TIC Solutions, Inc. Q3 FY2025 earnings call

• Business performance: The new name TIC Solutions reflects the unification of Acuren and NV5 under a single platform. The combined entity is a $2 billion-plus business with balanced exposure across multiple end markets. Teams are collaborating well and laying the groundwork for synergy capture. - Operational highlights: In the Consulting Engineering segment, there was strong momentum across infrastructure, buildings, and data center services. Geospatial data collection and analytics services performed well with steady mid-single-digit growth. The Inspection and Mitigation segment had year-to-date growth with growing run and maintain activity offsetting declines. Cross-selling examples: The consulting engineering team is partnering with the inspection and mitigation team on a nationwide laser scanning and digital blueprinting initiative covering over 1,000 retail sites, and a Digital Twin initiative for a major mining operator in Canada combining site access and inspection expertise with modeling and analytics capabilities.

Inspection and Mitigation segment: approximately $293 million in revenue during the third quarter, down approximately 3% from the prior year period and up approximately 1% year-to-date. Adjusted gross margin for the segment was 28.5% in the third quarter and 27.7% for the full year-to-date period. Consulting Engineering segment: contributed approximately $122 million during the 2-month stub period following the close, and if NV5's results were included for the full quarter, consulting engineering revenue would have been approximately $189 million, roughly 11% higher than the prior year on both a quarterly and year-to-date basis. Geospatial segment: contributed about $62 million during the 2-month period following the close, and including NV5 results for the full quarter, Geospatial would have been about $90 million, approximately 4% higher than the last year and 5% year-to-date. On a combined year-to-date basis, the company delivered year-over-year revenue growth of approximately 5% across its 3 segments, with the Consulting Engineering segment seeing double-digit expansion, data center work for hyperscalers more than doubling over the trailing 12 months, Geospatial data collection and analytics services having steady mid-single-digit growth, and Inspection and Mitigation having year-to-date growth despite certain challenges.

Reaffirming full-year 2025 guidance: revenue in the range of $1.530 billion to $1.565 billion and adjusted EBITDA in the range of $240 million to $250 million. For 2026, expecting revenue to grow between 3% and 5% relative to the 2025 combined company baseline, and adjusted EBITDA margin to be in the range of 15.5% to 16.5% including the impact from cost synergies as they are realized. Increased the cost synergy target from $20 million to $25 million and expect to be at that full run rate by mid-2027 within the original timeline of 18 to 24 months post close.

Potential risks include known and unknown factors that could cause actual results to differ from forward-looking statements. Impact from the timing of capital projects, softness in the chemicals customer base, foreign exchange headwinds, and limited impact from government shutdowns (nonmaterial so far).

Q: Chris Moore from CJS Securities asked about leverage, free cash flow, data center target, and exit of lower-margin customers.

A: Kristin Schultes and Robbie Franklin provided responses.

Q: Justin Hauke from Robert W. Baird asked about geospatial impact from shutdown and turnaround activity in Inspection and Mitigation.

A: Kristin Schultes and Talman Pizzey responded.

Q: Kathryn Thompson from Thompson Research Group asked about synergies, revenue synergies, end market mix.

A: Kristin Schultes and others responded.

Q: Joshua Chan from UBS asked about chemicals softness, margin, and 2026 guidance.

A: Kristin Schultes and Talman Pizzey responded.

Q: Harold Antor on behalf of Stephanie Moore asked about premium pricing, growth areas, and capital allocation.

A: Talman Pizzey and Kristin Schultes responded