Greetings, and welcome to the Mirion Technologies Second Quarter 2025 Earnings Conference Call. As a reminder, this conference is being recorded. It is now my pleasure to introduce Eric Linn, Vice President of Investor Relations. Please go ahead.

Thank you, Stacy. Good morning, and welcome to Mirion's Second Quarter 2025 Earnings Conference Call. Joining me this morning are Mirion's Chairman and CEO, Tom Logan, and Mirion's CFO and Medical Group President, Brian Schopfer. Before we begin today's prepared remarks, allow me to remind you that comments made during this call will include forward-looking statements, and actual results may differ materially from those projected. The factors that could cause actual results to differ are discussed in our annual report on Form 10-K, quarterly reports on Form 10-Q, and Mirion's other SEC filings under the caption Risk Factors. Quarterly references within today's discussion are related to the second quarter ended June 30, 2025, unless otherwise noted. The comments made during this call will also include certain financial measures that were not prepared in accordance with generally accepted accounting principles. A reconciliation of those non-GAAP financial measures to the most directly comparable GAAP financial measures can be found in the appendix of the presentation accompanying today's call. All earnings materials can be found in the Investor Relations section of our website at www.mirion.com. With that, let me now turn the call over to Tom, who will begin on Slide 3.

Eric, thank you, and a warm welcome to everyone on today's earnings call. As always, we appreciate your interest in the company. Taking a look at our Q2 results, we demonstrated continued progress on key financial and strategic objectives, most notably increasing adjusted free cash flow generation, stepping up our M&A game, and optimizing our capital structure. I'd like to thank my many Mirion colleagues for delivering another solid quarter. In addition, we've increased key components of our 2025 guidance based upon a bullish outlook for the second half. We'll have more on this in a bit. Beyond quarterly results, I'll spend some time discussing the growing momentum in the Nuclear Power sector, specifically how it is increasing Mirion's opportunities across the installed base, new utility scale projects, and small modular reactors or SMRs. Regarding M&A, last night, we were very pleased to announce the acquisition of Certrec, a leading provider of regulatory compliance solutions to the U.S. nuclear industry and a wider energy power market. We are incredibly excited to welcome the Certrec team on board and believe that together, we can better serve the rapidly growing North American energy markets. Let's turn to Panel 4 to get into the details. Second quarter revenue totaled $222.9 million. This reflects a 5.4% increase in organic revenue and a 7.6% increase in total revenue versus Q2 2024. Higher revenue reflects a $2 million tailwind from our Medical segment due to shipment timing from tariff impacts. Importantly, all 6 end markets from both segments contributed to the growth. Second quarter adjusted EBITDA was $51.2 million, up 4.9% versus last year's second quarter. The Medical segment was a positive contributor in the quarter. Conversely, Nuclear & Safety segment EBITDA was negatively impacted by nonrecurring items. During the quarter, we made significant improvements to our capital structure. In May, we successfully completed a $400 million convertible note offering. Later in the quarter, we refinanced our Term Loan B with a smaller $450 million term loan. The improved capital structure gives us the flexibility for further capital deployment and lowers our total cost of capital. Next, we generated $6 million of adjusted free cash flow in Q2, an 11% conversion of adjusted EBITDA. This, coupled with better-than-expected first quarter cash performance, undergirds our increased 2025 adjusted free cash flow guidance. Finally, second quarter orders grew by 1.6%. This growth was primarily from our Medical segment. Nuclear & Safety segment orders were lower in the quarter, which was not particularly surprising given the tough comp from the second quarter of 2024. As you may recall, we experienced 17% order growth in the Nuclear Power end market in Q2 of last year. This comp, combined with timing dynamics, resulted in lower Nuclear & Safety segment orders in Q2 2025. Despite this, we're highly encouraged by growing engagement in the nuclear ecosystem. Year-to-date, we booked approximately $9 million in SMR related orders with 5 different players. Historically, we've disclosed $17 million in aggregate SMR orders, and we're pleased with the accelerating growth in this sector and continue to strengthen our position. Brian will provide more details on our quarterly performance. I'd like to use my time to provide more context around the improving dynamics within Nuclear Power, beginning on Panel 5. As you'll see later, we are increasing our 2025 organic growth expectations for the Nuclear Power sector. We are seeing sizable opportunities across the nuclear landscape. While new builds and SMRs are grabbing the headlines, the installed fleet represents an improving opportunity set for the company. Recall that approximately 80% of the Nuclear Power end market revenue comes from this installed base and is typically accompanied by higher margins. The improving fleet opportunity comes principally in 3 forms: from modernization upgrades, from expanding nuclear capacity, and from extending operating lifetimes. Modernization CapEx is the greatest near-term opportunity for the company. As illustrated on the slide, nuclear operators are planning to meaningfully increase their capital budgets over the next 4 years, supporting a growing opportunity for Mirion. The average age today of the operating fleet is around 40 years old. Based on an expected 60- to 80-year operating lifespan, nuclear reactors are today middle-aged. As a result, system upgrades and modernization are required to ensure continued, safe and efficient performance. We expect accelerating reinvestment based upon extensive customer feedback. The slide also highlights additional reinvestment opportunities within the installed base. Decisions to expand nuclear capacity, either through power upgrades or higher capacity factor targets, often require incremental capital investments from customers. We are seeing our customers invest in next-generation in-core and ex-core instrumentation and bring on additional monitoring to more precisely manage key operating parameters. This gives them the confidence to run at higher utilization levels. The third opportunity comes through extending operating lifetimes, including recently announced restarts. This is perhaps the largest opportunity source for Mirion. Life extensions extend the clock on a nuclear facility and drive spare parts replenishment, system upgrades, software royalties, and services to support operations for an additional 10 to 20 years. Importantly, when an operator plans to decommission a power plant, they typically reduce CapEx dramatically 3 to 5 years in advance. Thus, decisions to life extend also reverse this subtle dynamic. In July, Vistra received approval from the NRC to extend operations of its Perry nuclear plant through 2046. This is the most recent example of the appetite to extend the life of existing reactors. Given all this, it should not be surprising then that we have been eager to strengthen our nuclear power-related portfolio. Organically, we've been active this year, introducing new products into the market as shown on Panel 6. Earlier this week, I hosted our 20th annual Mirion Connect event with more than 400 in attendance. This annual event brings our customers together to share ideas, showcase our latest innovations, and provide continuing education and training. It's also a tremendous opportunity for lead generation. This year marked record attendance as customers are eager to collaborate to solve their most pressing challenges with a far greater sense of urgency. In this vein, last week, we released our Vital Platform. This is the digital ecosystem we foreshadowed in our Investor Day in December, and it's a direct response to customer needs. Vital helps operators to simplify monitoring, streamline operations, and improve safety by facilitating real-time monitoring and data collection from thousands of instruments and sensors. Vital is intended to integrate seamlessly to scale with ease and support workflow optimization, and it replaces more than a dozen discrete supervisory software applications. It also provides a platform for our expanding digital offerings to interact on a plug-and-play basis. We also highlighted our LightLink technology at Mirion Connect. This technology allows for superior detection efficiency through the replacement of dated legacy photomultiplier tubes with silicon chips. This advanced technology allows for hyper-accurate radiation detection, improved human factors, and greater ruggedness. We believe it will redefine industry standards in operational productivity and reliability. Lastly, we announced our next-generation Apex-Guard software application. This digital platform incorporates more comprehensive reporting and improved analytics to drive greater workplace efficiency and inferential reliability. This is particularly relevant for the exploding Nuclear Medicine sector. These product releases are emblematic of our focus on delivering innovations to meet customers' growing needs. We are also broadening our Nuclear Power portfolio through M&A. Yesterday, we announced the acquisition of Certrec, shown on Panel 7. Approximately 55% of Certrec's revenue comes from nuclear power customers, including the operating fleet, new utility scale projects, and small modular reactors. Today, every U.S. nuclear reactor facility employs at least one Certrec solution. Certrec's business has grown double digits since 2022, and we believe we can enhance that growth with commercial synergies enabled by our vast global network. As previously mentioned, nuclear power operators are looking to extend operating lifetimes and expand existing nuclear reactor capacity. Certrec solutions help support these objectives by streamlining the regulatory burden. Certrec's solution set is also relevant to the SMR sector. Today, there are approximately 127 SMR designs globally, each trying to navigate a complex and burdensome regulatory environment. Certrec's leading position in this space means they will likely benefit regardless of which SMR technologies ultimately prevail. The other 45% of Certrec's revenue comes from the bulk electric system, generally referred to as the grid. This industry is regulated by the North American Electric Reliability Corporation, or NERC, and includes power-generating assets above 20 megawatts connected to the power grid. Until recently, this threshold was 75 megawatts. This is an important distinction as this regulatory change expands the number of assets under NERC's purview by approximately 65%. This represents an additional revenue opportunity for Certrec. In short, this is a fast-growing market in which Certrec is extremely well-positioned. We look forward to growing our presence in this space. With that, let me turn it over to Brian to discuss the quarter and 2025 guidance.

Thank you, Tom, and good morning, everyone. I'll pick up on Slide 8 with details on our second quarter order performance. Orders grew 1.6% in the quarter, driven by our Medical segment. Nuclear & Safety orders were lower year-over-year due to a tough prior year comp from the Nuclear Power vertical, where Nuclear Power-related orders increased 17% in the second quarter last year. These orders can be a little lumpy, and we're expecting an accelerated order book in the second half of the year based upon our current pipeline. Still, year-to-date, Nuclear Power orders grew 10%, reflecting the growing momentum in this attractive end market. We are definitely seeing good momentum in the North American and French Nuclear Power installed base. As Tom discussed, SMR-related activity continues to accelerate. We are highly engaged with key SMR players to support their journey to commercialization. This is a rapidly evolving area, and we're excited to be squarely in the mix. On the Medical side, all three end markets, RTQA, Nuclear Medicine, and Dosimetry, saw order growth in the quarter. This dynamic is particularly impressive in Nuclear Medicine, where we are lapping a 16% organic order increase in the second quarter of 2024. Slide 9 provides an update on the large one-time 2025 order pipeline that we've discussed over the past few quarters. This pipeline is bigger than what we've seen in the past years and indicative of the tailwinds across these key end markets. Today, our pipeline stands at approximately $350 million. We continue to believe we will win our fair share of opportunity set in play. Encouragingly, the project pipeline for 2026 continues to build, and we like our competitive positioning a lot. Moving to the financial results on Slide 10, second quarter consolidated revenue was $222.9 million, up 7.6% versus Q2 2024. Organic revenue grew 5.4% over the same time period. As expected, FX was a positive contributor to revenue growth, given the weaker U.S. dollar environment versus the euro. Within the Nuclear & Safety segment, we saw organic revenue growth across each end market. The Nuclear Power installed base revenue growth was the largest driver in the segment, reinforcing the importance of this sector to our growth expectations. In the Medical segment, organic revenue grew across all three medical end markets. Adjusted EBITDA grew as well, up 4.9% to $51.2 million. While adjusted EBITDA dollars grew, margins contracted slightly due to a couple of nonrecurring items in our Nuclear & Safety segment. We experienced FX-related transactional headwinds in France. In addition, project cost increases for a nuclear project in the U.K. negatively impacted project margins in the second quarter. Lastly, on this slide, adjusted EPS was $0.11 per share, a 10% increase compared to last year. Note that this includes 17.3 million additional shares related to the convertible notes. If you exclude the convertible notes, the warrant redemptions in Q2 '24, and the founder shares that vested in late 2024, our adjusted EPS would have been $0.13. This provides a more apples-to-apples comparison. Regarding the convertible note shares, from a GAAP perspective, we're required to use the fully diluted share count. You can see on Slide 29 in the appendix how the convertible and cap call structure impacts share count at certain share prices. Most importantly, there is zero dilution until the share price approaches $35. And even at $60 per share, the effective dilution is approximately 40% of the GAAP number. Moving to the segments, beginning on Slide 11, the Nuclear & Safety segment revenue grew 5.8% to $141.7 million. Organic revenue grew 2.9% in the quarter. Year-to-date, organic revenue grew 5.2% through the first half of the year. Labs & Research has been softer than expected, reflecting DOGE and budget uncertainty confronting the U.S. Department of Energy as well as tariff uncertainty from China. More significantly, our Nuclear Power end market has exhibited double-digit year-to-date revenue growth. Adjusted EBITDA declined slightly to $37.9 million, down 2.6% versus the second quarter last year. Adjusted EBITDA margins contracted in the quarter, reflecting a few nonrecurring cost items we already discussed. Moving next to the Medical segment on Slide 12. Segment revenue grew 10.9% to $81.2 million. Organic revenue grew 10.1% in the quarter. Revenue was $2 million higher due to some accelerated shipments, mostly in RTQA, to get ahead of expected tariff implementations early in the second quarter. This was partially offset by the lapping of our laser business closure. This will be the last quarter for our lasers business adjustment. If we normalize for these, each Medical end market performed well in the quarter. Medical segment adjusted EBITDA was $30.1 million, up nearly 20% versus last year. Adjusted EBITDA margins increased approximately 280 basis points. This margin performance was in line with the expectations we shared on our first quarter earnings call. Margin improvement reflects the power of our intrinsic operating leverage we've been discussing. In addition, procurement and mix performance positively impacted margins in the quarter. Let's spend a few minutes on adjusted free cash flow on Slide 13. We continue to improve adjusted free cash flow in the second quarter, adding another $6 million to end the first half of '25 with $35 million of adjusted free cash flow. Most importantly, we're improving our conversion as well. Beyond higher earnings, the biggest drivers continue to be net working capital improvements, an optimized capital structure, and tight controls around CapEx. For instance, our net working capital, project cash flow management, and improved collection performance contributed positively to the first half of the year. We continue to expect improved productivity in net working capital through year-end. Within our capital structure, a lower SOFR rate environment over the past 12 months was a tailwind for interest expense as was the debt refinancing we did in 2024. Separately, we successfully launched a convertible note in the second quarter and amended and extended our existing term loan, pushing its maturity to 2032 and significantly reducing the principal amount. These actions will be more impactful on the back half of 2025 and fully reflected in 2026. Lastly, year-to-date CapEx totaled $17 million, approximately $7 million lower than the first half of 2024. We're on track for 2025 CapEx of $40 million, an 18% reduction versus 2024. Before we open the call to Q&A, Slide 14 details our updated 2025 guidance. We have raised and tightened key 2025 metrics, including total revenue growth, adjusted EBITDA, adjusted free cash flow, and adjusted EPS. We slightly lowered organic revenue growth, but most importantly, we raised organic revenue growth within the Nuclear Power end market. Let's get into the details. Moving top to bottom on the slide, organic revenue growth was revised lower to reflect U.S. government budgetary headwinds impacting our Labs & Research business we already discussed. Recall that this end market within our Nuclear & Safety segment includes business from the U.S. Department of Energy and universities. As a result, we lowered Labs & Research expectations from low single-digit organic revenue growth to modestly negative growth in this end market. These reductions are being largely offset by increased organic growth expectations from our Nuclear Power end market. We now expect 2025 double-digit organic growth from Nuclear Power versus high single-digit previously. Next, total revenue growth is expected to be 7% to 9%, up from 5% to 7% previously. This reflects a 125 basis point tailwind from foreign exchange and a 100 basis point improvement from the acquisition of Certrec. These tailwinds more than offset the slight adjustment to 2025 organic revenue growth. Adjusted EBITDA is now expected to be between $223 million and $233 million, up from $215 million to $230 million. This reflects the previously mentioned revenue drivers as well as revised cost inputs from tariffs and foreign exchange. Adjusted free cash flow is forecasted at $95 million to $115 million, representing both an increase to total dollars and the expected conversion rate. The increase reflects higher expected EBITDA, lower cash taxes, and net interest expense savings. Project cash flow timing in the second half will likely cause net working capital to be a use of cash for the full year. Lastly, adjusted EPS is expected to be between $0.48 and $0.52 per share and reflects the full GAAP impact of the additional shares related to the convertible note. We've included in the appendix a slide that illustrates changes to 2025 guidance over the past 4 disclosures. For the third quarter, we're expecting Nuclear & Safety segment adjusted EBITDA margins to be flattish year-over-year before rebounding nicely in our seasonally strong fourth quarter. In our Medical segment, adjusted EBITDA margins should show slight year-over-year expansion. Medical segment organic revenue growth should return to mid-single digits, accounting for the shipment timing of sales volumes related to potential tariff impacts in the second quarter. With that, we're happy to take your questions.

Your first question comes from Chris Moore with CJS Securities.

Maybe just start on the new nuclear side. So obviously, it takes many years to get a new nuclear plant from concept to energy production. Can you at all quantify the number of new opportunities you're looking at now, say, versus 2 years ago?

Yes, broadly speaking, the number of new projects and the timing for those projects continues to increase. Historically, we've highlighted our strategic alliance with EDF in France, which may last over 20 years and involve their new EPR reactors planned for France, Europe, and other regions. Recently, we're optimistic about developments in the U.S. If we had this discussion two years ago or even a year ago, we would have been skeptical about the prospects for new utility-scale nuclear in the U.S. However, it is now openly discussed that Westinghouse, a leader in global reactor design, is planning up to 10 new AP1000 reactors in the U.S. to start before 2030, which is very encouraging. This is just the beginning, as we need to consider other global players like the Russian firm Rosatom, the Koreans, and the Chinese. Additionally, there are numerous small modular reactor (SMR) projects, totaling 127 distinct initiatives. What’s noteworthy now is that we are seeing a faster and more confident approach due to the urgent demand for electrical power and significant policy shifts, especially in the U.S. As a result, we are involved in numerous strategic discussions that extend beyond basic project deals to framework agreements where major players aim to consolidate their supply chains and form strategic partnerships to navigate the next decade. This level of activity and innovation excites me more than anything else in this field. Although I won't provide a specific number, I can say that the number of opportunities is increasing, timelines are speeding up, and the nature of these developments is becoming more concrete. We are quite enthusiastic about this.

That's really helpful. Maybe just a follow-up. Could you talk a little bit more about the Certrec acquisition? How it fits in with the core business and synergies? Why you're so excited?

Yes. Certrec is an unbelievable company. Its founder, Ted Enos, built the business and has run it throughout its lifetime. It really is a unique asset that today defines the space that they're in. We touched on some of the key financial metrics in terms of how it's performing, $17 million in revenue, a very attractive margin profile, incredible customer retention, 110% net revenue retention overall. Their platform includes 15 different SaaS applications, and they play today within a total addressable market that's just shy of $900 million. What's also very, very interesting about Certrec is that they possess 15 terabytes of unique industry data, which is an extraordinary number overall. And I think it's self-evident to everybody that when you think about the AI potential that represents, not only in terms of further streamlining their core software and services delivery today, but also what it means in terms of streamlining and accelerating regulatory approval processes, that is incredibly attractive and one of the less visible assets. The attractiveness to us, firstly, is that the majority of their revenue is in nuclear power. This year, about 50% of the revenue will come from the installed base. About 6% will come from nuclear new builds. This is core to our strategic focus right now. We love it because, again, the recurring revenue, SaaS-based software, massive AI potential here. But on top of that, the other 42% of the business, this NERC/FERC business that extends to the broader electrical grid, is also relevant and important to us overall. Fundamentally, when you look at the value proposition that Certrec brings to bear, at their core, the problems they're trying to solve, the customer pain points are that today, absent a solution like theirs, there's significant risk of human error. There is an immense volume of complex standards to track, to understand, and to apply. You have a situation where industry experts that really have the legacy knowledge are retiring. Insufficient expertise is a real threat on the customer side. The solution that Certrec offers essentially is the ability for their customers to outsource non-core mission-critical functions to decrease the risk of license revocation, fines, etc., to increase communication efficiency with regulators and fundamentally to ensure grid continuity, sufficiency, and security. So we're excited about it, firstly, because, again, it fits squarely within our focus on nuclear power delivery. It fits squarely within our focus on continuing the digital evolution and particularly the AI-enabled digital revolution taking place in our various markets. Finally, working together with the Certrec team, we think there is a huge opportunity for us to tap into our vast commercial network to provide them stronger and more efficient infrastructure. Again, recognizing their margin profile and their incredible capabilities as a team, we think this is going to be a great asset for us overall.

Next question, Joe Ritchie with Goldman Sachs.

So my first question, look, it was good to see the Nuclear Power growth rate raised for the year. I guess if I go back to Slide 5, right, you talked about like 80% of your revenue coming from your installed base. I know this is simplistic, but should we be thinking about kind of like, I don't know, 8 points of growth coming from the installed base this year? And what I'm really trying to get at is you talked about extensively having conversations with your customers. I think what I'm trying to figure out and I think what investors are trying to figure out is like how bankable is the growth rate from the installed base, not just this year, but really beyond this year?

Yes. And here, Joe, we have to approach it axiomatically because the dynamics are changing rapidly and broadly. But the key fundamentals here are that, a, there is insufficient electrical generating capacity globally to support current needs, and those needs continue to grow at a very high rate, again, based upon the work of hyperscalers in support of AI overall. Secondly, policy shifts clearly have favored nuclear power, not just in the U.S. but around the world. Market dynamics have adjusted to make nuclear power plants very profitable. Fundaments have shifted from kind of tepid fundamentals to very strong fundamentals. Over the last 20-plus years, this has been a tough market in the past, with many nuclear power stations losing money and many targeted for early decommissioning. As a consequence, we have a buildup of underinvestment in those power plants where people were operating under extreme capital rationing modes. That being said, we are seeing capital budgets swelling, and operators are investing in current infrastructure to modernize it and prepare for the broader modernization. So those are the fundamentals that are underpinning the overall operating fleet. Our expectation is that this is a generational trend that we're going to work hard to exploit continuously.

Yes. Maybe just one added color without giving you the exact numbers, Joe, one of the things I pointed out in my commentary is we've seen year-to-date good growth out of both North America and France. These are both installed base markets for us today. I think we're encouraged by the new build opportunities in both markets with what EDF announced in France and Tom's comments on Westinghouse. But today, they're basically installed base markets for us. So I think you can read that as you will.

No, that's helpful qualitative color, guys. I guess shifting to orders and the $350 million pipeline that you guys have discussed, I fully recognize also the second quarter, you guys had a tough comp. I guess what we're trying to understand is like, has the $350 million kind of pushed to the right a little bit? Is the opportunity still substantial into the second half of the year? And I guess, specifically, I'm going to go back to numbers, but like could there be a quarter where you guys see like a $300 million-plus order quarter because of this large opportunity that you have?

I think we're unlikely to see a $300 million order quarter. But having said that, again, as Brian said, we like where we sit in this opportunity set overall. Some of it has shifted to the right, mainly the government-related stuff because of DOGE-related noise and budgetary uncertainty. There’s some possibility that given the government year-end at the end of September, we may see a little bit of more accelerated order intake in that sector overall. But bear in mind that when you look at the composition, what's in there; it is government-related and new project-related in the main. There is always some risk of timing slippage in these arenas. But we do expect to win our fair share of this. Again, we like where we sit today. Can't control the timing. But bear in mind that these are large orders that we have called out to go above and beyond the core flow orders in the business. We do expect to monetize a decent chunk of this.

I think the other maybe a couple of things is, one, it's been a fairly consistent number. This quarter, we gave a number versus a range just because we felt like that was more appropriate. Two, I made this comment a quarter ago; things have moved in and out. New things have come in, other things have moved out. I think that's actually encouraging, not discouraging. I also would tell you, we like what we're seeing in '26 on some of these larger projects. We haven't decided if we're going to quantify kind of what those numbers look like. But I would say the '26 pipeline on larger deals continues to build. And every week and every month, there are new opportunities being added. Again, timing continues to be a little bit the wildcard. But we feel good about it.

Got it. If I could just sneak in one more for you, Brian. Just the margins on Nuclear & Safety and specifically the project cost increase in France; I understand the FX transactional piece of the issue. What I'm trying to understand is whether there is a lingering margin issue or cost issue associated with that project that maybe hampers margins through the rest of the year? I’m just trying to understand the implications of it.

No. The challenge with accounting for large projects is that if you're well into a project and additional costs arise, you must account for a large portion of those costs in one quarter. This can appear unusual in the financials as adjustments are made. We have more concern about project margins. However, this project is expected to meet the margin rates we anticipated at the beginning, although there have been fluctuations over the past five years of execution. We are very proud of our team in France, as we've seen significant growth in that business over the last two years. We are confident in their efforts and are optimistic about the operational and commercial developments happening in Europe, more so than in other regions, in some cases. We believe we are making great operational progress, and we anticipate this will be reflected in future numbers. I want to emphasize that we remain committed to our 30% target by 2028.

Next question, Andy Kaplowitz with Citigroup.

Tom or Brian, maybe I'll try Joe's question in a slightly different way. If we're sitting here at the end of the year, would you be quite disappointed if your backlog or at least your commercial nuclear backlog isn't higher than it is today?

Yes, we would be disappointed if our commercial nuclear backlog isn't higher than it is today. Given what we're seeing, that would indeed be a surprise to all of us.

Easy enough. And then, Tom, maybe just SMR orders; obviously, there's still kind of small numbers, but there's obviously been a ton of noise around SMR lately, as you pointed out. So does SMR orders become a more meaningful part of your order ramp up even over the next 6 to 12 months? I mean we all kind of thought it was next decade, but it does seem like there's some real activity here over the next few years. So does it become meaningful faster now, at least in the order profile?

Andy, we remain cautious about this situation. It's clear that the industry will experience some level of consolidation, and we won’t have as many viable SMR players a decade from now. Currently, as we navigate through the introduction of first-of-a-kind reactors, we are witnessing the formation of strategic alliances. We are focused on ensuring that we secure a significant position among the leading players in this field. The pace of developments has been quicker than I anticipated a year ago, and we appreciate the engagement we have with these companies. However, we will continue to exercise caution. We need to observe how the first-of-a-kind reactors perform and recognize that true growth will stem from the wider adoption and expansion of these initial designs. So, while we are pleased with the acceleration we see, I won’t predict a dramatic increase beyond our current situation.

That's helpful, Tom. And then maybe given concern about hospital reimbursement, you mentioned DOGE; it's obviously not surprising that you're seeing some modest impact on Mirion, but maybe you could talk about the resiliency of your medical and labs businesses moving forward that you won't see incremental sort of negative revisions to your growth forecast? I mean is this kind of you adjust and then you move forward in Medical overall still, call it, a mid-single-digit plus business?

Yes. This is an area where I think we've highlighted over the last 3 quarters that we're watching this. Clearly, there is a lot of battlefield haze right now within the medical community overall just given the uncertainty around budgetary dynamics. DOGE was a part of that. Certainly, in the recent tax bill, the cutbacks to Medicaid are a part of that overall. We have been pushing the team very hard for the better part of the last year to give us the best possible insights in and around this market and really to be looking around corners for signs of what you articulated. What we're seeing so far is that our markets have held up pretty well, in part because radiation therapy, in general, tends to have a higher proportion of reimbursement dollars coming from Medicare versus Medicaid and from private insurance overall. Secondly, given the imperative to improve efficiency within radiation therapy clinics, that plays well with our solution set. Our product offerings are all about efficiency and accuracy, and help drive greater patient throughput in these facilities. The central part of that is our SunCHECK software platform, which at its heart is a workflow platform that drives great efficiency in that environment. On top of that, it's all of our hardware applications that in a very efficient fashion across different RT platforms, not just Varian, but Elekta and others, helping support that kind of efficiency. So to be clear, we continue to be very watchful around this market and the dynamics. We are pushing the team hard to give us any early signs that there may be a change or erosion in the rate of growth. I would tell you that today, we have not seen that as of yet.

Next question comes from Yuan Zhi with B. Riley Securities.

Can you help us understand the current supply and demand dynamic with your Nuclear Medicine customers? Are they sensitive to pricing due to the current funding status? Or is the demand growing much faster than the supply right now?

Yes, Yuan. There are two main components of our Nuclear Medicine business. The first is our core hardware offerings, particularly dose-calibration instruments. Additionally, we offer clinical instruments, transport equipment, compounding equipment, and syringe shields. However, dose-calibration instruments are the key product. The second major component is our ec2 software platform, which connects drug makers, isotope producers, CDMOs, radiopharmacies, and clinics. We are pleased with our positioning given the overall growth rates and demand we are experiencing. The margins for this business continue to improve due to both our pricing power and the increasing proportion of software sales. The fundamentals are aligning with our expectations, and the theranostic movement is very active. If the current trends persist, we believe they will enhance our margins and support our long-term growth outlook.

Got it. It's also great to see the strong SMR backlog growth in 2025. Sorry, I have to ask Andy's question in a slightly different way. If we exclude SMR in the order books in both 2Q 2024 and 2Q 2025, what is the growth from the conventional nuclear power in the order book?

I need to check if I have the data available, Yuan. Looking at it from a year-to-date perspective, we still have positive order growth in the Nuclear Power segment. However, it's important to be cautious when analyzing the numbers due to the variability in some orders, which is why I hesitate to provide a specific figure. This could change if we secure a large order in the third or fourth quarter. Overall, we remain optimistic about the order dynamics, even excluding the larger SMR order from the base. Most importantly, our revenue numbers are in double digits, despite very little SMR revenue reflected in the profit and loss statement currently. That is, in my view, the most encouraging aspect.

Next question, Rob Mason with Baird.

Tom, I wanted to go back to your conversation around the installed base in Nuclear Power, where you talked about the larger buckets of opportunities. But you mentioned life extensions, perhaps the largest opportunity for Mirion. Is there a sort of more quantitative way that we can think about that? You've been helpful in the past talking about content per reactor on new builds; maybe on a per megawatt basis. I'm sure there's much more variability around life extensions. But is there a metric that we can think about to properly size what that opportunity could be?

Rob, we haven't provided specific metrics because factors like the type of reactor can greatly affect them. For instance, whether it's a pressurized water reactor, a boiling water reactor, or a heavy-water reactor introduces variability. Additionally, the size of the fleet plays a role. For example, comparing a major operator like Constellation, the largest nuclear power plant operator in the U.S., to others that run just one plant shows how management styles can differ. What I can emphasize is that during a life extension event, there's often a significant increase in modernization capital expenditure related to both instrumentation and software. Certain products, such as radiation monitoring systems, usually have a replacement cycle of around 20 years, subject to various factors. Typically, when an operator decides to extend the life of a power plant, they also determine that it's time to upgrade their essential RMS systems. However, since this varies widely, I'm reluctant to provide specific guidance on numbers you could incorporate into your model.

Sure. Well, maybe this is somewhat related. During the quarter, you did announce the partnership with Westinghouse around some of your instrumentation in particular. My sense was historically that fleet had not had as high a representation there. So am I right in thinking about this as more around potential share gain on top of replacement activity for you within that fleet? Is there any way to put some broader numbers around what that opportunity could be?

Yes, that's 100% accurate that this is an opportunity to essentially upgrade the fleet that Westinghouse covers with a digital neutron flux measurement system. These instruments, just for the uninitiated, are essentially measuring a variety of parameters inside the reactor core and immediately outside of the reactor core, the most important of which is neutron flux, which is the volume of neutrons that pass through a defined volume in a given time. It's essential to understand those dynamics because that provides insights about the operating quality and safety of the combustion inside that reactor overall. Our digital solution is unique. Westinghouse obviously sees it as a great opportunity in their broader service and maintenance business to utilize this as a core offering in upgrading reactors overall. We see a sizable opportunity to retrofit the installed base within the U.S. and more broadly not just through the Westinghouse deal to leverage this technology on a global basis overall. So in our view, this is an opportunity for share pickup, not merely replacing our legacy products with something newer and better.

Very good. Maybe just last question. Brian, talking about the margin expansion, I guess, in Medical, you mentioned procurement as one of the contributors. That was obviously something that was part of the algorithm you unveiled at the Investor Day around 2030 margins. But could you just update us more broadly where you are in that effort relative to the target that you issued at that time? How should we think about just phasing in of that procurement?

I mentioned to Joe that we remain fully committed to achieving our 30% EBITDA margin target. This year, our guidance indicates an expectation of over 100 basis points of margin expansion. This means we need to see improvement moving forward, which is our main focus. Even though we did not foresee an acquisition like Certrec at the time, it will assist us on this journey, as they have better EBITDA margins than we do as a company. We're confident in our approach, and our idea generation along with our tactical pipeline remains strong. We are pleased with our procurement efforts. Internally, we have announced some variabilization in both our software and IT labor through a partnership with Cognizant, a major player in this space. We are very excited about this, as we believe it will provide significant value, particularly on the cost and speed to market for new software products. We are optimistic; one notable trend in the medical sector this quarter has been the operating leverage. Experiencing high single-digit and even double-digit growth quarters showcases how the P&L structure benefits us, especially in that area. In the second quarter, we observed 200 basis points of margin expansion across all our medical businesses. We are eager about our direction and maintain strong conviction regarding our targets.

Yes, Rob, just to tag on to Brian's comments, too. Historically, we've been very clear that the pathway to 30-point margins is the combination of operating leverage, which is the biggest single lever and that's carried us historically. It's price, it's procurement. It is continued footprint rationalization. With clear focus on digital, we expect that we're going to continue to mix up overall from a margin standpoint. There's something new emerging here that I think is worth touching on, and that's AI. In this recent announcement where I've stepped away from running the medical group, Brian has picked that up. A major factor behind that is that I'm dedicating a substantial proportion of my cycles toward AI. We see two enormous opportunity sets in that regard. One is internal, where part of it is the future of work. I know today, 1/3 or more of my job can be done better with AI and independent autonomous agents than I can do it personally. I know that to be true for just about every non-shop floor position within our business. We know that AI represents not in the future, but today, an opportunity for us to substantially improve our efficiency and net output capabilities from a human capital standpoint. There are more and more near-term opportunities to harness AI for supply chain management, for conversion activities, think of it in terms of master production scheduling for distribution capabilities, and product design capabilities, etc. We're windowing our hierarchy priorities to make sure we get after this aggressively. The second bigger bucket is customer-facing stuff, where clearly, we see enormous opportunities to improve the utility we bring to our customers through AI solutions. We're taking this very seriously and devoting substantial resources to it. At the end of the day, when you come back to the margin equation is an additive factor to everything we've talked about historically.

I would like to turn the floor over to Tom Logan for closing remarks.

Well, folks, thanks again for your time and attention today. Again, we're happy about the quarter. We feel that, again, we continue to improve our financial metrics and our operating metrics. We continue to be very bullish about the order pipeline and expect to continue to extend the dynamics there in terms of what we bring down over the course of the year. We continue to enjoy the tailwinds that we see. There continues to be some noise in the market in and around tariffs, global geopolitics, reimbursement dynamics, etc. But our view continues to be that the tailwinds beat the headwinds here. We like where we sit and feel good about how the year is unfolding. So again, we appreciate your time and attention today, and we look forward to speaking with you again next quarter.

This concludes today's teleconference. You may disconnect your lines at this time, and thank you for your participation.