Acuren Q3 2026 Earnings Call Transcript

Acuren (NYSE:TIC) reported third-quarter financial results on Thursday. The transcript from the company’s third-quarter earnings call has been provided below.

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Summary

TIC Solutions reported a record third quarter with revenue growing 12.5% to $640 million, driven by 8.4% organic growth and strategic acquisitions.

The company raised its full-year revenue guidance and narrowed its adjusted EBITDA guidance, reflecting strong performance and strategic acquisitions.

Key growth areas included power and utilities, infrastructure, industrial, manufacturing, metals, aerospace, and data centers, with significant backlog growth reported.

Strategic acquisitions such as GEOVERA, WDI, and Core Group expanded the company’s service lines and geographic reach, supporting cross-selling initiatives and organic growth.

Notable operational highlights included the successful integration of AI and technology work streams to improve productivity and efficiency, and a focus on cross-selling to leverage the combined platform’s capabilities.

Full Transcript

OPERATOR

Hello and welcome everyone joining today’s TIC Solutions third quarter 2026 earnings call. 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 Shen with Investor Relations. Please go ahead.

Andrew Shen (Investor Relations)

Thank you, operator. Good morning everyone and thank you for joining the call. Joining me this morning are Benjamin Heraud, our Chief Executive Officer, Kristin Schultes, our Chief Financial Officer, and Robby 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, November 5, 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 third 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 purpose of this call, we refer to our segments as Inspection and Mitigation, or INM; Consulting and Engineering, or CME; and Geospatial, or Geo. Any reference to combined results reflects a non-GAAP combined view of Legacy Acuren and Legacy MV5, where applicable, for period-to-period comparability. More details on the calculation of our combined results are included in the presentation.

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

Benjamin Heraud (Chief Executive Officer)

Thank you, Andrew, and good morning, everyone. First, I want to thank our teammates for their outstanding work in this record quarter and their ongoing commitment to safety and quality. I also want to thank our shareholders for their continued support. I’m excited about the record results our team delivered this quarter. On a combined basis, revenue grew 12.5% to $640 million with organic growth accelerating to 8.4%, up from 2.5%. In the second quarter, adjusted EBITDA grew 19% to $107 million and adjusted EBITDA margin expanded approximately 90 basis points to 16.8%.

We grew across all three segments and we are raising our full year revenue guidance. The performance in this quarter demonstrates progress on the strategic priorities we outlined at our Investor Day: winning in essential high-demand end markets and geographies, expanding our role across the asset life cycle and client relationships, and improving profitability as we scale. We complemented that progress with three strategic acquisitions that broaden our service line capabilities and extend our geographic reach, all in response to established client demand.

Together, these results reinforce our confidence in our strategy and path to our 2029 objectives. I want to start with what is driving these results. Beginning with demand across our end markets, our services remain in high demand supported by the four megatrends we outlined at our Investor Day. Aging infrastructure requires sustained investment in planning, engineering, and inspection across transportation, water, buildings, and industrial assets. Growing energy demand is supporting investment in oil and gas infrastructure, power generation, transmission, distribution, and grid reliability.

Increasing data consumption supports the development and expansion of data centers, where we provide design, commissioning, and other technical services across the full asset lifecycle. Finally, the digitization of the physical world is increasing demand for geospatial data, digital models, and analytics that help clients better understand and manage their assets in the built and natural environments. Our position in essential, high-demand end markets is contributing to our results in the quarter. Power and utilities revenue increased 40% to $108 million, infrastructure increased 22% to $70 million, and our industrial, manufacturing, and metals business grew over 40% to $55 million. Aerospace and defense revenue increased more than 50% to $13 million, while buildings increased 25% to $126 million. Within buildings, data center revenue doubled to $38 million, bringing trailing 12‑month revenue to $117 million, exceeding our $100 million target we outlined earlier in the year.

Our U.S. work delivered the strongest percentage growth, while Asia continues to represent the largest share of data center revenue. We remain excited about our sales pipeline, our backlog of over $120 million, and our ability to gain share in this market while remaining selective in the opportunities that we pursue. We’re also using the scale and breadth of our combined platform to serve as a tech‑enabled lifecycle partner, supporting clients from planning and design through construction, ongoing operations, and asset optimization. Our inspection, engineering, and geospatial services allow us to address more of their needs and support the same assets over time. Our teams are putting this into practice by identifying client needs beyond the initial scope of work and addressing them through coordinated proposals across multiple service lines.

Cross‑selling is translating to awarded work, contributing to organic growth and further strengthening our client relationships. A recent assignment at a Canadian mining operation illustrates this approach. After an inspection identified buckling in a conveyor structure, we expanded the assignment to include rope access and drone surveying from GEOVERA, our recently acquired Canadian surveying and geomatics business. The resulting 3D models supported engineering analysis and repair design, extending our role from inspection into engineering and repair planning.

That connectivity and commercial momentum are also reflected in our combined C&E and GEO backlog, which reached a record $1.29 billion, up 23% year over year, providing strong visibility into the balance of 2026 and into the new year. As we grow, we’re also focused on improving profitability through enhanced service delivery and operating efficiency. We are deploying multiple technology and AI workstreams, including AI capabilities within the software our teams already use, and are beginning to see improvements in productivity and efficiency. These include tools that support quality assurance and quality control by helping teams review technical work for accuracy and completeness.

Other tools help teammates find relevant prior reports and technical documents to reference on current projects. We are using document intelligence to identify inconsistencies and potential risks in contracts, purchase orders, RFPs, and certifications across the combined platform. We are making client relationships and project experience more accessible to our teams, improving knowledge sharing and supporting more effective cross‑selling. Our focus is on practical applications of technology that support productivity, service quality, and margin expansion.

Our disciplined acquisition strategy complements these priorities by adding capabilities, client relationships, and local leadership. During the quarter, we announced three acquisitions in markets where we see established client demand and attractive growth opportunities. Together, these businesses generate approximately $90 million in annualized revenue and are accretive to our margin target. GEOVERA expands our Canadian presence with a scaled geospatial surveying and geomatics platform, strong local client relationships, and deep technical expertise.

Strategically, it extends our C&E and GEO capabilities in a market where we already have deep roots and established inspection relationships, creating opportunities to serve existing clients more broadly and introduce our inspection and engineering services to GEOVERA’s clients. WDI adds a new service offering into utility‑focused geographic information systems, or GIS, consulting and data services that is deeply embedded in utility operations and highly recurring.

This strengthens our power and utilities capabilities and expands our recurring revenue base while supporting clients’ grid modernization programs. It also brings new utility relationships, creating opportunities to offer our broader services to WDI clients and introduce their capabilities to our existing customers. Core Group, a European commissioning, management, and consultancy business, strengthens our presence in Europe and our ability to serve hyperscaler clients in the region.

The acquisition expands our data center commissioning capabilities and adds a local operating base in response to existing client demand. Consistent with our land‑and‑expand strategy, these acquisitions add complementary capabilities and local operating platforms in attractive markets. Our acquisition pipeline remains active, and our focus is on integrating these businesses and converting the expanded capabilities into profitable growth. Together, organic growth, strategic acquisitions, and operating improvements support our 2029 objectives of $3 billion in revenue, an 18% adjusted EBITDA margin, and 85% free cash flow conversion. We remain focused on executing and growing our backlog, expanding margins, and improving cash conversion supported by higher utilization, cost discipline, and automation. With that, I’ll turn to segment performance, beginning with Inspection & Mitigation.

We are pleased that the segment returned to growth this quarter. Third quarter revenue was $318 million, up 8.5% from the prior year. Growth reflected increased callout, outage, and capital project activity, including work that shifted from the second quarter into the third quarter. Our commercial pipeline remains active across callout services, capital projects, and embedded inspection and maintenance programs. Rope access services also grew at a double‑digit rate during the quarter, and we see significant opportunity to expand our penetration in the U.S. market.

Project work supports growth and diversification and creates opportunities to establish client relationships that can lead to recurring inspection and maintenance work, which remains central to our strategy. Turning to I&M’s end markets, oil and gas revenue was relatively flat, with lower refinery activity offset by growth in oil sands work. Power and utilities revenue increased over 50%, while industrial revenue increased 15%. Wind activity also contributed to the quarter’s performance. We continue to diversify our end‑market exposure and expand our addressable market through the combined platform, including opportunities in aerospace and defense, traditional infrastructure, and data centers.

These markets complement our core oil and gas and industrials business and broaden the range of assets and customers that we serve. Our established inspection relationships also create opportunities to introduce engineering and geospatial services. A recent assignment for a natural gas pipeline operator brought together the capabilities of multiple segments, demonstrating how our combined platform enables us to serve clients across multiple service lines.

As a leading North American provider, we are leveraging our scale while maintaining disciplined pricing, selective work pursuit, and strong regional execution. The strong third quarter results, 2026 site wins, and an active commercial pipeline give us greater confidence heading into 2027. Our priorities are to execute awarded work and deploy our workforce effectively while maintaining margin discipline. Consulting & Engineering delivered record third quarter revenue of $223 million, up 20.3% from the prior year. Growth was broad‑based across our largest end markets, reflecting favorable demand and solid execution across the segment. Buildings revenue increased 23%. Within buildings, data centers remained a significant contributor to growth, with quarterly revenue roughly doubling year over year. We support clients across the facility lifecycle from design and commissioning and through ongoing operations and future expansion.

Infrastructure revenue increased 14%. A recent award illustrates the value of our established client relationships. We were awarded a multi‑year contract to support a stormwater project in Brooklyn, New York. Building on a client relationship spanning approximately 30 years, the project will install special porous pavement that lets rainwater soak into the ground instead of flowing into the sewer system. This will help reduce pressure on the system and limit overflows into Gravesend Bay.

It is an example of the investment needed to modernize aging infrastructure and, with this project, helping Brooklyn’s sewer system better manage heavy rainfall and reduce street flooding. Power and utilities revenue increased 18%. Rising energy demand continues to drive investment in generation, transmission, distribution, and grid modernization. Larger developers are advancing multi‑project substation programs, creating opportunities for successive assignments.

Our work includes technically complex projects from large utility programs to fire and storm hardening of high‑voltage infrastructure. These programs underpin multi‑year demand for our power delivery services. Cross‑selling is also contributing to growth as our teams bring additional capabilities to existing clients and pursue work together across the platform. In power delivery, our teams are bringing in infrastructure specialists to support project execution with a long‑term client, and a transportation and infrastructure engagement expanded to include bridge scanning by our buildings technology team, extending that team’s capabilities into a new market. C&E backlog reached a record level, providing visibility into future activity. As that work converts to revenue, we remain focused on disciplined project selection, staffing, and execution to sustain margins.

The timing and mix of project delivery, particularly on multi‑year, larger‑scale programs, will influence the pace of revenue growth. Overall, broad‑based growth, expanding client relationships, and record backlog position C&E well heading into 2020. Turning to Geospatial, third quarter revenue was $98 million, up 9.3% from the prior year, supported by increased activity in power and utilities and military programs and contributions from recent acquisitions. Strong sales activity increased backlog during the quarter. Recent awards include two large NOAA contracts for LiDAR data collection along Florida’s Gulf Coast. The work maps coastal land and seafloor to support safe marine navigation and track coastal erosion and shoreline change.

These awards reflect continued demand for our large‑scale mapping capabilities and the recurring need to update coastal data, including after hurricanes. Our geospatial intelligence business also grew during the quarter. We were awarded a contract with the National Geospatial‑Intelligence Agency with a term of up to five years to provide access to commercial geophysical data and survey services. These data sets support mapping and navigation applications where accuracy is critical to mission success.

The award builds on an established client relationship and our ability to source specialized data and coordinate surveys through a global network of providers. Our commercial activity continues to grow, primarily in power and utilities. We conduct aerial surveys covering more than 1 million miles of power lines annually, helping utilities identify vegetation conflicts and support fire mitigation. Our geospatial and inspection teams are jointly pursuing utility work that combines aerial mapping with inspections, bringing complementary services to clients through coordinated proposals. Our geospatial services are essential and scalable.

We are pursuing opportunities in Canada, Asia Pacific, and the Middle East, with expansion guided by client demand in newer markets. Our proposals incorporate cost assumptions and contingencies that reflect local execution risks. While geospatial revenue and backlog grew, third quarter profitability was below our expectations, reflecting project timing, mix, and execution challenges, including a high proportion of pass‑through work on certain contracts. We’ve made leadership changes and are drawing on expertise in operating best practices from our C&E business to strengthen project management, improve forecasting and utilization, and support more consistent execution.

With that, I’ll turn the call over to Kristen to review our financial results, provide an update on integration, and offer more detail on our outlook.

Kristin Schultes (Chief Financial Officer)

Thank you, Ben, and good morning, everyone. Unless otherwise noted, all prior-year comparisons reflect results on a combined basis. C&E and Geospatial reflect legacy NB5 results and I&M reflects legacy Acuren to provide a more meaningful view of year-over-year performance. I am very pleased with our results this quarter with revenue growth across all three segments and continued progress on margin expansion. Cross-selling, cost synergies, and operating improvements are driving results as we execute against our long-term plan. Total third quarter revenue was $640 million, up 12.5% from $569 million. Total growth was 13.0% in constant currency and organic growth was in the high single digits at 8.4%. Growth reflects strong momentum across all three segments, favorable end-market positioning, and execution on our cross-selling platform.

Another quarter of record combined backlog continues to support our outlook. Adjusted gross profit was $243 million, up 13.2% from $215 million. Adjusted gross margin was 38.0% compared with 37.8%, up approximately 25 basis points. This improvement reflected disciplined project selection, favorable business mix in C&E and I&M, and strong operating execution, partially offset by GEO performance. Adjusted SG&A was $136 million, or 21.3% of revenue, compared with 21.8% last year. The decrease as a percentage of revenue reflected net synergy savings and operating leverage from strong organic revenue growth, partially offset by higher non-billable labor costs, incentive compensation, and overhead from acquired businesses.

We remain focused on continuing to drive SG&A leverage through cost management, integration, efficiency and automation initiatives, as well as growth across the business. Adjusted EBITDA was $107 million, up 19% from $90 million in the prior-year period, outpacing revenue growth of 12.5% as we continue to scale profitably. Adjusted EBITDA margin was 16.8% compared with 15.9%, an improvement of approximately 90 basis points reflecting strong growth in C&E margin, improvement in I&M, and SG&A leverage. Third quarter adjusted diluted earnings per share was $0.18, up from $0.14 in the second quarter, bringing year-to-date adjusted diluted earnings per share to $0.36.

Turning to segment results, Consulting and Engineering contributed revenue of $223 million, up 20.3% year over year. Adjusted gross profit grew 20% with adjusted gross margin holding roughly flat at 47.4%. Inspection and Mitigation generated revenue of $318 million, up 8.5% year over year. As Ben discussed, this growth reflected increased callout, outage, and capital project activity. Adjusted gross margin was 29.2%, up 80 basis points, primarily reflecting the contribution from this higher-margin work as well as indirect cost discipline.

Geospatial contributed revenue of $98 million, up 9.3% year over year, supported by increased activity in power and utilities and military programs, as well as contributions from recent acquisitions. Adjusted gross margin was 44.9%, down 330 basis points reflecting project timing, mix, project execution, including a higher proportion of pass-through work on certain contracts. Given the segment’s mix of larger fixed-fee contracts, GEO revenue and margins can vary quarter to quarter based on project timing and delivery schedules.

We have taken actions to strengthen execution and backlog growth supports the segment’s outlook. For the first nine months of 2026, total revenue was $1.712 billion compared with $1.603 billion in the prior-year period. On a combined basis, revenue increased 6.8%, including 4.3% organically. Adjusted gross profit was $646 million, or 37.8%. Adjusted SG&A was $389 million, or 22.7% of revenue. Adjusted EBITDA was $260 million, representing a margin of 15.2% for the first nine months of the year. I&M generated revenue of $850 million, up 1.0% year over year, with adjusted gross margin of 27.6%.

C&E generated revenue of $617 million, up 15.7%, with adjusted gross margin of 47.4%. GEO generated revenue of $245 million, up 7.5%, with adjusted gross margin of 48.7%. From a capital allocation perspective, we deployed net cash of $170 million on M&A during the quarter, bringing year-to-date acquisition investment to $180 million. This included the three strategic acquisitions Ben discussed and an additional bolt-on acquisition which added technical capabilities and broadened our geographic and market exposure. We believe these acquisitions offer outsized opportunities for growth and margin expansion while meeting our criteria for cultural fit and accretive financial profile.

We remain focused on integrating these businesses and expanding the services we provide to existing and new clients. Capital expenditures were $14 million during the third quarter and $40 million year to date, representing 2.3% of year-to-date revenue, slightly below our typical range of 2.5% to 3%. In July we also repurchased approximately 900,000 shares at an average price of $7.94 per share for a total of $7 million. Under our previously announced share repurchase program, this brings year-to-date repurchases to 2.8 million shares at an average price of $8.20 per share for a total of $22.7 million. Our capital allocation priorities remain focused on investing in the business while also delevering towards our long-term leverage target of 2.5 times.

We plan to continue evaluating and pursuing strategic acquisitions while also evaluating these investments against other opportunistic uses of capital. Turning to the balance sheet, as of September 30th total liquidity was $293 million, including $198 million of cash and undrawn capacity on our $125 million revolving credit facility. Bank-calculated net leverage was 3.9 times, with the increase driven by the timing of working capital investments to support growth during our busiest quarter of the year as well as cash deployed for M&A. Interest rate movements since May have reinforced the benefit of our $800 million interest rate swap which provides greater certainty around borrowing costs.

Cash conversion reflected seasonal working capital requirements and investments needed to support revenue growth across the business. As previously discussed, shifts in I&M outage schedules moved revenue later this year, delaying associated cash collections. We expect a portion of these collections in the fourth quarter with the remainder in early 2027. We believe this primarily reflects timing. We remain focused on billing discipline, collections, and working capital management to improve conversion as the business grows.

For the full year, we anticipate net cash interest expense of $95 to $105 million, cash taxes of $25 to $30 million, and capital expenditures of $50 to $60 million. Turning to integration, we continue to build a scalable, integrated back office. During the quarter we launched our integrated CRM platform, providing visibility into opportunities across the combined organization. We also continue to transition certain integration activities to business leaders as part of day-to-day operations. Remaining work includes HR and financial system integrations and alignment of our IT environment. As of September 30th we had actioned approximately $22 million of our annualized run-rate cost savings, up from $20 million at the end of the second quarter.

We remain on track to deliver our previously announced $25 million run-rate target by year end and continue to expect approximately $15 million of realized savings in 2026. These savings are contributing to margin expansion alongside improvements in utilization, business mix, and operating execution. I want to thank our teams for their continued effort and commitment to the integration as we continue building for our future. Turning to our outlook, we are increasing our full-year revenue guidance to $2.24 billion to $2.27 billion, up from $2.15 billion to $2.25 billion. We are also narrowing our adjusted EBITDA guidance range to $342 million to $350 million, updated from 330 to $355 million. This raises the midpoint to $346 million. The updated outlook reflects our momentum and the growth in the business both organically and through our recent acquisitions. Based on our results for September, our full-year guidance implies fourth quarter revenue of $528 to $558 million and adjusted EBITDA of $82 million to $90 million.

The fourth quarter outlook incorporates the timing of backlog conversion, planned outage activity, and contributions from our recent acquisitions. At the midpoint, this represents year-over-year growth of approximately 7% in the fourth quarter for revenue and 13% growth in adjusted EBITDA. While we look forward to providing more formal guidance for 2027 at a later date, we want to share a framework for planning purposes. Consistent with the strategy outlined at our Investor Day in May, we expect a year of strong growth supported by current commercial momentum, record backlog, and a full year of contributions from our 2026 acquisitions. For 2027, we are planning for mid- to high-single-digit revenue growth, with C&E and Geospatial growth again expected to outpace I&M. We expect adjusted EBITDA to grow faster than revenue, driven by operating leverage, scale synergies, and contributions from our 2026 acquisitions. Total combined C&E and GEO backlog increased 23% year over year, including a 16% increase in our 12-month backlog, providing solid visibility into 2027. Our 2027 growth framework reflects the expected pace of backlog conversion, which depends on project schedules and execution capacity. We remain focused on converting backlog into profitable revenue.

Our leading indicators remain strong, including proposal and commercial activity. We remain focused on execution, improved cash conversion, and disciplined capital allocation as we progress towards our 2029 objective of $3 billion in revenue, 18% adjusted EBITDA margin, and 85% free cash flow conversion. With that, I will turn the call over to Robbie.

Robbie

Thank you, Kristin. This quarter’s results again reinforce the strategic rationale of bringing Acuren and NB5. Our teams are winning assignments that draw on multiple parts of the business, and the acquisitions announced this quarter extend the opportunity into additional services and geographies. Our priority is to translate those capabilities into sustained earnings and cash flow. That requires strong operating execution, accountability for site and project profitability, and careful capital allocation.

Geovera, WDI, and Core Group each add capabilities we can bring to existing clients while introducing relationships that we can serve more broadly. As we evaluate further acquisitions, strategic and cultural fit must be matched by an appropriate purchase price, sustainable cash flow, and attractive expected returns. We also recognize the importance of reducing leverage. Improving cash conversion and using that cash effectively will be important measures of our execution as we pursue our 2029 objectives.

With that, Ben, back to you.

Benjamin Heraud (Chief Executive Officer)

Thanks, Robbie. This was a strong quarter for Acuren. We accelerated organic growth, returned I and M to growth, expanded margins, and raised our outlook. We also added businesses that strengthened our technical capabilities and geographic reach. Cross-selling is translating into awarded work, increasing backlog and organic growth. Our teams are identifying additional client needs and combining services to address them. This is our lifecycle model in practice: supporting clients from planning and design through construction and ongoing operations while expanding the scope of our relationships. Looking towards 2027, strong investment in infrastructure, energy, and the built environment continues to support demand for our highly technical services. Record backlog and our expanded capabilities put us in a position of strength, and we are confident in our ability to convert these opportunities into profitable growth and stronger cash flow.

Thank you to our teammates for their continued focus on client service, their commitment to operating discipline, and dedication to improving the business every day. With that, Operator, please open the line for questions.

OPERATOR

Thank you. At this time, if you would like to ask a question, please press star one on your telephone keypad. To leave the queue at any time, press star two. We ask that you please limit yourself to one question and one follow-up re-queueing if you have additional questions. Once again, that is star one. And our first question will come from Chris Moore with CJS Securities. Please go ahead.

Chris Moore (Analyst at CJS Securities)

Hey, good morning, guys. Thanks for taking a couple of questions. So just the 8.4% organic growth was terrific. You said cross-selling is picking up. Just trying to get a sense as to whether that had a meaningful impact on the organic growth yet.

Benjamin Heraud (Chief Executive Officer)

Yeah, absolutely. We’re really gaining momentum with the cross-selling program. And I think this idea of us as a combined platform is really resonating with our clients, and being a lifecycle partner, one service is leading to another, and we’re able to really drive additional business with our existing client base. Some common themes: we’re just really able to serve our clients’ needs better, expand our relationships geographically, and it’s a competitive advantage when we’re able to have this breadth of services that we have.

So it is absolutely driving—it’s one of the driving factors of our organic growth, for sure.

Chris Moore (Analyst at CJS Securities)

Terrific. And just on the three acquisitions, I think in total you talked about $90 million. Is any one of those meaningfully larger or smaller than the others? Just trying to get a sense as to, you know, kind of on a relative basis if, you know, the contribution that we should be looking for from them.

Kristin Schultes (Chief Financial Officer)

Yeah. Good morning, Chris. So I would tell you that there are four in total. Two of them are a little larger than the other two. We are still in the range—we talked about our acquisition range and multiple range of five to seven times. We’re on the high end of that for this quarter, but this was opportunistic for us. We remain very disciplined on M&A, but these were the right fit for us for the long term. So we’re excited about them.

OPERATOR

Thank you. Our next question will come from Kathryn Thompson with Thompson Research Group. Please go ahead.

Kathryn Thompson (Analyst at Thompson Research Group)

Hi. Thank you for taking my questions today. Just on the implied Q4 guide, could you help us differentiate between one-time comps, acquired growth versus quarter-to-quarter revenue shifts, and the run rate of the business into 2027? Really what we’re trying to parse out is just organic growth versus acquired and differentiated between those two, particularly as we set up into 2027. Thank you.

Kristin Schultes (Chief Financial Officer)

Morning, Katherine. Yeah, so if we look at our Q4 guidance, I think it’s important to remember the timing of three of these acquisitions in the quarter. They’re seasonal businesses, and it does take some time for us to digest those. So if we look at the Q4 guide, it implies organic growth and, I would call, a very small contribution from the acquisitions given that timing.

Kathryn Thompson (Analyst at Thompson Research Group)

Okay, perfect. Thank you. Last quarter and again this quarter you discussed some bigger growth end markets for you—data centers, aerospace, industrial, and energy—but, you know, big growth percentages on smaller numbers, and they add up to real growth. How are you positioning the businesses to capitalize those into 2027, and can you put any framework around the magnitude of growth for these end markets and what you are expecting into 2027? Thanks again, and great job on the quarter.

Benjamin Heraud (Chief Executive Officer)

Yeah, thank you. At our investor day we talked about these megatrends that are really driving the growth of the business, and I think that those really do drive sustained growth for us. And just to touch on them: aging infrastructure, obviously the digitization of the physical world, and the rising energy usage—and data centers relating to that. Really happy with how broad-based our end market growth is across the organization. Data centers has been a driver of growth, but if you look outside of that, we’re firing on all cylinders across many end markets.

So I think it’s really setting us up. We’re really pleased with the momentum that we have as we go into 2027.

Kristin Schultes (Chief Financial Officer)

And Catherine, I would just add that, you know, we look through our end markets on a regular basis. We are truly bullish on all of our end markets. And as an example, you know, the wind inspection business is a business that was strong for us in Canada in the legacy I and M business, and we’ve utilized resources and best practices and applied that to growth in the U.S. That piece of the business, that end market, is up 60% this quarter. And so we’re looking for pockets, leadership opportunities to kind of cross-share opportunities and resources to continue driving growth in all of our end markets.

OPERATOR

Thank you. Our next question will come from Josh Chan with UBS. Please go ahead.

Josh Chan (Analyst at UBS)

Hi, good morning. Thanks for taking my question. Really impressive backlog growth, and so I was wondering if you could talk about what are sort of the two or three primary drivers of your backlog growth. I know you give a combined number between the two businesses, so just curious where you’re seeing the greatest increase in demand.

Benjamin Heraud (Chief Executive Officer)

As I mentioned before, the broad-based sort of performance across the organization—it’s mostly organic, that growth. So I’d sort of come back to the cross-selling being a key driver of that. But it really is broad-based across the board. We’re really happy with—you know, we look every week at the new projects that are coming in, and it is very, very active across multiple, multiple end markets.

Josh Chan (Analyst at UBS)

Sure. Okay. Yeah, and I guess Kristen mentioned that you expect EBITDA margin expansion in 2027, which makes sense. I was thinking with, obviously, the capture of the remaining synergies and maybe kind of further operating leverage, that I was wondering what is kind of holding you back from having kind of a stronger language around margin expansion, or are you just trying to be kind of prudent, kind of starting this far ahead of the new year? Thanks.

Kristin Schultes (Chief Financial Officer)

Thanks, Josh. Yeah, I think, you know, if we align to our 318 85, you know, it does reflect meaningful margin expansion on a yearly basis. If you look at our applied Q4 guidance, I think it’s around 80 basis points of improvement. Our full year would be up about 60 basis points. You know, it’s early in our budgeting cycle. We’re excited about that process progressing and being able to provide more clarity on expectations for 2027 margin expansion.

But I would tell you that the team is very bullish on kind of the momentum we’re seeing and some of the acceleration opportunities we have. You know, we just returned to demonstrating operating leverage in the second quarter, and so—and again, we’ve talked about this before—but the levers we have from a margin expansion perspective are broad and meaningful and will deliver results.

OPERATOR

Thank you. Our next question will come from Andy Whitman with Baird. Please go ahead.

Andy Whitman (Analyst at Baird)

Great. Thanks for taking my questions here. So I guess I wanted to start with the I and M segments here. You kind of mentioned some of the delays from second quarter pushed into third and kind of sounded like you thought that third was obviously a good quarter for you there. But you also had some comments later talking that this is going to be the segment that’s growing slower than the others, which isn’t new information. But I’m just trying to kind of put that all together on this segment in particular and just get a sense of what you think the underlying business is there, recognizing that you do have some of that run-and-maintain, which is very visible and recurring, and obviously the outage work is always going to be somewhat lumpy. But I’m just trying to get a sense of how to think about this business like you’re thinking about it. Is this still kind of a low single-digit organic grower underneath everything, Ben or Kristen, or how should we be thinking about that?

Benjamin Heraud (Chief Executive Officer)

I think low to mid single digits. I would just say really, really happy with the work that we’ve done, the results from the work that we’ve done through the year, the leadership changes we’ve made, the commercial focus that the team has. It’s really on the front foot, and we have a really, really robust commercial pipeline. So the quarter—Q3—played out as we expected, and we’re looking for sustained growth within this business. We’re really happy with the momentum that we have going to 2027 with the I and M segment.

Kristin Schultes (Chief Financial Officer)

Andy, we talked about site wins last quarter. We have some pending site wins as well. The momentum and the commercial progress we’re making is meaningful. I’m excited also about, when you look at service lines within I and M—so, you know, there’s the core NDT business which is about 70% of that business, but the rope access work that we’re doing is growing meaningfully as well. That work was actually up over 20% this quarter and 15% year to date, which is exciting.

The lab side of the business is also growing—up about 15% for the quarter. And then if you look at the mix of the work that we’re doing in I and M between the—we call it natures of work—the outage activity obviously was strong this quarter as expected. But we’re seeing growth in callout work, which is our higher margin service work. We’re seeing growth in our small project work, which is also high margin work. So the momentum is there. We aren’t putting out a high conviction number at this stage in the process, but feel very good about where this business is headed.

Andy Whitman (Analyst at Baird)

That’s good detail. Thanks for that. I guess—what do I want to do next? I guess I wanted to just kind of understand the cash and cash flow a little bit better. There’s a couple of ways to kind of talk about this. We heard your comments that obviously big growth quarter took some working capital and you expect 4Q and maybe some bleeding into 1Q. So heard the comment on that. Just looking at some of the other things here, it looks like there’s a pretty meaningful increase in current liabilities sequentially—like $50 million.

So I wanted to understand what that is. Is it attached to—last quarter I asked about the purchase accounting and how the goodwill is now up over $20 million, kind of creeping from when you first took a glance at it to now. It seems like there’s probably some contract that you’re working on that’s getting revised in terms of its cost outlook. Is that all related? What is the impact to cash from that? Kristen, maybe if you could comment on that. I just want to make sure that whatever project or projects are causing this are contained now and why we shouldn’t expect—I mean, next quarter would be income statement eligible.

And so I just want to make sure that we’re talking about that now before anything else might happen in the future. Thanks.

Kristin Schultes (Chief Financial Officer)

Excuse me. Let me start with the measurement period adjustments. The growth in accrued liabilities is not related to that. That was largely completed in the second quarter. There was a minor adjustment not related to PPA accounting in the third quarter in terms of cash conversion. I think, I mean look, you’re right to focus on it. In fact, I had your name down for this question. So there’s a couple of nuances. We talked about the growth in the quarter. Interestingly, if you look at our revenue spread during our busy months, typically it’s fairly even between May and October. We had a very high concentration of revenue in August and September at the end of the quarter that drove a spike in working capital and receivables. Our fourth quarter is typically our largest cash conversion quarter. We’re working on an internal cash campaign to convert that. We did make meaningful progress on unbilled.

We’ve shaved about five days off of our time to bill, which is positive. So working capital management, proving and showing and demonstrating our ability to convert our billings and receivables to cash is a top priority for us. And we’re focused on the typical people, process and technology.

OPERATOR

Thank you. Our next question will come from Tomo Sano with JPMorgan. Please go ahead.

Brendan (Analyst at JPMorgan)

Hi, this is Brendan on for Tomo. With the Lifecycle partner model central to your thesis, are there any areas of greatest untapped opportunity to deepen your presence with existing clients that you’d like to call out, or are those opportunities more kind of broad based?

Benjamin Heraud (Chief Executive Officer)

The opportunity is significant because there are so many clients that we currently only work with in a very narrow scope of service, and there are so many other services that we have within our purview that we’re able to bring to them. So the trick really is educating our teams on what those services are and getting them in front of the clients, elevating our relationship and position with them, and really strengthening that relationship that we have with the clients.

So I am very, very bullish and excited about the cross-selling opportunity that we have within the organization. We’re only really just getting started, and I think the momentum is just continuing to build there.

Kristin Schultes (Chief Financial Officer)

Yeah. And I would add one of the integration items for bringing the businesses together was to get us on a consolidated CRM platform, and that just went live during the quarter. And we’re excited about the way that that’s going to help increase opportunities and communication, collaboration across our business.

Brendan (Analyst at JPMorgan)

Yeah, yeah. Great, great. Thank you. And then you described implementing AI and technology work streams to improve productivity. Can you quantify measurable productivity or margin gains that you’ve realized so far, and what kind of investment is required to implement all of that?

Benjamin Heraud (Chief Executive Officer)

We’re not quite there in terms of quantifying it. What I will say is that we have a really strong history as a technology-enabled company, and we have a very technical team, so they’re naturally leaning into this in a big way. Getting subject matter experts into our business is one of our growth limiters, and I’m so excited about AI being a productivity lever for the business, so we’re absolutely leaning into it. The CRM example that Kristin just brought up, AI is a big focus of that. Our ability to react to web leads in almost real time, for the team to understand cross-selling and the opportunity—AI is a big lever there. But we’re leaning into it in multiple work streams. The way I would look at it is it’s been very exploratory to date, and we’re really moving into an execution phase now where we identify the things that can be rolled out at scale across the organization, and we’re really in that process at the moment.

So more to come. We’re absolutely in agreement that KPIs and being able to measure this is important, but we’re not quite there yet.

OPERATOR

Thank you. Our next question will come from Jeff Martin with Roth Capital Partners. Please go ahead.

Jeff Martin (Analyst at Roth Capital Partners)

Thanks. Good morning to all of you. Wanted to dive into the acquisitions in the quarter a little bit deeper. Sounds like they are highly strategic in nature and bring unusual organic growth opportunities. Just curious if you could speak to that.

Benjamin Heraud (Chief Executive Officer)

Yeah, it’s showing us executing on our strategy. If we look at the GeoVerra acquisition in Canada, we’ve talked a lot about wanting to bring consulting, engineering, and geospatial to that area. It’s really executing on our land-and-expand strategy. We’re already seeing a ton of cross-selling potential and leaning into the leadership that we have up there. The Core acquisition was in response to client demand. They were asking for us on the data center side to be in Europe, and this was a great opportunity for us to set a platform up there. And then WDI was a completely new service line and an end market that we really want to be in more—in utilities. So highly recurring revenue base that also offers up a really big cross-selling potential between the clients that they have in the utility space and ours, which, as you know, it’s a really high barrier to entry into new utility clients.

So sort of three different examples of our strategic acquisition strategy in play.

Jeff Martin (Analyst at Roth Capital Partners)

And then my second question—you’ve already answered the first part of it, which was: are we back on track to a normal, consistent I&M business? Sounds like we are; maybe confirm that statement you agree with. And then on Geospatial, I was just curious if you could kind of characterize what kind of timeline we might anticipate for better execution with the changes that you’re making there.

Benjamin Heraud (Chief Executive Officer)

Yeah, so we wanted to react quickly to some of the project-related issues that we have, and really what it is is we’re bringing some of the best practices from our consulting and engineering business and bringing those to the table. Within geospatial, Q3 was a really, really strong sales month, and I think that that’s setting us up for a good year next year around growth. So there were some problematic projects that we’ve dealt with and we’re getting behind us.

And as I said, we wanted to react quickly to this and bring the horsepower that we have within the organization to the group to really strengthen it and support its growth.

OPERATOR

Thank you. Our next question comes from Stephanie Moore with Jefferies. Please go ahead.

Stephanie Moore (Analyst at Jefferies)

Hi, good morning. Thank you. I was hoping—really, really pleased by the rebound in the inspection business in the quarter—maybe you could talk a little bit about what changed or what has kind of evolved as this year has progressed, whether it’s benefiting from some new wins, some project work. So anything that you can speak to that’s driven the rebound here as the quarters progress. And at the same time, maybe you could comment about how demand has exited the quarter as well.

Benjamin Heraud (Chief Executive Officer)

Yeah, so I mentioned earlier the work that we’ve done to date—it does really start with leadership and culture, and I think that the tone within the group has completely changed and shifted towards a much more positive momentum and commercial focus. So the team is extremely focused on getting out, meeting with clients, elevating our position with a client, and moving ourselves up the value chain, and bringing the C&E and Geospatial services to the table really, really enhances that.

So we talked about new site wins last quarter. Those will start to ramp up through Q4, and as we look ahead I’m really excited about some of the commercial pipeline that we have. We’ve had a nice focus on project work, for example, and that’s a great filler—just seeing that grow—and the call-out work that we’re doing. So it’s quite broad based. It’s not one particular region. We’re just seeing performance improve across the board. There’s been a lot of focus and questions around the Gulf.

I’m just really happy with the changes that we’ve made there and that’s behind us. The team is on a great growth path. There’s.

Stephanie Moore (Analyst at Jefferies)

That’s great. And specifically related to the work in the Gulf, was this more so from actions that you think are more in TIC’s control, or do you think this is just more of an underlying demand environment that maybe became a bit more favorable?

Benjamin Heraud (Chief Executive Officer)

I think the changes that we made in leadership were absolutely key to getting us back onto a good growth path. I mean, we did have some recessionary behavior from clients last year, and some of the oil and gas behavior around holding out on outages over a quarter or two did hurt us in the past. I think there’s going to be a lot of pent-up demand for that work into 2027. So a little bit of both—some self-inflicted that we’ve fixed, and some to do with the behavior of our clients, which we see as a positive opportunity into 2027.

Kristin Schultes (Chief Financial Officer)

Yeah. If the I&M leadership were on the call, they would tell you that it’s all the hard work on so many fronts that they’ve been executing against for the last year that is starting to show up in results, and it’s coming from a number of different areas. And so yeah, agree with Ben. It’s broad based. It’s not one customer, one site. It’s structural improvements in the business.

Benjamin Heraud (Chief Executive Officer)

Yeah, definitely proud of the team and what they’ve pulled off this year.

OPERATOR

Thank you. Our last question will come from Min Chao with Texas Capital Securities. Please go ahead.

Min Chao (Analyst at Texas Capital Securities)

Great. Thank you for taking my question. I had a question just basically on your data center business. Obviously you added your European presence with the Core acquisition. Can you just talk about how your expansion into the U.S. is going, and maybe talk about the outlook just based on geography?

Benjamin Heraud (Chief Executive Officer)

Yeah, sure. Just to sort of ground on where most of the revenue is: it is about 80% still in Asia Pacific, 20% in the U.S., and a little bit in Europe. That business we acquired in Europe was actually quite diversified, so it wasn’t just a data center business, which is what we like—it’s nice. I’m still really, really excited about the pipeline of work that we have in front of us. It continues to grow. Using Texas as an example, we were aware of some slowdown a couple of months ago, and in conversations with our clients, because it’s such a resource-constrained space, they said, look, if anything goes on hold here, we need you on a project over here. So we do expect some things to shift around in the U.S. with some of the recent changes, but we expect that capital to be diverted elsewhere. We have a very diverse client base. We work with approximately 80 end users.

So as far as an end market that we’re working in, we feel we’re in a really good space when it comes to the data centers.

Min Chao (Analyst at Texas Capital Securities)

Excellent. And then Kristin, maybe this is for you. In terms of the geospatial end market—obviously based on your commentary around execution this quarter, but also just based on your outlook in terms of mix—should we expect the Geo margins to be down sequentially in the fourth quarter? Just curious about your guidance there.

Kristin Schultes (Chief Financial Officer)

Yeah, so we haven’t given guidance at the segment level, but that said, we’re not anticipating degradation in the fourth quarter. Like Ben mentioned, the structural changes we’re making in that business are providing improvements in results. And so on a combined basis for Q4, we’re projecting about 7% growth at the midpoint. I could just give a little bit of color on those gross margin drivers as well. Depending on the mix during a quarter, it can swing the numbers quite significantly. Gross margin on different services within that segment can range from 30 to 60% in the quarter. We also had a higher amount of pass-through than typical, and that was due to capacity constraints. A lot of our assets are fully utilized and we needed to leverage subcontractors a little bit more.

And we also had a data brokering opportunity or project, which is a really, really great business because it’s pass-through. So while it was a little bit dilutive to our gross margin, it was actually accretive to the EBITDA margin. Just a little bit more color on that gross margin.

OPERATOR

Thank you. This concludes the question and answer portion of today’s call. I’d like to turn the call back over to management for any additional or closing remarks.

Benjamin Heraud (Chief Executive Officer)

Thank you. Thank you all for your questions and your continued interest in Acuren. I’m really proud of our team’s third quarter delivery. We achieved what we set out to do and we’ve demonstrated scale. Inspection mitigation is back to growth and the combined platform is working as we intended. Cross selling continues to gain momentum and it’s showing up in our organic growth and backlog. We remain focused on execution and delivering on our commitments and we look forward to updating you on our progress next quarter.

Thank you all and have a good day.

OPERATOR

Thank you, ladies and gentlemen. This brings us to the end of today’s meeting. We appreciate your time and participation, and you may now disconnect.

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