Mirion Technologies, Inc. Q2 FY2026 earnings call

Overall Business and Nuclear Power Momentum

• Double-digit order growth drove total backlog expansion to over $1.1 billion as of Q2 2026, which is nearly 40% higher year-over-year. Legacy backlog (excluding Paragon and Certrec acquisition additions) grew 17% year-over-year, with legacy installed base backlog up nearly 40% year-over-year.
• Global nuclear power demand is on a multi-decade growth trajectory: the World Nuclear Association projects total global nuclear capacity will triple to 1.5 terawatts by 2050, a 45% increase from projections a decade ago. Approximately 80% of Mirion's nuclear power revenue comes from the existing installed base, generating recurring revenue for decades.
• Three core demand waves drive near-to-medium term installed base growth: 1) catch-up capital spending for deferred maintenance and spare parts after decades of capital rationing; 2) upgrades for plant life extensions of 10-20 additional years of operation; 3) digital transformation to capture tribal knowledge of retiring workforces and optimize plant operations.
• Recent policy and market developments support nuclear momentum: U.S. NRC streamlining of licensing processes, $17.5 billion DOE loan program for new reactor builds, four advanced reactor pilot projects achieving criticality (beating targets), and new corporate power purchase agreements for nuclear energy. Mirion holds key positions on all four U.S. advanced reactor pilot projects via its acquisitions of Paragon and Certrec.

AI Strategy

• Mirion is investing to capture an early adopter advantage, with AI strategy organized across three core pillars:
  • Accelerate product development: AI compresses software development cycles, improves analytics and testing/compliance workflows, cutting months of manual work while maintaining regulatory rigor.
  • Drive organization-wide efficiencies: AI automates back-office and operational workflows including document review and test plan development, with internal adoption gaining traction.
  • Launch AI-powered customer solutions: Embedding AI across both segments and connecting existing hardware installations to cloud software platforms to deliver customer productivity gains. New launched products include the PlanAI dosimetry platform for medical applications and the Daily QA4 Pro integrated QA solution.

Financial and Operational Highlights

• Consolidated Q2 2026 total revenue was $266.8 million, up 20% year-over-year, with 1% organic growth (19% of growth from acquisitions, primarily Paragon). Adjusted EBITDA was $65.3 million, up 27.5% year-over-year, with margins expanding 150 basis points (over 200 basis points excluding M&A and one-time tariff refund impacts).
• Mirion has used $40 million of its $100 million share repurchase program as of Q2 end, with $40 million remaining. The company generated $49 million of adjusted free cash flow in Q2 2026, with $60 million of H1 2026 adjusted free cash flow, the best H1 result since going public.
• In early July 2026, Mirion was awarded over $50 million of large orders (including a large European installed base order and a DOE order), bringing year-to-date large opportunity awards to $160 million, with $280 million of large opportunities still pending award.

1. Nuclear and Safety Segment:

   • Q2 2026 revenue: $186 million, up 31% year-over-year; organic revenue growth of 2.3% year-over-year. Acquired Paragon contributed 15% revenue growth for the quarter and 27% year-to-date growth.
   • Adjusted EBITDA grew 35% year-over-year to $51.1 million, with adjusted EBITDA margins expanding approximately 70 basis points to 27.5% (after accounting for dilution from the Paragon acquisition).
   • Nuclear power end-market organic revenue was flat for the quarter, with growth in installed base and SMR revenue offset by a decline in new build revenue. Excluding M&A, nuclear power orders grew 50% year-over-year, with half of dollar growth coming from the operating fleet and half from SMRs.
   • This segment contributes approximately 69.7% of total consolidated Q2 2026 revenue.

2. Medical Segment:

   • Q2 2026 revenue: $81 million, down 1% year-over-year, with a 1% organic revenue decline. This missed the prior expectation of low-single-digit organic growth, primarily due to difficult year-over-year comparables from 2025 tariff-driven pull-forward of orders.
   • Adjusted EBITDA grew 3% year-over-year to $30.7 million, with adjusted EBITDA margins expanding year-over-year despite lower revenue, driven by price tailwinds, favorable product mix, and growing software revenue.
   • RTQA (Radiation Therapy Quality Assurance) revenue continues to grow, with mid-single-digit organic growth excluding the 2025 tariff comparables headwind. Nuclear medicine organic revenue declined on delayed hardware demand, though nuclear medicine software delivered strong double-digit order growth in H1 2026. Core dosimetry services organic revenue grew mid-single-digits, offset by tough year-over-year hardware order comparables.
   • This segment contributes approximately 30.3% of total consolidated Q2 2026 revenue.

• Full year 2026 consolidated guidance is maintained overall, with 81% of expected full-year revenue already covered by H1 actual results and backlog scheduled to convert in the second half, matching historical coverage levels.
• H1 2026 organic revenue growth came in at 2%, held back by tough medical comparables from 2025 tariff pull-forwards. Second half 2026 organic revenue growth is expected to accelerate to 7.5% to 11.2% year-over-year, driven by nuclear power (Nuclear and Safety segment) and RTQA (Medical segment).
• Second half 2026 adjusted EBITDA margins are expected to be 27% to 29%, up ~150 basis points year-over-year, with operating leverage driving seasonal margin acceleration. Second half 2026 adjusted free cash flow is forecast at $95 million to $115 million, with the company currently trending toward the high end of the range.
• Q3 2026 consolidated organic revenue growth is expected to be high single-digits: Nuclear and Safety is guided to mid-single-digit organic growth, and Medical is guided to high single-digit organic growth. Consolidated adjusted EBITDA margins are expected to expand year-over-year: Nuclear and Safety margins will contract due to Paragon acquisition dilution, tough 2025 incentive compensation comparables, and higher mix of lower-margin new build revenue, while Medical margins will expand on operating leverage from accelerating revenue growth.
• For the Medical segment full-year 2026, overall segment guidance is maintained despite internal revisions: RTQA growth guidance is raised to double-digit (from prior mid-single-digit), nuclear medicine growth guidance is lowered to mid-single-digit (from prior double-digit) due to near-term hardware demand delays (management views this as a delay, not a permanent decline), and dosimetry full-year organic revenue is now expected to be negative (from prior flat guidance) due to tough 2025 hardware comparables. Core dosimetry service revenue is still expected to grow low-single-digits.

• Large opportunity projects face primarily timing risk, with projects often slipping to later quarters than initially expected, though the overall opportunity pipeline is continuously replenished.
• Geopolitical tensions between the U.S. and China have stalled a legacy 2019 Chinese new build order, which was cancelled in July 2026. The cancellation has no impact on 2026 full-year guidance and an immaterial impact on long-range guidance. Management does not see broad elevated risk to the remainder of the backlog from similar issues, though China's focus on 100% indigenous Hualong reactors has locked Mirion out of most domestic Chinese new build activity.
• SMR commercial deployment timelines have historically been uncertain, though recent order momentum has moved expected growth timelines earlier than previous projections.
• U.S. government shutdowns could impact the timing of upcoming DOE award payments and projects.
• M&A activity creates near-term margin dilution from acquired businesses, though management expects synergies and operating leverage to offset this dilution over time.
• AI investment creates current OpEx pressure, though current annual spend remains material but manageable at ~$5 million per year.

Q: What is Mirion's win probability for its large $10M+ opportunity pipeline, and is M&A pipeline still active?

A: All opportunities in the large pipeline have an estimated win probability of over 50%, meaning Mirion believes it has a "right to win" every opportunity. Mirion won all large opportunities that transacted in Q2 2026, with the main risk being timing delays rather than lost bids. The M&A pipeline remains strong, with many strategically complementary assets available, and M&A will continue to be a core part of Mirion's long-term strategy, as it has completed ~20 deals over the past decade.

Q: Why was the 2019 Chinese new build contract cancelled now, and is there broader risk to other legacy backlog? What is Mirion's outlook for the Chinese market overall?

A: This contract was cancelled because the underlying project has made very little progress and has been impacted by changed U.S.-China trade and geopolitical dynamics. Backlog debooking is exceedingly rare for Mirion, with only 2 prior examples tied to major one-off events, and management sees no elevated broad risk to remaining backlog. Mirion still holds a meaningful installed base position in 50 of 60 operating Chinese reactors, with a stable $8 million per year spare parts business, and still sees opportunities for new build content in non-indigenous Chinese reactor export projects and domestic advanced SMR development.

Q: Is SMR revenue growth expected to continue accelerating in 2027, and what caused the delayed nuclear medicine hardware demand?

A: SMR opportunity flow and order momentum has moved commercial growth timelines earlier than previously expected, and SMR revenue growth is expected to continue outpacing Mirion's overall organic growth rate in 2027 and beyond. Nuclear medicine hardware saw a temporary first half pause due to slowed momentum in customer drug pipeline development. Management remains confident in a second half 2026 pickup, supported by strong double-digit order growth for nuclear medicine software, improved factory efficiency after recent ERP and consolidation projects, and dramatically reduced lead times.

Q: Is the 30% 2028 adjusted EBITDA margin target still achievable despite dilution from the Paragon acquisition, and how much is AI currently costing?

A: The 30% 2028 margin target is still maintained. Half or more of the required margin expansion will come from operating leverage as top-line growth outpaces fixed overhead cost growth. Additional expansion will come from ongoing procurement efficiency gains (1 to 2 points of margin over the period), and internal productivity improvements enabled by AI and operational optimization. Current AI spend is approximately $5 million per year, mostly OpEx with some CapEx, which is material but not disruptive to current margin targets.

Q: What is Mirion's updated medium-term capital allocation strategy as free cash flow improves?

A: If no M&A is completed for the rest of 2026, Mirion expects to end the year at ~2.5x net leverage. M&A remains the top strategic capital allocation priority, with most expected deals being smaller-sized. Net leverage will decline over the course of 2026 regardless of M&A activity, with the exact pace of deleveraging dependent on deal closure.