Financial Data and Key Metrics Changes - Reported revenues for Q2 2025 were $2 billion, a 15% increase compared to $1.73 billion in the prior year period, with organic growth of 8.3% driven by strong project revenue growth and pricing improvements [15][20] - Adjusted EBITDA increased by 17.7% for Q2, with an adjusted EBITDA margin of 13.7%, representing a 30 basis point increase compared to the prior year [15][20] - Adjusted diluted earnings per share for Q2 was $0.39, an 18.2% increase compared to the prior year [15] Business Line Data and Key Metrics Changes - Safety Services segment revenues increased by 15.8% to $1.36 billion, with organic growth of 5.6% driven by pricing improvements and strong growth in service and project revenues [17] - Specialty Services reported organic revenues grew 13.3% to $629 million, driven by strong project revenue growth [18] - Adjusted gross margin for Safety Services was 37.2%, a 70 basis point increase, while Specialty Services saw a decrease of 350 basis points to 18.1% due to increased project starts and rising material costs [17][18] Market Data and Key Metrics Changes - The North American safety business achieved double-digit inspection growth for the twentieth consecutive quarter, indicating strong market demand [11] - The international business delivered solid organic growth with high single-digit order growth, reflecting continued momentum under API's ownership [12][56] Company Strategy and Development Direction - The company aims to achieve over $10 billion in net revenues by 2028, with a target of 16% plus adjusted EBITDA margin and over $3 billion in cumulative adjusted free cash flow through 2028 [9][10] - Key initiatives include pricing strategies, improved revenue mix, disciplined customer selection, and selective business pruning to meet new financial targets [10][13] - The company is focused on building a strong leadership culture and investing in technology to support growth [6][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to execute the strategy and deliver against the 2025 plan, citing strong backlog and free cash flow generation [14][23] - The company anticipates continued organic growth and margin expansion, particularly in the inspection service and monitoring business [23][78] Other Important Information - The company completed six acquisitions in Q2, with a total of seven year-to-date, and plans to deploy approximately $250 million in accretive M&A this year [13][20] - The company has a strong balance sheet, with a net debt to adjusted EBITDA ratio of approximately 2.2 times [19] Q&A Session Summary Question: What businesses outperformed expectations in Q2? - Management noted that the inspection service and monitoring businesses performed largely as expected, with strong contract and project activity contributing to revenue exceeding guidance [28] Question: What caused the decline in gross margins in the specialty business? - The decline was attributed to increased project starts, rising material costs, and weather impacts, with expectations for sequential improvement in margins as the year progresses [31][32] Question: How does the guidance outlook for the base businesses look? - Management indicated that the guidance raise was driven by strong backlog and improved outlook for the second half of the year, with a third of the increase attributed to M&A [36][105] Question: What is the status of the international business? - The international business showed organic growth and high single-digit order growth, indicating strong performance and ongoing optimization efforts [56] Question: Can you elaborate on the elevator acquisition? - The elevator acquisition is performing as expected, with mid to upper single-digit organic growth, and management remains optimistic about building a billion-dollar elevator platform [46][60] Question: What are the key factors affecting backlog margin realization? - Key factors include material cost escalation, weather impacts, and labor availability, with management emphasizing the importance of execution [106][108]

Financial Performance Highlights - Net revenues for Q1 2025 reached $1.7 billion, a 7.4% increase compared to $1.601 billion in Q1 2024[17, 21] - Organic net revenue increased by approximately 2% compared to Q1 2024[17] - Adjusted gross profit totaled $545 million, compared to $492 million in Q1 2024, representing a 10.8% increase[19, 21] - Adjusted gross margin expanded by 100 basis points to 31.7% in Q1 2025 from 30.7% in Q1 2024[17, 21] - Adjusted EBITDA for Q1 2025 was $193 million, up from $175 million in Q1 2024, a 10.3% increase[17, 19, 21] - Adjusted EBITDA margin increased by 30 basis points to 11.2% in Q1 2025 from 10.9% in Q1 2024[17, 21] - Adjusted diluted earnings per share (EPS) for Q1 2025 was $0.37, an 8.8% increase compared to $0.34 in Q1 2024[17, 21] - Adjusted free cash flow for Q1 2025 was $86 million, a significant increase from $12 million in Q1 2024[17, 21] - Adjusted free cash flow conversion was 44.6% in Q1 2025, a substantial increase from 6.9% in Q1 2024[17, 21] Segment Performance - Safety Services net revenues increased by 13.4% to $1.267 billion in Q1 2025 from $1.117 billion in Q1 2024[23]