Limbach Talks Owner-Direct Shift, Data Center Upside and M&A Growth at Oppenheimer Conference

Key Points

• Owner-direct shift: Limbach has moved over the past 4–5 years toward an owner-direct (ODR) model, says its mix has largely stabilized and the company is positioned to pursue growth into 2026–2027 while emphasizing long-term (10–30 year) customer relationships.
• Data centers as risk-managed upside: Management views data centers as additive but selective — Q1 bookings included $56M of data-center work, the company has underutilized 14-acre fabrication capacity in Chattanooga, and sees retrofit/maintenance and liquid-cooling opportunities while managing exposure between ODR and GCR work.
• M&A and balance-sheet readiness: Acquisitions are the top capital-allocation priority (six deals since late 2021 and a robust pipeline), supported by an expanded $100M revolver, with targets focused on geographic and vertical expansion and expected margin improvement into 2027.

Limbach NASDAQ: LMB executives emphasized a continued shift toward owner-focused work, expanding data center opportunities, and an acquisition-led strategy to broaden the company’s geographic footprint and vertical market reach during a fireside chat at the Oppenheimer Industrials Virtual Conference.

Business overview and strategic shift

Chief Executive Officer Mike McCann described Limbach as a “building system solutions firm focused on mission-critical facilities,” providing mechanical, electrical, and plumbing (MEP) infrastructure work across the Northeast, Southeast, and Midwest. He said the company operates across six primary vertical markets: healthcare, industrial, manufacturing, data centers, life science, higher education, and culture/entertainment.

McCann said Limbach organizes its operations into two segments based on customer relationship type: Owner Direct Relationship (ODR) and General Contractor Relationships (GCR). While ODR work is “traditionally” more tied to existing buildings, he clarified the segmentation is defined primarily by “who we’re working for and who our relationship [is] with,” rather than strictly by new construction versus existing facilities.

McCann said the company has spent the past four to five years shifting from “traditional E&C large construction” toward an owner-direct model. Looking ahead, he said Limbach believes it has reached “a relative mix stabilization” and is positioned to pursue growth into 2026.

What management views as differentiators

McCann outlined three differentiators he said set Limbach apart:

• A connected footprint: He said the company aims to deliver a consistent customer experience across markets, citing examples such as “Tampa,” “Boston,” and “Columbus, Ohio.”
• Integrated solutions and installation: McCann said Limbach does not operate with separate engineering and installation organizations, positioning the company to deliver “creative solutions that we can install.”
• Nimbleness and speed: He said Limbach emphasizes speed-to-market and views itself as a “solutions partner” spanning planning, service/maintenance, and complex installations.

He also said the company’s approach centers on long-term customer relationships, targeting “10, 20, 30-year” engagement rather than “build one project and leave.”

Bookings momentum and end-market diversification

Discussing recent performance, McCann said management took “a lot of lessons learned from 2025,” including an increased focus on diversification. He said healthcare remains the company’s strongest vertical market, but several areas became more challenging in 2025 as customers were “not spending as aggressively.” He cited factors including the “Big, Beautiful Bill,” NIH spending tied to higher education, and tariffs impacting manufacturing, along with broader election-year uncertainty.

McCann said Limbach has recently rebuilt demand, pointing to bookings of $225 million in the fourth quarter and $209 million in the first quarter, for a combined $434 million. He called that the company’s “strongest couple quarters” of bookings. He also stressed the importance of sales execution, noting that orders must be sold before they become revenue, and characterized the first quarter as “kind of an air pocket” ahead of momentum he expects to build “over the course of 2026 into 2027.”

Data centers: mix of ODR and GCR, with emphasis on risk management

McCann said Limbach has performed data center work for “probably eight or 10 years,” with a concentration in Columbus, Ohio, and characterized current activity as an expansion of existing relationships rather than entirely new ones. He said supply-and-demand dynamics are favorable and that the company sees opportunities across its “six customer solutions,” including service and maintenance.

McCann repeatedly underscored a risk-managed approach. As an example, he referenced a $30 million fabrication project contracted direct with an owner, describing it as the “fifth or sixth” project of that type and noting the company prefers to scale gradually rather than take “a huge chunk.” He also pointed to available capacity at Limbach’s fabrication facility, saying the company has a “14 acres fabrication facility in Chattanooga” that has been “barely” utilized.

On whether data center work is owner-direct, McCann said it is “a mix,” noting the company has developed contract mechanisms to make owner-direct work easier while remaining selective about returns. He cited company guidance that includes “20%-25% GCR” work and said Limbach would “rather work for the owner” when possible.

McCann also highlighted potential “day two work” and said the “advent of liquid cooling” could create retrofit opportunities on large data center campuses. On the maintenance side, he said Limbach is evaluating opportunities beyond original equipment manufacturer (OEM) coverage of major cooling equipment, and referenced ongoing discussions and requests from customers in multiple areas.

McCann said the company does not want to “over-index” to data centers but believes it is currently “under-indexed.” He cited first-quarter booking mix as an example, stating that of $209 million in Q1 bookings, $56 million was data center-related while $155 million was not, which he said still supported a “1.12 book-to-bill” and demonstrated that data centers can be “really additive.”

M&A priorities and balance sheet positioning

McCann said acquisitions remain an important growth pillar, with targets focused primarily on expanding geographic footprint and enhancing customer solutions and owner access. He said Limbach is building three national vertical market teams—data center, healthcare, and industrial—that management believes can accelerate value creation from acquisitions.

He outlined key acquisition filters including cultural fit, customer base, and margin improvement opportunity. McCann said Limbach has completed six acquisitions since late 2021 and referenced Pioneer as an example, describing it as having a core business in industrial and higher education with potential to “layer on healthcare and data centers.” He said the company has “a pretty robust pipeline” and that he and Chief Financial Officer Jayme Brooks “wanna get deals done this year.”

On the timing of margin improvement at Pioneer, McCann said the company hopes to see improvement in the back half, with 2027 as the period when Limbach can “really ultimately institute some big-time margin changes.” He described the company’s integration approach, including moving quickly through systems integration such as accounting, HR, benefits, and ERP transitions to reach the “value creation process” sooner.

Brooks said from a capital allocation standpoint, “our priority is acquisitions.” She noted Limbach has a revolving credit facility that was expanded to $100 million, providing liquidity for transactions. She also said the first quarter was a cash draw “as expected,” with stronger cash flow anticipated in the back half of the year as the company bills and collects on work performed. On share repurchases, Brooks said Limbach has a repurchase program and may use it opportunistically, but reiterated that acquisitions are the main priority.

About Limbach NASDAQ: LMB

Limbach Holdings, Inc NASDAQ: LMB is a U.S.-based mechanical construction firm specializing in the design, installation and maintenance of heating, ventilation and air conditioning (HVAC) systems, piping, plumbing and sheet metal fabrication. The company delivers comprehensive mechanical solutions to commercial, institutional, health care, education, government and industrial clients, drawing on its in-house engineering, prefabrication and construction management capabilities.

The company's service offerings encompass full-scope mechanical construction, including energy system design, direct digital controls and building automation, retrofits, testing and balancing, preventive maintenance programs and emergency response services.

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