Financial Data and Key Metrics Changes - The company reported record quarterly consolidated revenues of $776 million, up 6.3% compared to the same quarter last year, and up 5.5% on an organic basis [7][17] - Adjusted EBITDA grew 13.9% year over year to $197 million, with an adjusted EBITDA margin of 25.4%, an increase of 170 basis points from the previous year [7][18] - Adjusted net income for the second quarter was $110 million, up 17% from last year, with adjusted diluted earnings per share increasing to $0.52 from $0.44 [18][19] Performance by Business Segment - **Industrial Segment**: Revenues rose 7.6% to $338 million, with adjusted EBITDA increasing 20.6% to $117 million and an adjusted EBITDA margin of 34.6% [19][20] - **Consumer Segment**: Revenues were $340 million, up 5.6% overall and 4.7% organically, with adjusted EBITDA of $65 million, a 6.6% increase [21][22] - **Software and Advisory Segment**: Revenues increased 4.3% to $98 million, with adjusted EBITDA unchanged at $15 million and a margin of 15.3%, down 70 basis points [22][23] Market Data and Key Metrics Changes - The company noted a favorable impact from foreign exchange movements, particularly with the euro and Japanese yen, contributing to revenue growth [17] - The demand for data center services is expected to grow significantly, with power consumption by data centers projected to increase from 4.4% of total U.S. electricity demand in 2023 to 12% by 2028 [10][11] Company Strategy and Industry Competition - The company is focusing on higher growth megatrends, including global energy transition, electrification, and digitalization, which are expected to drive demand for its services [5][6] - Strategic investments include the launch of new testing facilities in Europe and expansions in HVAC testing capabilities to meet growing demand [9][10] - The company aims to capitalize on emerging opportunities while managing potential risks effectively, affirming its full-year 2025 outlook [26][27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate a dynamic geopolitical and macroeconomic environment, affirming a mid-single-digit organic revenue growth outlook for 2025 [27][28] - The company highlighted the essential nature of its services, noting a shift in customer behavior due to tariffs and geopolitical uncertainties, but a return to normalcy in June [13][66] Other Important Information - The company generated $208 million in free cash flow in the first half of 2025, a 58.8% increase from the previous year [24] - Capital expenditures for the first half were $93 million, with expectations to maintain capital expenditures at approximately 7% to 8% of revenue for 2025 [24][28] Q&A Session Summary Question: Changes in client behavior related to tariffs - Management noted a shift in client behavior due to uncertainties in 2025, with some pull forward in orders observed [34][35] Question: Update on lab capacity and future investments - Management confirmed ongoing investments in lab capacity and improvements, with a focus on meeting customer demand [36][37] Question: Clarification on full-year guidance and tougher comparisons - Management acknowledged tougher comparisons in the second half but expressed confidence in the business's progress [40][43] Question: Quantifying pull forward activity in segments - Management indicated pull forward activity in both industrial and consumer segments, with specific growth rates provided [46][48] Question: Margin expansion opportunities - Management sees margin expansion opportunities across all segments, with strong progress noted in the industrial segment [50][51] Question: Data center growth and related investments - Management discussed the importance of data centers and the potential for incremental lab capacity investments to capitalize on this trend [54][60] Question: Competitive pressures from recent acquisitions in the industry - Management remains disciplined in M&A activities, focusing on deals that align with their strategic goals [86][88] Question: Trends in the Software and Advisory segment - Management highlighted challenges in the advisory segment due to changing wind policies and pressures in commercial real estate [90][91]