TIC Solutions, Inc. Q4 FY2025 earnings call

• Leadership transition: Tal Pizzey to retire as CEO, Ben Heraud to succeed effective March 31, 2026, with Tal to serve on Board and advise. • 2025 performance: Combined revenue grew ~4% to $2.1 billion, adjusted EBITDA $312 million, margin 14.8%; completed combination, rebranded, established scale platform. • 2026 priorities: Accelerate organic growth via cross-selling and deeper client engagement; strengthen organizational alignment and cultural cohesion; drive margin expansion through cost management, service mix improvement, utilization. • Segment highlights: CE data center revenue doubled in 2025, near $100 million line of sight; GEO steady growth, strong margins, AI-enabled platform GEO Agent to roll out; I&M lower volumes in Gulf Coast due to LNG timing, chemical activity, tightened account coverage, refined operating model. • Integration: Transitioned to execution phase, on track for $25 million cost synergies, ~half realized in 2026, full synergy run rate by mid-2027.

For Inspection and Mitigation (I&M): Revenue was ~$1.1 billion in 2025, roughly flat with growth in industrial, midstream, wind and automotive offset by localized softness in the Gulf Coast; Q4 revenue was $258 million, down 2% driven by lower outage and capital project spending, adjusted gross margin was 28.2% compared to 26.1% in prior year. For Consulting Engineering (CE): 2025 revenue was $714 million, up ~8% lifted by infrastructure and data center tailwinds; Q4 revenue was $181 million, up 2%, adjusted gross margin was 46.9% in the quarter up 150 basis points against 45.4% in prior year. For Geospatial (GEO): 2025 revenue was $298 million, up ~6% driven by strong commercial demand as well as broadening analytics and software sales; Q4 revenue was $70 million, up 2% with growth impacted due to federal funding lapse, adjusted gross margin of 57.2% in the quarter improved against 50.0% in prior year.

• 2026 revenue range $2.15 billion to $2.25 billion, adjusted EBITDA range $330 million to $355 million, midpoint ~4% revenue growth over 2025; growth in CE and GEO to outpace I&M. • Adjusted EBITDA guidance reflects $8 million investment related to NV5 compensation alignment from stock-based to cash compensation. • First quarter 2026 implied revenue $470 million to $485 million, adjusted EBITDA $55 million to $60 million. • Expect healthy free cash flow conversion, net interest expense $95 million to $105 million, cash taxes $20 million to $30 million, CapEx $60 million to $70 million. • Board authorized $200 million share repurchase program.

• Forward-looking statements subject to known and unknown risks, uncertainties, factors causing actual results to differ; material risks detailed in press release and SEC filings. • Middle East situation and oil price impacts relatively immaterial to business; other market and operational risks not specifically detailed in provided transcript but implied by forward-looking nature.

Q: Can you talk a little bit more about the integration process in a little more detail? Are there specific milestones you're looking to reach in 2026?

A: Kristin Schultes said they're proud of the team's momentum, focus areas include communications, culture, compensation studies, alignment, choosing system implementation partners, on track to meet $25 million savings with half realized in 2026.

Q: On the top line, can you talk more about the biggest potential synergies and go-to-market strategies? And what are you hearing from customers? Is there any cross-selling opportunities that you're seeing that you weren't thinking about initially?

A: Benjamin Heraud said there are exciting cross-selling developments, recent win in data center inspection mitigation is new, seeing white space between businesses creating opportunities, progress seen so far.

Q: A couple of questions on end markets. It seems fair to say that some of the smaller exposure categories are the fastest-growing. In your release and prepared comments, you called out significant organic growth in data centers, and we know that aerospace is another fast-growing end market. Both of these, of course, are higher-margin businesses. Where do you think these businesses could be in the next 12 to 24 months? And could they represent a double-digit percentage of sales?

A: Benjamin Heraud said data center revenue has doubled in 2025, near $100 million line of sight in 2026, aerospace is a fast-growing end market, they're well positioned.

Q: Can you talk about the EBITDA margins in the latest 2026 guidance. IC is lower than what was indicated in your prior outlook given the considerations of the stock comp to cash comp, I get that, but what other reasons for this more vicious margin outlook compared to what you guided 3 months ago, please?

A: Kristin Schultes said the previous range was 15.5% to 16.5% adjusted by stock compensation investment, best for business long term, framework for 2026 guidance shows revenue growth and margin expansion from improved execution and cost synergy realization.

Q: Could you elaborate on the timing and the rationale for this transition? And should we expect any changes in strategies or execution, please?

A: Robbie Franklin said transition contemplated from onset, wanted Ben to learn about Acuren, timing right as building unified culture, Board and team supportive, no expected major changes in strategies or execution.

Q: More broadly, can you address the current situation in the Middle East and the rise in oil prices and how that could impact your business or some of your customers' decisions?

A: Benjamin Heraud said Middle East is ~1% of business, impacts minimal, oil price could lead to additional work on pipelines, good for oil sands business, refinery side stable, run and maintain business has good line of sight.

Q: As it relates to revenue guidance, which just kind of 2% to 7% growth rate, can you talk about the primary variables that could cause this to be either kind of closer to the high end or the low end?

A: Kristin Schultes said high confidence in revenue guidance, thoughtful budgeting process down to division level, bottoms-up approach, confident in delivering against it.

Q: This is Harold Antor on for Stephanie Moore. So a quick question. Just on the pricing front, could you remind us what pricing rack historically, how it trended in the quarter? Just give me we're more disciplined and what, as you focus on the margin profile we want to walk away from some businesses. And then I guess, do you see that you guys are better positioned to be more aggressive on pricing, just given you provide the full suite of products and services today versus mostly competitors we can't compete on our phone.

A: Benjamin Heraud said worked on organization of I&M business in US to be more competitive on pricing, work is value proposition, fixed fee, seeing good momentum, backlog up 10%, strong relationships keep them sticky. Kristin Schultes said Q4 results showed gross margin dollars and percentages up across all segments, high confidence with operational initiatives.

Q: Just wanted to get a sense, is that a '27 event? Is that a '28 event? Or is that just -- is that a longer-term event? Just wanted to get a sense of the timing on that.

A: Benjamin Heraud said $100 million data center revenue line of sight is '26, strong backlog and multiyear programs.

Q: On capital allocation that you guys focused did the buyback. So should we be thinking more of the capital being deployed and buy backs? Or do you expect to do a little bit more on tuck-in side, any organic growth implementation investments that you could provide a little bit more color, that would be great.

A: Benjamin Heraud said robust tuck-in line to continue, Board authorized buyback program for flexibility, opportunistic, tuck-ins create robust operating profile, new geographies and service lines. Kristin Schultes said team maintained focus on integration and small tuck-in strategy, completed 3 small tuck-ins during quarter, 12% for full year.