TIC’s 2026 Q2 Call: Cross-Selling Clarity, Data Center Discrepancies, and AI’s Mixed Messaging Clash

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Date of Call: Aug 6, 2026

Financials Results

• Revenue: $584M, up 3.3% YOY, with Q2 growth 3.2% in constant currency and 2.5% organic
• EPS: $0.10 adjusted diluted EPS
• Gross Margin: Adjusted gross margin 38.2%, up 135 basis points YOY
• Operating Margin: Adjusted EBITDA margin 16.2%, up 40 basis points YOY

Guidance:

• Q3 revenue expected to be $610M to $630M (9% YOY growth at midpoint).
• Q3 adjusted EBITDA expected to be $100M to $110M (16% YOY growth at midpoint).
• Full year 2026 revenue guidance reiterated at $2.15B to $2.25B.
• Full year 2026 adjusted EBITDA guidance reiterated at $330M to $355M.

Business Commentary:

Consulting and Engineering (CNE) Growth:

• TIC Solutions' Consulting and Engineering segment reported record revenue of $207 million, up 16.8% from the prior year.
• Growth was driven by strong performance in power and utilities, buildings, infrastructure, and data centers, benefiting from favorable market exposure and solid execution.

Geospatial Segment Performance:

• The Geospatial segment reported revenue of $81 million, up 7.9% year-over-year.
• The increase was primarily driven by power and utilities clients, along with momentum in private sector markets, and successful execution of high-profile projects like federal offshore mapping.

Inspection and Mitigation (INM) Challenges and Recovery:

• The INM segment reported revenue of $297 million, down 5.5% from the prior year, attributed to site losses and timing of planned outage work.
• Commercial indicators have improved, with new site wins and a robust open proposal pipeline, supporting expectations for stronger momentum in the second half of the year.

Record Backlog and Cross-Selling:

• The company's combined backlog for Consulting, Engineering, and Geospatial increased 20% year-over-year to $1.18 billion.
• This growth was driven by cross-selling initiatives and favorable end market exposure, demonstrating the integrated platform's ability to capture broader client needs.

Margin Expansion and Synergy Execution:

• TIC Solutions achieved an adjusted EBITDA margin improvement of 40 basis points to 16.2%.
• This was due to favorable business mix, improved operating execution, and ongoing synergy savings from integration initiatives.

Sentiment Analysis:

Overall Tone: Positive

• "Our second quarter demonstrated solid execution across the platform." "Cross-selling is working across the business and margin expansion is underway." "Record combined C&E and geo backlog, increased 20% year-over-year." "Our leading indicators are healthy. Our backlog is at a record level." "The results this quarter support our confidence in the earnings power of the platform and the achievability of the long-term targets we have communicated."

Q&A:

• Question from Chris Moore (CJS Securities): Just keep going on the cross-selling. Is there any way to put kind of an approximate value on the cross-sell? revenue expected in 26 and a growth factor in 27. Does it have any kind of meaningful impact on organic growth this year or just trying to size it a little bit better?
  Response: Not reporting cross-sell numbers directly, but it is showing up in record backlog and in-market exposure, with many new projects won due to the breadth of services.

• Question from Chris Moore (CJS Securities): In terms of visibility over the next 12 months, Is one, does one have meaningful, higher visibility than the other? And the second part of that question was, I know geospatial has bounced around a little bit quarterly. The assumption is still that's likely to happen over time.
  Response: C&E has strong visibility due to its 20% backlog growth. INM is now on YOY growth (June) and expected to contribute to overall growth. GEO's quarterly variability due to large fixed-price contracts is acknowledged.

• Question from Katherine Thompson (Thompson Research Group): Give a little bit more color on the levers for growth in that [Consulting and Engineering] segment. In other words, you know, more color on the organic. You had mentioned cross-selling previously. How much did that play through in overall growth? And any other factor that we should take in consideration for driving that mid to high teens growth?
  Response: Growth is largely organic, driven by data centers, power/utilities, and infrastructure. Cross-selling is contributing, utilization is improving, and the M&A pipeline is robust.

• Question from Katherine Thompson (Thompson Research Group): What are these [improving commercial indicators] in the inspection segment? And maybe a little bit more color on that.
  Response: June revenue turned positive YOY for the first time in a while. Momentum from new site wins (e.g., Gulf Coast), price increases on contracts, and structural changes are driving improvement.

• Question from Katherine Thompson (Thompson Research Group): And finally, just on backlogs up 20%, where are you seeing those by project, by segment, and by in-market?
  Response: Broad-based across the business, including data centers, buildings, aviation, healthcare, power/utilities, industrial, and aerospace/defense.

• Question from Josh Chan (UBS): I guess the legacy NV5 businesses seem to be growing much faster than maybe the long term or at least historically. So I guess in broader terms, do you feel like you're in a period where those businesses can kind of have a stronger than normal growth driven by some of the factors that you're talking about?
  Response: Yes, record backlog (up 20%) and strong C&E performance indicate a period of stronger growth, driven by real megatrends like aging infrastructure and grid demand pressures.

• Question from Josh Chan (UBS): And maybe a follow up on data center. I think historically that business has been more APAC oriented, but I think you mentioned some growth in the U.S. too. So are you having more success kind of coming into the U.S. and doing work here?
  Response: Yes, U.S. data center revenue is now 25% of total, with trailing 12-month revenue just under $100M. Cross-selling is also bringing INM exposure to the space.

• Question from Andy Whitman (Baird): ...I guess the second half implied margin percentages like in the high 16s at the midpoint, which was a pretty good ramp over the first half performance... Are there other things besides that? Is it just really the mix of contracts that need to help you get to that margin level?
  Response: Over 100 basis points of improvement is baked into H2, driven by mix and execution, including growth in higher-margin end markets and improved utilization.

• Question from Andy Whitman (Baird): ...in consulting and engineering, there's this idea of fixed price contracts that you have a year under purchase accounting to mark the value and the profitability of those contracts to market... what project drove that... what is this a factor to the second quarter cash flow...?
  Response: Attributed to measurement period adjustments in acquisitions, considered accounting noise with immaterial P&L impact; not projected to affect gross margins going forward.

• Question from Alex Reigel (Texas Capital): Can you speak to any headwinds you're seeing that might be impacting your business from AI? And is there any scenario where larger players like yourself increasingly take share from smaller players that may not have the capital to keep up with the investment needs to create AI tools?
  Response: AI is a long-term opportunity and efficiency driver; not seen as impacting pricing or work winning. It's being deployed across workstreams and is an advantage for bolt-on acquisitions.

• Question from Alex Reigel (Texas Capital): And then I also... Felt like I heard an increased excitement with regards to M&A. So maybe if you could give us a little bit more color on that.
  Response: Confident in deploying $100-150M annually on M&A. Sellers are interested due to the 'forever home' story and growth acceleration. Recent deals closed at accretive multiples (5-7x).

• Question from Jeff Martin (Roth Capital Partners): Why don't you touch on the funding environment? ...any look under the hood on when follow-on opportunities with that rare earth project might start to come in.
  Response: ~3-4 follow-on opportunities in active discussion; work may be privatized, positioning TIC well. Commercial geospatial work was up 13% YOY in the quarter.

• Question from Jeff Martin (Roth Capital Partners): My other question is on LNG. I know there are some large opportunities down the, you know, down the pipeline. Just curious if you could give us an update there...
  Response: LNG work is ramping up after a first-half drag; high backlog over next 3 years. INM just landed a $30M multi-year MSA for LNG, setting up a strong 2027.

• Question from Stephanie Moore (Jeffries): ...it'd be helpful if you could talk about maybe the volume and pricing performance of the quarter, any updates on pricing opportunities going forward. But also, I think it would be great to maybe if you could talk about cadence of organic growth in the back half.
  Response: For INM, technical yield/hourly rate is up (pricing), supporting organic growth. Backlogs are a great indicator for future organic growth momentum in H2.

• Question from Stephanie Moore (Jeffries): And then I just wanted to follow up on the M&A question as well. ...where would be your greatest appetite for real M&A, either side or maybe it's both?
  Response: Greatest appetite likely in C&E due to its huge addressable market, but opportunities exist across all three segments. Focus is on strategic fit, cross-selling growth, and ROI.

• Question from Brendan Shea (JP Morgan): I wanted to ask you about INM. Revenue was down 5.5% year-over-year on site losses and outage timing. Beyond a second-and-a-half seasonality recovery, what supports a return to consistent growth?...
  Response: Strength is evident: aside from site loss/outage impact, the business was up 4% in Q2. Commercial pipeline is at a high, and the team is on the front foot, indicating a turnaround.

• Question from Brendan Shea (JP Morgan): And on a follow-up, you're scaling INM into bridges, public infrastructures. How do margins compare to your recent high 20s INM adjusted gross margin?...
  Response: Bridges and public infrastructure are higher-margin end markets. Diversification is occurring within INM (e.g., rope access work up nearly 10% in the quarter).

Contradiction Point 1

Cross-Selling Impact and Visibility

Conflicting statements on whether cross-selling revenue is material to reported growth.

Chris Moore (CJS Securities) - Chris Moore (CJS Securities)

2026Q2: While not reporting specific cross-sell numbers, the impact is visible in the record backlog... - Ben Harad(CEO)

What are the expected growth factors for cross-selling revenue in 2026 and 2027, and will they meaningfully impact organic growth this year? - Chris Moore (CJS Securities)

2026Q2: Cross-selling activity is reflected in record backlog numbers and end-market exposure. Momentum from cross-selling is evident in new project wins... - Ben Heraud(CEO)

Contradiction Point 2

Geospatial Segment Volatility and Visibility

Contradiction on whether Geo's volatility is expected to persist despite diversification.

Chris Moore (CJS Securities) - Chris Moore (CJS Securities)

2026Q2: GEO’s revenue is more volatile due to its mix of large fixed-fee contracts, but the segment is diversified and growing. - Kristen Schultes(CFO)

Which segment, Consulting & Engineering (C&E) with a 9% CAGR or Geospatial (GEO) with 5-8%, has higher visibility over the next 12 months, and will GEO’s quarterly volatility persist? - Chris Moore (CJS Securities)

2026Q2: Geo's recent performance reflects diversification across end markets. - Ben Heraud(CEO)

Contradiction Point 3

AI as a Competitive Headwind

Inconsistent characterization of AI's impact, from a long-term opportunity to a present-day competitive factor.

Alex Reigel (Texas Capital) - Alex Reigel (Texas Capital)

2026Q2: AI is viewed as a long-term opportunity. TIC is investing in AI to improve efficiency... but has not seen negative pricing impacts or share loss. AI is not currently a competitive headwind. - Ben Harad(CEO)

Are AI headwinds and investment needs enabling larger players to take market share from smaller ones? - Alex Rygiel (Texas Capital)

2026Q2: AI is a long-term opportunity. It's being deployed across workstreams to improve efficiency... but has not impacted pricing or win rates. - Ben Heraud(CEO)

Contradiction Point 4

I&M Segment Growth and Visibility

Contradiction on growth momentum and future outlook for the Inspection & Mitigation segment.

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2026Q2: Excluding site losses and outage timing, I&M was up 4% in Q2. The pipeline for new sites is the highest seen, and the team is more commercially proactive. - Ben Harad(CEO)

What factors beyond seasonality support a return to consistent growth in I&M, and what are the leading indicators? - Christopher Moore (CJS Securities, Inc.)

2026Q1: No additional lost sites have occurred since last year. - Ben Harad(CEO)

Contradiction Point 5

Data Center Revenue and Growth

Contradiction in reported data center revenue size and growth rate between the quarters.

Josh Chan (UBS) - Josh Chan (UBS)

2026Q2: Data center revenue is now 25% of total revenue, with trailing 12-month revenue just under $100 million. - Ben Harad(CEO)

Is the U.S. data center business growing? - Tomohiko Sano (JPMorgan Chase & Co)

2026Q1: Data center growth is around 5%. The U.S. business... with trailing 12-month revenue of approximately $80 million. - Ben Harad(CEO)

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