IES Holdings Inc (IESC) delivered a solid QQ3 2024 performance characterized by strong top-line growth, expanding margins, and robust cash flow generation, despite a meaningful cash outflow linked to acquisitions. Revenue rose to $768.4 million, up 31.5% year over year and 8.9% quarter over quarter, driven by favorable project mix across the company’s three segments: Commercial/Industrial, Communications, and Infrastructure Solutions. Gross margin stood at 25.3%, contributing to an operating margin of 11.7% and net margin of 8.1%, with EBITDA margin around 13.0%, underscoring operating leverage and disciplined cost control.
Cash flow remains a highlight, with net cash provided by operating activities of $82.9 million and free cash flow of $65.4 million in the quarter. However, investing cash flow was negative at $85.0 million, reflecting the company’s ongoing strategy to pursue acquisitions and strategic capabilities, including net acquisitions of approximately $67.7 million in the prior quarter. The balance sheet shows a conservative leverage profile with total debt of $38.7 million and net debt of approximately negative $6.2 million, supported by a cash balance of about $44.9 million and a solid liquidity position. Strong working capital metrics (DSO ~71 days, CCC ~39 days) indicate efficient cash collection and inventory management for a project-based business.
The management commentary, though not disclosed in this transcript, has historically emphasized disciplined project execution, backlog management, and selective acquisitions to broaden capabilities in electrical design, installation, and power infrastructure. Given the company’s diversified end-market exposure to electrical infrastructure, data center networks, and renewables-related projects, IESC is positioned to benefit from capex cycles in utilities, industrials, and data-center buildouts while balancing near-term cash outlays with accretive long-term growth. Investors should monitor backlog visibility, integration progress on acquisitions, and commodity/labor cost inflation that could influence margins going forward.