TIC Solutions, Inc 2026 Q2 Earnings Call

Good morning, everyone, and thank you for joining the call. Joining me this morning is Ben Heraud, our Chief Executive Officer, Kristin Schultes, 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, and other matters that are not historical facts. These statements are not a guarantee of future performance and are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. In our press release and filings with the SEC, we detailed material risks that may cause our future results to differ from our expectations.

Our statements are as of today, August 6th, 2026, and we undertake no obligation to update any forward-looking statements we may make except as required by law. As a reminder, we have posted a presentation detailing our second quarter financial performance on the investor relations page of our website at ticsolutions.com. Our comments today will also include non-GAAP financial measures and other key operating metrics. The required reconciliations of non-GAAP financial metrics can be found in our press release and in our presentation. For the purposes of this call, we refer to our segments as Inspection & Mitigation or I&M, Consulting & Engineering or C&E, and Geospatial or Geo. Any reference to combined results reflects a non-GAAP combined view of legacy Acuren and legacy NV5, where applicable, for a period-to-period comparability. More details on the calculation of the combined results are included in the presentation.

It's now my pleasure to turn the call over to Ben.

Thank you, Andrew. Good morning, everyone. I want to take a moment to thank our shareholders for their continued support and our team members across the organization for their hard work and dedication to our clients. Our second quarter demonstrated solid execution across the platform. We delivered double-digit growth in Consulting & Engineering, strong growth in Geospatial, and improving commercial indicators in Inspection & Mitigation as we enter the second half of the year. Cross-selling is working across the business and margin expansion is underway, with consolidated adjusted EBITDA margin improving year-over-year as we progress towards our long-term target of 18%. Our services are in high demand. Aging infrastructure across the globe requires sustained investment in inspection, engineering, and geospatial services. Growing energy demand is driving investment in power delivery, grid reliability, LNG, and other energy infrastructure.

Increasing data consumption supports the construction, commissioning, and technical services required for data centers. The digitization of the physical world is increasing demand for the data analytics and asset intelligence capabilities that help clients better plan, operate, and maintain their critical assets. These mega trends reinforce the strategy we outlined at our investor day. We are building a more integrated company, increasing our exposure to attractive end markets, expanding our capabilities across the asset lifecycle, and improving margins through a more favorable service mix, higher utilization, cost discipline, and improved opportunity selection. We are also executing on our strategy to expand geographically where we have established technical capabilities and strong leadership. Our M&A pipeline remains active, and we see a number of compelling opportunities ahead that we expect will expand our geographies, end markets, and capabilities in ways that are complementary to the existing platform.

We continue to build on our position as a tech-enabled lifecycle partner, supporting clients from planning through construction and ongoing operations. Bringing those capabilities together allows us to address a broader portion of client needs than a single service provider can. We are receiving positive feedback from clients as they learn more about the breadth of our capabilities. In many cases, clients have been pleased to learn that we can support multiple needs across the asset lifecycle. We are seeing this model translate into commercial results as cross-selling becomes a TIC-wide opportunity, with our teams engaging clients across multiple service lines. This is expanding our scope of work and creating opportunities that would not have existed as separate businesses.

That momentum is reflected in our record combined C&E and Geo backlog, which increased 20% year-over-year to $1.18 billion, providing high visibility as we enter the second half of 2026 and into next year. A recent example illustrates how this works in practice. A municipal client awarded us multiple assignments to support the lifecycle of its bridges and water pump stations, including the development of digital twins to assist with engineering, inspection, and mitigation. The work translates asset data and condition assessments into actionable engineering and operating programs, positioning our inspection teams to support the resulting work. It also creates a repeatable model that we can take to bridge and infrastructure owners globally. That is the integrated platform working as intended. Our focus on essential high-demand end markets continues to accelerate our growth and margin expansion goals.

Our buildings end market increased 28% year-over-year to $115 million in the quarter. Our industrial manufacturing and metals business grew over 40% to $56 million, while power and utilities increased 11% to $90 million. Aerospace and defense also saw significant momentum with revenue up over 40% to $10 million. These markets benefit from long-term investment requirements and technical complexity. They align well with the breadth of our platform. Technology and AI are also creating opportunities to be more efficient across the business. TIC Solutions operates at significant scale, with thousands of active client engagements, a productive field workforce, and complex technical workflows across our three segments. We have a number of AI initiatives underway to improve knowledge access, streamline workflows, and accelerate decision-making.

For example, our Procedure Knowledge Assistant allows field technicians to query internal procedures, while our Engineering Report Assistant helps engineers search and summarize historical reports so prior technical knowledge can be applied more efficiently to current projects. We're also using document intelligence tools as a second set of eyes across contracts, purchase orders, RFPs, and certifications, helping identify inconsistencies, risks, and potential compliance issues. Over time, we expect the cumulative benefit of tools like these to support utilization, cost discipline, and margin expansion. With that, I'll turn to segment performance, beginning with Consulting & Engineering. Consulting & Engineering delivered record second quarter revenue of $207 million, up 16.8% from the prior year. Growth was driven by continued strength in power and utilities, buildings, infrastructure, and data centers, reflecting both favorable end market exposure and solid execution across the segment.

Aging infrastructure is driving ongoing investment in highways, water, transportation, and related public assets. Rising electricity demand is supporting spending across power generation, transmission, distribution, and grid modernization. Larger developers are executing substation programs at scale, moving sequentially from one project to the next. We are well-positioned and winning in this space. Recent wins include grid hardening work for a 230,000-volt transmission infrastructure, demonstrating our team's highly technical capabilities and a multi-year agreement with a large California utility, representing one of the most expansive awards in the power business unit's history. Battery storage is an additional area of growing activity as clients increasingly pair power generation with storage investments. The depth and breadth of our power delivery capabilities, combined with the demand we are seeing, gives us confidence in the long-term growth of this end market. Data centers remain a significant contributor to growth.

Trailing 12-month revenue reached $98 million. Our data center backlog has grown to over $110 million, providing strong line of sight into the second half of the year. We continue to layer in additional services as clients invest in mission-critical capacity, reliability, and expansion. Overall, C&E continues to benefit from attractive structural demand, differentiated capabilities, and a growing ability to serve clients across a broader set of technical needs. Turning to Inspection & Mitigation. Second quarter revenue was $297 million, down 5.5% from the prior year. As discussed on our prior earnings call, this performance was contemplated in our Q2 guidance and primarily reflected 2025 site losses, along with the timing of planned outage work that shifted from the second quarter into the second half of the year. While the quarter was below our long-term expectations for the segment, commercial indicators have significantly improved.

Fallout work grew during the quarter, and we were awarded multiple new run-and-maintain sites and meaningful new awards supporting client capital projects. Our open commercial proposal pipeline for the next 12 months is robust and supports our expectation for stronger commercial momentum through the balance of the year, and we were encouraged to see June revenue turn positive year-over-year. Power and utilities, industrial manufacturing, and midstream oil and gas infrastructure continue to show healthy demand. We are also extending the I&M platform into attractive adjacent end markets and geographies, including an emerging position in data centers and traditional infrastructure. As the combined platform grows, we are bringing I&M's inspection and integrity management capabilities to complementary asset classes, creating more opportunities to connect these services with our C&E and Geospatial offerings. Bridges and traditional public infrastructure represent a meaningful expansion of I&M's addressable market.

We recently began a multi-year bridge inspection and NDT engagement, bringing our inspection and integrity management capabilities to transportation assets for the first time at scale. The North American bridge market is large and aging, and ongoing public safety and asset condition requirements create the same recurring mandated demand that underpins our core industrial business. We see this as a repeatable model that broadens the long-term opportunity for the segment. The team remains focused on converting this commercial momentum and opportunities into attractive end markets and into profitable growth through disciplined pricing, selective work pursuit, stronger regional accountability, and more effective deployment of resources. As we move through the second half of 2026, we expect I&M to benefit from normal seasonal activity, continued site win conversion, and further progress in commercial execution. The segment is positioned to return to a more consistent growth profile while maintaining margin discipline.