Mirion Technologies, Inc.

Greetings and welcome to the Merion Technologies fourth quarter 2025 earnings call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Mr. Eric Lin, Treasurer and Head of Investor Relations. Thank you, sir. You may begin.

Okay. Thank you, Melissa. Good morning and welcome to Merion's fourth quarter and full year 2025 earnings conference call. Joining me this morning are Merion's founder, chairman, and CEO, Tom Logan, and Merion'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 reports on Form 10-K, quarterly reports on Form 10-Q, and in Miriam's other SEC filings under the caption risk factors. Quarterly references within today's discussion are related to the fourth quarter ended December 31st, 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 Panel 3.

Tom Merion. Eric, thank you, and thanks to everyone for joining the call today. 2025 was a strong year for Marion, and it would not have been possible without the hard work, the energy, and the dedication of the entire Marion team. And I thank you all for your efforts and results. We booked record orders in 2025, totaling more than $1 billion. This was largely driven by the nuclear power market strength we've been highlighting throughout the year. This includes $150 million from our large opportunity pipeline. Favorable macro conditions in both nuclear power and nuclear medicine supported meaningful growth in 2025. Nuclear power organic revenue grew more than 11% in the year, while nuclear medicine organic revenue grew more than 13%. Both of these end markets are expected to enable double-digit organic growth coming into 2026. As you may recall, in 2025, we articulated a strategic priority to increase our nuclear power exposure. To that end, we acquired Certrek in July, and in December, we closed on the acquisition of Paragon Energy Solutions. Both of these acquisitions augment our North American nuclear power exposure and take our nuclear power revenue to roughly 40% of the total. Importantly, this revenue accrues from fuel cycle, new plant construction, plant operations, and decommissioning. Thus, we cover the breadth of the century-long cradle-to-grave lifespan of a modern large-scale reactor. Importantly, approximately 80% of our revenue comes from the installed base, which is being both pushed and economically incentivized to life extend, operate, and modernize, driving an attendant increase in demand for the solutions Mirion provides. We believe this dynamic is robust and not dependent upon any particular view on new build or SMR dynamics, Given the profound shortage and generating capacity in most developed markets new bills and SMR should be thought of as attractive incremental opportunities on top of the flow from the operating fleet and we remain highly bullish on the sector. These key themes are expected to further evolve in 2026 our large opportunity pipeline is growing and is expected to support favorable order dynamics in the year. We have a right to win on more than 400 million of large opportunity projects that are expected to be awarded in 2026 inclusive of 200 million of projects carrying over from the 2025 pipeline. Lastly, on this panel, I note our 2026 full year guidance, which reflects the strong fundamentals underpinning our forecast supporting growing revenues banding margins and enhanced adjusted free cash flow. I'll detail a few of these points beginning on Panel 4. As mentioned, we booked a record nearly $1.1 billion of orders in 2025. This represents a 26% increase versus 2024. 2025 order growth plus the addition of Paragon's backlog resulted in a 36% increase in our backlog versus last year. The nuclear power and market demonstrated the strongest growth supported by 150 million from our large opportunity pipeline. This was followed by 34 million of Defense and diversified and market orders principally out of the US and with NATO. These two factors were partially offset by a decline in labs and research and market orders. As I mentioned in our last call, DOGE and the lengthy 43-day government shutdown negatively impacted DOE orders in Q4. Our medical segment also faced some headwinds in 2025, largely due to tough comps from the prior year, coupled with transitory macro headwinds. To elaborate, nuclear medicine orders increased 31% in 2024, making for a difficult comp in 2025. Despite this, nuclear medicine orders were down only 6% in 2025. Dosimetry orders grew 19% last year due to a large hardware order booked in 2024, making for a tough comp in 2025. RTQA full-year orders were lower versus 2024 due to a sluggish Japanese market and negative capital spending dynamics in the U.S. healthcare market. On Panel 5, we summarize our performance compared to 2025 guidance. Top-line performance was softer than guidance due to the RTQA and labs and research weakness. Despite the revenue miss, adjusted EBITDA was on target and demonstrated expanding margins. In addition, free cash flow was more than twice 2024's performance and beat guidance from both an absolute and conversion ratio standpoint. Adjusted EPS was 46 cents, slightly below guidance between 48 and 52 cents, largely due to tax dynamics. Panel 6 addresses key drivers for the labs and research and RTQAN markets. We believe that 2025 headwinds reflected demand deferral rather than a secular change in the market. More specifically, in labs and research, DOGE and the government shutdown represent one-time impacts that are expected to equilibrate. In RTQA, the fundamental market growth drivers continue to apply, notably an aging population demographic and developed economies, and an increased push for higher standards of care in developing economies are both expected to lead to overall demand growth. Our RTQA and nuclear medicine solutions benefit from this dynamic and comprise around 75% of the segment's revenue. Panel 7 demonstrates our strong historical track record. We've delivered double-digit five-year revenue and adjusted EBITDA CAGRs of 11% and 12% respectively. Moreover, adjusted free cash flow strengthened dramatically in 2025, doubling last year's performance and achieving our 2026 conversion target a year early. We expect to make continued progress on all of these KPIs in 2026. 2026 performance will be augmented by the recent acquisition of paragon and search track discussed on discussed on panel eight. we're broadening our exposure to our most dynamic vertical with these two deals and are confident in the integration campaign. Both acquisitions immediately broaden marion's presence in the North American nuclear power market substantially enhanced customer intimacy. and represent a significant opportunity for us to take their capabilities global by leveraging our strong international presence. Similar to Mirion, most of Paragon and Surtrack's revenue comes from the operating fleet. However, both acquisitions strengthen our position in the rapidly evolving SMR space. Both Paragon and Surtrack are the tip of the era with SMR developers supporting licensing, regulatory guidance, and reactor instrumentation design. This has immediately improved the top of funnel opportunity set for Mirion as a whole and increases drag-along traction for legacy Mirion solutions. We now have contractual commitments in place with more than 20 SMR developers and our reach is expanding. We're working hard to run the tables to land and expand our position with all key players. As you can see on this panel, we have quantified attractive synergy opportunities and are moving ahead rapidly. In 2026, we will move beyond foundational work such as finance, HR, and IT integration and shift our focus to material synergy drivers like commercial integration, improved pricing heuristics, and supply chain optimization. In the case of the latter, we saw nearly 100 basis points of adjusted EBITDA margin improvement in 2025 alone from procurement process improvement and legacy mirroring. We believe much of the work we're doing in this space will translate well to both the Paragon and Certrek business models. Looking further out, commercial leverage and AI-informed product evolution represent the tail of the integration opportunity set, and we are increasingly enthusiastic about the potential. Paragon also contributes to our large opportunity project pipeline. Panel 9 illustrates that at this time, we see more than $400 million of large opportunities with the potential to transact in 2026. The chart identifies 200 million plus of new large projects on top of the 200 million of carryover from 2025. Notably, nearly half of these new opportunities come from Paragon. While these projects are definitionally $10 million or higher, the broader nuclear power space continues to support growth opportunities for Mirion. Panel 10 shows headlines from just the past month or so. Whether it's an $80 billion deal for new nuclear power plants in the U.S. or new hyperscaler partnerships, the momentum in the market continues to build. It is abundantly clear that power availability is becoming increasingly critical to the global economy. Panel 11 illustrates that by 2035, nearly a third of all data centers are expected to exceed one gigawatt compared to only 10% of data centers today. For reference, each one gigawatt data center campus uses about a fifth of New York City's entire electrical load. Power generation and grid capacity are increasingly becoming the bottlenecks for data center growth, and nuclear power is likely to remain a critical component of the long-term solution. Before I turn it over to Brian to walk through the financials, allow me to detail our 2026 guidance on Panel 12. The headlines here are growing revenues, expanding margins, and increasing adjusted free cash flow. 2026 total revenue is expected to grow between 22% and 24%. This includes tailwinds from FX and acquisition-related growth from Certrek and Paragon. Absent these tailwinds, you arrive at our 2026 organic revenue growth guidance of between 5 and 7%. Adjusted EBITDA guidance is between 285 and 300 million. This equates to adjusted EBITDA margins between 25 and 26%. And this margin range represents approximately 90 basis points of margin expansion expected for the year, notwithstanding the dilutive margin impact from the Paragon deal. We expect to help Paragon become margin accretive within our planning horizon, again, as we capture clearly identified synergies. 2026 adjusted free cash flow should range from $155 to $175 million. This expected growth is attributable mainly to the full-year impact of growing earnings and capital structure improvements, which will more than offset a modest increase in expected capex to fund AI and other critical strategic initiatives. Finally, 2026 adjusted earnings per share should range from 50 cents to 57 cents. This includes an expected 275 million fully diluted shares, reflecting a full year's impact from the Paragon-related capital raise in September of 2025. Also new this year, we are now including stock-based comp within our adjusted EPS. If you were to exclude it, similar to last year, our 2026 midpoint guidance would have been 61 cents or 7 cents higher. Brian will share more details on this and the broader financials. Brian.