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 [18] - 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 [19] - Adjusted diluted earnings per share for Q2 was $0.39, an 18.2% increase compared to the prior year [19] Business Line Data and Key Metrics Changes - Safety Services segment reported revenues of $1.36 billion, a 15.8% increase year-over-year, with organic growth of 5.6% driven by pricing improvements and strong project revenues [20] - Specialty Services segment revenues grew 13.3% to $629 million, with adjusted gross margin at 18.1%, a 350 basis point decrease due to increased project starts and rising material costs [21] Market Data and Key Metrics Changes - The North American Safety business achieved double-digit inspection growth for the twentieth consecutive quarter, indicating strong market performance [13] - The international business showed high single-digit order growth, reflecting continued momentum under API's ownership [14] Company Strategy and Development Direction - The company aims for $10 billion in net revenues by 2028, with a focus on mid-single-digit organic growth and a 16% adjusted EBITDA margin [11] - Key initiatives include pricing strategies, improved revenue mix, disciplined customer selection, and selective business pruning to achieve long-term financial targets [12] 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, highlighting strong backlog and free cash flow generation [17] - The company remains optimistic about the inspection service and monitoring business, with expectations for continued organic growth [27] 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 [15][16] - The adjusted free cash flow for the first half of the year was $186 million, reflecting a significant improvement [22] Q&A Session Summary Question: What business 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 [32] Question: What caused the decline in gross margins in the specialty business? - Rising material costs and increased project starts were identified as key factors impacting margins, with expectations for sequential improvement as the year progresses [36] Question: How does the company view its M&A potential? - Management indicated that there is potential to exceed the $250 million M&A target, emphasizing the importance of disciplined selection in acquisitions [42] Question: What is the outlook for the Safety Services segment? - The company expects mid to upper single-digit revenue growth in the Safety Services segment for the back half of the year [46] Question: How is the international business performing? - The international business has shown consistent organic growth, with high single-digit order growth indicating strong health in the inspection and service business [58] Question: What is the margin profile of recent acquisitions? - All recent acquisitions are expected to be accretive, with a mix of businesses in the North American safety sector and a profitable HVAC service business [51]