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    LMB
    Earnings call· Jun 2026(Q2 FY26)

    Limbach Holdings Q2 FY26 earnings call LMB

    Aug 5, 2026 Source

    Executive summary

    Limbach Q2 FY26 — Strategic Diversification Amidst Near-Term Headwinds

    Limbach Holdings faced near-term challenges in Q2 FY26, with project timing and market softness impacting gross margins and profitability, leading to a reset of full-year guidance. However, the company demonstrated strong bookings and cash generation, while strategically diversifying its end markets and geographic reach through the acquisition of CYMCOR to build a more resilient, higher-quality business with long-term growth drivers.

    Highlights

    5

    • Generated $182 million in bookings during Q2 FY26, contributing to $616 million over the past three quarters.

    • ODR revenue increased 17.9% to $128.4 million, driven by $30.9 million from the Pioneer Power acquisition.

    • Net operating cash inflow was $18.7 million, marking the second highest Q2 operating cash flow since becoming a public company.

    • Adjusted EBITDA conversion to free cash flow was 98.2% in Q2 FY26, up from 89.7% in Q2 FY25.

    • Acquired CYMCOR for $30 million, expanding data center capabilities and geographic footprint.

    Concerns

    5

    • Total gross profit decreased 6.4% to $37.3 million, with total gross margin down to 21.5% from 28% in the prior year quarter.

    • Net income decreased 38.8% to $4.7 million, and adjusted diluted EPS fell from $0.93 to $0.64.

    • Adjusted EBITDA decreased 22.3% to $13.9 million, with margin at 8% compared to 12.6% in Q2 FY25.

    • ODR organic revenue decreased 3.4% due to project timing and softness in health care and institutional markets.

    • GCR gross margin was 14.5%, down from 24.7%, primarily due to the lower margin profile of Pioneer Power and project timing.

    Guidance & targets

    12
    CategoryTargetConfidence
    Full-year 2026 Revenue
    $760 million to $790 million
    high materiality
    High
    Full-year 2026 Adjusted EBITDA
    $78 million to $84 million
    high materiality
    High
    Full-year 2026 Total Organic Revenue Growth
    9% to 14%
    medium materiality
    High
    Full-year 2026 ODR Revenue as Percentage of Total Revenue
    70% to 80%
    medium materiality
    High
    Full-year 2026 ODR Organic Revenue Growth
    6% to 10%
    medium materiality
    High
    Full-year 2026 Gross Margin Percentage
    23% to 24%
    high materiality
    High
    Full-year 2026 SG&A Expense as Percentage of Total Revenue
    15% to 16%
    medium materiality
    High
    Full-year 2026 Free Cash Flow Conversion of Adjusted EBITDA
    at least 75%
    high materiality
    High
    Full-year 2026 Capital Expenditures
    approximately $5 million
    medium materiality
    High
    CYMCOR 2027 Program Management Revenue
    $12 million
    medium materiality
    High
    CYMCOR 2027 Adjusted EBITDA
    $4 million
    medium materiality
    High
    Pioneer Power Gross Margin Improvement
    in line with company average
    medium materiality
    High

    Segment performance

    2
    SegmentRevenueYoYQoQMargin
    ODR (Owner-Direct Relationship)
    Revenue increase primarily due to $30.9 million revenue contribution from Pioneer Power. Organic revenue decrease due to project timing and softness in health care and institutional markets. Gross margin was down from 29% in the prior year period, primarily driven by the lower margin profile of Pioneer Power.
    Acquisition-related revenue increase: 21.3%Organic revenue decrease: 3.4%Gross profit decrease: 2.6% or $0.8 million
    		$128.4 million17.9%—24% gross margin
    GCR (General Contractor Relationship)
    Gross margin was down from 24.7% in the prior year period. The decrease was primarily driven by the lower margin profile of Pioneer Power, lower net project write-ups, and competition for skilled labor and materials associated with construction activity in the data center market. Also impacted by project timing due to low backlog at the end of 2025.
    Acquisition-related revenue increase: 23.3%Organic revenue increase: 12%Gross profit decrease: 20.7% or $1.7 million
    		$45 million35.3%—14.5% gross margin

    Operational metrics

    25
    Total Revenue
    $173.5 millionup from $142.2 million YoY
    Q2 FY26

    Increase primarily due to $30.9 million revenue contribution from Pioneer Power.

    Total Gross Profit
    $37.3 milliondecreased 6.4% from $39.8 million YoY
    Q2 FY26

    Impacted by lower segment gross margins.

    Total Gross Margin
    21.5%down from 28% YoY
    Q2 FY26

    Primarily driven by the lower margin profile of Pioneer Power, lower net project write-ups, and competition for skilled labor and materials.

    SG&A Expense
    $28.1 millionincreased $1.5 million from $26.6 million YoY
    Q2 FY26

    Primarily driven by incremental SG&A expense associated with Pioneer Power and an aggregate $0.6 million increase in total stock-based compensation and payroll-related expenses.

    SG&A Expense as Percentage of Revenue
    16.2%decreased from 18.7% YoY
    Q2 FY26

    Despite absolute increase in SG&A, it decreased as a percentage of higher revenue.

    Net Income
    $4.7 milliondecreased 38.8% from $7.8 million YoY
    Q2 FY26

    Impacted by lower gross profit and higher SG&A expense.

    Diluted Earnings Per Share
    $0.39down from $0.64 YoY
    Q2 FY26

    Reflects the decrease in net income.

    Adjusted Net Income
    $7.6 milliondecreased 32.1% from $11.3 million YoY
    Q2 FY26

    Non-GAAP measure.

    Adjusted Diluted Earnings Per Share
    $0.64down from $0.93 YoY
    Q2 FY26

    Non-GAAP measure.

    Adjusted EBITDA
    $13.9 milliondecreased 22.3% from $17.9 million YoY
    Q2 FY26

    Non-GAAP measure, primarily driven by lower gross profit and higher SG&A expense.

    Adjusted EBITDA Margin
    8%down from 12.6% YoY
    Q2 FY26

    Non-GAAP measure.

    Net Operating Cash Inflow
    $18.7 millionup from $2 million YoY
    Q2 FY26

    Second highest second quarter operating cash flow since becoming a public company.

    Noncash Adjustments to Net Income
    $9.6 million
    Q2 FY26

    Driver of net operating cash inflow.

    Working Capital Increase
    $4.4 million
    Q2 FY26

    Driver of net operating cash inflow.

    Free Cash Flow Conversion of Adjusted EBITDA
    98.2%up from 89.7% YoY
    Q2 FY26

    Strong conversion rate.

    Cash and Cash Equivalents
    $17.5 million
    as of June 30, 2026

    Balance sheet item.

    Total Debt
    $41.1 million
    as of June 30, 2026

    Includes $17.5 million borrowed on revolving credit facility.

    Total Liquidity
    $93.1 million
    as of June 30, 2026

    Defined as cash and availability on revolving credit facility.

    Revolving Credit Facility Capacity
    $125 millionincreased from $100 million
    effective July 24, 2026

    Provides an additional $25 million in potential availability.

    Pioneer Power Gross Margin Improvement
    1.5%from acquisition
    H1 FY26

    Encouraging improvements since acquisition in July 2025.

    Healthcare Program Management Professional Service Revenue
    $3 million
    LTM

    Generated by Limbach's healthcare program management platform.

    Healthcare Program Management Project Bookings Pull-through
    $60 million
    LTM

    Resulting from the healthcare program management platform.

    Healthcare Program Management Pull-through Multiple
    20x
    LTM

    Calculated from professional service revenue and project bookings pull-through.

    New Orders / Bookings
    $182 million
    Q2 FY26

    Third consecutive quarter of strong bookings.

    New Orders / Bookings (Last 3 Quarters)
    $616 million
    Q4 FY25 - Q2 FY26

    Total bookings over the past three quarters.

    Industry KPIs

    6
    MetricValueDetails
    Total backlog—
    Book to bill ratio—
    End market pipeline$8 billionUSD
    Acquisition contribution$30.9 millionUSD
    Same store organic revenue growth-3.4%%
    Craft skilled labor headcount capacity—

    Orderbook & backlog

    1
    GCR Backlog$99 millionend of Q2 2025

    doubled since then

    Impacted by project timing, now rebuilding.

    Deals & partnerships

    1
    CYMCORAcquisition of a program management services company specializing in data centers.$30 million

    Funded through a combination of available cash and borrowing under the revolving credit facility. Expands Limbach's geographic footprint, enhances ability to serve national and multi-site data center customers, and increases engagement with building owners early in the facility life cycle. CYMCOR oversees project budgets exceeding $8 billion.

    Risks & headwinds

    4
    Project Timing DelaysQ2 FY26, impacting full-year guidance

    Contributed to GCR gross margin of 14.5% (down from 24.7% YoY) and ODR organic revenue decrease of 3.4%.

    Mitigation: Strong bookings over the past three quarters ($616 million) provide confidence for future revenue conversion. Management is focused on executing against the plan and capitalizing on new opportunities.

    Softness in Healthcare and Institutional MarketsOngoing

    Elevated price sensitivity and market conditions pressured gross margins, leading to a 3.4% decrease in ODR organic revenue.

    Mitigation: Diversifying end markets (data centers, industrial manufacturing), expanding geographic reach, and leveraging integrated platform to reduce reliance on any single vertical. Strengthening relationships with national customers and guiding them through long-term planning.

    Lower Margin Profile of Pioneer PowerQ2 FY26, expected to improve over 2-3 years

    Negatively impacted overall gross margin, contributing to ODR gross margin of 24% (down from 29% YoY) and GCR gross margin of 14.5% (down from 24.7% YoY).

    Mitigation: Operational and pricing improvement initiatives are underway to enhance profitability and bring gross margins in line with the company average over the next 2 to 3 years.

    Competition for Skilled Labor and MaterialsOngoing, particularly in the data center market

    Contributed to the decrease in GCR gross margin.

    Mitigation: The CYMCOR acquisition is expected to help with staffing for data center demand, as Limbach can immediately add staff to their team.

    What to watch in Q3 FY26

    5

    ODR Organic Revenue Growth

    next quarter
    Current-3.4% (Q2 FY26)
    TargetImprovement from Q2 levels

    Why it matters

    Indicates recovery in healthcare/institutional markets and the effectiveness of the diversification strategy.

    ODR organic revenue increasing 21.3% and partially offset by a 3.4% decrease in ODR organic revenue.

    Q&A highlights

    9

    Can you elaborate on the lower ODR organic revenue growth, specifically regarding healthcare market softness and project timing, and if this trend extends into 2027?

    Management attributes confidence in guidance to strong bookings ($660 million over the last three quarters). Healthcare and institutional markets face price sensitivity, but the company is gaining market share. Bookings momentum is expected to lead to a strong start in the next year.

    “So what kind of gives us confidence from a guidance perspective, not just from an ODR organic, but a total organic is our strong bookings that we've had over the last 3 quarters. So we sold $660 million from Q4, Q1 and Q2.”

    asked by Christopher Moore · answered by Michael McCann

    2 min read6 chapters

    Detailed Narrative

    01

    Strategic Shift to Disciplined Growth

    Limbach is transitioning from transformation to disciplined growth, aiming to build a larger company with strong cash generation and higher returns. This strategy focuses on vertical market diversity, geographic expansion, and leveraging its integrated operating model. The company believes these advantages will compound over time⏳, creating a more resilient business with durable earnings and stronger long-term shareholder value.

    02

    CYMCOR Acquisition and Data Center Strategy

    The acquisition of CYMCOR for $30 million is a key part of Limbach's disciplined growth strategy, expanding its geographic footprint and enhancing its ability to serve national data center customers. CYMCOR oversees project budgets exceeding $8 billion, creating significant cross-selling opportunities and pull-through project bookings. This mirrors Limbach's successful healthcare program management platform, which generated $3 million in professional service revenue and pulled through $60 million in project bookings over the last 12 months.

    03

    Healthcare Market Dynamics and Mitigation

    The healthcare market remains challenged by budget constraints and delayed decision-making, leading to elevated price sensitivity. Despite these pressures, Limbach continues to strengthen its position by engaging earlier with national customers in facility planning. Management views healthcare as a long-term market and is focused on helping customers navigate short-term challenges by driving value and adapting to new purchasing behaviors.

    04

    Industrial and Data Center Growth Opportunities

    Industrial demand remains strong and increasingly complements Limbach's data center strategy, with both benefiting from sustained investment in power, manufacturing, and mission-critical infrastructure. Data centers are identified as an attractive long-term growth opportunity, and Limbach is investing in capabilities, customer relationships, and professional services to establish itself as a trusted partner in this high-growth vertical.

    05

    Q2 Performance and Margin Pressures

    Limbach's Q2 FY26 results fell short of expectations due to project timing and ongoing softness in health care and institutional markets, which pressured gross margins. The decrease in GCR gross margin was primarily attributed to project timing and the lower margin profile of Pioneer Power. However, underlying customer demand remains healthy, as evidenced by $182 million in bookings during the quarter and $616 million over the past three quarters.

    06

    Pioneer Power Integration Progress

    Pioneer Power is performing in line with integration expectations, showing an encouraging 1.5% improvement in gross margin from the first half of 2026 compared to when it was acquired in July 2025. Operational and pricing initiatives are underway to enhance profitability further, with the goal of bringing Pioneer Power's gross margins in line with the company average over the next 2 to 3 years.

    AI-generated summary of the company’s earnings call. Not investment advice.