EMCOR(EME) - 2025 Q1 - Quarterly Results

First Quarter 2025 Financial and Operational Highlights This section details EMCOR's record Q1 2025 revenues, net income, and EPS, alongside strong operating performance, record RPOs, and segment-specific contributions Consolidated Financial Results EMCOR Group, Inc. reported record revenues and diluted EPS for Q1 2025, driven by strong year-over-year growth, with non-GAAP figures adjusted for acquisition-related transaction costs | Metric | Q1 2025 (GAAP) | Q1 2024 (GAAP) | YoY Change | Q1 2025 (Non-GAAP) | | :-------------------------------- | :------------- | :------------- | :--------- | :----------------- | | Revenues | $3.87 billion | $3.43 billion | +12.7% | - | | Net Income | $240.7 million | $197.1 million | +22.1% | $247.6 million | | Diluted EPS | $5.26 | $4.17 | +26.1% | $5.41 | - Q1 2025 net income included $9.4 million ($6.9 million after taxes) in transaction-related costs from the Miller Electric Company acquisition[2] Operating Performance and Margins Operating income and margin improved significantly in Q1 2025 on both GAAP and non-GAAP bases, reflecting strong operational execution | Metric | Q1 2025 (GAAP) | Q1 2024 (GAAP) | YoY Change | Q1 2025 (Non-GAAP) | | :-------------------------------- | :------------- | :------------- | :--------- | :----------------- | | Operating Income | $318.8 million | $260.0 million | +22.6% | $328.1 million | | Operating Margin | 8.2% | 7.6% | +0.6 pp | 8.5% | | SG&A Expenses | $404.0 million | $329.4 million | +22.6% | - | | SG&A as % of Revenues | 10.4% | 9.6% | +0.8 pp | - | | Income Tax Rate | 25.8% | 26.4% | -0.6 pp | - | - Operating income for Q1 2025 included depreciation and amortization expense of $41.9 million, up from $29.6 million in Q1 2024[3] Remaining Performance Obligations (RPOs) EMCOR achieved record remaining performance obligations (RPOs) of $11.75 billion as of March 31, 2025, representing a substantial year-over-year increase | Metric | As of March 31, 2025 | As of March 31, 2024 | YoY Change | | :-------------------------------- | :------------------- | :------------------- | :--------- | | Total RPOs | $11.75 billion | $9.18 billion | +28.1% | | RPOs from Miller Electric | $1.0 billion | - | - | - Significant RPO growth was seen in Network and Communications, Healthcare, Manufacturing and Industrial, Hospitality and Entertainment, and Institutional sectors[7] - Reductions in RPOs within High-Tech Manufacturing and Commercial market sectors were due to progress on construction projects[7] Segment-Specific Performance U.S. Electrical and Mechanical Construction segments drove revenue and operating income growth, with Miller Electric significantly contributing to the former Q1 2025 Segment Revenues (YoY Change) | Segment | Q1 2025 Revenue | Q1 2024 Revenue | YoY Change | | :------------------------------------------ | :-------------- | :-------------- | :--------- | | U.S. Electrical Construction & Facilities Services | $1,087.8 million | $764.7 million | +42.3% | | U.S. Mechanical Construction & Facilities Services | $1,572.6 million | $1,427.7 million | +10.2% | | U.S. Building Services | $742.6 million | $781.2 million | -4.9% | | U.S. Industrial Services | $359.0 million | $354.1 million | +1.4% | | U.K. Building Services | $105.3 million | $104.7 million | +0.6% | Q1 2025 Segment Operating Income and Margin | Segment | Q1 2025 Operating Income | Q1 2025 Operating Margin | | :------------------------------------------ | :----------------------- | :----------------------- | | U.S. Electrical Construction & Facilities Services | $136.1 million | 12.5% | | U.S. Mechanical Construction & Facilities Services | $186.7 million | 11.9% | | U.S. Building Services | $36.4 million | 4.9% | | U.S. Industrial Services | $6.8 million | 1.9% | | U.K. Building Services | $5.0 million | 4.7% | - The acquisition of Miller Electric contributed $183 million in revenues to the U.S. Electrical Construction segment during the quarter[8] Full-Year 2025 Guidance This section outlines EMCOR's reaffirmed full-year revenue guidance and narrowed non-GAAP diluted EPS range, reflecting confidence in future performance 2025 Outlook and Reaffirmations EMCOR reaffirmed its full-year 2025 revenue guidance range and narrowed its non-GAAP diluted EPS guidance range, reflecting confidence in execution Full-Year 2025 Guidance | Metric | Current Guidance (4/30/25) | Previous Guidance (2/26/25) | | :-------------------- | :------------------------- | :------------------------- | | Revenues | $16.1 billion - $16.9 billion | $16.1 billion - $16.9 billion | | Operating Margin | 8.5% - 9.2% | 8.5% - 9.2% | | Non-GAAP Diluted EPS* | $22.65 - $24.00 | $22.25 - $24.00 | - The guidance reflects confidence in the company's ability to execute with efficiency and discipline, considering potential impacts of tariffs and macroeconomic factors[10] - The company remains well positioned with a significant year-over-year increase in RPOs and a healthy project pipeline[10] Management Commentary This section presents the CEO's insights on strong Q1 performance, strategic drivers, successful acquisitions, and future segment expectations CEO's Remarks on Performance and Strategy CEO Tony Guzzi highlighted the continued strength of the business, driven by U.S. Electrical and Mechanical Construction segments, successful execution, and strategic expansion - Results were driven by U.S. Electrical Construction and U.S. Mechanical Construction segments, with year-over-year revenue growth of 42.3% and 10.2%, respectively[8] - Performance reflects customer confidence, proactive expansion into new geographies, and productivity from virtual design and construction technologies and prefabrication capabilities[8] - The integration of Miller Electric is on track, contributing $183 million in revenues to the U.S. Electrical Construction segment[8] Financial Statements This section provides the condensed consolidated statements of operations, balance sheets, and cash flows for Q1 2025, detailing financial position and performance Condensed Consolidated Statements of Operations The condensed consolidated statements of operations show a significant increase in revenues, gross profit, and operating income for Q1 2025 compared to Q1 2024 Condensed Consolidated Statements of Operations (Q1 2025 vs. Q1 2024) | Metric | Q1 2025 (in thousands) | Q1 2024 (in thousands) | | :-------------------------------- | :--------------------- | :--------------------- | | Revenues | $3,867,372 | $3,432,276 | | Cost of sales | $3,144,654 | $2,842,967 | | Gross profit | $722,718 | $589,309 | | Selling, general and administrative expenses | $403,962 | $329,356 | | Operating income | $318,756 | $259,953 | | Income before income taxes | $324,197 | $267,716 | | Net income | $240,677 | $197,149 | | Diluted earnings per common share | $5.26 | $4.17 | | Dividends declared per common share | $0.25 | $0.18 | Condensed Consolidated Balance Sheets The balance sheet as of March 31, 2025, shows an increase in total assets, primarily driven by higher accounts receivable, goodwill, and identifiable intangible assets Condensed Consolidated Balance Sheets (March 31, 2025 vs. December 31, 2024) | Metric | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------------------------------- | :---------------------------- | :----------------------------- | | Total current assets | $4,910,984 | $5,389,189 | | Goodwill | $1,336,557 | $1,018,415 | | Identifiable intangible assets, net | $1,096,817 | $648,180 | | Total assets | $8,078,872 | $7,716,473 | | Total current liabilities | $4,222,262 | $4,153,863 | | Borrowings under revolving credit facility | $250,000 | $0 | | Total liabilities | $5,126,944 | $4,777,779 | | Total equity | $2,951,928 | $2,938,694 | Condensed Consolidated Statements of Cash Flows Cash flows from operating activities decreased in Q1 2025, while investing activities saw a significant net cash outflow due to business acquisitions Condensed Consolidated Statements of Cash Flows (Q1 2025 vs. Q1 2024) | Cash Flow Activity | Q1 2025 (in thousands) | Q1 2024 (in thousands) | | :-------------------------------- | :--------------------- | :--------------------- | | Net cash provided by operating activities | $108,471 | $132,264 | | Net cash used in investing activities | $(875,441) | $(19,439) | | Net cash used in financing activities | $(829) | $(58,948) | | (Decrease) increase in cash, cash equivalents, and restricted cash | $(762,930) | $52,737 | | Cash, cash equivalents, and restricted cash at end of period | $577,465 | $842,487 | - Payments for acquisitions of businesses, net of cash acquired, totaled $850.6 million in Q1 2025[21] - Repurchases of common stock amounted to $224.8 million in Q1 2025[21] Non-GAAP Financial Measures Reconciliation This section reconciles non-GAAP financial measures, including organic revenue growth, operating income, net income, and diluted EPS, to their GAAP equivalents Organic Revenue Growth Reconciliation EMCOR provides a reconciliation of organic revenue growth, a non-GAAP measure, to total GAAP revenue growth, illustrating the impact of acquisitions on overall revenue expansion Organic Revenue Growth Reconciliation (Q1 2025) | Metric | Amount (in thousands) | Percentage | | :-------------------------------- | :-------------------- | :--------- | | GAAP revenue growth | $435,096 | 12.7% | | Incremental revenues from acquisitions | $(250,900) | (7.3)% | | Organic revenue growth (non-GAAP) | $184,196 | 5.4% | Non-GAAP Operating Income, Net Income, and Diluted EPS Reconciliation Reconciliations are provided for non-GAAP operating income, net income, and diluted EPS, adjusting for transaction expenses related to the Miller Electric acquisition Non-GAAP Operating Income Reconciliation (Q1 2025) | Metric | Q1 2025 (in thousands) | Q1 2024 (in thousands) | | :------------------------------------------------ | :--------------------- | :--------------------- | | GAAP operating income | $318,756 | $259,953 | | Transaction expenses related to Miller Electric acquisition | $9,353 | - | | Non-GAAP operating income | $328,109 | $259,953 | Non-GAAP Net Income Reconciliation (Q1 2025) | Metric | Q1 2025 (in thousands) | Q1 2024 (in thousands) | | :------------------------------------------------ | :--------------------- | :--------------------- | | GAAP net income | $240,677 | $197,149 | | Transaction expenses related to Miller Electric acquisition | $9,353 | - | | Tax effect of transaction expenses | $(2,410) | - | | Non-GAAP net income | $247,620 | $197,149 | Non-GAAP Diluted EPS Reconciliation (Q1 2025) | Metric | Q1 2025 | Q1 2024 | | :------------------------------------------------ | :------ | :------ | | GAAP diluted earnings per common share | $5.26 | $4.17 | | Transaction expenses related to Miller Electric acquisition | $0.20 | - | | Tax effect of transaction expenses | $(0.05) | - | | Non-GAAP diluted earnings per common share | $5.41 | $4.17 | Additional Information This section offers an overview of EMCOR Group, Inc., along with important disclaimers regarding forward-looking statements and the use of non-GAAP financial measures About EMCOR EMCOR Group, Inc. is a Fortune 500 company specializing in mechanical and electrical construction services, industrial and energy infrastructure, and building services - EMCOR Group, Inc. is a Fortune 500 leader in mechanical and electrical construction services, industrial and energy infrastructure, and building services[12] Forward-Looking Statements & Non-GAAP Disclosure This section provides standard disclaimers regarding forward-looking statements, outlining risks and uncertainties, and explains the use of non-GAAP financial measures - Forward-looking statements include anticipated future operating and financial performance, financial guidance, impact of RPOs, timing of projects, and financial impact of acquisitions[13] - Risks and uncertainties include adverse economic conditions, market changes, labor scarcity, supply chain disruptions, inflation, regulatory impacts, and increased competition[13] - Non-GAAP measures are used as key performance indicators for internal evaluation and to provide useful information to investors, but are not GAAP substitutes and may not be comparable to other companies' calculations[14]