Mirion Technologies, Inc. Q1 FY2026 Earnings Call

Greetings, and welcome to the Mirion Technologies, Inc. First Quarter 2026 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, as a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Eric Linn, Treasurer and Head of Investor Relations. Thank you. You may begin.

Thank you, Maria. Good morning, and welcome to Mirion Technologies, Inc.'s first quarter 2026 earnings conference call. Joining me this morning are Mirion Technologies, Inc.'s Founder, Chairman and CEO, Tom Logan, and Mirion Technologies, Inc.'s CFO and Medical Group President, Brian Schopfer. Before we begin today's prepared remarks, allow me to remind you that comments made through this call will include forward-looking statements, and actual results may differ materially from those projected in the forward-looking statements. The factors that could cause actual results to differ are disclosed in our Annual Reports on Form 10-Ks, Quarterly Reports on Form 10-Q, and in Mirion Technologies, Inc.'s other SEC filings under the caption Risk Factors. Quarterly references within today's discussion are related to the first quarter ended 03/31/2026, 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. 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 mirion.com. With that, let me now turn the call over to Tom, who will begin on panel three.

Eric, thank you very much, and thanks to each of you for joining our first quarter earnings call. We are off to a strong start in 2026 with significant first quarter order generation. Orders are a bellwether for our business, and they increased 19% in the first quarter to $241 million excluding M&A-related growth. If we include M&A growth from Paragon and CertRec, orders increased 42% to $288 million. Order volume was notably diverse. Both segments saw meaningful growth, including our RTQA medical business, which faced headwinds in 2025. This is translating into noticeable expansion. Backlog now totals $1.1 billion, up 19% excluding M&A, or 38% including M&A. Our nuclear power end market within the Nuclear and Safety segment continues to lead the way. Nuclear power orders and revenue growth were derived primarily from existing reactors running today and small modular reactors, or SMRs. Paragon orders added another $43 million in the quarter. We continue to be impressed by the value created by the Paragon team. Given the nature of their solution set, they are truly the tip of the spear when it comes to momentum from the nuclear power installed base. The existing nuclear fleet is approaching middle age and reinvestment is critical to maintain and increase capacity through power upgrades. We will spend time this morning detailing progress on our large opportunity order pipeline, but let me tease the discussion by noting we secured $50 million of these large opportunity orders in Q1. Moreover, we won an additional $35 million in SMR-related orders in April. The rest of the pipeline remains intact and we continue to have high conviction on our right to win. The accelerating nuclear power demand we see is reflective of increasing market tailwinds. The momentum continues to compound and recent geopolitical events reinforce the need for onshore secure baseload energy. A decade ago, operators were focused on accelerated plant shutdowns with extreme capital rationing impacting OpEx and CapEx budgets. Today, they are focused on 100-year operating cycles as well as plant modernization, both of which profoundly impact capital spending plans. We see this most immediately in Paragon and CertRec, with a substantial follow-on opportunity for Mirion Technologies, Inc. instrumentation and controls, and digitally enabled radiation protection solutions. Note that this dynamic is robust and not contingent upon future assumptions about AI-driven demand growth. The limiting factor on AI growth is available compute which, in turn, is most profoundly constrained by energy availability. Further, note that greater than 80% of our nuclear power revenue accrues from the installed base. New nuclear projects represent upside with strong optionality tied to both SMR and utility-scale development plans. Panel four quantifies the impact of just a few recent notable nuclear power headlines, which reinforce the surging global demand for nuclear power. First, in the U.S., the Department of Energy's Uprise Initiative aims to boost existing nuclear power capacity by 2.5 gigawatts by 2027 and 5 gigawatts by 2029. Power demand is so strained that the DOE and utilities are rapidly accelerating capital deployment to deliver more nuclear output at existing plants. This is part of the administration's broader push to expand U.S. nuclear energy capacity from around 100 gigawatts today to 400 gigawatts by 2050. Additionally, the energy shock driven by recent geopolitical uncertainty has highlighted the risk of reliance on imported fossil fuels in many regions. This is sharpening the focus on energy security, onshoring, and decarbonization. Nuclear power is increasingly viewed as a core solution across all three priorities, especially with countries whose energy needs are becoming strained by a changing world order. In aggregate, these two headlines alone will add an estimated 8 to 15 gigawatts of nuclear power generation. Of this added amount, approximately 3 to 5 gigawatts are incremental to the U.S. market, underscoring the importance of our U.S.-based Paragon and CertRec acquisitions. It is also worth noting that U.S. utilities have committed $1.4 trillion in planned capital expenditures through 2030, a 21% increase from projections made just one year ago. Companies like Duke Energy are projecting over $100 billion in their planned five-year capital spend. NextEra is not far behind at approximately $94 billion. Each of these is an existing year-end customer. Panel five details Paragon's integration progress and first quarter financial contributions. Both the Paragon and CertRec acquisitions are positioning Mirion Technologies, Inc. to address the U.S. market at exactly the right moment. We made these acquisitions before the full scope of the existing fleet capital cycle was broadly visible to the market. The commercial synergy opportunities are coming into focus as utilities and the federal government are injecting capital into the operating fleet. As a reminder, we have content in every single reactor within North America and approximately 98% of the global operating fleet. The synergy opportunities are significant. For example, Paragon's products and engineering capabilities will allow Mirion Technologies, Inc. to expand our scope to better compete for power uprate and digital modernization projects. CertRec's regulatory and workforce software is a compelling solution for today's labor-constrained environment. This addition gives Mirion Technologies, Inc. a software and services revenue layer that compounds within our hardware footprint at every plant. These combined offerings mean Mirion Technologies, Inc. can now offer customers more integrated solutions that span laboratory instruments, safety and security systems, qualified equipment, radiation protection, and regulatory and workforce software. No competitor in the U.S. nuclear market has that breadth. These acquisitions will deliver revenue synergies, customer access synergies, and platform synergies at exactly the moment the market is asking for all three. We are already seeing this materializing in Paragon's financial performance. Paragon's first quarter revenue grew 45%, reflecting a broad-based increase in demand. This accelerating revenue is improving their operating leverage and helping to expand margin. We spoke with you last quarter about the planned cadence of integration efforts. We are pleased to report that we have identified additional synergy opportunities. Legacy teams are collaborating closely, and customers are eager to realize the benefits of a combined Mirion Technologies, Inc., Paragon, and CertRec entity. We are prioritizing the customer experience with joint customer engagements across strategic accounts. These collaborations are already resulting in incremental order wins. For example, we were able to utilize Paragon's existing relationships with key strategic customers to secure a significant order for legacy Mirion Technologies, Inc. products. This is an early example of what will become normal operating procedure for our combined companies. All of these data points are resulting in tangible benefits for Mirion Technologies, Inc., and this is most evident in our backlog illustrated on panel six. Back-to-back strong Q4 and Q1 orders are creating a step change in our backlog. After two years of nominal backlog growth, the nuclear dynamic we have been discussing is translating into tangible opportunities for our company. We have consistently reminded investors that it can take several quarters or years for orders to convert into revenue. But clearly the backlog is meaningfully expanding, which is the precursor to accelerated revenue growth ahead. Before I turn it over to Brian, panel seven summarizes progress continuing across the Medical segment. Our RTQA end market, which accounts for a significant portion of the segment's revenue, enjoyed promising activity. Recall, in 2025, we experienced several headwinds, both domestically and abroad. Encouragingly, we are beginning to see strengthening hardware activity while software activity continues to be a bright spot. In the U.S., we booked a sizable radiation-tolerant camera order tied to the Varian partnership. This is an important relationship with the leading OEM in the industry. We look forward to supporting this relationship and other key accounts with the kind of new product innovation that helped to secure this important order. In nuclear medicine, we remain on track for double-digit organic revenue growth in 2026. This will be our second consecutive year of double-digit organic nuclear medicine growth. Our market-leading position with key hardware offerings like dose calibrators and thyroid uptake systems makes us a critical supplier to the growing radiopharma ecosystem. In addition, we are broadening our international reach to capture infrastructure growth abroad. We believe our EC2 software platform will create growing opportunities across the radiopharmaceutical landscape from drug discovery through clinical administration. This opportunity will grow meaningfully as more targeted radiopharmaceuticals advance to the market. Lastly, dosimetry services remain a compelling business. This end market is a reliable franchise growing at GDP-plus through the cycle. Meanwhile, it consistently provides strong margins and remains an attractive recurring revenue platform. Our broader push from analog to digital offerings will continue, creating additional margin upside over time. As a side note, we are proud of the fact that the crew on the recent Artemis lunar mission wore a customized version of our digital dosimeters to monitor their radiation safety. More significantly, our digital dosimetry offerings caught the attention of numerous key nuclear power accounts, creating cross-sell opportunities to expand beyond a historically medically oriented business. I will turn it over now to Brian to walk through the financials.

Brian?

Thank you, Tom, and good morning to each of you on the call. I will continue the prepared remarks on slide eight outlining our financial performance. First quarter total revenue was $258 million, an increase of 28% versus last year's first quarter. Organic revenue growth was 3%, in line with our expectations and aligned with what we communicated in February. First quarter adjusted EBITDA was $54 million, or 16% better than last year. As foreshadowed back in February, margins contracted in the quarter, reflecting margin-dilutive M&A, one-timers in Q1 of the prior year, and a mix shift in the legacy Nuclear and Safety segment, mainly related to our sensing business. We utilized approximately $16 million of our $100 million share repurchase program in the first quarter to buy back approximately 700 thousand shares. This is consistent with last year's first quarter to offset the dilutive impact from our annual stock-based compensation program. We generated $11 million of adjusted free cash flow in the quarter. Q1 is historically our lightest cash flow generation quarter. Cash generation around our project business can be lumpy, and that is what we saw in Q1 with less project inflows than a year ago. In the quarters going forward, we have line of sight to a much more robust cash generation profile and better working capital dynamics. Lastly, as Tom outlined, orders in the first quarter were strong, with growth coming from both segments. Slide nine has the details. Order performance was the highlight of the quarter. Absent any M&A-related order growth, core orders grew nearly 20%, reflecting growth in both segments. Total orders, including a $47 million contribution from Paragon and CertRec, grew 42% in the quarter to $288 million. In Nuclear and Safety, orders grew across all three end markets: nuclear power, labs and research, and defense diversified. In nuclear power, growth primarily reflects two sizable installed base orders within the U.S. operating fleet, and a large SMR order. Within Paragon, we booked an incremental large order within the U.S. installed base. The approximately $35 million SMR-related order we were awarded in April will show up in the Q2 orders number. Labs and research orders grew primarily out of Europe despite comping against a $5 million DOE order from last year. One thing I would point out at Paragon is we saw strong DOE-related order activity in the quarter. Our DOE pipeline across the company is very strong. Lastly, defense and diversified orders grew in the quarter thanks to a radioactive waste handling order, which was part of our large opportunity pipeline. In the Medical segment, order growth primarily reflects the radiation-hardened cameras order within the RTQA end market. That gives us good backlog in that new product for the next three years. Slide 10 provides the latest update to our large opportunity pipeline. Two of the five large opportunity orders are Paragon-related. In the first quarter, we won the first part of an SMR order, part of a radioactive waste handling order in our defense and diversified end market, a Paragon large battery qualification order within the installed base, and a large medical order for radiation-hardened cameras from our RTQA business. Interestingly and importantly, both the RTQA and battery orders were not in our pipeline at year end, which tells you how dynamic the environment continues to be. Separately, in April, we were awarded the first part of another large Paragon SMR order. The rest of the pipeline remains active and continues to represent a significant opportunity for the company, including the remaining components of the three partial orders I mentioned. Before I dig into the quarter's financial results, let me spend a moment detailing the nuclear power end market on slide 11. Nuclear power orders, excluding M&A, grew 15% in the first quarter, including the large partial SMR order. SMR orders continue to impress. We booked approximately $15 million of orders in the quarter, followed by the $35 million large opportunity we were awarded in April. Momentum continues within this segment of nuclear power. Let us get into the quarterly financials beginning on slide 12. Consolidated first quarter revenue grew 27.5% to $258 million. Approximately 21 of the 27.5 percentage points of growth were attributed to acquisitions, primarily Paragon. Organic revenue growth of 3% was in line with expectations. Recall, on our February earnings call, we noted that we expected organic revenue growth to be in the low single digits for the first quarter. First quarter adjusted EBITDA was $54 million, or 16% better than last year's first quarter. Also, as foreshadowed on our February earnings call, adjusted EBITDA margins contracted. This was primarily due to the margin-dilutive impact from M&A as well as some mix impacts, coupled with one-timers in the legacy business. We expect to see margin expansion in the next three quarters within the legacy business, offset by Paragon. Adjusted EPS totaled $0.10 per share in the quarter. In 2026, we are now including stock-based comp in our adjusted EPS calculation. Last year's adjusted EPS would have been $0.08 per share using a similar methodology to the one put in place for 2026. We have an adjusted EPS reconciliation slide in the appendix that has the details for your model. Turning to the Nuclear and Safety segment on slide 13. First quarter revenue was $186 million, up 39%. Organic revenue was 2.6%, better than our expectations of flat year-over-year noted in February. A few things of particular interest in the first quarter. First, nuclear power-related revenue, excluding M&A, increased 4% versus last year. I would note that for the first quarter, we were comping 18%. We saw growth in both our installed base markets of North America and Europe, while this was offset by less new build revenue in Asia, mainly China and Korea. We still expect to see double-digit revenue growth in the nuclear power end market for the full year. Second, we are seeing SMR-related revenue accelerate. This accounts for 2% of total Mirion Technologies, Inc. revenue and is expected to increase to greater than 3% of total Mirion Technologies, Inc. revenue by year end. Third, we saw better-than-expected labs and research end organic revenue growth, thanks to strong performance out in North America. Fourth, in our defense end market, we saw higher NATO and U.S. military and civil defense revenue. As a reminder, the defense end market can be lumpy, but activity has certainly picked up. Adjusted EBITDA grew nearly $8 million, or 19%, to $47 million. As we have already discussed, Nuclear and Safety adjusted EBITDA margins contracted. Half of the contraction was M&A-related. The other half was mostly due to mix shifts inclusive of the sensing business, a number of one-timers in the prior year, and some mix more broadly within our North America business. Lastly, it is worth noting that we were comping over 300 basis points of margin expansion in Q1 2025, the largest of any quarter in 2025 for this segment. Now let us move to the Medical segment on slide 14. First quarter revenue was $72 million, up 5%. Organic revenue growth was approximately 4%, in line with the expected mid-single-digit organic revenue growth noted on the February earnings call. Our RTQA end market posted double-digit organic revenue growth driven by an easier comp lapping last year's ERP implementation headwinds, favorable software performance, and a month's worth of production from the large camera order we received. In nuclear medicine, we expect much of the organic revenue growth to occur in the back half of the year. Meanwhile, our dosimetry services end market posted a slight reduction in organic growth. This business had a difficult comp due to a large hardware order last year, which we have discussed before. Excluding this, our core dosimetry services organic revenue would have grown low single digits in Q1. Medical segment Q1 adjusted EBITDA was $25 million, or 6% better than last year. As expected, margins expanded in the quarter, reflecting operating leverage and pricing tailwinds. Turning to adjusted free cash flow on slide 15. We generated $11 million of adjusted free cash flow in the first quarter. The difference versus last year is primarily due to timing affecting net working capital. While net working capital was the largest use of cash in the quarter, we saw the structural enhancements we made to our balance sheet bear fruit in the quarter via the interest expense line. We remain on track for our full-year adjusted free cash flow guidance and believe Q1 marks a trough. We continue to see large opportunities for improvement in AR, inventory, and our project cash flows. More broadly, on 2026 guidance on slide 16, everything remains unchanged from our February earnings call disclosures, with the exception of a small adjustment to adjusted EPS to account for the one-time CEO retention grant of performance-vesting stock options disclosed earlier this month. Before we open the call to your questions, I will provide some details about second quarter expectations. First, on orders. Second quarter orders will be higher compared to the first quarter. We expect another quarter of strong order growth, where sequentially from Q1 to Q2, we expect to see 15% to 20% order growth. Consolidated second quarter organic revenue growth is expected to be in the low single digits. This is also the case in each operating segment. As a reminder, on the top and bottom line, we shipped quite a bit of product in 2025 into China before the tariffs went into effect, so this quarter has that as a headwind. Consolidated adjusted EBITDA margins should be relatively flat versus Q2 2025. Nuclear and Safety segment adjusted EBITDA margins should also be relatively flat despite the margin-dilutive impacts from the Paragon acquisition. Excluding Paragon's margin-dilutive impact, the Nuclear and Safety segment adjusted EBITDA margins are expected to expand. Regarding Paragon, we expect second quarter revenue to be slightly lower than the first quarter, but still posting double-digit revenue growth versus last year. We maintain our prior expectations of approximately 25% full-year revenue growth for Paragon, and we continue to expect low twenties EBITDA margins. Lastly, Medical segment margin should expand slightly. Recall, Medical segment margins in last year's second quarter expanded almost 300 basis points, so we are lapping another tough comp in that segment. With that, let us open the call to your questions. Operator?

We will now open the call for questions. Thank you. We will now be conducting a question-and-answer session. A confirmation tone will indicate that your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset. We ask that analysts limit themselves to one question and a follow-up so that others have the opportunity to do so as well. One moment, please, while we poll for questions. Our first question comes from James West with Melius Research. Please proceed with your question.

Thanks. Good morning, guys. Morning, James.

Tom, you gave some macro comments in your prepared remarks, but I would love to hear a little bit of expansion there given I saw you in February, you were already pretty bullish, then, of course, we had the Middle East conflict, and the DOE has been very active, as you are well aware, in shepherding nuclear. I would love to hear if there has been, and I am sure there has been, what you are seeing in terms of acceleration of the nuclear buildout in the United States and also the nuclear renaissance that we are seeing more globally.

So I think there are three important dimensions to it overall. Far and away, the single most important is the dynamic being experienced right now by the installed base, recognizing that today if you look at the American nuclear fleet, they are running at very high capacity factors, typically in the low 90% range overall. Globally, we just had recent statistics updated that last year, the global fleet ran at about an 82% capacity factor. And the bottom line is that a few important things have profoundly changed psychology for the owners of those assets overall. Firstly, as I noted in my commentary, only a few years ago, the posture was very defensive. Many nuclear power plants were operating at very thin margins or even negative margins, and there was a general orientation toward premature decommissioning of nuclear power plants, with an incredibly defensive CapEx and OpEx posture overall to minimize the attendant expense. What we are seeing now is the exact opposite. Given the fact that even with AI demand as it is today, the world simply does not have enough electrical generating capacity, and that will always be the constraining factor in any reasonable scenario overall. It has created a very compelling economic incentive for operators to fundamentally change the way they manage these assets. The biggest single impact is that even though we are seeing life extensions in the American market from 60 years of permitted operating life to 80 years, the majority of operators are really thinking 100. And so if you imagine the psychology shift going from a shutdown posture to one where I want to operate these assets for another 40 years, that profoundly impacts the solutions that they need to shore up these power plants. Most immediately, we see that in CertRec and Paragon through their various activities, which are essential for the daily operation of the power plant. But what we are seeing just beyond that is that there is a compelling need and a compelling opportunity to broadly upgrade instrumentation and control systems, which include in-core detection, neutron flux measurement, radiation monitoring systems, and reactor protection systems. And beyond that, there is a need to upgrade and consolidate and digitally enable radiation protection systems. And so we are beginning to see the leading edge of that demand right now not only in the American market, but broadly on a global basis. And this is just a—I cannot overstate how profoundly this impacts the overall opportunity set as it relates to the global operating fleet. But beyond that, clearly we are seeing a lot more action in advanced reactors, the so-called small modular reactors. We obviously see that in our order book, but more broadly, if you look at the leading players here, if we were to take the top 20 best-capitalized SMR plays with the highest level of technological readiness, we almost run the tables with that group in terms of our position of prominence, orders booked, and the level of engagement. So we are very bullish on that sector. It continues to move to the left, and most recently undergirded by the IPO of X-energy, which has traded very, very well over the last week. And then beyond that, you have the utility scale. The activity that we have cited previously with Westinghouse, having plans to build 14 AP1000s internationally—nine in Ukraine, three in Poland, two in Bulgaria—an early commit by the Indians to build another six, potentially 10 additional AP1000s in the American market. Obviously, we will plan all of that. And then beyond that, you have EDF/Framatome, which has immediate plans in the near term to initiate three projects in France at Penly, at Bugey, and Gravelines. And again, given the strategic alliance we have with EDF/Framatome, we expect to play there. And then beyond that, it is Rosatom, it is KHNP/KEPCO, the Koreans, continued activity in China. So what we are seeing overall is also an acceleration in new build commits, and obviously, that bolsters the whole nuclear thesis for us.

That is very helpful, Tom. Thanks for that. And maybe for Brian, the medical business came in pretty strong this quarter. I know 2025 was a more difficult year with a lot of headwinds. Is this a one-off, or are the headwinds now behind us and we should expect this kind of performance from Medical going forward?

We are to our guidance on the Medical side for the year. From the beginning of the year to where we are today, I would say we have not changed any of the numbers, but I think we continue to be more optimistic in our viewpoints that this business has green shoots sprouting. We are still watching the Asian markets, which is where we have had many of our challenges, and the U.S. market. But our software business continues to perform well. Our services business continues to perform well. The order we got with Varian really kind of bolsters some backlog for this year and the next couple of years, and it is good business for us. So I would say we have not changed our guidance range, but I would say our confidence level is better than it was even three months ago.

Our next question comes from Joseph Alfred Ritchie with Goldman Sachs. Please proceed with your question.

Hey, good morning. So the order/backlog commentary was really good, not just this quarter, but just the start to the second quarter. I was wondering if you can maybe just give a little bit more details. The $35 million SMR order is in there for Q2, but maybe some more details around that 15% to 20% sequential move that you expect in orders in the second quarter would be helpful. Thank you.

I think it is indicative of everything Tom actually just talked about, which is the nuclear market continues to be good for us. We are clearly expecting another order or few on the SMR side. Right now, the timing of those is always a little bit hard to predict. But that has to be in there for us to hit those numbers. But again, the order dynamics continue to play to our favor. I do not want to get into anything project-specific because these things move a bit. But I do think it is very constructive that the teams believe that we will see sequential order growth year over year. If you looked at last year, we were a little bit flat orders Q1 to Q2 as well. So this is obviously a step change there. Paragon extends to that as well. So I think the flywheel is beginning to spin. I think we are still early innings. Maybe one other comment, Joe. The other positive is last year, we saw the large orders all end in Q4. I think what people should focus on is we are seeing that much earlier in the year. One, that gives us revenue opportunity this year for sure, but much of these larger orders probably end up more in 2027 than 2026, candidly, from a materiality standpoint. But two, there is not a wait-and-see game on whether this is happening. This is going to happen every quarter. You are going to see some things tick off the box from that pipeline. And I think that is very constructive. I think it is healthy. And I think it does show that the dynamic is positive. And I would just reiterate something I said. Two orders that were above $10 million that we booked in the first quarter we did not have in our pipeline at the end of the year. So I think that is very constructive about what else we are seeing.

The other thing I would tag in on is that Doug VanTassel, the CEO of Paragon, and I have been doing a systematic roadshow with chief nuclear officers spanning the American fleet. The dialogue there is incredible. The integrated Mirion and Paragon sales team is opening the aperture as we think about the opportunity set both in the near term and the long term.

That is super helpful, and obviously Paragon is off to a great start for you guys. I guess maybe just my follow-on question, and it does actually segue well from what you just said earlier, Brian, regarding the backlog conversion. So it is really two questions. If you think about the guidance and how you set up the guidance for 2026, maybe just talk a little bit about the confidence you have in hitting the ramp and EBITDA as the year progresses. And then secondly, the backlog is now step-changing—how much visibility you are now starting to get into 2027 given maybe some of these things are a little bit longer cycle.

If we had a different viewpoint on our EBITDA/revenue guidance, we would have made a change in the quarter. That is what we have always done—as we see it, we call it. So I think we continue to be confident in our guide. I think as you think about 2027, I think 2026 is really a bit back-end loaded. That is clear because you have seen first quarter, I gave you guidance on second quarter. But I also think that plays into how we are starting to see and think about 2027 shaping up. I am not going to guide that now, but I think we are very constructive on what we are seeing beyond 2026. And I think that shows in the backlog. You are going to see—if you just do the math—backlog growth again in the second quarter. I think that sets us up well.

Our next question comes from Andrew Alec Kaplowitz with Citigroup. Please proceed with your question.

Maybe a bit of a follow-up on that. You did not change anything in terms of your line of sight on your expected segment revenue growth for the year. But in Nuclear and Safety, you started out flat as expected in nuclear power. So maybe just talk about the visibility toward getting back to double digits as you said you will. Do you basically have the order coverage given Q1 and your commentary on Q2, or do you still need to see some bigger nuclear power orders to reach that double-digit growth in 2026?

If you look at the order—just even the large order dynamics and what we are seeing—it is definitely nuclear power heavy. So we continue to like double-digit growth in 2026 for nuclear power. And by the way, that is pre-Paragon double-digit growth. When you are talking about Paragon, where a lot of the revenue is nuclear power as well, we commented the DOE stuff—we are starting to see sprouts for sure. They had very good order growth there. We are talking Paragon 25% kind of organic growth for them if we owned them in 2025/2026. So I think we feel good about the dynamics happening within the nuclear power segment across both brands.

Very helpful. And then kind of similar in Medical, you did not change your expectation for RT in 2026, but you did mention green shoots in Q1 and hardware, and obviously the large camera order associated with Varian seems quite interesting. I think you announced a closer relationship with Varian maybe it was a year and a half ago or something like that. So maybe give us more color on whether RTQA now should see more opportunities with Varian and should see accelerating growth from here.

It is the first quarter. I think we want to see how the year continues to progress. But again, that RTQA order was not on our radar six months ago, and so I think that gives us some added visibility. Let us get through the second quarter, which is our toughest comp by far in the RTQA business because of the China shipments, etc. But like I said to an earlier comment, I think we have more conviction around our Medical number today than we did even in February.

Our next question comes from Tomohiko Sano with JPMorgan. Please proceed with your question.

Hi, good morning Tom and Brian. I wanted to ask you about Paragon, which has shown strong contract wins and growth. Can you update us on integration progress, cultural alignment, and specifically any revenue synergies realized so far? And also, does the 30%+ adjusted EBITDA margin target for 2028 remain intact post acquisitions? Any color appreciated. Thank you.

Let me start. On cultural alignment, this was really a critical determinant in our ability to acquire Paragon to begin with because there is such a high degree of compatibility culturally between the two organizations. They are very entrepreneurial, very engaged, very motivated to build a great business. Cultural symbiosis between Paragon and Mirion is extraordinarily high and we are seeing that resonate in the early days of the integration, where the two organizations have come together collaboratively. As we walk together, we are all more excited about the art of the possible here—what we can do together and the goodness of fit overall. In terms of the synergy profile, our playbook is that our first standing rule is the Hippocratic Oath, which is first do no harm. We are careful when we acquire a new asset to learn from one another and identify the opportunity set. Priority number one is infrastructure: connecting the central nervous system of the company, standardizing benefits, HR processes, IT, financial and accounting standards and processes. Immediately following that, the focus is on commercial synergies, recognizing this was the single biggest pillar in our investment thesis here. As we stated, that is paying off faster than we anticipated. We see a significant opportunity to enhance and increase the commercial leverage on both sides of the table, and that is already beginning to spill into backlog. Beyond that, we have cost optimization, and technological leverage as we embed the augmented capabilities of each organization into our R&D pipeline and evolve new product solutions. In the near term, we are not calling out specific cost synergies yet. But our track record is strong. A recent example is the acquisition of Sun Nuclear, which we acquired in 2020—since then we have added about 10 points of margin to that business. Our expectation is that Paragon will become accretive, and our goal is to make that happen quickly. On the 30% EBITDA target by 2028, which we announced at our Investor Day, we continue to stand by it. This year, we have guided 25% to 26% adjusted EBITDA margins and are trying to drive toward the upper end of that range. The remaining roughly four points of margin expansion over the next two years will come primarily from absorption as we drive greater volume against a largely fixed cost structure. The rest will be driven by self-help: improvements in procurement, conversion processes, rationalizing our industrial footprint, and improving pricing. AI is another lever; we are investing heavily in AI now, which in the near term is margin dilutive, but it unlocks longer-term efficiencies and capabilities. Overall, given the enhanced capabilities for cost and efficiency improvements and evolving customer-facing products, we are bullish on reaching the target.

Thank you, Tom. And just one follow-up for your nuclear medicine business. Could you discuss the current sales momentum and outlook as well as the margin profile and the key drivers for both growth and profitability going forward, please?

That is a big follow-up. We thought the organic growth in that business would be a bit more back-end loaded. This is a great margin story. We acquired three businesses and integrated them between 2020 and 2023, including EC2. Even combined, it was a single-digit EBITDA business that today is accretive to Mirion's margin profile. We continue to like our ability to expand margins there over time. New products are in development—more likely a 2027 introduction than 2026. Operationally, we are focused on procurement, continuing to streamline the workforce there, and growing the business is our number one priority. We continue to be confident in our ability to grow that business double digits, though much of the growth is back-end loaded this year.

Our next question comes from Analyst with Baird. Please proceed with your question.

Yes, thank you. I wanted to ask about the green shoots in RTQA commentary. Brian, you started talking about the Asian markets in response to an earlier question. Just how are trends playing out in those markets specifically relative to your expectations? And are you starting to see the benefits of some of the actions you have taken there playing out yet?

I would characterize those as green shoots. We are seeing some positive momentum. I like what Mark and the team have done to set us on the right foot. It will take quarters to see this come to fruition. Those markets do not always move as fast. We are probably a little more optimistic about China. We are still a little hesitant on Japan. The order with Varian gives us some nice underlying stability in RTQA. That product line is new, so it is incremental growth year over year for us. We continue to watch the U.S. market. Software and services led the way, but our hardware business did better than we expected in the first quarter. We are not ready to move the numbers yet; we want to see a bit more production on that business.

Thank you. And then I wonder if you could give us a little more color on the $35 million April SMR order. That seems to be a pretty sizable order for an SMR, and you said there is more still to come. Is that across multiple SMRs or a higher revenue opportunity per megawatt with Paragon? Just any additional context you could share there?

It is with a single leading SMR player and it is supportive of the central nervous system of the power plant—supporting instrumentation and control. It is a nice win. Paragon and Mirion have been working on this for quite a while. When you look at the activity in this market overall, we are seeing the movement to the left of the dynamics, particularly for first-of-a-kind orders. Instrumentation and control generally has intrinsic scale diseconomies, so the revenue opportunity per megawatt of output of an SMR is higher than utility-scale plants. We have cited a loose estimate previously of about 60% higher, and we continue to sustain that point of view.

The 60% estimate was pre-Paragon. We have not done the math or guided specifically to what the Paragon impact is yet, but you can see the scale here.

Our next question comes from Jeffrey Grampp with Northland Capital Markets. Please proceed with your question.

Good morning, guys. To circle back on Paragon here and hoping if you guys can elaborate a bit more on this tip-of-the-spear kind of language you position them as. I am curious, does that positioning give you guys a differentiated view or read into the growth potential underlying nuclear power that perhaps other offerings within legacy Mirion maybe were not available to the company pre-Paragon? Or just any other commentary on what that kind of tip-of-the-spear position facilitates for Mirion more broadly?

If you look at the legacy Paragon business, they have been in the business of keeping power plants operating. They provide critical spare parts which, in many cases, are no longer supplied by the original OEM. That can mean reverse engineering electromechanical components in a power plant. They also take commercially available parts that do not have a nuclear qualification—this could be a backup generator, a chiller, batteries—and put them through a formal commercial grade dedication to make them nuclear-qualified components. Beyond that, they offer a brokerage platform for available spare parts within the industry. Those activities keep the fleet operating and require a very high level of customer intimacy. That greater intimacy and dialogue is the critical catalyst for the greater demand traction we are seeing with Mirion products. Legacy Mirion products include instrumentation and control: in-core and ex-core detectors, neutron flux monitoring systems, radiation monitoring systems, and radiation protection systems and services. When you put these things together, because of the greater intimacy of the Paragon sales team, we are seeing a clearer, higher-resolution demand signal overall from the power plants compared with what we have historically experienced based upon a different sales model at legacy Mirion. That is elevating our bullishness on what is happening in the industry and gives us earlier dialogue about complementary areas of overlap, particularly in instrumentation and control. We are thrilled to bring the two companies together.

Our next question comes from Analyst with Evercore ISI. Please proceed with your question.

Hey. Good morning, guys. Just wanted to circle back on the backlog commentary as well. Obviously, Paragon is a little bit dilutive on the adjusted EBITDA margin this quarter. But just as we think about these new orders rolling in, how can we think about the margin profile within backlog currently? I mean, you kind of spoke to it on the 2028 target. But just want to kind of level set there.

I would characterize the margins in backlog as we would have expected and that they give us the ability to hit the numbers we are talking about. Think about margins in backlog more as contribution margin versus base margin. Some of the project business can be a little lower margin, but the teams have worked to ensure that the incremental margin on those bigger projects benefits Mirion over the long term. We are focused on margins and on cash as these larger projects convert.

We have reached the end of our question and answer session. I would now like to turn the floor back over to Tom Logan for closing comments.

Ladies and gentlemen, we appreciate your time and attention this morning. We appreciate your support. Again, an important quarter for the company. We feel great about the order momentum. We continue to have confidence in our outlook for the year. We continue to have confidence in our drive toward the 30% EBITDA target. As I have noted, we built this company in an environment of very difficult headwinds and always found a way to grow the top line and add value in a way that outpaced the markets and the peer set in general. It is tremendously exciting right now to have not only tailwinds but generational tailwinds supporting the business overall. So we are excited to continue to show what we can do, and we will look forward to speaking to all of you on our Q2 call. Thank you very much.

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