Q2 2026 TIC Solutions Inc Earnings Call Transcript
Key Points
- Record combined C&E and geospatial backlog increased 20% year-over-year to $1.18 billion, providing strong visibility for the second half of 2026 and into next year.
- Consulting and Engineering delivered record second quarter revenue of $207 million, up 16.8% year-over-year, driven by strength in power, utilities, buildings, infrastructure, and data centers.
- Geospatial segment revenue grew 7.9% year-over-year to $81 million, with adjusted gross margin expanding 360 basis points to 51.5%.
- Cross-selling initiatives are gaining momentum, leading to expanded client scopes and new opportunities, such as a municipal client awarding multiple assignments for bridge and water pump station life cycle support.
- The company repriced its $1.6 billion term loan, reducing interest rates by 25 basis points and saving approximately $4 million in annual cash interest, while also repurchasing 1.9 million shares at an average price of $8.33.
- Integration synergies are on track, with $20 million in annualized run-rate savings actioned as of June 30, up from $17 million at the end of Q1, and on track to deliver the full $25 million program by year-end.
- Inspection and Mitigation commercial indicators improved significantly, with June revenue turning positive year-over-year and a robust open commercial proposal pipeline for the next 12 months.
- The company is expanding into new high-margin end markets, such as bridge inspection and data centers, which are expected to drive future growth and margin expansion.
- Inspection and Mitigation revenue declined 5.5% year-over-year to $297 million, impacted by 2025 site losses and timing of planned outage work shifted to the second half.
- Total company revenue growth was modest at 3.3% year-over-year, below the long-term potential, with organic growth of only 2.5%.
- Adjusted SG&A increased to 22.1% of revenue from 21.2% last year, reflecting higher incentive compensation, indirect labor, legal reserves, and benefit costs.
- Adjusted EBITDA margin declined 40 basis points year-over-year to 16.2%, despite overall margin expansion, due to lower-margin I&M performance.
- Bank calculated net leverage increased to 3.7 times, primarily due to seasonal working capital build and share repurchases during the quarter.
- Geospatial segment revenue and margins can vary significantly quarter-to-quarter due to the timing and mix of large fixed-fee contracts, creating unpredictability.
- The company faces ongoing challenges in converting commercial momentum in I&M into consistent profitable growth, with the segment expected to return to growth only in the second half.
- There is potential for measurement period adjustments related to the acquisition, which could create accounting noise and impact financial reporting.
Hello and welcome everyone joining today's TIC Solutions second quarter 2026 earnings call.
(Operator Instructions)
At this time, all participants are in a listen-only mode. Later, you will have the opportunity to ask questions during the question-and-answer session.
Please note this call is being recorded and we are standing by should you need any assistance.
It is now my pleasure to turn the meeting over to Andrew Shin with Investor Relations. Please go ahead.
Thank you, operator. Good morning, everyone, and thank you for joining the call. Joining me this morning is Ben Harrod, our Chief Executive Officer Kristen Schultz, our Chief Financial Officer and Robbie Franklin, Executive Chairman.
I would now like to remind you that certain statements in the company's earnings press release and on this call are forward-looking statements that are based on expectations, intentions and projections regarding the company's future performance, anticipated events or trends
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