EMCOR Group, Inc. Q4 FY2025 earnings call

• Fourth quarter had excellent results with strong revenue, earnings, and margin growth. • 2025 was a tremendous year with record revenues, margins, and earnings per share. • Delivered sustained strong results despite complex projects. • Achieved strong operating margins in various segments. • Divested U.K. business, acquired Miller Electric and other companies. • Repurchased shares and increased dividend. • Maintained strong balance sheet and safety record. • RPOs grew driven by various market sectors. • Highlighted long-term growth trends and diversity of demand across segments.

In the fourth quarter, revenues were $4.5 billion (19.7% growth). Adjusted earnings per share were $7.19 per diluted share (13.8% increase from 2024). Adjusted operating income was $440 million (13.1% increase from 2024) with an adjusted operating margin of 9.7%. Full year 2025 had record revenues of nearly $17 billion, record adjusted full year operating margin of 9.4%, and record adjusted diluted earnings per share of $25.87 per share. Mechanical and electrical construction operating margins were 12.8% and 12.1% respectively, with revenue growth of 10.1% and 51.8%. Building Services segment had a 6% operating margin with 6% growth, driven by Mechanical Services. Industrial Services segment positioned to serve rebounding oil and gas industry. RPOs were $13.25 billion, with network and communications RPOs at $4.46 billion (60% year-over-year increase), institutional RPOs up 40% to $1.55 billion, manufacturing and industrial RPOs up 23% to $1.1 billion, water and wastewater RPOs up nearly 60% to $1.1 billion, and hospitality and entertainment RPOs more than doubled year-over-year.

• Expect revenues of $17.75 billion to $18.5 billion in 2026. • Expect diluted earnings per share from $27.25 to $29.25. • Full year operating margin between 9% and 9.4%. • Guidance is based on balanced capital allocation and execution, with confidence in low end absent major economic events and potential for higher end with good execution and margin performance.

Q: Comment on initiatives that compressed margins last quarter and lingering impact in fourth quarter.

A: Headwinds in certain markets were behind us, some spillover into fourth quarter, mix of work with less fixed price and more target price/GMP work.

Q: Regional exposure in network communications data center work.

A: Strong positions in various regions, looking to expand and strengthen capabilities in different areas.

Q: RPO diversification and geographic sector mix.

A: Intentional diversification over time, RPOs are funded contracts, 82% to burn over 12 months.

Q: Semiconductor awards outlook.

A: Some awards in smaller chunks, work planned but contracts not yet signed.

Q: Data center work growth drivers and sustainability.

A: Mechanical growing due to opening new markets, scale in critical infrastructure, and stranded power opportunities.

Q: Fire life safety capabilities and differentiation.

A: Strong design, prefabrication, workforce, and aftermarket component, one of few national players.

Q: Intangible amortization for acquisitions.

A: Danforth has about $2.7 million in 2025 and $14.2 million in 2026, Miller has $40.5 million in 2025 and $33 million in 2026.

Q: Productivity gains and headcount.

A: Revenue growing 2-3x faster than headcount, expecting to continue productivity gains.

Q: Margin guidance and fair value.

A: Mix of risk and return, fixed price risk affects margin, operating conditions and contract mix impact margins.

Q: Revenue growth outlook between organic and acquisition.

A: Lost revenue from U.K. offset by acquisitions, guidance includes organic and acquisition impacts.

Q: M&A pipeline.

A: Broader and more diverse pipeline than last year, focus on Mechanical and Electrical segments, building service, and various deal sizes.