Mirion Q3 2026 Earnings Call - Orders Surge 62% as Nuclear Backlog Converts to Revenue

Megan, Conference Operator, Mirion: Good day, everyone. My name is Megan, and I will be your conference operator today. At this time, I would like to welcome you to the Mirion third quarter 2026 earnings call. All lines have been placed on mute to prevent any background noise. After the speaker’s remarks, there will be a question and answer session. If you would like to ask a question during this time and you have joined via the webinar, please use the raise hand icon, which can be found at the bottom of your webinar application. At this time, I would like to turn the call over to Eric Linn, Head of Investor Relations and Treasurer.

Eric Linn, Head of Investor Relations and Treasurer, Mirion: Thank you, and good morning. Welcome to Mirion’s third quarter 2026 earnings conference call. Joining me this morning are Mirion’s Founder, Chairman, and CEO, Tom Logan, and Mirion’s CFO and Medical Group President, Brian Schopfer. Before we begin today’s prepared remarks, allow me to remind you that comments made during this call will include forward-looking statements, and actual results may differ materially from those projected in the forward-looking statements. The factors that could cause actual results to differ are discussed in our annual reports on Form 10-K, quarterly reports on Form 10-Q, and in Mirion’s other SEC filings under the caption Risk Factors. Quarterly references within today’s discussion are related to the third quarter ended September 30, 2026, unless otherwise noted. The comments made during this call will also include certain financial measures that were not prepared in accordance with generally accepted accounting principles.

Reconciliation of those non-GAAP financial measures to the most directly comparable GAAP financial measures can be found in the appendix of the presentation accompanying today’s call. All earnings materials can be found in the investor relations section of our website at www.mirion.com. With that, let me now turn the call over to Tom, who will begin on page three.

Tom Logan, Founder, Chairman, and CEO, Mirion: Eric, thank you, and good morning, everyone. Yesterday, after market close, we issued our third quarter results, and I’m pleased to report a quarter that reflects the continued positive momentum in our markets. Strong orders, including $140 million of large opportunity wins, revenue growth that demonstrates backlog conversion, and full-year guidance that has us expecting mid to high teens organic revenue growth in Q4. Let’s start with orders, which remain the key bellwether for our business. Here, we delivered yet another strong quarter, up 62% year-over-year, excluding M&A, to $340 million. The nuclear power end market led the way with an impressive 105% increase, also excluding M&A. On the revenue performance, you’ll recall that in July, I told you we were gearing up for a strong second half acceleration.

Third quarter organic revenue grew 6.5%, and we are tracking towards mid to high teens organic revenue growth in the fourth quarter. Our expanding backlog is doing what is expected, converting into accelerated revenue. That momentum, together with the visibility we now have through nine months, informs our revised full year 2026 guidance, which Brian will walk through. I would also note that we expect net leverage to improve to approximately 2.6 times by year-end, which reflects both the earnings growth and the cash generation that is expected in our fourth quarter. Let me emphasize that our debt structure is very low cost, with an average coupon of below 3%, or less than half of what it would be if it were in the form of straight debt. Thus, our effective leverage exposure is arguably substantially lower than many people believe when looking at screens.

On the subject of guidance, and before we go to panel four, I’d like to address our previously announced 2028 margin target, which we now believe is too aggressive. Our medical organic growth has been tempered over the last few years due to external factors, and we believe that margin expansion at Paragon will be behind initial expectations. Additionally, I’m prioritizing significant investments in AI and cybersecurity to capture the full potential from accelerating demand in our end markets. We have a long history of driving margin growth. However, we are in the midst of a generational opportunity, and it would be short-sighted on our part to prioritize a near-term margin target to the detriment of an opportunity that we believe will drive long-term shareholder value. Instead, we are committed to annual margin expansion driven by operating leverage, software, procurement, and self-help initiatives.

Now let’s turn to panel four, which illustrates our Q3 order book details versus Q3 of last year. Before M&A, core orders grew 62%. Total orders, including a $46 million contribution from Paragon and Certrec, grew 85% to $386 million, despite the Chinese de-booking previously discussed on our Q2 call. Nuclear and Safety orders, excluding the Chinese de-booking and M&A, increased approximately $130 million, driven by a doubling of orders in the nuclear power end market. Labs and research orders nearly doubled, helped by two large Department of Energy orders. Defense and diversified orders grew double digits, and medical orders increased approximately $19 million versus last year due to strong intake in the RTQA end market. Overall, the medical segment demonstrated order growth across all three end markets. Panel five puts the broader order trajectory in context.

This chart shows trailing 12-month orders excluding M&A, and I think the picture speaks for itself. You can see the step-up beginning in the fourth quarter of last year, which further accelerates into Q3. On a trailing 12-month basis, orders have grown 37%, excluding M&A. This growth primarily reflects nuclear power end market growth, and importantly, the installed base was the largest year-over-year contributor. Recall that we have a presence in more than 98% of the world’s nuclear reactors, and approximately 80% of our nuclear power revenue comes from today’s operating fleet. This is not growth built on unpredictable new build timelines, it is growth built on reactors that are running today. It’s also reflective of what I described last quarter, shown on panel six, as the waves of installed base customer demand.

The catch-up capital spending after decades of profound capital rationing, the life extensions and power uprates that represent near-term capacity increases, and the digital transformation that is beginning to take root. What I would highlight today is that all three waves are now beginning to materialize. The first wave is catch-up capital spending. Per the August NEI report, U.S. fleet capital spending dollars per megawatt hour reached $9.7 in 2025. That is up from $7.8 in 2024 and $6.4 in 2021. The second wave is life extensions and power uprates. In recent weeks, we saw uprate announcements totaling approximately 1.5 gigawatts, 890 megawatts across Constellation’s units in Illinois, Pennsylvania, and New Jersey, 433 megawatts across Vistra’s fleet in Pennsylvania and Ohio, and 190 megawatts, Calvert Cliffs in Maryland.

Alongside those uprates, 96% of U.S. reactors have now been approved for 20-year life extensions, and the required downstream investment work is already underway, and there may be even more runway. In July, the NRC proposed a rule that would allow license renewals of up to 40 years, double today’s 20-year limit. If finalized, operators could plan for decades of additional operation, and every added year of operation means continued demand for the instrumentation, software, and services that we provide. The final wave is digital transformation. We were previously awarded an order to digitally upgrade part of the reactor protection systems at the first operating unit of a large installed nuclear power plant. That equipment has now shipped, with installation beginning in November, and we expect to see additional opportunity with follow-on units.

This is a clear example of digital transformation moving from concept to commitment across our installed base, and we are still very early in this wave. Importantly, these three waves are not contingent upon future events, most specifically data center growth. Fleet operators have already made long-term commitments based upon a profound change in market dynamics, which are almost certainly likely to continue given the significant deficit in global electrical generating capacity. What will likely follow is a multi-year, possibly multi-decade capital growth cycle that will affect every category of instrumentation, software, and services that we provide to nuclear power plant operators. Let me pivot now to our backlog on panel 7, which illustrates the positive trend in revenue recognition. Total backlog now stands at $1.25 billion, up from $816 million a year ago.

That growth includes Paragon and Certrec, but even excluding M&A, we are seeing a sizable increase in expected backlog conversion in each of the subsequent years. Current year backlog recognition is projected to be $292 million, versus $212 million last year. 2027 backlog is $443 million versus $285 million. Put those together, and we have approximately $735 million of backlog to be recognized in Q4 2026 and full year 2027, more than $200 million greater than this time last year. This is the heart of the story, total backlog growth driving an increase in near-term revenue recognition. I will conclude my prepared remarks on panel 8, which shows the improving revenue visibility that backlog is providing. At the midpoint of our revised guidance, we now have 95% revenue coverage for the full year. That compares to 94% at this point in each of the last three years. Here is the math.

Year-to-date revenue through September is $802 million. We have $292 million of backlog expected to convert in the fourth quarter, and together, that is approximately $1.09 billion against the midpoint of our full-year revenue guidance of $1.15 billion. The remaining go-get is on the order of $60 million, and most of that reflects intra-quarter medical business, which is the kind of revenue we have historically delivered, and Paragon’s book-and-ship business that does not appear in backlog. The combination of year-to-date performance and the fourth quarter backlog meaningfully de-risks the full year. To summarize, we are delivering impressive orders performance, converting expanding backlog into revenue, and remain on track for mid to high teens organic revenue growth in Q4. We believe the generational tailwinds in nuclear power are only beginning to show up in our results and will set us up for strength in 2027.

With that, let me turn it over to Brian to walk through the financials and the details of our revised guide. Brian?

Brian Schopfer, CFO and Medical Group President, Mirion: Thank you, Tom, and good morning, everyone. I’ll continue the prepared remarks on slide 9 outlining our financial performance. Third quarter total revenue was $278 million, an increase of 24.5% versus last year’s third quarter. Organic revenue growth was 6.5%, with both segments inflecting higher from what we saw in the first half of the year. Third quarter adjusted EBITDA was $65 million, or 23.7% higher than last year. Margins were 23.3% compared to 23.5% last year, and below the modest year-over-year expansion we guided in July. A contraction in nuclear and safety margins was driven primarily by one-time adjustments to legacy projects within Paragon and headwinds in our sensing and North America businesses. This was more than offset by a 200 basis point expansion in medical margins.

Margins would have expanded approximately 150 basis points if you exclude a 50 basis point headwind from M&A, 50 basis points from certain one-time items, and almost 70 basis points from AI-related initiatives quarter. On that last point, we’ve spent almost $4 million in year-to-date operating expenses on AI initiatives that we expect to drive significant value in the coming years. Note, through three quarters, we’ve already actioned AI investments in excess of our initial full-year budget. We opportunistically repurchased $56 million worth of shares in the third quarter, which equated to 3.6 million shares. We completed our initial $100 million share repurchase program announced in December of 2024, and in August, our board approved a new $250 million program, of which $235 million remains. We generated $47 million of adjusted free cash flow, bringing our year-to-date total to $107 million, or double the prior year.

This equates to a 58% conversion of adjusted EBITDA through nine months. Lastly, as Tom Logan outlined, we experienced excellent Q3 order growth across both segments. Slide 10 details the continued progress against our large opportunity pipeline. In the third quarter, we were awarded $140 million of large opportunities or $122 million net of the Chinese new build de-booking we discussed in July. Previously highlighted awards in July included the European installed base order and the U.S. Department of Energy order. In terms of new awards, we received a Paragon order with the U.S. Department of Energy and an Egyptian large-scale new build order. This brings our year-to-date awards to $244 million, which is $234 million higher than the same period last year. Importantly, we have not lost any of the large opportunities in our pipeline this year. We are targeting approximately $125 million of additional awards in the fourth quarter.

Included in this $125 million are two orders totaling more than $80 million that were actually awarded in September, that are not currently in our backlog as the project is awaiting EU funding approval. These are related to new builds in France and are part of our strategic alliance with EDF. Before digging into the quarterly financial results, first, an update on the nuclear power end market on slide 11. Nuclear power orders, excluding M&A, grew 105% in the third quarter, or 108% excluding FX. Excluding the Chinese de-booking we discussed last quarter, orders were actually up 134%. We booked $16 million of SMR orders in the quarter, roughly in line with the $17 million in last year’s third quarter, bringing year-to-date SMR orders to $54 million, which came from 11 different SMR designers. Nuclear power organic revenue grew 14%, driven by growth in the installed base and SMRs.

This is a meaningful inflection from the flat organic growth we reported in the first half, as the backlog we have been building has begun converting into revenue. We remain confident that nuclear power will see double-digit organic revenue growth for the full year, which implies further acceleration in the fourth quarter. Let’s get into the quarterly financials beginning on slide 12. Consolidated third quarter revenue grew 24.5% to $277.8 million. Approximately 18.6% of growth came from acquisitions, mainly Paragon, partially offset by a 60 basis point headwind from FX. Organic revenue growth was 6.5%, slightly below the high single-digit guide we gave in July. As a reminder, we closed the Certrec acquisition on July 31, 2025. Third quarter adjusted EBITDA was $64.8 million, or 23.7% better than last year’s third quarter.

Adjusted EBITDA margins were 23.3% compared to 23.5% last year, as margin expansion in medical was more than offset by expected contraction in nuclear and safety. Excluding Paragon, margins would have been 23.9%, or up for the quarter. Adjusted EPS totaled $0.12 per share in the quarter, flat versus the $0.12 we reported last year, and up from $0.11 on a comparable basis that includes stock-based compensation. As a reminder, beginning in 2026, we are including stock-based compensation in our adjusted EPS calculation. We have an adjusted EPS reconciliation slide in the appendix that has the details for your modeling. Turning to the nuclear and safety segment on slide 13, third quarter revenue was $194 million, up 34%. Organic revenue was 6.3%, in line with our July guidance. As previously mentioned, nuclear power end market revenue grew 14% organically, driven by the installed base at SMRs.

Labs and research declined, which was partially offset by an increase in defense and diversified. We continue to see strong performance out of Paragon, with revenue growth of 12% for the quarter and 22% year-to-date. We continue to be on track to achieve at least 25% year-over-year growth for Paragon. Adjusted EBITDA grew 23% to $49.8 million. Margins contracted to 25.7% from 28.1% last year. As we indicated in July, this reflects dilution from Paragon, inclusive of margin pressure from those legacy contracts, mix, and the lapping of a reduction in incentive compensation in 2025. Excluding Paragon and the impact of incentive compensation adjustments in the prior year, margins would have been 28.3%, or up for the quarter. Onto the medical segment on slide 14. Third quarter revenue was $84 million, up 6.7%. Organic revenue also grew 6.7%, modestly below the high single-digit growth we had expected in July.

While we did have a very robust order growth in the quarter, order timing heavily favored the back end of September. All three end markets contributed to organic growth. RTQA was the largest driver, reflecting continued strength in the OEM sector. Encouragingly, nuclear medicine and dosimetry services, both of which declined in the second quarter, grew organically in the third quarter. Medical segment Q3 adjusted EBITDA was $31.7 million, or 12.4% better than last year. Margins expanded 200 basis points to 37.8%, driven by RTQA performance and operating leverage from higher revenue growth. Although medical margins expanded, the size of the increase was below our internal expectations, partially driven by a specific product one-time quality cost impact within our nuclear medicine end market. Turning to adjusted free cash flow on slide 15.

We generated $47 million in the third quarter to end the first nine months of 2026 with $107 million, for 58% conversion of adjusted EBITDA, versus $53 million and 35% respectively last year. Net working capital was a source of cash in the quarter, a trend that we expect to continue into Q4. We also continue to benefit from lower cash taxes, which are expected to be better than our initial guidance, and from our capital structure, with a blended cost of debt expected to be approximately 2.8% for the full year. We ended the quarter with net leverage of 3.1 times or 2.8 times excluding our opportunistic share repurchases we did in the quarter. We expect net leverage to improve to approximately 2.6 times by year-end at the midpoint, assuming no fourth quarter share repurchases or M&A.

Turning to slide 16, we are revising our full year 2026 guidance, which reflects better visibility with only a quarter to go. We are raising our total revenue growth guidance to 24%-25%, up from 22%-24%, which includes acquisition-related tailwinds and a slight full-year tailwind on FX, driven by the euro. We are also raising our organic revenue growth guidance to 7%-8%, up from 5%-7%, reflecting the inflection with the second half performance and the conversion of our growing backlog. On our fourth quarter organic revenue growth, consolidated organic revenue growth is expected to be in the mid to high teens. Medical is expected to grow mid-single digits plus, while nuclear and safety, including Paragon’s December results, is expected to grow high teens plus, driven by nuclear power. We now expect adjusted EBITDA of $285 million-$292 million, and margins of approximately 24.7%-25.2%.

We’re holding the low end of our prior adjusted EBITDA dollar range and lowering the high end, reflecting our third quarter margin headwinds in nuclear and safety and lower than expected medical margin expansion. Even so, this range implies adjusted EBITDA margin expansion in the fourth quarter versus last year for the total company. We expect to see slight margin pressure in medical due to prior year comps, mainly around incentive comp and other one-time items. In nuclear and safety, we expect the best margin expansion quarter of the year. Moving to adjusted free cash flow, we are raising our guidance to $170 million-$185 million from $155 million-$175 million, which represents 60%-63% conversion of adjusted EBITDA, up from 54%-58%. We are tightening our adjusted EPS range to between $0.50-$0.54 per share, versus $0.48-$0.55 per share previously.

Lastly, we’ve also updated our guidance to reflect a fourth quarter euro to dollar rate of 1.12. With that, we’re happy to take your questions.

Megan, Conference Operator, Mirion: We will now move to our question and answer session. If you have joined via the webinar, please use the raise hand icon, which can be found at the bottom of your webinar application. When you are called on, please unmute your line and ask your question. We kindly ask that you limit yourself to one question and one follow-up. We’ll now pause a moment to assemble the queue. Our first question will come from Tomo Sano with JP Morgan. Your line is open. Please ask your question.

Tomo Sano, Analyst, JP Morgan: Good morning, everyone.

Brian Schopfer, CFO and Medical Group President, Mirion: Hello, Tomo. Hello, Tomo.

Tomo Sano, Analyst, JP Morgan: Thank you. Maybe just on nuclear margins. I understand some of the pressure reflects the legacy Paragon mix as well as investment you are making in areas like AI. If we look through those headwinds, how should we think about the underlying margin trajectory of the nuclear business? As we move into 2027, should we expect those headwinds to begin to moderate and see more of the underlying operating leverage come through? Thank you.

Tom Logan, Founder, Chairman, and CEO, Mirion: Yeah, Tomo, why don’t I start? My view here continues to be very constructive. We see enormous potential to drive margin expansion overall. As I indicated, there are really three broad themes that are causing us to kind of step away from this 30 point near term EBITDA margin target. Clearly, one of them is AI and cyber, where if we look at where we are today, what our outlook is on the promise, the potential, but also on the cyber side, the risk. We are spending far more on AI and are likely to continue to do that than we anticipated three years ago when we set those targets overall. Secondly, it is on Paragon. On Paragon, just to flesh out the picture here a little bit.

If you look at the margins on their core business, they’re very strong. They’re net accretive to overall Mirion margins. But where we are, I wouldn’t say upside down, but where we are gaining better insight really relates to a large-scale product development initiative that is fleshing out our positioning in instrumentation and control in nuclear power plants. Here, the spend is a little higher than anticipated, and I think the overall timeline to driving margin accretion in this category is going to be a bit longer. All of which is to say we’re thrilled with Paragon. We are doing very well on the integration campaign overall. But as we’ve gained more insights about how this component of their business is likely to evolve over time, we’re just simply taking a more conservative viewpoint on it. The final piece of the puzzle is on medical.

As noted, really due to the macro, we have seen a two-year flat spot in medical sector growth overall. To be clear, this is a sector-wide issue. We have outperformed our competitors in this space. We are seeing a recovery. But again, in the context of where we were three years ago, we have just kind of rerated our expectations overall. Everything that we’ve talked about historically in terms of the continued potential to drive improved absorption dynamics, improved procurement initiatives, to harness the internal productivity of AI to drive greater product volume through AI-enabled services, and all the other self-help measures continue to be there. Again, we have a long history of margin expansion and our targets internally are very aggressive. We’ve simply removed that 30-point near-term target because we felt it was becoming a distraction and creating a bit of overhang.

Tomo Sano, Analyst, JP Morgan: Thank you, Tom. Maybe one on capital allocations. With free cash flow improving and leverage coming down, how are you thinking about priorities among M&A, further deleveraging, and then share repurchase as we move into 2027?

Brian Schopfer, CFO and Medical Group President, Mirion: Yeah, I think what we’ve been talking about, Tomo, externally is a bit of a kind of a 20/40/40 model. About 20%-ish of our cash flow going towards CapEx and organic growth initiatives. About 40% we’ve been thinking about through the M&A lens, and that’s all going to be bolt-on type deals. Then the last 40%, deploying really back to the shareholder, right? We don’t have a dividend today, so that’s pretty much entirely in the form of share repurchases. I think we’ll continue to evaluate that. I would note, we’re exceedingly happy with the cash flow performance of the company. We expect to continue to have momentum in that space. I think we’re very well-positioned for that to continue.

Tomo Sano, Analyst, JP Morgan: Great, Duane. That’s very helpful. I’ll leave it there. Thank you.

Brian Schopfer, CFO and Medical Group President, Mirion: Thanks, Tomo.

Megan, Conference Operator, Mirion: Your next question will come from Quinn Frederickson with Baird. Your line is open. Please go ahead.

Quinn Frederickson, Analyst, Baird: Good morning, guys. Thanks for taking the questions.

Tom Logan, Founder, Chairman, and CEO, Mirion: Hey, Quinn.

Quinn Frederickson, Analyst, Baird: I wanted to start off just on the AI investment spending. Could you maybe discuss why now is the right time to lean further? And where would you expect your AI investments to translate into returns in the P&L? Would it be primarily better growth or margin expansion?

Tom Logan, Founder, Chairman, and CEO, Mirion: Yeah. Quinn, there are really many dimensions to this overall as we think about our AI spend, and I’m going to lump cyber in there because, as we’ve seen most recently with this PHP exploitation, cyber risk is absolutely exploding, really driven by the enhanced capabilities derived from Anthropic and other frontier models overall. As we think about AI spending right now, there are really three broad components to it. One is the data infrastructure that is really kind of creating the frictionless flow of data with the proper ontology within the enterprise overall. A second area is in internal productivity.

Equipping from executive suite down to shop floor, all of our colleagues with AI capabilities, training them on them, and going through the process, really optimizing token spend as people come up that curve, where we are being very careful about managing that dynamic, putting people on the appropriate model for their needs, and again, continuing to monitor that as people develop a more mature relationship with this technology. The third element is on customer-facing product development. And here we have many dozens of identified initiatives where our view is that AI can meaningfully enhance the utility of some existing solution, whether it’s instrumentation, software, or services that we’re providing to the customer. And we’ve taken a very disciplined approach to creating a hierarchy of priorities and making sure that our spend is aligned with those initiatives overall.

But to be clear, here as everywhere, there is front-end loading on AI expenses. Again, as we develop the infrastructure, as we train our team members and as we do the development work on customer-facing solutions that are to be launched commercially. We’ve not yet guided in terms of when we expect we will achieve a break even on this, and we’ll probably provide some more insight around that as we approach our investor day next year. But to be clear, we’re very committed to this. We want to be a leader in AI. We believe we are, based upon the feedback of Anthropic and others, in comparison, broadly speaking, with the industrial technology peer set. And we think ultimately this is going to create enormous value for the enterprise.

But again, recognizing that front-end loading and recognizing the call on both OpEx and CapEx, certainly this has been a factor in just kind of pulling back a little bit on that margin target.

Quinn Frederickson, Analyst, Baird: Good. Thanks, Tom. Second question would just be on Paragon. You discussed the margins there. Is there any change in the revenue expectations? I think you were talking about 25% pro forma growth, and just given where you are at year to date, should we be thinking about a pretty big Q4 for Paragon? And just if you could discuss what drives that.

Brian Schopfer, CFO and Medical Group President, Mirion: Yeah, I think I said at least 25%. I think we continue to be super happy with where we sit in that cycle from then. The third quarter, Quinn, was their hardest comp, right? It’s the quarter that they transacted in. And I would say the fourth quarter is set up nicely for success here, with very good coverage and very good momentum in the space. I think the other thing that’s interesting under the covers maybe of Paragon is, there’s definitely a mix of nuclear power revenue coming through, but also increased opportunity set and revenue within the DOE space, that we continue to be very excited about. So we feel good about where we sit there. We have a great team, and we’re super happy with where we’re at from an execution standpoint, and we’re very confident in the fourth quarter.

Quinn Frederickson, Analyst, Baird: Thanks, Brian.

Megan, Conference Operator, Mirion: Next question will come from Joe Ritchie with Goldman Sachs. Your line is unmuted. Please ask your question.

Anvi, Analyst, Goldman Sachs: This is Anvi on for Joe. Good morning.

Tom Logan, Founder, Chairman, and CEO, Mirion: Good morning.

Anvi, Analyst, Goldman Sachs: Hi. Yeah, thanks. I just wanted to spend a minute on the order growth that you’re seeing and how that relates to the organic growth guide as well. So, in the third quarter, organic order growth was up 62%, substantially ahead of your revenue growth in the quarter, as well as your full-year guide. Can you talk to the mix that you’re seeing within the orders today? How much of it reflects more multi-year projects versus shorter cycle orders? And just expected conversion profile over the near term as well as medium term.

Brian Schopfer, CFO and Medical Group President, Mirion: First off, just a broad comment. I think we are seeing a broad mix actually across the order base, right? We talked about a new build order in the third quarter. For what it is worth, I also mentioned some orders we actually got from EDF that are not in our backlog. Those do not run through our order rates. They are not sitting in the backlog today. We are waiting on those projects more broadly to get funded at the EU level. But those would be incremental new builds on top of what we saw even in the third quarter. The SMR number actually was not the biggest dynamic in this quarter from a growth perspective. Actually, we had negative technically order growth, right? It is flat, is probably the better way. The installed base, the DOE momentum from an order perspective, all were very encouraging.

As you think about it, because we have been getting a lot of questions about, "Hey, is your backlog just growing and it is going to convert way later down the line?" We put in this page, I think page 7 of the presentation, the kind of beginning where that outlines just how this backlog kind of rolls off. We segregated that page between kind of the legacy business, so you could compare backwards in Paragon, so we did not distort things. I think what you see here is, just within the current year, the legacy Mirion business, taking Paragon to the side for a second, we have 18% more dollars in backlog to convert this year. Next year, that number is up 26% after the third quarter, right? It goes on from there. I think, 2 years out, so that would be 2028, is up 46%.

Much smaller numbers, obviously. The point is we are not just seeing backlog build that converts later. We are seeing backlog build and come in that converts nearer term, both in year this year, but also even into 2027. I think that is encouraging and is something we continue to believe will be something that we continue to see into the fourth quarter. I think we are super encouraged about the order momentum and the backlog growth, but also how that will and is translating into revenue.

Anvi, Analyst, Goldman Sachs: Got it. That is helpful. Just for my second question, I wanted to touch upon the medical segment. It has not come up much yet, but some puts and takes around the guide for this year. I recognize you have an easy comp as well in the fourth quarter. If you can talk to the implied mid-single digit growth and what you are seeing on the ground within RTQA, that would be helpful.

Brian Schopfer, CFO and Medical Group President, Mirion: Yeah, look, I think we were very pleased with the order dynamic in medical in Q4, or Q3, sorry. I think the challenge we had in Q3 specifically is it came very late in the quarter.

Isn’t surprising. Hospital year-end activity is actually a big September thing. I think in the medical business, that is not an abnormal dynamic. I think that also helps set us up for Q4 a bit. I think on RTQA, it’s really interesting. We continue to see very good software growth on the order side. Product, I would say, has been okay this year, better in the U.S. than in Europe. Again, we continue to see some signs of life in China, which we continue to be cautious about. I think Japan continues to be a bit tepid from a bounce-back standpoint. But I would say the team is doing a nice job in what’s been a difficult medical environment. I think if you went and looked more broadly, you’d see that. But we got some great new products. We’ve added some leadership to that team, which we’re excited about.

I think we continue to be cautious, but optimistic on medical going forward. I think that’s how we’re thinking about and approaching the fourth quarter. Look, we had talked about the second quarter being slightly down, but that was really about China. If you took out China in the prior year, you saw mid-single digit plus growth there. You see it again this quarter, a little bit less than our high single-digit number. I recognize that. We’re guiding to mid-single digit plus. I think that’s a good rhythm we’re in, and we’ll see how we exit the year, and then how that implies to our guide on 2027 when we get there.

Anvi, Analyst, Goldman Sachs: Thanks. Appreciate that, Carlo.

Megan, Conference Operator, Mirion: Next question will come from Andy Kaplowitz with Citigroup. Your line is open. Please go ahead.

Andy Kaplowitz, Analyst, Citigroup: Good morning, everyone.

Tom Logan, Founder, Chairman, and CEO, Mirion: Morning, Andy.

Andy Kaplowitz, Analyst, Citigroup: Tom or Brian, it is nice to see the backlog boost in Q3. I know you talked about $125 million of new large bookings for Q4. You mentioned the $80 million you already booked in Q4, but how would you compare the large project award environment coming into 2027 versus the large project award environment for 2026? There obviously, as you know, are some big opportunities in Europe outside of France and in the U.S. potentially in 2027. You can talk about Mirion’s positioning to win them.

Tom Logan, Founder, Chairman, and CEO, Mirion: From a macro picture, Andy Kaplowitz, what we see, again, is if we begin with nuclear, and then we can talk about medical a little bit, but most of this is about nuclear. On the utility scale new build opportunities, we continue to see an improving pipeline. Some of which is still not yet in the zone of what we would put in that high engagement pipeline. But definitely as we look at the core dynamics impacting each of the major players, which would include Westinghouse, EDF Framatome, Rosatom, KEPCO, and others, we see very encouraging signs there that I think will support continued growth. We have not reflected that, again, in the close and large order pipeline. But to be clear, that dynamic continues to improve. The second element would be the small modular reactor players.

I know this is a sector that people are nervous about or have some degree of caution as they think about it overall. But our point of view is simpler. While we do share the view that over some period of time, maybe it’s five years, maybe it’s longer, maybe it’s shorter, there will be a consolidation in this sector from the arguably over 100 discrete projects worldwide, down to a handful of players that really make this market and develop it into something powerful and sustainable overall. But our point of view is far simpler, and we take the view that there is an existential race here. The developers of the small modular technology all have the dream of being SpaceX.

They recognize that they are competing in a very dynamic field, and there’s an incredible urgency to move ahead quickly, to do things in a really bold fashion. That was best demonstrated in the four new reactors that went critical in and around July 4th, which was just an extraordinary achievement overall. But we look at the grouping of the people who actually have capital, the people who actually have strong balance sheets, and we take the view that they are going to spend that money, because they need to. They need to do that to be first past the post overall. What I would say here is that, we’re incredibly proud of our positioning here.

Where if you look at the categories of instrumentation and services and software that we are selling into the sector overall, and you handicap it by life phase in terms of what has traded, what is yet to trade, we have developed an incredibly dominant position in this sector, again, with respect to our overall capability set.

And we expect to see continued growth here, and we see it as perhaps a bit more tangible than the casual market observer may be, again, because we’re taking a capital approach to it rather than a high-level macro approach. Final piece of the puzzle relates to major system upgrade work in the operating fleet overall, and we continue to see, again, swelling activity there triggered by the life extension decisions and the uprate decisions that ultimately drive instrumentation package upgrades. So as it relates to the general dynamic there, we’re very bullish about how the current dynamic will translate into 2027 and beyond. But it’s not just nuclear power.

We also have, I think, most notably the Department of Energy, where when we look at the in-queue project opportunities relating to environmental remediation, modernizing our nuclear arsenal, and continuing to support the development of advanced reactor technology, again, we see a very favorable dynamic there. So, I’m approaching your question at a higher level, but I just want to make clear that as we look at the dynamics that feed that large order pipeline, which ultimately feeds backlog, the dynamic is great.

Andy Kaplowitz, Analyst, Citigroup: It’s helpful color, Tom. Maybe just to level set us. I understand sort of the 30% margin target’s off the table, but if we think about what you can do in margin then over the next couple of years, I think the old dynamic was that Mirion could do 50%+ incrementals. Is that what we should level set toward? Is there any sort of puts and takes that you’d talk about over the next couple of years that we need to think about in terms of incremental margin targets?

Tom Logan, Founder, Chairman, and CEO, Mirion: Yeah. I’m going to speak first and Brian’s going to cringe. He can correct me after I speak. But again, I’m incredibly bullish on the margin expansion story here. Our decision to basically withdraw that 30-point near-term target is really driven by the fact that this has become a bit of a distraction, and dynamics have changed, particularly as it relates to AI and cyber spending, and the requisite front-end loading associated with that overall. But my view, given the powerful operating leverage of the business, and again, all of these self-help opportunities and the integration pathway of Paragon, et cetera, is that as we look ahead, there’s a very strong opportunity for us to drive 1-2 points of margin expansion annually. But I think we’ll provide more mature guidance in and around that as we talk about our updated long range plan.

Brian, how do you want to correct that?

Brian Schopfer, CFO and Medical Group President, Mirion: No, I think everything you said is spot on. We are not pulling back from expanding margins. I think we want to not have people worry about we are going to stretch to hit a target, and we want to make sure that we continue to operate effectively, but be responsible.

Andy Kaplowitz, Analyst, Citigroup: Helpful, guys. Thank you.

Megan, Conference Operator, Mirion: Next question will come from Nick Amicucci with Evercore ISI. Your line is open. Please go ahead.

Nick Amicucci, Analyst, Evercore ISI: Good morning, guys. I did want to just kind of drill in a little bit on the capital allocation question that was asked prior, Brian, if we can. Just kind of thinking through Q4 and kind of the opportunity set there. I understand the 20/40/40 kind of structure, but I guess, how should we view any potential acceleration of kind of share repurchases as we kind of think through just given where the stock’s trading and kind of that opportunity set there?

Brian Schopfer, CFO and Medical Group President, Mirion: Yeah, I don’t think we want to play our hand on what we’ll do there. I think the thing we do have to be mindful of in the fourth quarter is we need to get the leverage printed down, for sure under 3, and I think that’s an absolute and has to happen in the fourth quarter. So I think no matter what we do on either share repurchase or on the inorganic side, that 3 number has to have a 2 in front of it when we print at year-end, and we’re very cognizant of that.

Nick Amicucci, Analyst, Evercore ISI: Got it. Then, you touched upon it a couple of times here, Brian, but I just wanted to clarify too. So the $125 million of incremental opportunity, of the large opportunity pipeline still available in 2026, $80 million is associated with those European projects with EDF that you had referenced? So, we’re talking about $45 million incremental on top of that?

Brian Schopfer, CFO and Medical Group President, Mirion: Yeah, that’s correct. Again, we actually have an order for those, but we can’t put it in our backlog until there’s formal funding from the EU for those six reactors. Those are all new build for what it’s worth, and this was all part of the strategic deal that we cut with EDF back two years ago. So we’re super proud of the team for getting this done. But that’ll come into backlog and through orders once the funding happens. But yeah, there’s about another $40 million-ish of other larger opportunities, which look, that would be quite a haul for the year. I’d also remind you just why we’re on the orders topic one more time. The fourth quarter last year was our largest ever orders quarter. FX was also, the euro was well above the $1.15.

But also, we won a ton of orders, so that is just a dynamic to keep in mind here on the fourth quarter, even with that potential to win $125 million or $140 million of orders.

Nick Amicucci, Analyst, Evercore ISI: Got it. Thanks, guys.

Megan, Conference Operator, Mirion: Next question will come from Jeff Grampp with Northland Capital Markets. Your line is open. Please ask your question.

Jeff Grampp, Analyst, Northland Capital Markets: Morning, guys.

Brian Schopfer, CFO and Medical Group President, Mirion: Morning.

Tom Logan, Founder, Chairman, and CEO, Mirion: Morning.

Jeff Grampp, Analyst, Northland Capital Markets: On the AI spend front, Tom, was curious to get maybe a little more clarification on. It sounded like you guys are ahead of budget, obviously. No surprise there, but can you quantify that a bit more in terms of where does AI spending ultimately shake out this year, and should our expectations be that that grows into 2027, or how are you guys thinking about scaling those investments?

Brian Schopfer, CFO and Medical Group President, Mirion: Yeah. Maybe I’ll answer the P&L questions. Look, I think, I said we’ve almost done $4 million year to date, so through three quarters. That’ll obviously grow in the fourth quarter. My guess is it’ll be a $5 million or above total for the end of the year. I do think it’ll grow some next year, for sure. Most of that today is sitting at corporate. So the corporate number is where a lot of that sits, for what it’s worth. But the benefits are sitting in the business, right? Tom talked about a lot of those. I’ll tell you, on the medical side, we’re definitely seeing faster releases of products because of the spend. So the timelines are getting faster. We had some new releases at one of the most recent shows, et cetera.

So there’s quite a bit of good dynamic happening underneath, but that’s about where we’re going to land from a P&L perspective. On the CapEx side, you can add a couple million dollars to that, in this year. It’ll be less than what’s been expensed through. That probably grows a bit next year as well as we continue to build out the infrastructure.

Jeff Grampp, Analyst, Northland Capital Markets: Got it. Okay. Appreciate those details. With respect to the larger opportunities, obviously, you guys highlight some of the uprate life extension announcements we’ve recently seen. Is any of that in backlog at the end of Q3? Is any of that in large order pipeline, or how material could some of these announcements be for Mirion?

Tom Logan, Founder, Chairman, and CEO, Mirion: As we look at the life extension-related activity, yes, that does inform some of the backlog, not only in the U.S., but also in Europe. As it relates to uprate activity, there is a bit more of a lag. So that is something that is yet to come in terms of how that may translate into opportunities for us.

Jeff Grampp, Analyst, Northland Capital Markets: Understood. Thanks for the time, guys.

Brian Schopfer, CFO and Medical Group President, Mirion: Thanks, Jeff.

Megan, Conference Operator, Mirion: Your next question comes from Chris Moore with CJS Securities. Your line is open. Please go ahead. Chris Moore, it looks like your line is still muted. If you could unmute and ask your question. Thank you so much. I believe Chris is having some technical difficulties. We will return to him. Your next question will come from Brandon Knutson with Morgan Stanley. Your line is open. Please go ahead.

Brandon Knutson, Analyst, Morgan Stanley: Good morning, guys, and thanks for taking my question. To start, backlog growth has been very strong, and some of the backlog here is going to be deliverable over multiple years. As we’re seeing broad input costs inflation, what are you all seeing in terms of inflation, and how does pricing work in the backlog? Are you priced for that going forward?

Brian Schopfer, CFO and Medical Group President, Mirion: Yeah. Look, we’re definitely seeing inflation just like everybody else. I think our procurement programs that we put in place a couple of years ago have actually very much helped us be out in front of this. I think price cost was, on a dollars basis this quarter, was flattish. So on a rate basis, it hurts us a little bit. Our ability to get price in the market is something we continue to drive the teams on. It’s a little easier near term on the nuclear medicine side because of the book-and-ship dynamic. A little bit harder on the nuclear safety side, not necessarily to get price, but for it to come through the P&L. On the larger contracts, everything new that we’ve signed has escalation clauses in it that are tied to some appropriate index, depending on where that contract is.

Our ability to kind of keep up with inflation, from a large contract standpoint, we feel like we have a very good handle on. I think, as we continue to see the supply and demand dynamics working, that probably works in our favor from a pricing perspective. But price is a hard one to talk about publicly just because we don’t want to overplay our hand too much. But we’re definitely seeing cost inputs come up. I think our margin profile also helps us, right? Where, even where we’re seeing it, our ability to pass it on has been good. So that’s how we’re kind of thinking about it at this point.

Brandon Knutson, Analyst, Morgan Stanley: Great. Thank you. A quick one on SMRs. I think you said that the orders this quarter represent 11 different SMR providers, which shows good relationships across the many providers that are out there. I would also imagine this gives you good visibility into how the projects are moving along. So have you seen any slowdown in terms of, or maybe any, just a slowdown in terms of them being able to deliver on time, or any delays there?

Tom Logan, Founder, Chairman, and CEO, Mirion: No, Brendan, I think we’re seeing the opposite. I think we’re seeing an acceleration, a strengthening of the sector overall. It’s not universally true, but it is broadly true, and I think it’s a robust dynamic that timelines continue to move to the left. Again, it’s all about who has capital and who has a mature Technology Readiness Level. But as a sector overall, we’re seeing things move a bit faster and a bit more tangibly.

Brandon Knutson, Analyst, Morgan Stanley: Great. Thank you.

Brian Schopfer, CFO and Medical Group President, Mirion: There’s a real competition in that space. There’s a real competition in that space for who wins, right? Or the couple that wins. So you’re seeing that definitely play out for sure.

Megan, Conference Operator, Mirion: Your next question will come from James West with Melius Research. Your line is open. Please go ahead.

James West, Analyst, Melius Research: Guys, good morning.

Tom Logan, Founder, Chairman, and CEO, Mirion: Hey, James.

James West, Analyst, Melius Research: Tom, Brian. You guys, a couple of years ago, gave a dollar per megawatt assumption for new builds. I think at the time you were trying to describe how much larger it was with SMRs versus AP1000s. Have you updated that number since the Paragon transaction? I am assuming it is considerably higher. If you have a magnitude or an official estimate, I would love to hear it.

Tom Logan, Founder, Chairman, and CEO, Mirion: We have not, James. We will do that again prior to the investor event next year. Directionally, you are correct. It is a combination both of enhanced organic capabilities as well as the inorganic, principally through Paragon and Certrec, that augment our wallet share. Other factors that will go into this update are the fact that, when we gave that guidance a few years ago, we were still using a default operating lifespan of 60 years for a nuclear reactor. Whereas now, I think arguably that number would be 100. It will drive a bit of a different dynamic. Our mix will be different, our footprint will be broader. That number will go up for utility scale.

As it relates to the SMR dynamic, we obviously have gained an enormous amount of knowledge about the different players, the different technologies, and ultimately where that center of gravity is evolving toward. It is premature, really, to toss out a number there, but I would just continue to hold to the directional guidance we have given before that on a per megawatt basis, the opportunity set is considerably higher than it is for utility scale.

James West, Analyst, Melius Research: Okay. Got it. That is fair enough. Thanks, Tom. Maybe just a follow-up on the SMRs and the competitive environment there. Brian alluded to it, I think in the answer to one of the last questions. The urgency effect from these SMR companies, how is that having an impact on your ability to price into these projects?

Tom Logan, Founder, Chairman, and CEO, Mirion: I think, it is the old saying, good, fast, cheap, choose two. We are really good. We can be really fast. But we are a premium priced player in the marketplace. Obviously, if you look at our track record of performance to date in the SMR sector, again, we are very proud of the team for what they have done and really forged just amazing partnerships with the majority of these players where they are trying to do great things and we want to walk hand in hand with them as they do these things. Again, I would cite the July 4th criticality events, which just, I mean, amazing at how quickly that came together and what it took to make it happen. We are proud to be a part of that. So, we are really focused on being a great partner to the sector overall.

With that, I think we will be fairly paid for it. But the dynamic so far is quite good.

James West, Analyst, Melius Research: Got it. Thanks, Tom.

Megan, Conference Operator, Mirion: This concludes the question and answer session. I would now like to turn the call over to Tom Logan, Chairman and CEO of Mirion.

Tom Logan, Founder, Chairman, and CEO, Mirion: Well, folks, we really appreciate the time and attention today. Again, very proud of the performance of the enterprise and a big thanks to all of my Mirion colleagues worldwide for delivering a strong quarter. But I think more importantly, setting us up for success in Q4 and into 2027. Thank you for your time again. We will look forward to our next call a few months down the road.