Mirion Technologies, Inc. (MIR) Earnings Call Transcript & Summary

All right, we're going to get -- we are going to start again. Thank you for joining us. We're here with Mirion Technologies. Very excited to have Mirion with us today. We've got Tom Logan, who is the CEO and Founder; and Brian Schopfer, who is the CFO. Tom, as I walk over to you. I think the investors are increasingly familiar with the Mirion story. You've done a good job over the last few years. Obviously exposed to some exciting trends. But maybe talk about -- there's some that probably still don't know you as well, so maybe a couple of minute overview and then -- you said, I think, on the last call, the Mirion is category of one. Maybe talk about that.

Okay. Great. Well, Andy, pleasure to be here with you, as always. Let me begin with the elevator pitch as to who we are. First, again. I'm Tom Logan, I'm the founder and longtime CEO of the company. I've been in role now for about 22 years and excited to enter this year as a public company and continue to drive the arc of our growth as a business. The best way to think about Mirion is as a pure play in the detection, measurement and analysis of ionizing radiation. That sounds very esoteric, very technical, and it is, but it's also a very exciting market. Firstly, when we talk about ionizing radiation, we're talking about radiation that can knock an electron out of orbit. And you can think of all of the vertical market dynamics where this is relevant, nuclear power, health care, science and exploration, military, life sciences, et cetera, and we participate in all of those verticals. The real magic of our company is the technological leverage that our expertise drives across our different vertical dynamics. In other words, once we discover a new technology, a good example would be in detector design that has immediate applicability across our network. And so this is really -- when we talk about a category of 1, we're the only pure play in the world in this field. And it's very exciting, very dynamic. Today, our currently served market is about $4 billion. The total addressable market is closer to $20 billion. So it gives us a lot of headroom to continue to grow as a business, both organically and inorganically without ever being confronted with the decision to become a conglomerate. Now the last thing I'll note, Andy, is that there are 2 really important kind of generational trends that are taking place right now. One is in commercial nuclear power. Commercial nuclear power today is about 38% of our total business. It is our largest vertical and where we have the greatest market dominance overall. And there's been a real awakening on the part of the investment community, but I think globally, just in terms of global populous, about the importance of nuclear power to power the future economy. We've heard a lot about hyperscalers and the AI and data center need for more baseload predictable, clean electrical energy. And certainly, that's driven a rally in nuclear power exposed stocks, of which we are 1 of the greatest again, nearly 40% of our total revenue. The second important generational trend is in health care, where the advances that are being made in external beam therapy and nuclear medicine, both are within our wheelhouse and are driving, again, very strong vertical market demand and long-term headwinds for our business overall.

Tom, it's a good overview. So this 1 might be for Brian, because you did report earnings last week. So I just want to hit that real fast. You reiterated '25 guidance, organic growth, 5.5% for '25. So as we think about the 2 segments, Nuclear & Safety and Medical, how are you thinking about relative growth between the 2 segments? Because I guess I would just note that Medical has been a bit slower lately, as you know, because of China and tough comps, but how do you think about the 2 segments in terms of growth for '25?

Yes. I mean, what we've said, Andy, is that medical, we expect to see a bit of a better year next year, but we're still only guiding mid-single digits right now. Within that, we believe our Nuclear Medicine business will grow at double digits in 2025. And that kind of then -- the other 2 pieces kind of fall in place. We like where the Nuclear and Nuclear & Safety business is going to grow. We've committed again to Nuclear power kind of growing high single digits for us next year. So yes, Nuclear & Safety will outgrow the Medical business in 2025, and we're excited about that.

So I'm going to ask you some more specific questions later, but I wanted to ask, like you mentioned backlog coverage is higher going into '25, 49% versus 46% at this time last year. We know the bulk of that is on the Nuclear & Safety side, I think, we do. So as you think about margin expansion in the near term, how does increase backlog coverage help with that? Obviously, you've been executing, I think, better lately. So does that give you more visibility towards execution? How to think about that?

Yes, absolutely. I think we're up, I think, we've 3 percentage points more coverage on growth, which is actually exciting and needle moving, candidly. We've spent the last couple of years working on pushing price out into the market. I think we continue to believe we can do more there. But I think we're excited about some of the new stuff we've put into the backlog and the pricing dynamics we've been able to achieve. But I think as you think about margin expansion, some of our biggest opportunities are within our own control. It's operating leverage is our absolute biggest lever we have. I always point people to -- if you look at just the third quarter versus the fourth quarter in our business, our EBITDA margins are up considerably quarter-over-quarter, and it's all revenue, right? We don't add extra people in the fourth quarter to ship product. But that tells you that also gives us ability to grow in Q1 to Q3 and lever up. So operating leverage is our most important metric or lever we have from a margin expansion standpoint. The other thing we spent a ton of time on inside the company right now is procurement. We think there's 150 to 300 basis points. We think we saw a little bit of that in '24. We think we'll see more in '25. We haven't given a precise number. And I think we want to see how the -- how it rolls through and the pace of change continue to go. And then obviously, '26, we'll see a bigger step up there. but significant opportunity. We're talking about leveraging our global footprint, bringing down the amount of suppliers we have to use our scale, et cetera. And then the last bucket, which look is that business system that we have. And it's kind of the core of everything we do, from strategy deployment to how we close a factory and everything in between. And that's our last lever. There's lots being done in that lever. Everything from the factory floor, Lean and Kaizen events to closing a factory, we're moving Wisconsin and Virginia. We've done that now et cetera. So we're excited about the margin expansion opportunity. I think the midpoint of our range is more than 100 basis points up year-over-year. So I think that's proved that we're kind of putting our money where our mouth is. And we saw a good expansion in '24, and we expect that to continue. We are -- we continue to commit to 30% by '28. So that is a number that is still on track.

Don't worry. We'll hold you to that. But Brian, let me just ask you 1 follow-up there, really related to your procurement initiative. If you go back into the end of the pandemic, supply chain was a little tough for you guys, there's tariffs out there, all that kind of stuff. So how do you prepare? And/or, I mean, again, you said a big focus for you guys is price. So I think you got better as time went on with supply chain handling. So are you ready for the noise that's out there on tariffs?

Yes. I mean I -- look, I think we are. Look, nobody is perfectly ready in this very dynamic staging environment. Just to be clear, every day, it's a little bit different. But what are we doing? Look, we have task force in both sides of the business working on this today. But if you kind of back up for a second, Andy, the company is about 50% U.S., 50% outside the U.S., right? And you may say, "Oh, wow, that might be a problem." The reality is we actually -- a lot of what we produce outside of the -- or a lot of what we sell outside the U.S., we also produce outside of the U.S., right? And that also helps us on the FX side as well as in the situation we're talking about. If you think about the net number, the net exposure for the company, it's about 13% of our revenue is -- could be applicable to tariffs if tariffs went both ways kind of across the board. And we think that is something that is meaningful, but also it's something we can manage. But we're also more focused on also the currency impacts that are happening across the country, right, so -- or across the world. So what happens with the euro does it go down? Obviously, the peso has devalued that actually potentially helps us and gives us some leverage into our supply chain, Canada, et cetera. Tax rates, right, is an important factor for us. potentially lower tax rates in the U.S. could play over the long term to our advantage in this situation, et cetera. So I think there's -- we need to look at the big -- the whole picture. I think we have enough tools in our toolkit between our internal ability to manage through this with some of the kind of other external factors to find a path. And we're pretty confident.

Just to add something to that, too, Andy, I think the other important thing to think about is competitive differential. Recognizing that for -- if you were to take any of our business segments, look at who we're competing with that. In some cases, there will be advantage gained. In some cases, there will be advantage given away based upon some of the dynamics relating to the competitive differential. Certainly, as Brian noted, a very dynamic environment. This is not -- nothing. But on the other hand, it's something that we're obviously giving considerable thought to.

Got it. And just on the pricing side, and then I'll leave this alone, you're able to sort of adapt relatively quickly if you need to. Your contracts either have escalators and/or you can focus on price pretty quickly if you need to if there are changes.

Yes. I mean the contractual tableau is complex. And in many cases, we're selling product CIF. So effectively, we're not paying tariffs, so it would be 1 of our customers paying it, there are different terms of trade that have to be taken into account, and again, a whole array of dynamics.

It's all complicated.

But our view is that if you look at our geographic footprint, again, the number of points of presence that we have both from an operational standpoint as well as a commercial standpoint. We have a large number of degrees of freedom to operate within that ultimately will allow us to adjust over time.

Great. So I wanted to ask you in Nuclear & Safety about the $300 million to $400 million. I'm sure you've got no questions on that today so far. But let me ask it to you in this sense, right, last -- on the earnings call, you said that these orders remain active in terms of you could get them by the end of '25, I think is the time frame. Are they relatively balanced, for instance, between Europe and the Americas or North America? And I think you've said in the past that there are more leverage installed base versus new builds. So maybe without giving a specific awards, could you give us examples of what a typical prospect would look like in the bucket?

The -- firstly, it's a heterogeneous mix -- overall -- where is your bingo card. And so there's not kind of a unifying standard theme other than we've characterized these opportunities as deals that would be greater than $15 million in revenue opportunity. As you noted, there is a strong geographic mix. There is a strong mix between new build activity and other large projects. So it really is a fairly diversified group. What we've noted publicly on this is that these are all deals that right now are expected to be awarded within 2025. So within the next 3.5 quarters or so. We've lost nothing. We like where we sit competitively, and this is a stronger-than-normal pipeline of large orders that ultimately will transact.

So we are public right now, so I'm going to push just a little bit more, and I'm just going to ask like -- so for example, like is something here like a 40-year-old nuclear plant that life needs to be extended. So then they order a bunch of nuclear -- Mirion products like -- is that potential type award in there? Like...

No, this is more tangible. This is more not a hypothetical strong end that this may happen. These are actual programmatic related tenders where there is formal engagement. And again, something more than an idea that somebody is thinking about. It is more tangible.

But I'm just trying to think about Tom is like an upgrade type thing? Like that's what I'm trying to get at. Like the $15 million jobs are big jobs, right? So like what's an example of a $15 million job that's not new build in nuclear -- commercial nuclear?

Yes. So they're -- in the mix would be things that would include potential government contracts that would fall within the Nuclear & Safety group, but may span in terms of segment outside of the pure nuclear industry. We've noted the newbuild activity, which, as we've guided historically on a per nuclear reactor basis can be upwards of $40 million to $50 million per reactor and so again, it is a mix of things, not necessarily tied purely to the nuclear power space. .

Okay. Anything you want to say to that?

No.

Okay. And then just in terms of historical win rates and these type of projects, is there any reason to think that your win rates would be different here? Like what are -- and then what are some of the gating factors to this $300 million to $400 million going forward? Like if we're sitting here in '26 and some of them haven't gone forward, why is that?

Yes. I think there are a few key factors. One, certainly would be the demonstrated capabilities recognizing that the very nature of the competitive space that we play in is that it has a concentrated number of suppliers. So we tend to be 1 of a few and the -- all that goes into that in terms of brand equity, relationship capital, et cetera, is very important. We're -- we feel good about where we stand there, that as we've noted before, we're the global leader in 17 of 19 product categories, even though Mirion is a relatively young company, if you date the legacy of the component pieces that actually coalesce to form Mirion, we've been in the key verticals that we play in for more than half of century. So that's very helpful. The third element would be position of incumbency. And so what we often find, and we've done a lot of market research historically as we've looked at new product categories and particularly with emerging technologies that may stretch the envelope a little bit. What we have found time and time again is that the #1 purchasing criteria on the list is position of incumbency where whoever is the incumbent is -- has a strong advantage coming into a bidding dynamic for all the obvious reasons that would be associated with that. So it's those 3 things. And then I would add to it, scale of capabilities where we have the broadest capability set in the industries that we compete in. All of these things kind of comfort our view on where we sit on these opportunities.

Got it. And you alluded to this a little bit, Tom, when I was probing the $300 million to $400 million. It seems you've been averaging sort of 1 large nuclear project a year. Hinkley Point, then Sizewell. I mean you can correct me if I'm wrong, right? But like, if I think about 2025, -- is there another large nuclear project that we're focused on for 2025? And then regardless of whether you answer that question or not, should we think that there's a better probability of large nuclear awards over the next let's call it, 2 to 3 years given the environment.

Yes, I'll answer the second part of your question. And I think that kind of informs our view on the first yes, we see, if you look at what's taking shape in terms of new nuclear projects globally, right now, there is ongoing activity in the U.K. You've noted Hinkley Point and Sizewell and that will continue as they do the generational upgrade of their technology. France has been very clear on adding to their nuclear ambitions, not only by noting that EDF will build an additional 6 to 14 EPRs in country, but further bolstered by the statement that President Emmanuel Macron made last week that they're going to sponsor 6 data center campuses co-located with some of their nuclear power stations. But then if you move beyond that and look at Europe more broadly, we see activity -- incipient activity in Poland. We think that when the conflict in Ukraine has settled that, that will represent meaningful new build activity as well as an opportunity to shore up their existing nuclear infrastructure where they have 18 operating nuclear power plants today. We see a lot of activity today in Eastern Europe, Czech Republic, Bulgaria, Hungary, that we think will accelerate over time. We're seeing continued activity in Turkey, expect activity in North Africa and kind of the Arab Gulf region. And this is on top of a strong activity today in China, Korea and other parts of the world. So the main takeaway there is that new build activity is accelerating. And with that, yes, we expect to get our bite of the apple. And I wouldn't necessarily call my [ at bat ] here. I think '25 is going to be a good year on that front.

Of the 18 facilities in the Ukraine are you in all of them?

No, we're not. This is an area where we're in many of them. We think there's an opportunity again with the presumption that when the conflict is settled, there will be some type of Marshall Plan to help rebuild the Ukraine. Who funds it right now, I think, is an open question. But certainly, part of that will be their energy infrastructure, where there's a real need to not only deal with battlefield damage in some areas, but also simply neglect and the fact that their historical supply base out of Russia, obviously, has been disrupted. We think that will give us, again, a meaningful opportunity to help to be part of the solution. In bringing that particular market, that nation back up to global standards.

I just ask you 1 side question while I remember because it's kind of related to this topic. On the defense side, right, like if European nations need to spend more because we're kind of pushing them that way. Like how does the environment look for your sort of defense-related business? And then you probably get the DOGE question occasionally, so like what's the balancing act there.

Yes. So on the defense side, today, we equipped the majority of the NATO armed forces with instrumentation that's germane to our capabilities. These are instruments that are used for detecting radiation, protecting war fighters and identifying -- locating sources of radiation et cetera. So Europe historically really has been our sweet spot from a military standpoint, in general. If NATO military budgets are increasing, particularly the European component. We would expect that some of that ultimately will find its way to the specific need that we meet, noting that the threat of radiological and/or nuclear exposure is not diminishing. If anything, it's increasing ultimately. On the DOGE question, who knows? Certainly, there will be a wildly unpredictable dynamics in government funding. We do participate in a number of government contracts in the U.S. through the Department of Energy, through the Department of Defense. We expect the budgetary dynamics are going to be, again, unpredictable over the course of the year. And the area of greatest exposure to us, if I had to guess right now, it would probably be on the medical side, where American hospitals operate on very thin, very narrow operating margins. And if you look at the period post COVID, there was a bit of a hangover where the majority of American health care providers were operating at negative margins. That toggled last year. But when you, again, contemplate the unpredictable cessation of some revenue flows into this group, offset by different demands based on population shifts, et cetera, again, very hard to predict, but that's the area where I think there's the greatest sensitivity overall to government subsidies and funding.

That's helpful. So before I get to Medical, let me ask you a question on software and then I'll open it up to the audience in case they have any questions. So I think it's been a significant focus for you guys on both sides of the business. So maybe you can update us into where you are there. I think you've said that 40% of medical revenue is software I think it's smaller on the Nuclear & Safety side. But talk about you give a goal? Like how is it helping you.

40% software and services...

Software and services. Thank you for the correction. -- the CFO, so that helps.

Yes. So on the Medical side, as you noted, this -- we were a few paces ahead of where we are on the Nuclear & Safety side of the house overall. And the play is different. There are really 3 segments that we participate in Medical. The largest is in radiation therapy. So today, a newly diagnosed cancer patient in a western kind of G20 market has a greater than 50% probability of being prescribed external beam therapy as a component of their treatment protocol. And here, we provide software that is used for workflow and data management. We provide capital equipment that is used to make sure that the linear accelerators and/or other equipment that is delivering that therapeutic dose is operating on spec and we provide other devices that are used for patient treatment planning and the like. Increasingly, software is really the linchpin of that ecosystem. A scenario where we have continued to invest heavily. We believe we have the leading independent platform in that industry. And importantly, clinicians dramatically prefer independent QA solutions versus those offered by OEMs. Importantly, we announced last year that we had entered into a strategic agreement with Siemens Healthineers, where really the keystone of that agreement is that they will be featuring our software as a component of their price book, which means that their global sales team will be mobilized to take us forward. There are many, many things that we'd like to continue to do to our -- that software suite to evolve and augment the feature set, but that's a major driver of our focus. On the nuclear medicine side, we own the leading data management software platform in the American Nuclear medicine industry. We think there's a big opportunity to take it global. We think there is more that we can do to drive coherence and clinical utility with this software platform and again, recognizing the exciting growth in this evolving theranostic therapeutic radiopharmaceutical space, this is really the foundation of our future strategy. Finally, on the dosimetry services ecosystem, we have our Instadose platform, which we view as largely being a software platform enabled by unique proprietary hardware that we offer. We continue to invest in this. We see it as an avenue of strong growth. On the Nuclear & Safety side, I think, the big opportunity that we and many others are looking at right now is the opportunity to really digitize the instrumentation ecosystem within nuclear power. Today, we have a number of product categories, more than a dozen that have discrete operating software environments, meaning that they're not compatible. They're all different. They're all unique. So if you're a customer, and you have all of these product categories. So that means you have to learn how to operate a dozen different supervisory software platforms. And so there's a clear and obvious opportunity here for us to create more of a unified plug-and-play ecosystem that not only makes life easier for our existing customers, but also creates a greater land and expand opportunity for us. As we become the incumbent as we offer this platform for a specific class of instrumentation that if something then comes up where we're not a player today, it kind of greases the skids a little bit to take that forward. And again, this is an area where the efforts that we've applied here have been long in the tooth. We're excited about what's in the pipeline, innovation, both digital and physical is 1 of my top areas of personal engagement this year.

Any questions from the audience? So actually, I'm going to jump ahead. I want to ask you about M&A and really capital allocation first before we get to Medical because you've -- I don't know, you've been maybe a little quieter as you've gotten your net leverage down to -- now it's down to 2.5. You've got good balance sheet flexibility. You announced $100 million share repurchase. But I know it's in your DNA to do M&A. So maybe talk about sort of what's out there. Are multiples feasible in nuclear safety and/or medical. Would you do more software versus hardware? What are you thinking in terms of M&A? Big deals, small deals. I asked you about 7 questions.

Sure. That's very specific. Thanks, Andy. So just by way of background, Mirion was built through M&A and organic growth. Since 2016, I think, we've done 17 M&A deals. I think we have a somewhat unique approach to deal origination that's proven very effective where a strong majority of those deals were bilaterally sourced and negotiated. They were not part of competitive processes. But we're also very good at integrating. Our average pre-synergy EBITDA multiple for that group was 12x, post-synergy about 6x. And so again, this is a core strength of the business. You noted, Andy, that when we became a public company, we came out at a relatively high leverage. We came out at 4.5x. We peaked at about 4.7x. We're very proud of the fact that we've quickly delevered the balance sheet to the point where we did better than what we guided last year, we finished the year at 2.5x leverage. What that means for us is that it opens up the aperture in terms of the opportunity set for us. To be a little bit more focused on M&A versus entirely on organic activity as we look ahead. We have continued to cultivate our deal pipeline throughout this quiet period and we very much like what we see on both Nuclear & Safety and Medical. And similar to the bid pipeline, there is a mix of opportunities that we see that would be inclusive of both hardware and software, a mix of potential proprietary opportunities as well as things that are likely to be competitively bid through some form of auction. What I would say, just to tie a ribbon around that is that we expect that we'll be active in M&A this year. It will be very deliberate. It will be very thoughtful. And we think the pipeline is good.

Can you find deals at the deal multiples you just quoted? Or is it going to be -- should we expect...

Yes, I think the reality is that multiples have gone up. What's happened, obviously, in the nuclear power space is that if you look at any of the key players. And many of you have probably followed the Constellation or Cameco or BWXT, right? And we hope us and seeing that there has been a strong kind of revaluation of nuclear power as people have understood better the insatiable needs of AI, the hyperscalers, et cetera. And we think that's a permanent shift. And certainly, that has trickled down to some of the assets that are in play. Certainly, every banker that is conducting an auction knows our evaluation. They know every other players valuation. And so in general, I think things may be a little bit more expensive, but I also believe they're probably worth more to us. And the important thing is that delta between pre-synergy and post-synergy that for anything that we are looking at, we have all of the conventional deal screens, but the 2 that are most important to me are number one, strategic coherence that this really makes sense in enabling our long-term strategy; and number two, the opportunity to drive and monetize synergies whether they be cost takeout, share gains, technological leverage, whatever it happens to be.

I think the related question is about cash flow. I always ask you, as you know. Like -- it seems like you've made some progress. So maybe talk to us about your satisfaction with free cash conversion and where you want to be at the end of '25?

Yes. I don't think either of our satisfaction is -- it's high there. I think we know there's more to do. I mean, and again, we've made a pretty big commitment for next year. We're talking a 50% step-up in free cash flow from '24 to '25 at the midpoint. So I think that's important, and that is something we are incentivized internally to do but also have committed to the Street. I think there's a lot of levers still left to pull. One, our CapEx is going to come down 18% year-over-year. We had a bigger year this year. We got a little bit of a headwind on cash taxes just because of timing. But the reality is CapEx is coming down and the net of those 2 is still cash flow positive to us. But working capital continues to be the biggest opportunity. It's AR, continues to be inventory and candidly, it continues just to be the contractual arrangements we're putting in place and driving to margin cash flow positive and not just cost cash flow positive. I think we're -- I think the team is energized. I think they're very focused on this. I think it's the top priority for the year across the board and did something that we're looking forward to making it happen.

It's good to hear, Brian. And just -- you had commented in my first question around the Medical should have a better growth year. I think the fundamental to that is I would say, a huge China headwind last year. So "easy comps there" but how do you know that China can't still get worse for you guys .

I'll let Tom talk about China. What I would say is we're not planning on any growth in China this year. So that's not part of our growth algorithm for 2025. You want to talk about?

Yes. I mean 2 comments for you, Andy. One is that the -- for anybody who follows the Medtech segment, the big stated policy reason that has impacted the market in China has been the anticorruption efforts put forth by Xi Jinping and his policymakers overall. And the long tail that's been associated with that. I suspect it's that, but I also suspect that there's some fragility right now to the Chinese economy that may be a factor as well. So to Brian's point, we've taken a very defensive stance in establishing our forecast for 2025 and in guiding it. And with the view that we want to make sure that there's not an unanticipated headwind there. But the other thing I want to say about the Medical business in general, which, as you know, has historically been a very strong growth engine for us. Our views really haven't changed. We're super, super excited about the dynamics in the medical industry. But I think this highlights an important aspect of our business, and that is a very low covariance of the demand drivers between the Nuclear & Safety side of the house and Medical. I guess I'm sure everyone in this room studied modern portfolio theory and understand that when you have that kind of negative covariance. You have an excellent hedge. This is the value driver of diversification. And I think it's an important and an attractive element of our business model that we're seeing in action.

And maybe just one side -- just 1 comment, too, on the Medical. I mean, just let's remember that Nuclear Medicine is the business we think will grow the fastest. We're committing to double digits next year. In '25 sorry. I'm still in 2020, which is the case though. So we have that. Look, we've taken a stance on '25 for dosimetry. If you looked at last year, we're saying, "Hey, last year, it grew kind of mid-single digits." We're talking low single digits this year. I think that's just more let's see how it goes. Candidly stats and the adoption rate for [ Instadose ], et cetera -- and then RTQA, really, we're talking about kind of mid-single-digit growth. That business historically for us has been a high single-digit kind of CAGR lifetime business. Look, I think we just want to -- we want to see how the first half of the year goes. We're going to see that come back, and we'll continue to evaluate that. But that's a really -- it's still a very strong business for us. And I said this on the earnings call, and I want to say it again, we think software inside the medical business grows double digits for us next year. So -- and that's mainly RTQA and a little bit of, obviously, the Nuclear Medicine business. So we are seeing that investment begin to pay off.

Brian, you're not talking about the full 40% of the software and service.

No, just the software business.

Yes. Yes. And software, do you know a rough percentage of Medical?

Yes. It's probably, it's still pretty small in sub-10% of the Medical business in total.

Okay. And then if you think about the RTQA business in general, visibility into the U.S. and Europe, just -- we talked about China, you think U.S. and Europe should grow mid-single digit plus? Is that the way to think about it? Or...

Look, I don't think we've historically given guidance kind of all the way to that but that was good. But look, I mean, that's where the majority of the business is. So inherently, it needs to grow at mid-single digits for us to do that.

Okay. Just 1 quick question on margin. Like just as I think about that journey to 30%, you've given guidance for this year, obviously, is it kind of ratable steady or is it back-end loaded because you're doing your procurement program. You've got operational excellence ramping up, like how to think about the journey to the 30%?

Yes. I think it ramps, but I don't think it's a complete hockey stick. I mean we're not talking about flat margins in '25 versus '24, right? So we're talking about growth. I think that continues and potentially has to accelerate. Let's just how the works. So yes, I think it accelerates as we get closer to 2028.

Last question, Tom. What are the top 2 or 3 innovations and structural changes affecting your company over the next 5 years? And are there any emerging industry trends that are perhaps being overlooked in the current discourse?

So the -- certainly, the biggest trends impacting the company right now relate to the market dynamics and the regulatory vector overall. So we look at the market dynamics. There's been such a reversal in the way that people think about nuclear power that, that informs we think about organic priorities. And resource and capital allocation, both organically and inorganically in that market as well. And then in terms of the regulatory vector, we talked about how that may impact the certain markets through the activities of DOGE, tariffs, et cetera, again, while it's wildly unpredictable and the impact could be positive, could be negative. Our exposure is probably less than people might anticipate on its face, just given the international footprint of the company. What I think people understand less well about our company really kind of comes back to the nuclear power story that if you look at our exposure to commercial nuclear power today, it's about 38% of total revenue. When you compare that with the people that we compete against and other people who are kind of viewed as being strong players in the nuclear industry is substantial. And this is part of the story that we need to bring out that when people have made the decision that I like the dynamics in the nuclear power market. I'd like to invest in it that we're 1 of the first names that comes up. Part of that is through efforts like this.

Excellent. I think it's a good way to end. Tom, Brian, thank you very much for joining us.

Thank you.