Q3 2025 TIC Solutions Inc Earnings Call

Hello and welcome to the tick Solutions. Third quarter 2025 earnings conference. Call currently all participants are in a listen-only mode. A question and answer session will follow the formal presentation. Should anyone require operator assistance during the conference call? You may press star then zero on your telephone keypad. As a reminder, this conference call is being recorded. I would now like to turn the call over to your host, Andrew Shen, director of investor relations. Thank you. You may begin.

Thank you, operator. Good morning, everyone. And thank you for joining the call today. Joining me this morning is tal pisy. Our chief executive officer, Kristen Schultz us, our Chief Financial Officer and Robbie Franklin, executive chairman.

Been hard. Our President and Chief Operating Officer will join us for the Q&A session.

Before we begin, I'd like to remind you that certain statements in the company's earnings press release. And on this call are forward-looking statements, which are based on expectations, intentions and projections, regarding the company's future performance. Anticipated events or Trends and other matters that are not historical facts.

These statements are not a guarantee of future performance and are subject to known and are known risks, uncertainties, and other factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements.

In our press release and filings with the SEC, we detailed material risks that may cause our future results to differ from our expectations.

Our statements are as of today, November 12th 2025 and we undertake no obligation to update any. Forward-looking statements, we may make except as required by law.

As a reminder, we have posted a presentation detailing our third quarter financial performance, on the investor relations page of our new website, reflecting our recent name, change www.tix.com.

Our comments today will also include non-gaap Financial measures and other key operating metrics the required. Reconciliations of our non-gaap financial metrics can be found in our press release and in our presentation.

Before we begin, let me outline the flow of today's prepared. Remarks.

How will we cover business performance and key operational highlights? Kristen will review our financial results, provide an update on our outlook, and share progress on our integration program.

Robbie will share perspectives on the Strategic alignment of the combined company and how Tech Solutions is positioned for long-term growth. It's now my pleasure to turn the call over to town.

Thank you, Andrew. Good morning, everyone and thank you for your continued interest in Tech Solutions. Welcome to our third quarter 2025 earnings call

As you may have seen our new name, tick Solutions, reflects the unification of accurate and envy 5.

Under a single platform. Dedicated to reliability Innovation and service excellence.

During the quarter, we brought together these 2 strong organizations under the tech Solutions, Banner.

This creates a unified tech-enabled TIC and engineering services leader with scale, diversification, and momentum across infrastructure, energy transition, and data centers that deliver comprehensive asset, integrity, and infrastructure solutions.

I am pleased with what I'm seeing in these early months. Our teams are collaborating well, and we're laying the groundwork for Meaningful. Synergy capture as integration actions, move from year, end into 2026.

An engineering space.

Let me start with our strategic Vision recent performance and Market momentum.

As a combined entity, we now support clients across the full lifecycle of critical assets and infrastructure, from design and construction through commissioning, operation, ongoing maintenance, compliance, and decommissioning.

Our technicians and Technology collect critical data on asset condition. Whether the asset is as small as a pressure, safety valve, or as large as a data center a bridge or a shoreline

Our engineers then analyze that data with capabilities to use artificial intelligence to assess Integrity, extend life and where needed mitigate risk through our industrial rope access and Remediation capabilities.

We are not simply larger, we're more capable and that matters in serving the complex regulated needs of our end markets where reliability, safety and compliance are Paramount.

Equally important is the diversification. We've achieved through the combination,

We're now at 2 billion plus business, with balanced exposure, across multiple attractive, end markets on a combined. Year-to-date basis, we delivered year-over-year Revenue growth of approximately 5% across our 3 segments,

our growth was supported by double-digit expansion in our Consulting engineering segment.

The exciting data center work for our hyperscaler clients, more than doubled over the trailing 12 months, reflecting accelerating demand from Ai and Cloud infrastructure build outs.

As hyperscalers expand into new geographies, we're growing with them. Both domestically and internationally, activity in infrastructure, conformity assessments, building planning and design, and building digitization also continues to strengthen alongside infrastructure buildout across North America.

Finally, infrastructure investments supporting grid modernization and the energy transition are creating new opportunities across all three of our segments.

These are not short-term Trends. They are multi-year growth drivers, reinvestment in both new and aging infrastructure expands our addressable market and our combined capabilities position us, well to compete and win.

Moving to geospatial, our geospatial data collection and analytics services.

Performed well, with steady mid-single-digit growth against the prior year, as well as a compelling margin during the quarter.

Performance was supported by healthy utilization increased momentum in aerial Hydro spatial and stable demand across both public and private sector clients.

The inspection and mitigation segment has delivered year-to-date growth despite the negative impact related to the timing of capital projects.

Such as LNG Construction.

Softness in the chemicals. Customer base and foreign exchange headwinds.

In the third quarter growing run and maintain activity. Along with stable call out work helped offset these declines.

Turning to integration and cost sell execution.

we are having meaningful conversations with our clients about delivering more solutions than either business could provide independently

In several cases, we're already collaborating on opportunities. That leverage our combined capabilities and these joint efforts will translate into tangible Revenue, wins and new value for our clients, as we further integrate.

We've seen examples of tangible cross-selling momentum. I'll provide two.

Our Consulting engineering team is partnering with our inspection and mitigation team on a nationwide laser scanning and digital Blueprinting initiative covering more than 1,000 retail sites with expansion into Canada playing planned for next year.

The program integrates Legacy Acur and Field Workforce, as well as Legacy Envy Fives, digital modeling capabilities to deliver high-resolution data and rich building scans that support real-time asset tracking and space management for the client.

The scans enable the technology to achieve roughly 99% accuracy for tracking, both quantity and location of individual. Retail products, providing a scalable foundation for future digital inventory applications.

Site access and inspection expertise, along with our modeling and analytics capabilities, were highlighted for one of our long-standing clients.

The program covers more than a dozen facilities and is focused on creating asset level maintenance models, that allow the client to track individual asset component condition age and replacement needs to optimize long-term reliability.

These examples demonstrate how the combined organization is actively unlocking opportunities that neither could have pursued independently. As Standalone companies, highlighting the Practical value of our value creation for our clients.

More broadly, the strength of the platform lies in the essential nature of our work. Our customers rely on us to keep critical assets buildings and infrastructure operating safely and efficiently.

Our work is fundamental to how these assets are managed.

Our recurring run and maintain business provides stability, while our specialized offerings command premium pricing when timing is critical and when deep technical expertise is required.

Together, these factors drive, a resilient business model with durable performance through varying business Cycles.

As we move forward, our focus is on disciplined execution.

Growing the business advancing. Integration capturing synergies, both revenue and cost synergies enhancing margins and driving long-term value creation for our stakeholders. We see, we see clear opportunities to invest prudently in the growth improve efficiency and continue strengthening our platform for scale. I will now hand the call over to Kristen to walk through our financial performance in Greater detail.

Thank you T and good morning, everyone. Third quarter revenue of 473.9 million, grew substantially year-over-year, reflecting 2 months of nv5s contribution, following the August closing.

This growth reflects continued performance across our core and markets.

If we look at the growth of the business, as if the acquisition had happened on January 1 2024.

The third quarter growth of the combined business would have been approximately 2.4%.

On a year-to-date basis. The combined business grew approximately 4.7%

Beginning with this 10-Q, we've introduced segment-level reporting that aligns with how we lead and manage the business and how we plan to communicate about the business going forward.

We felt it was important to provide a clear view of the different parts and how each contributes to our performance.

Our inspection and mitigation segment, which is primarily the Legacy accurate business generated approximately 20093 million in Revenue down approximately 3%, from the prior year period and up approximately 1% year to date.

Strong activity in our run and maintain business, along with steady demand in our kala, or was offset by the impact of less Project. Work along with softness, in our chemicals, and market and FX headwinds.

our Consulting engineering segment which is primarily primarily Legacy mv5, infrastructure and buildings and Technology businesses

Contributed approximately 122 million during the 2 months dub period following the close?

If NB FS results were included, for the full quarter, Consulting and Engineering revenue would have been approximately $189 million.

or roughly 11% higher than the prior year. On both a quarterly and year-to-date basis.

Reflecting data center growth as well as revenue from acquisitions.

The geospatial segment contributed about 62 million during the same. 2-month period.

Including mb5 results for the full quarter. Geospatial would have been about 90 million approximately 4% higher than the last year, and 5% year to date driven by Steady Federal and utility program demand

on a Consolidated basis. Adjusted gross profit which excludes depreciation was approximately 171 million with adjusted gross margin of 36.1% up from the prior year. Period reflecting the favorable growth margin. Mix from added nv5 services,

For our inspection and mitigation segments, adjusted gross margin was 28.5% for the quarter and 27.7% for the full year to date period.

In the third quarter.

On Gross, margins of 51.4% and 48.4% respectively supported by favorable project, mix and strong operational execution.

Adjusted sgna for the quarter was approximately 93 million or 19.7% of Revenue compared to 12.9% in the prior year period.

The increase was primarily due to the inclusion of mb5 operations, which have a higher proportion of sgna as a percentage of sales.

Adjusted EBA for the third quarter was 77.3 Million representing and adjusted ebita margin of 16.3% compared to 51.33% in the prior year period.

The year-over-year increase in dollars reflects the addition of 85 results without the impact of realized synergies.

We expect to begin realizing cost synergies late in the fourth quarter of this year and into 2026.

Operating cash flow for the 9 months. Ended. September 30th 2025 was approximately 45 million reflecting efficient working Capital Management and the inherent cash generative nature of our services-based Revenue model.

Capital expenditures for the first 9 months total approximately 21 million or 2 2.1% of Revenue.

This is slightly below our historical average, due to the mb5 acquisition.

turning now to an overview of our balance sheet and capital resources,

As of September 30, 2025, we had total liquidity of $282.9 million, including cash and cash equivalents of $164.4 million, as well as $1,118.5 million of available capacity under our revolving credit facility.

Total term loan debt was approximately 1.6 billion.

In October, we completed a 250 million private placement of approximately 20.8 million shares of common stock, and pre-funded warrants.

At 12 per share to an existing shareholder.

This transaction, strengthened our balance sheet and provides additional flexibility to fund selective growth opportunities as well as accelerate deleveraging.

These proceeds, enhance our Capital position and provide ongoing opportunity to allocate Capital to our creative tuck-in acquisition strategy.

As well as considering more material opportunities as they arise.

Our balance sheet is in a solid position and we remain focused on using free cash flow to reduce leverage over time.

We continue to Target a long-term net leverage ratio below 3 times through disciplined cash generation and integration execution.

Now, turning to our Outlook.

We are reaffirming our full-year 2025 guidance, expecting revenue in the range of $1.530 billion to $1.565 billion.

And adjusted ebta in the range of 240 to 250 million.

This outlook reflects steady, year-to-date performance.

And continued confidence in demand across our core markets.

For illustrative purposes, if NB5 had been included for the full year, these guidance ranges would equate to approximately $2.11 billion to $2.15 billion of revenue in 2025, on a combined basis.

Looking ahead to next year, we expect Revenue to grow between 3 and 5% relative to the 2025 combined company Baseline.

and adjusted ebda margin should be in the range of 15.5% to 16.5%, including the impact, from cost synergies as they are realized,

We look forward to providing a more detailed update in connection with our fourth quarter and full year 2025 results in March.

Next, I'd like to touch on the work. The team is doing to create these businesses. At the end of this month, we will conclude the planning phase of the integration program and move into our execution phase.

Our teams are working hard and I am excited to announce that we have increased our cost Synergy Target from 20 million to 25 million and we expect to be at that full run rate by mid 2027 within our original timeline of 18 to 24 months post close.

The largest area of savings are coming from overlapping, corporate resources and service providers.

System. Consolidation, real estate footprint, optimization and computer and procurement and vendor optimization.

Integration is advancing with discipline a dedicated integration management office. With leadership from both Legacy companies is driving execution against defined milestones and we look forward to continuing to update you on our progress.

Strategy for tick Solutions.

Thank you, Kristen, and good morning. Everyone, with the NV5 transaction complete, we're seeing the benefits of bringing these complimentary businesses together, creating new opportunities and measurable value for clients. The early success comes from how naturally these businesses fit together: accurate inspection and mitigation expertise combines with NV5's engineering design and geospatial intelligence to cover the full asset integrity lifecycle, enabling us to move quickly and deliver broader solutions for our clients.

Culturally this combination is working because both organizations share the same Foundation. Technical Excellence, professional integrity. And a client focused mindset.

This shared culture gives us confidence in the long-term success of the platform.

Looking ahead pick Solutions now, has the characteristics of a long-term, compounder meaningful scale and fragmented markets diversification, that drives resilience and exposure to secular Tailwinds, such as infrastructure, Renewal Energy transition and investment in digital infrastructure.

The company also has both the scale to invest across geographies and the financial flexibility to invest selectively where we see attractive returns.

The work we do is essential critical infrastructure across the globe, depends on our services ensuring acid, Integrity verifying compliance, designing resilient systems and delivering geospatial insight.

Demand for these capabilities is non-discretionary, and the complexity of modern infrastructure creates a sustained need for our expertise.

We're building tick solutions for the long term discipline execution, consistent cash generation and durable, value creation for shareholders while offering meaningful careers for our people and reliable outcomes for our clients.

Thank you with that. Let me turn the call back to tal for closing remarks.

Thanks Robbie and thank you Kristen.

Our third quarter results, demonstrate that we're executing effectively through a milestone year for our company. We completed a major acquisition, our integrating large teams while continuing to deliver for our clients without interruption

This is a testament to the dedication and professionalism of our people across both organizations.

We've built a platform with meaningful scale technical depth and diversification across attractive and markets the inspection and access capabilities, that Define accurate. Now, connect seamlessly with nv5s engineering and geospatial expertise, creating opportunities, neither business could have achieved could have achieved the loan.

The structural Trends supporting our markets remain, powerful aging infrastructure, increasing Regulatory and Technical complexity and the acceleration of AI Data Center and clean energy investment.

Our priorities remain clear, operate safely deliver exceptional service and translate growth into strong, cash flow and long-term value.

We are executing on a unified operating model. Accelerating cross-selling across end markets aligning. Our people and processes under 1 culture,

And focusing on high growth capabilities like data centers, Renewables and grid modernization.

Finally, I want to recognize our 11,000 team members across more than 250 locations across the globe.

Combining 2 organizations while delivering for our customers, every day requires focused flexibility and commitment. Our people are arising to that challenge and their professionalism, reflects the culture. We build on centered on safety quality, and a higher level of reliability for our clients with that. I would now like to open the call for questions.

Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2. If you would like to remove your question from the queue.

For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

1 moment, please, while we pull for questions.

The first question is from Chris Moore from CJs Securities. Please go ahead.

On at least my 26 adjusted.

Was trying to get a sense of.

A reasonable range for annual free cash flow, you know, after the integration is a little bit further along.

Hi, Chris. Good morning. This is Kristen. Thanks for the question.

I think you know cash flow for us is a, a big opportunity for us with regard to kind of the scale of and the profitability of the combined business,

um I think if you step back the the business is is you know what continues to be a high free cash flow business, low capex, high margin

If we if we just mentioned some of the building blocks for that. Um you know we haven't provided guidance on free cash flow yet but from a building block perspective you know we've got the cash interest of roughly 105 million and that a reminder that that assumes, no repayments. And you know, no changes to the current interest rate environment.

On the cash taxes piece. We're in the range of about 20 to 30 million

And then again we've talked about this in the past but our capex is roughly, 3% of Revenue.

and from there, it would just be any changes in working capital

You got it. I appreciate that.

Um, so nv5 had a, I think a 400 million dollar Revenue Target for for data center, uh, in in 4 to 5 years. A little while ago, just trying to get a sense. If is that still the Target and does the combination, you know, with accurate? Does that potentially accelerate anything?

Yeah, I that's a great question. The data center business is something that we're really proud of and very excited about the way we've been able to grow that. Um, I I would tell you that,

The the revenue on a quarter and year to date basis is up over 100%. It's still you know only about 3% of our Revenue but we're excited about where it's headed. Uh you know we started um outside of North America with our data center business and it was fairly Limited in scope and it continues to grow and we're looking for ways to expand services from their

Um so I'll uh I'll let Ben comment he wants to add anything. Yeah, yeah, Chris it's Robbie. I I would say we're we're in the process of of sort of building out

Our our strategic, like our 5-year, strategic plan. And I, I think the targets that that, the company that md5 had historically, um, were great and very ambitious and I think that there's a Glide path to get there. The, the opportunity for us in this combination is really to marry the the kind of in the on the ground services that that accurate and can provide within the data center environment with with sort of the tech,

Technical expertise in the and the commissioning side, um, that md5 had historically. So it's it's certainly a big area of focus for US. GI given sort of the secular Tailwinds, you see, in the space,

Got it, I appreciate that. Uh, and maybe just the last 1 for me.

Q2, uh, ackeren was still, you know, exiting some lower margin customers, contracts. Just trying to get a sense. Is is, is that did that still happen in Q3? And, you know, kind of where that process is.

Yeah, thanks Chris. You know margin is important for us. We're continuing to

Work. And if needed, you know, exiting those relationships through pricing. I think, um, you know, the the softness you see in the third quarter is primarily timing um, project related and LG construction related. And so um, you know, we'll continue to look at that. But we're also really excited about the growth opportunities that we see, you know, heading into 2026 in that segment.

I appreciate it. I'll jump back in line. Thanks guys.

Thanks Chris.

The next question is from Justin Hawk from Robert W beard. Please go ahead.

Oh, great. Thank you very much. Um, and and I appreciate the, the new segment disclosure that helps uh, kind of understand the moving pieces, a little bit better. Um, I I guess I wanted to ask about the geospatial, I mean, it was, it was good in the quarter, I'm just curious. Um, because in the past, you know, it's it's been levered to kind of activity with the federal government and, and funding, and things like that. So, I'm just curious. If there's been any impact from the shutdown in the fourth quarter, or how we should think about, uh, that business, uh, the year end.

You know, there is limited impact from issuing pose and work orders for our business.

Um, but but um, aside from that, that, that that's really it.

Thank you. Um and I guess my my second question would just be in the inspection and mitigation segment you talked about the the weaker turnaround activity as as kind of timing related um maybe separate from the the over Supply and the chemical markets but the the specific to the turnarounds. I'm just curious because that's also seasonal. Um, how that's trending in for Q of those? Kind of snapped back? Or, or are you still kind of waiting for turn around releases on on that? Thank you. Thank, I can take that.

Go ahead Kristen um the the turnaround activity is not really material change this quarter for us. We the the the decline we mentioned was related to the timing of the starting and ending of LNG projects, we see a a pretty good multi-year Horizon in construction of LNG facilities. It's an area of particular expertise for the accurate business and um as these projects

Come to an end. And the next 1 starts up there can be gaps there and and that's what we saw in the quarter and and as we indicated the End Market pressure, we saw was really the chemicals but the

The outage business for us is not a spike is some companies and and I I don't really see that as a, a big issue in the quarter or the year.

Okay, all right. Thank you for clarifying that; I appreciate it.

The next question is from Katherine Thompson. From Thompson research group. Please go ahead.

Hi. Thank you for taking my questions today, um, and uh, appreciate the call out that you're, you're also providing the tinq that you filed today.

On the segments. Um, just circling back to the synergies that you outline outlined. Um, appreciate you bumped it up to 25 million. Uh, could you give a little bit more color on the driver for the upside and, uh, how much of this of the components of the synergies are more cost driven? And, uh, do they include any Revenue synergies that can come from the combination?

Morning Catherine. Thanks for the question. Yeah, I would tell you um, I'm very excited about the momentum that the integration team has internally so far.

Given that, you know, this acquisition just recently closed in August and we really didn't kick off the integration until after Labor Day. I'm pleased with the way that we've um, accelerated, the progress and identifying cost synergies. I I would tell you that the 25 is is purely, cost synergies, nothing with Revenue. Uh, it's kind of a different topic for us, um, and it's primarily, um, it's primarily, you know, back office support and the way that we're, you know, organizing the business and supporting the business to sell and, and execute work. So we're going to continue to to push on that number. Um, but excited about the progress we've made so far.

Has. Do you have any even on a ballpark um standpoint any type of early assessment of what the uh Revenue synergies could be.

Yeah. So you know Robbie mentioned some of the long-term strategic planning we're doing and to put it to put a number on that. Um but it's an area of immense Focus within the team right now and we're really excited about some of the early momentum and the opportunities.

You know, we have cross-selling opportunities, you know, intercompany as well as you know, inter segment as well as a cross segment. And so we we are looking to provide some internal Targets on that front, but nothing to share externally yet.

Okay, thank you. Um, and then, uh, on slide 7 of the, the deck that you published today construction to earnings, um, has a nice breakout of the diverse side and Market next for the combined entities. And you know, you can see that data centers is, you know, technically 2% um of the of the mix but, you know, from from our visiting site of of a construction site. We know that there's more involved in than just the center itself. There's the, the power of the utilities. There's, you know, um, kind of the energy side,

um, when you step back, uh, and look at Broad, not just data centers, but the reindeer

What of your main buckets that you've, you've outlined in your in Market. Mix touches on both.

Uh, Data Center buildout and reindeer Trend in the US.

Yeah. So

As it relates to some of the, you know, Mega trends that we're seeing aside from, from data centers. Our Renewables business is up significantly, I think our wind business in the inspection mitigation segment is up, 30% year-over-year.

And um, we also see a lot of opportunities within the manufacturing and Fabrication space, you know, to your point.

Um and and also, I would just add, you know, the the Rope access or the access solution business that we have is, you know, primary you know, largely untapped and there's a tremendous amount of opportunity um opportunity uh to grow that cross the globe. So tal. Is there anything you want to add to that?

Sure. I think, you know, there's a lot of excitement around um, data centers for sure. And we are working on the individual with the individual segments to think of the cross-selling opportunities, things like, acur and technicians performing commissioning tasks, the undergrounding team dealing with power delivery and utilities, uh, coming to, and from, and then, of course, the, the generation of power itself is, is quite exciting as we see more and more companies looking at, um, gas, powered turbines as well as, um, in the future. I'm sure we'll see small package nuclear facilities. So, you know, these are all areas. We're going to pay attention to and um, and Ben. You, you may have some comments on this as well as as you've been working on.

The data center.

Business. Yeah, I mean when we started the data center business, it was with a very narrow range of services. It was really just MEP. And and commissioning as we brought and that was in Asia Pacific, largely. You a couple of years ago, we really invested in in bringing those services in the sector heavily to the States. And what that enabled us to do is start layering in other services. So this, you know, we we talk cross-selling but this has actually been happening happening actively over the last couple of years where we're bringing um, substation design, you know, power delivery, Fire Protection, security structural engineering and then more recently bringing the NDT work and so it it it enables us to generate more Revenue per megawatt of data centers and so it's sort of a double-edged sword. While those traditional Services, we were providing continued to grow rapidly. Um, we layer on these additional Services both here in the US and now International. Um, so so it it's it's a sort of a compounding effect in terms of our growth on the data center side.

Okay um thank you helpful. Uh just 1 follow-up question on the you know, somewhat related to the government uh shut down. You know when we

Based on our conversations with State Departments of Transportation, it does not appear that at least right now their flow has been impacted, um, which would would obviously impact your your infrastructure, you know, roughly a quarter of your your business. I just wanted to confirm that that has also been your experience but that that has been our our feedback from our industry contacts.

Yeah, I think so Katherine.

I think there's some individual um departments within the government that have have had an impact and and some of it is just um

more timing like we said. So I think getting through getting through this and getting things up and running again quickly will will be really helpful.

Well, I I would your thoughts around the the um infrastructure side of the business. That's not where we've been seeing impact.

Okay, great. Um, thank you. I'll jump back in the queue.

The next question is from Josh Chan from UBS. Please go ahead.

Hi. Good morning. Uh, thanks for taking my questions. Um, I know that you said some of the uh Q3 choppiness was timing related, so kind of setting those aside. Um, you know, on the chemical side do you expect that softness to kind of persist into Q4 and into 2026 and does that kind of color that the range that you kind of gave us for, for, for 2026? Thank you.

Good morning, Josh. Thanks for the question. Yeah, I I would say, you know what we're seeing is that we we hope that it's, it's stabilizes in the chemical space. But um, when we look at at our guidance, um, you know, for Q4 and into, and into the next year, uh, I would, I would tell you that, you know, we're we're modeling, you know, a little bit of the same, um, and hope that there's some upside there.

um, but, but in general, um,

Against the Q4 and and next year results, and hope that there's some bright spots within the chemical space soon.

Great. What I can add to that is, yeah, I just add that, um, in the chemical space.

I I thought it'd be helpful to play out what it looks like when when they're under pressure because we know the work we do is really essential services to maintain the Integrity of facilities. And and if our customers are are under stress financially,

you know, it's not wise for them to push inspection very far. So what what we might have seen is if you have 20 in sight, they reduce headcount to 15 or if they have an outage, you know, they might be able to replace some aged equipment. We refer to that as sustaining Capital Investments, and those sustaining Capital Investments have been smaller and, and deferred. And so often, when we see that there can be a bounce back at some point, because these facilities are not closing, they're still operating and uh, they need to operate safely. So, you know, we do expect at some point to be a bounce back because this is essential work that we do.

But that, that makes a lot of sense. Yeah, I appreciate that color, their tail. Um, I guess, um, on the margin front, um I I think the level that you gave for 2026, maybe roughly in the same ballpark as what it might be in 2025. So is there any thoughts on why that wouldn't be maybe a little bit better given the the realization of at least some of the the cost synergies.

Yeah, thanks Josh. So the range that we provided of 15.5 to 16.5 does include uh some slight margin Improvement as well as the impact of of realizing. Some of the synergies that that we've identified

Okay, great that that's encouraging. Yeah, thanks for the color and good luck in Q4.

Thank you.

The next question is from Stephanie Moore from Jeffrey's. Please go ahead.

Hello. This is um Geraldo on for Stephanie Moore. So I think when you have prepared March you discussed some premium prices. I mean it's not specialized services. So um I guess you know thinking about a can of growth in 4025 or 26 and just trying to get a sense for it, you know. Um what was premium impression in the quarter, how should you expect it to run next quarter? And then I guess in 2026 and then just any comments on

I guess, you know and that I think the revenue guide you gave for 26 was 3 to 5%. If you could, you know give us a sense for what percentage of that is. Um,

Or again. Um and then what you need to see the the high end of your even the margin range Target. Thank you.

Good morning. Thank you, thank you. Um, can you clarify the first part of your question again, please?

Yes, so um, discuss some premium pricing and some of your specialized services. So wanted to get a sense for what pricing was in the quarter and then reinforce you, and then, I guess your expectations for 4225 and 2026

Yeah, I think, you know, we we, we're excited to be providing guidance for 2026. It does include some margin Improvement and um,

In terms of um you know Specialized or premium pricing during the quarter. I think, you know we've we've provided um the the adjusted gross margin in the tables.

But I think it's important to point back. Just given the noise with the timing of the acquisition, back to our adjusted evidence. And I think that's the best way to be looking at the business in the short term given given the noise of the transactions.

Got it. Um, I guess I guess it just has a high level I guess, you know, from where the company is today and you know, we we discussed it, I guess the data set an opportunity a little bit, but yes. Where do you? Where do you see the most opportunity for growth in the business? Is it still dying? Or is it, you know, expanding infrastructure. Um, in the Canada or, um, doubling down on geospatial. Love to hear your comments. So, I guess which area of the business gets you most excited and then I guess on a separate point, you know, getting you discussed having a balanced Capital, allocation of view given the pipe transaction. So you know, in the, in The Debt Pay down is a focus but also want to hear any comments on um m&a and you know which side of the business you would like to gain exposure and through m&a.

I can take the first part of that question. Um,

you know, I think the biggest opportunity really realize the potential of these 3 companies working together, these 3 segments working together. There are, there's a lot of white space to fill in the total

Value chain or the life cycle of an asset and, and the engineering design leading to a plan for inspection, leading to an inspection and collecting data. And then back to engineering design. And I know that we have also, um, a lot of white space in Canada as an example, where nv5 has almost no presence and accurate and has a, a very strong uh stable base of customers. So as we fill in these holes to connect,

The.

Engineering, the Consulting, engineering the geospatial, and the inspection mitigation.

Is a great opportunity for us. Of course there are, you know, stronger end markets. Um and as we think about mix of work,

to the extent that

Consulting engineering geospatial the higher gross margin work has higher growth than than that will you know, realize a better mix for us. So

So I I I think there's a lot of work to be done on just filling whitespace between the companies and and following the the end markets things like data centers.

I think Kristen you could probably talk.

to the

Yes, I'll I'll take the question on on Capital allocation, so yeah. We're we're excited about, uh, the opportunity that the additional pipe provides from our flexibility perspective. I would tell you that, we're going to continue to be uh, opportunistic and disciplined from a capital allocation perspective.

We have a very strong pipeline of both on m&a. We closed 2 deals during the quarter and 9 on a year to date basis and we've got a few more in the hopper for for Q4.

And those are businesses that we're buying in the 4 to 6, times range. So, immediately A Creative for us and we'll continue, we'll continue, um, to be deploying Capital there where the the ones we've done so far. This year have been across all 3 segments.

Thank you. And I'll hold back in the queue.

This concludes the question and answer session, I would like to turn the floor back over to tell pisy for closing comments.

Thank you everyone for joining us today and for your thoughtful questions.

We appreciate your continued support and look forward to updating you on our programs as a combined organization next quarter. We're excited about the opportunities ahead, and we remain committed to executing our integration successfully.

While we remain focused on the business, operational excellence and customer service.

Have a great day everyone. Thanks.

This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.

Hi.