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Core Insights - Zacks Premium offers various tools for investors to enhance their stock market strategies and confidence [1] - The Zacks Style Scores are designed to help investors select stocks with the highest potential to outperform the market in the short term [2] Zacks Style Scores Overview - The Style Scores categorize stocks into four main types: Value Score, Growth Score, Momentum Score, and VGM Score [3][4][5][6] - Each stock receives a rating from A to F based on its characteristics, with A indicating the highest potential for outperformance [2] Value Score - The Value Score focuses on identifying undervalued stocks using financial ratios such as P/E, PEG, Price/Sales, and Price/Cash Flow [3] Growth Score - The Growth Score emphasizes a company's financial health and future growth potential, analyzing projected and historical earnings, sales, and cash flow [4] Momentum Score - The Momentum Score is based on price trends and earnings outlook, utilizing factors like recent price changes and monthly earnings estimate shifts to identify high-momentum stocks [5] VGM Score - The VGM Score combines all three Style Scores, providing a comprehensive indicator for investors who utilize multiple investment strategies [6] Zacks Rank Integration - The Zacks Rank is a proprietary model that leverages earnings estimate revisions to guide investors in stock selection, with 1 (Strong Buy) stocks historically yielding an average annual return of +23.75% since 1988 [7][9] - Stocks with a Zacks Rank of 1 or 2 and Style Scores of A or B are recommended for optimal investment success [9][10] Company Spotlight: Emcor Group - Emcor Group is a leading provider of mechanical and electrical construction, industrial and energy infrastructure, and building services [11] - The company holds a Zacks Rank of 2 (Buy) and a VGM Score of B, indicating strong potential for growth [11] - Emcor is projected to achieve year-over-year earnings growth of 11.8% for the current fiscal year, with an upward revision in earnings estimates [12]

Group 1 - Triba Research aims to identify high-quality businesses that can deliver sustainable, double-digit returns over the long term [1] - The firm's strategy emphasizes finding companies with strong competitive advantages, operating in growing markets, maintaining low debt levels, and led by skilled management teams [1] - Triba Research prioritizes long-term value creation while staying informed about the latest developments [1]

Core Insights - EMCOR Group reported record-setting Q2 FY2025 results, with GAAP revenue of $4.30 billion and GAAP diluted EPS of $6.72, both exceeding analyst expectations [1][5] - The company experienced significant year-over-year growth, with revenue increasing by 17.2% and EPS by 28.0% [2][5] - Strong performance was driven by core business execution, growth in project backlog, and positive impacts from recent acquisitions [1][4] Financial Performance - GAAP revenue reached $4.30 billion, surpassing the estimated $4.11 billion, while GAAP EPS was $6.72 compared to the consensus of $5.74 [2][5] - Operating margin improved to 9.6%, up from 9.1% in Q2 2024 [2][5] - Net income rose to $302.2 million, a 22.1% increase from $247.6 million in Q2 2024 [2] Business Overview - EMCOR operates as a leading specialty contractor in the U.S., focusing on mechanical construction, electrical contracting, and industrial maintenance [3] - The company generates 97% of its revenue domestically, allowing it to leverage local market knowledge [3] Strategic Focus - Recent diversification into high-growth sectors such as data centers, healthcare, and sustainable energy is a key strategy for EMCOR [4] - The acquisition of Miller Electric has expanded the company's service offerings and project pipeline [4][6] Project Pipeline - Remaining Performance Obligations (RPOs) surged to a record $11.91 billion, reflecting a 32.4% year-over-year increase [2][8] - Data center projects are a primary growth driver, with significant expansion and complexity in the project scope [11] Segment Performance - U.S. Electrical Construction and Facilities Services revenue increased by 67.5% year-over-year, driven by the Miller Electric acquisition [6] - Mechanical Construction revenue grew by 6% year-over-year, with a record operating margin of 13.6% [6] - Industrial Services faced challenges, with a revenue decline of 13.3% [6] Cost Management - SG&A expenses rose to $418.6 million, or 9.7% of revenue, attributed to increased staffing and acquisition integration costs [7] - Management expects normalization of this expense ratio as integration costs decrease [7] Future Outlook - EMCOR raised its FY2025 revenue guidance to $16.4 billion–$16.9 billion and non-GAAP diluted EPS guidance to $24.50–$25.75 [15] - The company anticipates continued growth supported by a robust project backlog and strong execution [15]

Financial Data and Key Metrics Changes - In Q2 2025, the company reported diluted earnings per share of $6.72, a 28% increase from $5.25 in the prior year [26] - Revenues reached a record $4.3 billion, representing a 17.4% increase year-over-year [6][14] - Operating cash flow was $194 million, with a strong balance sheet showing cash on hand of $486 million and a debt balance of $256.4 million [27][28] Business Line Data and Key Metrics Changes - The US Electrical Construction segment generated record revenues of $1.34 billion, up 67.5% due to strong organic growth and the acquisition of Miller Electric [15][20] - The US Mechanical Construction segment reported revenues of $1.76 billion, a 6% increase, primarily driven by network and communications projects [16][21] - US Building Services revenues increased by 1.6% to $793.2 million, with mechanical services showing robust growth [17][23] - Industrial Services revenues decreased by 13.3% to $281.1 million, impacted by lower field service volumes [18] Market Data and Key Metrics Changes - Remaining performance obligations (RPOs) reached a record $11.9 billion, a 32% increase year-over-year, driven by growth across nearly all market sectors [7][10] - RPOs in network and communications totaled $3.8 billion, while healthcare RPOs reached $1.4 billion, benefiting from the Miller Electric acquisition [11][12] Company Strategy and Development Direction - The company plans to continue disciplined capital allocation, with $430 million spent on share repurchases and $887 million on acquisitions in the first half of 2025 [8][28] - The focus remains on long-term secular trends in key markets, including data centers, healthcare, and manufacturing [29] - The company aims to leverage its strong balance sheet and healthy pipeline of acquisitions to support organic growth [30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strength of the markets served, particularly in manufacturing and healthcare, and expects to outperform non-residential construction [39][41] - There is acknowledgment of macroeconomic uncertainties, particularly around tariffs and trade, but guidance reflects potential impacts [30] - The company anticipates improvements in the Industrial Services segment as the year progresses [10][43] Other Important Information - The company achieved exceptional operating margins of 9.6%, a record for the second quarter [6][19] - SG&A expenses increased by $67.4 million, largely due to incremental expenses from acquired companies and increased headcount [25] Q&A Session Summary Question: Expectations for bookings in the second half of the year - Management indicated that they will continue to win their fair share of business and expect underlying strength to persist [38][39] Question: Activity in the industrial business post-administration change - Management noted an expected strengthening in midstream activity and other energy build-outs, particularly in LNG [43] Question: Strength in the UK market and sustainability - Increased volume and project activity are driving growth, with management expressing confidence in the sustainability of this performance [46][47] Question: M&A environment and pipeline of potential targets - Management confirmed that they are actively looking for acquisitions that fit their criteria and noted a competitive environment for larger deals [50][53] Question: Expansion of mechanical margins - Management attributed margin expansion to improved productivity, project sizes, and effective contract negotiation [54][56] Question: Pipeline perspective on pharma manufacturing - Management reported increased planning and activity in the pharma sector, particularly related to onshoring manufacturing [64][65] Question: Guidance raise implications - The guidance raise reflects strong Q2 performance and expectations for continued margin strength in the second half [70][74] Question: Capacity for prefabrication capabilities - Management confirmed ongoing efforts to expand prefabrication capabilities to enhance efficiency and volume [92][94]

Financial Data and Key Metrics Changes - In Q2 2025, the company reported diluted earnings per share of $6.72, a 28% increase from $5.25 in the prior year [26] - Revenues reached a record $4.3 billion, representing a 17.4% increase year-over-year [6][14] - Operating cash flow was $194 million, with a total of $302.2 million generated year-to-date [27][28] - Remaining performance obligations (RPOs) increased to a record $11.9 billion, up 32% year-over-year [10][11] Business Line Data and Key Metrics Changes - US Electrical Construction revenues were a record $1.34 billion, increasing 67.5% due to strong organic growth and the acquisition of Miller Electric [14][15] - US Mechanical Construction revenues reached $1.76 billion, up 6%, primarily driven by network and communications projects [15][21] - US Building Services revenues increased by 1.6% to $793.2 million, with mechanical services showing robust growth [17][22] - Industrial Services revenues decreased by 13.3% to $281.1 million, impacted by lower field service volumes [18][22] Market Data and Key Metrics Changes - RPOs in the network and communications sector totaled $3.8 billion, driven by data center projects [11] - Healthcare RPOs reached $1.4 billion, bolstered by the acquisition of Miller Electric [11] - Manufacturing and industrial RPOs totaled $1 billion, benefiting from onshoring initiatives and food processing projects [12] - UK Building Services revenues increased by 26.3% to $134.6 million, primarily due to increased service revenues [19] Company Strategy and Development Direction - The company plans to raise its 2025 revenue and earnings guidance, expecting diluted earnings per share between $24.5 and $25.75 [29] - The focus remains on disciplined capital allocation, supported by a strong balance sheet and a healthy pipeline of acquisitions [30] - The company aims to leverage long-term trends in key markets such as data centers, healthcare, and high-tech manufacturing [29] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued strength in the markets served, particularly in manufacturing and healthcare [40] - There is an acknowledgment of macroeconomic uncertainties, particularly around tariffs and trade, but the guidance reflects potential impacts [30] - The company expects improvements in the Industrial Services segment as the year progresses [10][45] Other Important Information - The company spent over $430 million on share repurchases and $887 million on acquisitions in the first half of 2025 [7][28] - Operating income for the quarter was $415.2 million, a 25% increase year-over-year, with an operating margin of 9.6% [19][20] Q&A Session Summary Question: Expectations for bookings in the second half of the year - Management indicated that they will continue to win their fair share of business and expect to see strength in various markets, including manufacturing and healthcare [38][40] Question: Activity in the industrial business post-administration change - Management noted that while the focus remains downstream, they expect strengthening activity, particularly in midstream and energy build-out projects [45] Question: Strength in the UK market and sustainability - The growth in the UK is attributed to increased project activity and service revenues, with management expressing confidence in its sustainability [48][49] Question: M&A environment and pipeline of potential targets - Management confirmed that they are actively looking for acquisition opportunities that align with their values and long-term growth strategy [53][56] Question: Mechanical margins and operating leverage - Management explained that the expansion in mechanical margins is driven by productivity improvements and effective project execution [57][60] Question: Pipeline perspective on pharma manufacturing - Management reported increased activity in pharma manufacturing, particularly related to onshoring initiatives [67][70] Question: Phase II award for semiconductor projects - The Phase II award is significant, valued at over $100 million, and reflects ongoing work at existing sites [71] Question: Guidance raise implications - The guidance raise reflects both strong Q2 performance and expectations for continued margin strength in the second half of the year [76][79] Question: Capacity for prefabrication and growth - Management confirmed ongoing efforts to expand prefabrication capabilities to enhance efficiency and support growth [99][100]

Financial Performance - Revenues for the second quarter of 2025 reached a record $4304 billion, a 174% increase compared to $3667 billion in the second quarter of 2024[7, 10] - Operating income for the second quarter of 2025 was $4152 million, representing 96% of revenues, an increase of $824 million or 248% year-over-year[7, 11] - Diluted earnings per share (EPS) for the second quarter of 2025 were $672, a 280% increase compared to $525 in the second quarter of 2024[7, 12] - For the six months ended June 30, 2025, revenues totaled $8171772 billion, a 151% increase from $7099173 billion in the same period of 2024[13] - Operating income for the first six months of 2025 was $733968 million, a 238% increase from $592761 million in the first six months of 2024[13] Remaining Performance Obligations (RPOs) - Record Remaining Performance Obligations (RPOs) reached $1191 billion, up $292 billion or 324% year-over-year, and up $181 billion or 179% from December 2024[7, 8, 9] Segment Performance - US Electrical Construction & Facilities Services revenues were $13402 million, a 5% increase[10] - US Mechanical Construction & Facilities Services revenues were $17553 million, a 6% increase[10] - US Building Services revenues were $7932 million, a 16% increase[10] Guidance - The company's current revenue guidance for 2025 is $164 billion to $169 billion[15] - The company's current operating margin guidance for 2025 is 90% to 94%[15] - The company's current non-GAAP diluted EPS guidance for 2025 is $2450 to $2575[15]

Financial Performance Overview [Q2 2025 Performance Highlights](index=1&type=section&id=Q2%202025%20Performance%20Highlights) EMCOR Group reported record Q2 2025 results with significant growth in revenues, diluted EPS, and RPOs, leading to updated full-year guidance with increased non-GAAP diluted EPS Q2 2025 Key Performance Indicators | Metric | Q2 2025 Value | Year-over-Year Increase | | :--- | :--- | :--- | | Revenues | $4.30 billion | 17.4% | | Diluted EPS | $6.72 | 28.0% | | Remaining Performance Obligations (RPOs) | $11.91 billion | 32.4% | Updated Full-Year 2025 Guidance | Metric | Previous Guidance (4/30/25) | Current Guidance (7/31/25) | | :--- | :--- | :--- | | Revenues | $16.1B - $16.9B | $16.4B - $16.9B | | Non-GAAP Diluted EPS | $22.65 - $24.00 | $24.50 - $25.75 | [Q2 2025 Detailed Financial Results](index=1&type=section&id=Q2%202025%20Detailed%20Financial%20Results) In Q2 2025, revenues grew 17.4% to $4.30 billion, and net income rose to $302.2 million, with operating income increasing to $415.2 million and operating margin expanding to 9.6% Q2 2025 vs. Q2 2024 Financial Comparison | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Revenues | $4.30 billion | $3.67 billion | | Net Income | $302.2 million | $247.6 million | | Diluted EPS | $6.72 | $5.25 | | Operating Income | $415.2 million | $332.8 million | | Operating Margin | 9.6% | 9.1% | - Selling, general and administrative (SG&A) expenses were **$418.6 million**, representing **9.7% of revenues**, a slight increase from 9.6% in Q2 2024[4](index=4&type=chunk) [First Six Months 2025 Financial Results](index=2&type=section&id=First%20Six%20Months%202025%20Financial%20Results) For the first half of 2025, revenues increased by 15.1% to $8.17 billion, with net income at $542.8 million, and non-GAAP diluted EPS reaching $12.11 after adjusting for acquisition costs First Six Months 2025 vs. 2024 Financial Comparison | Metric | H1 2025 (GAAP) | H1 2024 (GAAP) | | :--- | :--- | :--- | | Revenues | $8.17 billion | $7.10 billion | | Net Income | $542.8 million | $444.7 million | | Diluted EPS | $11.96 | $9.41 | | Operating Income | $734.0 million | $592.8 million | | Operating Margin | 9.0% | 8.3% | - The results for the first six months of 2025 include **$9.4 million** (**$6.9 million after-tax**) in transaction costs related to the acquisition of Miller Electric Company[8](index=8&type=chunk) - Excluding acquisition costs, non-GAAP operating income for H1 2025 was **$743.3 million**, with a non-GAAP operating margin of **9.1%**[9](index=9&type=chunk) Operational Performance and Business Outlook [Management Commentary](index=2&type=section&id=Management%20Commentary) The CEO highlighted an outstanding second quarter, driven by strong execution and robust demand for specialty contracting services, with Electrical and Mechanical Construction segments achieving record revenues and operating margins - Management attributes the strong performance to a **17.4% quarterly revenue growth** and an exceptional **9.6% operating margin**, driven by solid execution across diverse sectors[7](index=7&type=chunk) - The Electrical Construction segment's quarterly revenue grew **67.5%** with a record Q2 operating margin of **11.8%**[12](index=12&type=chunk) - The Mechanical Construction segment also achieved record revenues and record quarterly operating margins of **13.6%**[12](index=12&type=chunk) [Remaining Performance Obligations (RPOs)](index=2&type=section&id=Remaining%20Performance%20Obligations%20%28RPOs%29) As of June 30, 2025, RPOs reached a record $11.91 billion, a significant year-over-year increase, with growth across most market sectors, partially offset by progress in High-Tech Manufacturing - RPOs reached a record **$11.91 billion** as of June 30, 2025, up from **$9.00 billion** a year prior[6](index=6&type=chunk) - Significant RPO growth was seen in the Network and Communications, Institutional, Manufacturing and Industrial, Healthcare, and Hospitality and Entertainment sectors[6](index=6&type=chunk) - RPOs in the High-Tech Manufacturing sector decreased due to progress on existing construction projects[6](index=6&type=chunk) [Full-Year 2025 Guidance](index=3&type=section&id=Full-Year%202025%20Guidance) EMCOR has updated its full-year 2025 guidance, narrowing the revenue forecast to between $16.4 billion and $16.9 billion and increasing the non-GAAP diluted EPS forecast to a range of $24.50 to $25.75 Full-Year 2025 Guidance Update | Metric | Current Guidance (7/31/25) | Previous Guidance (4/30/25) | | :--- | :--- | :--- | | Revenues | $16.4B - $16.9B | $16.1B - $16.9B | | Operating Margin | 9.0% - 9.4% | 8.5% - 9.2% | | Non-GAAP Diluted EPS* | $24.50 - $25.75 | $22.65 - $24.00 | *Excludes acquisition related transaction costs Segment Performance [Segment Revenues](index=8&type=section&id=Segment%20Revenues) For Q2 2025, total revenues were driven by strong growth in the U.S. Electrical Construction segment, which increased to $1.34 billion, while the U.S. Mechanical Construction segment remained the largest contributor at $1.76 billion Revenues by Segment - Q2 (in thousands) | Segment | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | U.S. Electrical Construction | $1,340,247 | $799,994 | | U.S. Mechanical Construction | $1,755,258 | $1,655,181 | | U.S. Building Services | $793,259 | $781,108 | | U.S. Industrial Services | $281,072 | $324,047 | | U.K. Building Services | $134,564 | $106,567 | Revenues by Segment - Six Months (in thousands) | Segment | H1 2025 | H1 2024 | | :--- | :--- | :--- | | U.S. Electrical Construction | $2,428,091 | $1,564,705 | | U.S. Mechanical Construction | $3,327,860 | $3,082,846 | | U.S. Building Services | $1,535,882 | $1,562,268 | | U.S. Industrial Services | $640,074 | $678,100 | | U.K. Building Services | $239,865 | $211,254 | [Segment Operating Income](index=9&type=section&id=Segment%20Operating%20Income) In Q2 2025, operating income was led by the U.S. Mechanical Construction segment at $238.7 million and the U.S. Electrical Construction segment at $157.6 million, both showing significant growth and margin expansion, while U.S. Industrial Services reported a small operating loss Operating Income by Segment - Q2 (in thousands) | Segment | Q2 2025 Income | Q2 2025 Margin | Q2 2024 Income | Q2 2024 Margin | | :--- | :--- | :--- | :--- | :--- | | U.S. Electrical Construction | $157,644 | 11.8% | $88,577 | 11.1% | | U.S. Mechanical Construction | $238,737 | 13.6% | $213,440 | 12.9% | | U.S. Building Services | $50,045 | 6.3% | $46,839 | 6.0% | | U.S. Industrial Services | ($419) | (0.1)% | $12,746 | 3.9% | | U.K. Building Services | $8,425 | 6.3% | $5,777 | 5.4% | Operating Income by Segment - Six Months (in thousands) | Segment | H1 2025 Income | H1 2025 Margin | H1 2024 Income | H1 2024 Margin | | :--- | :--- | :--- | :--- | :--- | | U.S. Electrical Construction | $293,701 | 12.1% | $180,166 | 11.5% | | U.S. Mechanical Construction | $425,484 | 12.8% | $364,160 | 11.8% | | U.S. Building Services | $86,468 | 5.6% | $80,298 | 5.1% | | U.S. Industrial Services | $6,341 | 1.0% | $30,712 | 4.5% | | U.K. Building Services | $13,412 | 5.6% | $11,154 | 5.3% | Consolidated Financial Statements [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) The statement of operations shows a 17.4% revenue increase for Q2 2025 and a 15.1% increase for the first six months, with improved gross profit margins and substantial net income growth, leading to diluted EPS of $6.72 for the quarter and $11.96 for the six-month period Key Income Statement Items (in thousands) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Revenues | $4,304,400 | $3,666,897 | $8,171,772 | $7,099,173 | | Gross Profit | $833,771 | $684,001 | $1,556,489 | $1,273,310 | | Operating Income | $415,212 | $332,808 | $733,968 | $592,761 | | Net Income | $302,160 | $247,572 | $542,837 | $444,721 | | Diluted EPS | $6.72 | $5.25 | $11.96 | $9.41 | [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets increased to $8.40 billion from $7.72 billion at year-end 2024, primarily due to acquisitions, while cash and cash equivalents decreased significantly to $486.0 million and total liabilities grew to $5.35 billion Key Balance Sheet Items (in thousands) | Metric | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $485,988 | $1,339,550 | | Accounts receivable, net | $4,114,857 | $3,577,537 | | Goodwill | $1,351,824 | $1,018,415 | | Total Assets | $8,400,480 | $7,716,473 | | Total Liabilities | $5,346,908 | $4,777,779 | | Total Equity | $3,053,572 | $2,938,694 | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the first six months of 2025, net cash provided by operating activities decreased to $302.2 million, while substantial cash was used in investing activities for acquisitions and in financing activities for common stock repurchases Key Cash Flow Items - Six Months Ended June 30 (in thousands) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $302,158 | $411,958 | | Net cash used in investing activities | ($938,825) | ($211,139) | | Net cash used in financing activities | ($231,125) | ($181,444) | | Decrease in cash | ($853,234) | $18,448 | - Major uses of cash in H1 2025 included **$887.2 million** for business acquisitions and **$432.2 million** for common stock repurchases[25](index=25&type=chunk) Supplemental Information [Reconciliation of Non-GAAP Measures](index=10&type=section&id=Reconciliation%20of%20Non-GAAP%20Measures) The company provides a reconciliation of non-GAAP measures to GAAP, primarily adjusting for transaction expenses related to the Miller Electric acquisition, resulting in non-GAAP operating income of $743.3 million and non-GAAP diluted EPS of $12.11 for the first six months of 2025 - Organic revenue growth for Q2 2025 was **8.4%**, after excluding a **9.0%** contribution from acquisitions. For the first six months, organic growth was **6.9%**[32](index=32&type=chunk) Reconciliation of H1 2025 Non-GAAP Operating Income (in thousands) | Metric | Amount | | :--- | :--- | | GAAP operating income | $733,968 | | Transaction expenses (Miller Electric) | $9,353 | | **Non-GAAP operating income** | **$743,321** | Reconciliation of H1 2025 Non-GAAP Diluted EPS | Metric | Amount | | :--- | :--- | | GAAP diluted EPS | $11.96 | | Transaction expenses (Miller Electric) | $0.20 | | Tax effect of transaction expenses | ($0.05) | | **Non-GAAP diluted EPS** | **$12.11** |

Core Insights - Emcor Group (EME) reported quarterly earnings of $6.72 per share, exceeding the Zacks Consensus Estimate of $5.68 per share, and showing an increase from $5.25 per share a year ago, resulting in an earnings surprise of +18.31% [1] - The company achieved revenues of $4.3 billion for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 4.95%, compared to $3.67 billion in the same quarter last year [2] - Emcor Group's stock has increased approximately 40.9% year-to-date, significantly outperforming the S&P 500's gain of 8.2% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $6.23 on revenues of $4.18 billion, and for the current fiscal year, it is $23.59 on revenues of $16.42 billion [7] - The estimate revisions trend for Emcor Group was mixed prior to the earnings release, resulting in a Zacks Rank 3 (Hold), indicating expected performance in line with the market [6] Industry Context - The Building Products - Heavy Construction industry, to which Emcor Group belongs, is currently ranked in the top 4% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

[PART I. - Financial Information](index=5&type=section&id=PART%20I.%20-%20Financial%20Information.) Presents EMCOR's Q2 2025 unaudited consolidated financial statements, management's discussion, market risk, and internal controls [Item 1. Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements.) Presents EMCOR's unaudited consolidated financial statements for Q2 2025, detailing balance sheets, income, cash flow, and equity [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) Details EMCOR's financial position, including assets, liabilities, and equity, as of June 30, 2025, and December 31, 2024 | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | Change (vs. Dec 31, 2024) | | :--------------------------------- | :----------------------------- | :------------------------------- | :-------------------------------- | | **Assets** | | | | | Cash and cash equivalents | $485,988 | $1,339,550 | $(853,562) | | Accounts receivable, net | $4,114,857 | $3,577,537 | $537,320 | | Contract assets | $348,048 | $284,791 | $63,257 | | Total current assets | $5,176,646 | $5,389,189 | $(212,543) | | Property, plant, and equipment, net | $241,947 | $207,489 | $34,458 | | Operating lease right-of-use assets | $392,987 | $316,128 | $76,859 | | Goodwill | $1,351,824 | $1,018,415 | $333,409 | | Identifiable intangible assets, net | $1,082,028 | $648,180 | $433,848 | | Total assets | $8,400,480 | $7,716,473 | $684,007 | | **Liabilities** | | | | | Accounts payable | $1,117,733 | $937,087 | $180,646 | | Contract liabilities | $2,133,872 | $2,047,540 | $86,332 | | Total current liabilities | $4,394,538 | $4,153,863 | $240,675 | | Borrowings under revolving credit facility | $250,000 | — | $250,000 | | Total liabilities | $5,346,908 | $4,777,779 | $569,129 | | **Equity** | | | | | Total equity | $3,053,572 | $2,938,694 | $114,878 | [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Presents EMCOR's revenues, gross profit, operating income, and net income for the three and six months ended June 30, 2025 and 2024 | Metric | 3 Months Ended June 30, 2025 (in thousands) | 3 Months Ended June 30, 2024 (in thousands) | YoY Change | 6 Months Ended June 30, 2025 (in thousands) | 6 Months Ended June 30, 2024 (in thousands) | YoY Change | | :--------------------------------- | :------------------------------------------ | :------------------------------------------ | :--------- | :------------------------------------------ | :------------------------------------------ | :--------- | | Revenues | $4,304,400 | $3,666,897 | 17.4% | $8,171,772 | $7,099,173 | 15.1% | | Gross profit | $833,771 | $684,001 | 21.9% | $1,556,489 | $1,273,310 | 22.2% | | Operating income | $415,212 | $332,808 | 24.8% | $733,968 | $592,761 | 23.8% | | Net income | $302,160 | $247,572 | 22.0% | $542,837 | $444,721 | 22.1% | | Basic EPS | $6.74 | $5.27 | 27.9% | $12.00 | $9.45 | 27.0% | | Diluted EPS | $6.72 | $5.25 | 28.0% | $11.96 | $9.41 | 27.1% | | Dividends declared per common share | $0.25 | $0.25 | 0.0% | $0.50 | $0.43 | 16.3% | [Condensed Consolidated Statements of Comprehensive Income](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) Presents EMCOR's net income and other comprehensive income, including foreign currency adjustments, for the periods ended June 30, 2025 and 2024 | Metric | 3 Months Ended June 30, 2025 (in thousands) | 3 Months Ended June 30, 2024 (in thousands) | 6 Months Ended June 30, 2025 (in thousands) | 6 Months Ended June 30, 2024 (in thousands) | | :------------------------------------ | :------------------------------------------ | :------------------------------------------ | :------------------------------------------ | :------------------------------------------ | | Net income | $302,160 | $247,572 | $542,837 | $444,721 | | Foreign currency translation adjustments | $11,190 | $245 | $16,532 | $(971) | | Post-retirement plans, amortization of actuarial loss | $506 | $482 | $983 | $966 | | Other comprehensive income (loss) | $11,696 | $727 | $17,515 | $(5) | | Comprehensive income | $313,856 | $248,299 | $560,352 | $444,716 | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Outlines EMCOR's cash flows from operating, investing, and financing activities for the six months ended June 30, 2025 and 2024 | Cash Flow Activity | 6 Months Ended June 30, 2025 (in thousands) | 6 Months Ended June 30, 2024 (in thousands) | YoY Change (in thousands) | | :------------------------------------------ | :------------------------------------------ | :------------------------------------------ | :------------------------ | | Net cash provided by operating activities | $302,158 | $411,958 | $(109,800) | | Net cash used in investing activities | $(938,825) | $(211,139) | $(727,686) | | Net cash used in financing activities | $(231,125) | $(181,444) | $(49,681) | | Effect of exchange rate changes on cash | $14,558 | $(927) | $15,485 | | (Decrease) increase in cash, cash equivalents, and restricted cash | $(853,234) | $18,448 | $(871,682) | | Cash, cash equivalents, and restricted cash at end of period | $487,161 | $808,198 | $(321,037) | - The decrease in operating cash flow was due to an increase in working capital, primarily on construction projects, as the company worked through upfront payments[173](index=173&type=chunk) - The significant increase in cash used in investing activities was predominantly due to the acquisition of Miller Electric[174](index=174&type=chunk) - The increase in cash used in financing activities was primarily due to a **$283.2 million** increase in common stock repurchases, partially offset by **$250.0 million** in net borrowings under the revolving credit facility[175](index=175&type=chunk) [Condensed Consolidated Statements of Equity](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Equity) Details changes in EMCOR's total equity, including net income, other comprehensive income, and share repurchases, for the six months ended June 30, 2025 | Metric | Balance, Dec 31, 2024 (in thousands) | Net Income (6 months) | Other Comprehensive Income (6 months) | Repurchases of Common Stock (6 months) | Common Stock Dividends (6 months) | Balance, June 30, 2025 (in thousands) | | :------------------------------------ | :----------------------------------- | :-------------------- | :------------------------------------ | :------------------------------------- | :---------------------------------- | :------------------------------------ | | Total EMCOR Group, Inc. Stockholders' Equity | $2,937,657 | $542,837 | $17,515 | $(423,319) | $(22,640) | $3,051,601 | | Noncontrolling interests | $1,037 | — | — | — | — | $1,971 | | Total Equity | $2,938,694 | $542,837 | $17,515 | $(423,319) | $(22,640) | $3,053,572 | [Notes to Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Provides detailed explanations and disclosures for the consolidated financial statements, covering accounting policies, acquisitions, and other financial information [NOTE 1 - Basis of Presentation](index=11&type=section&id=NOTE%201%20-%20Basis%20of%20Presentation) The unaudited consolidated financial statements are prepared under Form 10-Q, including normal recurring adjustments, with Q2 2025 results not indicative of the full year - Unaudited consolidated financial statements are prepared in accordance with Form 10-Q and Rule 10-01 of Regulation S-X, with certain information and note disclosures condensed or omitted[29](index=29&type=chunk) - The statements include all adjustments (consisting only of those of a normal recurring nature) necessary to present fairly the financial position and results of operations[30](index=30&type=chunk) - Results for the three and six months ended June 30, 2025, are not necessarily indicative of the results to be expected for the full year ending December 31, 2025[30](index=30&type=chunk) [NOTE 2 - New Accounting Pronouncements](index=11&type=section&id=NOTE%202%20-%20New%20Accounting%20Pronouncements) Discusses new FASB ASUs from December 2023 and November 2024, enhancing income tax and expense disclosures, with no expected financial impact - FASB issued ASU in December 2023 to enhance income tax disclosures, requiring additional information within income tax rate reconciliation and expanded disclosure of income taxes paid[31](index=31&type=chunk) - This ASU is effective for fiscal years beginning after December 15, 2024, and is not expected to impact financial position or results of operations, but the company is evaluating its impact on disclosures[31](index=31&type=chunk) - FASB issued ASU in November 2024 requiring disaggregated disclosures for certain income statement expense line items (inventory purchases, employee compensation, depreciation, intangible asset amortization, selling expenses), effective for fiscal years beginning after December 15, 2026[32](index=32&type=chunk) [NOTE 3 - Revenue from Contracts with Customers](index=11&type=section&id=NOTE%203%20-%20Revenue%20from%20Contracts%20with%20Customers) EMCOR recognizes revenue over time using a five-step model, with remaining performance obligations totaling **$11.91 billion** as of June 30, 2025 - Revenue is recognized when promised goods or services are transferred to customers, applying a five-step model[33](index=33&type=chunk) - Revenue is generally recognized over time for construction contracts (cost-to-cost input method) and service contracts (straight-line or output method)[46](index=46&type=chunk)[47](index=47&type=chunk)[49](index=49&type=chunk) - Changes in estimates of transaction prices are recognized on a cumulative catch-up basis, potentially resulting in revenue recognition or reversal in current periods for prior period performance[42](index=42&type=chunk)[50](index=50&type=chunk) [Disaggregation of Revenues](index=15&type=section&id=Disaggregation%20of%20Revenues) Provides a detailed breakdown of EMCOR's revenues by operating segment for the three and six months ended June 30, 2025 and 2024 | Segment | 3 Months Ended June 30, 2025 (in thousands) | 3 Months Ended June 30, 2024 (in thousands) | YoY Change (in thousands) | YoY Change (%) | | :------------------------------------------ | :------------------------------------------ | :------------------------------------------ | :------------------------ | :------------- | | US electrical construction and facilities services | $1,340,247 | $799,994 | $540,253 | 67.5% | | US mechanical construction and facilities services | $1,755,258 | $1,655,181 | $100,077 | 6.0% | | US building services | $793,259 | $781,108 | $12,151 | 1.6% | | US industrial services | $281,072 | $324,047 | $(42,975) | -13.3% | | UK building services | $134,564 | $106,567 | $27,997 | 26.3% | | **Consolidated revenues** | **$4,304,400** | **$3,666,897** | **$637,499** | **17.4%** | | Segment | 6 Months Ended June 30, 2025 (in thousands) | 6 Months Ended June 30, 2024 (in thousands) | YoY Change (in thousands) | YoY Change (%) | | :------------------------------------------ | :------------------------------------------ | :------------------------------------------ | :------------------------ | :------------- | | US electrical construction and facilities services | $2,428,091 | $1,564,705 | $863,386 | 55.2% | | US mechanical construction and facilities services | $3,327,860 | $3,082,846 | $245,014 | 7.9% | | US building services | $1,535,882 | $1,562,268 | $(26,386) | -1.7% | | US industrial services | $640,074 | $678,100 | $(38,026) | -5.6% | | UK building services | $239,865 | $211,254 | $28,611 | 13.5% | | **Consolidated revenues** | **$8,171,772** | **$7,099,173** | **$1,072,589** | **15.1%** | - The United States electrical construction and facilities services segment saw a significant revenue increase, primarily in the network and communications market sector (data centers) and healthcare, commercial, institutional, and transportation sectors[145](index=145&type=chunk) - The United States mechanical construction and facilities services segment also experienced strong growth in the network and communications market sector (data centers), manufacturing and industrial, and hospitality and entertainment sectors, partially offset by declines in high-tech manufacturing and commercial sectors[146](index=146&type=chunk) - The United States industrial services segment's revenue decreased due to lower turnaround project demand and fewer new build heat exchanger sales in its field and shop services divisions[148](index=148&type=chunk) [Accounts Receivable and Allowance for Credit Losses](index=19&type=section&id=Accounts%20Receivable%20and%20Allowance%20for%20Credit%20Losses) Details the changes in EMCOR's allowance for credit losses, including provisions and write-offs, for the six months ended June 30, 2025 | Metric | Amount (in thousands) | | :------------------------------------ | :-------------------- | | Balance at December 31, 2024 | $34,957 | | Provision for credit losses | $9,029 | | Amounts written off against the allowance, net of recoveries | $(16,465) | | Balance at June 30, 2025 | $27,521 | - The decrease in allowance for credit losses was due to write-offs of previously reserved receivables in the U.S. building services segment, partially offset by a **$5.0 million** increase in the allowance for credit losses in the U.S. industrial services segment[67](index=67&type=chunk) [Contract Assets and Contract Liabilities](index=20&type=section&id=Contract%20Assets%20and%20Contract%20Liabilities) Presents EMCOR's contract assets and liabilities, highlighting the impact of acquisitions and revenue recognition on construction projects | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------------------------- | :----------------------------- | :------------------------------- | | Contract assets, current | $348,048 | $284,791 | | Contract liabilities, current | $(2,133,872) | $(2,047,540) | | Contract liabilities, non-current | $(3,202) | $(1,526) | | Net contract liabilities | $(1,789,026) | $(1,764,275) | - Excluding acquisitions, net contract liabilities decreased by approximately **$45.1 million** due to revenue recognition on previously billed-ahead construction projects and being underbilled on certain contracts[71](index=71&type=chunk) - Acquisitions in 2025 increased contract assets by approximately **$31.2 million** and contract liabilities by approximately **$101.0 million**[71](index=71&type=chunk) [Transaction Price Allocated to Remaining Unsatisfied Performance Obligations](index=21&type=section&id=Transaction%20Price%20Allocated%20to%20Remaining%20Unsatisfied%20Performance%20Obligations) Details total remaining performance obligations by segment, totaling **$11.91 billion** as of June 30, 2025, with most expected within one year | Segment | June 30, 2025 (in thousands) | % of Total | | :------------------------------------------ | :----------------------------- | :--------- | | US electrical construction and facilities services | $4,198,244 | 35% | | US mechanical construction and facilities services | $5,975,201 | 50% | | US building services | $1,313,603 | 11% | | US industrial services | $221,102 | 2% | | Total US operations | $11,708,150 | 98% | | UK building services | $206,238 | 2% | | **Total operations** | **$11,914,388** | **100%** | - Remaining performance obligations increased by approximately **$1.81 billion** from December 31, 2024, to June 30, 2025[164](index=164&type=chunk) - Acquisitions, primarily Miller Electric, contributed approximately **$0.96 billion** to the increase in remaining performance obligations[164](index=164&type=chunk) - Approximately **$9.38 billion** (**78.7%**) of the remaining performance obligations are expected to be recognized as revenue within one year[76](index=76&type=chunk) [NOTE 4 - Acquisitions of Businesses](index=22&type=section&id=NOTE%204%20-%20Acquisitions%20of%20Businesses) EMCOR acquired Miller Electric for **$868.6 million** in H1 2025, significantly expanding electrical construction, alongside three other companies for **$38.8 million** - On February 3, 2025, EMCOR acquired Miller Electric Company for approximately **$868.6 million** in cash, enhancing electrical construction capabilities in high-growth markets[78](index=78&type=chunk) - Miller Electric contributed **$500.4 million** in revenues and **$21.8 million** in operating income (net of **$18.4 million** amortization) from February 3 to June 30, 2025[78](index=78&type=chunk) - Three other companies were acquired in the first half of 2025 for **$38.8 million**, adding building automation, fire protection, and mechanical construction services, primarily integrated into the U.S. mechanical construction and facilities services segment[83](index=83&type=chunk) Miller Electric Acquired Assets (June 30, 2025) | Miller Electric Acquired Assets (June 30, 2025) | Amount (in thousands) | | :------------------------------------------ | :-------------------- | | Cash and cash equivalents | $18,394 | | Accounts receivable | $222,355 | | Contract assets | $23,120 | | Goodwill | $317,354 | | Identifiable intangible assets | $475,000 | | Total assets acquired | $1,104,945 | | Total liabilities assumed | $235,439 | | Net assets acquired | $868,572 | [NOTE 5 - Earnings Per Share](index=24&type=section&id=NOTE%205%20-%20Earnings%20Per%20Share) Diluted EPS increased to **$6.72** (QoQ) and **$11.96** (YoY H1) due to higher net income and reduced weighted average shares from repurchases | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net income (in thousands) | $302,160 | $247,572 | $542,837 | $444,721 | | Weighted average shares outstanding (basic) | 44,833,638 | 46,972,032 | 45,227,690 | 47,053,768 | | Shares used to compute diluted EPS | 44,990,388 | 47,159,660 | 45,380,744 | 47,236,738 | | Basic EPS | $6.74 | $5.27 | $12.00 | $9.45 | | Diluted EPS | $6.72 | $5.25 | $11.96 | $9.41 | - Diluted EPS benefited from a reduced weighted average share count due to common stock repurchases made throughout 2024 and the first half of 2025[138](index=138&type=chunk) [NOTE 6 - Inventories](index=25&type=section&id=NOTE%206%20-%20Inventories) Inventories increased to **$108.2 million** at June 30, 2025, driven by higher raw materials and construction materials | Inventory Category | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------------------------------- | :----------------------------- | :------------------------------- | | Raw materials and construction materials | $100,369 | $83,935 | | Work in process | $7,788 | $11,732 | | Total Inventories | $108,157 | $95,667 | [NOTE 7 - Debt](index=25&type=section&id=NOTE%207%20-%20Debt) EMCOR had **$250.0 million** in borrowings under its **$1.3 billion** revolving credit facility as of June 30, 2025, with **$978.5 million** available capacity | Debt Type | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------------------------- | :----------------------------- | :------------------------------- | | Revolving credit facility | $250,000 | — | | Finance lease liabilities | $6,386 | $6,095 | | Total debt | $256,386 | $6,095 | - The 2023 Revolving Credit Facility provides **$1.3 billion** in capacity, with **$250.0 million** in direct borrowings and **$71.5 million** in outstanding letters of credit as of June 30, 2025, leaving **$978.5 million** available[90](index=90&type=chunk)[91](index=91&type=chunk)[170](index=170&type=chunk) - The interest rate on borrowings under the revolving credit facility was **5.54%** at June 30, 2025[92](index=92&type=chunk) - The company was in compliance with all financial covenants of the 2023 Credit Agreement as of June 30, 2025, and December 31, 2024[94](index=94&type=chunk) [NOTE 8 - Fair Value Measurements](index=26&type=section&id=NOTE%208%20-%20Fair%20Value%20Measurements) EMCOR categorizes fair value measurements into a three-level hierarchy, with recurring assets as Level 1 and nonrecurring acquisition-related intangibles as Level 3 - Fair value hierarchy categorizes assets and liabilities into Level 1 (quoted prices in active markets), Level 2 (observable inputs other than Level 1), and Level 3 (significant unobservable inputs)[96](index=96&type=chunk)[97](index=97&type=chunk) Fair Value Measurements (June 30, 2025) | Asset Category | Level 1 (in thousands) | Level 2 (in thousands) | Level 3 (in thousands) | Total (in thousands) | | :-------------------------- | :--------------------- | :--------------------- | :--------------------- | :------------------- | | Cash and cash equivalents | $485,988 | — | — | $485,988 | | Deferred compensation plan assets | $72,351 | — | — | $72,351 | | Restricted cash | $1,173 | — | — | $1,173 | | **Total** | **$559,512** | **—** | **—** | **$559,512** | - Identifiable intangible assets from acquisitions (customer relationships, contract backlog, trade name) are measured at fair value using Level 3 inputs and valuation techniques like relief from royalty and multi-period excess earnings methods[101](index=101&type=chunk)[102](index=102&type=chunk) [NOTE 9 - Income Taxes](index=27&type=section&id=NOTE%209%20-%20Income%20Taxes) Income tax provision increased due to higher income, while the effective tax rate slightly decreased to **26.7%** (QoQ) and **26.3%** (YoY H1) due to earnings mix | Metric | 3 Months Ended June 30, 2025 (in thousands) | 3 Months Ended June 30, 2024 (in thousands) | 6 Months Ended June 30, 2025 (in thousands) | 6 Months Ended June 30, 2024 (in thousands) | | :-------------------- | :------------------------------------------ | :------------------------------------------ | :------------------------------------------ | :------------------------------------------ | | Income tax provision | $109,867 | $91,563 | $193,387 | $162,130 | | Income tax rate | 26.7% | 27.0% | 26.3% | 26.7% | - The increase in income tax provision was due to greater income before income taxes[105](index=105&type=chunk) - The decrease in effective income tax rate was primarily attributable to a decrease in the state and local effective tax rate due to changes in the mix of earnings[105](index=105&type=chunk) - The company is evaluating the future impact of The One Big Beautiful Bill Act of 2025 (OBBBA), which makes permanent key elements of the Tax Cuts and Jobs Act, including accelerated bonus depreciation[107](index=107&type=chunk) [NOTE 10 - Common Stock](index=28&type=section&id=NOTE%2010%20-%20Common%20Stock) EMCOR had **44.8 million** shares outstanding, repurchased **$423.3 million** in shares in H1 2025, and authorized an additional **$500 million** for repurchases - As of June 30, 2025, **44,762,776** shares of common stock were outstanding[108](index=108&type=chunk) - The Board increased the share repurchase authorization by **$500 million** in February 2025, totaling **$3.15 billion** since inception[110](index=110&type=chunk) - During the six months ended June 30, 2025, approximately **1.1 million** shares were repurchased for **$423.3 million**, with **$336.2 million** remaining authorization[110](index=110&type=chunk) - A regular quarterly dividend of **$0.25** per share was paid[109](index=109&type=chunk) [NOTE 11 - Retirement Plans](index=28&type=section&id=NOTE%2011%20-%20Retirement%20Plans) EMCOR recognizes defined benefit plan funded status, with the UK Plan reporting net periodic pension losses of **$26 thousand** (QoQ) and **$51 thousand** (YoY H1) - The funded status of defined benefit plans is recognized in the Consolidated Balance Sheets, with adjustments to accumulated other comprehensive income (loss)[111](index=111&type=chunk) Component of Net Periodic Pension Income (UK Plan) | Component of Net Periodic Pension Income (UK Plan) | 3 Months Ended June 30, 2025 (in thousands) | 3 Months Ended June 30, 2024 (in thousands) | 6 Months Ended June 30, 2025 (in thousands) | 6 Months Ended June 30, 2024 (in thousands) | | :------------------------------------------------- | :------------------------------------------ | :------------------------------------------ | :------------------------------------------ | :------------------------------------------ | | Interest cost | $2,552 | $2,362 | $4,968 | $4,738 | | Expected return on plan assets | $(3,268) | $(3,213) | $(6,362) | $(6,445) | | Amortization of unrecognized loss | $690 | $648 | $1,343 | $1,301 | | Net periodic pension income | $(26) | $(203) | $(51) | $(406) | [NOTE 12 - Commitments and Contingencies](index=29&type=section&id=NOTE%2012%20-%20Commitments%20and%20Contingencies) EMCOR faces commitments including **$2.7 billion** in surety bond exposure and **$262.1 million** in insurance liabilities, with ongoing legal proceedings covered by insurance - EMCOR guarantees subsidiary obligations under certain contracts, historically incurring no substantial liabilities[115](index=115&type=chunk) - As of June 30, 2025, the aggregate estimated exposure from surety bonds for construction contracts was approximately **$2.7 billion**, representing **23%** of total remaining performance obligations[116](index=116&type=chunk) - The company is named in several lawsuits related to a chemical release at the PEMEX Deer Park Refinery, but believes insurance will cover much or all of any amounts required to be paid[122](index=122&type=chunk) - Insurance liabilities, net of estimated recoveries, were **$262.1 million** as of June 30, 2025, with **$56.6 million** estimated to be payable within the next 12 months[123](index=123&type=chunk)[181](index=181&type=chunk) [NOTE 13 - Additional Cash Flow Information](index=30&type=section&id=NOTE%2013%20-%20Additional%20Cash%20Flow%20Information) Cash paid for interest increased to **$7.8 million** and income taxes to **$254.9 million** in H1 2025, alongside higher operating lease payments | Cash Paid For | 6 Months Ended June 30, 2025 (in thousands) | 6 Months Ended June 30, 2024 (in thousands) | YoY Change (in thousands) | | :------------------------------------------------ | :------------------------------------------ | :------------------------------------------ | :------------------------ | | Interest | $7,767 | $856 | $6,911 | | Income taxes | $254,949 | $191,694 | $63,255 | | Right-of-use assets obtained in exchange for new operating lease liabilities | $120,907 | $65,180 | $55,727 | | Right-of-use assets obtained in exchange for new finance lease liabilities | $1,665 | $2,566 | $(901) | [NOTE 14 - Segment Information](index=31&type=section&id=NOTE%2014%20-%20Segment%20Information) EMCOR operates five reportable segments, with performance assessed by operating income, detailing revenues and profitability for each - EMCOR operates through five reportable segments: United States electrical construction and facilities services, United States mechanical construction and facilities services, United States building services, United States industrial services, and United Kingdom building services[128](index=128&type=chunk) - The Chief Operating Decision Maker (CODM) evaluates segment performance based on operating income[126](index=126&type=chunk) Segment Revenues (3 Months Ended June 30) | Segment Revenues (3 Months Ended June 30) | 2025 (in thousands) | 2024 (in thousands) | YoY Change (%) | | :------------------------------------------ | :------------------ | :------------------ | :------------- | | US electrical construction and facilities services | $1,340,247 | $799,994 | 67.5% | | US mechanical construction and facilities services | $1,755,258 | $1,655,181 | 6.0% | | US building services | $793,259 | $781,108 | 1.6% | | US industrial services | $281,072 | $324,047 | -13.3% | | UK building services | $134,564 | $106,567 | 26.3% | | **Consolidated revenues** | **$4,304,400** | **$3,666,897** | **17.4%** | Segment Operating Income (3 Months Ended June 30) | Segment Operating Income (3 Months Ended June 30) | 2025 (in thousands) | 2024 (in thousands) | YoY Change (%) | | :------------------------------------------ | :------------------ | :------------------ | :------------- | | US electrical construction and facilities services | $157,644 | $88,577 | 78.0% | | US mechanical construction and facilities services | $238,737 | $213,440 | 11.8% | | US building services | $50,045 | $46,839 | 6.8% | | US industrial services | $(419) | $12,746 | -103.3% | | UK building services | $8,425 | $5,777 | 45.8% | | Corporate administration | $(39,220) | $(34,571) | 13.4% | | **Consolidated operating income** | **$415,212** | **$332,808** | **24.8%** | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=37&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations.) EMCOR achieved record Q2 2025 revenues of **$4.30 billion** and operating income of **$415.2 million**, driven by strong demand and acquisitions, with robust liquidity - Revenues of **$4.30 billion** for Q2 2025 set a new quarterly record, increasing **17.4%** YoY, with incremental acquisition contribution of approximately **$330.3 million**[136](index=136&type=chunk) - Operating income for Q2 2025 was a record **$415.2 million**, with an operating margin of **9.6%**, a **50 basis point** expansion YoY, predominantly due to improved operating performance in U.S. construction segments[137](index=137&type=chunk) - Net income of **$302.2 million** and diluted EPS of **$6.72** for Q2 2025 compare favorably to the prior year, benefiting from increased operating income and a reduced weighted average share count due to repurchases[138](index=138&type=chunk) [Business Description](index=37&type=section&id=Business%20Description) EMCOR is a leading specialty contractor in the U.S., providing diverse electrical, mechanical, and facilities services through approximately 100 subsidiaries - EMCOR is one of the largest specialty contractors in the U.S., providing electrical and mechanical construction, facilities services, building services, and industrial services[134](index=134&type=chunk) - Services are delivered through approximately 100 operating subsidiaries to a broad range of commercial, technology, manufacturing, industrial, healthcare, utility, and institutional customers[134](index=134&type=chunk) - The company's reportable segments include United States electrical construction and facilities services, United States mechanical construction and facilities services, United States building services, United States industrial services, and United Kingdom building services[139](index=139&type=chunk) [Overview](index=37&type=section&id=Overview) Summarizes EMCOR's record Q2 2025 financial performance, including **17.4%** revenue growth and **24.8%** operating income growth, partly due to acquisitions | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | YoY Change (%) | | :--------------------------------- | :--------------------- | :--------------------- | :------------- | | Revenues | $4,304,400 | $3,666,897 | 17.4% | | Gross profit | $833,771 | $684,001 | 21.9% | | Operating income | $415,212 | $332,808 | 24.8% | | Operating income as % of revenues | 9.6% | 9.1% | +0.5 pp | | Net income | $302,160 | $247,572 | 22.0% | | Diluted earnings per common share | $6.72 | $5.25 | 28.0% | - Revenues for Q2 2025 included incremental acquisition contribution of approximately **$330.3 million**[136](index=136&type=chunk) - Operating income for Q2 2025 included incremental acquisition contribution of **$9.2 million**, net of **$12.5 million** amortization expense[137](index=137&type=chunk) [Impact of Acquisitions](index=38&type=section&id=Impact%20of%20Acquisitions) Details the strategic acquisitions in H1 2025, including Miller Electric for **$868.6 million**, enhancing electrical and mechanical construction capabilities - Miller Electric Company was acquired in Q1 2025 for approximately **$868.6 million**, integrated into the U.S. electrical construction and facilities services segment[141](index=141&type=chunk) - Three additional companies were acquired in H1 2025 for **$38.8 million**, adding building automation, fire protection, and mechanical construction services to the U.S. mechanical construction segment[141](index=141&type=chunk) - Seven companies were acquired in 2024 for **$231.1 million**, expanding capabilities across U.S. electrical, mechanical, building, and industrial services segments[142](index=142&type=chunk) [Results of Operations](index=38&type=section&id=Results%20of%20Operations) Analyzes EMCOR's financial performance, including revenues, cost of sales, SG&A, and operating income, across its various segments [Revenues](index=38&type=section&id=Revenues) Presents a detailed breakdown of consolidated and segment revenues, highlighting significant growth in U.S. construction, particularly data centers | Segment Revenues (3 Months Ended June 30) | 2025 (in thousands) | 2024 (in thousands) | YoY Change (%) | | :------------------------------------------ | :------------------ | :------------------ | :------------- | | US electrical construction and facilities services | $1,340,247 | $799,994 | 67.5% | | US mechanical construction and facilities services | $1,755,258 | $1,655,181 | 6.0% | | US building services | $793,259 | $781,108 | 1.6% | | US industrial services | $281,072 | $324,047 | -13.3% | | UK building services | $134,564 | $106,567 | 26.3% | | **Consolidated revenues** | **$4,304,400** | **$3,666,897** | **17.4%** | | Segment Revenues (6 Months Ended June 30) | 2025 (in thousands) | 2024 (in thousands) | YoY Change (%) | | :------------------------------------------ | :------------------ | :------------------ | :------------- | | US electrical construction and facilities services | $2,428,091 | $1,564,705 | 55.2% | | US mechanical construction and facilities services | $3,327,860 | $3,082,846 | 7.9% | | US building services | $1,535,882 | $1,562,268 | -1.7% | | US industrial services | $640,074 | $678,100 | -5.6% | | UK building services | $239,865 | $211,254 | 13.5% | | **Consolidated revenues** | **$8,171,772** | **$7,099,173** | **15.1%** | - Revenue growth was most significant in U.S. construction segments, particularly the network and communications market sector (data centers)[144](index=144&type=chunk)[145](index=145&type=chunk)[146](index=146&type=chunk) - U.S. industrial services segment revenues decreased due to lower turnaround project demand and fewer new build heat exchanger sales[148](index=148&type=chunk) [Cost of sales and gross profit](index=40&type=section&id=Cost%20of%20sales%20and%20gross%20profit) Discusses the **16.4%** increase in cost of sales and **21.9%** increase in gross profit for Q2 2025, driven by U.S. construction and acquisitions | Metric | 3 Months Ended June 30, 2025 (in thousands) | 3 Months Ended June 30, 2024 (in thousands) | YoY Change (%) | 6 Months Ended June 30, 2025 (in thousands) | 6 Months Ended June 30, 2024 (in thousands) | YoY Change (%) | | :---------------- | :------------------------------------------ | :------------------------------------------ | :------------- | :------------------------------------------ | :------------------------------------------ | :------------- | | Cost of sales | $3,470,629 | $2,982,896 | 16.4% | $6,615,283 | $5,825,863 | 13.5% | | Gross profit | $833,771 | $684,001 | 21.9% | $1,556,489 | $1,273,310 | 22.2% | | Gross profit margin | 19.4% | 18.7% | +0.7 pp | 19.0% | 17.9% | +1.1 pp | - Increases in gross profit and margin were driven by U.S. construction segments and U.S. building services, due to improved revenue mix and excellent project execution[150](index=150&type=chunk) - Acquisitions contributed **$43.7 million** and **$85.4 million** to gross profit for the three and six months ended June 30, 2025, respectively[150](index=150&type=chunk) [Selling, general and administrative expenses](index=40&type=section&id=Selling%2C%20general%20and%20administrative%20expenses) SG&A expenses increased **19.2%** for Q2 2025, primarily due to acquisition-related costs and higher incentive compensation | Metric | 3 Months Ended June 30, 2025 (in thousands) | 3 Months Ended June 30, 2024 (in thousands) | YoY Change (%) | 6 Months Ended June 30, 2025 (in thousands) | 6 Months Ended June 30, 2024 (in thousands) | YoY Change (%) | | :------------------------------------------ | :------------------------------------------ | :------------------------------------------ | :------------- | :------------------------------------------ | :------------------------------------------ | :------------- | | Selling, general and administrative expenses | $418,559 | $351,193 | 19.2% | $822,521 | $680,549 | 20.9% | | SG&A margin | 9.7% | 9.6% | +0.1 pp | 10.1% | 9.6% | +0.5 pp | - SG&A expenses included **$34.4 million** (QoQ) and **$62.0 million** (YoY H1) of incremental expenses directly related to acquired companies, including amortization[151](index=151&type=chunk) - Excluding acquisition-related expenses, SG&A increased due to higher incentive compensation, salaries, and computer hardware/software costs[152](index=152&type=chunk) - The **50 basis point** increase in SG&A margin for the six months was due to improved gross profit (leading to higher incentive compensation), revenue decreases in U.S. building and industrial services, and **$9.4 million** in Miller Electric acquisition transaction costs[153](index=153&type=chunk)[78](index=78&type=chunk) [Operating income (loss)](index=41&type=section&id=Operating%20income%20(loss)) Consolidated operating income increased **24.8%** for Q2 2025, driven by U.S. construction segments, despite a loss in U.S. industrial services | Segment Operating Income (3 Months Ended June 30) | 2025 (in thousands) | % of Segment Revenues | 2024 (in thousands) | % of Segment Revenues | | :------------------------------------------ | :------------------ | :-------------------- | :------------------ | :-------------------- | | US electrical construction and facilities services | $157,644 | 11.8% | $88,577 | 11.1% | | US mechanical construction and facilities services | $238,737 | 13.6% | $213,440 | 12.9% | | US building services | $50,045 | 6.3% | $46,839 | 6.0% | | US industrial services | $(419) | (0.1)% | $12,746 | 3.9% | | UK building services | $8,425 | 6.3% | $5,777 | 5.4% | | **Consolidated operating income** | **$415,212** | **9.6%** | **$332,808** | **9.1%** | | Segment Operating Income (6 Months Ended June 30) | 2025 (in thousands) | % of Segment Revenues | 2024 (in thousands) | % of Segment Revenues | | :------------------------------------------ | :------------------ | :-------------------- | :------------------ | :-------------------- | | US electrical construction and facilities services | $293,701 | 12.1% | $180,166 | 11.5% | | US mechanical construction and facilities services | $425,484 | 12.8% | $364,160 | 11.8% | | US building services | $86,468 | 5.6% | $80,298 | 5.1% | | US industrial services | $6,341 | 1.0% | $30,712 | 4.5% | | UK building services | $13,412 | 5.6% | $11,154 | 5.3% | | **Consolidated operating income** | **$733,968** | **9.0%** | **$592,761** | **8.3%** | - Increased profitability was predominantly due to improved operating performance in U.S. construction segments, driven by a more favorable mix of work and better project execution, including enhanced productivity from virtual design, prefabrication, and automation investments[155](index=155&type=chunk) - U.S. industrial services segment reported an operating loss for Q2 2025 and a significant decline in operating income for H1 2025, primarily due to revenue reductions, unabsorbed labor costs, a less favorable revenue mix, and a **$5.0 million** increase in the allowance for credit losses[159](index=159&type=chunk) [Other items](index=42&type=section&id=Other%20items) Details changes in net periodic pension income, interest expense, income before taxes, and effective income tax rates for the periods | Metric | 3 Months Ended June 30, 2025 (in thousands) | 3 Months Ended June 30, 2024 (in thousands) | 6 Months Ended June 30, 2025 (in thousands) | 6 Months Ended June 30, 2024 (in thousands) | | :-------------------------- | :------------------------------------------ | :------------------------------------------ | :------------------------------------------ | :------------------------------------------ | | Net periodic pension income | $55 | $221 | $109 | $443 | | Interest (expense) income, net | $(3,240) | $6,106 | $2,147 | $13,647 | | Income before income taxes | $412,027 | $339,135 | $736,224 | $606,851 | | Income tax provision | $109,867 | $91,563 | $193,387 | $162,130 | | Effective income tax rate | 26.7% | 27.0% | 26.3% | 26.7% | - The shift from net interest income to net interest expense (QoQ) and reduction in net interest income (YoY H1) was due to increased borrowings under the revolving credit facility and a lower average daily invested cash balance[162](index=162&type=chunk) [Remaining Unsatisfied Performance Obligations](index=43&type=section&id=Remaining%20Unsatisfied%20Performance%20Obligations) Total remaining performance obligations increased by **$1.81 billion** to **$11.91 billion**, with acquisitions contributing **$0.96 billion** | Segment | June 30, 2025 (in thousands) | % of Total | December 31, 2024 (in thousands) | % of Total | June 30, 2024 (in thousands) | % of Total | | :------------------------------------------ | :----------------------------- | :--------- | :------------------------------- | :--------- | :----------------------------- | :--------- | | US electrical construction and facilities services | $4,198,244 | 35% | $3,068,396 | 31% | $2,632,120 | 29% | | US mechanical construction and facilities services | $5,975,201 | 50% | $5,463,096 | 54% | $4,758,744 | 53% | | US building services | $1,313,603 | 11% | $1,246,642 | 12% | $1,345,089 | 15% | | US industrial services | $221,102 | 2% | $138,599 | 1% | $99,022 | 1% | | UK building services | $206,238 | 2% | $185,466 | 2% | $164,248 | 2% | | **Total operations** | **$11,914,388** | **100%** | **$10,102,199** | **100%** | **$8,999,223** | **100%** | - The increase in RPO was approximately **$1.81 billion** compared to December 31, 2024, with acquisitions (notably Miller Electric) accounting for approximately **$0.96 billion**[164](index=164&type=chunk) - Growth in RPO was seen across most market sectors, with significant increases in network and communications (data centers), institutional, manufacturing and industrial, commercial, and hospitality and entertainment[164](index=164&type=chunk) [Liquidity and Capital Resources](index=43&type=section&id=Liquidity%20and%20Capital%20Resources) Discusses EMCOR's financial flexibility, including cash, credit facility availability, and material cash requirements for operations and investments - As of June 30, 2025, EMCOR had **$486.0 million** in cash and cash equivalents and **$978.5 million** of available capacity under its **$1.3 billion** revolving credit facility[170](index=170&type=chunk) - Material cash requirements include working capital, business acquisitions, capital expenditures, debt payments, and shareholder returns (share repurchases and dividends)[167](index=167&type=chunk) [Cash Flows](index=44&type=section&id=Cash%20Flows) Analyzes changes in cash flows from operating, investing, and financing activities, including the impact of acquisitions and share repurchases | Cash Flow Activity | 6 Months Ended June 30, 2025 (in thousands) | 6 Months Ended June 30, 2024 (in thousands) | YoY Change (in thousands) | | :------------------------------------------ | :------------------------------------------ | :------------------------------------------ | :------------------------ | | Net cash provided by operating activities | $302,158 | $411,958 | $(109,800) | | Net cash used in investing activities | $(938,825) | $(211,139) | $(727,686) | | Net cash used in financing activities | $(231,125) | $(181,444) | $(49,681) | | (Decrease) increase in cash, cash equivalents, and restricted cash | $(853,234) | $18,448 | $(871,682) | - Operating cash flow decreased due to an increase in working capital, as the company recognized revenue on projects previously billed ahead[173](index=173&type=chunk) - Investing cash flow increased significantly due to payments for the acquisition of Miller Electric[174](index=174&type=chunk) - Financing cash flow increased due to a **$283.2 million** increase in common stock repurchases, partially offset by **$250.0 million** in net borrowings under the revolving credit facility[175](index=175&type=chunk) [Material Cash Requirements from Contractual and Other Obligations](index=45&type=section&id=Material%20Cash%20Requirements%20from%20Contractual%20and%20Other%20Obligations) Outlines EMCOR's significant future cash obligations, including debt, lease liabilities, purchase obligations, and insurance liabilities - Outstanding debt under the revolving credit facility was **$250.0 million** as of June 30, 2025[178](index=178&type=chunk) - Future payments for operating and finance leases total **$499.3 million**, with **$112.1 million** due within the next 12 months[179](index=179&type=chunk) - Open purchase obligations amount to **$2.82 billion**, with approximately **$2.39 billion** expected within the next 12 months[180](index=180&type=chunk) - Net insurance liabilities are **$262.1 million**, with **$56.6 million** estimated to be payable within 12 months[181](index=181&type=chunk) - Contingent consideration liabilities have a present value of **$15.0 million**, with **$13.5 million** estimated as payable within 12 months[182](index=182&type=chunk) [Off-Balance Sheet Arrangements and Other Commercial Commitments](index=46&type=section&id=Off-Balance%20Sheet%20Arrangements%20and%20Other%20Commercial%20Commitments) Details EMCOR's off-balance sheet arrangements, including **$2.7 billion** in surety bonds and guarantees for subsidiary obligations - Aggregate estimated exposure from surety bonds for construction contracts was approximately **$2.7 billion** as of June 30, 2025, representing **23%** of total remaining performance obligations[185](index=185&type=chunk) - Surety bonds and letters of credit are used as collateral for insurance programs, totaling **$61.7 million** and **$71.2 million** respectively, as of June 30, 2025[187](index=187&type=chunk) - The company guarantees obligations of its subsidiaries under certain contracts but has not incurred substantial liabilities historically[191](index=191&type=chunk) [New Accounting Pronouncements](index=46&type=section&id=New%20Accounting%20Pronouncements) Refers to Note 2 for details on new accounting standards and their anticipated impact on EMCOR's financial reporting - Refers to Note 2 - New Accounting Pronouncements for details on new accounting standards, their anticipated adoption dates, and expected impact on consolidated financial position, results of operations, or liquidity[192](index=192&type=chunk) [Critical Accounting Policies and Estimates](index=46&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) Refers to the Form 10-K for significant accounting policies, noting no material changes in H1 2025 - Refers to Note 2 - Summary of Significant Accounting Policies in the Form 10-K for a description of significant accounting policies and estimates[193](index=193&type=chunk) - No significant changes to critical accounting policies or methods occurred during the six months ended June 30, 2025[193](index=193&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=47&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk.) EMCOR faces market risks from interest rate fluctuations, construction market conditions, and commodity price volatility, with limited foreign currency exposure - EMCOR is exposed to market risk from changes in interest rates on variable-rate borrowings under its revolving credit facility[195](index=195&type=chunk) - A **50 basis point** increase in interest rates would increase interest expense, net of income taxes, by approximately **$0.9 million** in the next twelve months, based on **$250.0 million** outstanding borrowings[195](index=195&type=chunk) - Construction market risk relates to potential impacts on accounts receivable or contract assets if customers' ability to pay is negatively affected by economic conditions; the company monitors creditworthiness and contract status[196](index=196&type=chunk) - Exposure to foreign currency fluctuations is limited as foreign operations primarily invoice and collect in local currencies[197](index=197&type=chunk) - The company is exposed to market risk from fluctuations in commodity prices (e.g., copper, steel) and energy prices, which could reduce profitability on fixed-price contracts if not recoverable through price adjustments[198](index=198&type=chunk) [Item 4. Controls and Procedures](index=48&type=section&id=Item%204.%20Controls%20and%20Procedures.) EMCOR's disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting - Disclosure controls and procedures were effective as of June 30, 2025, as concluded by the Chairman, President, and CEO, and the Senior Vice President, CFO, and Chief Accounting Officer[199](index=199&type=chunk) - No material changes in internal control over financial reporting occurred during the fiscal quarter ended June 30, 2025[200](index=200&type=chunk) [PART II. - Other Information](index=49&type=section&id=PART%20II.%20-%20Other%20Information.) Covers legal proceedings, equity sales, mine safety, other information, and the exhibit index for EMCOR's quarterly report [Item 1. Legal Proceedings](index=49&type=section&id=Item%201.%20Legal%20Proceedings.) Information on legal proceedings is incorporated by reference from Note 12 - Commitments and Contingencies - Information on legal proceedings is incorporated by reference from Note 12 - Commitments and Contingencies[201](index=201&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=49&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds.) EMCOR repurchased **573,001** shares for **$353.65** per share in April 2025, with **$336.2 million** remaining authorized for repurchases | Period | Total Number of Shares Purchased | Average Price Paid Per Share | Approximate Dollar Value of Shares That May Yet Be Purchased | | :------------------------------ | :----------------------------- | :--------------------------- | :----------------------------------------------------------- | | April 1, 2025 to April 30, 2025 | 573,001 | $353.65 | $336,162,101 | | May 1, 2025 to May 31, 2025 | — | — | $336,162,101 | | June 1, 2025 to June 30, 2025 | — | — | $336,162,101 | | **Total** | **573,001** | **$353.65** | | - As of June 30, 2025, approximately **$336.2 million** remained authorized for repurchases under the share repurchase program, which has no expiration date[205](index=205&type=chunk) [Item 4. Mine Safety Disclosures](index=49&type=section&id=Item%204.%20Mine%20Safety%20Disclosures.) Mine safety violations and regulatory matters are detailed in Exhibit 95.1 of this quarterly report - Information concerning mine safety violations or other regulatory matters is included in Exhibit 95.1[203](index=203&type=chunk) [Item 5. Other Information](index=49&type=section&id=Item%205.%20Other%20Information.) No directors or executive officers adopted or terminated Rule 10b5-1 or non-10b5-1 trading arrangements during Q2 2025 - No directors or executive officers adopted or terminated Rule 10b5-1 trading arrangements or non-10b5-1 trading arrangements during the quarter ended June 30, 2025[204](index=204&type=chunk) [Item 6. Exhibits](index=50&type=section&id=Item%206.%20Exhibits.) Lists exhibits filed with Form 10-Q, including corporate governance documents, Sarbanes-Oxley certifications, and iXBRL financial statements - The exhibit index includes corporate governance documents (Certificate of Incorporation, By-Laws), Sarbanes-Oxley certifications (Sections 302 and 906), mine safety disclosures, and iXBRL formatted financial statements[207](index=207&type=chunk)