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Chairman & CEO Troy Rudd stated that AI is already impacting results and is expected to have a material, favorable impact over the next three years, extending employee capabilities. Chief Financial & Operations Officer Gaurav Kapoor explained the implied Q4 margin step-down is due to planned increases in business development expenses to capitalize on a record pipeline, reflecting a balanced approach to long-term growth.

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CFO Gaurav Kapoor attributed the Americas margin strength to four factors: multi-year organic investments in program management and advisory, improved pricing rigor, benefits from global capability centers, and the full-year impact of prior restructuring. CEO Troy Rudd added that program management margins are similar to design, while advisory margins are 'higher,' without providing specific figures.

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CEO Troy Rudd confirmed the program management business continues to grow at a double-digit rate, now representing 16% of NSR, and is on track toward a long-term goal of having advisory and program management be 50% of the business. CFO Gaurav Kapoor explained that the 40 basis point margin expansion was achieved despite significant organic investments and FX headwinds, driven by strong performance in both the Americas and International segments. Rudd added that digital and AI investments are expected to drive efficiencies beyond the previously guided 5-15%.

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President Edmond Coletta and CEO John Casella confirmed the Mid-Atlantic issue is slower-than-expected synergy realization, not new costs, primarily due to truck delivery delays. Coletta described recent acquisitions as strategic tuck-ins in their Western and Mid-Atlantic regions. CFO Bradford Helgeson noted that while landfill recovery is a tailwind, the reaffirmed EBITDA guidance against higher revenue implies softer H2 margins due to the pace of Mid-Atlantic integration.

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President Edmond Coletta confirmed the issue is slower-than-expected synergy realization, not incremental costs, and detailed three Q2 acquisitions in the Western and Mid-Atlantic regions. EVP & CFO Bradford Helgeson stated that while landfill recovery is a tailwind, the reaffirmed EBITDA guidance on higher revenue implies softer H2 margins due to the pace of synergy execution in the Mid-Atlantic. Chairman & CEO John Casella highlighted that delayed truck deliveries were a key factor.

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Ned Coletta, an executive, explained that the landfill volume rebound was driven by recapturing construction and demolition tons, new transportation lanes for internalization, and a new strategic sales organization. He stated that Casella has approximately 30% excess landfill capacity, mainly in New York, with the McKean site serving as a long-term defensive asset. Coletta also noted the Juniper Ridge RNG plant is online but at low production levels, while three other partner-led projects are progressing and expected to come online starting in late 2025.

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Executive Ned Coletta explained that the landfill volume rebound was driven by recapturing C&D tons in New York and new transportation lanes for internalization. He noted the company has about 30% excess capacity, mainly in New York, with the McKean site serving as a long-term defensive asset. Coletta added that the Juniper RNG project is online but at low production levels, while other partner projects are progressing and expected to come online later in the year.

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COO Sean Steves stated there is a multi-year pipeline of several hundred automation opportunities, primarily in the Mid-Atlantic region. President Ned Coletta added that this directly addresses higher direct labor costs in acquired markets. Regarding internalization, Coletta explained that directing tons to landfills with excess capacity yields high incremental margins of 50-75%. CEO John Casella highlighted the significant opportunity to grow the national accounts business by targeting the dense industrial and distribution center market in the Mid-Atlantic.

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President Ned Coletta explained the insurance accruals related to a significant employee injury and a separate third-party legal matter, noting they were unusual events. CFO Bradford Helgeson stated that while it's early, 2025 is expected to see above-trend margin expansion as 2024 headwinds abate. Both Coletta and CEO John Casella confirmed that while integration is the top priority, the company will not fully pause M&A and will continue to pursue opportunistic tuck-in deals.

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CEO Tony Guzzi attributed the strong data center growth to EMCOR's broad market presence, strong customer relationships, and innovation in construction methods. However, both Guzzi and CFO Jason Nalbandian cautioned that margin expansion is not guaranteed. They emphasized that contract mix (e.g., GMP vs. fixed-price) is a significant variable that impacts profitability and can change by customer and project, making it difficult to generalize margins by sector.

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Chairman, President & CEO Tony Guzzi attributed the strong data center growth to their broad market presence, innovation in construction methods (BIM, prefabrication), and strong customer relationships. Regarding margins, Guzzi cautioned that contract mix (GMP vs. fixed-price) is a major variable that can change quarter-to-quarter and site-by-site. CFO Jason Nalbandian reinforced this, stating that margins are earned on a job-by-job basis and that the high data center growth this year has not led them to guide to higher full-year margins than last year, due to these other factors.

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CEO Tony Guzzi projected that future data center growth would be balanced between new and existing markets and has been almost entirely organic to date. He clarified that margin strength is due to broad-based execution improvements and a mix shift toward construction segments, not specific project types. Guzzi advised against focusing on quarter-to-quarter seasonality, urging investors to look at a 3-to-5 quarter trend to understand true margin performance due to the high number of moving parts in the business.

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CFO Jason Nalbandian projected that EMCOR will continue to grow 100-200 basis points above the non-residential construction market. Tony Guzzi, Chairman, President and CEO, explained that headcount grows slower than revenue due to productivity gains from prefabrication and planning, noting that EMCOR is a 'destination employer' for skilled labor. Regarding Q4 margins, Nalbandian stated there were no anomalies, attributing the outperformance to strong project execution, particularly in the Electrical segment. Guzzi added that at current levels, the focus is on growing absolute margin dollars, even if it means a slight dip in margin percentage.

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CFO Ken Dodgen noted that strong demand is driving Utilities revenue growth beyond their margin-focused strategy, with increasing opportunities in transmission work. Chairman and Interim CEO David King affirmed Primoris's ability to move resources, citing the shift of personnel from pipeline services to renewables and data center projects, and stated they are not seeing any project slowdowns.

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CFO Ken Dodgen attributed most of the sequential margin improvement to seasonality, but highlighted a roughly $5 million one-time benefit from storm work. For 2025, he indicated that while specific numbers are not yet finalized, the company expects continued sequential margin improvement in the Utilities segment. Dodgen projected mid-single-digit revenue growth for Utilities, led by power delivery and communications.

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Co-CEO Mike Battles stated the company was very aggressive with its CFO pricing and believes the industry has followed, noting collection gallons remained high. EVP & CFO Eric Dugas detailed the ES growth drivers, including pricing, volume, new Field Service branches, and stronger Industrial Services turnarounds in the second half, all supported by the Kimball ramp-up.

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Co-CEO Mike Battles stated the company was very aggressive on CFO pricing and believes the industry has followed, leading to strong collection volumes and increased confidence in the segment's guidance. EVP and CFO Eric Dugas detailed the ES growth drivers, noting that Q2 momentum will offset tough ER comps, while Q3 will benefit from stronger industrial turnarounds, all underpinned by pricing, the Kimball ramp-up, and new technologies.

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Co-CEO Eric Gerstenberg responded that customer attrition has been minimal, with the company proactively walking away from only a handful of clients who wouldn't accept new pricing. Co-CEO Mike Battles added there has been no real change in customer churn. Regarding SKSS, Battles explained that the company is a price taker on base oil and the guidance assumes prices remain relatively flat. An executive added that the company will remain dynamic with its used motor oil collection pricing to counteract any further deterioration in base oil prices.

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CFO Eric Dugas reported that labor inflation is tracking at 3-4%, serving as a good proxy for overall cost pressures. Co-CEO Eric Gerstenberg affirmed their commitment to a disciplined pricing program, citing a recent 6% increase in incineration pricing. Gerstenberg and Co-CEO Michael Battles stated the long-term goal for ES margins remains 30%, driven by pricing, cost initiatives, efficiencies from the new Kimball facility, and high operating leverage from record containerized waste volumes.

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Chair and CEO Bob Pragada described Program Management as a high-growth, cross-cutting capability that drives growth across all end markets. CFO Venk Nathamuni added that early-stage advisory work provides higher margins than the corporate average, though the exact amount varies by project, and it enhances visibility and scope across a project's lifetime.

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CEO Kyle Larkin attributed market share gains, particularly in the West, to strong execution and the company's focused home market strategy, which has improved bid hit rates. He confirmed that the M&A pipeline for vertically integrated assets is the healthiest it has been, supporting the goal of 1-2 deals per year. For 2025, Larkin anticipates a margin uplift of at least 1% from the Construction segment and expects overall 2025 EBITDA margin to approach the low end of the 12-14% target range for 2027.

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