Financial Highlights - Q2 2026 consolidated revenues increased by 5% year-over-year and 23% sequentially compared to Q1 2026, with a consolidated gross margin of 19%[5] - Record Q2 earnings per diluted share of $2.50, up $1.19 year-over-year[5] - Q2 EBITDA reached $36 million, representing 15.2% of revenue[5] - The company paid a quarterly dividend of $0.375 per common share[5] Project Backlog and Business Segments - Record project backlog of $2.0 billion as of July 31, 2025[5] - Power Industry Services accounted for 83% of Q2 revenues, generating $197 million in revenue and $35 million in pre-tax income[10] - Industrial Construction Services contributed 15% of Q2 revenues, with $36 million in revenue and $3 million in pre-tax income[10] - Telecommunications Infrastructure Services represented 2% of Q2 revenues, amounting to $5 million in revenue and $0.3 million in pre-tax income[10] Market Drivers and Growth - AI power demand is projected to grow at an annual average of 70% through 2027[14] - Electric vehicle adoption is projected to grow 20-fold by 2040, increasing the average total annual EV load in the U S to 468000 GWh from 24000 GWh in 2023[16] - Companies have committed $525 billion towards the construction of factories making semiconductors, microchips, batteries, and solar panels since 2021[18]

Financial Data and Key Metrics Changes - The company reported record quarterly consolidated revenues of $776 million, up 6.3% compared to the same quarter last year, and up 5.5% on an organic basis [8][17] - Adjusted EBITDA grew 13.9% year over year to $197 million, with an adjusted EBITDA margin of 25.4%, an increase of 170 basis points [8][18] - Adjusted net income for the second quarter was $110 million, up 17% from the previous year, with adjusted diluted earnings per share rising to $0.52 from $0.44 [18][19] Performance by Business Segment - **Industrial Segment**: Revenues rose 7.6% to $338 million, with organic growth of 7%. Adjusted EBITDA increased 20.6% to $117 million, and the adjusted EBITDA margin improved to 34.6% [19][20] - **Consumer Segment**: Revenues were $340 million, up 5.6% overall and 4.7% organically. Adjusted EBITDA was $65 million, a 6.6% increase, with a margin of 19.1% [21][22] - **Software and Advisory Segment**: Revenues increased 4.3% to $98 million, with organic growth of 3.2%. Adjusted EBITDA remained unchanged at $15 million, with a margin of 15.3% [22][23] Market Data and Key Metrics Changes - The company noted a dynamic geopolitical and regulatory environment impacting customer behavior, with a pull forward in orders observed in both industrial and consumer segments [14][35] - The demand for data center services is expected to grow significantly, with power consumption by data centers projected to rise from 4.4% of total U.S. electricity demand in 2023 to 12% by 2028 [11][12] Company Strategy and Development Direction - The company is focusing on higher growth megatrends, including global energy transition, electrification, and digitalization, to drive future growth [6][7] - Strategic investments in lab expansions and capacity enhancements are aimed at addressing growth opportunities in key end markets [9][10] - The company remains committed to identifying and executing strategic acquisitions to enhance profitability and earnings potential [27][89] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate uncertainties and affirmed the full-year 2025 outlook, expecting mid-single-digit organic revenue growth [26][25] - The company highlighted the essential nature of its services and the resilience of its business model, which supports sustained revenue streams and deep customer relationships [14][30] Other Important Information - The company generated $208 million in free cash flow in the first half of 2025, a 58.8% increase from the previous year [24] - Capital expenditures for the first half were $93 million, with expectations for 2025 capital expenditures to be around 7% to 8% of revenue [24][27] Q&A Session Summary Question: Changes in client behavior related to tariffs - Management noted a shift in client behavior due to uncertainties, with some pull forward in orders observed in both industrial and consumer segments [34][35] Question: Update on lab capacity and future investments - Management confirmed ongoing investments in lab capacity and improvements, with a focus on areas where customer demand is highest [36][37] Question: Tougher comparisons in the second half of the year - Management acknowledged the tougher comparisons but expressed confidence in the business's progress and affirmed guidance for the full year [42][43] Question: Quantifying pull forward activity in segments - Management indicated that pull forward activity was observed in both industrial and consumer segments, with specific quantification provided for organic revenue growth [46][47] Question: Margin expansion opportunities - Management sees margin expansion opportunities across all segments, with strong progress noted in the industrial segment [50][51] Question: Growth in data centers and related megatrends - Management discussed the confluence of electrification, sustainability, and digitalization as key trends driving growth in data centers [55][56] Question: M&A pipeline and competitive pressures - Management remains disciplined in the M&A environment, actively evaluating opportunities that align with the company's strategy [89][90]

Financial Highlights - Consolidated Q1 revenues increased by 23% year-over-year[4] - Q1 earnings per diluted share reached $1.60, an increase of $1.02 year-over-year[4] - Q1 EBITDA totaled $30 million, representing 15.6% of revenue[4] - Gross margin was 19% in Q1[4] Project Backlog - Record project backlog of $1.9 billion as of April 30, 2025[4] - Q1 backlog additions included a 1.2 GW ultra-efficient natural gas-fired project[4] - Natural gas projects constitute 67% of the backlog, while renewable projects account for 28%[19] - Industrial projects make up 5% of the backlog[19] Market Drivers and Growth Strategy - AI power demand is projected to grow at an annual average of 70% through 2027[13] - EV adoption is projected to grow 20-fold by 2040, increasing the average total annual EV load in the U S to 468,000 GWh from 24,000 GWh in 2023[15] - Companies have committed $525 billion towards the construction of factories making semiconductors, microchips, batteries, and solar panels since 2021[17]

Group 1: Importance of Copper - Copper is essential for the modern economy, playing a critical role in the electrification trend, including electric vehicles, renewable energy, and data centers [2] - The U.S. administration aims to support domestic production of copper, which is beneficial for Freeport-McMoRan [3] Group 2: Freeport-McMoRan's Role - Freeport-McMoRan supplies 70% of domestically sourced copper for U.S. refining, positioning itself as a key player in domestic production [4] - The company is expected to benefit from a premium on U.S. copper prices compared to international prices, potentially leading to an annual financial benefit of approximately $800 million [5] Group 3: Production Initiatives - Freeport plans to sell 4 billion pounds of copper in 2025, with a leaching initiative expected to contribute 200 million pounds by the end of the year, increasing to 800 million pounds by 2030 [6][7] - The company has brownfield expansion projects in Arizona that could increase copper production by 2.5 billion pounds over time, with 47% of that from the U.S. [9] Group 4: Financial Outlook - Management estimates $11 billion in EBITDA for 2026/2027 at a copper price of $4 per pound, and $15 billion at $5 per pound [12] - Current copper prices suggest a potential EBITDA of $13.6 billion, compared to a market capitalization of $56.6 billion, indicating an attractive valuation for the company [13]