[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)

Core Insights - EMCOR Group, Inc. is set to report its second-quarter 2025 results on July 31, with expectations of continued growth in earnings and revenue driven by strong demand in key sectors [1][10]. Financial Performance - In the last reported quarter, EMCOR achieved earnings per share (EPS) of $5.41, surpassing expectations by 18.4% and reflecting a 30% increase year-over-year [2]. - Revenue for the last quarter was $3.87 billion, marking a 12.7% year-over-year growth and exceeding the Zacks Consensus Estimate by 1.9% [2]. - The company's adjusted operating margin expanded to 8.5%, supported by prefabrication and virtual design capabilities [2]. - The backlog (Remaining Performance Obligations, or RPOs) grew 28.1% year-over-year to $11.8 billion [2]. Future Estimates - The Zacks Consensus Estimate for the second-quarter EPS is $5.68, indicating an 8.2% growth from the previous year, while the revenue estimate is $4.1 billion, suggesting an 11.9% year-over-year increase [4]. - For the full year 2025, EMCOR is expected to see a 12.7% growth in revenues and a 9.6% growth in EPS compared to the previous year [4]. Market Dynamics - Despite inflationary pressures and economic uncertainty, EMCOR's revenues and earnings are anticipated to have increased due to heightened project flows in high-tech manufacturing and network communications sectors, particularly in semiconductor and data center construction [5][6]. - The Electrical Construction segment is benefiting from strong demand in data centers, with 85% of the network and communications backlog linked to this area [7]. - The Mechanical Construction segment shows strength in healthcare, institutional, and water/wastewater markets, bolstered by the integration of Miller Electric [7]. Segment Performance - The U.S. Building Services segment is expected to improve in the second quarter, with a shift towards higher-margin technician-based services [8]. - The Industrial Services segment is projected to recover from weather-related disruptions in the first quarter, aided by a normalization of credit loss provisions [9]. - The U.K. Building Services segment is expected to maintain stable performance, with healthy project demand despite initial mobilization costs affecting margins [11]. Overall Outlook - EMCOR anticipates a strong second quarter in 2025, driven by construction segments, a rebound in Industrial Services, and margin resilience across the board [12].

Core Viewpoint - The article discusses the reliability of brokerage recommendations, particularly focusing on Emcor Group (EME), and highlights the importance of using these recommendations in conjunction with other analytical tools like the Zacks Rank to make informed investment decisions [1][5]. Group 1: Brokerage Recommendations - Emcor Group has an average brokerage recommendation (ABR) of 1.75, indicating a consensus between Strong Buy and Buy, with 75% of the eight recommendations being Strong Buy [2][5]. - Despite the positive ABR, relying solely on this information for investment decisions may not be advisable, as studies show brokerage recommendations often lack success in guiding investors towards stocks with significant price appreciation potential [5][10]. Group 2: Analyst Bias and Zacks Rank - Brokerage analysts tend to exhibit a strong positive bias in their ratings due to vested interests, resulting in a disproportionate number of favorable ratings compared to negative ones [6][10]. - The Zacks Rank, which is based on earnings estimate revisions, is presented as a more reliable indicator of a stock's near-term price performance compared to the ABR [8][11]. - The Zacks Rank is updated more frequently and reflects timely changes in earnings estimates, making it a better tool for predicting future stock prices [13]. Group 3: Emcor Group's Earnings Estimates - The Zacks Consensus Estimate for Emcor Group's current year earnings remains unchanged at $23.59, suggesting stability in analysts' views regarding the company's earnings prospects [14]. - The unchanged consensus estimate has led to a Zacks Rank of 3 (Hold) for Emcor Group, indicating a cautious approach despite the Buy-equivalent ABR [15].

Core Insights - EMCOR Group, Inc. (EME) is experiencing strong demand in institutional markets, particularly in healthcare construction, with total remaining performance obligations (RPOs) reaching $11.75 billion, a 17.1% organic growth [1][10] - The company reported a significant revenue increase in its mechanical and electrical construction segments, with growth rates of 10.2% and 42.3% year over year, respectively, driven by heightened activity in healthcare [2] - Healthcare revenues nearly doubled year-over-year in Q1 2025, bolstered by ongoing customer demand and the acquisition of Miller Electric, which added approximately $240 million to the healthcare-related backlog [3][10] Company Performance - Demand from hospitals and medical systems remains robust, supporting both new construction and facility upgrades, with the company focusing on disciplined execution through advanced project management techniques [4] - EMCOR's healthcare pipeline and institutional exposure position it well for long-term backlog growth, with both organic and acquired capabilities contributing to backlog visibility [5] Industry Context - Other industry players, such as Tutor Perini Corporation and Comfort Systems USA, are also capitalizing on the growing healthcare construction demand, indicating a broader trend in the sector [6] - Tutor Perini has secured $111 million in additional funding for healthcare projects and is advancing a major $500 million project in California, with expectations for further healthcare-related awards [7] - Comfort Systems reports that healthcare now constitutes approximately 10% of its business, with institutional markets contributing 24% of total revenues, supported by stable demand and large bookings [8] Financial Metrics - EMCOR's shares have increased by 42.8% over the past three months, outperforming the Zacks Building Products - Heavy Construction industry's growth of 39.8% [9] - The company's total RPOs reached $11.75 billion in Q1 2025, with healthcare RPOs rising to $1.5 billion, reflecting consistent activity in the medical sector [10] - EMCOR's earnings estimates for 2025 and 2026 remain unchanged at $23.59 and $25.47 per share, respectively, indicating year-over-year growth of 9.6% for 2025 and 8% for 2026 [14]

Core Insights - EMCOR Group, Inc. (EME) is experiencing growth due to U.S. government initiatives like the CHIPS Act and the Inflation Reduction Act, which are increasing demand in the semiconductor and biotech sectors [2][8] - As of March 31, 2025, EME reported a record $11.75 billion in remaining performance obligations (RPOs), reflecting a 28% year-over-year increase [3][8] - The company is optimistic about long-term spending in high-tech manufacturing, particularly in semiconductors, biotech, and pharmaceuticals, despite a recent setback in RPOs [4][5] Market Performance - EME's stock has surged 56.2% over the past three months, outperforming peers KBR and AECOM, as well as the broader market [6][9][8] - KBR and AECOM have seen stock gains of only 3.1% and 32.6%, respectively, indicating EME's stronger market position [9] Valuation Metrics - EME is trading at a forward 12-month price-to-earnings (P/E) ratio of 22.3X, which is higher than KBR's 11.78X and AECOM's 20.72X, suggesting strong market potential [10][11] Earnings Estimates - Earnings estimates for EME remain unchanged for 2025 and 2026 at $23.59 and $25.47 per share, indicating expected year-over-year growth of 9.6% and 8%, respectively [12]

Core Viewpoint - Emcor Group (EME) has an average brokerage recommendation (ABR) of 1.89, indicating a consensus between Strong Buy and Buy, with 66.7% of recommendations being Strong Buy [2][5]. Brokerage Recommendation Trends - The ABR is based on recommendations from nine brokerage firms, with six firms rating it as Strong Buy [2]. - Despite the positive ABR, reliance solely on brokerage recommendations may not be wise, as studies show limited success in guiding investors to stocks with the best price increase potential [5][10]. Zacks Rank Comparison - Zacks Rank, a proprietary stock rating tool, categorizes stocks from 1 (Strong Buy) to 5 (Strong Sell) and is based on earnings estimate revisions, showing a strong correlation with near-term stock price movements [8][11]. - The Zacks Rank for Emcor Group is 3 (Hold), indicating a cautious stance despite the positive ABR [14]. Earnings Estimates - The Zacks Consensus Estimate for Emcor Group's current year earnings remains unchanged at $23.59, suggesting steady analyst views on the company's earnings prospects [13]. - The recent change in consensus estimates, along with other factors, has led to the Zacks Rank of 3 for Emcor Group, advising caution with the Buy-equivalent ABR [14].

Core Insights - EMCOR Group, Inc. (EME) is experiencing significant growth in the data center sector, driven by long-term demand in the digital infrastructure ecosystem [1][3] - The company has expanded its presence in U.S. data center markets through organic growth and strategic acquisitions, with total remaining performance obligations reaching $11.75 billion, a 28.1% year-over-year increase [1][8] - Demand from hyperscale and enterprise clients, particularly for cloud services and generative AI workloads, is a key driver of this growth [2][8] Company Performance - EMCOR's data center work surged 112% year-over-year, contributing $3.6 billion to its total backlog [1][8] - The company operates in over 16 electrical and mechanical geographies, up from five years ago, indicating substantial market expansion [2] - EMCOR's prefabrication and virtual design capabilities position it well for large-scale data center projects, with strong client visibility extending into 2026 [3] Industry Context - Other industry players like Comfort Systems USA (FIX) and MasTec, Inc. (MTZ) are also poised to benefit from the growing demand for data center infrastructure [4] - Comfort Systems reported a record first-quarter 2025 with earnings up over 75% and revenues rising 19% year-over-year, supported by a backlog of $6.9 billion [5] - MasTec is capitalizing on the rapid expansion of data center development, driven by investments in power infrastructure and fiber connectivity [6] Stock Performance and Valuation - EMCOR's stock has increased by 43.6% in the past three months, outperforming the Zacks Building Products - Heavy Construction industry's 39.5% rise [7] - The stock is currently trading at a premium with a forward 12-month price-to-earnings ratio of 21.64X [10] - Earnings estimates for 2025 and 2026 remain unchanged at $23.59 and $25.47 per share, indicating year-over-year growth of 9.6% for 2025 and 8% for 2026 [12]

Group 1 - The individual has retired after over 43 years in investment research, now operating independently to provide actionable investment insights [1] - The focus is on rules and factor-based equity investing strategies, emphasizing the use of numbers to inspire human intelligence-driven investment stories rather than serving the numbers themselves [1] - The approach combines factor analysis with classic fundamental analysis to uncover the true story of a company and its stock, highlighting the importance of future potential over past data [1] Group 2 - The individual has extensive experience covering a wide range of stocks, including large cap, small cap, micro cap, value, growth, and special situations [1] - Previous roles included managing a high-yield fixed-income fund and conducting research on quantitative asset allocation strategies, contributing to the development of Robo Advising [1] - A passion for investor education has led to conducting numerous seminars and authoring two books on stock selection and analysis [1]

Industry Overview - The United States-based engineering and construction firms are experiencing a boom in public infrastructure demand driven by government initiatives such as the Infrastructure Investment and Jobs Act (IIJA), CHIPS Act, and Inflation Reduction Act (IRA) [1][3] - Public infrastructure spending is at its peak, primarily due to the aim of enhancing supply-chain resilience and boosting domestic manufacturing [3] Company Profiles - EMCOR Group, Inc. (EME) is a leading provider of mechanical and electrical construction, industrial and energy infrastructure, and building services [2] - Quanta Services, Inc. (PWR) specializes in utility and energy infrastructure and is one of North America's top contractors in electric power transmission and distribution [2] EMCOR Group, Inc. (EME) - EMCOR is benefiting from growing infrastructural demand, particularly in data centers, driven by the surge in Artificial Intelligence applications and digital transformation initiatives [5] - The acquisition of Miller Electric on February 3, 2025, enhances EMCOR's electrical construction capabilities and aligns with its growth strategy [6] - As of March 31, 2025, EMCOR's remaining performance obligations (RPOs) reached a record value of $11.75 billion, reflecting a 28% year-over-year growth [7] - EMCOR expects full-year revenues between $16.1 billion and $16.9 billion, indicating year-over-year growth of 10.5-16% [8] Quanta Services, Inc. (PWR) - Quanta's strength lies in delivering complex, large-scale projects such as power grid modernization and renewable energy infrastructure [9] - As of March 31, 2025, Quanta had a total backlog of $35.25 billion, with a 12-month backlog of $19.42 billion, showing significant growth from the previous year [12] - Quanta expects revenues between $26.7 billion and $27.2 billion for 2025, reflecting a 13.8% increase at the midpoint from 2024 [13] Financial Performance and Valuation - EMCOR has a trailing 12-month return on equity (ROE) of 37.1%, significantly higher than Quanta's average of 19.7%, indicating stronger shareholder value generation [10][20] - EMCOR trades at a lower forward price-to-earnings (P/E) ratio compared to Quanta, suggesting a more attractive entry point for investors [10][16] - The Zacks Consensus Estimate for EMCOR's 2025 EPS indicates a 9.6% year-over-year growth, while Quanta's 2025 EPS estimates imply a 15.1% improvement [18][20] Investment Outlook - EMCOR is positioned for steady growth with a discounted valuation, making it an attractive option for investors seeking sustainable returns [22][24] - Quanta, while benefiting from diversified market exposure and energy transition trends, faces challenges due to its premium valuation [23][24]

Group 1 - Emcor Group (EME) closed at $471.86, with a 0.77% increase, outperforming the S&P 500's 0.01% loss [1] - Over the past month, Emcor Group's shares gained 13.51%, exceeding the Construction sector's gain of 7.73% and the S&P 500's gain of 6.43% [1] Group 2 - Analysts expect Emcor Group to report earnings of $5.69 per share, reflecting a year-over-year growth of 8.38% [2] - The revenue forecast for the upcoming earnings report is $4.1 billion, indicating an 11.75% growth compared to the same quarter last year [2] Group 3 - For the annual period, earnings are anticipated to be $23.62 per share and revenue is expected to reach $16.5 billion, representing increases of 9.76% and 13.26% respectively [3] - Changes in analyst estimates for Emcor Group are important as they often indicate shifts in near-term business trends [3] Group 4 - The Zacks Rank system, which evaluates estimated changes, has a history of outperforming, with 1 stocks returning an average annual gain of 25% since 1988 [5] - Emcor Group currently holds a Zacks Rank of 2 (Buy) [5] Group 5 - Emcor Group has a Forward P/E ratio of 19.83, which aligns with the industry's average Forward P/E of 19.83 [6] - The Building Products - Heavy Construction industry, part of the Construction sector, ranks in the top 1% of all industries according to the Zacks Industry Rank [6]