Limbach Holdings Announces Strong Third Quarter 2025 Performance as ODR Strategy Continues to Drive Growth
Limbach Holdings, Inc. (Nasdaq: LMB) reported another solid quarter of performance for the three months ended September 30, 2025, reflecting meaningful progress in advancing its strategic transition toward higher-margin, customer-direct business. The company delivered net income of $8.8 million and Adjusted EBITDA of $21.8 million, highlighting steady operational execution, improved scale from acquisitions, and strong commercial traction in its Owner Direct Relationships (“ODR”) segment. Management reaffirmed its full-year 2025 financial guidance, emphasizing confidence in the company’s growth trajectory and visibility into its project pipeline.
Limbach continues to focus on shifting its business mix away from lower-margin general contractor-driven construction projects toward customer-direct service and recurring revenue opportunities. This strategic shift is designed to produce more predictable financial performance and generate higher profitability over the long term.
Quarterly Financial and Segment Performance
In the third quarter of 2025, Limbach reported a 37.8% increase in total revenue, which grew to $184.6 million, compared with $133.9 million in the same period of 2024. A significant contributor to this growth was the company’s acquisition strategy, including the recent addition of Pioneer Power, Consolidated Mechanical, and Kent Island Mechanical. These acquisitions added scale and expanded Limbach’s service capabilities across multiple regions, especially within industrial and power generation markets.
The ODR segment, which represents Limbach’s direct relationships with building owners and operators, delivered particularly strong results. ODR revenue rose 52.0% year-over-year to $141.4 million, accounting for 76.6% of total company revenue. Within this growth, organic ODR revenue increased 12.2%, demonstrating success in deepening long-standing customer relationships while expanding service lines. The segment also generated $35.7 million in gross profit, representing approximately 80% of total gross profit for the quarter. Though ODR gross margins declined due to the integration of Pioneer Power, Limbach noted that margin enhancement initiatives are underway and expected to improve profitability over time.
In contrast, the General Contractor Relationships (GCR) segment — historically associated with more variable revenue and lower margins — posted $43.2 million in revenue, a modest 5.6% increase. Notably, the company continued to intentionally scale down lower-margin GCR work, causing organic revenue within the segment to decline, while acquisition-related revenue offset these declines.
Profitability, Operating Performance, and Cash Flow
Total gross profit rose 23.7% to $44.7 million, compared to $36.1 million in the prior-year period. The company’s total gross margin was 24.2%, down from 27.0% in the third quarter of 2024, reflecting the lower-margin profile of Pioneer Power during its integration period. Management reiterated that ongoing performance alignment and operational improvements at Pioneer Power are expected to gradually raise its margins to be more consistent with Limbach’s historical levels.
Selling, general, and administrative expenses increased to $28.3 million, up from $23.7 million in the prior-year period. The increase was largely driven by additional personnel, expanded cost structure from recent acquisitions, and higher non-cash stock-based compensation. Despite the increase in absolute dollars, SG&A as a percentage of revenue declined to 15.3%, compared to 17.7% last year, highlighting the benefits of operating leverage as the company grows.
Net income for the quarter was $8.8 million, up from $7.5 million, while Adjusted net income rose to $12.7 million. On a per-share basis, diluted earnings were $0.73, and adjusted diluted earnings per share were $1.05, compared with $0.62 and $0.91, respectively, in the same quarter last year.
Limbach also reported a notable improvement in cash flow generation. Net cash from operating activities totaled $13.3 million, significantly higher than the $4.9 million reported in the prior-year period. The company attributed the improvement to the timing of billings and better working capital management. Management reiterated its commitment to using free cash flow to reduce borrowings under its revolving credit facility.
Strategic Progress and Management Commentary
Chief Executive Officer Michael McCann emphasized that the company’s results demonstrate the continued success of its multi-year transformation strategy. The strategic focus centers on:
- Expanding ODR revenue and customer relationships
- Selective acquisition activity to strengthen scale and capability
- Improved operational consistency and disciplined capital allocation
McCann highlighted that the acquisition of Pioneer Power in particular is already contributing incremental revenue beyond initial expectations. While Pioneer Power currently operates at a lower margin profile than Limbach’s core business, integration efforts are well underway. The company plans to implement operational improvements and strategic commercial adjustments expected to lift Pioneer Power’s margins over time.
McCann stated:
Our transition toward the ODR model is producing tangible results. Not only are we better positioned to deliver recurring, high-quality earnings, but we are also reducing risk and enhancing the predictability of our business. We believe we are building a resilient platform designed to deliver durable and sustainable value for shareholders.
Balance Sheet and Liquidity Position
As of September 30, 2025, Limbach reported $9.8 million in cash and cash equivalents. Total current assets were $216.8 million, while total current liabilities stood at $151.2 million, resulting in a current ratio of 1.43x. The company had $34.5 million outstanding on its revolving credit facility and $5.1 million in standby letters of credit. Management reiterated its intention to continue paying down debt during the remainder of the fiscal year.
Limbach reaffirmed its full-year 2025 financial guidance, signaling confidence in market conditions and operational execution:
| Metric | FY 2025 Guidance |
|---|---|
| Revenue | $650M – $680M |
| Adjusted EBITDA | $80M – $86M |
The company maintained expectations that ODR revenue will represent 70% to 80% of total revenue for the full year, while ODR revenue growth is expected in the range of 40% to 50%. Management refined its expectations for organic revenue growth, now projected at 7% to 10%, reflecting a faster-than-anticipated reduction in GCR revenue as the company continues to rebalance its project mix.
Gross margin expectations were updated to 25.5% to 26.5%, adjusted to reflect Pioneer Power’s current margin structure. The company continues to target free cash flow equal to approximately 75% of Adjusted EBITDA.
The third quarter of 2025 marks another important step in Limbach’s strategic repositioning. With strong growth in the ODR segment, improved cash generation, and continued progress on acquisition integration, the company is positioning itself for steady, durable long-term performance. Management continues to focus on disciplined operational execution, strategic capital deployment, and strengthening recurring revenue streams.
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