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Financial Data and Key Metrics Changes - Revenue for Q2 2025 was $116.5 million, a 15.1% increase year-over-year, driven by strong student start growth [22][30] - Adjusted EBITDA grew by 56% to $10.5 million, up from $6.7 million, with total consolidated adjusted EBITDA increasing by 68% [25][30] - Net income for the quarter was $1.6 million, or $0.05 per diluted share, with adjusted net income at $2.7 million, or $0.09 per diluted share [26] Business Line Data and Key Metrics Changes - Student starts for the quarter were approximately 5,900, representing a 22% growth over the prior year [23] - Transportation skilled trades programs saw a 32% increase in starts, while healthcare programs experienced an 8% decline due to a pause in nursing program enrollment [23][24] - The company achieved an 18.3% growth rate in student starts at existing campuses, driven by effective marketing initiatives [12] Market Data and Key Metrics Changes - The company is focused on training students for careers in fields with a chronic shortage of skilled employees, such as electrical, HVAC, automotive, welding, and nursing [8][9] - The demand for skilled trade training is expected to increase due to macroeconomic factors, including federal government actions impacting student loans [7] Company Strategy and Development Direction - The company plans to open two new campuses each year and aims for $25 million to $30 million in annualized revenue and $7 million to $10 million of EBITDA by the fourth year of operation for each new campus [14] - Corporate partnerships and program replications at existing campuses are key components of the growth strategy [15] - The company is investing in improving its nursing programs and seeking degree-granting status in multiple states to enhance its healthcare offerings [52] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the long-term demand for skilled trades, citing significant workforce needs in various sectors [18] - The company raised its full-year guidance, expecting revenue between $490 million and $500 million and adjusted EBITDA between $60 million and $65 million [30] Other Important Information - The company is experiencing a temporary slowdown in Title IV drawdowns due to increased verification selections by the Department of Education, which is expected to impact cash collections in the second half of the year [27][28] - Capital expenditures for the first half of the year were approximately $58 million, with an increase in full-year CapEx guidance to $75 million to $80 million [29][30] Q&A Session Summary Question: What are the expectations for student starts in Q3 and Q4? - Management indicated that Q3 starts are expected to be relatively flat due to high comparison from the previous year, while Q4 is anticipated to align with growth trends seen in the first half of the year [33][36] Question: What impact does the One Big Beautiful Bill have on the company? - Management noted that while the bill introduces annual and lifetime borrowing limits on Parent PLUS loans, it is not expected to have a material financial impact on the company [38][39] Question: Can you comment on the healthcare program's performance? - Management acknowledged that the healthcare segment is not as profitable as skilled trades and is undergoing restructuring to improve its performance, with expectations for growth in 2026 and 2027 [48][52] Question: What is the company's strategy for military and veteran outreach? - Management stated that military students currently represent less than 10% of total enrollment, and the company plans to re-enroll veterans once degree-granting status is achieved [56][59] Question: What programs are driving strong student starts? - The company highlighted that all four programs at the East Point campus (auto, HVAC, electrical, and welding) are performing well, contributing to strong enrollment growth [66][67]

Summary of Conference Call Records Industry Overview - The conference call focuses on the **data center power supply and liquid cooling industry** and discusses the evolving trends and opportunities within this sector [1][2][3]. Key Points and Arguments 1. **Power Supply Demand Upgrade**: The demand for power supply units (PSUs) has significantly increased, evolving from 3.3 kW to 5.5 kW, with many companies now pushing for 12 kW or higher. This upgrade raises the technical barriers, providing opportunities for domestic companies to enter overseas markets [1][2][3]. 2. **HVDC Technology Adoption**: Meta plans to implement a ±400V HVDC solution in its Prometheus data center project by 2026, which is ahead of market expectations. This presents a significant opportunity for domestic power supply companies to penetrate the overseas market [1][2][3]. 3. **NVIDIA's Future Plans**: NVIDIA's Ruben Ultra, set for mass production in the second half of 2027, will utilize an 800V HVDC architecture. The rapid advancement in HVDC technology by overseas clients exceeds market expectations, necessitating early positioning by domestic companies [1][3]. 4. **HVAC Trends**: The trend towards HVAC systems is clear, with NVIDIA's Robin Ultra achieving over 600 kW per cabinet. The adoption of HVAC can reduce costs and current losses, indicating a shift in power supply architecture [1][6]. 5. **Solid-State Transformer (SST) Benefits**: SST technology can significantly reduce cable usage in data centers by converting 10 kV input directly to 800V DC supply, potentially saving about 50% in cable usage. SST also improves overall efficiency by approximately 0.5% compared to traditional solutions [1][8]. 6. **Liquid Cooling Technology Growth**: The penetration rate of liquid cooling technology is expected to rise from 20% to around 50% by the end of 2025, driven by high-performance chip demand, system efficiency improvements, and energy-saving needs [1][10]. 7. **Domestic Companies' Competitive Edge**: Companies like HeWang, OuluTong, and MaiMi are actively developing relevant products. Those with established high-voltage, high-power technology will have a competitive advantage in the overseas market [1][5]. 8. **Market Catalysts**: Upcoming events, such as quarterly earnings reports from major companies and the global OCP conference in October, may serve as catalysts for industry development and market confidence [1][11]. Additional Important Insights - **Domestic Policy Support**: Shanghai has introduced a 600 million yuan subsidy policy for computing power, encouraging the establishment of new data centers. This support is expected to facilitate the adoption of flexible architectures in response to demand changes [1][15]. - **Investment Opportunities**: Companies that provide advanced cooling solutions and have strong competitive positions are recommended for investment. Notable mentions include Yingweike, Sixuan New Materials, and Shenli Environment [1][17][18]. This summary encapsulates the critical insights and developments discussed in the conference call, highlighting the opportunities and challenges within the data center power supply and liquid cooling industry.

Summary of Key Points from the Conference Call Industry Overview - The conference call focuses on the **US Industrial Orders** in Q2 2025, highlighting trends and expectations for the second half of the year [1][3]. Core Insights - **Q2 Margin Expectations**: Broad margin beats are anticipated for Q2, with a focus on 2H volumes as a key performance indicator (KPI) for the earnings season. Companies that can sustain pricing power amidst cost pressures will be closely monitored [3]. - **Order Rate Changes**: The sequential change in Q2 2025 order rates indicates potential for 2H volumes and pricing power. Notable leaders in order improvements include: - **Commercial Aircraft**: +70% - **Oil & Gas + Mining Machinery**: +5% - **Industrial Machinery**: +5% - **Construction Machinery**: +3% - **Lighting Equipment**: +2% - **HVAC**: +2% - Laggards include: - **Turbines + Power Transmission Equipment**: -7% - **Household Appliances**: -4% - **Measuring & Control**: -2% - **Defense**: No specific percentage mentioned [3]. Competitive Landscape - **Tariff Impacts**: The "Trump 2.0" tariffs are seen as providing competitive advantages for US industrials, particularly those compliant with USMCA, as they are less reliant on EU and Asian imports. This is expected to positively influence Q2 order rates [8]. - **Import Trends**: Mexico's imports increased by 6% year-over-year, while imports from China dropped significantly by 41% [8]. Company-Specific Insights - **Preferred Companies**: Companies with strong demand trends and excess backlog are favored, including: - **Rockwell Automation (ROK)** - **Eaton Corporation (ETN)** - **Johnson Controls (JCI)** - **Trane Technologies (TT)** - **Acuity Brands (AYI)** [7]. - **Valuation Methodology**: - **Acuity Brands (AYI)**: Price target based on ~17x blended FY26/FY27 EPS of $20.98, representing a ~20% discount to the S&P 500 [15]. - **Eaton Corporation (ETN)**: Price target of ~26.0x blended '26/'27 EPS of $14.44, justified by sustained high single-digit organic growth [16]. - **Johnson Controls (JCI)**: Price target of ~$115 based on ~23.5x blended F'26/'27 EPS of $4.91, supported by portfolio transformation [17]. - **Rockwell Automation (ROK)**: Price target of ~$350 based on ~28.0x blended FY'26/'27 EPS of $12.62, benefiting from secular tailwinds [22]. - **Trane Technologies (TT)**: Price target of ~$445 based on ~28.5x blended '26/'27 EPS of $15.50, reflecting strong demand in Data Center & Advanced Manufacturing [23]. Risks and Considerations - **Downside Risks**: Include potential inability to eliminate stranded costs post-portfolio transformation, erosion of pricing power due to supply chain normalization, and a slowdown in construction activity due to higher interest rates [19][20]. - **Upside Opportunities**: Order acceleration from mega-projects, continued margin expansion, and sustained demand in traditional commercial construction sectors [20][21]. Conclusion - The US industrial sector is showing signs of resilience with varying order trends across different categories. Companies with strong backlogs and pricing power are positioned favorably for the second half of 2025, while external factors such as tariffs and import dynamics play a crucial role in shaping the competitive landscape [3][8].

Company Insights - Hermes Building Services emphasizes the strategic importance of proactive maintenance in enhancing the value of real estate assets, viewing it as a critical investment for property longevity and performance [1][2] - The company offers a comprehensive suite of services including janitorial, HVAC, plumbing, electrical, and landscaping maintenance, focusing on early detection of potential issues to reduce downtime and extend the lifespan of building systems [3][7] - Clients of Hermes Building Services experience improved tenant satisfaction, reduced operational disruptions, and enhanced property valuations through regular maintenance investments [4] Industry Overview - The North American commercial facility maintenance market was valued at approximately $153.6 billion in 2023 and is projected to grow to $202.41 billion by 2030, reflecting a compound annual growth rate (CAGR) of 4.1%, indicating a growing recognition of maintenance services as essential in property management strategies [2]

Core Insights - ABM has shown a strong performance, climbing 7% over the past month, outperforming the S&P 500 composite's 6% rally, attributed to a disciplined transformation strategy [1] Group 1: Transformation Strategy - In 2015, ABM launched the 2020 Vision, aiming for long-term, profitable growth through a streamlined, industry-focused operating model, centralizing functions and standardizing service delivery across key verticals [2] - In 2021, ABM introduced ELEVATE, a strategic plan emphasizing digitization, data, and workforce development, resulting in stronger client traction and operational scalability [3] Group 2: Strategic Expansion - ABM's acquisition of Quality Uptime in 2024 marks a significant shift into the data center space, enhancing its capabilities in electrical testing and power distribution, crucial for AI-driven facilities, positioning ABM as a full-suite provider in a high-margin growth segment [4] Group 3: Shareholder Value - ABM has distributed dividends of $51.9 million, $57.5 million, and $56.5 million in fiscal years 2022, 2023, and 2024, respectively, and returned $97.5 million, $138.1 million, and $56.1 million through share repurchases in the same years, reflecting a commitment to enhancing shareholder value [5] Group 4: Financial Strength - ABM maintains a solid financial footing with a current ratio of 1.52, above the industry average of 1.31, ensuring operational agility and reinforcing investor confidence [6] Group 5: Market Position - ABM currently holds a Zacks Rank 2 (Buy), indicating strong market positioning, alongside other top-ranked stocks in the Zacks Business Services sector [7]

Financial Data and Key Metrics Changes - Revenue increased by 16% to $117.5 million, marking the eighth consecutive quarter of double-digit revenue growth [24] - Adjusted EBITDA grew by 56% to $10.6 million, with an adjusted EBITDA margin rising to 9% from 7% in the prior year [31] - Net income was $1.9 million or $0.06 per diluted share, while adjusted net income was $3.5 million or $0.11 per diluted share [32] Business Line Data and Key Metrics Changes - Student starts at 21 campuses grew by 20% over the prior period, continuing a trend of double-digit growth for six consecutive quarters [11] - Transportation and Skilled Trades programs saw a robust 32.4% increase in stock growth, while healthcare and other professions experienced a 6.3% decline due to program optimizations [25][26] Market Data and Key Metrics Changes - The company is successfully meeting the growing demand for educational alternatives to traditional four-year colleges, with a focus on closing the workforce skills gap [12][19] - The East Point campus in Atlanta opened in March 2024 and contributed over $4 million in revenue during Q1 2025, becoming profitable ahead of schedule [12][101] Company Strategy and Development Direction - The company is focused on expanding its network of schools by replicating in-demand programs and opening new campuses in underserved markets [17] - The Lincoln ten point zero hybrid teaching model has provided increased flexibility for students, contributing to higher graduation rates and attracting corporate partners [10][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving approximately $550 million in organically generated revenue and $90 million in adjusted EBITDA by 2027 [9] - The company anticipates continued strong demand for skilled trades training, driven by initiatives in manufacturing, electrical grid rebuilding, and workforce needs [18][85] Other Important Information - Capital expenditures for 2025 are expected to range between $70 million and $75 million, supporting new campuses and program expansions [28][35] - The company has amended its credit facility to increase financial flexibility, ending the quarter with approximately $90 million in total liquidity and no debt outstanding [28] Q&A Session Summary Question: Can you provide additional color on the strong demand and increased marketing efficiencies? - Management noted that improved marketing efficiencies and increased awareness have driven strong demand, with expectations for savings to continue throughout the year [39] Question: What is the update on regulatory changes and their impact? - Management indicated that they are in a good position with regulatory changes, as the administration supports more people entering trades, and they are maintaining close contact with the Department of Education [45][46] Question: Are all new programs approved by the Department of Education? - Management confirmed that all new programs are approved except for the welding program in Rhode Island, which is pending [51] Question: When will the healthcare starts begin to grow again? - Management expects healthcare starts to be in growth mode beginning in Q4 2025, following the suspension of certain programs [53] Question: How much of the healthcare start weakness is attributed to specific program suspensions? - Management indicated that outside of the suspended programs, healthcare starts grew by almost 6% [61] Question: What is the expected cadence of capital expenditures throughout the year? - Management forecasted Q2 to be one of the heaviest quarters for capital expenditures, slightly exceeding Q1 [97]

Financial Data and Key Metrics Changes - The company reported a net income of $86 million for Q2 2025, an increase of $18 million compared to the prior year period, driven by a $32 million increase in adjusted EBITDA [9] - Adjusted EBITDA rose by $32 million to $128 million due to higher home heating oil and propane volumes sold and improved margins [9][11] - For the first half of fiscal 2025, net income was $119 million, up $37 million from the previous year, largely due to a $34.6 million increase in adjusted EBITDA [11] Business Line Data and Key Metrics Changes - Home heating oil and propane volume increased by 27 million gallons or 23% to 144 million gallons in Q2 2025, attributed to colder weather and acquisitions [7] - Product gross profit increased by $52 million or 25% to $258 million, driven by higher sales volumes and margins [8] - The service and installation business contributed an increase in adjusted EBITDA of $1.6 million [8] Market Data and Key Metrics Changes - Temperatures during Q2 2025 were 13% colder than the previous year but still 4.5% warmer than normal, impacting heating oil and propane demand [8] - For the first half of fiscal 2025, temperatures were 9.4% colder than the prior year, contributing to a 14.7% increase in home heating oil and propane volume [10] Company Strategy and Development Direction - The company has completed $126.5 million in acquisitions since February 2024, enhancing its market presence [5] - The company raised its annual dividend by $0.05 to $0.74 per unit, reflecting a commitment to maximizing shareholder returns [5] - There is a focus on operational execution and efficiency, alongside ongoing expansion in the HVAC business [6] Management's Comments on Operating Environment and Future Outlook - Management expressed satisfaction with the team's response to increased demand due to colder temperatures and emphasized the importance of service quality [6] - The company anticipates opportunities for further investment in the summer and is focused on business development initiatives [6] Other Important Information - The company recorded a $3.1 million expense under its weather hedge for Q2 2025, compared to a benefit of $6.5 million in the same period last year [9] - Delivery, branch, and general & administrative expenses increased by $22 million year-over-year, with $9.6 million attributed to the weather hedging program [8] Q&A Session Summary Question: Any changes to the buyback program due to recent acquisitions? - Management stated there has been no change to the buyback program, which is currently on automatic pilot [16][17] Question: Are there any acquisitions in the HVAC installation servicing business? - Management indicated that the focus is primarily on distribution side acquisitions, with limited internal organic growth in HVAC [18] Question: Any changes in customers' ability to pay? - Historically, the bad debt rate has been around 3% of sales, and management noted that customers prioritize paying for home heating oil during winter [20] Question: Anticipated impact from tariffs on heating oil prices? - Management acknowledged price increases on HVAC parts and equipment due to tariffs, ranging from 3% to 15% [24] Question: Any changes in acquisition availability due to tax or other factors? - Management noted no significant changes related to taxes but mentioned a busy heating season and potential opportunities post-season [26]

Core Insights - SPX Technologies reported revenue of $482.6 million for Q1 2025, a year-over-year increase of 3.7% and an EPS of $1.38, up from $1.25 a year ago [1] - The revenue exceeded the Zacks Consensus Estimate of $478.43 million by 0.87%, while the EPS surprised by 18.97% against the consensus estimate of $1.16 [1] Revenue Breakdown - Detection & Measurement segment generated $159.60 million, surpassing the two-analyst average estimate of $157.67 million, but reflecting a year-over-year decline of 2% [4] - HVAC segment reported revenues of $323 million, exceeding the average estimate of $320.45 million, with a year-over-year increase of 6.8% [4] Segment Income - Detection & Measurement segment income was $36.60 million, compared to the average estimate of $30.75 million [4] - HVAC segment income reached $73.90 million, slightly above the average estimate of $72.90 million [4] Stock Performance - SPX Technologies' shares returned -1.1% over the past month, compared to the Zacks S&P 500 composite's -0.7% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market [3]