsel. For today's call, Tony will provide comments on our second quarter and discuss our RPOs. Jason will then review the second quarter and our numbers before turning it back to Tony to discuss our guidance before we open it up for Q&A. Before we begin, as a reminder, this presentation and discussion contain certain forward-looking statements and may contain certain non-GAAP financial information.

I will now turn the call over to Andy Pacman vice, president of investor relations, Mr. Pacman, you may begin.

$430 million in share repurchases and utilized $887 million for acquisitions.

Thank you, Benji and good morning everyone and welcome to M core second quarter 2025 earnings conference call. For those of you joining us by webcast, we are at the beginning of our slide presentation, that will accompany our remarks today.

We have a liquid balance sheet that will continue to support our growth and capital allocation strategy.

This presentation will be archived in the investor relations section of our website at emcor group.com.

Our performance remains strong, especially in our electrical and mechanical construction segments, both of which continue to earn impressive operating margins, while generating growth in their base of business as demonstrated by their RP OS. We have managed our project mix and continue to gain the confidence of our customers.

With me today. Our Tony guzy our chairman president and Chief Executive Officer. Jason d, d bandian m core is Chief Financial Officer and moiraine Mauricio Executive Vice President.

Chief administrator officer and general counsel.

Cross geographies and market sectors, we continue to execute well for our customers in these segments by using BDC Bim and pre fabrication, coupled with strong planning excellent labor sourcing and management and disciplined contract negotiation and oversight we have the best field leadership in the business and they operate.

For today's call, Tony will provide comments on our second quarter and discuss our rpos Jason will then review the second quarter uh and our numbers before turning back to Tony to turn discuss our guidance before we open it up for Q&A.

Andrew Backman: Slide two of our presentation describes in detail these forward-looking statements and the non-GAAP financial information disclosures. I encourage everyone to review both disclosures in conjunction with our discussion and accompanying slides. And finally, as a reminder, all financial information discussed during this morning's call is included in our consolidated financial statements within both our earnings press release issued this morning and in our form 10Q filed with the Securities and Exchange Commission. And with that, let me turn the call over to Tony. Tony?

Before we begin as a reminder, this presentation and discussion contains certain forward-looking statements and may contain certain non-gaap financial information. Slide 2 of our presentation describes in detail. These forward-looking statements and the non-gaap financial information disclosures

With focus discipline and grid and our electrical construction segment, our integration of Miller electric remains on track.

Our mechanical services business and our building services segment continues to execute well with good revenue growth and an operating margin in the high single digits. We also executed a successful restructuring in our site based business and response to past contract losses. This should provide us with a more efficient cost structure as we look to.

Tony Guzzi: Yeah, thanks, Andy. And good morning and welcome to our second quarter 2025 earnings call. And I'll be speaking to page four. What I'm going to cover up front here is some of the financial highlights for the second quarter. Then I'm going to provide some commentary on what has gone well through the first half of the year. Jason is going to cover the quarterly financials in detail. You know, we had an excellent second quarter and first half of 2025. In the second quarter, we earned $6.72 in diluted earnings per share, and we generated revenues of $4.3 billion. That represents a quarterly record and a 17.4% increase from the prior year period. We achieved exceptional operating margins of 9.6% and had an operating cash flow of $194 million.

The page 4.

As we look to resume growth in the future. Although we had a tough first half in our industrial services segment, we expect both our shop and <unk> businesses to improve as the year progresses, and lastly, the UK had a great start to the year with growth in revenue operating margin and operating income overall I think we are.

What I'm going to cover up front. Here are some of the financial highlights for the second quarter. Then I'm going to provide some commentary on what is going well through the first half of the year.

Jason's going to cover the quarterly financials uh in detail.

You know, we had an excellent second quarter and first half of 2025.

We're pretty sure that we had a very strong quarter and a very strong first half of 2025 now I will ask you to turn to page five and I'm going to talk to <unk> before I turn the call over to Jason.

And the second quarter, we earned $6.72 and diluted earnings per share and we generated revenues of 4.3 billion.

That represents a quarterly record and a 17.4% increase from the prior year period.

Tony Guzzi: We exited the second quarter with very strong RPOs or remaining performance obligations, a record of $11.9 billion, which represents an increase of $2.9 billion year-over-year and $1.8 billion from December of 2024. We continue to be disciplined capital allocators, and for the first six months of 2025, we spent just over $430 million in share repurchases and utilized $887 million for acquisitions. We have a liquid balance sheet that will continue to support our growth and capital allocation strategy. Our performance remains strong, especially in our electrical and mechanical construction segments, both of which continue to earn impressive operating margins, while generating growth in their base of business as demonstrated by their RPOs. We have managed our project mix and continue to gain the confidence of our customers across geographies and market sectors.

As I previously mentioned, we leave the quarter with diverse strong <unk> of $11 9 billion due to growth in nearly all of the market sectors. We serve our RP OS have increased by 32% year over year and 18.

We achieved exceptional operating margins of 9.6% and had operating cash flow of $194 million.

Percent when compared to December of 2024, excluding.

Excluding acquisitions organically <unk> have increased 22% year over year and nearly 9% since the end of 2024.

We exited the second quarter with very strong remaining rpos are remaining performance obligations our record of 11.9 billion which represents an increase of 2.9 billion year-over-year and 1.8 billion from December of 2024.

Our growth continues to be driven by long term secular trends across key markets.

We continue to be disciplined capital allocators. And for the first 6 months of 2025, we spent just over 430 million in share repurchases and utilize 887 million for acquisitions.

Within networking communications, which is where our data center businesses totaled a record $3 8 billion at the end of June we remain well positioned in this space supporting our customers with our build out of data centers health care <unk> totaled $1 4 billion and that builds on an already solid base and the acquisition of Miller electric.

We have a liquid balance sheet that will continue to support our growth and capital allocation strategy.

Our performance remains strong especially in our electrical mechanical construction, segments, both of which continue to earn impressive operating margins while generating growth in the base of business as demonstrated by their rpos.

We have managed our project mix.

<unk> expanded our opportunities in this sector that contributed to the RPM growth we've seen thus far in 2025.

Tony Guzzi: We continue to execute well for our customers in these segments by using BDC, BIM, and prefabrication, coupled with strong planning, excellent labor sourcing and management, and disciplined contract negotiation and oversight. We have the best field leadership in the business, and they operate with focus, discipline, and grit. In our electrical construction segment, our integration of Miller Electric remains on track. Our mechanical services business in our building services segment continues to execute well with good revenue growth and an operating margin in the high single digits. We also executed a successful restructuring in our site-based business in response to past contract losses. This should provide us with a more efficient cost structure as we look to resume growth in the future. Although we had a tough first half in our industrial services segment, we expect both our shop and field businesses to improve as the year progresses.

Manufacturing industrial Ipos now total $1 billion and in addition to demand driven by customers Onshoring and reassuring initiatives recent growth in this sector has also benefited from the award of certain food processing projects as well as a renewable energy project within our industrial services segment and led by our mechanical.

Construction segment water and wastewater ipos totaled $725 million as we continue to be awarded projects throughout Florida.

And continue to gain the confidence of our customers across geographies and Market sectors. We continue to execute well, for our customers in these segments by using VDC, Bim and prefabrication coupled with strong planning, excellent, labor sourcing and management and discipline contract, negotiation and oversight. We have the best build leadership in the business and they operate with Focus, discipline, and grit, and our electrical construction segment. Our integration of Miller Electric remains on track.

Additionally, due to a combination of new contract awards and the acquisition of Miller Electric we saw growth within the institutional sector, where <unk> is now total $1 4 billion and the hospitality and entertainment sector, where our <unk> have grown 72% year over year or 64% from December although <unk> within high Tech.

Our Mechanical Services business in our building service to segment, continues to execute well with good Revenue growth and an operating margin in the high single digits. We also executed a successful restructuring at our site based business and response to past contract losses. This should provide us with a more efficient cost structure as we Loom to look, as we look to resume growth in the future,

Manufacturing have decreased from June of last year, and I stated. This many times before we believe in the long term fundamentals of this sector.

Tony Guzzi: And lastly, the UK had a great start to the year with growth in revenue, operating margin, and operating income. Overall, I think we can be, we are pretty sure that we had a very strong quarter and a very strong first half of 2025. Now I'll ask you to turn to page five, and I'm going to talk to RPOs before I turn the call over to Jason. As I previously mentioned, we leave the quarter with diverse, strong RPOs of $11.9 billion. Due to growth in nearly all of the market sectors we serve, our RPOs have increased by 32% year-over-year and 18% when compared to December of 2024. Excluding acquisitions organically, RPOs have increased 22% year-over-year and nearly 9% since the end of 2024. Our growth continues to be driven by long-term secular trends across key markets.

We acknowledge and habits had talked about that the award of these projects can be <unk> in nature.

On a sequential basis, though when compared to the end of March we did experience an increase in high tech manufacturing <unk> of $126 million or nearly 50, 215% due in large part to the award phase III mechanical construction project for our semiconductor customer and with that I'll turn the call.

Although we had a tough first half in our Industrial Services segment, we expect both our shop and field businesses to improve as the year progresses. And lastly, the UK had a great start to the year with growth and revenue operating margin and operating income overall. I think we can, we, we are pretty sure that we had a very strong, uh, quarter and a very strong first half of 2025. Now, I'll ask you to turn to page 5 and I'm going to talk to rpos before I turn the call over to Jason

As I previously mentioned, we leave the quarter with diverse strong rpos of 11.9 billion.

Over to you Jason.

Thank you Tony Hey, good morning, everyone.

Beginning on slide six I'm going to discuss the operating performance for each of our segments as well as some of the key financial data for the second quarter of 2025 as compared to the second quarter of 2024.

Due to growth in nearly all the market, sectors. We serve are rpos have increased by 32% year-over-year and 18%. When compared to December of 2024,

As Tony mentioned consolidated revenues of $4 3 billion set a new quarterly record and represented an increase of $637 5 million or 17, 4%.

excluding Acquisitions or organically, rpos have increased 22% year-over-year and nearly 9% since the end of 2024.

Tony Guzzi: RPOs within network and communications, which is where our data center business is, totaled a record $3.8 billion at the end of June. We remain well-positioned in this space, supporting our customers with their build-out of data centers. Healthcare RPOs total $1.4 billion, and that builds on an already solid base, and the acquisition of Miller Electric has expanded our opportunities in this sector. That contributed to the RPO growth we've seen thus far in 2025. Manufacturing and industrial RPOs now total $1 billion. In addition to demand driven by customers' onshoring and reshoring initiatives, recent growth in this sector has also benefited from the award of certain food processing projects, as well as a renewable energy project within our industrial services segment. And led by our mechanical construction segment, water and wastewater RPOs total $725 million as we continue to be awarded projects through OBFlorida.

Our growth continues to be driven by long-term secular Trends across key markets.

Revenue growth was led by our construction segments, where we experienced greater demand across the majority of the market sectors. We serve.

During the quarter acquisitions generated incremental revenues of $333 million with the most significant contribution from Miller electric.

On an organic basis revenues grew by eight 4%.

Rpos within Network and Communications, which is where our data center business, is totaled our record. 3.8 billion at the end of June. We remain. Well, positioned in the space supporting our customers with their build-out of data, centers, Healthcare rpos, total, 1.4 billion, and that builds on an already solid base. And the acquisition of Miller Electric has expanded our opportunities in this sector. That contributed

If we look at each of our segments.

is the RPO growth we've seen thus far in 2025

Revenues of U S. Electrical construction were a record 134 billion, increasing 67, 5% due to a combination of strong organic growth and the acquisition of Miller.

This segment generated greater revenues from nearly all market sectors with the most significant growth being derived from our data center projects within the networking communications sector.

Besides datacenters electrical experienced notable growth in healthcare, where our quarterly revenues more than doubled.

Tony Guzzi: Additionally, due to a combination of new contract awards and the acquisition of Miller Electric, we saw growth within the institutional sector, where RPOs now total $1.4 billion, and the hospitality and entertainment sector, where RPOs have grown 72% year-over-year or 64% from December. Although RPOs within high-tech manufacturing have decreased from June of last year, and I've stated this many times before, we believe in the long-term fundamentals of this sector. We acknowledge and have talked about that the award of these projects can be exotic in nature. On a sequential basis, though, when compared to the end of March, we did experience an increase in high-tech manufacturing RPOs of $126 million, or nearly 15%, due in large part to the award of Phase Two mechanical construction project for our semiconductor customer. And with that, I'll turn the call over to you, Jason.

Manufacturing industrial rpos now. Total a billion dollars in addition to the demand driven by customers on Shoring and reassuring initiatives. Recent growth in the sector has also benefited from the award of certain food processing projects, as well as a renewable energy project within our Industrial Services segment and led by our mechanical construction segment water and waste Wastewater. Rpos total 725 million as we continue to be awarded projects throughout Florida.

Commercial as we are starting to see some resumption in tenant fit out demand and institutional driven by increased activity for certain colleges and universities.

Revenues in this sector also benefited from higher levels of short duration projects and service work in part due to the service capabilities, we've added to the Miller acquisition.

U S. Mechanical construction quarterly revenues were a record $1 76 billion up 6% almost all of which was organic.

We believe in the long-term fundamentals of this sector.

Similar to electrical construction, while this segment did experienced increased revenues across a number of market sectors. The largest growth during the quarter was generated from networking communications due to greater demand for datacenter construction projects.

Other sectors with the largest incremental growth include manufacturing and industrial primarily driven by food processing projects and hospitality and entertainment given the recent award of certain contracts in the Western region of the United States.

Andrew Backman: Thank you, Tony. And good morning, everyone. Beginning on slide six, I'm going to discuss the operating performance for each of our segments, as well as some of the key financial data for the second quarter of 2025 as compared to the second quarter of 2024. As Tony mentioned, consolidated revenues of $4.3 billion set a new quarterly record and represent an increase of $637.5 million or 17.4%. Revenue growth was led by our construction segments, where we experienced greater demand across the majority of the market sectors we serve. During the quarter, acquisitions generated incremental revenues of $330.3 million, with the most significant contribution from Miller Electric. On an organic basis, revenues grew by 8.4%. If we look at each of our segments, revenues of US electrical construction were a record $1.34 billion, increasing 67.5% due to a combination of strong organic growth and the acquisition of Miller.

We acknowledge and have talked about that the war of these projects can be exotic in nature on a sequential basis. Though, when compared to the end of March, we did experience an increase in high-tech manufacturing, RPOS of $126 million or nearly 525% due in large part to the award of Phase 2, mechanical construction project for our semiconductor customer. And with that, I'll turn the call over to you, Jason.

Thank you, Tony and good morning, everyone.

Partially offsetting the growth of the mechanical construction, where revenue declines within high Tech manufacturing as we near completion of certain semiconductor construction projects and commercial largely due to fewer active warehousing and distribution projects for some of our e-commerce customers.

Beginning on slide 6, I'm going to discuss the operating performance for each of our segments, as well as some of the key financial data for the second quarter of 2025 as compared to the second quarter of 2024.

With respect to high Tech manufacturing and as Tony Just mentioned, we did receive a phase II award for one of our semiconductor customers, which is reflected in the sequential increase in our <unk> at the end of the quarter.

As Tony mentioned, Consolidated revenues of $4.3 billion set a new quarterly record and represent an increase of $637.5 million, or 17.4%.

Revenue growth was led by our construction segments, where we experienced greater demand across the majority of the market sectors we serve.

On a combined basis, our construction segments generated revenues of $3 1 billion, an increase of 26, 1%.

Turning to U S building services revenues of $793 2 million reflect a one 6% increase year over year.

during the quarter, Acquisitions generated incremental, revenues of 330.33 million with the most significant contribution from Miller Electric

On an organic basis, revenues grew by 8.4%.

If we look at each of our segments,

In line with our expectations as we exited the first quarter growth in mechanical services has now exceeded the revenue decline within site based and we're pleased to see that this segment has turned the corner after four consecutive quarters of organic revenue declines.

Andrew Backman: This segment generated greater revenues from nearly all market sectors, with the most significant growth being derived from our data center projects within the network and communications sector. Besides data centers, electrical experienced notable growth in healthcare, where our quarterly revenues more than doubled, commercial, as we are starting to see some resumption in tenant fit-out demand, and institutional, driven by increased activity for certain colleges and universities. Revenues in this sector also benefited from higher levels of short-duration projects and service work, in part due to the service capabilities we've added through the Miller acquisition. US mechanical construction quarterly revenues were a record $1.76 billion, up 6%, almost all of which was organic.

revenues of us electrical construction were a record, 1.34 billion, increasing 67.5% due to a combination of strong organic growth and the acquisition of Miller.

With respect to the segments mechanical services Division revenues increased by six 5% as demand remained robust across each of its service lines.

This segment generated greater revenues from nearly all Market sectors. With the most significant growth being dived from our data center projects within the networking Communications sector.

Moving to industrial services revenues were $281 1 million, a 13, 3% decrease rare.

Besides data center electrical experience, we saw notable growth in healthcare, where our quarterly revenues more than doubled.

Revenues were impacted by lower field services volumes when compared to the prior year, which had benefited from jobs of a larger size scope growth on certain turnarounds and the performance of our renewable fuel project.

Commercial as we are starting to see some resumption in tenant fit out, demand and institutional driven by increased activity for certain colleges and universities.

This segment also experienced a reduction in shop services revenues due to fewer newbuild heat exchanger sales during the quarter.

revenues in the sector also benefited from higher levels of short duration projects and service work in part due to the service capabilities, we've added to the Miller acquisition

And lastly, UK building services generated revenues of $134 6 million, an increase of $28 million or 26, 3%.

Andrew Backman: Similar to electrical construction, while this segment did experience increased revenues across a number of market sectors, the largest growth during the quarter was generated from network and communications due to greater demand for data center construction projects. Other sectors with the largest incremental growth include manufacturing and industrial, primarily driven by food processing projects, and hospitality and entertainment, given the recent award of certain contracts in the western region of the United States. Partially offsetting the growth of the mechanical construction, where revenue declines within high-tech manufacturing, as we near completion of certain semiconductor construction projects, and commercial, largely due to fewer active warehousing and distribution projects for some of our e-commerce customers.

Us mechanical construction quarterly revenues where a record 1.76 billion up 6%. Almost all of which was organic

While favorable exchange rate movements did positively impact the segment's revenues by $7 4 million. The majority of its growth was due to greater service revenues, partially as a result of the recent award of a facilities maintenance contract and increased project activity with existing customers.

similar to electrical construction. While this segment did experience increased revenues across a number of Market sectors, the largest growth during the quarter was generated from networking Communications due to Greater demand for data center construction projects,

Let's turn to slide seven.

With operating income of $415 2 million or nine 6% of revenues our performance established a quarterly record for operating income and a second quarter record for operating margin.

Other sectors with the largest incremental growth include manufacturing and industrial, primarily driven by food processing projects and hospitality and entertainment, given the recent award of certain contracts in the western region of the United States.

This represents a year over year increase in operating income of $82 4 million or nearly 25% and a 50 basis point improvement in operating margin.

Partially offsetting the growth of the mechanical construction, where Revenue declines within high-tech manufacturing. As we near completion of certain semiconductor construction projects,

Andrew Backman: With respect to high-tech manufacturing, and as Tony just mentioned, we did receive a Phase Two award for one of our semiconductor customers, which is reflected in the sequential increase in our RPOs at the end of the quarter. On a combined basis, our construction segments generated revenues of $3.1 billion, an increase of 26.1%. Turning to US building services, revenues of $793.2 million reflect a 1.6% increase year-over-year. In line with our expectations as we exited the first quarter, growth in mechanical services has now exceeded the revenue decline within site-based, and we are pleased to see that this segment has turned a corner after four consecutive quarters of organic revenue declines. With respect to the segment's mechanical services division, revenues increased by 6.5%, as demand remained robust across each of its service lines. Moving to industrial services, revenues were $281.1 million, a 13.3% decrease.

If we look at each of our segments U S. Electrical construction generated operating income of $157 7 million, which represents a 78% increase.

And commercial, largely due to fewer active warehousing and distribution projects for some of our e-commerce customers.

In addition to greater revenues operating income of this segment benefited from a 70 basis points expansion in operating margin.

With respect to high-tech manufacturing, and as Tony just mentioned, we did receive a Phase 2 award for one of our semiconductor customers, which is reflected in the sequential increase in our RPOs at the end of the quarter.

And the segment earned an operating margin of 11, 8%.

On a combined basis, our construction segments generated revenues of $3.1 billion, an increase of 26.1%.

This segment experienced greater gross profit across the majority of the market sectors in which we operate with the largest increases generally in tracking with its revenue growth.

Turning to us Building Services revenues of 793.2 million reflect a 1.6% increase to year-over-year.

Largely driven by Miller electric operating income of electrical construction included $9 8 million of incremental acquisition contribution net of $11 4 million of intangible asset amortization.

In line with our expectations as we exited, the first quarter growth in Mechanical Services has now exceeded the revenue decline within site-based. And we are pleased to see that this segment has turned a corner after 4 consecutive quarters of organic Revenue declines

Operating income for U S. Mechanical construction increased nearly 12% to $238 7 million and operating margin expanded by 70 basis points, establishing a new quarterly record of 13, 6%.

With respect to the segments, Mechanical Services Division, revenues increased by 6.5% as demand remained robust across each of its service lines.

Similar to electrical construction this segment experienced greater profitability across a number of market sectors with the most significant increase in gross profit being generated from networking communications.

Andrew Backman: Revenues were impacted by lower field services volumes when compared to the prior year, which had benefited from jobs of a larger size, scope growth on certain turnarounds, and the performance of a renewable fuel project. This segment also experienced a reduction in shop services revenues due to fewer new build heat exchanger sales during the quarter. And lastly, UK building services generated revenues of $134.6 million, an increase of $28 million, or 26.3%. While favorable exchange rate movements did positively impact the segment's revenues by $7.4 million, the majority of its growth was due to greater service revenues, partially as a result of the recent award of a facility's maintenance contract, and increased project activity with existing customers. Let's turn to slide seven.

Moving to Industrial Services, revenues were $281.1 million, a 13.3% decrease.

Revenues were impacted by lower Field Services volumes when compared to the prior year which had benefited from jobs of a larger size.

Together, our construction segments reported operating margin of 12, 8%, which is a 50 basis point improvement year over year.

Scope growth on certain turnarounds and the performance of a renewable fuel project.

Excellent project execution enhanced productivity and a more favorable mix continue to be significant contributors to our success.

This segment also experienced a reduction in shop services revenues due to fewer new build heat exchanger sales during the quarter.

Operating income for U S building services of $50 million grew by six 8% and operating margin of six 3% increased by 30 basis points.

And lastly, UK Building Services, generated revenues of 134.6 million and increase of 28 million or 26.3%.

Contributing to the improved profitability was a greater percentage of revenues from mechanical services, where we continued to perform well, earning strong returns with notable margin expansion across HVAC projects and retrofits as well as repair service.

The majority of its growth was due to Greater service revenues partially, as a result of the recent Award of the facilities maintenance contract and increased project activity with existing customers.

Andrew Backman: With operating income of $415,2 million, or 9.6% of revenues, our performance established a quarterly record for operating income and a second quarter record for operating margin. This represents a year-over-year increase in operating income of $82.4 million, or nearly 25%, and a 50 basis point improvement in operating margin. If we look at each of our segments, US electrical construction generated operating income of $157.7 million, which represents a 78% increase. In addition to greater revenues, operating income of this segment benefited from a 70 basis points expansion in operating margin. And the segment earned an operating margin of 11.8%. The segment experienced greater gross profit across the majority of the market sectors in which we operate, with the largest increases generally in tracking with its revenue growth.

Let's turn to slide 7.

Turning to industrial services and operating loss of 419000 compares to operating income of $12 7 million or three 9% of revenues a year ago.

With operating income of 415.2 million or 9.6% of revenues, our performance established, a quarterly record for operating income and a second quarter record for operating margin.

The decrease in this segment's profitability was primarily due to the reduction in revenues and the mix shifts that I previously referenced.

This represents a year-over-year increase in operating income of 82.4 million or nearly 25%. And a 50 basis, point Improvement in operating margin

In addition to the direct impact of lower revenues does volume decline also resulted in a greater amount of unabsorbed overhead within the segment.

And lastly, UK building services earned operating income of $8 4 million or six 3% of revenues.

If we look at each of our segments, U.S. electrical construction generated operating income of $157.7 million, which represents a 78% increase.

The increased profitability of our U K business resulted from greater gross profit stemming from increased segment revenues and a reduction in SG&A margin due to effective cost management, coupled with the leveraging of their overhead.

in addition to Greater revenues, operating income of this segment benefited, from a 70 basis, points expansion in operating margin

and the segment earned, an operating margin of 11.8%.

If we move to slide eight I'll cover a few quarterly highlights not included on the previous slides.

Andrew Backman: Largely driven by Miller Electric, operating income of electrical construction included $9.8 million of incremental acquisition contribution, net of $11.4 million of intangible asset amortization. Operating income for US mechanical construction increased nearly 12% to $238.7 million, and operating margin expanded by 70 basis points, establishing a new quarterly record of 13.6%. Similar to electrical construction, this segment experienced greater profitability across a number of market sectors, with the most significant increase in gross profit being generated from network and communications. Together, our construction segments reported an operating margin of 12.8%, which is a 50 basis point improvement year-over-year. Excellent project execution, enhanced productivity, and a more favorable mix continue to be significant contributors to our success. Operating income for US building services of $50 million grew by 6.8%, and operating margin of 6.3% increased by 30 basis points.

The segment experience greater gross profit across the majority of the market sectors, in which we operate with the largest increases generally in tracking with its Revenue growth.

Driven by our electrical and mechanical construction segments as well as our U S building services segment. Our gross profit margin has expanded by 70 basis points with gross profit increasing nearly 22%.

Largely driven by Miller Electric operating income of electrical construction included, 9.8 million of incremental acquisition contribution. Net of 11.4 million of intangible asset amortization,

Looking next to SG&A, our second quarter expenses increased by $67 4 million and contributing to that variance was $28 9 million of incremental expenses from acquired companies and $5 5 million of additional amortization expense.

Operating income for us mechanical construction, increased nearly 12% to 238.7 million and operating margin expanded by 70 basis points. Establishing a new quarterly record of 13.6%

Excluding these items SG&A grew by $32 9 million largely due to employment costs, given both greater head count to support our organic growth as well as increased incentive compensation expense within certain of our segments given higher projected annual operating results.

similar to electrical construction. This segment experience greater profitability across a number of Market sectors with the most significant increase in gross profit being generated from networking Communications.

Together, our construction segments, reported operating margin of 12.8% which is a 50 basis, point Improvement year-over-year.

SG&A margin for the quarter of nine 7% compares to nine 6% a year ago and as expected. Our SG&A margin did decrease from that of this year's first quarter and we continue to expect our full year SG&A margin to be relatively comparable to that of 2024, when adjusting for the $9 4 million of transaction.

And a more favorable, mix continue to be significant contributors to Our Success.

Andrew Backman: Contributing to the improved profitability was a greater percentage of revenues from mechanical services, where we continued to perform well, earning strong returns with notable margin expansion across HVAC projects and retrofits, as well as repair service. Turning to industrial services, an operating loss of $419,000 compares to operating income of $12.7 million, or 3.9% of revenues a year ago. The decrease in this segment's profitability was primarily due to the reduction in revenues and the mix shift that I previously referenced. In addition to the direct impact of lower revenues, this volume decline also resulted in a greater amount of unabsorbed overhead within the segment. And lastly, UK building services earned an operating income of $8.4 million, or 6.3% of revenues.

Operating income for us Building Services of 50 million, grew by 6.8% and operating margin of 6.3% increased by 30 basis points.

Expenses incurred earlier this year.

And finally on this page diluted earnings per share was $6 72.

Compared to $5 25.

An increase of 28%.

Contributing to the improved profitability was a greater percentage of revenues from Mechanical Services, where we continue to perform well, earning strong returns with notable margin expansion across HVAC projects, retrofits, and repair services.

If we look briefly at slide nine this slide summarizes our results for the first six months of 2025 and has been included here for your reference.

Turning to Industrial Services.

Other than go through the page in detail I want to again highlight that we have had a tremendous start to the year setting a number of company records as we continued to deliver for our customers and shareholders.

And operating loss of 419,000 compares to operating income of 12.7 million or 3.9% of revenues a year ago.

the decrease in this segment's, profitability was primarily due to the reduction in revenues and the mix shift that I previously referenced

In a later slide Tony will outline our updated earnings guidance for 2025, I mentioned that now is this guidance assumes continued strengthen our margins in line with what we have achieved through the first half of the year.

In addition to the direct impact of lower revenues, this volume decline also resulted in a greater amount of unabsorbed overhead within the segment.

Specifically at the low end of our guidance, we have assumed a full year operating margin, which is equal to the 9%. We have earned year to date, while the high end assumes operating margins in the back half of the year, which are essentially equivalent to the outstanding nine 6% achieved this quarter the implied full year margin is comparable.

Andrew Backman: The increased profitability of our UK business resulted from greater gross profit stemming from increased segment revenues and a reduction in SG&A margin due to effective cost management coupled with the leveraging of their overhead. If we move to slide eight, I'll cover a few quarterly highlights not included on the previous slides. Driven by our electrical and mechanical construction segments, as well as our US building services segment, our gross profit margin has expanded by 70 basis points, with gross profit increasing nearly 22%. Looking next to SG&A, our second quarter expenses increased by $67.4 million, and contributing to that variance was $28.9 million of incremental expenses from acquired companies and $5.5 million of additional amortization expense.

And lastly, UK Building Services earned operating income of $8.4 million, or 6.3% of revenues.

The increased profitability of our UK business, resulted from greater gross profit, stemming from increased segment revenues and a reduction in sg&a margin due to effective cost management coupled with the leveraging of their overhead.

<unk> to the margins we have delivered over the last 12 to 24 months.

If we move to slide 8, I'll cover a few quarterly highlights not included on the previous slides.

With that I will turn to slide 10 to close on our balance sheet.

Our balance sheet remains strong and liquid and as of June 30, we had cash on hand of $486 million and working capital of just over $782 million.

Driven by our electrical and mechanical construction segments, as well as our U.S. Building Services segment, our gross profit margin has expanded by 70 basis points, with gross profit increasing nearly 22%.

Largely as a result of borrowings outstanding on our revolver, our debt balance was a modest $256 4 million.

Looking next to SG&A, our second quarter expenses increased by $67.4 million.

We had operating cash flow of $193 $7 million during the quarter and generated $302 $2 million year to date.

Andrew Backman: Excluding these items, SG&A grew by $32.9 million, largely due to employment costs, given both greater headcount to support our organic growth, as well as increased incentive compensation expense within certain of our segments, given higher projected annual operating results. SG&A margin for the quarter of 9.7% compares to 9.6% a year ago, and as expected, our SG&A margin did decrease from that of this year's first quarter, and we continue to expect our full-year SG&A margin to be relatively comparable to that of 2024 when adjusting for the $9.4 million of transaction expenses incurred earlier this year. And finally, on this page, diluted earnings per share was $6.72 compared to $5.25, an increase of 28%. If we look briefly at slide nine, this slide summarizes our results for the first six months of 2025 and has been included here for your reference.

And contributing to that variance was 28.9 million of incremental, expenses from acquired companies and 5.5 million of additional amortization expense.

For the full year, we estimate operating cash flow to be at least equivalent to net income and up to approximately 80% of operating income.

During the quarter, we utilized $207 3 million for the repurchase of our common stock, bringing our year to date repurchases to $432 2 million.

Excluding these items, SG&A grew by $32.9 million, largely due to employment costs—given both a greater headcount to support our organic growth, as well as increased incentive compensation expense within certain of our segments, due to higher projected annual operating results.

When layering in second quarter acquisitions, we have spent $887 $2 million year to date on M&A.

As we've said before our balance sheet, coupled with the cash expected to be generated by our operations as well as the nearly $980 million of capacity available under our credit facility leaves us well positioned to continue to deliver on our philosophy of balanced and disciplined capital allocation with that I'll call. The turn the call back over to Tony.

Sua margin for the quarter of 9.7% compares to 9.6% a year ago. And as expected our sg&a margin did decrease from that of this year's first quarter and we continue to expect our full year. Sg&a margin to be relatively comparable to that of 2024 when adjusting for the 9.4 million of transaction expenses incurred earlier this year,

Thanks, Jason and I'm going to be on pages 11 and 12.

8%.

Clearly, we've been executing well and as a result.

We will raise our 2025 revenue and earnings guidance.

Andrew Backman: Rather than go through the page in detail, I want to again highlight that we have had a tremendous start to the year, setting a number of company records as we continue to deliver for our customers and shareholders. In a later slide, Tony will outline our updated earnings guidance for 2025. I mention that now as this guidance assumes continued strength in our margins in line with what we've achieved through the first half of the year. Specifically, at the low end of our guidance, we have assumed a full-year operating margin, which is equal to the 9% we have earned year to date, while the high end assumes operating margins in the back half of the year, which are essentially equivalent to the outstanding 9.6% we achieved this quarter. The implied full-year margin is comparable to the margins we've delivered over the last 12 to 24 months.

We now expect to earn between $24 50 to $25 75, and diluted earnings per share and we expect revenue of between $16 four and $16 9 billion.

If we look briefly at slide 9, this slide summarizes our results for the first six months of 2025 and has been included here for your reference.

Rather than go through the page in detail. I want to again highlight that we have had a tremendous start to the year setting, a number of company records as we continue to deliver for our customers and shareholders.

We expect to continue to earn strong operating margins and execute with discipline and efficiency for our customers.

In a later slide tonal outline our updated earnings guidance for 2025.

Our rps demonstrates the momentum and demand in our markets, especially in data centers traditional and high Tech manufacturing healthcare.

I mentioned that now is this guy's assumes continued strength in our margins in line with what we've achieved through the first half of the year.

<unk> service building controls and retrofit projects.

Macroeconomic uncertainty persists, especially around tariffs and trade, but we believe our guidance reflects the potential impact of such uncertainty as we view it today.

We will remain disciplined capital allocators.

Capital Allocators.

Bolstered by our strong balance sheet, a healthy pipeline of acquisitions and robust opportunities to support our organic growth and if you look at page 12, and you look at a 10 year view of the World you will see $50 50 <unk>.

Andrew Backman: With that, I'll turn to slide 10 to close on our balance sheet. Our balance sheet remains strong and liquid, and as of June 30th, we had cash on hand of $486 million and working capital of just over $782 million. Largely as a result of borrowings outstanding on our revolver, our debt balance was a modest $256.4 million. We had operating cash flow of $193.7 million during the quarter and generated $302.2 million year to date. For the full year, we estimate operating cash flow to be at least equivalent to net income and up to approximately 80% of operating income. During the quarter, we utilized $207.3 million for the repurchase of our common stock, bringing our year-to-date repurchases to $432.2 million. When layering in second quarter acquisitions, we have spent $887.2 million year to date on M&A.

Specifically at the low end of our guidance. We have assumed a full year operating margin, which is equal to the 9%. We have earned year to date while the high-end assumes operating margins in the back, half of the year which are essentially equivalent to the outstanding. 9.6% we achieved this quarter, the implied full year margin is comparable to the margins. We've delivered over the last 12 to 24 months

With that, I'll turn to slide 10 to close on our balance sheet.

<unk> capital allocation and deals happen when they happen and finally I want to close with the most important statement in the call I want to thank by Amcor teammates. Thank you for your dedication to our customers and to our company and thank you for taking care of each other and keeping each other safe with that.

Our balance sheet remains strong and liquid. As of June 30, we had cash on hand of $486 million and working capital of just over $782 million.

Largely as a result of borrowing, our outstanding balance on the revolver was a modest $256.4 million.

Then drew I'll take questions.

We had operating cash flow of 193.7 million during the quarter and generated 302.2 million year to date.

Thank you.

We will now begin the question and answer session to ask a question you met the stock and one on your touch to unfold.

For the full year, we estimate operating cash flow to be at least equivalent to net income and up to Approximately 80% of operating income.

If you are using a speakerphone please pick up your handset before pressing the keys.

Anytime Youre question has been interest and you would like to withdraw your questions. Please press Star then two.

During the quarter, we utilize 207.3 million for the repurchase of our common stock, bringing our year-to-date repurchases to 432.2 million.

At this time, we will pause momentarily to assemble the module stone.

Andrew Backman: As we've said before, our balance sheet, coupled with the cash expected to be generated by our operations, as well as the nearly $980 million of capacity available under our credit facility, leaves us well positioned to continue to deliver on our philosophy of balanced and disciplined capital allocation. With that, I'll turn the call back over to Tony. Thanks, Jason. And I'm going to be on pages 11 and 12. You know, clearly we've been executing well, and as a result, we will raise our 2025 revenue and earnings guidance. We now expect to earn between $2,450 to $2,575 in diluted earnings per share, and we expect revenue of between $16.4 and $16.9 billion. We expect to continue to earn strong operating margins and execute with discipline and efficiency for our customers.

When layering in second quarter Acquisitions, we have spent 887.2 million year to date on m&a.

The first question comes from the line of Brent Thielman.

D. A davidson. Please go ahead.

Brent question.

Mr. <unk>. Please go ahead.

Hey, Brent start over your muted. There then you can start over.

As we've said before our balance sheet, coupled with the cash expected to be generated by our operations as well as the nearly 980 million of capacity available under our credit facility leaves us. Well, positioned to continue to deliver on our philosophy of balanced and disciplined Capital, allocation with that. I'll call the turn the call back over to Tony

Yeah.

Thanks Jason and I'm going to be on pages 11 and 12.

Brent.

Mr. Tillman if you have a mutual sense and go ahead with your question.

You know, clearly we've been executing well and as a result, we we will raise our 2025 revenue and earnings guidance.

Okay, let's come back to Brad Let's go to the next question.

Since there's no other place on the line are Mr. Tillman, we'll take the next.

We now expect to earn between 2450 to 2575 and diluted earnings per share, and we expect revenue of between 16.4 and 16.9 billion.

The next question comes from the line of Adam Thalheimer pumps.

Andrew Backman: Our RPOs demonstrate the momentum and demand in our markets, especially in data centers, traditional and high-tech manufacturing, healthcare, HVAC service, building controls, and retrofit projects. Macroeconomic uncertainty persists, especially around tariffs and trade, but we believe our guidance reflects the potential impact of such uncertainty as we view it today. We will remain disciplined capital allocators, bolstered by our strong balance sheet, a healthy pipeline of acquisitions, and robust opportunities to support our organic growth. And if you look at page 12 and you look at a 10-year view of the world, you'll see 50/50 balanced capital allocation. And deals happen when they happen. And finally, I want to close with the most important statement of the call. I want to thank my EMCOR teammates. Thank you for your dedication to our customers and to our company.

We expect to continue to earn strong, operating margins, and execute with discipline and efficiency for our customers.

Thompson Davis. Please go ahead.

Hey, good morning, guys nice quarter, Thanks, Hey.

Tony can you just talk a little bit about bidding at a high level I'm curious what your expectations are for bookings at a high level in the back half of the year, Yes, I am not going to guess if bookings.

Our RPO is demonstrate the momentum and demand that our markets, especially in data centers, traditional and high-tech. Manufacturing Healthcare, HVAC service, building controls and retrofit projects.

We will continue to win.

Our fair share of the business and we continue to have repeat business with customers I think we're doing a great job will continue to expand our footprint to serve more markets.

Back back back, economic uncertainty, persists, especially, around tariffs and trade but we believe our guidance reflects the potential impact of such uncertainty as we view it today.

We will remain disciplined capital allocator, g capital allocators.

In our business, it's not a quarter to quarter bookings business. It never has been but all of the underlying strength, we've seen through the first half of the year and we saw through the back half of last year. There is no reason for us to believe that doesn't continue.

We're building the first building on a lot of sites that are multiyear build outs and phases over time, we continue to see the strength in the markets that we've talked about extensively in the call whether it be manufacturing high tech manufacturing, which are little more episodic networking communications the commercial market for <unk>.

Andrew Backman: And thank you for taking care of each other and keeping each other safe. With that, Vanju, I'll take questions.

Ranju: Thank you. We will now begin the question and answer session. To ask a question, you may press star and one on your touch-tone phone. If you are using a speakerphone, please pick up your headset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your questions, please press star, then two. At this time, we will pause momentarily to assemble our roster. The first question comes from the line of Brent Thielman with TA Davidson. Please go ahead.

Bolstered by our strong balance sheet, a healthy pipeline of acquisitions, and robust opportunities to support our organic growth. And if you look at page 12 and you look at a 10-year view of the world, you'll see 50/50 balance capital allocation, and deals happen when they happen. And finally, I want to close with the most important statement of the call. I want to thank my M core teammates. Thank you for your dedication to our customers and to our company, and thank you for taking care of each other and keeping each other safe. With that, I'll take questions.

Which is retrofit continues to chug along healthcare continues to be a strong market. So really it's broad base.

Thank you. We will now begin the question and answer session. To ask a question, you may press start and 1 on your touchtone phone.

And if you think about our call Jason go through some numbers.

If you are using a speakerphone, please pick up your handset before pressing the keys.

We have demonstrated over a long period of time that we will outpace non res construction maybe cover some of those numbers Jason.

If at any time your question has been addressed and you would like to withdraw your questions. Please press star then 2

I think we've covered some of this in the past right. If you look at EMCORE over of <unk>.

At this time, we will pause momentarily to assemble our roster.

Period of time, let's say five years, we've historically outpaced non res by 200 basis points organically and probably 250 basis points. When you include M&A I think.

The first question comes from the line of Brent thielman with da Davidson, please go ahead.

The more telling story, though is when you look at our construction segment and even the mechanical services business within building services over that same five year period, those segments outpace non res by 500 to 600 basis points.

Tony Guzzi: Brent. Question.

Ranju: Mr. Thielman, please go ahead.

Brent question, just

Steelman. Please go ahead.

Tony Guzzi: Hey, Brent, start over. You were muted there. You can start over.

We expect the markets to be good, especially where we operate and we expect to outperform those markets Adam.

Hey, Brent start over. You were you were muted there, you can start over.

Andrew Backman: Brent?

Ranju: Mr. Thielman, if you have muted your phone, unmute yourself and go ahead with the question.

Brent.

Great and then I wanted to ask about the industrial business with the change in administration curious if youre seeing any signs of life.

Mr. Thielman uh if you have muted your phone, unmute yourself. And go ahead with the question.

Andrew Backman: Okay, let's come back to Brent. Let's go to the next question.

Okay.

The business again think about a lot of the business is focused downstream.

Ranju: Since there is no reply from the line of Mr. Thielman, we'll take the next. The next question comes from the line of Adam Thelheimer with Thomson Davis. Please go ahead.

Okay, let's come back to Brent. Let's go to the next question.

<unk>.

Since that is not a plan from the line or Mr. Tillman will take the next

That really Hasnt changed is more timing, which you see through the first half of this year versus last year at the timing of turnarounds.

We do expect strengthening through the year, we do see more activity potentially midstream, which will impact our electrical.

Tony Guzzi: Good morning, guys. Nice quarter.

The next question comes from the line of Adam palr with Thompson Davis. Please go ahead.

Andrew Backman: Thanks.

Tony Guzzi: Hey, Tony, can you just talk a little bit about bidding at a high level? I'm curious what your expectations are for bookings at a high level in the back half of the year.

Business within industrial.

And we also see.

Some work around other energy build out, especially in the LNG, where all of the other things is the plans come to fruition. So I'd say, that's the major parts you will see it.

Andrew Backman: Yeah, I'm not going to guess at bookings. We'll continue to win our fair share of the business, and we continue to have repeat business with customers who think we're doing a great job, and we continue to expand our footprint to serve more markets. You know, in our business, it's not a quarter-to-quarter bookings business. It never has been. But all the underlying strength we've seen through the first half of the year, we saw through the back half of last year, there's no reason for us to believe that doesn't continue. You know, we're building the first building on a lot of sites that are multi-year build-outs and phases over time. We continue to see the strength in the markets that we've talked about extensively in the call, whether it be manufacturing, high-tech manufacturing, which is a little more episodic, network and communications.

But <unk>.

Being that we're 70% or so downstream focused we're dependent on refinery utilization in the turnaround schedule.

Uh good morning guys. Nice quarter. Thanks. Hey uh, Tony. Can you just talk a little a little bit about bidding at a high level and curious? What your expectations are for bookings at a high level in the back half of the year. Yeah I'm not going to guess a booking uh we'll continue to win uh our fair share of the business and we can continue to have repeat business with customers to think we're doing a great job. And we continue to expand our footprint to serve more markets.

Got it and last one for me in the U K.

uh, you know, in our business they it's not a quarter to quarter bookings business that never has been

Sure.

What's caused the strength there and curious if that's sustainable yes, I think the biggest thing is <unk>.

Increased volume rate, we got a recent award or two on the service side, we had more project activity and when you really look.

But all the underlying strength we've seen through the first half of the year that we saw through the back half of last year. There's no reason for us to believe that doesn't continue.

That's what's driving the revenue growth when you look at the margin side, it's really just leveraging their overhead in a period of growth and it's been a pretty steady performer.

It's known for technical excellence.

Andrew Backman: The commercial market for us, which is retrofit, continues to chug along. Healthcare continues to be a strong market. So really, it's broad-based. And if you think about our call, I have Jason go through some numbers. We have demonstrated over a long period of time that we will outpace non-res construction. Maybe cover some of those numbers, Jason.

And it wins those kind of windows kind of contracts and it's had long term customer relationships.

We've grown it organically.

Uh, you know, we're, we're we're building the first building on a lot of sites that are multi-year builds and phases. Over time, we continue to see the strength in the markets that we've talked about extensively in the call, whether it be manufacturing, high-tech manufacturing, which a little more episodic networking Communications, the commercial market for us, which is retrofit continues to chug along Healthcare continues to be a strong market. So really, it's broad base. Uh and if and if you think about our

And we've been pretty steady over time, and it's been a very good performer for us.

Yes, nice to see a step up in revenue there alright, I will turn it over thank you.

Tony Guzzi: And I think we've covered some of it in the past, right? If you look at EMCOR over a period of time, let's say five years, we've historically outpaced non-res by 200 basis points organically and probably 250 basis points when you include M&A. I think the more telling story, though, is when you look at our construction segment and even the mechanical services business within building services, over that same five-year period, those segments outpaced non-res by 500 to 600 basis points.

Thank you next question comes from the line of Brent Thielman with D. A Davidson. Please go ahead.

Hey, Thanks, good morning, sorry for that.

Problem.

Yes, Tony.

Seems to be.

Becoming an even more active M&A environment with some larger public transactions out there lately and either electrical and mechanical wanted to get your your.

Took a call Jason, go through some numbers. We have demonstrated over a long period of time that we will outpace non-res construction, Maybe cover some of those numbers Jason and I I think we we've covered some of this in in the past, right? If you look at em core over a period of time, let's say 5 years. We've historically outpaced non-res by 200 basis points organically and and probably 250 basis points when when you include m&a. I think

Take on the.

Pipeline of potential targets.

Andrew Backman: So we expect the markets to be good, especially where we operate, and we expect to outperform those markets, Adam.

The more telling story, though, is when you look at our construction segments, and even the Mechanical Services business within Building Services. Over that same five-year period, those segments outpace non-residential by 500 to 600 basis points.

The market evolved a lot in the last 12 months were.

So our expectations are can still meet your criteria to be an attractive deal here I'd just love to get your take there.

So we expect the markets to be good, especially where we operate, and we expect to outperform from those markets, Adam.

Tony Guzzi: Great. And then I wanted to ask about the industrial business. With the change in administration, curious if you are seeing any signs of life.

I think it's yes and yes.

If you go back to sort of how.

Andrew Backman: You know, the business, again, think about it. A lot of the business is focused downstream. That really hasn't changed. It's more of timing, which you see through the first half this year versus last year. It's a timing of turnarounds. We do expect strengthening through the year. We do see more activity potentially midstream, which will impact our electrical business within industrial. And we also see some work around other energy build-out, especially in the LNG world and other things as the plans come to fruition. So I'd say that's the major parts you'll see it. But you know, being that we're 70% or so downstream focused, you know, we're dependent on refinery utilization and the turnaround schedule.

How we think about deals right that hasnt changed.

We're looking to buy companies of any size that can execute in the field and execute very well.

Uh great. And then I wanted to ask about the industrial business with the change in administration. Curious, if you are seeing any signs of Life, uh, you know, the business again, think about it. A lot of the businesses focused Downstream

uh,

As they become larger or larger acquisitions. We worry then very much about is there a cultural fit.

And if you look at it.

Our two largest acquisitions, we've done in the last five or six years, Bachelor and Kimball and Miller electric.

<unk> met those criteria in both of our lives by teams that were worried about the long term.

Sustainability of their organizations did we fit with their values as much as we worried about them fitting with our values and the ability to grow and have growth capital.

That really hasn't changed. It's more of a timing. What you see through the first half this year versus last year, it's a timing of turnarounds, we do expect strengthening through the year, we do see more activity potentially mid-stream, which will impact our Electrical uh, business within industrial. Uh, and we also see, uh, some some work around uh, other energy buildout especially in the LNG World and Other Things is the plans come um, to fruition. So

So how we look at deals haven't changed.

Tony Guzzi: Got it. And last one for me. In the UK, what's caused the strength there and curious if that's sustainable?

I'd say that's the major part, you'll see it uh but you know being that we're 70% or so Downstream focused, you know, we're dependent on refining the utilization and the turnaround schedule

We're always looking to make a fair deal and Thats got to be fair for our shareholders, but we also want the seller to fill that they've made a good deal with us because that's how you performed better together going forward.

got it. And last 1 for me in the UK, um,

Andrew Backman: Yeah, I think the biggest thing is increased volume, right? We got a recent award or two on the service side. We had more project activity. And when you really look, that's what's driving the revenue growth. When you look at the margin side, it's really just leveraging their overhead in a period of growth.

If you think about the current environment I think youre referencing.

We did Miller.

Quanta did cupertino and then this morning, they just did DSI.

Some of the deals have gotten larger and Thats understandable right at some of these are closely held businesses.

Tony Guzzi: And it's been a pretty steady performer. And it's, you know, it's known for technical excellence. And it wins those kind of contracts. And it's had long-term customer relationships. We've grown it organically, and you know, and we've been pretty steady over time, and it's been a very good performer for us.

Theyre getting very large the owners have all their eggs in one basket.

And they also on growth capital because they see what we see in the future.

They see a growing market they want to be part of that and they want to continue to provide opportunities for their people. While at the same time taken some of the risk off the table, but continuing to run their business.

Ranju: Yeah, nice to see the step up in revenue there. All right, I'll turn it over. Thank you. Thank you. Next question comes to the line of Brent Thielman with TA Davidson. Please go ahead.

which caused the strength there and curious, if that's sustainable. Yeah, I think the the biggest thing is increased volume, right? We got a recent award or 2 on on the service side. We had more project activity. And and when you really look, that's what's driving, the revenue growth. When you look at the margin side, it's really just leveraging their overhead in a period of growth, and it's been a pretty steady performer and it, you know, it's known for technical excellence and, and it wins those kind of it wins, those kind of contracts and, and it's had long-term customer relationships, uh, We've grown it organically and, you know, and we and we've been pretty steady over time. And it's been a very good performer for us.

So the competitive environment for those for me wake up in the morning, and you say, okay. One of your competitors are quasi competitors.

Yep. Uh, nice to see you step up in revenue there. All right, I'll turn it over. Thank you.

Potentially bought somebody that is a good company that's not a bad thing.

Tony Guzzi: Hey, thanks. Good morning. Sorry for that.

Thank you. Next question comes from the line of Brent Tillman. Please go ahead.

Andrew Backman: No problem.

Tony Guzzi: Yeah, hey, Tony, you know, this seems to be becoming an even more active M&A environment with some larger public transactions out there lately in either electrical or mechanical. Wanted to get your take on the pipeline of potential targets. Has the market evolved a lot in the last 12 months where, you know, seller expectations can still meet your criteria to be an attractive deal here? I'd just love to get your take there.

Hi.

Hey, thanks. Good morning. Sorry for that. Um, no problem.

Because.

They know how to run businesses and we compete with those people today and.

Nothing has really changed on the playing field today, and how things are procured and how that moves. So I think it's a combination of I think optimism towards the future.

Yeah, hey Tony. Um, you know, this seems to be becoming an even more active m&a environment, that's within larger public transactions out there lately and either electrical or mechanical, I wanted to get your

That drives these larger deals.

Yes, that's great color and I appreciate that.

Just wanted to ask on the <unk>.

Continue to put up.

Andrew Backman: I think it's yes and yes. If you go back to sort of how we think about deals, right, that hasn't changed. We're looking to buy companies of any size that can execute in the field and execute very well. As they become larger or larger acquisitions, we worry then very much about, is there a cultural fit? And if you look at our two largest acquisitions we've done in the last five or six years, Bachelor and Kimball and Miller Electric, both met those criteria and both were led by teams that were worried about the long-term sustainability of their organizations. Did we fit with their values as much as we worried about them fitting with our values and the ability to grow and have growth capital? So how we look at deals hasn't changed.

Really impressive expansion in the mechanical margins I guess in particular here and.

Your take on the pipeline of potential targets is that the market has evolved a lot in the last 12 months. Seller expectations can still meet your criteria to be an attractive deal here. I would love to get your take on that.

I think it's yes, and yes. If you go back to sort of...

Tony just wanted to circle back is this sort of the same mix.

Mix in terms of combination of operating leverage versus just getting higher rates.

How we think about deals, right? That hasn't changed.

<unk> be helpful to hear what exactly youre leveraging in that yes, I think it starts with us right. So.

Of any size that can execute in the field and execute very well.

As they become larger acquisitions, we worry very much about: is there a cultural fit?

So you think about the customer set.

And it's driving that mix today.

And you've heard me say this many times. These are the most sophisticated customers in the world and they are very demanding.

So theyre not paying.

One more center and they need to.

It's up to us to deliver and Theyre not also.

Having any easier contract terms and they need to.

So start there.

So then you have to get to okay. It's a busy market maybe pricing is a little bit better, but I believe most of it's being driven by our means and methods our ability to gain productivity on a job site, our ability to leverage things like BDC, and Bam, which our customers see real value to and then our ability to turn that into pre fabricated.

Andrew Backman: We're always looking to make a fair deal, and that's got to be fair for our shareholders. But we also want the seller to feel that they've made a good deal with us because that's how you perform better together going forward. If you think about the current environment, I think you're referencing, you know, we did Miller and Quanta did Cupertino, and then this morning they just did DSI. Yeah, some of the deals have gotten larger, and that's understandable, right? Some of these are closely held businesses. They're getting very large. The owners have all their eggs in one basket. And they also want growth capital because they see what we see in the future, right? They see a growing market.

And if you look at our, our 2 largest Acquisitions, we've done in the last 5 or 6 years, Batchelor and Kimball and Miller Electric, uh, both met those criteria and, and both were led by teams that were worried about the long-term, uh, sustainability of their organizations. Did we fit with their values as much as we worried about them fitting with our values, and the ability to grow and have growth Capital. Uh, so how we look at deals, haven't changed, uh, we're always looking to make a fair deal and that's got to be fair for our shareholders, but we also want the seller to fill that they've made a good deal with us because that's how you perform Better Together going forward.

Uh, if you think about the current environment, I think you're referencing. You know, we did Miller.

<unk> and our ability to have less labor on the job site in more highly skilled labor.

and quanta did Cupertino. And then they this morning, they just did DSi.

And then it really comes down to also do you have the best field supervision on the site to be able to drive the best productivity and get the best outcomes and do that in a safe manner to the point, where you become a point a place where labor really wants to work and I think we check the box on all of that.

Yeah, some of the deals have gotten larger, and that's understandable, right? Some of these are closely held businesses.

Andrew Backman: They want to be part of that, and they want to continue to provide opportunities for their people, while at the same time taking some of the risk off the table but continuing to run their business. So the competitive environment for those, I mean, for me, you wake up in the morning and you say, okay, one of your competitors or quasi-competitors potentially bought somebody that is a good company. That's not a bad thing. You know, because they know how to run businesses, and we compete with those people today, and nothing's really changed on the playing field today and how things are procured and how that moves. So I think it's a combination of, I think, optimism towards the future that drives these larger deals.

If you start with great supervision on a job site.

Do you have a lot of great planning going on.

Negotiated the contract the right way.

Uh, they're getting very large, the owners have all their eggs in 1 basket. And they also want growth Capital because they see what we see in the future, right? They see a growing Market. They want to be part of that and they want to continue to provide opportunities for their people. Well at the same time, taking some of the risk off the table But continuing to run their business.

Youre really doing good progress billings and keeping your customer prize and coming up with solutions, how to how to drive value engineering and productivity.

A lot of times you end up in a good place I'll ask Jason to go through this.

Sustainability of margins, we always look at 12, 18, and 24 month averages.

Uh, so the competitive environment for those, I mean, for me, you wake up in the morning and you, you say, Okay, 1 of your competitors or quasi competitors. Uh, potentially bought somebody. That is a good company. That's not a bad thing. Uh, you know, because they know how to run businesses and we compete with those people today. And

And I think we're at a level, where we think were pretty good.

Two things I'd add one first before we talk about margins is just also the project sizes right. We've talked about increasing of project sizes and you get better utilization you get better leverage on your indirect and all of that's certainly helping margins as well when you look at each of our segments and we say this repeatedly it's not a quarter to quarter business.

Nothing's really changed on the playing field today and how things are procured and and how that moves. So I think it's a combination of I think optimism towards the future uh that drives these larger deals

Tony Guzzi: Yeah, that's great cover, Tony. I appreciate that. Yeah, so yeah, I wanted to ask on the, I mean, you continue to put up really impressive expansion in the mechanical margins, I guess, in particular here. And you know, Tony, just wanted to circle back. Is this sort of the same mix in terms of the combination of operating leverage versus just getting higher rates? It'd be helpful to hear what exactly you're leveraging in that group.

Yeah, that's a great color, Tony, I appreciate that. Um, yes. So yeah, I want to ask on the um, I mean, you continue to put up

So mechanical is as.

A record quarterly margin here in the second quarter, but margins will bounce around I think.

On a consolidated basis, we've said look at the trailing 12 months to 24 months I think that same logic holds true to the segment level. So if you look in mechanical and you look at kind of a rolling 12 to 24 months.

Andrew Backman: Yeah, so I think it starts with us, right? So you think about the customer set that's driving that mix today. And you've heard me say this many times. These are the most sophisticated customers in the world, and they're very demanding. So they're not paying one more cent than they need to, and it's up to us to deliver, and they're not also having any easier contract terms than they need to. So start there. So then you have to get to, okay, it's a busy market. Maybe pricing's a little bit better.

Good expectation.

The margins there so that gets to the sustainability point of view, we're seeing outsized.

Um, really impressive expansion in the mechanical margins. I guess in particular here and uh, you know, attorney just wanted to Circle back, is this sort of the same uh, mix in terms of combination of operating leverage versus just getting higher rates? Um, would be helpful to to hear what? What, exactly you're leveraging in that, that group? Yeah. So I, I think it starts with us, right? So, you think about the customer set

That's driving that mix today.

Big Falloff, we don't expect to see that but that sort of 12 months to 24 month average gives you sort of a picture into how we view sustainability of margins.

And you've heard me say this many times, these are the most sophisticated customers in the world and they're very demanding.

So they're not paying 1 more scent than they need to.

Understood.

I take from your comments just on building services sort of feels like we're maybe at an inflection point here. When you think about just the financial outlook for the rest of the year is that implying that we're back to kind of a growth business here.

and it's up to us to deliver and they're not also,

Having any easier contract terms than they need to?

Andrew Backman: But I believe most of it's being driven by our means and methods, our ability to gain productivity on a job site, our ability to leverage things like VDC and BIM, which our customers see real value to, and then our ability to turn that into prefabricated solutions, and our ability to have less labor on the job site and more highly skilled labor. And then it really comes down to also, do you have the best build supervision on the site to be able to drive the best productivity and get the best outcomes and do that in a safe manner to the point where you become a point, a place where labor really wants to work? And I think we check the box on all that. If you start with great supervision on a job site, you have a lot of great planning going on.

We are start growing again.

The comps get easier.

And more fair really lose a large customer that you did very well.

And then the mix moves more towards mechanical services, which is good for margins.

Okay very good I'll pass it on thank you.

Okay.

Thank you next question comes from the line of <unk>.

So start there, so then you have to get to, okay? It's a busy Market, maybe pricing is a little bit better, but I believe most of it is being driven by our means. And methods, our ability to gain productivity on a job site. Our ability to leverage things like VDC and Bim, which our customers see, real value to and then our ability to turn that into prefabricated Solutions and that and our ability to have less labor on the job site and more highly skilled labor.

<unk> with Stifel. Please go ahead.

Thanks, Good morning, everybody congrats on the nice quarter, just curious what youre seeing from a pipeline perspective project pipeline perspective on the farmer manufacturing side have you seen any change or acceleration in conversations with customers just given some of the changing.

And then it really comes down to. Also, do you have the best field supervision on the site to be able to drive the best productivity, and get the best outcomes and do that in a safe manner? To the point, where you become a point, a place where labor really wants to work? And I think we check the box on all that.

if you start with great supervision on a job site,

Andrew Backman: You negotiated the contract the right way. You're really doing good progress buildings and keeping your customer prized and coming up with solutions on how to drive value engineering and productivity. A lot of times you end up in a good place. I'm going to ask Jason to go through this. You know, sustainability of margins, we always look at, you know, 12, 18, and 24-month averages. And I think we're at a level where we think we're pretty good.

you have a lot of great planning going on.

You negotiated the contractor the right way.

Our outlook on the tariff discussion in that space. Thanks.

Yes, I think for the most part.

So our customers started planning so you got to separate into two things right. The first part is they've got a bunch of new drugs that are going to build onshore.

You're you're you're really doing good progress Billings and keeping your customer prized and coming up with Solutions how to how to drive value, engineering and productivity.

<unk> been investing.

Medical Oxford, I think they're called <unk>.

A lot of times you end up in a good place. I'm going to ask Jason to go through this, you know, sustainability of margins. We always look at, you know, 12, 18, and 24-month averages.

Tony Guzzi: I think two things I'd add. One, first, before we talk about margins, is just also the project sizes, right? We've talked about the increasing of project sizes, and you get better utilization, you get better leverage on your indirects, and all of that's certainly helping margins as well. When you look at each of our segments, and we say this repeatedly, it's not a quarter-to-quarter business, right? So mechanical is a record quarterly margin here in the second quarter, but margins will bounce around. I think on a consolidated basis, we've said look at the trailing 12 to 24 months. I think that same logic holds true to the segment level. So if you look at mechanical and you look at kind of a rolling 12 to 24 months, that's a good expectation for the margins there.

And the weight loss drugs, that's been a big part of the story of the places we are whether it be parts of Indiana.

Or.

North Carolina, and then somewhat New Jersey, now Youre getting to the second part, which I think they started plant in middle of next last year.

Okay got it and it really started as a result of Covid too.

Onshoring more manufacturing that doesn't happen overnight.

But that has been ongoing and I expect that to accelerate.

I saw an analyst yesterday say there.

And I think we're of level where we think we're pretty good. I think, 2 things I'd add 1 first. Before we talk about margins is just also the project sizes, right? We've talked about the increasing of project sizes and you get better utilization, you get better, leverage on your indirect. And all all of that certainly helping margins as well. When you look at each of our segments and and we say this repeatedly, it's not a quarter to quarter business, right? So mechanical is is a is a record quarterly margin here in the second quarter but margins will bounce around I think.

There hasnt been a lot of farm activity in the U S.

Stock analysts and I'm watching TV and I go I must be in a different world than they have been because we see a lot of activity and we participated in it.

Andrew Backman: So that gets to the sustainability point. If you were seeing outsize and a big falloff, we don't expect to see that. But that sort of 12 to 24-month average gives you sort of a picture into how we view sustainability of margins.

Thanks, That's yes, that's really helpful and good to hear and then one follow up.

On this phase two award on the semi side that you guys mentioned in your opening comments is this is a small portion of the overall award you're expecting.

To 24 months. That's a good expectation for the, for the, for the margins there. Yeah. So that gets to the sustainability point if you were seeing outside and then a big fall off, we don't expect to see that. But that sort of 12 to 24 month, average giving you sort of a picture into how we view sustainability of margins.

Tony Guzzi: Understood. I take from your comments just on building services, it sort of feels like we're maybe at an inflection point here when you think about just the financial outlook for the rest of the year. Is that implying that we're back to kind of a growth business here?

As part of this phase II projects or should we be thinking about additional awards in subsequent quarters as it relates to I think this is not a small.

Job.

And to $100 million, plus and it's and it's on a a second phase to the next fab on a site where we are.

Andrew Backman: I think we're starting to grow again. The comps get easier and more fair, really. You lose a large customer that you did very well with. And then the mix moves more towards mechanical services, which is good for the margins.

Repeating what we did the first phase.

Understood um I take from your comments just on Building Services that sort of feels. Like we're we're maybe at an inflection point here when you think about the just the financial outlook for the rest of the year is that implying that we're back to a kind of a growth business here. I I think we're start growing again. Uh, the comps get easier.

So it's not a small award with a question I think is what happens on other sites.

<unk>.

That's where we'll probably do some initial work and then which you probably won't even see it because it'll be smaller and then an award like this potentially could happen.

Uh and more fair, really it was a large customer that you did very well with uh and in the mix moves more towards Mechanical Services which is good for the margins.

Tony Guzzi: Okay, very good. I'll pass it on. Thank you.

Very good. I'll pass it on. Thank you.

Ranju: Thank you. Next question comes to the line of Bruan Proffy with Stifel. Please go ahead.

Question please.

Thanks, I appreciate it I'll pass it on.

Question.

Jason Nalbandian: Thanks. Good morning, everybody. Congrats on the nice quarter. Just curious what you're seeing from a pipeline perspective, project pipeline perspective on the pharma manufacturing side. Have you seen any change or acceleration in conversations with customers, just given some of the changing outlook on the tariff discussion in that space? Thanks.

Thank you. Next question, comes from the line of Broan trophy, but still, please go ahead.

Thank you next question comes from the line of Justin Hauke.

Please go ahead.

Oh great.

Thanks for taking my questions here this morning.

I just wanted to ask I guess.

Yes, obviously.

First half was really strong <unk> really strong I'm, just thinking about the guidance raise and.

Andrew Backman: Yeah, I think for the most part, our customers started planning. So you got to separate into two things, right? The first part is they've got a bunch of new drugs they're going to build onshore that they've been investing in. You know, I'm not a medical expert. I think they're called GLP-1s and the weight loss drugs. That's been a big part of the story in the places we are, whether it be parts of Indiana or North Carolina and then somewhat New Jersey. Now you're getting to the second part, which I think they started planning in the middle of the next last year, is, okay, we got, and it's really started as a result of COVID too, of onshoring more manufacturing. That doesn't happen overnight, but that has been ongoing, and I expect that to accelerate.

The kind of the implied second half is it obviously.

Thanks, good morning everybody, uh, congrats on the nice quarter, just curious what you're seeing uh from a pipeline perspective, project pipeline perspective, on the uh farmer manufacturing side. Have you seen any change or acceleration? Um in conversations with customers? Um just giving some of the the changing uh outlook on the Tariff discussion in that space. Thanks.

Obviously, you don't guide quarterly but.

yeah, I I think for the most part,

Is the guidance raise more reflection of <unk> coming in stronger than expected in second half.

Expectation conventional ranged or is it a balance of the two.

Obviously, you raised the margin guidance, but.

our customers started playing so you got to separate it into 2 things, right. The first part is they've got a bunch of new drugs. They're going to build on Shore that they've been investing and it's it's you know I'm not a medical expert. I think they're called glp ones.

And it sounds like.

At the low end it would be kind of assuming kind of saying that the first half level.

So just trying to understand.

Yes.

On that front and how.

You would characterize your guidance so far.

First of all welcome.

Uh, and the weight loss drugs, that's been a big part of the story and the places we are, whether it be parts of Indiana, uh, or uh, North Carolina, and then somewhat New Jersey. Now, you're getting to the second part, which I think they started playing in middle of the next last year.

We appreciate.

Taking you guys up and having you cover us.

And we very much look forward to your conference this fall.

As far as the guidance I think characterize it right at the lower end is sort of.

Andrew Backman: You know, I saw an analyst yesterday say that they, you know, there hasn't been a lot of pharma activity in the US. A stock analyst, and I'm watching TV, and I go, I must be in a different world than they've been because we see a lot of activity, and we participated in it.

Keep going what we're doing in the higher end sort of takes the higher end of the revenue guidance puts a higher margin on it.

Jason has got a fairly detailed analysis here. He can walk you through and I'm sure. The rest of you will love to hear that too can save you having to do the work.

Jason Nalbandian: Thanks. That's, yeah, that's really helpful and good to hear. And then one follow-up on this Phase Two award on the semi-side that you guys mentioned in your opening comments. Is this a small portion of the overall award you're expecting as part of this Phase Two project, or should we be thinking about additional awards in subsequent quarters as it relates to this?

Is okay, we got and it really started as a result of Co 2 of ensuring more manufacturing. That doesn't happen overnight. But that has been ongoing. And I, I expect that to accelerate. Uh, you know, I saw an analyst yesterday say that they, you know, there hasn't been a lot of farm activity in the US, uh, a stock analyst, and I'm watching TV and I go, I must be in a different world than they've been, because we see a lot of activity and we participated in it.

I think the only thing I would say I think it is twofold.

<unk> of it is the performance in the second quarter at a piece of it is our expectations for margin in the back half of the year and if you look now.

As I stated for the back half, we expect margins between 9% to 96, which gives you full year margins of somewhere between 9% to 94 and so if you just look at that midpoint, which is about nine 2% and you take into consideration the intangible asset amortization impact from Miller Theres, probably another 20 to 30 basis points on <unk>.

Andrew Backman: I think this is not a small job. It's $100 million plus, and it's on a second phase. It's the next fab on a site where we're repeating what we did the first phase. So it's not a small award. The question I think is, what happens on other sites? And you know, that's where we'll probably do some initial work, and then which you probably won't even see because it'll be smaller. And then an award like this potentially can happen.

Thanks. That's yeah, that's really helpful and and good to hear. And then 1 follow up, um, on this Phase 2 award on the semi side that you guys mentioned in your opening comments is this a small portion of the overall award you're expecting. Um, as part of this Phase 2 project, or should we be thinking about additional Awards in subsequent quarters as it relates to this? I think this is not a small, uh, job

To 100 million plus, and it's, and it's on a a second phase. It's the next Fab on a site where we're repeating, what we did. The first phase.

Of that if you're really comparing apples to apples to 'twenty four but to answer your question I think it's a two part raised it taking into consideration what we did in the second quarter and our expectations in the back half which are good.

Uh, so it's not a small award. The question I think is what happens on other sites.

Yes.

Yes, Okay fair enough.

Jason Nalbandian: Thanks. I appreciate it. I'll pass it on.

And, uh, you know, that's where we'll probably do some initial work and then which you probably won't even see because it'll be smaller. And then an award like this potentially can happen.

And I guess my second question.

Andrew Backman: Sure.

Tony Guzzi: Next question.

We will be talking a lot about.

Thanks, I appreciate it. I'll pass it on sure. Next question.

Ranju: Thank you. Next question comes from the line of Justin Hockey with Bed. Please go ahead.

The pharma bio stop in the semis.

We don't have a ton of exposure renewables is something that you guys.

Thank you. Next question. Comes from the line of Justin hockey.

Tony Guzzi: Oh, great. Thanks for taking my questions, Jason, this morning. I just wanted to ask, I guess, you know, obviously the first half was really strong, 2Q really strong. I'm just thinking about the guidance raise and, you know, the kind of the implied second half. Is it, obviously you don't guide quarterly, but is the guidance raise more a reflection of 2Q coming in stronger than expected and the second half expectations kind of unchanged, or is it a balance of the two? Obviously, you raised the margin guide, but you know, it sounds like, you know, at the low end, it would be kind of assuming it kind of stays at the first half level. So just trying to understand, you know, the impetus on that front and how you would characterize the guidance.

Bed, please go ahead.

No we got so.

To make a broader point right first of all I think of who we are we're contracted.

So we look for two things when we look at how we're going to invest in and grow in a resource. The first thing we look at.

There is projects that are we consider one off things are may be of a short term, but I thought about evs that way and the hysteria around that we participated in especially on the fire life safety, but thats not where we made our long term durable bet.

We made it more into other high tech manufacturing and into data centers.

I do believe there'll still be more batteries and will participate in we will do all of that but it wasn't where we put people one that I should put an outsized part of our resources there.

And we didn't buy into it.

Secondarily, when you get to specifics around.

Andrew Backman: So first of all, welcome. We appreciate picking you guys up and having you cover us. And we very much look forward to your conference this fall. As far as the guidance, I think you'd characterize it right. The lower end is sort of keep going what we're doing, and the higher end sort of takes the higher end of the revenue guidance, puts a higher margin on it. Jason's got a fairly detailed analysis here he can walk you through. And I'm sure the rest of you will love to hear that too. It'll save you having to do the work.

To summarize our Biolife, we're set up well to participate in in your third part of our renewables that has always been something we do.

Oh great. Uh, thanks for taking my questions here, this morning. Um, I just wanted to ask, I guess. Um, yeah, obviously, the the first half is really strong 2q, uh, really strong. I'm just thinking about the the guidance rays. And, um, you know, the kind of the implied second half is it, obviously, you don't guide quarterly but, um, is the guidance raised more reflection of 2 Cube coming in stronger than expected and second half, um, expectations kind of been changed or is it a, a balance of the 2? Um, obviously you raised the margin guide, but, uh, you know, it sounds like, um, you know, the low end it would be kind of assuming it, it kind of stays at the first half level. Um, so, just trying to understand, uh, you know, the impetus, um, uh, on that front and how you would characterize the guidance. So, uh, uh, first of all, welcome, uh, we appreciate

We've built some very successfully some renewable farms, especially solar.

Uh, taking you guys up and having you cover us, uh, and we very much look forward to your conference this fall.

Uh, as far as the guidance, I think you've characterized it, right? The lower end is sort of

We've done it.

Specifically also with respect to smaller scale towards the megawatt are less when they're doing it on site. We've done that we've done combined heat and power.

Keep going with what we're doing, and the higher end sort of takes the higher end of the revenue. Guidance puts a higher margin on it.

But that's what I want to one of our customers ask us to get involved or something we have a team that has particular expertise. It was never something that we did large scale acquisitions on and it's never something that we put.

Tony Guzzi: No, I mean, I think the only thing I would say is I think it is twofold, right? A piece of it is the performance in the second quarter, and a piece of it is our expectations for margin in the back half of the year. And if you look now, as I stated, for the back half, we expect margins between 9 to 9.6, which gets you full-year margins of somewhere between 9 and 9.4. And so if you just look at that midpoint, which is about 9.2%, and you take into consideration the intangible asset amortization impact from Miller, there's probably another 20 to 30 basis points on top of that if you're really comparing apples to apples to 24. But to answer your question, I think it's a two-part raise, taking into consideration what we did in the second quarter and our expectations in the back half.

The majority of the company's resources against.

<unk> always had a simple philosophy go to durable demand where your customers have their money.

Loophole write a piece of it is the performance. In the second quarter, at a piece of it, it is our expectations for margin in the back half of the year. And if you look now, um,

And our accounting on somebody else's money to make it a successful project or not.

I've always looked at if something subsidize that's icing on the cake.

But one person subsidies is another person's ability to remove that subsidy. So we always look for a long term normal demand and over a very long time that has served us well I think if you take the broadest definition of renewable and you threw everything in their solar or even some of the EV plans to battery manufacturing that we've done it's less than 5% of our tone.

Andrew Backman: Which are good.

Revenue, so it's not a significant piece of it.

Tony Guzzi: Yeah. Yeah, okay. Fair enough. And I guess my second question, I mean, we talked a lot about, you know, the pharma bio stuff and the semis. You don't have a ton of exposure to renewables, but it is something that you guys talked about.

Yeah, as I stated for the back half, we expect margins between 9 to 96, which gets you full your margins of somewhere between 9 and 94. And so, if you just look at that midpoint, which is about 9.2% and you take into consideration the the intangible asset amortization impact from Miller. There's probably another 20 to 30 basis points on top of that if you're really comparing Apples to Apples to 24, but, but to answer your question, I think it's, it's a 2-part raise. It's taking into consideration what we did in the second quarter, in our expectations, in the back half, which are good.

Yes, Okay, alright, that's kind of lines I appreciate that perspective.

Yeah.

Thanks for letting us.

Have you guys broken.

Welcome aboard we look forward to the future.

Next question please.

Thank you next question comes from the line of Ivy jealous of itch with <unk>.

Andrew Backman: No, we've, so that allows me to make a broader point, right? First of all, think of who we are. We're contractors, right? So we look for two things when we look at how we're going to invest and grow in a resource. The first thing we look at, there's projects that we consider one-off things or maybe of a short-term blip. I thought about EVs that way and the hysteria around that. We participated, especially on the fire life safety, but that's not where we made our long-term durable bet. We made it more into other high-tech manufacturing and into data centers. I do believe there'll still be more batteries, and we'll participate, and we'll do all that. But it wasn't where we put, people wanted us to put an outside part of our resources there, and we didn't buy into it.

UBS. Please go ahead.

Hey, guys congrats on a nice.

Yeah, yeah okay. Um, fair enough um, and I guess my second question. Um, we talked a lot about, um, you know, the farm of Bio stuff and the, uh, the semi, uh, you don't have a ton of exposure Renewables, but it is something that you guys talk. I'm just, no, no, no, no. We've, uh, so, so that allows me to make a broader point, right? First of all, think of who we are, we're contractors.

Welcome and we appreciate your cover.

B covering you guys.

Right? So, we look for two things when we look at how we're going to invest and grow in a resource. The first thing we look at...

So just wanted to circle back to the margin conversation.

And I know you guys touched on this to some extent.

Just when we think of the margins moving in bands, we've not seen I believe five quarters, where the margins in the combined construction segments north of 12%.

There's projects that are we consider 1-off things, or maybe of a short-term, but I, I thought about EVS that way and, and the hysteria around that we participated, especially on the fire Life Safety but that's not where we made our long-term durable bet.

But if we extend it back to the.

Uh, we we made it more into other high-tech manufacturing and into Data Centers.

The range back to 24 months, a decently wider range. So.

Curious how you guys are thinking about the range within the construction segment for the foreseeable future I.

I do believe they'll still be more batteries and we'll participate and we'll do all that. But it wasn't where we put people wanted us to put an outside part of our resources. There.

Tony Guzzi: Yeah.

Andrew Backman: Secondarily, when you get to specifics around semis or bio-life, we're set up well to participate. And then your third part about renewables, that has always been something we do. We've built some very successfully, some renewable farms, especially solar. We've done it specifically also with respect to smaller scale, sort of the megawatt or less when they're doing it on-site. We've done that. We've done combined heat and power. But that's when one of our customers asked us to get involved or something we have a team that has particular expertise. It was never something that we did large-scale acquisitions on, and it's never something that we put the majority of the company's resources against. I've always had a simple philosophy. Go to durable demand where your customers have their money and aren't counting on somebody else's money to make it a successful project or not.

And we didn't buy into it.

I think if you look at a rolling 24 months Rolling 24 months for construction, it's going to get you somewhere between 12 and a half maybe 12 in a quarter to $13 $13 a quarter.

Yeah. Secondarily uh, when you get to specifics around, uh, semis or BioLife are, we're we're set up well to participate and in your third part about Renewables that has always been something we do.

That's a decent range on the construct we might end up in court. We were looking at a rolling 12, 12, Rolling 24, yes, sorry about that.

Uh, we built some very successfully some renewable Farms, especially solar

Uh, we've done it.

Okay.

It makes sense and in terms of the.

Capacity for your pre fabrication capabilities.

Still see opportunity to leverage that to grow your volumes faster than your head count.

Are you working on continuing to expand your capacity there, yes, and yes, we absolutely continue to look for opportunities to expand that.

Specifically also, with respect to uh, smaller scale, sort of the megawatt or less when they're doing it on site. We've done that, we've done combined, heat and power, but that's 1, 1 of 1 of our customers asked us to get involved or something. We have a team that has particular expertise. It was never something that we did large-scale Acquisitions on and it's never something that we put uh the majority of the company's resources against

We fabricate for the most part for ourselves.

I've always had a simple philosophy. Go to doorable demand where your customers have their money.

95% is for us.

Andrew Backman: I've always looked at if something subsidized, that's icing on the cake. But one person's subsidy is another person's ability to remove that subsidy. So we always look for a long-term durable demand. And over a very long time, that has served us well.

Some that someone will ask us to do a job because we did particularly well somewhere and there is another skid they want to send to another data center site somewhere.

And aren't counting on somebody else's money to make it a successful project or not.

I've always looked at if something subsidized, that's icing on the cake.

We're not the installer, but again, that's 5% 95% are for us.

Tony Guzzi: Yeah. I think if you take the broadest definition of renewable and you threw everything in there, solar, even some of the EV plants and battery manufacturing that we've done, it's less than 5% of our total revenue. So it's not a significant piece of.

We have if you look at our Capex.

As a percentage of sales is relatively the same.

But it's more than doubled and that is almost all into pre fabrication assets and it's been mainly in the construction business in the fire life safety business, which is a sprinkler side, especially is a big free prefabricated business and even there we do about 70% of our total volume and we still sourced 30% and we'll always do it.

Andrew Backman: Yeah. Okay. All right. That's kind of what I thought. I appreciate that perspective. And thanks for letting us cover you guys. We're looking forward to it.

But 1 person subsidies and others person's ability to remove that subsidy. So we always look for a long-term Doral demand and over a very long time that has served us. Well, yeah, I think if you take the broadest definition of renewable and you threw everything in there. So solar even some of the EV plants and Battery manufacturing that we've done, it's less than 5% of our total revenues. So it's not a significant piece.

Tony Guzzi: No, it's great. Welcome aboard. We look forward to the future.

Andrew Backman: Next question, please.

Yeah. Okay. All right. That's, that's kind of what I appreciate that perspective and um, thanks for uh for letting us. Uh hope you guys were looking forward to it. Okay, welcome aboard, we look forward to a future.

Ranju: Thank you. Next question comes from the line of Avi Jarosevic with UBS. Please go ahead.

That because some of the smaller jobs at dusk local jobs it doesn't make sense for us to build fabrication capability on the electrical we continue to expand that.

Jason Nalbandian: Good morning, guys.

Thank you. Next question, comes from the line of arrows which with UBS, please go ahead.

Andrew Backman: Good morning.

Tony Guzzi: Morning.

Andrew Backman: You're welcome. We appreciate your cover.

Probably more aggressively than any right now because we have more sites, we're doing data center work at and other large scale work and mechanically we have.

Tony Guzzi: Excited to be covering you guys.

Congratulations, you're welcome. We appreciate your cover.

Right to be covering you guys.

Jason Nalbandian: So I just want to circle back to the margin conversation. And I know you guys touched on this to some extent, but just when we think of the margins moving in bands, we've now seen, I believe, five quarters where the margins in the combined construction segments were north of 12%. But if we extend it back to the range back to 24 months, a decently wider range. So curious how you guys are thinking about the range within the construction segment for the foreseeable future.

Couple of really big shops, we continue to expand again, we're fabricating for ourselves and where you see that fabrication really come into play.

On fire life safety, it's almost every job on a sprinkler side, but where you see it come to play in electrical is on the large shops.

When you're doing a big data center, a big duct bank, if youre doing some of the underground we're looking for ways everyday to take labor off the job and become more efficient and safer.

Um so just want to Circle back to the margin conversation. Um and I know you guys touched on this to some extent, but I just when we think of the margins moving in bands, we've now seen I Believe by 5 orders where the margins in the uh, combined construction. Segments is north of 12%. Uh, but if we extend it back to, uh, the range back to 24 months,

And so the bigger electrical jobs data centers semiconductor plants.

Tony Guzzi: I think if you look at a rolling 24 months, rolling 24 months for construction, it's going to get you somewhere between 12 and a half, maybe 12 and a quarter to 13, 13 and a quarter. I think that's a decent range on the construction.

Pharma plants been mechanical even more so, especially as you get to the heavy piping systems, which is especially true for semi plants and manufacturing plants in general healthcare and also.

Andrew Backman: We might end up in 12. We were looking at a rolling 12.

Data centers. So you put all that together the growth in the markets, where we see is whats driving our pre fabrication, but you cannot do that pre fabrication unless you have very good BDC and beam capability. So what's really happening in the world today is.

Tony Guzzi: Rolling 12, rolling 24.

Andrew Backman: Yeah. Sorry about that.

A decently wider range. So curious how you guys are thinking about, uh, the range within the construction segment for the foreseeable future. I I think if you look at a a rolling 24 months, rolling 24 months for construction, it's going to get you somewhere between 12 and a half maybe 12 and a quarter to 1313 and a quarter. So I think I think that's a decent range on the construction. We might end up in core. We were looking at a rolling 12 Rolling 24. Yeah. Sorry about that.

Jason Nalbandian: Okay. Makes sense. And in terms of the capacity for your prefabrication capabilities, do you still see opportunity to leverage that to grow your volumes faster than your headcount? And are you working on continuing to expand your capacity there?

Drawings are getting done to a certain level, we're not usually the engineer of record, but we are finishing for construct ability at about 50 to 70, 60%, we're picking up and getting more involved in the design on these to design for construct ability and offer our suggestions to get more value engineering in place, especially on means and mirth.

Andrew Backman: Yes and yes. We absolutely continue to look for opportunities to expand that. We fabricate, for the most part, for ourselves. 95% is for us. There's some that someone will ask us to do a job because we did particularly well somewhere, and there's another skid they want to send to another data center site somewhere where we're not the installer. But again, that's 5%, 95% are for us. We have, if you look at our CapEx, you know, as a percentage of sales, it's relatively the same. But you know, it's more than doubled, and that is almost all into prefabrication assets. And it's mainly in, you know, in the construction business. It's in the fire life safety business, which is a, in the sprinkler side especially, is a big prefabricated business. And even there, we do about 70% of our total volume, and we still source 30%.

Okay, um, makes sense. And in terms of, uh, the capacity for your pre-fabrication capabilities, uh, do you still see opportunity to leverage that to grow your volume as faster than your headcount? And, uh, are you working on continuing to expand your capacity there? Yes. And yes, we we, we, we absolutely continue to look for opportunities to expand that.

We fabricate for the most part for ourselves.

<unk>.

That then drives our pre fabrication plan for that job and for US that's very much coordinated with the field and how we do that.

I said for US today, it's about 95% for us.

Some people call. This modular construction, we call pre fabrication.

95% is for us. Uh there's some that some will ask us to do a job because we did particularly well somewhere and there's another kid. They want to send to another data center site somewhere where we're not the installer. But again that's that's 5% 95% or for us.

Alright.

Paul.

Uh, we we have if you look at our capex, uh, you know, as a percentage of sales, It's relatively the same.

And then just when we think about your bookings this quarter.

Obviously.

That can be volatile.

Volatile quarter to quarter.

Try to fit it into a 90 day window.

But just.

As we think about your capacity there in expanding your capacity.

Andrew Backman: And we'll always do that because some of the smaller jobs, it does, local jobs, it doesn't make sense for us to build fabrication capability. On the electrical, we continue to expand that, probably more aggressively than any right now because we have more sites we're doing data center work at and other large-scale work. And mechanically, we have a couple of really big shops we continue to expand. Again, we're fabricating for ourselves. And where you see that fabrication really come into play, on fire life safety, it's almost every job on the sprinkler side. But where you see it come into play in electrical is on the large jobs. When you're doing a big data center, a big duct bank, if you're doing some of the underground, we're looking for ways every day to take labor off the job and become more efficient and safer.

How much more do you think you I guess.

Is this the limit of what you were comfortable booking how much more could you have booked with more capacity. There's clearly a lot of momentum in your end markets, but you also need to be prudent about the work that youre, taking on just curious to hear how youre balancing that yes, we.

But, you know, it's more than doubled and that is almost all in the prefabrication assets and it's mainly in, you know, in the construction business, it's in the fire Life, Safety business, which is a, in the sprinkler side, especially as a big, free pre pre-fabricated business. And even there, we do about 70% of our total volume, and we still Source 30%. And we'll always do that because some of the smaller jobs, it does local jobs. It doesn't make sense for us to build fabrication capability.

So we don't really think about it that way I mean, we.

Look at our market, we look at the jobs, we look at the long term potential on a site.

And we've had the ability to attract the labor we need to do the work we're going to of course.

I never said that.

People are throwing work at us and we're deciding what we want to do that for us isn't true.

We start with strategically what are the markets, we're going to serve.

Andrew Backman: And so the big electrical jobs, data centers, semiconductor plants, pharma plants, have been mechanical even more so, especially as you get to the heavy piping systems, which is especially true for semi plants and manufacturing plants in general, healthcare, and also data centers. You put all that together, the growth in the markets we see is what's driving our prefabrication. But you cannot do that prefabrication unless you have very good VDC and BIM capability. So what's really happening in the world today is, you know, drawings are getting done to a certain level. We're not usually the engineer of record, but we are finishing for constructability at about 50 to 70, 60 percent. We're picking up and getting more involved in the design on these to design for constructability and offer our suggestions to get more value engineering in place, especially on means and methods.

On the electrical, we continue to expand that uh probably more aggressively than any right now because that we have more sites, we're doing data center work at and other large scale work and mechanically. We have a couple, really big shops. We continue to expand. Again, we're fabricating for ourselves and where you see that fabrication really come into play. Uh, on on on, on fire like safety. It's almost every job on the sprinkler side but where you see it come to play an electrical is on the large shops. Uh, when you're doing a big data center, a big duck bank. If you're doing some of the underground we're looking for ways every day to take labor off the job and become more efficient and safe.

With the capacity, we're going to build to serve that over time, how do we build supervision to serve that market.

We'll find the craft labor because people want to work for us.

Got a bill supervision right, we've got to build the form and the project managers project Engineers, we got it we got to build the VDC capability.

And we've gone through this period of significant growth and we can continue to build that capacity.

And we think about I don't even say measured we think about it site by site.

Location by location company by company.

And I wouldn't say our people are capacity constrained every contractor can be capacity constrained if they want to chase a whole market. What I would say is we continue to manage to the right mix that we need to to be successful over a very long period of time.

Alright, I appreciate the color and thanks for your time.

Andrew Backman: That then drives our prefabrication plan for that job. And for us, that's very much coordinated with the field and how we do that. Like I said, for us today, it's about 95% for us. Some people call this modular construction. We call prefabrication.

Next question please.

Paper. Uh, and so the bigger electrical jobs, data centers, uh, semiconductor plants. Uh, Pharma plants been mechanical even more. So, especially as you get to the heavy piping systems, which is especially true for uh, semi plans and manufacturing plants in General Health Care and also uh, uh uh, data centers, you put all that together, the growth in the markets, where we see is, which Drive in our prefabrication, but you cannot do that prefabrication. Unless you have very good VDC and Bim capability. So what's really happening in the world today is is you know drawings are getting done to a certain level. We're not usually the engineer record but we are finishing for constructibility at about 50 to 70. 60%. We're picking up and getting more involved in the design on these to design for constructibility and offer. Our Suess to get more value, Engineering in place, especially on means and methods.

Thank you next question comes from the line of Sam Sato.

Mr. <unk>. Please go ahead.

Hey, guys. Thanks for the question.

That then drives our prefabrication plan for that job and for us that's very much coordinated with the field and how we do that. Uh, like I said for us today, it's about 95% for us.

Just wanted to know maybe you could remind us I'm looking at the growth rates between mechanical and electrical.

Some people call this modular construction. We call pre-fabrication.

Jason Nalbandian: All right. That is helpful. And then just when we think about your bookings this quarter, obviously, you know, that can be somewhat volatile quarter to quarter, and you don't try to fit it into a 90-day window. But just as we think about your capacity there and expanding your capacity, you know, how much more do you think you, or I guess, is this the limit of what you were comfortable booking? How much more could you have booked with more capacity? There's clearly a lot of momentum in your end markets, but you also need to be prudent about the work that you're taking on. I'm just curious to hear how you're balancing that.

Do you expect them to converge and then maybe you could remind us.

All right, that is uh, helpful.

For everybody on the call how that sort of flows from the beginning to an end of a project. Obviously every project is different but.

Do you expect that mix to change as projects mature on average.

Yes, yes.

You could almost think of.

Every project has a cycle manpower usually starts to peak between 25% to 30% of the job to about 65% of the job. So thats, obviously when youre, earning the most revenue in.

Um, and then just when we think about your bookings, this quarter, um, obviously, you know, that can be, uh, someone volatile quarter to quarter and you don't try to fit it into a 90-day window. Uh, but just, uh, as we think about your capacity there and and expanding Your Capacity, um, you know, how much more do you think you or I guess?

Margins trial that typically because you start to figure out what youre actually going to make on which I remember everything we do is based on an estimate.

Andrew Backman: Yeah, we don't really think about it that way. I mean, we look at a market, we look at the jobs, we look at the long-term potential on a site. And we've had the ability to attract the labor we need to do the work we're going to. Of course, you know, I never said that, you know, people are throwing work at us and we're deciding what we want to do. That for us isn't true. For us, we start with strategically what are the markets we're going to serve? What's the capacity we're going to build to serve that over time? How do we build supervision to serve that market? We'll find the craft labor because people want to work for us. We've got to build supervision, right? We've got to build the foreman, the project managers, the project engineers. We got to build the VDC capability.

And do you have estimate becomes more for for better or worse as the job progresses.

But.

Will they converge.

Is this the limit of what you were comfortable booking, how much more could you have booked with more capacity? There's clearly a lot of momentum in your end markets, but you also need to be prudent about the work that you're taking on. I'm just curious to hear how you're balancing that. Yeah, that we don't really think about it that way. I mean, we look at a market. We look at the jobs. We look at the long-term potential on a site,

Probably not I mean that they will have different growth rates in the quarter are they both serving the same end markets with a little different mix electrical is a little more heavily weighted towards data centers mechanically a little more diverse mix of projects.

Some of that has just started.

<unk> heritage and where our footprint is somewhat more datacenter markets, where our big mechanical contractors are and some of them are just getting into that business now.

And and and we've had the ability to track the labor, we need to do the work. We're going to, of course, you know, I never said that, you know, people are throwing work at us and we're deciding what we want to do that for us isn't true. For us, we start with strategically what are the markets we're going to serve.

But the markets. They serve are relatively the same more of an emphasis right now electrically on data centers will continue to look to expand the mechanic opacity.

Andrew Backman: And we've gone through this period of significant growth, and you know, we can continue to build that capacity. And we think about, I don't even say measures, we think about it site by site, location by location, company by company. And I wouldn't say our people are capacity constrained. Every contractor can be capacity constrained if they want to chase the whole market. What I would say is we continue to manage to the right mix that we need to to be successful over a very long period of time.

Not really because there's so many projects going at any time, it's hard to say there is anything Jason right driving overall by the timing.

What's the capacity? We're going to build to serve that over time. How do we build supervision to serve that market? We'll find the craft labor because people want to work for us. We we've got a bills supervision, right? We've got to build the form in the project. Managers the project Engineers, we got to, we got to build the VDC capability and we've gone through this period of

One thing I would add on the data center growth for each right is if you look at electrical construction dollar wise growing faster data centers or more growth from data centers dollar wise for mechanical is growing at a faster growth rate and thats. The point that Tony made that historically, our electrical business was our data center business, we are starting to see an uptick in demand.

Significant growth and you know we can continue to build that capacity. Uh and we think about I don't even say measured we think about it sight by sight.

Uh, location by location, Company by company.

And I wouldn't say our people are capacity to constrain every contractor can be capacity constrained if they want to chase the whole Market.

Mechanical yes, we have three or four companies that do it.

What I would say is we continue to manage to the right mix that we need to to be successful over a very long period of time.

Jason Nalbandian: All right. Appreciate the cover and thanks for the time.

Mechanically.

Fire life safety everywhere, we can do it electrically thats upwards of eight or 10 that really do it in a significant way.

Andrew Backman: All right. Next question, please.

All right, appreciate the color and thanks for your time.

Ranju: Thank you. Next question comes from the line of Sam Snyder with North Coast Research. Please go ahead.

Next question, please.

Got it thanks, I'll pass it back to the rest of the queue.

Jason Nalbandian: Hey guys, thanks for the question. Just wanted to know, you know, maybe you could remind us, I'm looking at the growth rates between mechanical and electrical. Do you expect that to converge? And then maybe you could remind us, you know, for everybody on the call, how that sort of flows from the beginning to an end of a project. Obviously, every project is different, but do you expect the mix to change, you know, as projects mature on average?

But not go through such, please go ahead.

Thanks.

Thank you.

The last question comes from the line of Adam <unk> with <unk>.

Hey guys. Uh, thanks for the question. Uh,

<unk>. Please go ahead.

Hi, good morning.

I just had a.

Just had a couple on the data center business.

Based on last quarter's 10-Q in today's results.

Looks like your data center business is growing in the very high double digit growth range organically.

Andrew Backman: Yeah, yeah, absolutely. You could almost think of every project has a cycle. Manpower usually starts to peak between 25 to 30 percent of the job to about 65 percent of the job. So that's obviously when you're earning the most revenue. And margins trail that typically because you start to figure out what you're actually going to make on the job. Remember, everything we do is based on an estimate. And that estimate becomes more for better or worse as the job progresses. But you know, will they converge? Probably not. I mean, they'll have different growth rates in a quarter. Are they both serving the same end market? Yeah, with a little different mix. Electrically is a little more heavily weighted towards data centers. Mechanically, a little more diverse mix of projects. Some of that's just our heritage and where our footprint is.

It appears that while above broader data center construction spending in the U S.

Uh just wanted to know, you know, maybe you could remind us, I'm looking at the growth rates between mechanical and electrical. Um, do you expect that to converge? And then maybe you could remind us uh, you know, for everybody on the call how that sort of flows from the beginning to an end of a project. Obviously every project is different but uh do you expect the mix to change? You know, as projects mature on average? Yeah, yeah. So you could almost think of

Which is closer to call it 25% up year over year. So just wondering what's driving your outsized data center growth versus industry data points in your view and do you expect that spread is sustainable.

Well I don't know if that sizeable spread sustainable, but I think much like non res market.

Every project has a cycle vampire usually starts to Peak between 25 to 30% of the job to about 65% of the job. So that's obviously, when you're earning the most revenue and, uh, margins travel, that typically because you start to figure out what you're actually going to make on the job, remember, everything we do is based on an estimate.

I would expect us over time to outgrow whatever the data center market is growing <unk>.

And you know, estimate becomes more affordable for for better or worse as the job progresses.

Uh,

That's for a number of reasons, we're in more markets than just about anybody.

but, you know, you know will they converge

We have a lot of customers that really like us.

We do great work for them.

Some of our folks are the most innovative people, both mechanically and electrically and how a datacenter gets built.

Both fire life safety mechanical and electrical.

We do a great job of BDC, and Vim and pre fabrication in the data center World, which leads to really good outcomes for our customers.

Andrew Backman: Some of them aren't data center markets where our big mechanical contractors are. And some of them are just getting into that business now. But the markets they serve are relatively the same. More of an emphasis right now electrically on data centers. We'll continue to look to expand the mechanical capacity. But really, because there's so many projects going at any time, it's hard to say there's anything, Jason, right, driving overall on the timing.

And we have a resume.

Probably not. I mean that they'll have different growth rates in a quarter. Are they both serving the S amen Market? Yeah with a little different mix. Electrically is a little more heavily weighted towards data centers. Mechanically a little more diverse mix of projects. Uh, some of that's just our uh parodies and where our footprint is, some of them are more data center markets, where our big mechanical contractors are and some of them are just getting into that business. Now,

And a lot of ways is second to none and again I always go back to these are the most.

Demanding.

Smart customers that we work with.

But the markers they serve are relatively the same, with more of an emphasis right now electrically on data centers. We'll continue to look to expand the mechanical capacity.

And so I take it as a real.

For source of pride, but not so much for my source of pride in our people that have become leaders in this market and build our capability.

Tony Guzzi: The one thing I'd add on the data center growth for each, right, is if you look at electrical construction dollar-wise, growing faster data centers or more growth from data centers dollar-wise, the mechanical is growing at a faster growth rate. And that's to the point that Tony made that historically our electrical business was our data center business. We are starting to see an uptick in demand in mechanical now.

And they're good and I think if youre growing like we are both mechanically and electrically and outpacing the market by one five to two <unk> you have to be good because again youre working for some of the toughest customers.

Known demand.

Andrew Backman: Yeah, and we have, you know, three or four companies that do it mechanically. Fire life safety, everywhere we can do it. Electrically, that's upwards of eight or ten that really do it in a significant way.

Great and then I understand there is many different moving pieces underpinning margin, but I think.

All else equal data center margins are relatively strong.

Jason Nalbandian: Got it. Thanks. I'll pass it back to the rest of the queue.

But really because there's so many projects going at any time. It's hard to say there's anything Jason Wright driving overall on the timing the 1 thing I'd add on on the data center group, where you try to. If you look at electrical construction, dollarwise growing faster data centers are more growth from data centers Dollar Wise. The mechanical is growing at a faster growth rate. And that's to the point that that Tony made that historically our electrical business was was our data center business. We are starting to see an uptick in demand in mechanical now. Yeah. And we have you know, 3 or 4 companies that do it. Uh, mechanically, uh, fire Life, Safety everywhere, we can do it, electrically, that's upwards of 8 or 10. That really do it in a significant way.

Added centers continues to increase as a percent of your.

Got it. Thanks, I'll pass pass. Pass it back to the rest of the queue.

Ranju: Thank you. The last question comes from the line of Adam Bubas with Goldman Sachs. Please go ahead.

App.

Overall revenues should we expect potential for further total company margin expansion all else equal what I'd have to say you'd have to add other variable on top of that and thats contract mix.

Thank you.

Tony Guzzi: Hi, good morning. I just had a, hey, just had a couple on the data center business. Based on last quarter's 10-Q and today's results, it looks like your data center business is growing in the very high double-digit growth range organically. And it appears that's well above broader data center construction spending in the US, which is closer to call it 25% up year over year. So just wondering what's driving your outsized data center growth versus industry data points in your view, and do you expect that spread is sustainable?

The last question comes from the line of Adam Bubbas with Goldman Sachs. Please go ahead.

Hi, good morning.

Certain times, we're working.

GMP, we're working towards target fee and a target price other times, we're doing at fixed price.

I just had a 8, just had a couple on the data center business. Um based on last quarter's 10 q and today's results.

That mix of contract mix and that can change quarter to quarter by customer that can be whether one of the big people. We all heard about this morning as they announced.

Whether it's one of the 7% or whether it's one of the Colo people building for the seven.

The contract mix has a big part of that and also for US is the timing one where on our site, sometimes we'll start on our site.

And are going to do a three year build four year build on that data center site will start on that site and we'll work on that side initially and we started some new sites will initially started to GMP and then we'll move to a fixed price.

Andrew Backman: Well, I don't know if that sizable spread is sustainable, but I think much like non-res market, I would expect us over time to outgrow whatever the data center market's growing. And that's for a number of reasons. We're in more markets than just about anybody. We have a lot of customers that really like us. We do great work for them. Some of our folks are the most innovative people, both mechanically and electrically, in how a data center gets built. That's both fire life safety, mechanical, and electrical. We do a great job of VDC and BIM and prefabrication in the data center world, which leads to really good outcomes for our customers. And we have a resume in a lot of ways that's second to none. And again, I always go back to these are the most demanding, smart customers that we work with.

It looks like your data center business is growing and the very high double digit growth range organically and it it appears that while above broader data center construction spending in the US um, which is closer to call it 25% up year-over-year. So just wondering what's driving your outside? Status Center, growth versus industry data points in your view, and do you expect? That spread is sustainable.

The changes in mix are happening all the time and they will come up with a new design on our site and we thought we were going to be doing that fixed price and now that will go GMP for the next bill because they've changed their design.

I don't know if that's Fable spreading, but I think much like non-residential market, I would expect us over time to outgrow whatever the data center market is growing, that's for a number of reasons. We're in more markets than just about anybody.

We have a lot of customers that really like us. Uh we do great work for them.

Theyre managing their risks remember, we're always managing our risk too but.

But the only reason data centers may look more profitable is because we spend a lot of time working with our customers.

Some of our folks are the most Innovative people, both the mechanically and electrically and how a data center gets built.

That's both fire. Like safety mechanical and electrical.

On speed to market and we spent a lot of time working with our customers.

What's the appropriate level of risk each of us should be taking.

Uh we do a great job of BDC and Bim and prefabrication in the data center World, which leads to really good outcomes for our customers.

And just to Echo what Tony said he'd never generalize by sector I think that we earn a margin on every job. It's just speculation until you know the scope of the job the contract structure, the geography, what that labor pool like it looks like and how much we can pre fab and just as a point there as you said if you look at the growth rate we've seen for data centers. This year.

And we have a resume.

In a lot of ways the second to none and again I always go back to. These are the most

Andrew Backman: And so I take it as a real source of pride, but not so much for me, source of pride in our people that have become leaders in this market and built our capability. And they're good. And I think if you're growing like we are, both mechanically and electrically, and outpacing the market by one and a half to two X, you have to be good. Because again, you're working for some of the toughest customers known demand.

Uh, demanding smart customers that we work with.

Year, it's definitely high high high double digits, but our guidance for the full year implies the same margins. We earned last year. So I wouldn't necessarily say that just because you have more of one sector. Your margins are going up because of the contract mix. So much of that and we're in a learning curve in some of these new sites because of the labor.

And so I I take it as a real uh, for source of Pride, but not so much for me source of pride, in our people that have become leaders in this market and build our capability.

And, uh, they're good, and I think if you're growing, like we are both mechanically and electrically, and outpacing the market by 1.5 to 2 times, you have to be good because, again, you're working for some of the toughest customers.

Great I appreciate all the color. Thanks, so much.

Known demand.

Tony Guzzi: Great. And then I understand there's many different moving pieces underpinning margins, but I think all else equal, data center margins are relatively strong. If data centers continue to increase as a percent of your overall revenue, should we expect potential for further total company margin expansion, all else equal?

Thank you.

This concludes our question and answer session I would now.

I would like to turn the conference back over to Tony Guzzi for closing remarks. Thank you all very much for being part of our call today I'll welcome to our new cover analysts and we look forward to a strong second half and I Hope you all stay safe and have a good remainder of the summer Andy back to great. Thanks, Tony and thanks, Jason and thank.

Great. And then I understand there's many different moving pieces. Underpinning margins. But I think uh OLS equal data center. Margins are relatively strong if data centers continue to increase as a percent of

Andrew Backman: Well, I'd have to say you'd have that whole other variable on top of that, and that's contract mix. You know, certain times we're working a GMP, we're working to a target fee and a target price. Other times we're doing a fixed price. That mix of contract mix, and that can change quarter to quarter by customer. That can be whether one of the big people we all heard about this morning as they announced, you know, whether it's one of the seven or whether it's one of the colo people building for the seven. So contract mix has a big part to that. And also for us is the timing when we're on a site. Sometimes we'll start on a site and they're going to do a three-year build, four-year build on that data center site.

All else. Equal what? You'd have to add a whole other variable on top of that and that's contract. Mix.

You all for joining us today as always if you should have any follow up questions. Please do not hesitate to reach out to me directly. Thank you all again and have a great day friends, who can you. Please close the call.

Thank you. The conference has now concluded. Thank you for attending today's presentation you may now disconnect.

You know, certain times we're working uh, a GMP. We're working to a Target fee and a Target price. Other times, we're doing it. Fixed price that mix of contract mix and that can change quarter to quarter by customer that can be whether 1 of the big people, we all heard about this morning is they announced

Andrew Backman: We'll start on that site and we'll work on that site initially, and we've started some new sites. We'll initially start as a GMP and then we'll move to a fixed price. So that's changes in mix are happening all the time, or they'll come up with a new design on a site, and we thought we were going to be doing that fixed price, and now that'll go GMP for the next build because they changed their design. They're managing their risk, but remember, we're always managing our risk too. But the only reason data centers may look more profitable is because we spend a lot of time working with our customers on speed to market, and we spend a lot of time working with our customers on what's the appropriate level of risk each of us should be taking.

You know, whether it's a 1 of the 7 or whether it's 1 of the Colo, people building for the 7 to contract. Mix has a big part to that and also for us is the timing when we're on a site sometimes we'll start on a site and are going to do a 3-year build for your build on that data center site. We'll start on that site. And we'll work on that site initially and we started some new sites, we'll initially start as a GMP and then we'll move to a fixed price. So but that changes in mixer happening all the time or they'll come up with a new design on a site. And we thought we were going to be doing that fixed price. And now, that'll go GMP for the next build because they've changed their design. We're, they're managing their risk. But remember, we're always managing ours, too.

Tony Guzzi: Yeah, and just to echo what Tony said, right, I'd never generalize by sector. I think we earn our margin on every job, and it's just speculation until you know the scope of the job, the contract structure, the geography, what that labor pool looks like, and how much we can prefab. And just as a point there, right, as you said, if you look at the growth rate we've seen for data centers this year, it's definitely high double digits, but our guidance for the full year implies the same margins we earned last year. So I wouldn't necessarily say that just because you have more of one sector, your margins are going up.

But the only reason data centers may may look more profitable is because we spend a lot of time working with our customers on speed to Market. And we spend a lot of time working with our customers on which the appropriate level risk. Each of us should be taking

Andrew Backman: Because the contract makes so much of that, and we're in a learning curve in some of these new sites too because of the labor.

Tony Guzzi: Great. Appreciate all the color. Thanks so much.

Yeah, and just to Echo what Tony said, right? I never generalized by sector. I think we are in our margin on every job and it's just speculation until, you know, the scope of the job, the contract structure, the geography, what that labor pool like looks like and how much we can prefab. And, and just, as a point there, right? As you said, if you look at the growth rate, we've seen for data centers this year, it's definitely high high high, double digits. But our our guidance, for the full year, implies the same margins, we were in last year. So I wouldn't necessarily say that. Just because you have more of of 1 sector, your margins are going up because of the contract makes so much of that. And we're learning curve in some of these new sites, too. Because of the labor,

Great, appreciate all the color. Thanks so much.

Ranju: Thank you. This concludes our question and answer session. I would now like to turn the conference back over to Tony Gursi for closing remarks.

Andrew Backman: Thank you all very much for being part of our call today. Welcome to our new cover analysts. And we look forward to a strong second half, and I hope you all stay safe and have a good remainder of the summer. Andy, back to you.

Tony Guzzi: Great. Thanks, Tony, and thanks, Jason, and thank you all for joining us today. As always, if you should have any follow-up questions, please do not hesitate to reach out to me directly. Thank you all again and have a great day. Ranju, can you please close the call?

Ranju: Thank you. The conference has now concluded. Thank you for attending today's presentation. You may now.Good morning. My name is Ranju, and I'll be your conference operator today. At this time, I would like to welcome everyone to EMCOR Group's second quarter 2025 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speakers' prepared remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star, then the number one on your telephone keypad. If you would like to withdraw your questions, please press the pound keys. I will now turn the call over to Andrew Backman, Vice President of Investor Relations. Mr. Backman, you may begin.

Thank you. This concludes our question and answer session. I would now like to turn the conference back over to Tony Kasi for closing remarks. Thank you all very much, uh, for being part of our call today. I'll Welcome to our new cover analyst and uh we look forward to a a strong second half and I hope you all stay safe and have a good remainder of the summer, Andy back to you great. Thanks, Tony, and thanks Jason. And thank you all for joining us today. As always, if you should have any follow-up questions, please do not hesitate to reach out to me directly. Thank you all again and have a great day around. You, can you please close the call?

Thank you. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect

Good morning. My name is renju and I'll be your conference operator. Today at this time I would like to welcome everyone to MCO group second quarter 2025 earnings conference call.

All lines have been placed on mute to prevent any background noise.

If you would like to withdraw your question. Please first bump piece of it.

Now turn the call over to Andy Backman, Vice President of Investor Relations, Mr. Backman, you'll have to get.

Andrew Backman: Thank you, Ranju, and good morning, everyone, and welcome to EMCOR's second quarter 2025 earnings conference call. For those of you joining us by webcast, we are at the beginning of our slide presentation that will accompany our remarks today. This presentation will be archived in the Investor Relations section of our website at emcoregroup.com. With me today are Tony Guzzi, our Chairman, President, and Chief Executive Officer; Jason Nalbandian, EMCOR's Chief Financial Officer; and Maureen Mauricio, Executive Vice President, Chief Administrative Officer, and General Counsel. For today's call, Tony will provide comments on our second quarter and discuss our RPOs. Jason will then review the second quarter and our numbers before turning it back to Tony to discuss our guidance before we open it up for Q&A. Before we begin, as a reminder, this presentation and discussion contain certain forward-looking statements and may contain certain non-GAAP financial information.

Thank you Andrew and good morning, everyone and welcome to <unk> second quarter 2025 earnings Conference call.

Thank you joining us by webcast, we were at the beginning of our slide presentation that will accompany our remarks today.

This presentation will be archived in the Investor Relations section of our website at Amcor group Dot Com with me today are Tony Guzzi, Our chairman President and Chief Executive Officer, Jason down now Danielle <unk>, Chief Financial Officer, and Maureen Mauricio Executive Vice President Chief administrative officer, and General Counsel today's call Tony will provide.

Comments on our second quarter and discuss our Rps, Jason will then review the second quarter and our numbers before turning it back to Tony to turn discuss our guidance before we open it up for Q&A.

We began as a reminder, this presentation and discussion contains certain forward looking statements and may contain certain non-GAAP financial information.

Andrew Backman: Slide two of our presentation describes in detail these forward-looking statements and the non-GAAP financial information disclosures. I encourage everyone to review both disclosures in conjunction with our discussion and accompanying slides. And finally, as a reminder, all financial information discussed during this morning's call is included in our consolidated financial statements within both our earnings press release issued this morning and in our form 10Q filed with the Securities and Exchange Commission. And with that, let me turn the call over to Tony. Tony.

Two of our presentation describes in detail. These forward looking statements and the non-GAAP financial information disclosures.

I encourage everyone to review both disclosures in conjunction with our discussion and accompanying slides and finally as a reminder, all financial information discussed during this morning's call is included in our consolidated financial statements within both our earnings press release issued this morning and in our Form 10-Q filed with the Securities and Exchange Commission and with that let me turn the call over to Tim.

Tony Guzzi: Yeah, thanks, Andy. And good morning and welcome to our second quarter 2025 earnings call. And I'll be speaking to page four. What I'm going to cover up front here is some of the financial highlights for the second quarter. Then I'm going to provide some commentary on what has gone well through the first half of the year. Jason is going to cover the quarterly financials in detail. You know, we had an excellent second quarter and first half of 2025. In the second quarter, we earned $6.72 in diluted earnings per share, and we generated revenues of $4.3 billion. That represents a quarterly record and a 17.4% increase from the prior year period. We achieved exceptional operating margins of 9.6% and had operating cash flow of $194 million.

Yes, Thanks, Andy and good morning, and welcome to our second quarter 2025 earnings call and I'll be speaking to page four.

What I'm going to cover upfront here some of the financial highlights for the second quarter, then I'm going to provide some commentary of what has gone well through the first half of the year.

Jason is going to cover the quarterly financials in detail, we had an excellent second quarter and first half of 2025 in the second quarter, we earned $6 72, and diluted earnings per share and we generated revenues of $4 3 billion that represents a quarterly record of 17, 4% increase from there.

Prior year period, we achieved exceptional operating margin of nine 6% and had operating cash flow of $194 million we.

Tony Guzzi: We exited the second quarter with very strong RPOs or remaining performance obligations, a record of $11.9 billion, which represents an increase of $2.9 billion year-over-year and $1.8 billion from December of 2024. We continue to be disciplined capital allocators, and for the first six months of 2025, we spent just over $430 million in share repurchases and utilized $887 million for acquisitions. We have a liquid balance sheet that will continue to support our growth and capital allocation strategy. Our performance remains strong, especially in our electrical and mechanical construction segments, both of which continue to earn impressive operating margins while generating growth in the base of business as demonstrated by their RPOs. We have managed our project mix and continue to gain the confidence of our customers across geographies and market sectors.

We exited the second quarter with very strong RPI is our remaining performance obligations a record $11 9 billion, which represents an increase of two 9 billion year over year and one 8 billion from December of 2024, we continue to be disciplined capital allocators and for the first six.

Six months of 2025, we spent just over $430 million in share repurchases and utilized $887 million for acquisitions.

We have a liquid balance sheet that will continue to support our growth and capital allocation strategy.

Our performance remains strong, especially in our electrical and mechanical construction segments, both of which continue to earn impressive operating margins, while generating growth in their base of business as demonstrated by their Ipos. We have managed our project mix and continue to gain the confidence of our customers.

Cross geographies and market sectors, we continue to execute well for our customers in these segments by using BDC Bam and pre fabrication, coupled with strong planning excellent labor sourcing and management and disciplined contract negotiation and oversight we have the best filled leadership in the business and they operate.

Tony Guzzi: We continue to execute well for our customers in these segments by using BDC, BIM, and prefabrication, coupled with strong planning, excellent labor sourcing and management, and disciplined contract negotiation and oversight. We have the best field leadership in the business, and they operate with focus, discipline, and grit. In our electrical construction segment, our integration of Miller Electric remains on track. Our mechanical services business in our building services segment continues to execute well with good revenue growth and an operating margin in the high single digits. We also execute a successful restructuring in our site-based business in response to past contract losses. This should provide us with a more efficient cost structure as we look to resume growth in the future. Although we had a tough first half in our industrial services segment, we expect both our shop and field businesses to improve as the year progresses.

With focus discipline and grid and our electrical construction segment, our integration of Miller electric remains on track.

Our mechanical services business and our building services segment continues to execute well with good revenue growth and an operating margin in the high single digits. We also executed a successful restructuring in our site based business and response to past contract losses. This should provide us with a more efficient cost structure as we look to.

As we look to resume growth in the future. Although we had a tough first half in our industrial services segment, we expect both our shop and field businesses to improve as the year progresses and lastly, the UK had a great start to the year with growth in revenue operating margin and operating income overall I think we can.

Tony Guzzi: And lastly, the UK had a great start to the year with growth in revenue, operating margin, and operating income. Overall, I think we can be, we are pretty sure that we had a very strong quarter and a very strong first half of 2025. Now I'll ask you to turn to page five, and I'm going to talk to RPOs before I turn the call over to Jason. As I previously mentioned, we leave the quarter with diverse, strong RPOs of $11.9 billion. Due to growth in nearly all of the market sectors we serve, our RPOs have increased by 32% year-over-year and 18% when compared to December of 2024. Excluding acquisitions organically, RPOs have increased 22% year-over-year and nearly 9% since the end of 2024. Our growth continues to be driven by long-term secular trends across key markets.

We're pretty sure that we had a very strong quarter and a very strong first half of 2025 now I will ask you to turn to page five and I'm going to talk to <unk> before I turn the call over to Jason.

As I previously mentioned, we leave the quarter with diverse strong <unk> of $11 9 billion due to growth in nearly all of the market sectors. We serve our <unk> have increased by 32% year over year and 18% when compared to December of 2024.

Excluding acquisitions organically <unk> have increased 22% year over year and nearly 9% since the end of 2024, our growth continues to be driven by long term secular trends across key markets.

Tony Guzzi: RPOs within network and communications, which is where our data center business is, totaled a record $3.8 billion at the end of June. We remain well-positioned in this space, supporting our customers with their build-out of data centers. Healthcare RPOs total $1.4 billion, and that builds on an already solid base, and the acquisition of Miller Electric has expanded our opportunities in this sector. That contributed to the RPO growth we've seen thus far in 2025. Manufacturing and industrial RPOs now total $1 billion. In addition to demand driven by customers' onshoring and reshoring initiatives, recent growth in the sector has also benefited from the award of certain food processing projects, as well as a renewable energy project within our industrial services segment. And led by our mechanical construction segment, water and wastewater RPOs total $725 million as we continue to be awarded projects throughout Florida.

RP OS within networking communications, which is where our datacenter businesses totaled a record $3 8 billion at the end of June we remain well positioned in this space supporting our customers with our build out of data centers health care Rpm's total $1 4 billion and that builds on an already solid base and the acquisition of <unk>.

<unk> electric has expanded our opportunities in this sector that contributed to the RVO growth we've seen thus far in 2025 Manny.

Manufacturing industrial Ipos now total $1 billion.

And in addition to demand driven by customers Onshoring and reassuring initiatives recent growth in this sector has also benefited from the award of certain food processing projects as well as a renewable energy project within our industrial services segment and led by our mechanical construction segment water and wastewater <unk> <unk>.

$725 million as we continue to be awarded projects throughout Florida.

Tony Guzzi: Additionally, due to a combination of new contract awards and the acquisition of Miller Electric, we saw growth within the institutional sector, where RPOs now total $1.4 billion, and the hospitality and entertainment sector, where RPOs have grown 72% year-over-year or 64% from December. Although RPOs within high-tech manufacturing have decreased from June of last year, and I've stated this many times before, we believe in the long-term fundamentals of this sector. We acknowledge and have talked about that the award of these projects can be exotic in nature. On a sequential basis, though, when compared to the end of March, we did experience an increase in high-tech manufacturing RPOs of $126 million, or nearly 15%, due in large part to the award of phase two mechanical construction project for our semiconductor customer. And with that, I'll turn the call over to you, Jason.

Additionally, due to a combination of new contract awards and the acquisition of Miller Electric we saw growth within the institutional sector, where <unk> is now total $1 4 billion and the hospitality entertainment sector, where our periods have grown 72% year over year or 64% from December although <unk> within high Tech.

Manufacturing have decreased from June of last year, and I've stated. This many times before we believe in the long term fundamentals of this sector.

We acknowledge and haven't had talked about that the award of these projects can be at Sonic in nature.

On a sequential basis, though when compared to the end of March we did experience an increase in high tech manufacturing <unk> of $126 million.

Or nearly 50, 215% due in large part to the award phase III mechanical construction project for our semiconductor customer and with that I'll turn the call over to you Jason.

Andrew Backman: Thank you, Tony. And good morning, everyone. Beginning on slide six, I'm going to discuss the operating performance for each of our segments, as well as some of the key financial data for the second quarter of 2025 as compared to the second quarter of 2024. As Tony mentioned, consolidated revenues of $4.3 billion set a new quarterly record and represent an increase of $637.5 million or 17.4%. Revenue growth was led by our construction segments, where we experienced greater demand across the majority of the market sectors we serve. During the quarter, acquisitions generated incremental revenues of $330.3 million, with the most significant contribution from Miller Electric. On an organic basis, revenues grew by 8.4%. If we look at each of our segments, revenues of US electrical construction were a record $1.34 billion, increasing 67.5% due to a combination of strong organic growth and the acquisition of Miller.

Thank you Tony Hey, good morning, everyone.

Beginning on slide six I'm going to discuss the operating performance for each of our segments as well as some of the key financial data for the second quarter of 2025 as compared to the second quarter of 2024.

Tony mentioned consolidated revenues of $4 3 billion set a new quarterly record and represents an increase of $637 5 million or 17, 4%.

Revenue growth was led by our construction segments, where we experienced greater demand across the majority of the market sectors. We serve.

During the quarter acquisitions generated incremental revenues of $333 million with the most significant contribution from Miller electric.

On an organic basis revenues grew by eight 4%.

If we look at each of our segments.

Revenues of U S. Electrical construction were a record $1 34 billion, increasing 67, 5% due to a combination of strong organic growth and the acquisition of Miller.

Andrew Backman: This segment generated greater revenues from nearly all market sectors, with the most significant growth being derived from our data center projects within the network and communications sector. Besides data centers, electrical experienced notable growth in healthcare, where our quarterly revenues more than doubled; commercial, as we are starting to see some resumption in tenant fit-out demand; and institutional, driven by increased activity for certain colleges and universities. Revenues in this sector also benefited from higher levels of short-duration projects and service work, in part due to the service capabilities we've added through the Miller acquisition. US mechanical construction quarterly revenues were a record $1.76 billion, up 6%, almost all of which was organic.

This segment generated greater revenues from nearly all market sectors with the most significant growth being derived from our data center projects within the networking communications sector.

Besides datacenters electrical experienced notable growth in health care, where our quarterly revenues more than doubled.

Commercial as we are starting to see some resumption in tenant fit out demand and institutional driven by increased activity for certain colleges and universities.

Revenues in this sector also benefited from higher levels of short duration projects and service work in part due to the service capabilities. We've added through the Miller acquisition.

U S. Mechanical construction quarterly revenues were a record $1 76 billion up 6% almost all of which was organic.

Andrew Backman: Similar to electrical construction, while this segment did experience increased revenues across a number of market sectors, the largest growth during the quarter was generated from network and communications due to greater demand for data center construction projects. Other sectors with the largest incremental growth include manufacturing and industrial, primarily driven by food processing projects; and hospitality and entertainment, given the recent award of certain contracts in the western region of the United States. Partially offsetting the growth of the mechanical construction, where revenue declines within high-tech manufacturing, as we near completion of certain semiconductor construction projects; and commercial, largely due to fewer active warehousing and distribution projects for some of our e-commerce customers.

Similar to electrical construction, while this segment did experienced increased revenues across a number of market sectors. The largest growth during the quarter was generated from networking communications due to greater demand for datacenter construction projects.

Other sectors with the largest incremental growth include manufacturing and industrial primarily driven by food processing projects and hospitality and entertainment given the recent award of certain contracts in the Western region of the United States.

Partially offsetting the growth of the mechanical construction, where revenue declines within high Tech manufacturing as we near completion of certain semiconductor construction projects and commercial largely due to fewer active warehousing and distribution projects for some of our e-commerce customers.

Andrew Backman: With respect to high-tech manufacturing, and as Tony just mentioned, we did receive a phase two award for one of our semiconductor customers, which is reflected in the sequential increase in our RPOs at the end of the quarter. On a combined basis, our construction segments generated revenues of $3.1 billion, an increase of 26.1%. Turning to US building services, revenues of $793.2 million reflect a 1.6% increase year-over-year. In line with our expectations as we exited the first quarter, growth in mechanical services has now exceeded the revenue decline within site-based, and we are pleased to see that this segment has turned a corner after four consecutive quarters of organic revenue declines. With respect to the segment's mechanical services division, revenues increased by 6.5% as demand remained robust across each of its service lines. Moving to industrial services, revenues were $281.1 million, a 13.3% decrease.

With respect to high Tech manufacturing and as Tony Just mentioned, we did receive a phase II award for one of our semiconductor customers, which is reflected in the sequential increase in our <unk> at the end of the quarter.

On a combined basis, our construction segments generated revenues of $3 1 billion, an increase of 26, 1%.

Turning to U S building services revenues of $793 2 million reflect a one 6% increase year over year.

In line with our expectations as we exited the first quarter growth in mechanical services has now exceeded the revenue decline within site based and we're pleased to see that this segment has turned the corner after four consecutive quarters of organic revenue declines.

With respect to the segments mechanical services Division revenues increased by six 5% as demand remained robust across each of its service lines.

Moving to industrial services revenues were $281 1 million, a 13, 3% decrease rare.

Andrew Backman: Revenues were impacted by lower field services volumes when compared to the prior year, which had benefited from jobs of a larger size, scope growth on certain turnarounds, and the performance of a renewable fuel project. This segment also experienced a reduction in shop services revenues due to fewer new build heat exchanger sales during the quarter. And lastly, UK building services generated revenues of $134.6 million, an increase of $28 million or 26.3%. While favorable exchange rate movements did positively impact the segment's revenues by $7.4 million, the majority of its growth was due to greater service revenues, partially as a result of the recent award of a facility's maintenance contract, and increased project activity with existing customers. Let's turn to slide seven.

Revenues were impacted by lower field services volumes when compared to the prior year, which had benefited from jobs of a larger size scope growth on certain turnarounds and the performance of our renewable fuel project.

This segment also experienced a reduction in shop services revenues due to fewer newbuild heat exchanger sales during the quarter.

And lastly, UK building services generated revenues of $134 6 million, an increase of $28 million or 26, 3%.

While favorable exchange rate movements did positively impact the segment's revenues by $7 4 million. The majority of its growth was due to greater service revenues, partially as a result of the recent award of the facilities maintenance contract and increased project activity with existing customers.

Let's turn to slide seven.

Andrew Backman: With operating income of $415,2 million or 9.6% of revenues, our performance established a quarterly record for operating income and a second quarter record for operating margin. This represents a year-over-year increase in operating income of $82.4 million or nearly 25%, and a 50 basis point improvement in operating margin. If we look at each of our segments, US electrical construction generated operating income of $157.7 million, which represents a 78% increase. In addition to greater revenues, operating income of this segment benefited from a 70 basis points expansion in operating margin. And the segment earned an operating margin of 11.8%. The segment experienced greater gross profit across the majority of the market sectors in which we operate, with the largest increases generally in tracking with its revenue growth.

With operating income of $415 2 million or nine 6% of revenues our performance established a quarterly record for operating income and a second quarter record for operating margin.

This represents a year over year increase in operating income of $82 4 million or nearly 25% and a 50 basis point improvement in operating margin.

If we look at each of our segments U S. Electrical construction generated operating income of $157 7 million, which represents a 78% increase.

In addition to greater revenues operating income of this segment benefited from a 70 basis points expansion in operating margin.

And the segment earned an operating margin of 11, 8%.

The segment experienced greater gross profit across the majority of the market sectors in which we operate with the largest increases generally in tracking with its revenue growth.

Andrew Backman: Largely driven by Miller Electric, operating income of electrical construction included $9.8 million of incremental acquisition contribution, net of $11.4 million of intangible asset amortization. Operating income for US mechanical construction increased nearly 12% to $238.7 million, and operating margin expanded by 70 basis points, establishing a new quarterly record of 13.6%. Similar to electrical construction, this segment experienced greater profitability across a number of market sectors, with the most significant increase in gross profit being generated from network and communications. Together, our construction segments reported operating margin of 12.8%, which is a 50 basis point improvement year-over-year. Excellent project execution, enhanced productivity, and a more favorable mix continue to be significant contributors to our success. Operating income for US building services of $50 million grew by 6.8%, and operating margin of 6.3% increased by 30 basis points.

Largely driven by Miller electric operating income of electrical construction included $9 8 million of incremental acquisition contribution net of $11 4 million of intangible asset amortization.

Operating income for U S. Mechanical construction increased nearly 12% to $238 7 million and operating margin expanded by 70 basis points, establishing a new quarterly record of 13, 6%.

Similar to electrical construction this segment experienced greater profitability across a number of market sectors with the most significant increase in gross profit being generated from networking communications.

Together, our construction segments reported operating margin of 12, 8%, which is a 50 basis point improvement year over year.

Excellent project execution enhanced productivity and a more favorable mix continue to be significant contributors to our success.

Operating income for U S building services of $50 million grew by six 8% and operating margin of six 3% increased by 30 basis points.

Andrew Backman: Contributing to the improved profitability was a greater percentage of revenues from mechanical services, where we continue to perform well, earning strong returns with notable margin expansion across HVAC projects and retrofits, as well as repair service. Turning to industrial services, an operating loss of $419,000 compares to operating income of $12.7 million or 3.9% of revenues a year ago. The decrease in this segment's profitability was primarily due to the reduction in revenues and the mix shift that I previously referenced. In addition to the direct impact of lower revenues, this volume decline also resulted in a greater amount of unabsorbed overhead within the segment. And lastly, UK building services earned an operating income of $8.4 million or 6.3% of revenues.

Contributing to the improved profitability was a greater percentage of revenues from mechanical services, where we continued to perform well, earning strong returns with notable margin expansion across HVAC projects in retrofit as well as repair service.

Turning to industrial services and operating loss of 419000 compares to operating income of $12 7 million or three 9% of revenues a year ago.

The decrease in this segment's profitability was primarily due to the reduction in revenues and the mix shift that I previously referenced.

In addition to the direct impact of lower revenues. This volume decline also resulted in a greater amount of unabsorbed overhead within the segment.

And lastly, UK building services earned operating income of $8 4 million or six 3% of revenues.

Andrew Backman: The increased profitability of our UK business resulted from greater gross profit stemming from increased segment revenues and a reduction in SG&A margin due to effective cost management coupled with the leveraging of their overhead. If we move to slide eight, I'll cover a few quarterly highlights not included on the previous slides. Driven by our electrical and mechanical construction segments, as well as our US building services segment, our gross profit margin has expanded by 70 basis points, with gross profit increasing nearly 22%. Looking next to SG&A, our second quarter expenses increased by $67.4 million, and contributing to that variance was $28.9 million of incremental expenses from acquired companies and $5.5 million of additional amortization expense.

The increased profitability of our U K business resulted from greater gross profit stemming from increased segment revenues and a reduction in SG&A margin due to effective cost management, coupled with the leveraging of their overhead.

If we move to slide eight I'll cover a few quarterly highlights not included on the previous slides.

Driven by our electrical and mechanical construction segments as well as our U S building services segment. Our gross profit margin has expanded by 70 basis points with gross profit increasing nearly 22%.

Looking next to SG&A, our second quarter expenses increased by $67 4 million and contributing to that variance was $28 9 million of incremental expenses from acquired companies and $5 5 million of additional amortization expense.

Andrew Backman: Excluding these items, SG&A grew by $32.9 million, largely due to employment costs, given both greater headcount to support our organic growth, as well as increased incentive compensation expense within certain of our segments, given higher projected annual operating results. SG&A margin for the quarter of 9.7% compares to 9.6% a year ago, and as expected, our SG&A margin did decrease from that of this year's first quarter, and we continue to expect our full-year SG&A margin to be relatively comparable to that of 2024 when adjusting for the $9.4 million of transaction expenses incurred earlier this year. And finally, on this page, diluted earnings per share was $6.72 compared to $5.25, an increase of 28%. If we look briefly at slide nine, this slide summarizes our results for the first six months of 2025 and has been included here for your reference.

Excluding these items SG&A grew by $32 9 million largely due to employment costs, given both greater head count to support our organic growth as well as increased incentive compensation expense within certain of our segments given higher projected annual operating results.

SG&A margin for the quarter of nine 7% compares to nine 6% a year ago and as expected. Our SG&A margin did decrease from that of this year's first quarter and we continue to expect our full year SG&A margin to be relatively comparable to that of 2024, when adjusting for the $9 4 million or <unk>.

<unk> expenses incurred earlier this year.

And finally on this page diluted earnings per share was $6 72.

Compared to $5 25.

An increase of 28%.

If we look briefly at slide nine this slide summarizes our results for the first six months of 2025 and has been included here for your reference.

Andrew Backman: Rather than go through the page in detail, I want to again highlight that we have had a tremendous start to the year, setting a number of company records as we continue to deliver for our customers and shareholders. In a later slide, Tony will outline our updated earnings guidance for 2025. I mention that now as this guidance assumes continued strength in our margins in line with what we've achieved through the first half of the year. Specifically, at the low end of our guidance, we have assumed a full-year operating margin, which is equal to the 9% we have earned year to date, while the high end assumes operating margins in the back half of the year, which are essentially equivalent to the outstanding 9.6% we achieved this quarter. The implied full-year margin is comparable to the margins we've delivered over the last 12 to 24 months.

Rather than go through the page in detail I want to again highlight that we have had a tremendous start to the year setting a number of company records as we continued to deliver for our customers and shareholders.

In a later slide Tony will outline our updated earnings guidance for 2025.

Mentioned that now is this guidance assumes continued strengthen our margins in line with what we have achieved through the first half of the year.

Specifically at the low end of our guidance, we have assumed a full year operating margin, which is equal to the 9%. We have earned year to date, while the high end assumes operating margins in the back half of the year, which are essentially equivalent to the outstanding nine 6%. We achieved this quarter the implied full year margin is key.

Comparable to the margins we have delivered over the last 12 to 24 months.

Andrew Backman: With that, I'll turn to slide 10 to close on our balance sheet. Our balance sheet remains strong and liquid, and as of June 30th, we had cash on hand of $486 million and working capital of just over $782 million. Largely as a result of borrowings outstanding on our revolver, our debt balance was a modest $256.4 million. We had operating cash flow of $193.7 million during the quarter and generated $302.2 million year to date. For the full year, we estimate operating cash flow to be at least equivalent to net income and up to approximately 80% of operating income. During the quarter, we utilized $207.3 million for the repurchase of our common stock, bringing our year-to-date repurchases to $432.2 million. When layering in second quarter acquisitions, we have spent $887.2 million year to date on M&A.

With that I will turn to slide 10 to close on our balance sheet.

Our balance sheet remains strong and liquid and as of June 30, we had cash on hand of $486 million and working capital of just over $782 million.

Largely as a result of borrowings outstanding on our revolver, our debt balance was a modest $256 4 million.

We had operating cash flow of $193 $7 million during the quarter and generated $302 $2 million year to date.

For the full year, we estimate operating cash flow to be at least equivalent to net income and up to approximately 80% of operating income.

During the quarter, we utilized $207 3 million for the repurchase of our common stock, bringing our year to date repurchases to $432 2 million.

When layering in second quarter acquisitions, we have spent $887 $2 million year to date on M&A.

Andrew Backman: As we've said before, our balance sheet, coupled with the cash expected to be generated by our operations, as well as the nearly $980 million of capacity available under our credit facility, leaves us well-positioned to continue to deliver on our philosophy of balanced and disciplined capital allocation. With that, I'll turn the call back over to Tony. Thanks, Jason. And I'm going to be on pages 11 and 12. You know, clearly we've been executing well, and as a result, we will raise our 2025 revenue and earnings guidance. We now expect to earn between $2,450 to $2,575 in diluted earnings per share, and we expect revenue of between $16.4 and $16.9 billion. We expect to continue to earn strong operating margins and execute with discipline and efficiency for our customers.

As we've said before our balance sheet, coupled with the cash expected to be generated by our operations as well as the nearly $980 million of capacity available under our credit facility leaves us well positioned to continue to deliver on our philosophy of balanced and disciplined capital allocation with that I'll call turn the call back over to Tony.

Thanks, Jason and I'm going to be on pages 11 and 12.

Clearly, we've been executing well and as a result.

We will raise our 2025 revenue and earnings guidance.

We now expect to earn between $24 50 to $25 75, and diluted earnings per share and we expect revenue of between $16 four and $16 9 billion.

We expect to continue to earn strong operating margins and execute with discipline and efficiency for our customers.

Andrew Backman: Our RPOs demonstrate the momentum and demand in our markets, especially in data centers, traditional and high-tech manufacturing, healthcare, HVAC service, building controls, and retrofit projects. Macroeconomic uncertainty persists, especially around tariffs and trade, but we believe our guidance reflects the potential impact of such uncertainty as we view it today. We will remain disciplined capital allocators, bolstered by our strong balance sheet, a healthy pipeline of acquisitions, and robust opportunities to support our organic growth. And if you look at page 12 and you look at a 10-year view of the world, you'll see 50/50 balanced capital allocation, and deals happen when they happen. And finally, I want to close with the most important statement of the call. I want to thank my EMCOR teammates.

Our rps demonstrates the momentum and demand in our markets, especially in data centers traditional and high Tech manufacturing healthcare.

Service building controls and retrofit projects.

Macroeconomic uncertainty persists, especially around tariffs and trade, but we believe our guidance reflects the potential impact of such uncertainty as we view it today.

We will remain disciplined capital allocators.

Capital Allocators.

Bolstered by our strong balance sheet, a healthy pipeline of acquisitions and robust opportunities to support our organic growth and if you look at page 12, and you look at 10 year view of the World you will see $50 50 <unk>.

<unk> capital allocation and deals happen when they happen and finally I want to close with the most important statement of the call I want to thank by Amcor teammates. Thank you for your dedication to our customers and to our company and thank you for taking care of each other and keeping each other safe with that.

Andrew Backman: Thank you for your dedication to our customers and to our company, and thank you for taking care of each other and keeping each other safe. With that, Ranju, I'll take questions.

Then drew I'll take questions.

Ranju: Thank you. We will now begin the question and answer session. To ask a question, you may press star, then one on your touch-tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your questions, please press star, then two. At this time, we will pause momentarily to assemble our roster. The first question comes from the line of Brent Thielman with DA Davidson. Please go ahead.

Thank you.

We will now begin the question and answer session.

Ask a question you met the Star then one on your Touchtone phone.

If youre using a speakerphone please pick up your handset before pressing the keys.

Any time Youre question has been addressed and you would like to withdraw your question. Please press Star then two.

At this time, we will pause momentarily to assemble honorable stone.

The first question comes from the line of Brent Thielman.

D. A davidson. Please go ahead.

Tony Guzzi: Brent? Question.

Brent question.

Ranju: Mr. Thielman, please go ahead.

Stephen Please go ahead.

Tony Guzzi: Hey, Brent, start over. You were muted there. You can start over. Brent?

<unk> you're muted there then you can start over.

Brent.

Ranju: Mr. Thielman, if you have muted your phone, unmute yourself and go ahead with the question.

Mr. Tillman if you have a mutual on mute yourself and go ahead with your question.

Tony Guzzi: Okay, let's come back to Brent. Let's go to the next question.

Okay, let's come back to Brian Let's go to the next question.

Ranju: Since there is no reply from the line of Mr. Thielman, we'll take the next. The next question comes from the line of Adam Thelheimer with Thompson Davis. Please go ahead.

Since there's no plan from the line of Mr. Tailwind, we'll take the next.

The next question comes from the line of Adam Thalheimer pumps.

Thompson Davis. Please go ahead.

Jason Nalbandian: Good morning, guys. Nice quarter.

Good morning, guys nice quarter, Thanks, Hey.

Tony Guzzi: Thanks.

Jason Nalbandian: Hey, Tony, can you just talk a little bit about bidding at a high level? I'm curious what your expectations are for bookings at a high level in the back half of the year.

Tony can you just talk a little bit about bidding at a high level I'm curious, what's your expectations are for bookings at a high level in the back half of the year, Yes, I am not going to guess of bookings.

Tony Guzzi: Yeah, I'm not going to guess at bookings. We'll continue to win our fair share of the business, and we continue to have repeat business with customers that think we're doing a great job, and we continue to expand our footprint to serve more markets. You know, in our business, it's not a quarter-to-quarter bookings business. It never has been. But all the underlying strength we've seen through the first half of the year, we saw through the back half of last year, there's no reason for us to believe that doesn't continue. You know, we're building the first building on a lot of sites that are multi-year build-outs and phases over time. We continue to see the strength in the markets that we've talked about extensively in the call, whether it be manufacturing, high-tech manufacturing, which is a little more episodic, network and communications.

We'll continue to win.

Our fair share of the business and we continue to have repeat business with customers I think we're doing a great job will continue to expand our footprint to serve more markets.

In our business, it's not a quarter to quarter bookings business and never has been but all of the underlying strength, we've seen through the first half of the year and we saw through the back half of last year. There is no reason for us to believe that doesn't continue.

We're building the first building on a lot of sites that are multiyear build outs and phases overtime. We continue to see the strength in the markets that we've talked about extensively in the call whether it be manufacturing high tech manufacturing, which are little more episodic networking communications the commercial market for us.

Tony Guzzi: The commercial market for us, which is retrofit, continues to chug along. Healthcare continues to be a strong market. So really, it's broad based. And if you think about our call, I have Jason go through some numbers. We have demonstrated over a long period of time that we will outpace non-Res construction. Maybe cover some of those numbers, Jason.

Which is retrofit continues to chug along healthcare continues to be a strong market. So really it's broad base.

And if you think about our call Jason go through some numbers.

We have demonstrated over a long period of time that we will outpace non res construction maybe cover some of those numbers Jason.

Jason Nalbandian: And I think we've covered some of this in the past, right? If you look at EMCOR over a period of time, let's say five years, we've historically outpaced non-Res by 200 basis points organically and probably 250 basis points when you include M&A. I think the more telling story, though, is when you look at our construction segment and even the mechanical services business within building services, you know, over that same five-year period, those segments outpace non-Res by 500 to 600 basis points. So we expect the markets to be good, especially where we operate, and we expect to outperform those markets, Adam.

I think we've covered some of this in the past right. If you look at EMCORE over of <unk>.

Period of time, let's say five years, we've historically outpaced non res by 200 basis points organically and probably 250 basis points. When you include M&A I think.

The more telling story, though is when you look at our construction segment and even the mechanical services business within building services over that same five year period, those segments outpace non res by 500 to 600 basis points.

We expect the markets to be good, especially where we operate and we expect to outperform those markets Adam.

Andrew Backman: Great. And then I wanted to ask about the industrial business with the change in administration. Curious if you are seeing any.