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    TIC
    Earnings call· Jun 2026(Q2 FY26)

    TIC Solutions Q2 FY26 earnings call TIC

    Aug 6, 2026 Source

    Executive summary

    TIC Solutions Q2 FY26 — Record Backlog and Improving I&M Trajectory

    TIC Solutions delivered solid Q2 FY26 results, marked by strong growth in Consulting & Engineering and Geospatial segments, alongside improving commercial indicators in Inspection & Mitigation. The company achieved a record backlog and made progress on synergy realization, reinforcing confidence in its full-year guidance and long-term targets. Management emphasized the success of cross-selling initiatives, strategic M&A, and disciplined capital allocation to drive margin expansion and deleveraging, despite I&M's temporary revenue decline.

    Highlights

    5

    • Consolidated adjusted EBITDA margin improved 40 basis points year-over-year to 16.2%.

    • Record combined Consulting & Engineering and Geospatial backlog increased 20% year-over-year to $1.18 billion.

    • Consulting & Engineering revenue grew 16.8% year-over-year to $207 million.

    • Geospatial revenue grew 7.9% year-over-year to $81 million.

    • Annualized run rate synergy savings reached $20 million, up from $17 million in Q1, on track for $25 million by year-end.

    Concerns

    3

    • Inspection & Mitigation (I&M) revenue decreased 5.5% year-over-year to $297 million, impacted by approximately $30 million from 2025 site losses and timing of planned outage work.

    • Adjusted SG&A increased to 22.1% of revenue from 21.2% last year, driven by higher incentive compensation, indirect labor, legal reserves, benefit costs, and overhead from acquired businesses.

    • Bank calculated net leverage increased to 3.7x, primarily due to seasonal working capital build and share repurchases.

    Guidance & targets

    10
    CategoryTargetConfidence
    Full-year 2026 Revenue
    $2.15 billion to $2.25 billion
    high materiality
    High
    Full-year 2026 Adjusted EBITDA
    $330 million to $355 million
    high materiality
    High
    Third Quarter Revenue
    $610 million to $630 million
    medium materiality
    High
    Third Quarter Adjusted EBITDA
    $100 million to $110 million
    medium materiality
    High
    Full-year 2026 Net Interest Expense
    $95 million to $105 million
    low materiality
    Medium
    Full-year 2026 Cash Taxes
    $25 million to $30 million
    low materiality
    Medium
    Full-year 2026 Capital Expenditures
    $50 million to $65 million
    low materiality
    Medium
    Long-term Revenue Target
    $3 billion
    high materiality
    High
    Long-term Adjusted EBITDA Margin Target
    18%
    high materiality
    High
    Long-term Free Cash Flow Conversion Target
    85%
    high materiality
    High

    Segment performance

    6
    SegmentRevenueYoYQoQMargin
    Consulting & Engineering (Q2 FY26)
    Growth driven by continued strength in power and utilities, buildings, infrastructure, and data centers. Improvement in adjusted gross margin by 75 basis points reflected favorable mix and improved operating execution. Excluding data centers, growth was approximately 7% organically. Recent wins include grid hardening work and a multiyear agreement with a large California utility. Battery storage is an additional area of growing activity.
    Data center trailing 12-month revenue: $98 millionData center backlog: $110 million
    		$207 million16.8%—47.2% adjusted gross margin
    Inspection & Mitigation (Q2 FY26)
    Revenue decline primarily reflected 2025 site losses and timing of planned outage work, totaling approximately $30 million. Adjusted gross margin was down 45 basis points due to lower outage activity. Commercial indicators significantly improved, with fallout work growing and multiple new run and maintain sites awarded. June revenue turned positive year-over-year. Expanding into data centers, bridges, and traditional public infrastructure.
    		$297 million-5.5%—28.3% adjusted gross margin
    Geospatial (Q2 FY26)
    Growth primarily driven by power and utilities clients and broader private sector markets. Adjusted gross margin improved 360 basis points due to favorable mix and project timing. Completed a major high-profile pilot for federal offshore mapping. Revenue and margins can vary quarter-to-quarter based on timing and mix of large fixed-fee contracts.
    		$81 million7.9%—51.5% adjusted gross margin
    Consulting & Engineering (H1 FY26)
    Strong performance in the first half of the fiscal year.
    		$394 million13.3%—47.4% adjusted gross margin
    Inspection & Mitigation (H1 FY26)
    Revenue decline in the first half of the fiscal year.
    		$532 million-3%—26.6% adjusted gross margin
    Geospatial (H1 FY26)
    Solid performance in the first half of the fiscal year.
    		$147 million6.3%—51.3% adjusted gross margin

    Operational metrics

    28
    Organic growth
    2.5%
    Q2 FY26

    Company-wide organic growth.

    Constant currency growth
    3.2%
    Q2 FY26

    Company-wide growth in constant currency.

    Adjusted gross profit
    $223 millionup 7.1% YoY
    Q2 FY26

    Company-wide adjusted gross profit.

    Adjusted gross margin
    38.2%up 135 bps YoY
    Q2 FY26

    Company-wide adjusted gross margin.

    Adjusted SG&A
    $129 million22.1% of revenue vs 21.2% last year
    Q2 FY26

    Company-wide adjusted selling, general, and administrative expenses.

    Adjusted EBITDA
    $95 millionup from $89 million YoY
    Q2 FY26

    Company-wide adjusted earnings before interest, taxes, depreciation, and amortization.

    Adjusted EBITDA margin
    16.2%up 40 bps YoY
    Q2 FY26

    Company-wide adjusted EBITDA margin.

    Adjusted diluted earnings per share
    $0.10
    Q2 FY26

    Company-wide adjusted diluted EPS.

    Capital expenditures as % of revenue
    ~2.4%
    YTD FY26

    Capital expenditures as a percentage of year-to-date revenue.

    Term loan interest rate reduction
    25 bps
    Q2 FY26

    Repricing of $1.6 billion term loan.

    Share repurchases
    $16 million
    Q2 FY26

    Under previously announced share repurchase program.

    Total liquidity
    $474 million
    as of June 30, 2026

    Includes cash and available revolving credit facility capacity.

    Cash balance
    $362 million
    as of June 30, 2026

    Part of total liquidity.

    Available revolving credit facility capacity
    $112 million
    as of June 30, 2026

    Net of letters of credit outstanding.

    Bank calculated net leverage
    3.7x
    as of June 30, 2026

    Increased due to seasonal working capital build and share repurchases.

    Annualized run rate synergy savings
    $20 millionup from $17 million in Q1
    as of June 30, 2026

    Progress on integration initiatives.

    Realized synergy savings
    $6 million
    H1 FY26

    Savings recognized through the first half of the year.

    Buildings end market revenue
    $115 millionup 28% YoY
    Q2 FY26

    Revenue from the buildings end market.

    Industrial manufacturing and metals revenue
    $56 millionup over 40% YoY
    Q2 FY26

    Revenue from the industrial manufacturing and metals business.

    Power and utilities end market revenue
    $90 millionup 11% YoY
    Q2 FY26

    Revenue from the power and utilities end market.

    Aerospace and defense revenue
    $10 millionup over 40% YoY
    Q2 FY26

    Revenue from the aerospace and defense sector.

    Geospatial commercial work growth
    13%YoY
    Q2 FY26

    Growth in commercial work for the Geospatial segment.

    I&M rope access technologies growth
    almost 10%
    Q2 FY26

    Growth in rope access technologies within the I&M segment, demonstrating diversification.

    I&M business growth (excluding outage/site losses)
    4%
    Q2 FY26

    Underlying growth in the I&M business when excluding the impact of outage timing and site losses.

    Total revenue
    $1.072 billionup 3.7% combined YoY, 2.3% organic
    H1 FY26

    Company-wide total revenue for the first six months of 2026.

    Adjusted gross profit
    $403 million
    H1 FY26

    Company-wide adjusted gross profit for the first six months of 2026.

    Adjusted EBITDA
    $153 million
    H1 FY26

    Company-wide adjusted EBITDA for the first six months of 2026.

    Adjusted SG&A
    $252 million
    H1 FY26

    Company-wide adjusted SG&A for the first six months of 2026.

    Orderbook & backlog

    1
    Combined C&E and GEO backlog$1.18 billionQ2 FY26

    up 20% YoY

    Provides high visibility as we enter the second half of 2026 and into next year.

    Deals & partnerships

    2
    Multiple undisclosed companiesBolt-on acquisitions adding technical capabilities and broadening geographic density.

    Completed 3 bolt-on acquisitions during the quarter. One smaller acquisition closed last month. The company aims to deploy $100 million to $150 million annually for bolt-on M&A.

    Undisclosed clientMultiyear Master Service Agreement (MSA) for LNG work.$30 millionmultiyear

    A new MSA landed for the Inspection & Mitigation segment.

    Risks & headwinds

    3
    Inspection & Mitigation (I&M) revenue declineQ2 FY26

    Down 5.5% YoY, approximately $30 million combined impact

    Mitigation: Work shifting from Q2 into H2 FY26; commercial momentum building with new site wins and robust proposal pipeline; June revenue turned positive YoY; segment positioned to return to consistent growth profile in H2 FY26.

    Increased Adjusted SG&A as a percentage of revenueQ2 FY26

    22.1% of revenue in Q2 FY26, up from 21.2% last year

    Mitigation: Focus on improving SG&A leverage through cost management, integration initiatives, and growth across the business.

    Increased bank calculated net leverageas of June 30, 2026

    3.7x

    Mitigation: Expect cash conversion to increase in the second half as collections catch up with revenue; focus on deleveraging the balance sheet over time.

    What to watch in Q3 FY26

    5

    I&M revenue growth

    Second half of 2026
    CurrentDown 5.5% YoY in Q2; June revenue positive YoY
    TargetConsistent growth profile

    Why it matters

    Indicates successful conversion of commercial momentum and planned outage work, crucial for overall company growth.

    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.

    Q&A highlights

    8

    Can you quantify the revenue impact of cross-selling for 2026 and 2027, and its contribution to organic growth?

    Management stated that while specific cross-selling numbers are not reported, its impact is reflected in the record backlog and end market exposure. They highlighted numerous successful projects resulting from the breadth of services and growing momentum in company-wide collaboration.

    “While we're not sort of reporting on the cross-selling numbers itself, it is showing up in the record backlog numbers that we're talking about and the end market exposure that each of our segments are now getting through the cross-selling program.”

    asked by Christopher Moore · answered by Benjamin Heraud

    2 min read5 chapters

    Detailed Narrative

    01

    Cross-Selling Momentum and Life Cycle Model

    TIC Solutions is seeing positive commercial results from its integrated platform and cross-selling initiatives, which are expanding the scope of work and creating opportunities that would not have existed as separate businesses. This momentum is reflected in a record combined C&E and GEO backlog of $1.18 billion, up 20% year-over-year. An example includes a municipal client awarding multiple assignments for bridge and water pump station life cycle support, including digital twin development, engineering, inspection, and mitigation, creating a repeatable model for global infrastructure owners.

    02

    End Market Strength and Diversification

    The company benefits from strong demand in essential, high-growth end markets. Buildings end market revenue increased 28% to $115 million, industrial manufacturing and metals grew over 40% to $56 million, power and utilities increased 11% to $90 million, and aerospace and defense saw over 40% growth to $10 million. These markets align with megatrends like aging infrastructure, growing energy demand, and increasing data consumption, reinforcing the company's strategy to expand capabilities and improve margins.

    03

    AI Initiatives for Efficiency and Margin Expansion

    TIC Solutions is leveraging technology and AI to improve efficiency across its operations. Initiatives include a procedure knowledge assistant for field technicians and an engineering report assistant to streamline historical data access. Document intelligence tools are also used to identify inconsistencies and risks in contracts and RFPs. These tools are expected to cumulatively support utilization, cost discipline, and margin expansion over time⏳, without impacting pricing or work acquisition.

    04

    Inspection & Mitigation (I&M) Turnaround

    Despite a 5.5% revenue decline in Q2 due to prior site losses and outage timing, I&M showed significant commercial improvement, with June revenue turning positive year-over-year. Fallout work grew, new run and maintain sites were awarded, and the commercial proposal pipeline is robust. The segment is expanding into attractive adjacent end markets like data centers, bridges, and traditional public infrastructure, with new multiyear engagements like a bridge inspection and NDT contract. Management expects I&M to return to a consistent growth profile in H2 2026.

    05

    Capital Deployment and Integration Progress

    The company completed three bolt-on acquisitions in Q2, adding technical capabilities and geographic density. It repriced its $1.6 billion term loan, reducing annual cash interest by $4 million, and repurchased 1.9 million shares for $16 million. Total liquidity stood at $474 million. Integration efforts continue to yield results, with $20 million in annualized run rate synergy savings achieved by Q2, on track for $25 million by year-end, with $6 million realized in H1 and $15 million expected for FY26.

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