Mirion Technologies, Inc. Q2 FY2025 earnings call

• Q2 results showed continued progress on key financial and strategic objectives, including increasing adjusted free cash flow generation, M&A activity, and optimizing capital structure.
• Announced the acquisition of Certrec, a leading provider of regulatory compliance solutions to the U.S. nuclear industry and wider energy power market.
• Highlighted growing momentum in the Nuclear Power sector, including opportunities in the installed base, new utility scale projects, and SMRs.
• Released the Vital Platform digital ecosystem, LightLink technology, and Apex-Guard software application.
• Hosted the 20th annual Mirion Connect event with record attendance, showcasing innovations and generating leads.

The Nuclear & Safety segment revenue grew 5.8% to $141.7 million, with organic revenue growth of 2.9% in the quarter. The Medical segment revenue grew 10.9% to $81.2 million, with organic revenue growth of 10.1% in the quarter. Second quarter consolidated revenue was $222.9 million, up 7.6% versus Q2 2024, with organic revenue growing 5.4% over the same period. Adjusted EBITDA was $51.2 million, up 4.9% versus last year's second quarter, with the Medical segment being a positive contributor and the Nuclear & Safety segment negatively impacted by nonrecurring items.

• Raised and tightened key 2025 metrics, including total revenue growth (7%-9% vs previous 5%-7%), adjusted EBITDA ($223M-$233M vs previous $215M-$230M), adjusted free cash flow ($95M-$115M), and adjusted EPS ($0.48-$0.52).
• Slightly lowered organic revenue growth but raised organic revenue growth within the Nuclear Power end market.
• Project cash flow timing in the second half may cause net working capital to be a use of cash for the full year.

• Government budgetary headwinds impacting Labs & Research business within the Nuclear & Safety segment.
• Timing slippage in orders, particularly in government-related and new project-related sectors.
• FX-related transactional headwinds in France and project cost increases for a nuclear project in the U.K. negatively impacting margins.
• Uncertainty around hospital reimbursement and budgetary dynamics affecting the medical business.

Q: Can you help us understand the current supply and demand dynamic with your Nuclear Medicine customers?

A: Nuclear Medicine business has core hardware offerings like dose-calibration instruments and software platform ec2. Demand and margin profile are tracking expectations, with the theranostic movement driving growth.

Q: Talking about margin expansion in Medical, where are you relative to the 2030 target?

A: Still committed to 30% EBITDA margin target, with margin expansion seen in Q2. Procurement, operating leverage, and AI are contributors, with a partnership with Cognizant to improve speed to market and efficiency.