Good day and welcome to the ITG Q3 conference call. At this time, all participants are on a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question, you will need to press star 1-1 on your touchstone telephone. Please note this call is being recorded. I would like to turn the call over to Chris McRae, CFO. Please go ahead.

Good morning and thank you for joining us for today's third quarter 2026 financial results webcast. Joining us today are myself, Chris Mecray, Chief Financial Officer, and Andy Parrott, Chief Executive Officer. Yesterday, after the market closed, we issued a quarterly results press release, which can be found in the investor relations section of our website at itgcom.com. We also posted a separate shareholder letter with more detailed operational and financial commentary to accompany our earnings release. The shareholder letter is intended to provide much of the details typically included in management's prepared remarks. and others. Accordingly, we will provide more condensed comments on our quarterly performance and outlook and then turn the call over to Q&A. Please be advised that information shared in this webcast is currently as of today's date and may no longer be accurate as of any replay of this event later. This webcast will include forward-looking statements qualified under the Safe Harbor Rules established by the Private Securities Litigation Reform Act of 1995, including statements reflecting expectations, intentions, assumptions or beliefs about future events or financial performance. These statements involve certain risks, uncertainties, and assumptions that are difficult to predict or beyond ITG's control, and actual results may differ materially from those expressed or implied in this webcast. We will also discuss historical and forecasted non-GAAP financial measures. Reconciliations of these historical financial measures to the most directly comparable GAAP financial measures are included in our earnings release and accompanying shareholder letter. Please refer to these statements for additional information regarding our forward-looking statements and non-GAAP financial measures. With that, I'll turn the call over to Andy.

Thank you, Chris, and good morning. We're pleased to be with you today for ITG's second earnings call as a public company. Our third quarter performance reflected continued strong execution against the objectives we outlined during the IPO process, and I'm pleased that we showed ongoing growth, continued strong new awards with both new and existing customers, and that we remain on track with our strategic objectives. As noted in August, We remain focused on discipline organic growth, complementary value creating acquisitions, and refining our operation execution, all with an eye towards shareholder value creation. With that in mind, we've clearly been surprised and disappointed in our share price performance since IPO. We do not believe it represents the underlying value of our business, or of the structural opportunity we see to build the broadband backbone of the United States for years to come. We believe price pressure reflects a set of company-specific trading dynamics combined with the market level sentiment shift we have seen with public peers as well as certain other recent IPO issuers. We are committed to doing everything in our power to maximize our market value, including active investor outreach, communications around notable business developments, and ensuring management access and transparency with our investors. That said, I'd like to offer a few thoughts about our third quarter and underscore a few items of note. Regarding INTG's focus on growth, we saw record level revenue and increased our top line in third quarter by almost 50% year over year, including growth from each of our business lines. Our E&M service saw 39% growth while infrastructure deployment grew a fully 63% versus the prior year. This includes growth from our top two customers combined and significant contributions from newer customers that have been added in the last year on both service lines. Nearly all business lines saw sequential growth as we enjoyed our peak seasonal quarter, and we saw a notable ramp in both new local wired line projects with data center customers, which remain a significant growth opportunity for ITG. We're helping to build the fiber backbone and related infrastructure connecting data center campuses, network routes, and end markets. We also have multiple bids outstanding to continue building on our growth we're experiencing in that market. Broadband connectivity is rapidly becoming an essential service, and our customers are investing to expand access, support growing bandwidth requirements, and improve network reliability. One way to see this is through our backlog and new project and relationship wins, which also illustrate the breadth of ITG's platform. We saw new awards of about $237 million this quarter, largely from infrastructure deployment, representing direct contracts for fiber build-outs across the national footprint. Our largest win was from a new logo that we've recently added to ITG, and excited about the growth as they are a multi-state fiber builder continuing to show our team and hopefully to all of our investors the continued trust in new logos that we're able to organically bring into the organization. Regarding our core legacy customers, I also note that ITG is well positioned to benefit from our customers' interest to continue vendor consolidation and outsource their infrastructure requirements. Our ability to support customers across the infrastructure lifecycle is a differentiator that can create multiple entry points for future work. And we are confident that we will be included in the list of partners for the future as these companies consolidate their providers. As we've noted previously, we completed our first post-IPO acquisition in August, purchasing certain assets of Full Circle Fiber. This tuck-in transaction was uniquely suited to ITG's flexibility, ability to move fast, and our integration strength. The acquired assets and contracts contributed positively to ITG out of the gate. We expect a run rate contribution of at least $50 million in sales at the corporate average margins. We fully expect significant accretion from the acquisition, giving attractive low single-digit multiples paid, coupled with a highly complementary profile of the business, including visible and immediate synergies. Chris will now comment more on the quarter and outlook.

Good morning, everyone, and thanks for joining us. Regarding third quarter results and key drivers, third quarter revenue increased 49% year-over-year, about 5% ahead of the plan. driven by both contributions from acquisitions as well as strong organic growth. E&M benefited from stable core customer volumes, new customer expansion, and growth in new service lines. Infrastructure deployment benefited from the expected seasonal ramp of project work as well as rollout of data center projects during the period. I think it's important to point out that all of our business lines grew in the quarter. Also, Charter and Comcast, our top customers, collectively grew both year over year by over 20%, and sequentially were stable versus Q2. While they both may be slowing overall capex, we remain stable and believe we're gaining share of wallet. Adjusted EBITDA was 64.5 million, also slightly ahead of our forecast, and an increase of 63% from the prior year period. Adjusted EBITDA margin was 14%, 120 basis points increased from a year earlier, and a similar increase from the second quarter. The year-over-year margin improvement reflected slowing new business startup headwinds. Mixed changes related to acquisitions completed also contributed. The sequential lift was driven by normal seasonal volume pickup as well as the start of new data center projects, though offset in part by higher fuel expense, which has been a headwind for several quarters versus the prior year as well. On free cash flow, the use in the third quarter was notable but included a number of factors. We saw about $18 million of acquired contract assets as well as a significant increase in WIP due to seasonal volumes. We expect more stable working capital outcomes in the fourth quarter, including seasonal increases in cash collection. Our next 12-month backlog was $1.54 billion at quarter end, increasing slightly sequentially and 27% year-over-year. E&M next 12-month backlog was essentially stable sequentially and increased 24% year-over-year, while infrastructure deployment backlog increased 10% sequentially and 31% year over year. The sequential increases reflected new and extended MSA awards from four notable new customers. We've updated our guidance for full year 2026, the details of which are in our release and commentary documents. We remain confident in achieving our growth plan set out at our IPO, including 37% full year revenue growth and 37% adjusted EBITDA growth. Slightly higher than 35% projected last quarter, inclusive of the BEAT and Q3. Our outlook reflects currently expected customer activity and timing of project grants and normal business seasonality, including essentially two weeks of fewer working days in the fourth quarter around the holiday season and the winter's effect on production in northern states. It also incorporates the expected ramp in data center activity and continued new work awarded in infrastructure deployment, which is expected to grow faster than E&M and Q4. As always, the pace of customer authorizations and permit issuance and other factors can influence variable outcomes. With that, we're happy to take your questions.

Thank you. If you'd like to ask a question, please press star 11. If your question has been answered and you'd like to remove yourself from the queue, press star 11 again. Our first question comes from Angel Castillo with Morgan Stanley. Your line is open.

Hi, good morning. Hi, Andy. Hi, Chris. This is actually Stephan Diaz sitting in for Angel. Maybe just to begin, can you just talk a little bit about your data center pipeline? How much of the backlog does it represent today? How do you view this opportunity post the midterm election results and maybe what your customers are saying on the ground post-election?

Yeah, hi, Stefan. So our data center backlog entering this year was over $500 million, and we've been ramping our revenue and production associated with that work really since more or less early summer, and that was a good contributor to the third quarter on the top line. So we've burned a little bit of that backlog down, but we still have substantial, call it half a billion dollar kind of scoped backlog in data center. So significant opportunity there. While we didn't have any major new contracts in the third quarter associated with data center, we have a number of bids outstanding and those could hit one way or another. We'll get decisions on that relatively near term. So there's a lot of work still out there for incremental associated jobs. and we're still equally bullish on that end market. I'm sorry, did I miss another part of your question there?

No, no, that was all of it. That was really helpful. And then maybe just a question on 2027. There was a major telco that cut capex for next year. It doesn't seem like it's a major customer of yours, but can you just speak to the demand environment and maybe how you see it shaping up next year versus your original expectations that you communicated to the market throughout the IPO process?

Hey, Stephan, this is Andy. I can tell you that our 2027 is looking extremely well. It gives us tons of confidence that we will absolutely deliver everything that we've committed to the street and to you on our 2027. There are levers that we absolutely have. CapEx because we actually have a handful of customers that would love for us to even accelerate some of our deliverables in 2027. So as we find, you know, peaks and valleys throughout the U.S., we absolutely have opportunities to shift resources and be able to come alongside those CapEx kind of limiting customers of ours. The other thing that's also happening is the consolidation. And, you know, with limited CapEx, as it pertains to third-party partners, also drives limited CapEx internal resources and really allows ITG to even provide greater value to our customers because we are able to do full turnkey solutions and it requires less capital overhead to execute these projects. So as we see consolidation, ITG is very, very well positioned to be able to absorb that consolidated. So our share of the wallet, if you will, continues to increase even with our customers that are out there publicly announcing that there is some capex reduction. We don't see that in our backlog.

Great. Thanks for the caller.

Thank you. Our next question comes from Steven Fisher with UBS. Your line is open.

Thanks. Good morning. Just wanted to ask you about the guidance for this year. Just curious how you factored in full circle, kind of what's the quarterly impact of that $50 million of sales you mentioned. And just curious, the growth implied or you forecasted specifically in the guidance for the fourth quarter slows down quite a bit year over year basis. So just curious why it does that in the fourth quarter, please. Thank you, Steve.

So what we see is a ramping contribution from Full Circle with relatively smaller numbers in the third quarter. It'll be a little stronger in the fourth, closer to the annualization of the full year guide that I gave. And our overall guide for the fourth quarter is intact. Obviously, that builds in an assumption of a little bit of slippage from a couple of customers in the fourth quarter relative to where we were. But, you know, there could be potential to perform a little bit better than planned, you know, depending on circumstances. But, you know, we don't want to get ahead of our skis when it comes to what we see on the top line. And Full Circle is brand new, so it's just starting to contribute.

and just sort of on the growth rate year over year, you know, significant slowdown kind of sequentially.

Yeah, that growth rate is really just baking in the annualization of acquisitions that were completed in the third quarter, a bunch of them in the third quarter of last year. So it's really just reflecting that, but still good growth assumed as we go forward. But the fourth quarter, you know, is the one where you – You annualized a bunch of those deals from last year.

Okay, that makes sense. And then just maybe shifting gears, in terms of cash flow, we're happy to see the new definition that you'll be using. Just curious how much improvement to working capital you see as possible and the potential for cash flow and free cash flow under the new definition to be positive in 2027.

Yeah, thank you. So, you know, when you look at cash flow from operations, net, CapEx, there's a couple things that, number one, we had somewhat stronger CapEx than budgeted in the third quarter and again in the fourth quarter. And that's coming, it's inclusive of the acquisitions but also some spend associated with incremental opportunities that have come up more recently. One area where we spent a little more CapEx is in our civil utility business where we've won new business and are ramping that opportunity here over the coming months. So a little bit of earlier spend to CapEx than previously planned. On the working capital side, I did note in the commentary that we had $18 million in purchased working capital in the third quarter. So that is an inorganic portion there. and we had significant ramp in volume and beat the top line, which did come with some early working capital use. So what I see is that the fourth quarter is going to be a quarter where you stabilize that and not only do we see a seasonal dip in volume, which will then help pull through some of the cash because you're not building the incremental whip, but also just to focus overall on cash collection and the pace of invoicing, which I would acknowledge was a little slow in the third quarter, which also contributed to the build and working capital. But that's not structural. I view that as a timing difference. So we do see cash improving in the fourth quarter, and we continue to believe we have the opportunity to be positive in 2027 and will

Thank you very much.

Thank you. Our next question comes from Andrew Kaplowitz with Citigroup. Your line is open.

Hey, good morning, guys. This is actually Jose on for Andy.

Morning, Jose.

Morning.

So throughout the quarter, we have increasingly heard about, you know, the potential competition from SpaceX in the future. So maybe you guys can provide a little bit more color there about how do you think about the longer term competition environment and the ability of ITG to stay ahead in the future?

This is Andy. One of the reasons ITG will continue to stay ahead, even through, you know, I would say disruptors like SpaceX, you know, Amazon, Leo, when that publicly deploys, is it does drive a lot of activity as it pertains to our E&M business where the life cycle of a customer is absolutely being reduced on the duration. So when I bring that up, what I'm saying is you see some of our largest customers reporting potentially net losses and seeing some of the disruption, but it's absolutely creating more truck rolls, more activity, more disconnect activity as we are an extension to those teams. So our E&M business absolutely kind of increases because we're having higher volume because a customer that would typically stay for seven years is potentially staying with their service provider for three or less because they're chasing the promos because there are more choices. So you can have that same conversation about 5G wireless. You can have the same conversation about now that we have more choice, those choices are driving more truck rolls. The other thing that doesn't change is the network of management of the homes passing on plant miles. So what I'm saying is The volume of networks still requires the same amount of work to maintain those networks, even if, unfortunately, some of those providers have a lower penetration than what they would have had previously. Because we are the E&M side of the business, that's absolutely going to continue to probably be on scale or greater, even with the increase of the competition. And then there's a race to, you know, add greater reliability through fiber enhancements of those networks. And that's where, once again, ITG comes in as an extension of those teams, augmenting those legacy copper plants into fiber to the home and being far more competitive because the competitive landscape is there. and other partners that we have, there's this land grab race to try and get fiber as fast as possible. And then with DOCSIS IV on a legacy MSO side, the benefit is ITG is absolutely the experts that are out there executing those electronic upgrades and what's required to have symmetrical gigabit speeds on a legacy network. ITG is brought in both in the engineering and design and the execution of that. And that's going to be going on for the next half decade before we get to, you know, that technology completely rolled out. So, yes, it changes things, but now we don't see that as any kind of detractor to our business plan at IQG.

And one other thing I'd throw on that is just I was reading recently, and Andy, you have a lot of perspective since you built some of these towers earlier in your career, but there's a lot of terrestrial fiber associated with wireless networks in general, right? So if you do build out more and more mobile-friendly and wireless technology, you're also ultimately doing a lot of terrestrial-based fiber deployment on top of that, right?

Definitely for the 5G. There's a lot of conversion from microwave to fiber projects that are still going on today with the wireless carriers that allow us to have leveraging some of our relationships that we have directly with some of these wireless carriers to ensure that we have these longer-hauling fiber networks there. You have to offload this and fiber gets closer and closer, whether it converts at the side of your house or it converts on the curb. It goes back to fiber eventually.

Very helpful. Lots of details there. So maybe shifting a little bit, I did also want to dig into the margin performance a little bit more. How should we think about the puts and takes here potentially impacting your business? You do have a fair amount of acquisitions and investments that tends to add costs. You're also scaling your business, and there's also the fuel costs, but the margin performance here has still held up pretty well. So maybe you can talk about some of that dynamics. Yeah, I mean, we're pleased with the margin outcome in third quarter, and we do believe we can maintain solid margins, you know, kind of that we outlined during the IPO process as we look forward into 27. But you're correct, there are a bunch of puts and takes. I think the headwinds are quite clear. We've had pretty substantial fuel headwinds in the last couple of quarters. And, you know, when you look on a year-over-year basis, You're probably a little shy of 1% of sales when you look at the incremental headwind of fuel expense. And beyond that, and that's real, and frankly, not fully recovered in terms of our ability to go out and just kind of get right away to offset that. But I would say positively that those negotiations are ongoing. And I do think over the course of time, we have the but it doesn't happen right away in this business. So there's been a headwind there. The other thing I'd highlight is just pretty substantial increases in healthcare costs, which maybe you've read a little bit about in the news, but that's also very real. And the way we do it, there's very real absorption of costs that we take because we provide healthcare to our employees across the country. And so there's incremental inflation headwind associated with that. So there are A couple of headwinds on margins. On the other side of the coin, we're working every day on utilization of fleet, utilization of our workforce, and I would probably say that overall business mix in the outlook, while I don't want to commit to more than neutral as I look forward today, there are some elements that could provide tailwinds as we look into 2017. So we'll have to internalize that and kind of look at a net effect in our guidance. But I think overall, the magnitude of opportunity and the top line opportunity for this company gives us a lot of comfort in our ability to get to the kind of EBITDA profit level expectations that are out there. And you can get there in different ways, right, either through more volume or more margin. I ask for a little bit of wiggle room as a new public company as we look at guidance. We're not buttoned down so much that I can be to the dollar on guide there, but I think there's a couple different ways we can get to the outlook that we've outlined. Appreciate all the color. Thank you.

Thank you. Our next question comes from Jamie Cook with Truist Securities. Your line is open.

Hey, good morning. I guess a couple questions. Andy, just because you put it out there, it sounds like you're comfortable with the 2027 outlook you guys provided at the IPO. Just wondering if we should think about the mix between organic and acquisition contribution changing, and I guess layered on that, just wondering what your acquisition pipeline looks like, if you're seeing any opportunities, if you're seeing multiple contraction or valuations more attractive, similar to what we're seeing in the public markets, and does that create an opportunity And then my second question, just with regards to customer mix, it was good to see an improvement in customer concentration despite the fact that you're growing with Comcast and Charter. Just wondering if you think that's a trend that continues as we look to 2027. Thank you.

Yeah, so yes and is the answer. So as I think of the organic contribution that gives us the confidence to absolutely deliver our 2027 forecast, The exciting thing is a lot of organic relationships. As I've said during our IPO process, our strategy right now is to land and expand. If you look at a lot of the things that we're doing for a lot of our new logos, we're at the design phase. That means 2027, we're converting from design to build. That's really where The volume is going to kick in as we have just hundreds of crews out there every single day delivering fiber infrastructure for a lot of customers. And a lot of them are not, as you mentioned, they're not the top two, top three, top five customers. The new entrances into the space are really investing in fiber infrastructure across the Atlantic Ocean, the Pacific Ocean. We're thrilled to be their partners. We're thrilled to have this variety of being able to have the peaks and valleys of having 10s, 20s, 30 different companies that are out there with the same mission and leveraging ITG to be the experts. And the benefit we're having is a lot of new organic growth and new logos have come to us because we are absolutely easy to do business with. And when I have conversations with other CEOs and investors, and other fiber companies, it's, yes, we can do that for you. You don't have to have five different partners to go get this thing put together. You can have one back to pat. And that's really one of the benefits that's allowing us to have this natural organic growth with companies that might have only been a fraction of our total revenue in 2026. that's going to have significant multiplication because we are converting from either a consulting side, a permitting side, and we're putting all the foundations in place to then convert them into full construction, activation. And then, once again, ITG is well-positioned because we then convert to our E&M side. Great, you built this network, but if you don't have customers connected to it, you're not getting any revenue, and that's where our strengths come in for our partners as well.

And I guess I'll jump in on the M&A question. The reality is we've got far more transactions out there to look at that are actionable than we can actually act on. So that's good news. I mean, we are being selective. and we're confident that there will be continued opportunity in the inorganic side as we look forward and into next year. So absolutely very active there. And Jamie, the overall value opportunity along the lines of what we've seen historically appears to be intact. So the kind of valuations that are and maybe even better in some instances. So that's good news. We think at the price points that we're looking at for transactions that in most cases are either moderately or direct negotiated, essentially, we're not risking a scenario where we've got to suddenly do something that's not economic or whatever. I mean, we wouldn't do it if it were, but we're not having to turn things down because it would be non-economic for us or non-returning. So I feel very good about the M&A construct still very much intact. And we certainly saw that with a full circle transaction. We think there's a very, very strong return on capital associated with that transaction. And yeah, so the inorganic Organic Mix probably won't change materially in 27 versus prior years. Yeah, is there anything we missed on the question, Jamie?

Yeah, it was just the customer concentration. If that improves, it sounds like it should.

Right, so per Andy's answer, yeah, there's so much opportunity with new customers that we've been adding in that I think despite expected growth from those core customers, we will continue to outgrow in the overall delivery of revenue. So they will continue to move down in a concentration sense. And just year over year, we went from 60 to under 50 in the third quarter. So it's already kind of happening today, and I think that will continue.

Thank you.

Thank you. Our next question comes from Michael Dudas with Vertical Research Partners. Your line is open. Michael, if your telephone is muted, please unmute.

Michael Dudas Good morning, gentlemen. Maybe share a little bit more about the new business you took in the third quarter. You mentioned in some of your prepared marks some of the notable areas. Maybe you can expand on that a little bit, current versus new logo customer. And then as you look at the pipeline of opportunities to convert that pipeline into the next 12 months or the backlog, where do you predominantly see that? And can you anticipate if things work right? and so forth. So, an acceleration of that moving into 2027 to give you more visibility or comfort levels on achieving those targets. Thank you.

Yeah, so I'm starting with the backlog. You know, we have over a billion and a half dollars of backlog, so we're not even at the end of the year, and we've got, you know, obviously the vast majority of expected or planned revenue, you know, against and the current consensus in backlog. So I feel quite good about the visibility of where the work's coming from based on that NTM backlog that we have. And I think, as Andy has highlighted, there's so much incremental opportunity with existing and newer customers that we've added on that it's not necessarily the full scope of that opportunity is not reflected directly in the NTM backlog. There are illustrations of that with some of the customers that we've added just in the last year where we've taken new orders or new wins and awards that'll be reflected in the fourth quarter, for example, on top of awards that we've been given within the last year. So this idea of compounding opportunity with existing customers is playing out. And I think you'll see that reflected in the Q4 backlog. In Q3, we added, I think we had four good new customers in that award list, Andy.

Yeah, we've got, you know, and the great thing is, is probably our greatest awards were new logos. one of one one great logo that you know I'm excited that we they've turned to ITG as their trusted partner and doing full turnkey solutions on doing you know hundreds of thousands of passings that they want to deliver and ITG is their strategic partner to be you know the trusted source to go execute in 2027 and we're you know we're ramping that up now in 2024 so we're We're thrilled that people are trusting us and seeing our reputation is preceding us because sometimes people are actually outreaching out to us. And from a sales perspective, it's always good when fish are jumping in the boat and the phone's ringing with new logos and new opportunities because they're looking for trusted partners that can execute and deliver what they commit on. And that's where ITG stands out.

Yeah, I think as I kind of alluded to, I think the pace of business that we're seeing in the fourth quarter is already at the point here mid-quarter where we can say it's almost certainly going to be as good or better than the previous quarter. So just a lot of business coming in over the transom here.

Thank you. Our next question comes from Brian Brophy with Stiefel. Your line is open.

Yeah, thanks. Good morning. I appreciate you taking the question. I believe in your opening comments, you mentioned full circle fiber margins were expected to be in line with corporate average. If I remember correctly, that asset was in a troubled financial situation. So is the margin profile improving rapidly there? And just any color on how you're executing that so quickly? Thanks.

Yeah, thanks for the question. You know, and fair comment, it's a company that was facing financial difficulties, but it really is a perfect illustration of the business model that we've employed, not only with that deal, but with a number of others, where you have a company that has perfectly good existing contracts, productive labor, and a high-quality fleet, but running into some financial challenges. because that's an asset purchase, we're buying essentially the fleet and the contracts and then we're bringing the people on as new employees on ITG and that integration day one approach allows us to essentially adopt those contracts, integrate them into our company and operate it as ITG almost immediately and that's how you ultimately solve for and get to a corporate average margin quite quickly after just a matter of weeks of initial integration activities. So I feel very good about that as an illustration of the actual M&A model that we employ and can continue to employ based on other transactions that we're looking at today.

Appreciate it. That's very helpful. And then there's a pretty healthy acceleration in infrastructure deployment growth here in the third quarter. Just any more color on what drove that and how we should be thinking about the sustainability there. Thanks.

I'm sorry. Can you restate the question? We didn't hear you clearly.

Yeah, no problem. There's a pretty healthy acceleration in infrastructure and deployment growth here in the third quarter. If there's any more color on what drove that and how we should think about the sustainability. Thanks.

Yeah, thank you. Definitely, third quarter acceleration in business, and that's a combination of just a seasonal ramp. We do typically see a ramp in the summer season for the construction season, so you've got people working all over the country with good weather everywhere. We We also saw a contribution from new end markets. So the work that we're doing with hyperscaler customers, for example, flows through infrastructure deployment and a lot of that was starting to pick up during the third quarter. So there's both regular seasonality and just a pure acceleration of backlog conversion into that business. And I think it's a smaller service line than E&M, but as we noted back at the IPO, it's going to grow faster because of the magnitude of fiber build-out opportunity that's out there. So you saw that realized in the third quarter. Appreciate it.

I'll pass it on.

Thank you. As a reminder, to ask a question, please press star 1-1. Our next question comes from Justin Hawk with Baird. Your line is open.

Hi. Most of my questions have been answered, but I did want to just clarify the organic versus the inorganic contribution in the quarter and in the guide for 4Q. You mentioned that you know some of the inorganic contribution falls off in the fourth quarter but it kind of looks like you know given the the full circle acquisition plus the the run rate of you know what you previously had that the organic revenue is maybe implied negative in 4Q and so I guess I just wanted to understand the dynamics there and then you know you reiterated the outlook for 27 and I think the organics were kind of mid-teens is typically what you do and so maybe if you just address the have been moving pieces there. Thank you.

Yeah, so I'd like to respond by really highlighting how we run the company. And the acquisition model that we employ is pretty unique, and I just want people to understand that organic and inorganic are pretty hard to track given our model. We do operate a total growth model, and we don't plan to dissect overall from core growth over time. There is disclosure in our filings related to revenue from operations and assets acquired, but nearly all deals that we've done to date have been asset purchases, not equity deals. So we've bought people and fleet and contracts, essentially assets plus working capital and very limited liabilities. We integrate them into ITG immediately and layer them onto our FUSE 360 platform, and they operate as ITG right away. Frankly, even the fleet that we buy has ITG decals within days or weeks. and they're immediately operating under the ITG insurance policy, just as one illustration. So many of our deals also come from struggling companies that are in or even near bankruptcy. And there are multiple illustrations of that. And with ITG, that trajectory of growth is turned around rapidly. So we enable bonding, we restore credit with customers or enable fleet expansion to meet those opportunities. and as an integrated asset, they can produce revenue previously not available to them and we could go through deal by deal and explain how that's worked for many of the deals that we've done. The fleet becomes fungible, so assets are applied seamlessly around the business and that can frankly be hard to track from the original source. So because of all these things, the growth that we've seen from acquired assets has in many cases been very substantial and that could be misinterpreted to be coming from talent resources and capital investment. From those relationships that we've acquired, it's really the opposite. In many cases, we're seeing these folks operating as ITG right away, and it's the growth coming from being with ITG that's enabled. So while we do track our profit centers and track inorganic and organic on a technical basis, according to sort of that traditional definition, I think it's just really important to note that our acquired businesses have grown dramatically since we've acquired them. So I did some math on this, and if you hold revenue stable at day one when we acquired companies over the last couple of years, and if you just look at the last year, holding acquisitions at levels of revenue acquired on day one, we grew 27% in the third quarter. The reality is if you just counted that as inorganic, it would make it appear that our overall organic growth is low. But in fact, you really have to give some credit to some of the opportunities that have been realized from acquired companies once they're integrated immediately. And if you do that, you can see that the success of this company is really based on that model. And so it's a little difficult to track the sort of technical organic inorganic, but hopefully that makes sense.

No, that does. Actually, I really appreciate that response because that does, I think all of that intellectually makes a lot of sense and that's helpful for context on it. I guess my final question here would just be on the legacy customers and the consolidations that they're talking about as part of their restructuring. I guess I would just be curious your thoughts about to the extent that you pick up share, is it is the mix more of, you know, more revenue from more share, but, you know, maybe the incremental margin on that is a little bit lower as part of their, because I think that's kind of what they communicated as part of their desire to, you know, consolidate this, and so we should think of this as maybe additive to revenue and maybe a little bit dilutive to margins on, at least on the legacy ops. Thank you.

Yeah, I would say, you know, the dilution of margin isn't necessarily going to be the case. They may dilute their spend because they don't have the same amount of layers of management to have to go and execute some of these projects. So you take some of these larger customers of ours that are going through staffing changes, announcing reductions in costs, it's actually driving more volume to companies like ITG or specifically ITG because we're the ones coming in and you're seeing reductions of positions that would typically need to be required to go execute their just BAU activity day-to-day business. So we're seeing requests coming in from those larger customers to add more incremental trucks for the E&M side to pick up more project management. So it allows us to actually maintain our margins and grow our market share within them because they're no longer using in-house resources to go execute these projects and leveraging ITG because it is more efficient. To our customers, we're always 100% productive and efficient because everything we do is per foot, per task. And there's not this level of overhead that our customers have to absorb. training cost, turnover. When you partner with ITG, all that sits on ITG is our ability to maintain, keep our workforce in place and be able to provide the skilled workforce to execute is very, very attractive when our customers are looking for their margin expansion and using us as one of their levers. So to their street, they're saying our partnerships, our leverage on companies like ITG is going to create It's not because they're getting necessarily discounted margin rates on our rate cards but they're finding synergies from their own internal overhead because it doesn't take 20 people to execute a project when you have one ITG partner that can go do the role of 20 people that are on your staff.

Thank you. I'm showing no further questions at this time. I'd like to turn the call back over to management for closing remarks.

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