Thermon Group Holdings, Inc. Q2 FY2026 earnings call

• Second quarter highlights: Revenues up 15% y-o-y, adjusted EBITDA up 29%, backlog up 17% y-o-y. - Strategic initiatives: 3D strategy of decarbonization, digitization, diversification. - Digitization: Genesis Network has over 86,000 installed circuits, leveraged across Thermon Solutions. - Decarbonization: Medium voltage heaters (Quantum product line) with growth potential, first 2 orders totaling nearly $10 million. - Data center market: Progress on liquid load banks (Poseidon and Pontus), quote log ~$30 million, first order secured for Poseidon units.

Revenue for the quarter was $131.7 million, a year-over-year increase of 15%. OpEx revenues were $107 million during the second quarter, an increase of 10% compared to last year, representing 81% of total revenues. Large project revenue was $24.7 million, up 41% from last year. Gross profit was $61 million, up 20% from last year, with gross margin at 46% for the quarter. Adjusted EBITDA was $30.6 million for the quarter, up 29% from the prior year, with adjusted EBITDA margin at 23.2%. On a regional basis, USLAM sales were up 8%, Canada revenue increased by 10%, EMEA revenue doubled, while APAC experienced a 4% decline.

• Raised full year 2026 financial guidance: Revenue in range $506 million to $527 million (4% midpoint growth), adjusted EBITDA in range $112 million to $119 million (6% midpoint growth). - Guidance assumes current tariff structures remain in place and sustained improved business trends.

• Forward-looking statements carry risks of actual results differing materially. - Government shutdowns not impacting as no exposure to government contracts.

Q: About large CapEx projects in LNG and other sectors, and digitization drivers A: Bruce Thames mentioned LNG projects moving from design to execution, LNG pipeline up 140% y-o-y, and digitization differentiates Thermon, increases customer engagement, and is leveraged across multiple solutions Q: Gross margin dynamics and second half outlook A: Jan Schott noted large projects have less favorable margins, but offset by operating leverage, productivity gains, pricing, and tariff mitigation; gross margin will depend on mix going forward Q: Organic vs inorganic growth and government shutdown impact A: Bruce Thames stated priority on organic growth via SG&A and CapEx, but also tracking inorganic opportunities; government shutdowns not a problem as no exposure to government contracts