IES Holdings(IESC) - 2025 Q2 - Quarterly Report

Financial Performance - Consolidated revenues for the three months ended March 31, 2025, were $833.96 million, an increase of 18.2% compared to$ 705.73 million for the same period in 2024[110] - Gross profit for the three months ended March 31, 2025, increased to $208.87 million, representing a gross profit margin of 25.0%, up from 24.3% in the prior year[111] - Net income attributable to IES Holdings, Inc. for the three months ended March 31, 2025, was$ 70.65 million, an increase of 33.7% from $52.91 million in the prior year[109] - For the six months ended March 31, 2025, consolidated revenues were$ 1.58 billion, an increase of 18.2% compared to $1.34 billion for the same period in 2024[114] - The overall gross profit percentage for the six months ended March 31, 2025, increased to 24.4%, compared to 23.5% in the same period in 2024[115] Segment Performance - The Communications segment's revenues increased by$ 79.5 million, or 41.1%, during the three months ended March 31, 2025, driven by strong demand in the data center market[117] - Residential segment revenues decreased by $21.4 million, or 6.3%, to$ 317.966 million for the three months ended March 31, 2025, compared to $339.372 million for the same period in 2024[123] - Infrastructure Solutions segment revenues increased by$ 41.8 million, or 55.2%, to $117.620 million for the three months ended March 31, 2025, driven by strong demand and acquisitions[128] - Commercial & Industrial segment revenues increased by$ 28.3 million, or 29.1%, to $125.358 million for the three months ended March 31, 2025, driven by strong demand in data center and education markets[134] Profitability and Expenses - Selling, general and administrative expenses for the three months ended March 31, 2025, were$ 116.04 million, a 21.8% increase from $95.27 million in the same period in 2024[113] - Gross profit in the Residential segment decreased by$ 9.0 million, or 10.1%, to $79.672 million, with gross profit as a percentage of revenue declining to 25.1% from 26.1% year-over-year[124] - Selling, general and administrative expenses in the Residential segment increased by$ 1.9 million, or 3.4%, to $57.151 million, raising the percentage of revenue to 18.0% from 16.3%[124] - Gross profit in the Infrastructure Solutions segment increased by$ 15.6 million, or 65.5%, to $39.301 million, with gross profit as a percentage of revenue rising to 33.4% from 31.3%[129] - Selling, general and administrative expenses in the Infrastructure Solutions segment increased by$ 4.9 million, or 63.7%, to $12.487 million, with the percentage of revenue increasing to 10.6% from 10.1%[130] - Gross profit in the Commercial & Industrial segment increased by$ 6.6 million, or 32.5%, to $26.853 million, with gross profit as a percentage of revenue increasing to 21.4% from 20.9%[135] - Selling, general and administrative expenses in the Commercial & Industrial segment increased by$ 2.3 million, or 26.6%, to $11.024 million, while the percentage of revenue decreased to 8.8% from 9.0%[136] Cash Flow and Investments - Net cash provided by operating activities increased to$ 62.1 million for the six months ended March 31, 2025, up from $58.7 million in the same period of 2024, driven by increased earnings[166] - Net cash used in investing activities rose significantly to$ 97.1 million for the six months ended March 31, 2025, compared to $11.4 million in the prior year, including$ 44.9 million for acquiring a membership interest in Jett Texas Company LLC[167] - Net cash used in financing activities increased to $43.4 million for the six months ended March 31, 2025, compared to$ 17.1 million in the same period of 2024, primarily due to $36.3 million used for stock repurchases[168] - The company repurchased 139,362 shares under its stock repurchase program during the six months ended March 31, 2025[169] Future Outlook and Strategic Initiatives - The company expects an increase in multi-family bid activity in the second half of fiscal 2025, which is anticipated to benefit revenues in fiscal 2026[106] - The company plans to reduce reliance on leasing by increasing the purchase of vehicles and equipment, reflecting a strategic shift in capital expenditure management[173] - Capital expenditures for the fiscal year ending September 30, 2025, are expected to range from$ 70 million to $80 million, a substantial increase from$ 45.2 million for the year ended September 30, 2024[173] Backlog and Performance Obligations - Backlog across all business segments remains high, indicating strong demand in key end markets, particularly for data centers[106] - Remaining performance obligations as of March 31, 2025, totaled $1,225.9 million, compared to$ 1,214.8 million as of December 31, 2024[152] - Backlog increased to $1,812.7 million as of March 31, 2025, from$ 1,753.9 million as of December 31, 2024[152] Tax and Interest Expenses - Income tax expense for the six months ended March 31, 2025, was $46.1 million, up from$ 34.8 million in the same period of 2024, driven by increased pretax income[147] - Total interest expense for the six months ended March 31, 2025, was $0.8 million, a slight decrease from$ 0.8 million in the same period of 2024[144] Marketable Securities and Risk Exposure - As of March 31, 2025, the company had investments in marketable securities with a fair value of $65.8 million, with a potential$ 6.6 million impact on pre-tax income from a hypothetical 10% change in market value[176] - The company is exposed to interest rate risk due to floating rate debt under its revolving credit facility, with no borrowings outstanding as of March 31, 2025[177] - An unrealized gain of $7.8 million was recorded in the six months ended March 31, 2025, due to changes in the market value of investments[176]