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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.mirion.com. With that, let me turn the call to Tom who will begin on Slide three. Eric, thank you, and thank you to everyone on today's call for joining us. And most importantly, you to my nearly 3,000 Mirion colleagues for delivering a big quarter. We're off to a great start in 2025. We're hitting our marks both financially and operationally. This is most clearly reflected in our first quarter adjusted free cash flow and order growth. We delivered $29,000,000 of adjusted free cash flow a 62% conversion of adjusted EBITDA. In addition, first quarter orders grew 11.5% driven largely by nuclear power orders. This is our best first quarter performance since going public, and I'll share more details with you momentarily. As you may have seen in this morning's press release, we acquired a small software business called OncoSpace. Onco Space is a cloud native data analytics platform that enables clinicians to confidently design an optimal patient plan for radiation oncology, consistently promote best practice behavior, and share a peer to peer expertise.
11m 57s
The software is a great addition to our cancer care portfolio and is expected to enhance our go to market strategy. This acquisition is small but significant. Small in initial revenue and adjusted EBITDA contribution but significant in its potential to catalyze the growth. In our radiation therapy software business. I'm excited to welcome the OncoSpace team to Mirion. Beyond this transaction, the M and A deal pipeline remains attractive. But as you'd expect today's uncertain market dynamics, have clouded valuations and executability. As a result, we are remaining disciplined with a patient view of likely activity by year end. Let's get into the details now beginning with first quarter performance on Slide four. First quarter organic revenue grew 6% versus the same period last year aided by double digit revenue growth from the nuclear power end market. First quarter adjusted EBITDA totaled 47,000,000 or 18.2% higher than last year's first quarter. Margins also increased two sixty basis points to 23.1%. The improvement reflects strong operating leverage and procurement key components of our pathway to 30 adjusted EBITDA margins by 2028 as committed to at our December Investor Day. We also repurchased 1,200,000.0 shares in the quarter for $18,600,000 as part of our capital deployment strategy outlined in December.
13m 23s
Adjusted EPS in the quarter was $0.10 per share compared to $06 per share in the first quarter twenty twenty four. A 67% increase. As mentioned in my opening comments, the two standout elements for the quarter were adjusted free cash flow and orders. Q1 orders are particularly encouraging given that this is typically our lightest volume quarter. Importantly, this orders number does not account for any of the 300 to $400,000,000 of large one time opportunities that are currently in the pipeline. While global government budget dynamics have likely lengthened bidding cycles, we remain optimistic about our prospects for these contracts As mentioned last quarter, we think the 3 to $400,000,000 sizing may be conservative. It is worth noting, we've not lost any of these projects. The strong orders of nuclear power just another proof point of the momentum building in this market Seemingly on a weekly basis, we see and hear affirmation nuclear is a critically important component of the solution to the growing supply demand imbalance in the global electricity market. This view is increasingly reflected in the public consciousness. The 2024 National Nuclear Energy Public Opinion Survey shows that more than 75% of Americans support the use of nuclear energy a record level for the fourth consecutive year.
14m 44s
I personally seen growing bipartisan political support for nuclear energy in The US. Last month, I visited Washington DC for lobbying trip. During the trip, I spent time with legislators and regulators overseeing the nuclear industry. I can confidently say this support for nuclear power is the highest I've seen in my career and my sense of optimism strongly correlates to that dynamic. Now zooming out a bit to talk about Mirion's resilient business model, on Slide five. Given today's uncertain economic backdrop, it's important to remind investors why we believe we are well positioned to traverse the unpredictable road that lies ahead. First, it begins with the customer. Mirion is a trusted partner to a global customer base. In most instances, our safety critical solutions are compulsory for customers. We are a leader in 17 of the 19 major product categories we serve and define ourselves as a category of want. The leading player in the detection, measurement and analysis of ionizing radiation. This is all that we do and we're better at this than anybody in the world. We've also proven the resilience of our financial performance by consistently delivering organic growth and consistently outperforming our peer set on a through cycle basis.
16m 2s
More than 70% of our revenue is recurring or repeat in nature. Also, approximately 80% of our nuclear power based revenue is tied to the installed base. This was evident in our first quarter orders where 79% of the year over year nuclear power order growth came from the existing nuclear fleet. Importantly, structural tailwinds from nuclear power and cancer care have us better positioned today versus previous cycles. We are highly levered to two generational trends that should be robust. Beyond structural tailwinds, our path to future value creation is predicated on established self help initiatives, including operating leverage, procurement savings, and our proven Mirion business system. Our business system has been central to our operating activities for more than fifteen years and informs everything we do. From the C suite to the shop floor. One of the factors helping to mitigate potential tariff impacts is the regionalized supply chain we've established. This is table stakes for us in our local for local business model has us well positioned in today's macroeconomic environment. The benefits of this regional supply chain are better illustrated on slide six, where we detail the expected tariff exposure based upon what we know today.
17m 19s
As mentioned, we believe we are well positioned to weather the tariff storm impact. More broadly, we have a deep stack of mitigating actions to diffuse our modest net exposure. Not surprisingly, China accounts for the largest exposure. Between a 7 to $9,000,000 headwind for 2025. This is largely attributable to Medical segment products that have historically been produced in The U. S. And sold into China. Note, the majority of nuclear and safety segment goods that we sell into China originate from Europe and therefore are not subject to today's retaliatory tariffs placed on U. S. Goods. Outside of China, the 2025 exposure is minimal. At a 3 to $4,000,000 headwind. We are currently evaluating ways to reduce this exposure moving forward. Of note, we've learned in the last twenty four hours that a plurality potentially a majority of our products that may be exempt from the higher Chinese retaliatory tariffs. If true, this would position us at the upper end of our mitigating strategy range. I caution here that the situation is extraordinarily dynamic and is likely to take some time to stabilize. Mitigating actions totaling 5,000,000 to $8,000,000 include alternative sourcing strategies, production shifts, price increases, and cost management.
18m 39s
Lastly, prevailing foreign exchange represents an additional tailwind upwards of $5,000,000 at current rates. To help offset the potential impact from tariffs. Taken together, our net impact to 2025 adjusted EBITDA from today's known tariff rates plus offsets from mitigating actions and FX. Is between a $3,000,000 tailwind an $8,000,000 headwind, with the $8,000,000 headwind representing a worst case scenario. Again, based upon what we know today. As a result, you saw in yesterday's press release that we are reaffirming our full year 2025 organic revenue growth target, adjusted EBITDA, adjusted EPS and adjusted free cash flow guidance, while increasing our top line revenue growth and revising the corresponding low end of adjusted EBITDA margin guidance to account for the non tariff impacts. We remain confident in our value creation strategy and well positioned to the evolving landscape. Brian will share additional details around our 2025 guidance as well as share additional color on our first quarter performance.
19m 44s
Brian?
19m 46s
Thanks, Tom. And good morning, everyone.
19m 49s
Let's pivot to the first quarter financials now on slide seven. As Tom stated, first quarter orders grew 11.5% compared to the first quarter twenty twenty four. Driven by disproportionate demands from the installed base of nuclear reactors. Additionally, we received a $5,000,000 labs and research order reflecting continued engagement from the Department of Energy. Meanwhile, in our Medical segment, orders declined in the quarter. This was anticipated as a recurring dosimetry services order that usually appears in the first quarter was booked in the fourth quarter twenty twenty four. Offsetting this, we saw our RTQA business deliver strong order growth in the quarter of approximately 12%. First quarter order performance is particularly encouraging because it highlights the continued demand from the nuclear power installed base. Moving to the financial results on Slide eight. First quarter enterprise revenue was $2.00 2,000,000 or 4.9% better than first quarter twenty twenty four. Organic revenue growth was 6%, with both reporting segments contributing to the year over year improvement. This was partially offset by approximately 110 base points of FX headwinds. We expect the foreign exchange rate headwind to improve for the remainder of 2025 driven by the weaker dollar. Adjusted EBITDA in the first quarter was $46,700,000 $7,200,000 or 18% better than the first quarter twenty twenty four.
21m 16s
This strong performance translated to 23.1% adjusted EBITDA margins or a two sixty basis point year over year improvement. The margin improvement reflects the high operating leverage in our business as well as procurement and Mirion business system initiatives underway. Adjusted EPS totaled $0.10 per share, an increase of $04 per share or 67% versus first quarter twenty twenty four. Moving to the segments beginning on slide nine. Within our Nuclear Safety segment, first quarter revenue totaled $133,400,000 dollars $7,600,000 or 6% better than first quarter twenty twenty four. Organic revenue increased 7.6% in line with the targeted full year mid single digit plus organic revenue growth we unveiled in February. We saw continued strength across the segment. Particularly from Nuclear Power, which grew 17.6%. Both from the current installed base, but also from new builds. We continue to expect the full year to represent high single digit growth in the nuclear power end market. Our Sensing business, which incorporates in core and core radiation detectors and electrical penetrations delivered strong revenue in the quarter within the nuclear power end market. Offsetting this strength was a reduction in our labs and research business. Down approximately 19% in the quarter. Two drivers, first, we're comping 15% growth in 2024 in this quarter in this end market.
22m 44s
Second, this is where we may be seeing some limited impact from Doge. Either from timing or enhanced contractual scrutiny. Regardless, labs and research and defense of diversifieds tend to be lumpier and more varied on a quarter to quarter basis. As a reminder, within our Nuclear and Safety segment, the nuclear power end market accounts for approximately 60% of the segment's revenue. While labs and research and defense are diversified are 20% each. Nuclear and Safety segment first quarter adjusted EBITDA was $39200000.06100000.0 dollars or 18.4% better than the first quarter twenty twenty four. Adjusted EBITDA margins improved three ten basis points to 29.4%, driven by operating leverage and ongoing procurement and Mirion business system initiatives. Recall, we are streamlining our procurement process to drive efficiencies and to leverage our scale to improve cost and working capital performance. These efforts are increasingly reflected in our results with more to come over the coming quarters. Moving to the Medical segment on Slide 10. Medical segment first quarter revenue totaled $68,600,000 or $1,800,000 or 2.7% better than the first quarter twenty twenty four. Organic revenue was 3%. The nuclear medicine end market was the primary contributing factor to first quarter revenue growth.
24m 8s
Notably, even if we normalize for the ERP implementation in nuclear during the first quarter of twenty twenty four, the business still would have grown double digits. Several extraordinary items resulted in a $1,000,000 revenue headwind for the segment in the quarter. These include the previously announced closure of our lasers business in 2024 that is still reflected in the first quarter twenty twenty four results. China was down approximately $2,000,000 in revenue versus the first quarter last year. And the net effect of two ERP system installations. One in the first quarter of twenty twenty four and the other in the first quarter of twenty twenty five. If you exclude this $1,000,000 headwind, or normalize for it, organic revenue would have been approximately 4.5% and approaching our targeted mid single digit full year organic growth target. We are encouraged by the good order growth we saw in Q1 in our RTQA business We continue to enjoy backlog in our New Glory Medicine business. Medical segment first quarter adjusted EBITDA was $23,200,000 $2,700,000 or 13.2% better than first quarter twenty twenty four. Medical segment adjusted EBITDA margins also improved by three ten basis points to 33.8%. Half of which reflects the absence of the nuclear medicine ERP system implementation headwind from last year.
25m 29s
Another highlight for the quarter was adjusted free cash flow shown on Slide 11. We delivered $29,000,000 of adjusted free cash flow or a 62% conversion of adjusted EBITDA. This not only reflects our improved earnings profile, but also net working capital improvement from project cash timing and better DSO. Better net cash interest expense and a focus on more efficient CapEx. For example, CapEx improved by $4,000,000 versus last year, as we lapped a significant launch investment in our 18% reduction in CapEx for the full year 2025 from 2024. Although not on this slide, we also did repurchase 1,200,000.0 shares as part of the 100,000,000 share repurchase plan we put in place in December. The program is principally intended to mitigate the dilutive impact of shares issued under the company's 2021 Omnibuds incentive plan. And to provide management with capital structure flexibility. This leads nicely into our full year guidance outlined on Slide 12. As mentioned, we're maintaining our organic revenue growth adjusted EBITDA, adjusted EPS and adjusted free cash flow guidance. Despite the puts and takes of potential tariff impacts, mitigating factors and updated foreign exchange rates, our initial guidance here still holds. We're revising total revenue higher to account for the emerging tailwind from FX at quarter end rates, recognizing that the dollar has fallen a bit further since quarter end.
27m 2s
You can see the potential impact of current trading ranges on our tariff analysis. As a reminder, total revenue growth is now between 57% better than our initial guidance of between 46%. This still includes an approximately 40 basis point foreign exchange headwind at the $1.08 to USD. Better than the 190 basis point headwind from our previous guidance. The biggest FX driver is our update from assumed $1.04 to USD rate to $1.8 at the March. Adjusted EBITDA is still expected to land between $215,000,000 and $230,000,000 However, the low end of adjusted EBITDA margin was slightly tweaked to incorporate the new revenue guidance and to recognize there may be some margin leakage due to tariffs. We are sticking to our adjusted free cash flow guide recognizing that we got off to a strong start in Q1. From where we sit today, the second quarter will be our lightest cash flow quarter of the year mainly driven by timing of cash tax payments and net working capital being a seasonal use of cash. It is worth reminding everyone that the midpoint of full year adjusted free cash flow guidance is a 50% increase year over year. Adjusted EPS guidance of between $0.45 and $0.50 remains intact and assumes an effective tax rate of between 2527%.
28m 25s
Down from 2024. Cash taxes of approximately $40,000,000 and an average share count approximately $227,000,000 shares. All are unchanged. Remember, the 2025 share count increase versus 2024 reflecting the founder shares vesting in the fourth quarter, and the taking out of the warrants in the second quarter. This is a $05 per share headwind to our adjusted EPS guide to 2025 due to these two factors. While we are confident in our full year guide, let's set some margin expectations for Q2. We expect Medical margins to be up year over year but slightly less than they were up in the first quarter. Any tariff impacts on the Medical segment will be more back end weighted in the year. On the Newbury and Safety side, we expect flattish 2Q margins year over year due to mix and timing around tariff mitigation plans. We are expecting to see some revenue move from Q2 to Q3 in this segment as we implement tariff mitigation strategies. Concurring with Tom's earlier comments, I remain enthusiastic for the financial and operating performance of the business We're off to a strong start in 2025 and are making great progress towards our 2028 financial targets. With that, I'll turn it back to the operator to open the line for questions.
29m 46s
Thank you. Ladies and gentlemen, we will now begin the question and answer session. If you would like to ask a question, please press star and 1 on your telephone You may press star and 2 you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Ladies and gentlemen, we will wait for a moment while we poll for questions. The first question comes from the line of Rob Mason from Baird. Please go ahead.
30m 25s
Yes. Good morning. Tom, your commentary I mean, I you know, I know this is a developing situation, but what you're seeing on the ground there in China around the tariffs potential reprieve, [indiscernible] Can you elaborate a little more on just what would be driving that when you might think you would have some more clarity on it? Yes, Rob, good morning. Just to reiterate a couple of comments that I made. Firstly, that most of our exposure today comes from medical equipment produced in The U. S, predominantly radiation therapy equipment, but some nuclear medicine equipment. That then is shipped to China. It's obviously a very dynamic and the landscape is changing. But what we are learning is that there are three or four classification codes under which our products are shipped. Where there's an emerging body of thought and evidence that they'll be exempt from the retaliatory tariffs with a likelihood that there will still be a 20% baseline tariff but to the extent we can prove this out and it is in fact validated Obviously, would be a great benefit to us. [indiscernible] change our view a bit on the aggregate range of that net tariff exposure. [indiscernible] Sure.
31m 54s
Just as a as well, Again, the order number looked really strong. Absent, you know, any, any influence from the 300 to 400,000,000. That we're referencing frequently. Just you did mention, you know, some potential exposure there to government procurement process in that envelope. Way that you can quantify that and what what you're actually seeing, you know, what percent is exposed and, you know, where that's coming from, what you're seeing.
32m 26s
Yeah, it's a bit challenging, Rob, recognize that this pipeline that we've referenced is a combination of government and commercial projects overall. And scattered around the globe. So this is not all about Doge or not all about U. S. Government dynamics. But we clearly have a confirmation bias where we are looking for evidence that DOGE related activities are having some impact on these and or other just kind of routine flow government business. And today, we're really not seeing it absent the commentary that Brian made that there may be some evidence that some of the some of the tepid order dynamics in labs may be theoretically related to Doge. But beyond that, we're not seeing anything. We are actively looking for it. But to be clear, we're not hearing any commentary from the program managers of these government funded projects It continues to be a relatively constructive environment for us. But obviously we're being quite vigilant and monitoring changes and any flow through.
33m 47s
Maybe just if I could sneak one quick one in. Talked about almost weekly occurrence of news flow around power. Japan recently talked about restarting a reactor. Can you just update us on what your Japan exposure might be? [indiscernible] Japanese exposure is relatively minimal as it relates to their nuclear In aggregate, it's just under 2% of our total revenue. But much of that relates to scientific instruments some medical exposure, medical market exposure, etcetera. And this is because historically, within Japan, there's been a very tightly bound Keiretsu network, supporting the nuclear fleet, really supporting the nuclear infrastructure. I will say, that we've chipped away at this and increasingly, are being what I would characterize as more assertive in that marketplace. So it is a marketplace that represents upside opportunity for us. And the importance of what you stated really reflects not only the continued momentum in Japan to restart a significant tranche of their idled nuclear base. But also the desire to do more to take it further. And so we see that more as upside than than anything else. Very good. Thank you.
35m 25s
Thank you. The next question comes from the line of Joe Ritchie from Goldman Sachs. Please go ahead.
35m 34s
Thank you. Good morning, everybody.
35m 37s
Hey, Joe.
35m 38s
So Hey, guys. So, I'm just curious, nice start to the year, great to see the orders. Just on that 300,000,000 to $400,000,000 pipeline, I think kind of like the expectation was that you'd see like the vast majority of those decisions being made sometime in 2025. Has the timeline on that shifted at all just given the current backdrop? And then then also, are we like, is this like, just like a handful of projects or like anything you can tell us about, like, kind of like the sizing on on these on these projects that are out there?
36m 18s
Yes, so in aggregate, we hold view that a majority of these contracts will be awarded within calendar year 2025. Obviously reserving for the possibility that there may be some spillage into the back end of the year. In aggregate, are projects that we would define as being notably larger than what we would typically expect in our flow business. So typically that would mean an eight an 8 figure or higher handle on the deal overall. And again, as we've noted previously, it's a mix of nuclear and other projects US and international. Ryan, anything you want to add to that?
37m 1s
No, I would just say where we've seen maybe a few things move to the right maybe out of the 25, I think we've seen candidly more stuff drop into the pipeline into 25. And they look my commentary in the last two quarters has been we hold the range, but we see kind of more in the funnel than that. We did not have any expectations to close anything in the first quarter.
37m 28s
So to date, I think I would tell you we're pretty on track. Okay, great. And then helpful to get to 2Q color So thank you for that. Curious, like, it seems like you're already starting to see some of the benefit from your procurement savings, the incremental margins, this quarter were really good in both segments. Just maybe kind of help me understand like, I know we have the color for the second quarter, but for the second half of the year, should we be expecting then incremental margins on your volume to be better than what you have historically said. So, in medical at 50 to 60% range and nuclear that 40 to 50% range. How do we think about that? Into the second half of the year?
38m 20s
Yes. I mean, look, we've tried to stick to keeping kind of our annual guidance. Joe, I did obviously give you some color on the second quarter. Look, I think that the first quarter incrementals were very strong. Obviously, we do have a pay raise cycle that goes into effect kind of in the second quarter. So what I would tell you is we still believe there is margin expansion every quarter. I would tell you that I think the third quarter is probably our best margin expansion quarter. And the others are kind of similar in size.
39m 4s
And I think the incrementals you'll see they are a little bit lumpy by business by quarter. You heard me talk about kind of my expectations in the second quarter on nuclear and safety are more more for flattish margins. Just as we move some stuff probably from Q2 to Q3 to help mitigate some of the tariffs. But we also have some mixed dynamics in the second quarter. We talked about this a little last year as well. So mean, that's probably as much as I want to give at this point. But we do feel good about margin expansion company wide each quarter of the rest of the year.
39m 41s
Okay, great. One last one for you. Just free cash flow, nice start to the year, just all the working capital benefits. Second quarter, it sounds like you're indicating because of a couple cash taxes and a few other items that you you might see, like, I guess, maybe negative flow in the second quarter. I just want to make sure I understood that correctly. And then yes, how are you then thinking about working capital going forward?
40m 9s
I'm not sure I said it would be negative. I just said it'd be the lightest cash flow quarter of the year. And look, I mean, I don't think it's if you look back at the second quarter's over let's say, last two years, it's probably somewhere in those ranges candidly, maybe on the lower end of those ranges versus the higher end of those ranges. Look, we had a very good first quarter. Collective teams across the company did absolutely fantastic. Collections were good. There's still tons of opportunity here for us, both on the collection side, As the procurement stuff comes, that should help on the payable side. We're very focused specifically in Europe on project cash flow timing. I like the third and fourth quarter to see continued pickup on net working capital. Seasonally, we're negative networking capital in the second quarter. I think that holds true here.
41m 12s
And our biggest kind of one of our biggest cash tax quarters is the second quarter just with The US tax season, etcetera. So I think we feel good, but I don't think I said it would be negative.
41m 27s
Yeah, no, that was me. That was me [indiscernible] You can put that in your model if you want.
41m 36s
All right. Thanks, guys. [indiscernible] Thank you. The next question comes from the line of Vlad Blistecchi from Citigroup. Please go ahead.
41m 51s
Hey, good morning, guys.
41m 52s
Thanks for taking my question here.
41m 56s
So maybe first just on China Medical.
42m 1s
The potential [indiscernible] clarification that you mentioned is encouraging. But could you just step back and talk about underlying demand trends in China medical broadly? [indiscernible] as a follow-up to that, how you're thinking about the risks of any potential anti American backlash in that market or whether you've seen any evidence of that developing?
42m 31s
So Vlad, I mean, I'll start with a caveat that it's hard to say. Obviously, there's a lot of battle haze right now and we're we're trying to be careful about our guidance, careful about describing how we see things. But it's important to contextualize the answer as well. That's something we've been talking about for the last two years. The last year you may recall we saw slowdown in the Chinese component of our growth, particularly in radiation therapy. And this was driven by a generalized slowdown in med tech overall exports into China. Because of their pronounced anti corruption program. Where it just induced incredible caution into the marketplace. And this began out in 'twenty four, it began the prior year. But it's had a long tail and had a big impact on the things like the build out of new radiation therapy clinics, which is really the key demand driver for our growth into that marketplace overall. In hindsight, it's a bit of a godsend though, because of the cautionary stance that we took in terms of framing our operating plans for 2025 and guiding that view overall. Again, we took a a cautious view toward China in general because of this tail.
44m 5s
And I think that certainly helps in terms of the aggregate exposure that we're facing this year. At the end of the day, I think what it comes down to for Chinese economic decisions, particularly today. We're all hopeful that some type of constructive deal is brokered the clarity emerges and that China and The U. S. Work together as partners to reduce the trade imbalance overall. But our interpretation of of this whole trade code dynamic is at the end of the day, there's a rationality that prevails. And there are certain things that The U. S. Has to source from China. And there are certain things that China has to source from The US. And I think that's reflected in this instance. By these trade code exemptions. And so again, this is very dynamic. We're still trying to prove this out and we're being very careful about this overall. But if that is true, then that would suggest that we have reason to believe that the environment in China, maybe a little bit more constrained going from 0% tariffs potentially to 20% tariffs But again, that is a reflection of national need as it relates to the products software and solutions.
45m 31s
That we're selling into that market overall. Longer term, if there is some type of sentiment that builds up not just in the China block, but in any other trading block Europe, Latin America, etcetera. We have within planning queue a number of actions that we think we can take to further defuse that risk. And really kind of build on this local for local construct that's endemic in our structure today.
46m 8s
That's that's helpful. Helpful color, Tom. And I guess we'll just have to watch the tweets going forward. [indiscernible] I think Tom, I heard you say that 79% of the 1Q nuclear order growth came from the existing fleet. As opposed to new build, which is quite encouraging. Maybe could you just characterize how you're thinking about where customers are in terms of their current upgrade cycle and how you're thinking about potential longevity of this capital investment into the existing fleet?
46m 53s
Yes, I think it's still early days. Vlad. And the dynamic just for all listening is that the installed base really is the most important element of our nuclear business. And it typically represents 80 of our nuclear revenue overall. What is changing? Just to walk people through the logic is that the there's a growing supply demand or demand supply imbalance in global electrical generating capacity. We are seeing an immediate spike in year over year demand for electricity is more pronounced. In the American market than in many. But in general, we are seeing an acceleration of demand, which in aggregate was up about 4% last year. Versus the prior year. And that's versus what had been for much of the decade between 2010 and 2020 a rate of about 1% to 2% annual growth. And an environment where most of the nuclear power plant operators will lose their money. So what's happening today is that the demand for electricity is mounting particularly clean baseload energy, which only nuclear power can supply. And the most visible motive behind that is the AI driven data center growth, but it goes well beyond that. It's the general electrification of of the economy, the EV market as it emerges, etcetera.
48m 32s
So what is clear and what will be, I think, an extent trend for quite a while is this view that there is a very clear and compelling economic incentive for the operators of nuclear power plants to run them at a higher capacity factor that being the term of art for capacity utilization within the industry. To extend the life of plants through permit extensions So the majority of American power plants will be life extended to eighty years, some will be life extended to one hundred years. It is bringing back previously shutdown kind of pre decommissioned reactors, including the Palisades Reactor, the 3 Mile Island reactor, potentially now the Duane Arnold Reactor coming back online. It is resuscitating projects that had been terminated like the VC summer project, in North Carolina. Or South Carolina. And then it operates. So it's adding capacity to the existing fleet. And so while people tend to focus on new build activity as they're looking at the nuclear market, whether it's through small modular reactors or utility scale. For us, what matters more is the health of that installed base And when they have the incentive that they do today, to operate with greater uptime, extend life, operate capacity, etcetera, then that obviously drives looser capital spending budgets It green lights projects that are supportive of those three overarching objectives.
50m 20s
Which would include many of the solutions that we sell. And so long answer, but the summary of all of that is we expect us we think we're just in the beginning of this cycle and we expect to see really healthy CapEx coming out of the global fleet for many, many years to come.
50m 39s
And I would also just remind you, Vlad, that we had just committed to and December kind of high single digit growth. Through the our long range guidance. So we're expecting that this year and that means we need to see that also for the next couple of years. That's That's encouraging and really helpful color guys. Maybe just one last one for me and I'll get back into the queue. On the acquisition you announced, I know it's know it's fairly small, but maybe could you just characterize how that came about? Was that proprietary Just any color on it.
51m 15s
Yes, this was a proprietary and again, kind of consistent with that crowdsourcing approach that we take internally Again, a small deal, but I think it'll be proved to be very important strategically. In terms of how it flushes out some of the capabilities that we have in our our flagship RTQA workflow software platform called Sunshine. And really excited about it, not only in terms of the capability, that the acquisition brings to bear, but the team. It's a great team. And I think we're going to see some good leverage down the road from this. So a nice deal, nice pickup. It's not really going to move the needle meaningfully in the short term. But the main point is that our pipeline continues to be good. Obviously, is an environment where a lot of people are being very cautious, sellers are being cautious, I think sellers of private companies have not quite yet capitulated in terms of of multiple reductions that we've seen driven by the public industrial tech sector. But I think all that will sort out. We continue to actively work on it at the clear, we're going to be very disciplined we're going be patient as always in this room.
52m 40s
And maybe just two other comments. This is like sub million of revenue deal for us. This year. So really small, probably breakeven. I think the other thing that this is one of the more creative deals we've done where there's almost no upfront cash and it's kind of a earn as you go stream. I think that is is also just kind of proving that we are flexible in how we do deals and we want to make sure that it's a win win for everyone.
53m 13s
Awesome. Thanks, guys.
53m 16s
Thank you.
53m 18s
The next question comes from the line of Chris Moore from CJS Securities. Please go ahead.
53m 25s
Hey. Good morning, guys. Yeah. Maybe just a bigger picture pricing power question.
53m 33s
If there are surprises, you know, after this ninety day hiatus is over, Are there certain areas, products, services, you know, where you consider Mirion to have kind of stronger pricing power? Maybe there might be a little less uncertainty there.
53m 55s
Yeah, Chris, this is super important question because when most people are talking about tariffs or doge, they're talking about it narrowly. The approach that we're trying to take is very [indiscernible] the FX dynamics, which are strongly correlated to this kind of global reset more broadly are obviously an important and very visible economic element. But the other element that I think is less visible to people that we are hyper, hyper focused on right now is competitive advantage. Recognizing that in some instances based on [indiscernible] future tariff constructs we will gain economic advantage versus our competitors. And in some instances we will lose that economic or a degree of economic advantage relative to competitors. What I would tell you is that in general, we like where we sit. Meaning that in aggregate, we feel like our competitive advantage will be strengthened based upon likely kind of long term sustained tariff scenarios overall. And to the extent that does in fact happen, obviously that gives us a pricing power and the ability to really optimize between hoped for incremental share gains plus margin expansion. So it's something again that [indiscernible] thinking about a lot, doing a lot of analytics on and and feel like there's probably an upside opportunity for us here down the road.
55m 41s
Got it. That's very helpful. All the other ones I had were asked already. I will jump back in line. Thanks, guys.
55m 49s
Thank you. The next question comes from the line of Yuan Ji from B. Riley Securities. Please go ahead.
55m 58s
Thank you for taking our questions, Tom and Brian. So we have that $21,000,000 debooking from Turkey in 1Q twenty twenty four. Can we anticipate the backlog to grow in the near term?
56m 16s
Look, I don't like to comment on quarter to quarter orders and backlog. I think as it relates to that specific project, the team continues to work on winning some of that back. And I think when we're ready, when we have more to say there, we'll talk about it. Look, we had a strong first quarter. On the order side. Obviously, FX rates are beginning to kind of favor our backlog, which about half the backlog does sit in euros. So the strong move here in April with the euro, the weaker dollar, I guess, should help us over time.
56m 59s
But look, we've talked a lot about the 300 to $400,000,000 today. As that comes in, of course, we would expect backlog growth between now and the end of the year because there's some larger projects obviously in that queue. So, look, we like where we sit. We like the dynamics We think we had a very good first quarter commercially. And we look forward to updating you in kind of Q in the back half of the year on how we're progressing.
57m 29s
Yes, got it.
57m 30s
And maybe a quick follow-up to Joe's question earlier.
57m 34s
What is the exact timing on those onetime orders in total of $300,000,000 to $400,000,000 Should we anticipate more in the second half? Or is it like even out in the next two, three quarters? [indiscernible] again, we're not going to talk about precise diamond, but I would tell you it's back half loaded.
57m 58s
Yeah.
57m 58s
Yeah. And maybe one last question for me. For those in the backlog, how should we think about the push and pull in terms of timing? What if some projects have been delays? Is that a big risk in your assumptions?
58m 15s
Look, we spent a lot of time in the backlog and teams looking at the project pieces of this quite bit. I think one of the one of the these bigger projects are longer cycle. They take years and years and years to kind of push through the revenue stream. And so I think we're always kind of looking in accounting for that as we put our forecast together. So there's always risk. It's just kind of inherent in the new build nuclear game. Maybe things moving to the right. But I think a lot of the work currently going on from a project basis is actively happening. And I think we feel very good about our forecast for the year.
59m 3s
Yuan, I'll have to say randomly too that I was convinced you would ask a question either about the PluVicto broader approval or our ApexGuard software So I got that one wrong.
59m 20s
Sorry, we just got more questions on the other part, but yeah, we can save the related questions for the callback. Thank you for taking our questions.
59m 30s
Okay. Thanks, Yuan.
59m 33s
Thank you. Ladies and gentlemen, as there are no further questions, I now hand the conference over to Thomas Logan, Chairman and CEO of Mirion.
59m 43s
For disclosure. Thank you, Ryan.
59m 44s
And ladies and gentlemen, thank you for listening in today. And always thank you for your support. Just to close by reiterating it was a strong quarter, great start to the year. The team executed extremely well. We're in a remarkable environment. It's a fascinating time to be alive, very challenging from business standpoint. But I would say that historically, these are the times where we've been at our best. Where we have excelled, we have a battle hardened team that has weathered a lot of macro variability and challenges and their track record of second to none. And I'm proud to take the field with them each and every day. Going to continue to drive hard on execution in Q2. And we'll look forward to speaking with you again in a quarter and seeing many of you in the various investor conferences and NDRs that we have scheduled for the quarter. Thanks again today and we'll talk soon.
1h 50s
Thank you.
1h 51s
Ladies and gentlemen, the conference of Mirion Technologies has now concluded. Thank you for your participation. You may now disconnect your lines.
Key Insights
Mirion delivered a strong Q1 2025, with adjusted free cash flow of $29M (62% conversion of adjusted EBITDA), 11.5% order growth (driven by nuclear power), and organic revenue growth of 6%; adjusted EBITDA was $47M (18.2% YoY increase) with margins up 260 bps to 23.1%.
The company reaffirmed its full-year 2025 guidance for organic revenue growth, adjusted EBITDA ($215M–$230M), adjusted EPS ($0.45–$0.50), and adjusted free cash flow, while raising total revenue guidance due to FX tailwinds and slightly lowering the low end of EBITDA margin guidance to account for non-tariff impacts.
Mirion acquired OncoSpace, a small cloud-native data analytics platform for radiation oncology, expected to enhance its cancer care portfolio; the deal is strategically significant but immaterial to near-term financials.
Tariff exposure in China is estimated at a $7–$9M headwind for 2025 (mainly from US-made medical products sold into China), but mitigating actions and possible product exemptions could reduce this; net 2025 adjusted EBITDA impact from tariffs and FX is projected between a $3M tailwind and an $8M headwind.
Nuclear power remains a key growth driver, with 79% of Q1 nuclear order growth from the existing fleet; management expects high single-digit growth in the nuclear power end market for the full year and sees a robust pipeline of $300M–$400M in large one-time opportunities, mostly expected to be awarded in 2025.
