TIC Solutions (TIC) technically missed on earnings, but the miss is the least important part of the third quarter. The company reported earnings of $0.14 per share, a penny below the $0.15 consensus, a 6.7% shortfall. Revenue of $639.6 million beat the $615.85 million consensus by 3.9%. Earnings grew 275.0% year over year and revenue rose 35.0%, the latter inflated by the August 2025 NV5 acquisition. The more meaningful result is underneath. On a combined basis, revenue grew 12.5% and organic growth reached 8.4%, up from 2.5% in the second quarter and 2.2% in the first. Management raised full-year revenue guidance. This quarter looks like an operating inflection, and the per-share miss reads mostly as noise around it.
The quality of the earnings deserves some scrutiny, because the per-share figures diverge widely. On a GAAP basis, TIC lost $11.1 million, or $0.05 per share, which narrowed from a $13.9 million loss a year ago. Company-defined adjusted EPS was $0.18. That figure adds back $40.3 million of acquisition amortization, $11.2 million of stock compensation and $16.0 million of acquisition and integration costs. Earnings Whispers' normalized $0.14 sits between the two. The operating picture is cleaner at the EBITDA line. Adjusted EBITDA was $107.2 million, up 19% on a combined basis, and margin expanded roughly 90 basis points to 16.8%. That compares with a 40-basis-point gain in the second quarter. GAAP operating income swung to $16.0 million from a $6.5 million loss. However, $29.3 million of quarterly interest expense still consumed it entirely.
The call explained where the acceleration came from. Inspection & Mitigation had been the drag. It returned to 8.5% growth after declining 5.5% in the second quarter, and its gross margin improved 80 basis points to 29.2%. Consulting & Engineering growth accelerated for a third straight quarter, to 20.3% from 16.8% and 9.5%. Power and utilities revenue jumped 40% to $108 million. Data center revenue doubled to $38 million in the quarter, pushing trailing revenue to $117 million, above the roughly $100 million target. Combined Consulting & Engineering and Geospatial backlog reached a record $1.29 billion, up 23%. Backlog growth has improved every quarter, from 10% four quarters ago to 14% and then 20%. Actioned synergies rose to $22 million. Management's tone was clearly more confident.
The weak spot was Geospatial. Adjusted gross margin there fell 330 basis points to 44.9%, a sharp reversal from 51.5% in the second quarter. Management cited project execution problems, mix and pass-through costs, and it has made leadership changes in the segment. Management also still frames underlying I&M growth as low-to-mid single digits. That suggests the third-quarter I&M rebound partly reflects new site ramps and outage timing rather than a new run rate. Some U.S. data center work, notably in Texas, is shifting. Converting the large multi-year backlog depends on customer schedules.
The balance sheet is where bears have legitimate ammunition. Cash fell to $197.9 million from $439.5 million at year-end. Nine-month operating cash flow was just $36.6 million, down from $45.3 million, as receivables rose $95 million and contract assets rose $66 million. Management said delayed I&M collections will partly slip into early 2027. TIC also spent roughly $170 million in the quarter on GeoVera, WDI, Core Group and a smaller bolt-on. Together these add about $90 million of annualized, margin-accretive revenue but were priced at the high end of a 5-7x range. Net leverage rose to 3.9x from 3.7x, liquidity dropped to $293 million from $474 million, and term debt stands at $1.6 billion. The executive chairman's emphasis on cash conversion and deleveraging is an acknowledgment that this is now the gating issue.
Guidance was constructive. Full-year revenue is now $2.24-$2.27 billion, up from $2.15-$2.25 billion. Adjusted EBITDA was narrowed to $342-$350 million, lifting the midpoint to $346 million. The first 2027 framework calls for mid-to-high single-digit revenue growth with EBITDA growing faster, helped by expected pent-up oil and gas outage demand. The market had already started to price in improvement. Shares rose 31.9% since the open after the August report to $10.70. That is 22.2% above the 200-day moving average and within 1.6% of the inter-earnings high set the day before the release. Investor sentiment climbed from -0.18 to roughly neutral, meaning skepticism has faded without turning into enthusiasm. The trend readings lean positive, with momentum and AVWAP favorable while sequential growth is neutral.
The bottom line is that TIC delivered the organic acceleration, margin expansion and guidance raise that skeptics of the Acuren-NV5 combination were not positioned for, and a one-cent EPS miss does not change that. But the stock entered the report near the top of its range after a 30%-plus run, so the easy rerating may already be done. The next leg depends less on demand, which looks healthy, than on fixing Geospatial execution, collecting receivables and showing that acquisition-fueled growth can coexist with falling leverage.