Limbach Q4 Earnings Call Highlights

Limbach (NASDAQ:LMB) executives highlighted record 2025 results, a continued shift toward owner-direct relationships, and a 2026 outlook that calls for double-digit growth in revenue and adjusted EBITDA during the company’s fourth-quarter and full-year 2025 earnings call.

Record 2025 performance and headquarters move

President and CEO Michael McCann said 2025 marked a “record-setting year,” with total revenue up 24.7%. He noted the company’s strategic shift toward its Owner Direct Relationships (ODR) model—an effort Limbach began executing in 2020—was a key driver of the year’s performance.

McCann also addressed Limbach’s announcement that it will relocate its headquarters to Tampa, Florida, citing that a significant portion of senior leadership and nearly 40% of the corporate workforce are already based there. The move comes during Limbach’s 125th anniversary year, he said.

ODR mix, margins, cash flow, and capital allocation

Management emphasized that Limbach’s revenue mix continues to move toward ODR. For full-year 2025, the company’s ODR/GCR mix was 75% ODR and 25% General Contractor Relationships (GCR), compared with 67% ODR and 33% GCR in 2024. ODR revenue grew 40.6% in 2025, including 17% organic growth, while GCR revenue declined 7% as the company continued the mix shift.

McCann said total gross margin was 26.2% for 2025 and 28.2% when excluding acquisitions since 2021, which management said demonstrated stable legacy-branch margin performance compared with 2024. CFO Jayme Brooks added that consolidated margin comparisons were affected by Pioneer Power’s lower margin profile and by fewer net project write-ups in 2025 than in 2024.

The company reported record full-year adjusted EBITDA of $81.8 million, within its prior guidance range of $80 million to $86 million, representing a 28.4% increase from 2024. Limbach generated $71.9 million in cash from operations excluding working capital in 2025, including $21.4 million in the fourth quarter, according to McCann.

Brooks said free cash flow (as defined by the company) was $70.1 million for 2025, up from $52.3 million in 2024, and free cash flow conversion of adjusted EBITDA was 85.7% for the year. In December, Limbach authorized a $50 million share repurchase program.

Management characterized the balance sheet as strong. McCann said net debt ended 2025 at $24.6 million, or 0.3x net debt to adjusted EBITDA. Brooks reported $11.3 million in cash and total debt of $35.9 million at year-end, with total liquidity of $96.3 million, including revolver availability.

Fourth-quarter results: growth led by ODR

For the fourth quarter, Brooks said total revenue rose 30.1% to $186.9 million. ODR revenue increased 51.8% to $145.0 million, with the growth split between acquisitions (27.9%) and organic gains (23.9%). GCR revenue fell 13% to $41.9 million, with organic declines partially offset by acquisition-related contributions.

Fourth-quarter gross profit increased 10.4% to $48.1 million, while consolidated gross margin declined to 25.7% from 30.3% a year earlier, primarily due to Pioneer Power. Adjusted EBITDA increased 30.8% to $27.2 million, and adjusted EBITDA margin was 14.6%.

Brooks said net income for the quarter increased to $12.3 million from $9.8 million, with diluted EPS rising to $1.02 from $0.82. Adjusted diluted EPS was $1.40, up from $1.15. Operating cash flow was $28.1 million, and free cash flow was $21.1 million for the quarter.

2026 priorities, acquisition integration, and vertical market commentary

Looking ahead, McCann outlined three strategic growth pillars for 2026:

• Grow ODR and organic total revenue: The company expects its ODR/GCR mix to hold steady, with ODR as the primary growth driver. Management said it is investing in both local and national selling efforts, including positioning two senior executives—one focused on local sales and another on national relationships—to accelerate growth.
• Expand margins through “evolved customer solutions”: Limbach plans to continue building capabilities across six customer solutions, including integrated facility planning, service maintenance, equipment replacements/retrofits, MEPC infrastructure upgrades, and energy efficiency/decarbonization work. McCann said the company trains staff to bundle solutions, managing overall blended margins across transactions.
• Scale through strategic M&A: Limbach expects to remain selective and pursue one to three acquisitions in 2026 that meet its return thresholds, expand geography and service capabilities, and add to its core customer solutions. Management said it is particularly focused on acquisitions that expand integrated facility planning.

McCann provided an update on Pioneer Power integration, saying the company has largely completed “phase one,” focused on systems integration, and is moving into “phase two,” focused on gross margin improvement. Priorities include negotiating time-and-material contracts, measuring margins by revenue type, introducing Limbach sales training, identifying cross-selling opportunities, and aligning resources toward the most profitable accounts. Management said it expects Pioneer margin improvement to take shape throughout 2026, with exit margins higher than current levels, and continued improvement over the following two to three years as Pioneer aligns with Limbach’s broader margin profile.

McCann cited Jake Marshall (acquired in 2021) as an example of the company’s margin-improvement playbook, saying Jake Marshall’s gross margin increased from about 13.4% at acquisition to 28% in 2025 after four years of executing Limbach’s value creation model.

On demand trends, McCann said the company saw “positive demand improvement” in the fourth quarter across verticals, including a rebound in institutional markets such as healthcare, life science, and higher education after mid-year softness. He said the company achieved 24% ODR organic revenue growth in Q4, aided by the recovery following customer pauses tied to a government shutdown and D.C. policy changes.

Management discussed vertical market dynamics, including a healthcare planning environment that could lead to a softer start in 2026 with revenue building through the year. McCann also described data centers as a developing opportunity, noting two emerging relationships with hyperscale owners and the company’s decision to build a national vertical market team focused on data center work. He said the company was awarded a specialty infrastructure project worth approximately $10 million in Q4 and noted that data center revenue was less than 5% of total revenue in 2025. The company’s industrial manufacturing vertical produced steady results in 2025, McCann said, though management expects first-quarter seasonality in 2026.

2026 guidance and seasonality expectations

Limbach guided for 2026 revenue of $730 million to $760 million, implying year-over-year growth of 13% to 17%, and adjusted EBITDA of $90 million to $94 million, implying growth of 10% to 16%. Key assumptions discussed on the call included total organic revenue growth of 4% to 8%, ODR organic revenue growth of 9% to 12%, ODR at 75% to 80% of total revenue, total gross margin of 26% to 27%, and SG&A expense at 15% to 17% of revenue.

Management also reiterated its expectation that free cash flow will be about 75% of adjusted EBITDA in 2026, with significant cash use in the first quarter due to incentive compensation, insurance, and tax payments, followed by stronger cash generation later in the year. McCann said the first quarter is typically the slowest due to seasonality and noted that 2026’s first quarter would not include $900,000 of gross margin write-ups that occurred in Q1 2025.

During Q&A, McCann said the company booked $225 million in Q4 compared with $187 million of revenue in the quarter, a bookings-to-revenue ratio of about 1.2, which management said provides visibility into 2026. He also said the benefits from the company’s increased national account focus are expected to be more meaningful in 2027 than 2026.

About Limbach (NASDAQ:LMB)

Limbach Holdings, Inc (NASDAQ: LMB) is a U.S.-based mechanical construction firm specializing in the design, installation and maintenance of heating, ventilation and air conditioning (HVAC) systems, piping, plumbing and sheet metal fabrication. The company delivers comprehensive mechanical solutions to commercial, institutional, health care, education, government and industrial clients, drawing on its in-house engineering, prefabrication and construction management capabilities.

The company’s service offerings encompass full-scope mechanical construction, including energy system design, direct digital controls and building automation, retrofits, testing and balancing, preventive maintenance programs and emergency response services.