Executive Summary

Q2 2025 delivered double‑digit growth and margin expansion: revenue $834.0M (+18% y/y), operating income $92.7M (+19% y/y), diluted EPS $3.50 (+53% y/y vs $2.29 prior year), with broad strength across Communications, Infrastructure Solutions, and Commercial & Industrial, while Residential remained soft .
Data center demand accelerated, with some customers pulling forward schedules; Communications segment revenue rose 41% y/y to $273.1M and operating income nearly doubled to $39.6M on strong execution .
Backlog rose to ~$1.8B and remaining performance obligations to ~$1.226B, supporting visibility; capital allocation included $30.1M capex, 118,314 shares repurchased for $20.4M, and revolving credit facility upsized to $300M (maturity 2030) .
Residential faced continued affordability headwinds and lower margins due to pricing concessions; multi‑family bid activity is improving and expected to benefit FY26–FY27 revenues; management remains optimistic on long‑term housing demand .
Wall Street consensus (S&P Global) was not available for EPS or revenue; comparisons to estimates are therefore not applicable. Values retrieved from S&P Global.*

What Went Well and What Went Wrong

What Went Well

Communications, Infrastructure Solutions, and Commercial & Industrial segments delivered strong growth and margins; management cited “robust customer demand, operating leverage from our increased scale and strong project execution,” particularly in data centers .
Infrastructure Solutions revenue +55% y/y to $117.6M, with acquisitions (Greiner, Arrow Engine) contributing to growth and operating income up to $26.5M, driven by higher volumes, improved pricing, and operating efficiencies .
Enhanced financial flexibility and shareholder returns: revolver increased to $300M, $30.1M capex to scale operations, and $20.4M in buybacks with $173.3M remaining authorization .

What Went Wrong

Residential revenue declined 6% y/y to $317.9M; operating income fell to $22.7M from $34.7M as affordability issues and reduced pricing to match homebuyer incentives pressured margins .
Corporate costs increased (corporate operating loss of $(11.9)M vs $(6.7)M prior year quarter), reflecting continued investment in systems and scalability .
EPS/Revenue consensus data unavailable from S&P Global, limiting external benchmark context for beat/miss analysis. Values retrieved from S&P Global.*

Financial Results

Metric	Q4 2024	Q1 2025	Q2 2025
Revenue ($USD Millions)	$775.8	$749.5	$834.0
Diluted EPS ($)	$3.06	$2.72	$3.50
Gross Profit ($USD Millions)	$186.4	$178.0	$208.9
Gross Margin (%)	24.0%	23.7%	25.1%
Operating Income ($USD Millions)	$75.0	$74.6	$92.7
Operating Margin (%)	9.7%	10.0%	11.1%
EBITDA ($USD Millions)	$83.7	$84.3	$102.7
EBITDA Margin (%)	10.8%	11.2%	12.3%
Adjusted EPS ($)	$2.79	$2.64	$3.30

Segment Revenues

Segment Revenue ($USD Millions)	Q4 2024	Q1 2025	Q2 2025
Communications	$219.9	$232.9	$273.1
Residential	$356.1	$320.0	$317.9
Infrastructure Solutions	$110.4	$108.1	$117.6
Commercial & Industrial	$89.4	$88.5	$125.4
Total	$775.8	$749.5	$834.0

Segment Operating Income

Segment Operating Income ($USD Millions)	Q4 2024	Q1 2025	Q2 2025
Communications	$22.6	$28.6	$39.6
Residential	$34.8	$23.8	$22.7
Infrastructure Solutions	$20.7	$23.3	$26.5
Commercial & Industrial	$9.7	$7.1	$15.8
Corporate	$(12.8)	$(8.2)	$(11.9)
Total	$75.0	$74.6	$92.7

KPIs and Balance Sheet Highlights

KPI	Q4 2024	Q1 2025	Q2 2025
Backlog ($USD Billions)	$1.786	$1.754	$1.813
Remaining Performance Obligations ($USD Billions)	$1.176	$1.215	$1.226
Cash and Cash Equivalents ($USD Millions)	$100.8	$59.1	$22.4
Marketable Securities ($USD Millions)	$35.0	$53.0	$65.8
Share Repurchases (Shares / $USD Millions)	289,284 FY24 / $39.0	21,048 / $4.4	118,314 / $20.4
Capex ($USD Millions)	N/A	$13.2	$30.1

Estimate Benchmarks (S&P Global)

Metric	Q4 2024	Q1 2025	Q2 2025
Revenue Consensus Mean ($USD Millions)	N/A*	N/A*	N/A*
Primary EPS Consensus Mean ($)	N/A*	N/A*	N/A*

Values retrieved from S&P Global.*

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Company guidance	FY25/Q2–Q4	None provided	None provided	Maintained (no formal guidance)
Directional commentary – Residential	FY25	Cautious near‑term demand; affordability headwinds	Continued near‑term pressure; multi‑family bid activity improving for FY26–FY27	Qualitative update (no ranges)
Capital allocation	FY25	$200M buyback program (authorized Jul-2024)	$173.3M authorization remaining; repurchased 118,314 shares in Q2	Maintained active program
Liquidity	FY25	$150M revolver	Revolver increased to $300M; maturity extended to 2030	Raised

Earnings Call Themes & Trends

Note: A Q2 2025 earnings call transcript was not available in the document set; themes below reflect management commentary from press releases across periods.

Topic	Previous Mentions (Q4 2024, Q1 2025)	Current Period (Q2 2025)	Trend
Data center demand	Strong demand across Communications and Infrastructure; a large C&I data center project substantially complete; expecting ramp on new projects into Q2 FY25	Demand accelerated; certain customers accelerated project schedules; new bookings remained robust; hiring/training to expand capacity for large DC projects	Strengthening
Residential housing affordability	Cautious near‑term outlook due to affordability; optimism long‑term; hurricane‑related Florida disruption expected minor	Q1: Single‑family impacted by hurricanes and affordability; margins maintained via execution and lower materials; continued ERP investment	Continued short‑term challenges; lower margins from pricing concessions; multi‑family bid activity improving for FY26–FY27
Capacity expansion & operations	FY24: expanded capacity, procurement, better project selection; planned IT investments and ERP	Q1: Ongoing ERP implementation; investment in scalability; post‑quarter Arrow acquisition	New Birmingham facility leased to expand custom engineered solutions; continued IT upgrades; hiring/training
M&A	Greiner acquired Apr‑2024; contributed in FY24	Arrow Engine acquired Jan‑2025	Arrow + Greiner contributed ~$15.7M to Q2 Infra revenue growth
Liquidity/credit facility	FY24 strong cash flow; no debt	Revolver increased to $300M post‑Q1; maturity 2030	$300M revolver in place; marketable securities increased; continued buybacks

Management Commentary

CEO perspective: “We continued the momentum… with an 18% increase in revenue and a 19% increase in operating income… segments continue to benefit from strong demand, particularly in the data center market. Operating margins remain strong…” — Jeff Gendell, Chairman & CEO .
Residential outlook: “Decreased housing affordability… continues to create short‑term challenges… multi‑family bid activity… expected to benefit revenues in fiscal 2026 and 2027… we remain optimistic… based on positive demographic trends and pent‑up demand for housing.” — Jeff Gendell .
Growth initiatives: “Completed the acquisition of Arrow Engine… entered into a lease for a new production facility in Birmingham… focused on hiring and training to expand capacity for large data center projects… continued to invest in people and processes, including IT upgrades.” — Matt Simmes, President & COO .
Capital allocation: “We ended the quarter with $22.4M of cash and $65.8M of marketable securities… $30.1M capex… revolver increased to $300M… repurchased 118,314 shares for $20.4M…” — Tracy McLauchlin, CFO .

Q&A Highlights

A Q2 2025 earnings call transcript was not available in the document set; no Q&A details could be reviewed [Search attempted; none found].

Estimates Context

S&P Global consensus estimates for EPS and revenue were not available for Q2 2025 and the prior two quarters; as a result, beat/miss versus Street estimates cannot be determined. Values retrieved from S&P Global.*
Given strong y/y growth and margin expansion, estimates (where initiated) may need to reflect accelerating data center activity, contribution from Arrow Engine and Greiner, and sustained backlog; however, Residential headwinds and corporate investment should temper margin extrapolation .

Key Takeaways for Investors

Secular data center demand is a clear multi‑segment driver; Communications revenue +41% y/y and accelerating bookings underpin near‑term growth visibility .
Backlog and remaining performance obligations grew sequentially, supporting revenue visibility into FY25–FY26; Infra and C&I demand remains solid .
Residential remains the principal risk: lower pricing to match homebuyer incentives and affordability pressures compressed margins; watch for multi‑family bid conversion in FY26–FY27 .
Balance sheet and liquidity improved with a $300M revolver; ongoing buybacks ($173.3M authorization remaining) provide capital return optionality alongside growth capex .
Non‑GAAP EBITDA margin expanded to 12.3% in Q2 vs 11.2% in Q1 and 10.8% in Q4, reflecting operating leverage and execution; monitor sustainability as mix shifts and corporate investments continue .
M&A integration appears accretive (Arrow/Greiner), broadening Infra solutions and capacity; track incremental revenue and margin contribution in subsequent quarters .
Leadership continuity with COO Matthew Simmes appointed CEO effective July 1, 2025 suggests strategic consistency focused on scalability, capacity, and disciplined project selection .

Notes:  
- All financial and operational data cited from company press releases and 8‑K filings.  
- S&P Global consensus data was unavailable; therefore, estimate comparisons are not provided. Values retrieved from S&P Global.*

IES Holdings, Inc. (IESC)·Q2 2025 Earnings Summary