IES (IESC) investor relations material

Business Overview and Financial Performance

• Provides integrated electrical and technology systems for diverse end markets, including data centers, e-commerce, manufacturing, healthcare, education, and residential housing.

• Fiscal 2025 revenue reached $3.4 billion, with operating income of $384 million and adjusted EPS of $13.66; margins have expanded as income outpaces revenue growth.

• Over 11,000 employees and 174 locations nationwide, supporting scale and geographic reach; business mix is shifting from residential to high-growth sectors like data centers.

• Revenue from residential segment declined from over 50% two years ago to under 30% in 2026, driven by housing slowdown and rapid growth in other markets.

• Five-year revenue CAGR of 23% and operating income CAGR of 50%, with operating margins rising from under 4% to over 11%.

Growth Strategy and Capital Allocation

• Growth driven by organic expansion, capital investments, and disciplined acquisitions, including the $650 million DBM Global acquisition expected to close by December 2026.

• Acquisitions are opportunistic, often sourced internally, and funded primarily through operating cash flow; debt is used sparingly and repaid quickly.

• Maintains a disciplined capital allocation strategy, deploying free cash flow into operations, acquisitions, and shareholder returns while preserving a strong balance sheet.

• Strong financial position enables rapid action on attractive opportunities; maintains debt below 1x trailing 12-month EBITDA.

• Cash is prioritized for organic growth, working capital, and CapEx, with additional focus on expanding manufacturing capacity.

Market Trends and Segment Performance

• Data center investments, driven by AI and cloud computing, are the largest growth driver, benefiting communications, infrastructure, and commercial/industrial segments.

• Manufacturing reshoring and e-commerce growth are fueling demand for infrastructure and technology services.

• Residential segment faces near-term headwinds from high interest rates and weak consumer sentiment, but long-term outlook remains positive due to pent-up housing demand.

• Expansion of plumbing and HVAC services helps offset residential market weakness.

• Positioned to benefit from secular trends in technology infrastructure, electrical modernization, and U.S. residential housing.