Good morning. My name is Jamie, and I will be your conference operator today. At this time, I would like to welcome everyone to the EMCOR Group Fourth Quarter and Full Year 2025 Earnings Conference Call. At this time, I'd like to turn the floor over to Lucas Sullivan, Director, Financial Planning and Analysis. Mr. Sullivan, you may begin.

Thanks, Jamie. Good morning, everyone, and welcome to EMCOR's fourth quarter and full year 2025 earnings conference call. For those of you joining us by webcast, we are at the beginning of our slide presentation that will accompany our remarks today. This presentation will be archived in the Investor Relations section of our website at emcorgroup.com. With me today are Tony Guzzi, our Chairman, President and Chief Executive Officer; Jason Nalbandian, Senior Vice President and EMCOR's Chief Financial Officer; and Maxine Mauricio, Executive Vice President, Chief Administrative Officer and General Counsel. For today's call, Tony will provide comments on our fourth quarter and full year and discuss our RPOs. Jason will then review the fourth quarter and full year numbers, then turn it back to Tony to discuss our guidance before we open it up for Q&A. Before we begin, a quick reminder that this presentation and discussion contains certain forward-looking statements and may contain certain non-GAAP financial information. Slide 2 of our presentation describes in detail these forward-looking statements and the non-GAAP financial information disclosures. I encourage everyone to review both the disclosures in conjunction with our discussion and accompanying slides. And finally, as a reminder, all financial information discussed during this morning's call is included in our consolidated financial statements within both our earnings press release issued this morning and in our Form 10-K filed with the Securities and Exchange Commission. And with that, let me turn the call over to Tony. Tony?

Yes. Thanks, Lucas. Good morning, and welcome to our fourth quarter 2025 earnings call. I'm going to speak briefly to the fourth quarter in my opening comments, but we'll focus my introductory remarks on what drove our continued success in 2025. We had an excellent close to the year with our fourth quarter results. In the fourth quarter, we generated revenues of $4.5 billion, which represents 19.7% growth. We earned adjusted earnings per share of $7.19 per diluted share, a 13.8% increase from 2024 and delivered adjusted operating income of $440 million, a 13.1% increase from 2024. We did this while achieving strong adjusted operating margins of 9.7%. Our adjusted results for the fourth quarter exclude the gain on the sale of our U.K. business and the transaction costs related to that sale. For the full year, our adjusted results include these items as well as the transaction costs incurred in the first quarter due to the acquisition of Miller Electric Company. By any measure, 2025 was a tremendous year for us. We had record revenues of nearly $17 billion and record adjusted full year operating margin of 9.4% and at the high end of our guidance range. We also had record adjusted diluted earnings per share of $25.87 per share, an increase of 20% from 2024. With operating cash flow of $1.3 billion, we continued our exceptional record of cash conversion. Our success once again demonstrates our ability to execute with discipline across our business as we drive innovation and efficiency to achieve exceptional outcomes for our customers. We have delivered sustained strong results despite the fact that we are working on the most technically sophisticated fast-paced and demanding projects in our history. We had a great year, and we enjoyed delivering for our customers and our shareholders. Notably, we earned full year mechanical and electrical construction operating margins of 12.8% and 12.1%, respectively, demonstrating excellent execution across a diverse range of projects by size, end market, and geography. We did this while growing revenues of these segments by 10.1% and 51.8%, respectively. We achieved a 6% operating margin in our Building Services segment, driven by the underlying strength of our Mechanical Services business, which achieved high single-digit operating margins and 6% growth. Virtually all that growth was organic. Demand for this business remains strong with a primary focus on aftermarket projects and retrofits, HVAC service and repair, building automation and controls upgrades and services, and indoor air quality and energy efficiency projects. We remain well positioned with our Industrial Services segment to serve a rebounding oil and gas industry. We divested our U.K. business to focus on our U.S. operations. We found EMCOR U.K. a great strategic home and achieved a very strong result for our shareholders in the sale. We acquired Miller Electric, which is the largest acquisition in EMCOR history. The integration is on track, our leadership and values are aligned, and Miller will serve as a great platform for growth in the Southeast and Texas. In addition to Miller, we acquired nine other companies across our Mechanical Construction and Building Services segments. Collectively, these platform-enhancing acquisitions will help us to better serve our customers. We repurchased almost $600 million in shares and increased our quarterly dividend to $0.40 per share. This return of cash to shareholders, coupled with our organic investment and acquisitions, affirms our successful balanced capital allocation strategy. We maintained our sterling balance sheet that allows for continued organic and acquisition growth. We maintained our industry-leading safety record in this demanding and complex environment with a TRIR under 1 for the second year in a row. We earned inclusion into the S&P 500, and we were recognized by Fortune as the most admired company in the engineering and construction industry. And we built our RPOs to $13.25 billion from $10.1 billion despite our record revenues. That's quite a year, right? Congratulations to our team, and thank you for a great 2025. I'm now going to go to Page 6. These are RPOs, which I will now highlight, … Operations have increased 5.1% since September or 3.6% organically, driven by demand in our data center business, RPOs within the network and communications totaled a record $4.46 billion, at the end of December, an increase of $1.65 billion or nearly 60% year-over-year. We see no change in the momentum of the CapEx plans from our customers in this sector, and we have good visibility for the next 2 to 3 years as we work to support their build-out. Institutional RPOs have increased by just under $440 million or 40% to $1.55 billion, largely as we continue to see demand for our services within the education sector, including from a number of colleges and universities. Manufacturing and industrial RPOs have increased by $201 million or 23% to $1.1 billion. As I mentioned last quarter, this growth in this sector has also benefited from certain food processing projects within our Mechanical Construction segment as well as a renewable energy project in our Industrial Services segment. Led by our Mechanical Construction segment, water and wastewater RPOs have increased by $408.5 million or nearly 60% to $1.1 billion as we continue to win projects throughout Florida. And due to select project opportunities, RPOs within hospitality and entertainment have more than doubled year-over-year. I'm now going to turn to Page 7 because I think it's important to look at some of the longer-term trends and what's really driving our growth over a sustained period of time and also to highlight our diversity of demand. I'm going to spend a little bit of time talking about high-tech manufacturing on a compound annual growth rate that's in and out of major projects. For where we started in 12/31/19, which had some semiconductor work in it and pharma work in it, to where we are today has grown by a compound annual growth rate of 48%. We remain very bullish on this market with the demand for semiconductor chips, the reshoring of pharma, and the growth in GLP-1 drugs. Just in general, what has been reshored in High-Tech and what’s going to continue to grow is this 48% compound annual growth rate. Right above that is network and communications. We thought we had a great data center business in 2019. We went from having a very strong data center business to a terrific data center business. Now I'm not going to say we're the only ones that can do data center work at scale. We're the only ones that can operate in about 17 markets electrically. And we're doing about 7 markets now mechanically and we're one of the only ones that could cover the whole country on fire-life safety projects in the data center business.

Thank you, Tony, and good morning, everyone. Before we dive into our results for the fourth quarter, I thought it made sense to step back and take a look at how we performed for the full year, which is summarized on Slide 8. In 2025, we earned revenues of $16.99 billion, operating income of $1.71 billion and operating margin of 10.1% and diluted earnings per share of $28.19. When excluding the transaction costs incurred in connection with both the acquisition of Miller Electric and the sale of EMCOR U.K. as well as the gain on sale of EMCOR U.K., we are non-GAAP operating income of $1.59 billion, operating margin of 9.4% and diluted earnings per share of $25.87, all of which were records for EMCOR. We performed extremely well in 2025, benefiting from some of the best execution in our history and a favorable mix of work, both of which allowed us to deliver full year operating margin at the high end of the guidance we previously provided and in excess of our expectations when we began the year. Let’s turn to Slide 9, I will now review the operating performance for each of our segments during the quarter, starting with revenues. $4.5 billion represents a quarterly record for EMCOR, with revenues increasing 19.7% or 9.5% organically. Revenues of U.S. Electrical Construction were a quarterly record of $1.36 billion, increasing 45.8% due to a combination of strong organic growth and the acquisition of Miller. The most significant growth in this segment was generated from our data center projects within the network and communications market sector, where revenues increased nearly 50% year-over-year. While this represents the greatest increase during the quarter, almost all other sectors experienced growth. Moving to U.S. Mechanical Construction, revenues of $1.94 billion increased 17%, establishing a new quarterly record for this segment. Similar to electrical, due to greater demand for data center construction projects, this segment saw the largest increase from the network and communications market sector, where quarterly revenues grew nearly 80% year-over-year. Notably, manufacturing and industrial, including food processing, was up just over 50%. Institutional was up 55% and commercial increased 17% as we are starting to see resumption in warehousing demand. On a combined basis, our construction segments generated revenues of $3.3 billion, an increase of 27.4%. Looking next at U.S. Building Services, revenues of $772.5 million reflect a 2.2% increase, all of which was organic. For the fourth quarter, we generated operating income of $573.8 million or 12.7% of revenues. When adjusting for the transaction expenses and the gain on sale of EMCOR U.K., we have a non-GAAP operating income of $439.6 million, a quarterly record for EMCOR. This performance resulted in an exceptional 9.7% non-GAAP operating margin the highest we achieved in any quarter this year. Looking at each of our segments, Electrical Construction had operating income of $173.1 million, a 17% increase. As a result of its revenue growth, the segment experienced greater gross profit across the majority of the market sectors in which we operate, resulting in an increase in operating income to a record level. U.S. Mechanical Construction generated operating income of $250.5 million, slightly below the prior year's quarter, but operating margin of 12.9% remained consistent. From an end market standpoint, we saw greater gross profit across many of the sectors in which we operate with the largest increases generally tracking in line with the revenue fluctuations I previously mentioned. On a combined basis, our construction segments grew operating income by nearly 15% and earned a combined operating margin of 12.8%. U.S. Building Services generated operating income of $41.3 million, a modest increase over the prior year, and the operating margin was a consistent 5.4%. Moving to Industrial Services, this segment's revenue growth coupled with better absorption resulted in a 21.1% increase in operating income.

Thanks, Jason. And I'm going to close on Pages 13 and 14. As discussed, we are well-positioned to continue to deliver excellent results in 2026. We expect to earn revenues of $17.75 billion to $18.5 billion and achieve diluted earnings per share from $27.25 to $29.25 with a full-year operating margin between 9% and 9.4%. As we set guidance and I have stated this many times over the years, we have always thought about it the following way. From the low end to the midpoint, we have a high degree of confidence that we will deliver that outcome absent a major economic event. From the midpoint to the high end of our range, we need to execute very well from a margin standpoint, and we need to book 40% to 45% of new work to allow us to hit the mid to high point of our revenue range. As we look at the composition of our RPOs, we began the year with a strong mix of work, with estimated gross margins in line with those experienced over the last few years. At this time, we see no slowing of demand for most of our end markets and continue to see exceptional prospects in our data center markets. As we move into 2026, we need to keep leveraging our training, BDC, fabrication and project planning and delivery capabilities. We must not only continue to incrementally improve but also innovate in our internal processes and delivery. We will always face some macroeconomic challenge of some kind and some headwinds, but our team has excelled over these challenges over a very long period of time. I do believe that we are an employer of choice because of our excellence in field leadership.

Our first question today comes from Brent Thielman from D.A. Davidson.

Tony or Jason, if you could comment just on some of the initiatives that compressed margins a bit last quarter, 3Q. I think you moved into some new territories that caused a little pressure there. Like what lingering impact that had in the fourth quarter, if any? And are you sort of beyond that at this stage here in 2026?

You always have to be careful to say we're beyond that because we're starting projects all the time and we execute really well, and we write projects up. We write them down. But on balance, I think the headwinds we've experienced in that particular market are behind us now. We had a little bit of that spillover into the fourth quarter. Some of it also is just mix of work. We didn't finish as much fixed-price work in our Electrical segment as we did the year before. And we started some work that was more target price or GMP. And hopefully, we'll convert some of that to fixed price, but we don't know that. But the underlying margins in the business, which you can see from our gross margins is pretty strong.

Yes. I would echo what Tony said. The only thing I would add is that the gross profit margin for electrical, if you adjust for the amortization impact, it performed relatively consistently year-over-year. So any impacts that we did have from those project startups were offset by just execution within the segment.

Yes. Brent, and you could see it in our numbers, right? Are we a little disappointed we coughed up 50 or 60 basis points this year in electrical operationally? Sure, we are. Some of the headwind was from amortization. That's not a cash expense. But when you look over a 12- to 24-month period, that's a pretty good snapshot of our margins. We expect to operate somewhere mid- to low 12s to around 14 percent electrically. And mid- to low 12s, so 13.5 percent or so mechanically, and it's going to bounce around there.

Tony, maybe just to follow up, there was an interesting chart on Slide 7. So on the network communications, data center side, you talked about good visibility here for the next 2 to 3 years. I think it would be hard to dispute that. Maybe one of the questions that often comes up is just like your regional exposure. Do you see yourself having to move into different regions to get more of this work?

I don't have specific indiscernible markets electrically. But the way I look at it is we have a strong position in the Midwest. We'd like to make that a little bit stronger in some of the markets. We think we can do that either through acquisition investment or organic growth. Arizona, we continue to build that out. We've just built a better position mechanically in Arizona that we look to take advantage of. In Texas, we're pretty strong mechanically, and we will take some of our first significant jobs in Texas. We had that capability there doing semiconductor work. We'll continue to do some of that. But quite frankly, we think some of the rural data center work is better for us to do and it allows us to sort of get more productivity in our prefab shops. And we've invested ahead of that.

Got it. I appreciate that, Tony. And just last one. I mean, your balance sheet, you sort of have a war chest here. How do you think about total excess liquidity here, assuming you want to keep some level of cash on the balance sheet?

I'll hit on a macro level on that, and then Jason will get into some specifics about what cash we'd like to have on hand. In general, we're never going to have a highly leveraged balance sheet on a sustained basis to think of who we're working for. One of our competitive differentiators, especially on this large project work is we're not a leveraged company. And think about the hyperscalers. They're not looking to do business with leveraged companies.

If you look at our guidance, and let's say, at the low end, it's 4.5% and at the high end, it's 9%. It's really equivalent to 7.5% and 12%. When you consider the 1 month of incremental contribution we have from Miller and the 10 months from Danforth, you put that together, it really offsets the U.K. impact, the lost revenues from the U.K.

Got it. Understood. Helpful. And then can you update us on the M&A pipeline today?

Sure. First of all, we have as good or better pipeline sitting here today than we did at the end of 2020. If you look at the pipeline beyond Miller, our pipeline today is broader and more diverse than it was at the end of 2024. The universe of them is where we like to buy, right? Mechanical and Electrical segments, building service, focus on mechanical service and building controls companies. Deals happen when they happen.

Yes. Our deals range anywhere from $2 million to $865 million. We could do smaller acquisitions that bring in specialized expertise, or larger ones like Miller Electric. So we could easily add a few strategic acquisitions through our M&A pipeline.

We're not private equity guys. We're not averaging multiples down. We’re looking to buy and build for the long term and build sustainable positions. What we don’t do particularly well in is auctions against private equity. Our acquisition record is pretty good. I always say I never give anybody an A, but that gives us a strong B+ over an extended period of time.

I guess, first one, I mean, you've talked about the fire life safety projects being strong for a while. Can you elaborate a little bit more on your capabilities there? And how you're different in that market?

Yes. Are we different? Yes, because I think we have some of the best fire-life safety. We have critical mass on design, and we have a very strong position with the local unions for sprinkler fitters. Our guys are experts at that. We design it and fire life safety has a fairly significant prefabrication component. We have some pretty at-scale fabrication shops to support our fire life safety business. We have a nice aftermarket business that provides long-term service agreements post-building.

If we look just at Danforth, in 2025, round numbers, it’s about $2.7 million of amortization. In 2026, it’s going to be around $14.2 million. So you got about $11.5 million of incremental amortization from Danforth in 2026. Just a refresher on Miller, we said in year 1, so 2025, it’d be about $40.5 million of amortization. In 2026, it’s going to be about $33 million.

I think if you ask any of our management team down through the segment level, we would love to replicate 2025 here in '26 and '27. I'm going to turn the call back over to Jason.

Our next question comes from Adam Thalhimer from Thompson, Davis.

Congrats on the strong quarter and the year. Tony, I wanted to ask you first about RPO. The 33% in network and communications, obviously, some others in your space are even higher than that. And I'm just curious if that was a conscious decision on your part to stay more diversified? Or if that reflects something else like geographic mix?

It's funny. I’ll go to the second point you made. It's geographic and sector mix. We're not passing up great data center opportunities because we're doing the other work. However, we're not going to go away from our existing customers. We have a very strong position in markets that have limited or no data center exposure. Some of our best electrical contractors are generating returns that are as good or better than our segment averages. Long-term, we've intentionally built diversity of demand.

As we move into 2026, we need to keep leveraging our training, BDC, fabrication and project planning and delivery capabilities.

And with that, everyone, we will be ending today's question-and-answer session. I would like to turn the floor back over to Tony for any closing remarks.

Thanks, Jamie. And thanks to all the analysts. I thought this was a great question-and-answer session today. I want to thank my colleagues from EMCOR and my teammates for what was a great '25. We have a great outlook. We're in all the right sectors. We're playing with the right team, and we have a terrific capital allocation strategy. Thanks for your interest in EMCOR. And thank you to all my teammates.

And with that, everyone, we'll be concluding today's conference call and presentation. We do thank you for joining. You may now disconnect your lines.