TIC Solutions (TIC) Q4 2025 Earnings Transcript

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DATE

Thursday, March 12, 2026 at 8:30 a.m. ET

CALL PARTICIPANTS

• Chief Executive Officer — Talman Pizzey
• Incoming Chief Executive Officer, President, and Chief Operating Officer — Benjamin Heraud
• Chief Financial Officer — Kristin Schultes
• Executive Chairman — Robbie Franklin
• Director of Investor Relations — Andrew Shen

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TAKEAWAYS

• Leadership Transition -- Ben Heraud named CEO effective March 31, 2026, with Talman Pizzey remaining as Board member and adviser to support continuity.
• Full-Year Revenue -- $2.1 billion, up 4.4% on a constant currency basis and 3.6% as reported, marking the highest combined full-year revenue to date.
• Adjusted EBITDA -- $312 million for the year and $76.4 million for the quarter, with annual margin of 14.8% and Q4 margin of 15.0%.
• Segment Revenue — I&M -- $1.1 billion for the year, with year-over-year results roughly flat and Q4 revenue of $258 million, down 2% in the quarter due to lower outage and capital project spending.
• Segment Revenue — Consulting Engineering (CE) -- $714 million for the year, up approximately 8% from the prior year, supported by infrastructure and data center demand; fourth quarter revenue of $181 million rose 2%.
• Segment Revenue — Geospatial (GEO) -- $298 million for the year, reflecting roughly 6% growth, with Q4 revenue of $70 million rising 2% despite federal funding delays.
• Adjusted Gross Margins -- Q4 combined adjusted gross margin was 38.8%, up 277 basis points from the prior year; full-year adjusted gross margin was 37.6%, up 14 basis points.
• Data Center Revenue -- Nearly $70 million, more than doubling year over year, with a "line of sight to nearly $100 million" in 2026.
• Combined Year-End Backlog -- $1.07 billion for CE and GEO, up about 10% from the prior year's $970 million, representing incremental contracted work.
• Integration Synergies -- $25 million of annualized cost synergies remain on track, with about half expected to be realized during 2026 and full realization by mid-2027.
• Liquidity and Debt -- Year-end liquidity of $551 million, comprising $440 million cash and $111 million revolving credit facility availability; total term loan debt at $1.6 billion.
• Cost Management -- Adjusted SG&A of $124 million in Q4, or 24.4% of revenue; integration efforts aim to address elevated SG&A and drive margin expansion.
• Capital Expenditures -- $34 million reported for the year and $56 million on a combined basis, representing 2.2% and 2.7% of revenue, respectively.
• Share Repurchase Authorization -- A new $200 million share buyback program was approved by the Board this week to offer capital allocation flexibility.
• 2026 Guidance -- Revenue expected to reach $2.15 billion to $2.25 billion and adjusted EBITDA projected at $330 million to $355 million, indicating approximately 4% growth at midpoint.
• Q1 2026 Expectations -- Revenue guidance of $470 million to $485 million and adjusted EBITDA outlook of $55 million to $60 million, reflecting seasonal patterns.
• Compensation Change -- NV5 short-term incentive moved from stock to cash compensation, decreasing adjusted EBITDA guidance by $8 million for 2026.
• Tuck-in Acquisitions -- Three small acquisitions completed in the quarter, with full-year contribution across all segments described as 12% to the combined business.

SUMMARY

TIC Solutions (NYSE:TIC) announced a CEO transition, reported record combined revenue and EBITDA for the year, and highlighted a 10% increase in year-end backlog for its CE and GEO segments. The Board authorized a $200 million share repurchase program, and integration initiatives are progressing as planned to deliver $25 million in annualized cost synergies. 2026 guidance projects continued revenue and margin growth, driven by cross-segment collaboration, disciplined cost management, and a focus on recurring end markets.

• Kristin Schultes stated that first quarter adjusted EBITDA typically represents roughly 15%-18% of full-year EBITDA, alerting investors to material quarterly seasonality in earnings.
• The federal funding lapse was referenced as a specific factor impacting GEO award and approval pacing, though management described the effect as limited and temporary.
• Ben Heraud explained, "Our embedded run and maintain programs and call-out activity grew in the year," with growth in these areas providing visibility and resiliency despite declines in outage and capital project business.
• The GEO Agent AI-enabled geospatial platform will begin client rollout in the initial months of 2026, expected to create new analytics and workflow opportunities for the segment.
• Capital allocation in 2026 will include continued pursuit of tuck-ins alongside the authorized share repurchase, with organic reinvestment prioritized for the highest-return business lines.
• A $250 million private placement of shares and prefunded warrants was completed in October to bolster balance sheet flexibility and reduce leverage.
• Management stated, "We maintain pricing integrity even when competitors were more aggressive, and we will not trade long-term economics for short-term volume," emphasizing a disciplined approach to pricing and resource deployment within the I&M segment.
• Ben Heraud noted that the Middle East is a relatively small piece of business, around 1%, and the impact from the region is immaterial for TIC.

INDUSTRY GLOSSARY

• I&M: Inspection and Mitigation — TIC segment specializing in inspection, testing, and industrial maintenance services.
• CE: Consulting Engineering — TIC segment focused on engineering design, consulting, and specialty services.
• GEO: Geospatial — TIC segment providing mapping, analytics, and location-based technology solutions.
• NDT: Nondestructive Testing — Analysis and inspection methods that do not damage or alter the tested materials or components.
• DSO: Days Sales Outstanding — Metric indicating average time to collect receivables from clients.
• Backlog: The total value of contracted work not yet completed or recognized as revenue.
• Tuck-in: A small-scale acquisition intended to be easily integrated into an existing business segment or operation.

Full Conference Call Transcript

Andrew Shen: Thank you, operator. Good morning, everyone, and thank you for joining the call. Joining me this morning is Tal Pizzey, our Chief Executive Officer; Ben Heraud, our President and Chief Operating Officer; Kristin Schultes, our Chief Financial Officer; and Robbie Franklin, Executive Chairman. As disclosed in our earnings release, we would like to acknowledge the planned leadership transition we announced this morning. Ben Heraud has been appointed Chief Executive Officer effective March 31, 2026, succeeding Tal Pizzey. Tal will continue to serve on our Board of Directors and act as an adviser to Ben through and following the transition to ensure continuity. We will provide additional context during our prepared remarks.

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 measures 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 detail material risks that may cause our future results to differ from our expectations.

Our statements are as of today, March 12, 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 fourth quarter financial performance on the Investor Relations page of our website @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 I&M, Consulting Engineering or CE, and Geospatial or GEO.

Any reference to combined results reflects a non-GAAP combined view of legacy Acuren and legacy NV5 for comparability. More details on the calculations of the combined results are included in the presentation. Let me outline the flow of today's prepared remarks. Tal will provide opening comments. Ben will review our operating priorities and segment performance. Kristin will cover our financial results, integration progress and our 2026 outlook. Robbie will conclude with strategic priorities and capital allocation. It's now my pleasure to turn the call over to Tal.

Talman Pizzey: Thank you, Andrew. Good morning, everyone. This morning, we announced the planned leadership transition that has been contemplated as part of our broader succession planning process. After nearly 4 decades with the business, including serving as Chief Executive Officer, I will be transitioning from the CEO role as I prepare for retirement. I will continue to serve on the Board and act as an adviser to Ben and his team to ensure a seamless transition. Since joining Acuren in 1987, it has been a privilege to help build this organization. We entered the public markets and completed the combination with NV5 create TIC Solutions a $2 billion revenue company.

Ben has been deeply involved in shaping the combined operating model since the NV5 combination closed in August. He understands the platform, the culture and the priorities ahead. I have full confidence in his leadership as the company moves into this next chapter. With that, I will turn the call over to Ben.

Benjamin Heraud: Thank you, Tal. I'm excited to step into the CEO role on March 31 and to build on the strong foundation we have established across both legacy organizations. Since joining TIC Solutions in August, my priority has been sharpening our commercial execution across the platform. That starts with aligning leadership around clear growth priorities, strengthening account management processes and accelerating cross-segment collaboration. We are driving greater consistency and pricing and utilization. Before joining TIC Solutions, I served as CEO of NV5 and previously as COO. I joined NV5 through the acquisition of Energenz, a business I co-founded and spent more than a decade building and scaling engineering and commissioning operations across global markets.

That experience in building commercial teams, improving operating rigor and driving prudent capital allocation informs how I approach this next chapter. 2025 marked an important step change for TIC Solutions. We completed the combination, rebranded and established a scale TIC, Engineering and Geospatial platform positioned for the next phase of growth. On a combined basis, in 2025, we grew revenue approximately 4% to $2.1 billion, representing our highest combined full year revenue. We delivered approximately $312 million of adjusted EBITDA and 14.8% adjusted EBITDA margin for the full year. We now operate at meaningful scale with a diversified end market mix and a recurring revenue base anchored in compliance and essential services that positions us well for durable growth.

We have an incredible opportunity ahead to expand margins and compound earnings through focused execution of our strategy. And as we move into 2026, our priorities are clear. First, we will accelerate organic growth across the platform with a particular focus on cross-selling and deeper client engagement across our segments. We see a meaningful opportunity to expand share of wallet with key infrastructure, industrial, utilities, data center and government clients by leveraging our combined capabilities. Second, we are focused on strengthening organizational alignment and cultural cohesion across TIC, so we retain our great talent and deploy our resources and capital to the highest return opportunities.

Finally, we'll drive margin expansion through prudent cost management, service mix improvement and utilization improvements as we scale. We're beginning to see tangible cross-selling traction across the platform. For example, we're in late-stage negotiations on a multiyear bridge infrastructure engagement. The scope brings together drone-based LiDAR mapping and modeling, engineering oversight and design review, both access and inspection capabilities, allowing the client to execute a long-term inspection and maintenance solution. This is a good example of how we can serve as a multidisciplined provider across the asset life cycle, which we believe is a differentiator in the market. In this example, we expect opportunities to expand and scope over time, including additional inspection work and analytics services.

This project is emblematic of the sizable market opportunity ahead for this integrated offering. Our revenue base remains anchored in recurring and repeat compliance-driven inspection, Engineering and Geospatial activity. We believe the diversified nature of our portfolio provides enhanced stability and performance greater flexibility and capital allocation. Diving into segment performance, CE continued to perform well. Activity in data centers, infrastructure, engineering, building planning and design and specialty services such as the development of digital twins remains healthy. Results were supported by ongoing infrastructure investment and grid hardening and modernization programs. These programs are typically embedded within multiyear capital plans rather than short cycle activity.

Data center revenue increased meaningfully year-over-year, reaching nearly $70 million in 2025, more than doubling versus the prior year. We continue to see strong momentum with line of sight to nearly $100 million of data center revenue supported by contracted backlog and programmatic client engagements. Within data centers, our work expands building systems design commissioning and power-related scopes, including mechanical, electrical, bioprotection, substation, peer review and digital modeling services. Our mix reflects a broader life cycle position. We support hyperscale and colocation clients from early stage engineering and design through commissioning and operational optimization, increasing scope density per site and supporting repeat deployment across multiphase campus relationships.

We also recently secured a U.S.-based I&M engagement within the data center vertical, extending our inspection capabilities into the mission-critical space. The scope involves radiographic testing of critical mechanical systems. The engagement demonstrates the applicability of our advanced NDT capabilities within the data center ecosystem. We continue to deepen relationships with global hyperscale clients and as we expand service rep within existing accounts, we expect to continue gaining market share. GEO delivered steady growth and strong margins, supported by utility demand, healthy fleet utilization and increasing contribution from analytics and software services. During the quarter, the federal funding lapse slowed certain procurement and approval processes, which affected timing of work in select programs.

The impact was limited to award and approval pacing, and there were no material cancellations. We expect execution timing and visibility to improve as we progress through the year. In February, we announced GEO Agent, our proprietary AI-enabled geospatial platform, and we expect to begin rolling it out to clients in the coming weeks. GEO Agent is designed to integrate with clients' existing systems record and over time, it should improve processing efficiency, automate key workflows and enable higher-value analytics. We expect it to support faster delivery times and incremental analytics services over time while operating within client environments and established workflows. Year-end backlog within CE and GEO was $1.07 billion, up about 10% from approximately $970 million last year.

In I&M, Lower volumes were concentrated in the Gulf Coast, primarily due to LNG construction timing and slower chemical activity, along with a few site losses amid elevated competition. Competitive intensity in the region remained elevated during 2025, and we stayed disciplined on pricing while tightening account coverage and improving staffing and resource deployment. LNG-related demand has increased globally and we believe the impact in our second half results reflect timing between major construction phases rather than demand deterioration. We have strengthened regional leadership in the Gulf Coast and made targeted leadership additions with an inspection of litigation to drive operating consistency, commercial focus and improved resource deployment.

We remain focused on margin quality, and we continue to pursue work that meets our margin thresholds. We maintain pricing integrity even when competitors were more aggressive, and we will not trade long-term economics for short-term volume. Our embedded run and maintain programs and call-out activity grew in the year. This recurring and repeat revenue base provides meaningful visibility and resiliency across cycles. This growth was offset by declines in the timing and scale of outages and capital projects. To strengthen execution we refined the I&M operating model during the quarter by reorganizing the segment into economically meaningful operating regions with clear P&L ownership. We also streamlined support function and improved indirect cost management to reduce duplication and improve coordination.

We are tightening utilization management, asset deployment and cost oversight. On the commercial side, we are reinforcing structured account and pipeline management discipline across our largest customers with compensation frameworks aligned to growth and renewal performance. Collectively, these actions are intended to improve execution consistency and support margin progression in 2026. We plan to host an Investor Day in May to outline our longer-term growth strategy, margin trajectory and capital allocation framework, including additional detail on our updated I&M operating framework. Across TIC Solutions, this quarter's performance reinforces the benefits of scale and diversification in our business. We believe that this positions the company for continued growth and margin progression.

And with that, I'll turn the call over to Kristin to review the financial details for the full year and fourth quarter 2025, provide an update on integration and offer context for our 2026 outlook.

Kristin Schultes: Thank you, Ben, and congratulations. Good morning, everyone. On a combined basis, full year revenue grew 4.4% on a constant currency basis or 3.6% as reported to $2.1 billion after FX headwinds in the year. Full year combined adjusted gross profit was $794 million, with adjusted gross margin of 37.6%, up 14 basis points. In I&M, revenue was approximately $1.1 billion for 2025, roughly flat for the year with growth in industrial, midstream, wind and automotive, offset by localized softness in the Gulf Coast. I&M full year adjusted gross margin was 27.8% compared to 28.5% in the prior year. On a combined basis, CE revenue was $714 million, up roughly 8% against 2024, lifted by infrastructure and data center tailwinds.

CE's full year adjusted gross margin was 47.0% and up 150 basis points against 45.5% in the prior year driven by data center growth and real estate transaction work. On a combined basis, Geospatial revenue was $298 million, up roughly 6% against 2024, driven by strong commercial demand as well as broadening analytics and software sales. Geospatial's full year adjusted gross margin was 51.5% compared to 53.6% in the prior year, driven by mix and utilization. Now shifting to our fourth quarter results. Total revenue was $508 million, reflecting a full quarter of NV5 contribution. On a combined basis, this was roughly flat year-over-year, with growth in CE and GEO offset by I&M.

Adjusted gross profit for the quarter was $197 million, up 8% from the combined $183 million. Adjusted gross margin was 38.8%, up 277 basis points from the combined margin of 36.0% in the prior year period. This performance represented margin expansion on a dollar and percentage basis across all 3 segments. In I&M, revenue was $258 million in the fourth quarter, down 2% driven by lower outage and capital project spending. Adjusted gross margin was 28.2% for the quarter compared to 26.1% in the prior year period. The over 200 basis point margin improvement reflects favorable mix, including higher call-out activity as well as improved execution. On a combined basis, CE contributed fourth quarter revenue of $181 million, up 2%.

CE's adjusted gross margin was 46.9% in the quarter up 150 basis points against 45.4% in the prior year period, driven by infrastructure and data center tailwinds. On a combined basis, GEO contributed fourth quarter revenue of $70 million, up 2%, with growth impacted due to the federal funding lapse. GEO's adjusted gross margin of 57.2% in the quarter improved against 50.0% in the prior year period, reflecting favorable project mix and strong operational execution. The margin improvement in each of our 3 segments in the quarter demonstrates real momentum as we start 2026. Adjusted SG&A for the quarter was $124 million or 24.4% of revenue reflecting the inclusion of NV5 operations, which carry a higher SG&A ratio.

In the near term, we are attacking the elevated SG&A levels through the announced integration program as well as our commercial excellence initiatives. Adjusted EBITDA for the fourth quarter was $76.4 million, representing an adjusted EBITDA margin of 15.0% compared to $40.7 million in the prior year period. The full year combined adjusted EBITDA was $312 million, representing an adjusted EBITDA margin of 14.8%. We improved cash conversion during the year, supported by lower DSO and tire working capital management. Operating cash flow as reported for the year was $95 million, reflecting only a partial year contribution from NV5. Capital expenditures for the full year totaled $34 million or 2.2% of revenue.

On a combined basis, CapEx was $56 million or 2.7% of revenue reflecting our low capital intensity and asset-light business. Moving now to an overview of our balance sheet and capital resources. As of year-end, we had total liquidity of $551 million, including approximately $440 million of cash and cash equivalents and $111 million of available capacity under our revolving credit facility. Total term loan debt was approximately $1.6 billion. Our balance sheet is in a solid position, and we remain focused on generating free cash flow to achieve our long-term net leverage ratio target of below 3x.

In October, we completed a $250 million private placement of 20.8 million shares of common stock and prefunded warrants to an existing shareholder. The transaction strengthened our balance sheet and provided additional flexibility to fund growth opportunities and to deleverage. Turning to integration. We transitioned to the execution phase of the integration program toward the end of the fourth quarter. We remain on track to execute on the $25 million of cost synergies that we've committed to delivering. We anticipate roughly half of the annualized cost savings to be realized during 2026. And we expect to reach full synergy run rate by mid-2027.

To ensure disciplined execution, our integration management office has clear ownership across key functional work streams with defined milestones to track delivery and cost capture while ensuring operational stability. We are also focused on communication, incentive alignment and cultural integration as we bring the organizations together. Now turning to our outlook. For the full year 2026, we expect revenue in the range of $2.15 billion to $2.25 billion and adjusted EBITDA in the range of $330 million to $355 million. At the midpoint, this implies approximately 4% revenue growth over our 2025 combined baseline of $2.1 billion.

Meaningful year-over-year growth in adjusted EBITDA is expected to be driven by commercial focus and partial realization of our cost synergies, along with the operating model refinements and I&M that Ben discussed earlier. By segment, on a combined basis, we expect growth in CE and GEO to outpace growth in I&M for the full year. Please note that our 2026 adjusted EBITDA guidance reflects an $8 million investment related to compensation alignment actions at NV5. Specifically, we made a decision to reclassify the short-term incentive program at NV5 from stock-based compensation to cash compensation, which all else equal, reduces adjusted EBITDA beginning in 2026, thus impacting our guidance framework. This important change reflects an integrated market-based compensation structure at TIC.

We are excited to announce this to our team, and we believe this will help retain and attract top talent as we continue to grow. We expect typical seasonality in 2026, consistent with the combined profile of our business. First quarter adjusted EBITDA typically represents roughly 15% to 18% of full year EBITDA. In line with historical patterns. The first quarter is generally the lightest quarter of the year, and we expect activity levels and margins to improve with performance weighted towards the second and third quarters.

As you think about the first quarter, based on what we see today and our internal planning assumptions, we imply revenue in the range of $470 million to $485 million and adjusted EBITDA of $55 million to $60 million. From a cash flow perspective, we expect healthy free cash flow conversion from adjusted EBITDA. In 2026, we expect net interest expense of $95 million to $105 million, cash taxes in the range of $20 million to $30 million and capital expenditures between $60 million to $70 million. We also expect working capital to be a modest use of cash as we see growth this year. Taken together, these items frame our expected free cash flow generation for 2026.

We are excited to be filing our first 10-K as a combined company. I want to thank our teams across the organization for the care, commitment and TIC first mindset that they've demonstrated through this period of change. Many leaders within our businesses have taken on additional responsibilities to move this forward and the integration momentum and progress we've made reflects the pride and ownership our teams bring to the table every day. With that, I'll turn the call over to Robbie to discuss our long-term strategy and capital allocation priorities.

Robert Franklin: Good morning, and thank you, Kristin. I also want to thank our investors for your continued engagement and support. Before I outline our strategic priorities, I want to reiterate the Board's confidence in Ben's leadership and thank Tal for his decades of service. With integration underway, TIC Solutions is a unified platform with meaningful scale across inspection, engineering and geospatial analytics. Our revenue base is anchored in nondiscretionary maintenance, regulatory compliance, utility programs and long-cycle investment across critical industries. We support our clients from planning and design through commissioning, maintenance, compliance and asset optimization. Our team combined field data collection with design, analysis and digital capabilities that enhance reliability and reduce operational risk. Our capital allocation framework is disciplined.

We will prioritize deleveraging towards our long-term target, reinvest organically in the highest return areas of our business and pursue selective tuck-ins and larger acquisitions that enhance capability, geography or technical depth at attractive returns. This week, our Board authorized a $200 million share repurchase program, which we may use opportunistically based on market conditions. With scale, diverse end markets and resilient revenue characteristics, we believe TIC Solutions is positioned to compound earnings and cash flow over time. 2026 is a critical year for TIC Solutions. We are laser-focused on execution and delivering on the targets we have shared with the investor community.

We are encouraged by our early results to start the year and have confidence in our team's ability to drive top and bottom line growth. And with that, I'll turn the call back to Ben for -- to close our prepared remarks.

Benjamin Heraud: Thank you, Robbie. As we close, I want to frame where we are going. 2025 was a pivotal year for TIC Solutions. We successfully brought together 2 scaled organizations, strengthened the balance sheet and advanced integration while continuing to deliver for our clients without disruption. The structural tailwinds in our markets remain intact, including infrastructure reinvestment, grid modernization, increasing technical and regulatory complexity and the continued expansion of mission-critical facilities. As we move into 2026, we are focused on accelerating growth by increasing share of wallet, expanding cross-selling across our segments and scaling our account coverage, while strengthening how we work together and reinforcing a common culture.

That focus supports continued margin progression and cash generation while maintaining balance sheet strength, which will ultimately drive shareholder returns. I want to take a moment to recognize our teammates across TIC Solutions, they've handled a period of significant change with discipline and focus while staying committed to delivering for our clients every day. Thank you. With that, operator, we're ready to open the line for questions.

Operator: [Operator Instructions] Our first questions come from the line of Chris Moore with CJS Securities.

Unknown Analyst: This is Will on for Chris. Can you talk a little bit more about the integration process in a little more detail? Are there specific milestones you're looking to reach in 2026?

Kristin Schultes: Yes. Thank you for the question. I will tell you that we are -- I am extremely proud of the team and the momentum that we have so far, a high degree of confidence in our ability to execute on this. Right now, I would tell you that some of our focus areas have been around communications and culture, which is incredibly important, especially during leadership transitions. We're working through compensation studies and alignment and choosing system implementation partners. So if you think about our commitment of $25 million of savings and capturing half of that this year, think about that as roughly 60% headcount and the rest non-headcount.

And the team is meeting weekly on individual milestones and on track, we're ahead of schedule.

Unknown Analyst: That's super helpful. And then on the top line, can you talk more about the biggest potential synergies and go-to-market strategies? And what are you hearing from customers? Is there any cross-selling opportunities that you're seeing that you weren't thinking about initially?

Benjamin Heraud: Yes. Thanks, we touched on it on the call, but we have some really exciting developments and opportunities that are coming through the cross-selling program. Been really pleased with how the segments have been coming together and exploring ideas with their clients. We have a lot of white space between the businesses that create opportunity. But just pointing to that recent win and inspection mitigation within the data center space, that's really exciting, that's completely new to inspection of mitigation. So to be able to get that exposure to that market where we're seeing a lot of tailwinds is exciting.

And then on the infrastructure side of things, we're able to really service the full life cycle of any kind of asset now with our capabilities from planning and design, consulting and engineering through I&M, it's driving opportunity for us to service our clients in new ways. So we're seeing a lot of upside. It does take time to get these wins in play. We're going to put these ideas in front of our clients and give it to a contract, but very pleased with the progress that we're seeing so far.

Operator: Our next questions come from the line of Brian Biros with Thompson Research Group.

Unknown Analyst: This is Chris calling in for Brian. A couple of questions on end markets. It seems fair to say that some of the smaller exposure categories are the fastest-growing. In your release and prepared comments, you called out significant organic growth in data centers, and we know that aerospace is another fast-growing end market. Both of these, of course, are higher-margin businesses. Where do you think these businesses could be in the next 12 to 24 months? And could they represent a double-digit percentage of sales?

Benjamin Heraud: Yes. I mean in terms of organic growth, we sort of we've doubled the data center business over the last 12 months, and we're continuing to see -- be on track for continued significant growth. Related to that is power delivery and the demand that data centers are putting on the grid. We're very, very well positioned to exploit that also with our technical capabilities in that space, along with infrastructure and general and the demand that we're seeing there. So some good end markets. Data centers will continue to grow and outpace certain parts of the business, especially as we layer in new services and increase our revenue per megawatt.

Kristin Schultes: Chris, I would just add that we're really excited about with the combination of the businesses is the more diversified platform. And really, we see all of our end markets is having tailwinds. So yes, there are pockets of outsized or outpaced growth. But in general, we're really optimistic about all of our end markets.

Benjamin Heraud: Yes, probably a good indicator of that. The backlog being up 10% year-on-year.

Unknown Analyst: Yes. Fantastic. And then can you talk a little bit about your expectations on the inspection side for the energy and oil end markets? I know they can be somewhat lumpy quarter-to-quarter with the chemical market pressure and how oil and gas is performing, but how should we think about that end market into 2026.

Benjamin Heraud: Yes. I mean we have good visibility on the business. A very large percentage of it is planned outages and run and maintain year-on-year as we look at the number of sites that we're working on, that's similar. And in a lot of cases, the contracts have a longer time line. So we have good visibility there.

Operator: Our next questions come from the line of Tomo Sano with JPMorgan.

Tomohiko Sano: Could you talk about the EBITDA margins in the latest 2026 guidance. IC is lower than what was indicated in your prior outlook given the considerations of the stock comp to cash comp, I get that, but what other reasons for this more vicious margin outlook compared to what you guided 3 months ago, please?

Kristin Schultes: Yes. Thank you. So you're spot on the previous range was 15.5% to 16.5% and have been adjusted by the stock compensation investment that we've decided to make. We think this is best for the business in the long term and really drive the integration of the team and provides market-based compensation for our team. So we feel that's the right decision from there. And from there, we've given a nice framework for our 2026 guidance, both on revenue and adjusted EBITDA on a consolidated basis. Demonstrating dementing growth on the top line as well as margin expansion coming from improved execution across all 3 segments as well as the planned cost synergy realization.

Tomohiko Sano: And follow up on CEO transitions. Could you elaborate on the timing and the rationale for this transition? And should we expect any changes in strategies or execution, please?

Robert Franklin: It's Robbie. The transition sort of contemplated from the onset, when we bought Acuren helping the business for a very long time, and we wanted to create an environment where he could execute and really have its fingerprints on what the combined TIC Solutions entity would look like. And we also -- we had Ben who was already CEO of NV5, new the business, but we wanted to give him sort of the period to learn about Acuren and sort of the inspection side of the business. So in terms of timing, we feel like this is sort of the right transition time as we build. As we build sort of this unified culture.

So pretty consistent with sort of our original thinking. And the Board and the entire team is very supportive of sort of this path.

Operator: Our next questions come from the line of Alex Rago with Texas Capital.

Unknown Analyst: Thank you very much. More broadly, can you address the current situation in the Middle East and the rise in oil prices and how that could impact your business or some of your customers' decisions?

Benjamin Heraud: Yes. So the Middle East is a relatively small piece of our business, around 1%. So it's relatively immaterial, like now the impacts that we're seeing are minimal on the business there. As far as the price of oil and the impact on the business, we could see some additional work around pipelines. It's good for our oil sands business. And the refinery side of the business is relatively stable. So I mentioned earlier the good line of sight that we have with the run and maintain business. And right now, the outlook looks good.

Unknown Analyst: Very helpful. And then as it relates to revenue guidance, which just kind of 2% to 7% growth rate, can you talk about the primary variables that could cause this to be either kind of closer to the high end or the low end?

Kristin Schultes: Yes. So from a 2026 perspective on the top line, I would tell you we have a high degree of confidence in this and it was a very thoughtful approach that we did to the budgeting process this year down to the division level and a bottoms-up approach. And given the tailwinds we have in our business, we feel very confident in our ability to deliver against that.

Operator: Our next questions come from the line of Harold Antor with Jefferies.

Harold Antor: This is Harold Antor on for Stephanie Moore. So a quick question. Just on the pricing front, could you remind us what pricing rack historically, how it trended in the quarter? Just give me we're more disciplined and what, as you focus on the margin profile we want to walk away from some businesses. And then I guess, do you see that you guys are better positioned to be more aggressive on pricing, just given you provide the full suite of products and services today versus mostly competitors we can't compete on our phone.

Benjamin Heraud: Yes. So we mentioned some of the work that we've done around the organization of our inspection and mitigation business in the U.S. that has offered us an opportunity to be more competitive on our pricing and go after more of the work in that space. A lot of the work that we price is more on a value proposition, fixed fee kind of work and we continue to see good momentum there. I would also just point back to the backlog being up 10% and the sales being very positive through the first part of this year already. And yes, just -- I mean, you mentioned the mix of work.

And if we think of this opportunity to work through the life cycle of an asset, we are very sticky with our clients -- we have very strong relationships and our ability to work through the entire life cycle of an asset keeps us very sticky with those assets and clients.

Kristin Schultes: And Harold, on the pricing, I think also I would just remind you to point back to our Q4 results, gross margin dollars and percentages were up across all 3 of our segments. We feel really good about that heading into 2026. And if you combine that with some of the operational initiatives under Ben's leadership, high confidence.

Harold Antor: Yes. And then just to piggyback on an earlier question, Ben, I think you highlighted that you see a line of sight of $100 million in data center revenue. Just wanted to get a sense, is that a '27 event? Is that a '28 event? Or is that just -- is that a longer-term event? Just wanted to get a sense of the timing on that.

Benjamin Heraud: It's '26 line of sight. So we have a very strong backlog, particularly to that, and we have multiyear programs, some extremely resource constrained area of the business where we have very strong relationships with the hyperscalers. So we see over the next 12 months line of sight to those numbers.

Harold Antor: And then I could squeeze in 1 more just on capital allocation that you guys focused did the buyback. So should we be thinking more of the capital being deployed and buy backs? Or do you expect to do a little bit more on tuck-in side, any organic growth implementation investments that you could provide a little bit more color, that would be great. And that's all for me.

Benjamin Heraud: So on capital allocation, we have a robust tuck-in line that we're going to continue to execute on. But we thought, as a Board, it was prudent have the flexibility to have a buyback program in place given where market conditions are. And frankly, there's no better acquisition than your own stock at the right levels. So we have a very opportunistic view on how we approach ,but there is no question we're continuing with in pipeline because it creates a more robust a more robust operating profile and allows us to new geographies and new service lines, which are critical to sort of our investment thesis.

Kristin Schultes: Harold, I would just add that on our -- on the tuck-in side that Robbie mentioned, I'm really proud of the team's ability to continue maintaining focus on the broader integration with the merger, but also remain focused on the importance of the small tuck-in strategy that we have that's been largely successful for us. So we completed 3 small tuck-ins during the quarter and the combined business together at 12% for the full year, and that's across all 3 segments. So we're excited to continue that into the New Year.

Operator: [Operator Instructions] We have reached the end of our question-and-answer session. I would now like to hand the call back over to Ben Heraud for any closing comments.

Benjamin Heraud: Thank you all for your questions. I just wanted to reemphasize our strategic priorities to drive shareholder value. One, we need to accelerate our organic growth, and we will. Two, we're going to strengthen our organizational alignment and cultural cohesion. And three, drive margin expansion. Finally, I want to thank our investors for their continued support and partnership. We look forward to updating you on our next quarter. Thank you all, and have a good day.

Operator: Thank you, ladies and gentlemen. This does now conclude today's teleconference. We appreciate your participation. You may disconnect your lines at this time. Enjoy the rest of your day.

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