Limbach's second quarter was marked by notable revenue growth, but the market responded negatively to the results. Management attributed the performance to continued expansion in its owner-direct relationships, strengthened by both organic efforts and recent acquisitions. CEO Michael McCann highlighted that “ODR revenue rose 31.7%” and now makes up the majority of total sales, reflecting the company’s ongoing shift toward higher-margin, recurring service work. However, discussion on the earnings call revealed that margin gains are expected to ebb and flow due to integration of newly acquired businesses and the evolving mix of contracts.
Is now the time to buy LMB? Find out in our full research report (it’s free).
Limbach (LMB) Q2 CY2025 Highlights:
- Revenue: $142.2 million vs analyst estimates of $144.2 million (16.4% year-on-year growth, 1.4% miss)
- Adjusted EPS: $0.93 vs analyst estimates of $0.77 (20.4% beat)
- Adjusted EBITDA: $17.95 million vs analyst estimates of $16.7 million (12.6% margin, 7.5% beat)
- The company lifted its revenue guidance for the full year to $665 million at the midpoint from $620 million, a 7.3% increase
- EBITDA guidance for the full year is $83 million at the midpoint, above analyst estimates of $80.37 million
- Operating Margin: 8%, in line with the same quarter last year
- Market Capitalization: $1.28 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Limbach’s Q2 Earnings Call
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Christopher Paul Moore (CJS Securities) asked about the outlook for gross margins in the GCR segment given recent improvements. CFO Jayme Brooks explained that margins will fluctuate quarter-to-quarter but guided to a long-term range of 28% to 29% overall.
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Moore (CJS Securities) also inquired if Pioneer Power’s margins would be dilutive in the short term. Brooks confirmed that Pioneer’s margins are initially lower and will require integration before improvement.
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Moore (CJS Securities) questioned which vertical could become most important beyond healthcare and industrial. CEO Michael McCann emphasized the focus on mission-critical facilities across six verticals rather than prioritizing a single one.
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Robert Duncan Brown (Lake Street Capital) sought clarification on demand trends and whether the shift to proactive sales is gaining traction. McCann responded that the company’s strategy is to convert short-term actions into long-term capital programs, citing recent wins with national healthcare clients.
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Brian Daniel Brophy (Stifel) asked whether the raised guidance reflected only the Pioneer acquisition or included changes in organic growth assumptions. McCann replied that the update is primarily driven by Pioneer, with a conservative approach to projections as integration progresses.
Catalysts in Upcoming Quarters
In upcoming quarters, our analysts will be watching (1) progress on the integration of Pioneer Power and its impact on consolidated margins, (2) the effectiveness of the expanded sales team in converting customer relationships into long-term capital projects, and (3) the pace of ODR revenue growth as the company continues to shift away from traditional construction contracts. Execution of digital solutions and new service offerings will also be key indicators of successful strategy implementation.
Limbach currently trades at $110, down from $133.59 just before the earnings. Is the company at an inflection point that warrants a buy or sell? Find out in our full research report (it’s free).
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