Financial Data and Key Metrics Changes - The company's revenue for Q1 2025 increased by 41.7% compared to Q1 2024, primarily due to the inclusion of revenues from Timber Technologies and Alliance Drilling Tools acquisitions [5] - Gross margin improved to 24.3% from 17.3% in the same quarter last year, attributed to higher revenues and the addition of Timber Technologies [5] - Net loss from continuing operations was $1,200,000 in Q1 2025, an improvement from a net loss of $2,200,000 in Q1 2024 [9] - Non-GAAP adjusted EBITDA from continuing operations was a loss of $800,000 in Q1 2025, compared to a loss of $1,100,000 in the same period last year [10] Business Line Data and Key Metrics Changes - Building Solutions segment revenues increased by 32.9% compared to Q1 2024, although it was below internal expectations due to delays in commercial projects [5] - The Building Solutions division backlog reached a record $27,900,000 at quarter end, up from $14,800,000 at the end of Q1 2024, indicating strong future demand [6] - The Energy Services division was established with the acquisition of Alliance Drilling Tools, and integration is proceeding smoothly [6] Market Data and Key Metrics Changes - The company noted a significant uptick in customer interest and activity over the past couple of quarters, indicating a positive market environment [6] - There were no signs of projects being put on hold due to tariff impacts, with a strong backlog supporting future growth [19] Company Strategy and Development Direction - The management team is focused on creating shareholder value through targeted business development initiatives and identifying additional accretive opportunities across all divisions [12] - The company is exploring organic growth opportunities within the Energy Services division and considering further acquisitions [6] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong backlog and ongoing projects, suggesting that the construction demand built up over time is now being realized [19] - The company is monitoring input costs, such as lumber prices, but does not foresee significant negative impacts on their operations [20] Other Important Information - Consolidated cash flow from operations for Q1 2025 was an inflow of $600,000, a significant improvement from an outflow of $2,400,000 in Q1 2024 [10] - The company's unrestricted cash balance at the end of Q1 2025 was $1,900,000, down from $4,000,000 at the end of 2024, primarily due to acquisition-related cash outflows [10] Q&A Session Summary Question: Inquiry about project delays due to tariffs - Management clarified that delays were specific to a large project at EdgeBuilder, which experienced a temporary pause but is expected to resume and recognize revenue in Q2 [16][17] Question: Signs of projects being put on hold - Management indicated that there are no signs of projects being put on hold, with a strong backlog supporting ongoing construction activities [19] Question: Gross profit margin changes in Alliance Drilling - Management explained that the gross profit margin fluctuations are a function of quarterly activity levels and reaffirmed the high-margin nature of the Alliance Drilling business [26][27] Question: Equipment rental revenue structure - Management described the rental terms as project-based, with high rental rates due to the nature of the equipment used in drilling operations [30]

Core Viewpoint - Johnson Controls International plc (JCI) is set to release its second-quarter fiscal 2025 financial results on May 7, with expectations of a mixed performance in revenues and earnings compared to the previous year [1][5]. Revenue Estimates - The consensus estimate for JCI's revenues is $5.64 billion, reflecting a decrease of 15.8% from the same quarter last year [2]. - The Building Solutions North America segment is anticipated to benefit from strong demand for HVAC platforms in data centers [2]. - The Building Solutions Europe, the Middle East, Africa/Latin America segment is expected to see revenues of $1.1 billion, indicating a 0.5% increase year-over-year [3]. - The Building Solutions Asia Pacific segment is projected to experience a revenue decline of 14.3% year-over-year to $434.8 million [4]. - The Global Products segment is expected to see an 8.3% increase in revenues year-over-year to $531.5 million [4]. Earnings Estimates - The consensus estimate for adjusted earnings is set at 77 cents per share, a decrease of 1.3% from the previous year [2]. - JCI has consistently surpassed earnings estimates in the past four quarters, with an average surprise of 5.1% [1]. Key Factors Influencing Performance - Investments in digital offerings, such as the OpenBlue platform, are expected to drive revenue growth [5]. - However, rising selling, general and administrative (SG&A) expenses, particularly due to higher insurance recovery costs, may negatively impact margins [6]. - The company faces foreign currency headwinds due to its significant international operations, which could further affect profitability [6]. Earnings Prediction Model - JCI currently has an Earnings ESP of 0.00%, indicating no clear prediction for an earnings beat this time [8]. - The company holds a Zacks Rank of 4 (Sell), which suggests a less favorable outlook compared to higher-ranked peers [8].

Market Overview - The bull run in Wall Street that began in early 2023 faced challenges last month, primarily due to a significant rally in the technology sector driven by generative AI growth [1] - Market participants have experienced increased pain, with U.S. stock markets in negative territory year-to-date and the Nasdaq Composite in correction [2] - Key factors contributing to this downturn include overstretched valuations of AI stocks, recession fears in the U.S. economy, uncertainty regarding future interest rate cuts by the Fed, and competition from low-cost generative AI platforms from China [3] AI-Powered Non-Tech Stocks - Five non-tech companies utilizing extensive AI applications are recommended for investment: PayPal Holdings Inc. (PYPL), Visa Inc. (V), Upstart Holdings Inc. (UPST), Netflix Inc. (NFLX), and Johnson Controls International plc (JCI) [4][5] PayPal Holdings Inc. (PYPL) - PYPL is experiencing robust growth in total payment volume, with improved customer engagement and rising adoption rates across platforms [7] - The company leverages AI to enhance transaction efficiency and consumer insights, with platforms like Fastlane and Ads providing a technological edge [8] - Expected revenue and earnings growth rates for PYPL are 3.7% and 8% respectively, with a Zacks Consensus Estimate for earnings improving by 2.4% in the past 60 days [9] - PYPL's current valuation metrics indicate an attractive position compared to peers, with a forward P/E of 13.58X, P/S of 2.12X, and P/B of 3.30X [10] - The average price target suggests a potential increase of 36.2% from the last closing price of $68.62, indicating a maximum upside of 82.2% [11] Visa Inc. (V) - Visa's strategic acquisitions and alliances are driving long-term growth, with expected net revenue growth in low double-digits for fiscal 2025 [12] - The shift to digital payments and increased demand for AI-driven services, particularly in fraud prevention, are beneficial for Visa [13] - Visa has invested $3.5 billion over the past decade to enhance its data platform, preventing $40 billion in fraud attempts annually [14] - Expected revenue and earnings growth rates for Visa are 10.2% and 12.4% respectively, with a current dividend yield of 0.71% [15] - The average price target indicates a potential increase of 15.2% from the last closing price of $332.84, with a maximum upside of 23.2% [16] Upstart Holdings Inc. (UPST) - UPST operates as an AI lending platform, partnering with banks to provide affordable credit across various lending segments [17] - The company's AI-driven credit risk models allow for more approvals at lower APRs, enhancing efficiency and fraud detection [18] - Expected revenue and earnings growth rates for UPST are 59.3% and over 100% respectively, with earnings estimates improving significantly in the past 30 days [19] - The average price target suggests a potential increase of 61.5% from the last closing price of $49.66, indicating a maximum upside of 117.5% [21] Netflix Inc. (NFLX) - Netflix utilizes AI and machine learning to enhance user experience through personalized content recommendations [22] - The company reported strong engagement levels, with an average of two hours of viewing per member per day [22] - Expected revenue and earnings growth rates for Netflix are 14% and 24% respectively, with earnings estimates improving by 4% in the past 60 days [25] - The average price target indicates a potential increase of 20% from the last closing price of $919.68, suggesting a maximum upside of 62.4% [26] Johnson Controls International plc (JCI) - JCI is benefiting from strong demand in its Building Solutions segment, particularly in HVAC and security [27] - The company is investing in digital offerings, enhancing its AI capabilities through the OpenBlue platform [28] - Expected revenue and earnings growth rates for JCI are -11.9% and -1.9% respectively, with a current dividend yield of 1.92% [30] - The average price target suggests a potential increase of 23.4% from the last closing price of $78.68, indicating a maximum upside of 33.5% [31]