Limbach Holdings ((LMB)) has held its Q3 earnings call. Read on for the main highlights of the call.
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Limbach Holdings’ recent earnings call painted a picture of robust growth and strategic advancements, particularly in the Owner-Direct Relationships (ODR) segment and through successful acquisitions. However, the company also faces challenges with decreased gross margins and increased Selling, General, and Administrative (SG&A) expenses, indicating areas that require attention.
Significant Revenue Growth
Limbach Holdings reported a remarkable 37.8% increase in total revenue for the third quarter of 2025, reaching $184.6 million compared to $133.9 million in the same period of 2024. The ODR segment was a significant contributor, with revenue growing by 52% to $141.4 million.
Strong Performance in ODR Segment
The ODR segment accounted for 76.6% of the total revenue for the third quarter, up from 69.4% in Q3 2024. This aligns with Limbach’s strategic focus on expanding its ODR business, which has proven to be a key driver of the company’s growth.
Successful Acquisition Integration
The acquisition of Pioneer Power has exceeded expectations, significantly contributing to Limbach’s revenue and aligning well with its strategic objectives. This acquisition has been a pivotal part of the company’s growth strategy.
Improved Free Cash Flow
Limbach Holdings saw an increase in free cash flow for Q3 2025, rising to $17.9 million from $13 million in Q3 2024. The free cash flow conversion of adjusted EBITDA stood at an impressive 82%.
Gross Margin Decline
Despite the revenue growth, Limbach experienced a decline in total gross margin, which fell to 24.2% from 27% in Q3 2024. This was primarily due to the lower gross margin profile associated with the Pioneer Power revenue.
Organic Revenue Growth Adjustment
The company adjusted its total organic revenue growth estimate for 2025 to a range of 7% to 10%, down from the previous estimate of 10% to 15%. This adjustment is attributed to a slower mix shift.
Increased SG&A Expenses
SG&A expenses rose by 19.3% to $28.3 million in Q3 2025, compared to $23.7 million in the same quarter of the previous year. This increase has impacted the company’s operating margins.
Forward-Looking Guidance
During the earnings call, Limbach Holdings reaffirmed its 2025 guidance, projecting total revenue between $650 million and $680 million and adjusted EBITDA ranging from $80 million to $86 million. The company emphasized its strategic focus on the ODR segment, which now constitutes 76.6% of total revenue, with a goal to maintain this segment at 70% to 80% of total revenue. Despite the decrease in gross margin, Limbach is committed to ongoing integration efforts to improve margins and leverage its market position for sustained growth.
In summary, Limbach Holdings’ earnings call highlighted strong revenue growth and strategic progress, particularly in the ODR segment and through successful acquisitions. However, challenges such as decreased gross margins and increased SG&A expenses were also noted. The company remains optimistic about its future, reaffirming its guidance and focusing on strategic initiatives to drive continued growth.