EMCOR(EME) - 2025 Q2 - Quarterly Results

Financial Performance Overview Q2 2025 Performance Highlights 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 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] First Six Months 2025 Financial Results 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] - Excluding acquisition costs, non-GAAP operating income for H1 2025 was $743.3 million, with a non-GAAP operating margin of 9.1%[9] Operational Performance and Business Outlook Management Commentary 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] - The Electrical Construction segment's quarterly revenue grew 67.5% with a record Q2 operating margin of 11.8%[12] - The Mechanical Construction segment also achieved record revenues and record quarterly operating margins of 13.6%[12] Remaining Performance Obligations (RPOs) 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] - Significant RPO growth was seen in the Network and Communications, Institutional, Manufacturing and Industrial, Healthcare, and Hospitality and Entertainment sectors[6] - RPOs in the High-Tech Manufacturing sector decreased due to progress on existing construction projects[6] Full-Year 2025 Guidance 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 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 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 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 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 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] Supplemental Information Reconciliation of Non-GAAP Measures 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] 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 |