Financial Data and Key Metrics Changes - Total revenue for Q1 2025 was $133.1 million, an increase of 11.9% compared to $119 million in Q1 2024 [21] - ODR revenue grew by 21.7%, while GCR revenue declined by 4.5% as part of a strategic shift towards ODR [22] - Gross profit increased by 18.1% from $31.1 million to $36.7 million, with total gross margin rising to 27.6% from 26.1% [22] - Adjusted EBITDA for the quarter was $14.9 million, up 26.5% from $11.8 million in Q1 2024, with an adjusted EBITDA margin of 11.2% [24] - Net income grew by 34.6% to $10.2 million, with earnings per diluted share increasing by 32.8% to $0.85 [24] Business Line Data and Key Metrics Changes - ODR revenue accounted for 67.9% of total revenue in Q1 2025, up from 62.4% in Q1 2024 [22] - ODR gross profit increased by $4 million or 18%, while GCR gross profit rose by $1.6 million or 18.3% [23] - ODR gross margins were 28.9%, slightly down from 29.8% in Q1 2024, primarily due to prior year write-ups [23] Market Data and Key Metrics Changes - The healthcare market is showing signs of recovery, with customers beginning to address deferred maintenance from previous years [32] - Customers are accelerating purchasing decisions due to tariff uncertainties, which has positively impacted project timelines [14][35] Company Strategy and Development Direction - The company is focused on expanding its ODR model, which has increased from less than 21% of total revenue in 2019 to a projected 70-80% for full year 2025 [6][7] - A significant investment in the sales organization has been made, adding approximately 40 new professionals to enhance customer relationships [9] - The company aims to transition strategic customer relationships from reactive to proactive, influencing customer budgets by year-end [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving full year revenue guidance of $610 million to $630 million and adjusted EBITDA of $78 million to $82 million [19] - The company remains well-positioned to capitalize on growth opportunities in identified metropolitan areas, with a focus on acquisitions to accelerate market entry [19][64] Other Important Information - The company reported a significant improvement in operating cash flow, moving from a $3.9 million outflow in Q1 2024 to a $2.2 million inflow in Q1 2025 [25] - The balance sheet remains strong, with $38.1 million in cash and total debt of $27.5 million [26] Q&A Session Summary Question: Insights on the healthcare market recovery - Management noted that the healthcare vertical has shown stability and is addressing deferred maintenance, leading to long-term capital planning [32][33] Question: Impact of tariffs on project timelines - Management indicated that while tariffs have been neutral, customers are accelerating decisions to avoid future price increases [35] Question: ODR client relationship development - Management explained that account managers are placed based on research and spending patterns, ensuring that only viable accounts receive dedicated attention [40][41] Question: GCR gross margin sustainability - Management aims to maintain GCR gross margins between 28% and 29%, though it may fluctuate based on project mix [46][47] Question: Sales team ramp-up and effectiveness - Management confirmed that the new sales team, primarily on-site account managers, is crucial for growing the ODR segment, with a ramp-up period expected [57][58] Question: M&A strategy and market competition - Management emphasized a patient and disciplined approach to acquisitions, focusing on long-term integration rather than immediate deals [80][81]

Financial Data and Key Metrics Changes - Total revenue for Q1 2025 was $133.1 million, an increase of 11.9% compared to $119 million in Q1 2024 [20] - ODR revenue grew by 21.7%, accounting for 67.9% of total revenue, up from 62.4% in Q1 2024 [21] - Gross profit increased by 18.1% from $31.1 million to $36.7 million, with total gross margin rising to 27.6% from 26.1% [21][22] - Adjusted EBITDA for the quarter was $14.9 million, up 26.5% from $11.8 million in Q1 2024, with an adjusted EBITDA margin of 11.2% [23] - Net income grew 34.6% to $10.2 million, with earnings per diluted share increasing by 32.8% to $0.85 [23] Business Line Data and Key Metrics Changes - ODR gross profit comprised 71.2% of total gross profit, increasing by $4 million or 18% [22] - GCR revenue declined by 4.5% as part of a strategic shift towards ODR, but GCR gross profit increased by 18.3% due to a focus on higher quality projects [21][22] Market Data and Key Metrics Changes - The healthcare market is showing signs of recovery, with customers beginning to address deferred maintenance from previous years [32] - Customers are accelerating purchasing decisions due to tariff uncertainties, which has positively impacted project timelines [36] Company Strategy and Development Direction - The company is focused on expanding its ODR model, which has increased from less than 21% of total revenue in 2019 to a projected 70-80% for the full year 2025 [6] - A significant investment in sales personnel has been made, adding approximately 40 new professionals to the sales team [8] - The company aims to transition customer relationships from reactive to proactive, influencing customer budgets by the end of the year [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving full-year revenue guidance of $610 million to $630 million and adjusted EBITDA of $78 million to $82 million [18] - The company remains well-positioned to capitalize on growth opportunities in identified metropolitan statistical areas (MSAs) [18] Other Important Information - The company has a strong balance sheet with $38.1 million in cash and total debt of $27.5 million [26] - Tariffs have had a neutral effect on the business, allowing for quick responses to market dynamics [13] Q&A Session Summary Question: Insights on the healthcare market recovery - Management noted that the healthcare vertical has shown stability and customers are beginning to plan for long-term capital needs due to deferred maintenance [32][33] Question: Impact of tariffs on project timelines - Management indicated that customers are making quicker purchasing decisions to avoid potential price increases due to tariffs, which has been beneficial for the company [36] Question: ODR client relationship development - Management explained that account managers are placed at ODR clients after assessing the potential for long-term partnerships based on spending patterns and opportunities [40][41] Question: GCR gross margin sustainability - Management stated that they are targeting a blended gross margin of 28% to 29% for the year, acknowledging variability based on project mix [48][49] Question: M&A strategy in a competitive environment - Management emphasized a patient and disciplined approach to acquisitions, focusing on long-term integration and cultural alignment with potential targets [78][80]