Earnings call transcript: Mirion Technologies Q2 2025 earnings beat forecasts

Mirion Technologies Inc. reported its Q2 2025 earnings, surpassing analysts’ expectations with an adjusted EPS of $0.11, compared to the forecasted $0.10, marking a 10% surprise. Revenue reached $222.9 million, exceeding the anticipated $217.04 million by 2.7%. According to InvestingPro data, the company’s revenue growth remains solid at 7.25% over the last twelve months. Despite the positive earnings report, Mirion’s stock fell by 14.18% in after-hours trading, closing at $19.18, amidst broader market volatility. Based on InvestingPro’s Fair Value analysis, the stock appears to be trading above its fundamental value.

Key Takeaways

• Mirion Technologies exceeded EPS and revenue forecasts for Q2 2025.
• Despite strong earnings, the stock declined over 14% in after-hours trading.
• The company raised its full-year guidance for revenue, EBITDA, and EPS.
• Strategic initiatives include launching new products and acquiring CertRec.
• The nuclear power market continues to show robust growth potential.

Company Performance

Mirion Technologies demonstrated strong performance in Q2 2025, with a 7.6% year-over-year increase in revenue, reaching $222.9 million. The company’s adjusted EBITDA grew by 4.9% to $51.2 million, showcasing resilience in a competitive market. InvestingPro analysis reveals a healthy liquidity position with a current ratio of 2.23, indicating strong ability to meet short-term obligations. The launch of new products and strategic acquisitions has positioned Mirion well within the nuclear power and medical markets. InvestingPro subscribers can access 8 additional key tips and a comprehensive Pro Research Report covering Mirion’s strategic positioning and growth prospects.

Financial Highlights

• Revenue: $222.9 million, up 7.6% YoY
• Earnings per share: $0.11, up 10% YoY
• Adjusted EBITDA: $51.2 million, up 4.9%

Earnings vs. Forecast

Mirion Technologies reported an EPS of $0.11, surpassing the forecast of $0.10 by 10%. Revenue also exceeded expectations, coming in at $222.9 million compared to the projected $217.04 million, a 2.7% surprise. This marks a consistent trend of outperforming market expectations, further solidifying the company’s financial standing.

Market Reaction

Despite beating earnings forecasts, Mirion’s stock experienced a significant decline of 14.18% in after-hours trading, closing at $19.18. This drop could be attributed to broader market trends or investor concerns about future growth prospects. The stock’s 52-week range highlights volatility, with a high of $22.8 and a low of $9.11. Notable is the stock’s impressive 117% return over the past year, as tracked by InvestingPro. The company maintains a beta of 0.83, suggesting lower volatility compared to the broader market. For detailed valuation metrics and expert analysis, investors can access the complete Pro Research Report, part of InvestingPro’s coverage of over 1,400 US stocks.

Outlook & Guidance

Mirion Technologies has raised its full-year guidance, expecting total revenue growth between 7-9%. The company projects adjusted EBITDA to be in the range of $223-$233 million and adjusted free cash flow between $95-$115 million. The introduction of new technologies and the acquisition of CertRec are expected to drive future growth.

Executive Commentary

CEO Tom Logan expressed optimism about the company’s future, stating, "We continue to be very bullish about the order pipeline." He also highlighted the role of AI in improving efficiency: "AI represents not in the future but today an opportunity to substantially improve our efficiency." CFO Brian Shopper reiterated the company’s financial goals, saying, "We’re still very committed to the 30% EBITDA margin target."

Risks and Challenges

• Market volatility impacting stock performance.
• Potential supply chain disruptions affecting product delivery.
• Regulatory changes in the nuclear power sector.
• Competition from other companies in the nuclear and medical markets.

Q&A

During the earnings call, analysts inquired about the growth potential in the nuclear power market, the strategic rationale behind the CertRec acquisition, and the company’s margin expansion strategies. Executives addressed these queries, emphasizing the resilience of the medical market and the company’s commitment to achieving its financial targets.

Full transcript - Mirion Technologies Inc (MIR) Q2 2025:

Conference Operator: Greetings, and welcome to the Marion Technologies Second Quarter twenty twenty five Earnings Conference Call. At this time, all participants are in a listen only mode. A question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to introduce Eric Lynn, Vice President of Investor Relations.

Please go ahead.

Eric Lynn, Vice President of Investor Relations, Marion Technologies: Thank you, Stacy. Good morning, and welcome to Marion’s second quarter twenty twenty five earnings conference call. Joining me this morning are Marion’s Chairman and CEO, Tom Logan and Marion’s CFO and Medical Group President, Brian Shopper. 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 in the forward looking statements. The factors that could cause actual results to differ are discussed in our annual report on Form 10 ks, quarterly reports on Form 10 Q, and in Myrion’s other SEC filings under the caption Risk Factors.

Quarterly references within today’s discussion are related to the second quarter ended 06/30/2025, 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. 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.merion.com. With that, let me now turn the call over to Tom, who will begin on Slide three.

Tom Logan, Chairman and CEO, Marion Technologies: 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 and A game and optimizing our capital structure. I’d like to thank my many Marion 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 and A, last night we were very pleased to announce the acquisition of Certrek, a leading provider of regulatory compliance solutions to The US nuclear industry and a wider energy power market. We are incredibly excited to welcome the Surtrac team on board and believe that together we can better serve rapidly growing North American energy markets. Let’s turn to panel four to get into the details.

Second quarter revenue totaled $222,900,000 This reflects a 5.4% increase in organic revenue and a 7.6% increase in total revenue versus Q2 twenty twenty four. Higher revenue reflects a $2,000,000 tailwind from our Medical segment due to shipment timing from tariff impacts. And importantly, all six end markets from both segments contributed to the growth. Second quarter adjusted EBITDA was $51,200,000 up 4.9% versus last year’s second quarter. The Medical segment was a positive contributor in the quarter.

Conversely, Nuclear and Safety segment EBITDA was negatively impacted by non recurring items. During the quarter, we made significant improvements to our capital structure. In May, we successfully completed a $400,000,000 convertible note offering. Later in the quarter, we refinanced our term loan B with a smaller $450,000,000 term loan. The improved capital structure gives us the flexibility for further capital deployment and lowers our total cost of capital.

Next, we generated $6,000,000 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 and Safety segment orders were lower in the quarter, which was not particularly surprising given the tough comp from the 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 and Safety segment orders in Q2 twenty twenty five. Despite this, we’re highly encouraged by growing engagement in the nuclear ecosystem. Year to date, we’ve booked approximately $9,000,000 in SMR related orders with five different players. Historically, we’ve disclosed $17,000,000 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 five. As you’ll see later, we’re increasing our 2025 organic growth expectations for the nuclear power sector. We’re 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 with higher margins. The improving fleet opportunity comes principally in three 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 four years, supporting a growing opportunity for Myriad. The average age today of the operating fleet is around 40 years old.

Based on an expected sixty to eighty 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. This slide also highlights additional reinvestment opportunities within the installed base. Decisions to expand nuclear capacity either through power operates or higher capacity factor targets, often require incremental capital investments from customers.

We are seeing our customers invest in next generation N Core and X 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 Myriad. 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 ten to twenty years.

Importantly, when an operator plans on decommissioning a power plant, they typically reduce CapEx dramatically three to five years in advance. Thus, decisions to life extent also reverse this subtle dynamic. In July, Vistra received approval from the NRC to extend operations of its perinuclear plant through 02/1946. 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 six. Earlier this week, I hosted our twentieth annual Marion 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 via the replacement of dated legacy photomultiplier tubes with silicon chips. This advanced technology allows for hyper accurate radiation detection, improved human factors, and greater ruggedization. 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’re also broadening our nuclear power portfolio through M and A. Yesterday we announced the acquisition of CertRec shown on panel seven.

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 US nuclear reactor facility employs at least one CertRX solution. CertRX 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. CertRX solutions help support these objectives by streamlining the regulatory burden.

Solution set is also relevant to the SMR sector. Today, are approximately 127 SMR designs globally, each trying to navigate a complex and burdensome regulatory environment. Certrek’s leading position in this space means they will likely benefit regardless of which SMR technologies ultimately prevail. The other 45% of Certrek’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 Surtrac. In short, this is a fast growing market in which Surtrac 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. Brian?

Brian Shopper, CFO and Medical Group President, Marion Technologies: Thank you, Tom, and good morning, everyone. I’ll pick up on slide eight with details on our second quarter order performance. Orders grew 1.6% in the quarter, driven by our Medical segment. Nuclear and Safety orders were lower year over year due to a tough prior year comp from the Nuclear Power vertical. 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 2024. Slide nine provides an update on the large one time twenty twenty five 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 $350,000,000 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 $222,900,000 up 7.6% versus Q2 twenty twenty four. Organic revenue grew 5.4% over the same time period.

As expected, FX was a positive contributor to revenue growth given the weaker US dollar environment versus the Euro. Within the Nuclear and 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 $51,200,000 While adjusted EBITDA dollars grew, margins contracted slightly due to a couple of nonrecurring items in our Nuclear and Safety segment.

We experienced FX related transactional headwinds in France. In addition, project cost increases for a nuclear project in The UK 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 17,300,000.0 additional shares related to the convertible notes. If you exclude the convertible notes, the warrant redemptions in Q2 twenty twenty four and the founder shares that vested in late twenty twenty four, 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 could 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 and Safety segment revenue grew 5.8% to $141,700,000 Organic revenue grew 2.9% in the quarter.

Year to date, organic revenue grew 5.2% through the first half of the year. Labs and 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. Significantly, more significantly, our nuclear power end market is exhibiting double digit year to date revenue growth.

Adjusted EBITDA declined slightly to $37,900,000 down 2.6 versus the second quarter last year. Adjusted EBITDA margins contracted in the quarter reflecting a few non recurring cost items we already discussed. Moving next to the Medical segment on Slide 12. Segment revenue grew 10.9% to $81,200,000 Organic revenue grew 10.1% in the quarter. Revenue was $2,000,000 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 a lasers business adjustment. If we normalize for these, each medical end market performed well in the quarter. Medical segment adjusted EBITDA was $30,100,000 up nearly 20% versus last year. Adjusted EBITDA margins increased approximately two eighty 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 $6,000,000 to end the 2025 with $35,000,000 of adjusted free cash flow.

Most importantly, we’re improving our conversion as well. Beyond higher earnings, the biggest drivers continue to be networking capital improvements and optimized capital structure and tight controls around CapEx. For instance, our networking 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 twelve 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 in the 2025 and fully reflected in 2026. Lastly, year to date CapEx totaled $17,000,000 approximately $7,000,000 lower than the 2024. We’re on track for 2025 CapEx of $40,000,000 and an 18% reduction versus 2024. Before we open the call to Q and 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 US government budgetary headwinds impacting our labs and research business we already discussed. Recall that this end market within our nuclear and safety segment includes business from the US Department of Energy and universities.

As a result, we lowered labs and 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 twenty twenty five 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 Certrek.

These tailwinds more than offset the slight adjustment to 2025 organic revenue growth. Adjusted EBITDA is now expected to be between $223,000,000 and $233,000,000 up from $215,000,000 to $230,000,000 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 $95,000,000 to $115,000,000 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 four disclosures. For the third quarter, we’re expecting Nuclear and 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.

Conference Operator: Thank you. We will now be conducting a question and answer You may press 2 to remove yourself from the queue. Your first question comes from Chris Moore with CJS Securities. Please go ahead.

Chris Moore, Analyst, CJS Securities: Hey, good morning guys. Thanks for taking

Tom Logan, Chairman and CEO, Marion Technologies: the Hey Chris.

Chris Moore, Analyst, CJS Securities: Good morning. And maybe just start on the new nuke 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 two years ago?

Tom Logan, Chairman and CEO, Marion Technologies: Yeah, mean broadly speaking Chris, what I would tell you is that both the quantum of new projects and the desired timing of those projects continues to accelerate. I think historically we have touted the strategic alliance we forged with EDF in France that could span well over twenty years and cover all of their new EPR reactors, of which many are planned for France, the balance of Europe and other parts of the world. But we’re encouraged of late by what’s happening here in The US. I think if we had been having this conversation certainly two years ago, even a year ago, we still would have been skeptical about the prospects for new utility scale nuclear in The US. But right now it is being openly discussed that Westinghouse, one of the leaders in the global reactor design space, is talking about up to 10 new AP1000 reactors in The US which starts prior to 02/1930.

So this is very encouraging. And again, it’s kind of the tip of the iceberg because you have to go well beyond utility scale, well beyond Westinghouse and EDF and look at the many other players The Russian firm Rosatom, the Korean, certainly the Chinese, all players in that utility scale space. But on top of that, you again have this array of SMR players, the 127 discrete projects that we talked about. And what’s happening today that may be a little bit different is that not only are we seeing an accelerating pathway, again just driven by the extreme urgency caused by this AI catalyzed shortage of electrical power, but also caused by meaningful shifts in policy stance, particularly in The US, is that people are moving faster and more deliberately and with greater confidence. And so as a consequence, right now we are engaged in many strategic discussions that go beyond simply project related or transactionally oriented deals to frame agreements, where all of the major players are looking to consolidate supply chains, link up with strategic partners that can really carry them through the next decade and beyond.

And this is what I’m more excited about than anything in this space. Again, just the magnitude and the intensity activity here is innovating. So, while I’m not gonna give you a specific number, I would tell you that, again, the quantum is growing, timelines are accelerating, and I think the tangibility of what’s there continues to solidify. So, we’re pretty fired up about this.

Chris Moore, Analyst, CJS Securities: That’s really helpful. Maybe just a follow-up. Could you talk a little bit more about the Surtrac acquisition? How it fits in with the core business and synergies and why you’re so excited?

Tom Logan, Chairman and CEO, Marion Technologies: Yes. Surtrac is an unbelievable company. Its founder led, Ted Enos, built the business and has run it throughout its lifetime. It really is a unique asset that today really defines the space that they’re in. We touched on some of the key financial metrics in terms of how it’s performing, 17,000,000 in revenue, very, 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 900,000,000. What’s also very, very interesting about Surtrac 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 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 perhaps the less visible assets with us. 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. And this is obviously core to our strategic focus right now. And we love it because, again, the recurring revenue, SaaS based software, massive, massive, 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, you look at the value proposition that Certrek 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 and insufficient expertise is a real threat on the customer side. The solution that SearchRec offers essentially is the ability for their customers to outsource non core mission critical functions, to decrease the risk of license revocation fines, etcetera, 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 that’s taking place in our various markets.

And finally, working together with the Surtrac 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. And again, recognizing their margin profile, their incredible capabilities as a team, we think this is going to be a great asset for us overall.

Chris Moore, Analyst, CJS Securities: Perfect. I will leave it there. Thanks, guys.

Conference Operator: Next question, Joe Ritchie with Goldman Sachs. Please go ahead.

Brian Shopper, CFO and Medical Group President, Marion Technologies: Good morning, guys. Yeah.

Joe Ritchie, Analyst, Goldman Sachs: Yeah. 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 five, 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, eight 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.

And 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.

Tom Logan, Chairman and CEO, Marion Technologies: Yeah. 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 US but around the world. And market dynamics have adjusted to make nuclear power plants very profitable.

And so fundamentally over what has been about a five year period, we have seen a shift from kind of tepid fundamentals in that market to very, very strong fundamentals. And recognizing that over the last twenty plus years, this has been a tough market. Over much of that time, nuclear power stations were losing money and many were 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. And so the first thing that’s happening is that as we see capital budgets swelling, operators are investing in current infrastructure to modernize it, bring it back up to snuff and then to prepare for the things that we touched on, which is the broader modernization, trying to operate plants at higher capacity factors, contemplating operates and life extensions across the board.

Not only does this reverse that dynamic of extreme capital rationing, But it also over time is shifting their footing toward more growth capital to enable these things. And so those are the fundamentals that are essentially underpinning the overall operating fleet. And at the end of the day, when you look at the broad array of solutions, not just instrumentation, but software and now with the Vital platform, Vital enabled software and services, the fundamentals are like nothing that we have seen literally in a generation. And so from our standpoint as we look at this, while we’re not gonna quantify a specific number in terms of longer term growth rates in the space, Clearly, it is moving up into the right and our expectation is that this is a generational trend that we’re gonna work very, very hard to exploit continuously.

Brian Shopper, CFO and Medical Group President, Marion Technologies: Maybe just one added color without giving you the exact numbers, Joe. One of the things I pointed out in my commentary is we saw, 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 EDFs 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.

Joe Ritchie, Analyst, Goldman Sachs: No, that’s helpful qualitative color guys. I guess shifting to orders and $3.50 pipeline million that you guys have discussed, fully recognized also the second quarter you guys had a tough comp. I guess what I’m what we’re trying to understand is like has the $350,000,000 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 $300,000,000 plus order quarter because of this large opportunity that you have.

So

Tom Logan, Chairman and CEO, Marion Technologies: I think we’re unlikely to see a $300,000,000 order quarter. But having said that, the 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 is some possibility that given the government year end and at the September that 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 of what’s in there, it is government related and new project related in the main, and there’s always some risk of timing slippage in these arenas.

But what we’ve said is that we 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, again, these are large orders that we have called out to go above and beyond the core flow orders in the business. And ultimately, we do expect to monetize a decent chunk of this.

Brian Shopper, CFO and Medical Group President, Marion Technologies: I think the other maybe couple of things is one, it’s been a fairly consistent number. I mean, 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 are moving, have moved in and out. So new things have come in. Other things moved out.

I think that’s actually encouraging, not discouraging. And I also would tell you we like what we’re seeing in the ’26 on some of these larger projects. We haven’t decided if we’re gonna 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’s new stuff kind of being added. Again, timing kind of continues to be a little bit the wild card, But we feel we continue to talk about it, which means we feel we continue to feel pretty good about it.

Joe Ritchie, Analyst, Goldman Sachs: Got it. If I could just sneak in one more for you, Brian. The margins on nuclear and specifically the project cost increase in France, understand like the FX transactional piece of What the I’m trying to understand is whether there is kind of like a lingering margin issue or cost issue associated with that project that we that maybe kind of hampers margins through the rest of the year? I’m just trying to understand like the implications of No.

Brian Shopper, CFO and Medical Group President, Marion Technologies: The challenge with just the accounting of the large projects is if you’re significantly way through the project and there’s some costs that come, you have to take a significant amount of that cost all at one time in a quarter. So it just shows up weird in a quarter as you’re truing those things up, more than we’re worried about project margins. This project actually will end up with margin rates we expected when we started the project. That’s ebbed and flowed over the five plus years that we’ve been executing on it. So look, we are super proud of the team in France.

We’ve seen just an amazing kind of up into the right out of that business since two years ago. We have a lot of confidence in everything they’re doing. And we’re excited about both the operational and the commercial direction that’s happening in Europe more than probably as much as anywhere else, candidly, and in some instances more. So I think we’re making great progress operationally. And I think you’ll continue to see that in the numbers.

I would tell you, we’re not backing off our 30% number. We’re still very squarely committed to that by ’28.

Conference Operator: Next question, Andy Kaplowitz with Citigroup. Please go ahead.

Andy Kaplowitz, Analyst, 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 at least your commercial nuclear backlog isn’t higher than it is today?

Tom Logan, Chairman and CEO, Marion Technologies: I think we would, yeah. I think the, again, what we’re seeing, Andy, that would be a surprise to all of us. So yeah, the short answer is yes, we would be disappointed.

Andy Kaplowitz, Analyst, Citigroup: Easy enough. And then, Tom, maybe just the SMR orders. Like obviously there’s still kind of small numbers, but there’s obviously been a ton of noise around SMR lately, as you kind of pointed out. So does SMR orders, do they become a more meaningful part of your order ramp up? Even over the next six to twelve months, 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 becoming meaningful faster now, at least in the order profile?

Tom Logan, Chairman and CEO, Marion Technologies: Andy, we continue to be cautious here. Again, recognizing that this is an industry, a space, a sector that will go through some level of consolidation. Clearly, we’re not going to have 127 viable SMR players ten years from now. And so we expect that right now as we kind of churn through this wave of first of a kind reactors, that this is the time when strategic alliances are being forged. We’re working hard to make sure that we get our fair share or better of positioning in the leading players in the space overall.

Clearly, has accelerated faster than I would have guessed a year ago. And so we like the cadence of what we’re seeing. We love the engagement that we’re enjoying right now experiencing with these players, but we’re gonna continue to be cautious about this. Again, we’ve gotta get through first of a kind, see how those work out and where the real growth begins is that when you then get into the broader proliferation and extension of those, the first of a kind types. So again, we continue to be cautious.

We’re happy that we are seeing an acceleration, but I’m not going to call for some dramatic spike above and beyond where we are.

Andy Kaplowitz, Analyst, Citigroup: That’s helpful, Tom. And then maybe given concern about hospital reimbursement, you mentioned Doge, it’s obviously not surprising they’re seeing some modest impact on their end, but maybe you could talk about the resiliency of your medical and lab businesses moving forward that you won’t see incremental sort of negative revisions to your growth forecast? I mean, is this kind of adjust and then you move forward in medical overall still call it a mid single digit plus business?

Tom Logan, Chairman and CEO, Marion Technologies: Yes, this is an area where I think we’ve highlighted over the last three 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. And so we have been pushing the team very, 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.

And 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. But 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.

But on top of that, it’s all of our hardware applications that in a very efficient fashion across different RT platforms. So not just Varian, but Elekta and others help support that kind of efficiency. So to be clear, we continue to be very watchful around this market and the dynamics. Are pushing the team hard to give us any early signs that there may be a change or an erosion in the rate of growth. I would tell you that today we have not seen that as of yet.

Conference Operator: Next question comes from Yan Xie with B. Riley Securities. Please go ahead.

Yan Xie, Analyst, B. Riley Securities: Good morning. Thank you for taking our questions. 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?

Tom Logan, Chairman and CEO, Marion Technologies: Yes, Yuan, what I would say is that if you look at there are really two components associated with our nuclear medicine business. One is kind of our core hardware offerings where the franchise product there would be dose calibration instruments and above and beyond that is clinical instruments and transport equipment, compounding equipment, syringe shields and the like. But really think of dust calibration instruments as being the bellwether. And then the second major component is our software platform, our EC2 software platform, which uniquely is connecting drug makers and isotope producers and CDMOs and radio pharmacies and clinics. When we look at the overall growth rates and the demand that we’re seeing, we do like our positioning.

If you look at the margin profile of this business overall, it continues to improve, which is emblematic of a combination of both pricing power as well as the fact that we are mixing up in this space principally through higher proportion of software sales overall. But fundamentals here continue to be tracking with our expectations that there, as you know better than most, the Theranostic movement, the Theranostic revolution is real. And we’re seeing a lot of activity in and around that. Our view is that if the trends continue as we believe they will, that will continue to drive margin accretion in our business and support the kind of longer term growth that we’ve called for.

Yan Xie, Analyst, B. Riley Securities: Got it. Thanks for the helpful color there. It’s also great to see the strong SMR backlog growth in 2025. Sorry, I have to ask Andy’s question here in a slightly different way. If we exclude SMR in the order books in both 2Q twenty twenty four and 2Q twenty twenty five, what is the growth from the conventional nuclear power in the order book?

Brian Shopper, CFO and Medical Group President, Marion Technologies: I got to see if I have the data in front of me. You want I think if you look at it from a quarter or year to date perspective, you know, I would tell you that we are sorry. I got the wrong page. Apologies. If you look at it from a from a year year to date perspective, you know, we’re we still have positive order growth in the nuclear power segment.

Again, you’ve got to be a little bit careful trying to parse things in and out here because of the lumpiness of some of the orders, which is why I don’t want to give a precise number. Because at the end of the day, that could change with when we win a large order in the third or fourth quarter. So we still feel very good about the order dynamics, even if you exclude the larger SMR order that we’re seeing in the underlying base. And most importantly, our revenue numbers are double digits. And I would tell you that with very little SMR revenue running through the P and L today.

So that is, I think, the most encouraging thing. Yep. Got it. Thank you.

Conference Operator: Next question, Rob Mason with Baird. Please go ahead.

Rob Mason, Analyst, Baird: Yeah, good morning. Thanks for taking the question. 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 Myriad. Is there a 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.

And 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?

Tom Logan, Chairman and CEO, Marion Technologies: Rob, we’ve not guided a specific metric because this is something that can vary depending on the type of reactor. Is it a pressurized water reactor? Is it a boiling water reactor? Is it a heavy water reactor? So there’s variability in and around all of those things.

And to some degree, there’s also variability induced by the size of the fleet. So if you look at somebody like Constellation, the number one operator of nuclear power plants in The US versus others who may be operating a single power plant, it varies depending on how those fleets are being managed overall. But what we have said and what I would reiterate here is that when you are looking at a life extension event, that typically that is a trigger for a higher degree of modernization CapEx, relating not only to instrumentation but also to software. This is where there are certain product categories like radiation monitoring systems, which typically have about a twenty year replacement cycle, give or take a few years again depending on facts and circumstances. But oftentimes when an operator is making a decision to life extend a power plant, that’s when they’ll say, okay, we need to upgrade our core RMS systems.

So again, it varies across the board. So I’m hesitant to give you any specific guidance on the numbers are in this range and you can put that into your model.

Rob Mason, Analyst, Baird: Sure. Maybe this is somewhat related. During the quarter, did announce a partnership with Westinghouse around some of your instrumentation in particular. My sense was historically fleet, that Westinghouse fleet, had not had as high representation there. So am I right in thinking about this is more around potential share gain on top of replacement activity for you within that fleet?

And is there any way to put some broader numbers around what that opportunity could be?

Tom Logan, Chairman and CEO, Marion Technologies: Yeah, that’s 100% accurate that this is an opportunity to essentially upgrade the fleet that Westinghouse covers with a digital neutron flux measurement system. And 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 essentially the volume of neutrons that pass through a defined volume in a given period of time. It’s essential to understand those dynamics because that provides a lot of insights about the operating quality and the safety of the combustion that’s taking place inside that reactor overall. Our digital solution is unique. Westinghouse sees it as a great opportunity in their broader service and maintenance business to utilize this as kind of a core offering in upgrading reactors overall.

We see a sizable opportunity to retrofit the installed base within The US and more broadly, not just through the Westinghouse deal to leverage this technology on global basis overall. So in our view, is an opportunity for share pickup. It’s not merely replacing our legacy products with something newer and better.

Rob Mason, Analyst, Baird: Very good. Maybe just last question. Brian, in talking about the margin expansion, I guess, in medical, you mentioned procurement is one of the contributors. And that was obviously something that was part of the algorithm that you unveiled at the Investor Day around 2,030 margins. But could you just update us more broadly where you are in that effort relative to, I guess, the target that you issued at that time?

And how should we think about just phasing in of that procurement?

Brian Shopper, CFO and Medical Group President, Marion Technologies: Like I think I said to Joe, I think, we’re still very committed to the 30% EBITDA margin target. Obviously, this year, our guide still indicates kind of more than 100 basis points of margin expansion. That’s our expectation. Obviously, that means it needs to pick up from here. And that’s what we’re very focused on.

And even an acquisition like Surtrac, although not contemplated then, helps with this journey. They actually have better EBITDA margins than we do as a company, so that’s helpful. So I think we’re still know we’re still very committed to it. The idea generation and the tactical pipeline is still very robust. We like what we’re doing on the procurement side.

One of the things that we’ve announced internally and we should talk about it a little bit here is some of the variabilization of both our software and IT IT labor in a deal that we did a partnership deal with a large partner in this space called Cognizant that we’re super excited about and we think will add a ton of value for us both on the cost side, but actually even more importantly on the speed to market side for new software products. And that’s something that we continue to implement here over the next couple of quarters. So we feel good. I think one of the things you saw in the medical space this quarter is just that operating leverage. I mean, when you get into these high single digit and in this case double digit quarters, the P and L structure really plays to our favor, specifically in that business.

And we saw 200 basis point margin expansion plus across every one of the businesses we have within our medical business in the second quarter. So we’re excited about where we’re going. And we’re even I would tell you, we continue to have a lot conviction around our targets.

Tom Logan, Chairman and CEO, Marion Technologies: Yeah, Rob, just to tag on to Brian’s comments too. Historically, we’ve been very clear that the pathway to 30 margins is a combination of operating leverage, which is the biggest single lever and that’s what’s carried us historically. It’s price, it’s procurement, it is continued footprint rationalization. It’s the fact that with our clear focus on digital, we expect that we’re going to continue to mix up overall from a margin standpoint. But there’s something new that’s emerging here that 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, if you will, toward AI. And we see two enormous opportunity sets in that regard. One is internal, where part of it is the future of work. I know that today a third or more of my job can be done better with AI and independent autonomous agents then 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 not only our efficiency but also our net output capabilities from a human capital standpoint. Additionally, internally, 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, for product design capabilities, etcetera. And we’re in the process of really winnowing our hierarchy priorities to make sure that we’re getting after this aggressively. The second bigger bucket is the customer facing stuff, where clearly we see enormous opportunities to improve the utility that we are bringing to our customers through AI solutions.

And again, we’re taking this very seriously, devoting substantial resources to it. And all of this at the end of the day when you come back to the margin equation is an additive factor to what we’ve talked about historically.

Conference Operator: Thank you. I would like to turn the floor over to Tom Logan for closing remarks.

Tom Logan, Chairman and CEO, Marion Technologies: Well, folks, thanks again for your time and attention today. Again, we’re happy about the quarter. We feel like, again, we continue to improve our financial metrics, 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. So 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, etcetera. 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 today and we’ll very much look forward to speaking with you again next quarter.

Conference Operator: This concludes today’s teleconference. You may disconnect your lines at this time and thank you for your participation.

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