IES Holdings, Inc. (IESC): PESTLE Analysis [Nov-2025 Updated]

You need to know where IES Holdings, Inc. (IESC) is headed, and the PESTLE analysis shows a high-stakes balancing act. The direct takeaway is this: IESC is defintely poised to capitalize on massive, federally-funded infrastructure spending, but the economic squeeze of high interest rates and the persistent labor shortage are real headwinds they must navigate. With a strong backlog of approximately $1.4 billion underpinning a projected Fiscal Year 2025 revenue of around $2.1 billion, the growth is clear, but protecting gross margins against inflationary pressure on copper and steel is the immediate challenge. Let's look at the six macro-factors that will determine if they hit their numbers.

IES Holdings, Inc. (IESC) - PESTLE Analysis: Political factors

US Infrastructure Investment and Jobs Act (IIJA) funding drives demand.

The political commitment to national infrastructure renewal, primarily through the Infrastructure Investment and Jobs Act (IIJA), continues to be a major tailwind for IES Holdings' core business segments. This massive federal spending package, which mobilizes unprecedented levels of funding, is a direct driver of demand for the company's electrical and technology systems. For instance, the Infrastructure Solutions segment, which provides custom engineered solutions and industrial services, saw its fiscal 2025 revenue climb to $498.7 million, marking a significant increase of 42% compared to the previous fiscal year. Similarly, the Communications segment, which services the data center market-a key beneficiary of infrastructure and energy build-out-reported fiscal 2025 revenue of $1.14 billion, up 47% year-over-year. The IIJA funding is authorized to continue through the end of fiscal year 2026, so the demand pipeline remains strong in the near term.

However, the shift in the federal administration in January 2025 has already introduced political uncertainty into the IIJA's implementation. The new administration revoked the Justice40 initiative, which had directed at least 40% of the benefits of certain investments to historically marginalized communities. This policy reversal, coupled with a focus on federal funding cuts and freezes, could threaten project implementation and slow the pace at which authorized funds are actually paid out to award recipients through 2026. Honestly, even with the political headwinds, the sheer volume of authorized IIJA money still translates into a huge amount of work for companies like IES Holdings.

Potential for shifts in federal energy policy post-2024 election cycle.

The outcome of the 2024 US election has created a clear, bifurcated risk-and-opportunity profile for IES Holdings' energy-related work. The new administration has prioritized an American 'energy dominance' agenda, declaring a national energy emergency in January 2025 to accelerate domestic energy production and infrastructure development. This is a boon for projects like natural gas pipelines and nuclear energy, which IES Holdings' Commercial & Industrial and Infrastructure Solutions segments can service.

The primary risk lies in the potential for a rollback of clean energy incentives. While a full repeal of the Inflation Reduction Act (IRA) is unlikely due to the economic benefits flowing to many Republican-led districts (some estimates suggest 85% of the money has gone there), certain provisions are in the crosshairs. Specific IRA energy credits, such as those for electric vehicles (EVs), clean hydrogen, and standalone energy storage, are more likely to be modified or curtailed as policymakers look for revenue. This means IES Holdings must be defintely agile, ready to pivot from projects reliant on specific green energy subsidies to those benefiting from the new administration's focus on fossil fuels and accelerated infrastructure build-out. The new administration is using executive orders to streamline permitting and limit greenhouse-gas analysis.

State-level permitting and regulatory approval timelines for large projects.

Permitting remains a complex, multi-layered political challenge, even with federal efforts to streamline the process. While the federal Fiscal Responsibility Act (FRA) set a two-year time limit for Environmental Impact Statements (EISs), down from an average of 4.8 years previously, a significant number of reviews-61%-still took longer than the two-year target between 2023 and 2024. Plus, litigation continues to be a major political delay, with challenged projects spending a median of three years between agency approval and a final court decision.

The good news is that some states are taking political action to centralize and expedite approvals, which helps IES Holdings secure project starts faster:

• New York: Averages only 25 days for total solar permitting time due to its standardized Unified Solar Permit.
• Michigan: State-level authority can approve large renewable projects (e.g., $\ge$50 MW for solar) if local governments fail to act within 120 days.
• Pennsylvania: The Streamlining Permits for Economic Expansion and Development (SPEED) Program allows state-approved third-party entities to perform the review process for certain permits, reducing delays.

The uneven regulatory terrain means that state-level political engagement is crucial for IES Holdings to minimize delays and costs, as permit times can vary wildly from a few weeks to several months depending on the jurisdiction.

Geopolitical tensions affecting global supply chains for electrical components.

Geopolitical risks are translating directly into supply chain volatility and higher costs for IES Holdings, which relies on a steady flow of electrical and technology components. The ongoing war in Ukraine continues to disrupt exports from Eastern Europe, and tensions in the Asia-Pacific region remain a concern for high-volume shipping lanes. More directly, the political weaponization of trade policy is impacting critical materials.

China's restrictions on exports of critical raw materials, such as gallium and germanium, are a prime example, as these are essential for electronics and semiconductors used in the data centers and high-tech manufacturing facilities IES Holdings services. The new US administration's 'America First' agenda, with its focus on increased tariffs, particularly on imports from China, and a push for onshoring, is reshaping sourcing strategies for all US companies. This political environment forces IES Holdings to focus on supply chain resilience, which means building inventory buffers and seeking alternate, more expensive sourcing routes, thereby increasing operational costs. This is a cost pressure that must be managed, especially in the Infrastructure Solutions and Communications segments where component demand is surging.

Here's a quick summary of the political risk/opportunity mapping for IES Holdings:

Political Factor	Near-Term Impact (FY 2025-2026)	IES Holdings Action/Implication
IIJA Funding	Continued high demand for services, but risk of funding cuts/freezes due to new administration policy shifts.	Focus on securing contracts now; monitor federal spending obligation rates; Infrastructure Solutions segment benefits from $498.7 million FY2025 revenue.
Post-2024 Federal Energy Policy	Acceleration of domestic energy (oil, gas, nuclear) and infrastructure projects; potential rollback of IRA credits for clean tech (EV, hydrogen).	Pivot resources to traditional energy/industrial projects; hedge exposure to projects reliant on specific IRA subsidies.
Permitting & Regulatory Timelines	Federal EIS reviews still face long delays (median 3 years with litigation); some states (NY, MI) are streamlining.	Prioritize projects in states with streamlined processes; factor in 1-2 years for litigation risk on major federal projects.
Geopolitical Supply Chain Tensions	Increased costs and delays from tariffs and export controls on critical materials (e.g., semiconductors, gallium, germanium).	Build inventory buffers; diversify sourcing away from high-risk regions; factor higher component costs into bids.

IES Holdings, Inc. (IESC) - PESTLE Analysis: Economic factors

High interest rates slow residential and commercial construction starts.

The lingering effects of elevated interest rates have created a clear headwind for IES Holdings' (IESC) Residential segment, even as the Federal Reserve began easing policy. The Fed lowered the Federal Funds Rate target range to 3.75%-4.00% in October 2025, but the damage to housing affordability was already done. This macroeconomic pressure directly resulted in a 6% revenue decline for IES Holdings' Residential segment for the full Fiscal Year 2025.

You can see this sector-wide: U.S. Housing Starts tumbled to an annualized rate of 1.307 million units in August 2025, underscoring persistent weakness in new home construction. Still, the commercial side is a mixed bag, with massive demand for data centers offsetting the general slowdown in other commercial real estate sectors. That's why IES Holdings' overall revenue growth remained strong-the Communications and Infrastructure Solutions segments are simply booming, but you defintely can't ignore the residential drag.

Strong backlog of approximately $2.37 billion provides revenue visibility.

The most important number for IES Holdings' near-term revenue visibility is its backlog. As of September 30, 2025, the company reported a record backlog of approximately $2.37 billion. This is a significant jump and provides a clear line of sight for revenue conversion well into fiscal year 2026 and beyond, especially in the high-growth segments like Communications and Infrastructure Solutions.

This backlog figure is a non-GAAP (Generally Accepted Accounting Principles) measure, but it's a critical indicator in the construction industry, representing signed contracts and letters of intent. The sheer size of this pipeline suggests that while the residential market is soft, IES Holdings has successfully pivoted its focus to large-scale, long-duration projects, particularly in the data center end market, which are less sensitive to short-term rate fluctuations.

Inflationary pressure on raw materials, especially copper and steel.

Inflationary pressure on key construction materials continues to be a major cost-push factor. For IES Holdings, which relies heavily on electrical components, this means the cost of copper and steel is a constant threat to gross margins. As of August 2025, nonresidential construction input costs rose 2.6% year-over-year, but the specific materials IES Holdings uses saw much sharper increases:

• Iron and steel prices: Rose 9.2% year-over-year.
• Copper and cable prices: Jumped 13.8% year-over-year.

The company has managed to mitigate this through favorable materials purchasing and improved pricing strategies, but the underlying cost volatility remains a substantial risk for new, long-term fixed-price contracts. You have to watch the commodity markets like a hawk right now.

Fiscal Year 2025 revenue projected to hit around $3.37 billion, a strong increase.

Despite the residential slowdown, IES Holdings delivered an exceptional year. The company's actual consolidated revenue for Fiscal Year 2025 hit $3.37 billion, marking a strong 17% increase over the $2.88 billion reported in fiscal year 2024. This performance was not driven by a single factor, but by the massive tailwinds in technology infrastructure.

Here's the quick math on where the revenue came from:

Segment	FY 2025 Revenue	YoY Growth Rate	Primary Driver
Communications	$1.14 billion	47%	Data Center Demand
Residential	$1.30 billion	-6%	Housing Affordability/Rates
Infrastructure Solutions	$498.7 million	42%	Custom Engineered Solutions/Data Centers
Commercial & Industrial	$427.7 million	16%	Strong Project Performance
Consolidated Total	$3.37 billion	17%

The growth in Communications and Infrastructure Solutions-up 47% and 42% respectively-more than compensated for the decline in the Residential segment. That's a textbook case of diversification paying off.

Tight labor market forces wage increases, compressing gross margins.

The construction labor market is incredibly tight, which is forcing industry-wide wage inflation. The Associated Builders and Contractors (ABC) estimates the U.S. construction industry needs to attract an estimated 439,000 net new workers in 2025 just to meet anticipated demand. This shortage is pushing up the cost of labor across all IES Holdings' segments.

Construction wages grew 4.2% from June 2024 to June 2025, outpacing the national average. While IES Holdings' gross profit for FY2025 was a robust $859.5 million, indicating strong operational efficiency and pricing power, this labor pressure is a constant threat to profitability. The company has to keep investing in training and retention programs, or those rising wages will eventually compress margins, especially on lower-margin, fixed-bid contracts.

IES Holdings, Inc. (IESC) - PESTLE Analysis: Social factors

Growing demand for data centers and electric vehicle (EV) charging infrastructure.

You can't talk about IES Holdings, Inc. (IESC) right now without starting with the data center boom-it's a social and economic phenomenon driving a massive, immediate demand for electrical infrastructure. This isn't just a blip; it's a structural shift fueled by artificial intelligence (AI) and cloud services. The sheer scale is staggering: US data center grid-power demand is forecast to rise by a sharp 22% by the end of 2025, reaching 61.8 GW for hyperscale and leased facilities alone.

This demand is directly translating into IES Holdings' top line. For fiscal year 2025, the Infrastructure Solutions segment's revenue soared to $498.7 million, an increase of 42% over the prior year, driven primarily by data center projects. The Communications segment saw even faster growth, hitting $1.14 billion in revenue, up 47%, largely due to these same customers. It's a clear, high-margin opportunity.

Plus, the push for Electric Vehicle (EV) adoption is creating a parallel infrastructure need. The global EV charging infrastructure market is projected to grow at a Compound Annual Growth Rate (CAGR) of 23.75% from 2025 to 2034. For IES Holdings, this means a steady stream of installation and maintenance work for commercial and fleet charging stations, which fits neatly into their Commercial & Industrial and Infrastructure segments.

Increased focus on skilled trades training to address the persistent labor shortage.

The biggest near-term risk for IES Holdings, and frankly, the entire construction and electrical industry, is the persistent labor shortage. You can have a $3.37 billion revenue pipeline, but if you don't have the hands to execute, growth stalls. The social trend of de-emphasizing vocational training for decades is now hitting the industry hard.

The numbers are a flashing red light for project timelines: the US construction industry must attract an estimated 439,000 net new workers in 2025 just to keep up with demand and retirements. This shortage is most acute in specialized trades like electrical work, which is projected to see a 13.1% growth in jobs, equating to an estimated 74,800 new positions. This forces up wages and project bids, but it also creates a competitive disadvantage for firms that don't invest in their own pipeline.

Here's the quick math: 37% of organizations anticipate their 2025 budget will be focused on increased hiring to add or replace jobs. This means IES Holdings must prioritize internal apprenticeship programs and strategic acquisitions to secure talent, not just projects. It's a talent war, defintely.

Shift to remote work impacts office space needs, changing Commercial & Industrial segment demand.

Remote work has fundamentally changed the demand profile for commercial real estate, creating both a drag and a new opportunity for IES Holdings. The old-school office market is struggling: the nationwide U.S. office vacancy rate spiked to 22% in Q1-2025, a clear sign of underutilized space. This means fewer new office tower projects and less traditional tenant fit-out work for the Commercial & Industrial segment.

However, the social need for housing is turning this weakness into an opportunity through adaptive reuse (converting old commercial properties). A record 70,700 units are in the office-to-apartment conversion pipeline for 2025, marking a 28% year-over-year growth in this type of project. These conversions require extensive electrical, plumbing, and low-voltage system overhauls-core IES Holdings services. While new office space delivered year-to-date in Q3 2025 is down 50% from a year ago, the conversion market is a crucial offset.

The change looks like this:

Metric (2025)	Traditional Office Demand	Adaptive Reuse/Conversion Opportunity
U.S. Office Vacancy Rate (Q1)	22% (Spiked)	Drives need for conversion
New Office Space Delivered (YTD Q3)	Down 50% from prior year	Reduces IESC's new construction revenue
Office-to-Apartment Pipeline	N/A	Record 70,700 units planned
IESC Segment Impact	Reduced new construction/renovation work	Increased complex retrofitting/electrical work

Customer preference for energy-efficient and 'smart' building solutions.

The social drive toward sustainability and operational efficiency is creating a premium market for smart building solutions (Building Automation Systems, energy management, etc.). Customers, from homeowners to corporate facility managers, are demanding systems that cut utility bills and meet Environmental, Social, and Governance (ESG) standards. This isn't a niche market anymore; it's a baseline expectation.

This preference is quantifiable: the global smart building market size is estimated at $111.51 billion in 2025, with the US segment projected to grow at a CAGR of 10.78% from 2025 to 2034. The energy management segment within this market is expected to register the fastest CAGR through 2030. This is a perfect fit for IES Holdings' technology integration services.

For the Residential segment, this means a focus on high-efficiency, integrated home systems. The global residential energy-efficient technologies market is valued at $200.0 billion in 2025. This includes products like smart thermostats, advanced lighting controls, and integrated energy storage systems, all of which require specialized installation by IES Holdings' electricians.

• Demand for energy solutions is growing fastest in the smart building market.
• The U.S. smart building market is projected to reach $68.67 billion by 2034.
• Prioritize advanced building automation systems (BAS) integration.

Next step: Operations: review current skilled trades training budget and propose a 15% increase for apprenticeship programs by Q1 2026.

IES Holdings, Inc. (IESC) - PESTLE Analysis: Technological factors

Adoption of Building Information Modeling (BIM) for project efficiency

The shift to Building Information Modeling (BIM) is a core technological imperative for IES Holdings, Inc. to maintain efficiency and competitive advantage, especially in complex data center and infrastructure projects. BIM, which is a digital representation of a building's physical and functional characteristics, allows for clash detection and precise coordination of electrical systems before any physical work begins.

IES Holdings' Communications segment, which is a major contributor to the company's $3.37 billion in fiscal 2025 revenue, actively recruits for roles like BIM Coordinator. This staffing focus confirms the internal adoption of BIM software, such as Revit and AutoCAD, to streamline design and documentation. The goal is simple: reduce costly field rework, a major drain on construction margins.

Use of prefabricated electrical assemblies reduces on-site labor time

This is a major strategic focus and a clear opportunity for IES Holdings, Inc. to drive operational efficiencies and improve its operating income of $383.5 million in fiscal 2025. Prefabrication, or modular construction, involves manufacturing electrical components (like racks, conduit assemblies, and power distribution units) in a controlled factory environment for faster, standardized installation on-site.

IES Holdings has made significant capital investments to expand this capability. Over the last two years, the Infrastructure Solutions business has added over 1 million square feet of manufacturing capacity. Furthermore, the company's capital allocation highlights for fiscal 2025 included an investment of $52.4 million in acquisitions, which included the new Manitowoc, Wisconsin fabrication operation, directly expanding this prefabrication footprint. This strategy is defintely a key driver for the Infrastructure Solutions segment, which saw a 42% revenue increase in fiscal 2025.

Technological Investment Area	IESC Fiscal 2025 Action/Value	Strategic Impact
Prefabrication Capacity	Investment of $52.4 million (including Manitowoc fabrication operation)	Reduces on-site labor, improves quality, and supports Infrastructure Solutions' 42% revenue growth.
Information Technology	Investment in IT upgrades for Residential segment scalability	Increases business scalability and efficiency, particularly in the largest revenue segment.
BIM Adoption	Active hiring of BIM Coordinators (using Revit/AutoCAD)	Minimizes design clashes and rework, improving project execution on complex jobs.

Increased cybersecurity risk for connected infrastructure and operational technology (OT)

As IES Holdings, Inc. connects more of its project management, prefabrication facilities, and even the installed systems (Operational Technology, or OT) to its corporate IT networks, the cybersecurity risk rises sharply. This IT-OT convergence is a major industry challenge in 2025.

A breach in the OT environment, which controls physical processes in their facilities or on client sites, could lead to costly operational downtime, not just data loss. The global OT security market is projected to grow from nearly $21 billion in 2024 to $45 billion by 2029, underscoring the severity of this threat. For IESC, protecting its expanding manufacturing capacity and the critical data center infrastructure it builds is a non-negotiable cost of doing business.

• IT-OT convergence makes industrial control systems vulnerable to cyber-attacks.
• Cyber-attacks on critical infrastructure are expected to intensify due to geopolitical tensions.
• Effective security requires specialized OT security practices, not just standard IT controls.

Integration of AI for project management and predictive maintenance

While IES Holdings, Inc. is a massive beneficiary of the demand for Artificial Intelligence (AI) infrastructure-with its data center work being a primary growth driver-the internal application of AI is the next logical step. The company's Communications and Infrastructure Solutions segments are seeing strong demand driven by accelerating AI data center capital expenditure (capex).

The real opportunity for IESC lies in using AI to optimize their own operations. For project management, AI can analyze historical data to predict schedule delays and cost overruns on their large-scale projects, allowing for proactive intervention. For maintenance, AI-driven predictive maintenance (PdM) uses sensor data to forecast equipment failures before they happen, which is crucial for the reliability of the custom engineered solutions they provide.

Adopting AI for PdM can reduce unplanned downtime and cut maintenance costs by ensuring repairs are done only when necessary. Given IESC's overall capital expenditure of $67.3 million in fiscal 2025 to support growth, a portion of future spending will defintely need to be allocated to pilot and scale these internal AI tools to maintain their impressive operational efficiencies.

IES Holdings, Inc. (IESC) - PESTLE Analysis: Legal factors

The legal landscape for IES Holdings, Inc. (IESC) in fiscal year 2025 is defined by escalating compliance costs across three primary areas: worker safety, environmental mandates in building codes, and data privacy enforcement. You're navigating a complex mix of federal penalty hikes and aggressive state-level regulatory action, plus the inherent risk of long-term, fixed-price contracts in volatile markets. Getting ahead of these rules is defintely a cost of doing business now, not an option.

Stricter enforcement of Occupational Safety and Health Administration (OSHA) standards on job sites.

The financial risk from safety non-compliance has measurably increased for IESC's construction-focused segments (Residential, Commercial & Industrial, and Infrastructure Solutions). The U.S. Department of Labor increased maximum civil penalties for OSHA violations effective January 15, 2025, continuing the trend of annual inflation adjustments mandated by Congress. This is a direct hit to the bottom line if safety protocols slip.

The jump in maximum fine amounts means a single, severe incident can result in a six-figure penalty. For context, the construction industry's most-cited violation is consistently Fall Protection-General Requirements (Standard 1926.501), which accounted for 6,307 violations in the most recent fiscal year data. Your action here is simple: double down on training and site audits.

Violation Type (Effective Jan. 15, 2025)	Maximum Penalty per Violation	Increase from 2024
Serious / Other-than-Serious	$16,550	2.6%
Failure to Abate (Per Day)	$16,550	2.6%
Willful or Repeated	$165,514	2.6%

New state and local building codes mandating higher energy efficiency standards.

New state and local building codes are rapidly mandating higher energy efficiency standards, creating a near-term compliance challenge but a long-term revenue opportunity for IESC. Jurisdictions are pushing to adopt the latest model codes, like the 2024 International Energy Conservation Code (IECC) and ASHRAE 90.1-2022. This directly impacts the electrical and mechanical systems IESC designs and installs.

For your Residential and Commercial & Industrial segments, this means a shift in material and labor specifications. The Department of Energy's analysis projects the prescriptive path of the 2024 IECC will yield a national average site energy savings of 7.8 percent for residential buildings compared to the 2021 code base. Similarly, the ASHRAE 90.1-2022 standard is projected to provide national average site energy savings of 9.8 percent for commercial buildings. This regulatory push forces builders to use more sophisticated, higher-margin systems, which plays directly into IESC's strengths in integrated technology systems.

Contractual risks tied to fixed-price bids amid volatile material costs.

The core risk here is that your backlog, which stood at a robust $2.37 billion as of September 30, 2025, contains fixed-price contracts that are vulnerable to material cost swings. While IESC's overall fiscal 2025 operating income hit $383.5 million, the Residential segment specifically felt pricing pressure, with homebuilders passing on incentives to you and other suppliers.

Here's the quick math on the volatility: nonresidential construction costs, a key metric for IESC's Communications and Infrastructure Solutions segments, rose +6.60% over the twelve months leading up to Q3 2025. Certain key inputs saw even sharper spikes, accelerating to a 6% annualized rate in the first half of 2025. This means a fixed-price bid made six months ago is now materially less profitable, or even a loss, if you didn't include robust escalation clauses.

• Steel prices climbed 12% YoY in Q2 2025.
• Aluminum mill shapes rose 6.3% over the past year.
• Structural steel for bridges saw a 22.5% spike in the first half of 2025.

Compliance with evolving data privacy laws for the Communications segment.

The Communications segment, with its fiscal 2025 revenue of $1.14 billion driven heavily by data center work, faces significant legal risk from evolving state-level data privacy laws, primarily the California Consumer Privacy Act (CCPA) and the California Privacy Rights Act (CPRA). You are not just building the infrastructure; you are often a service provider or contractor handling customer data.

Enforcement in 2025 has become aggressive, with a focus on procedural compliance and even B2B-related data, like job applicants. For instance, the California Attorney General announced a record CCPA fine of $1.55 million against Healthline Media in July 2025, and the California Privacy Protection Agency (CPPA) issued a $1.35 million fine against Tractor Supply Co. in September 2025 for violations that included issues with job applicant data. The CPRA allows for fines ranging from $2,500 to $7,500 per violation, which can quickly compound for a company operating at IESC's scale. Your contracts with data center clients must now be audited to ensure they clearly define IESC's role as a service provider (not a data seller) to mitigate this exposure.

IES Holdings, Inc. (IESC) - PESTLE Analysis: Environmental factors

Pressure to use sustainable and low-carbon materials in construction.

The shift toward low-carbon construction presents both a cost risk and a major opportunity for IES Holdings, particularly within your Commercial & Industrial and Residential segments. The US sustainable building material manufacturing industry is projected to reach $99.2 billion in revenue in 2025, a 1.0% gain for the year, reflecting the market's demand for green buildings and net-zero emissions solutions. This demand directly impacts your material procurement and installation processes.

While IES Holdings primarily handles electrical and technology systems, the pressure on general contractors to use materials like recycled metals, low-carbon concrete, and sustainable insulation forces a supply chain review. You must anticipate the cost volatility and potential scarcity of these specialized materials. For instance, the Residential segment's $1.30 billion in fiscal 2025 revenue is highly sensitive to material cost increases, especially as you navigate the challenging housing affordability market.

The opportunity lies in integrating low-carbon solutions into your service offerings, like the residential solar power installation services you already provide. You need to start quantifying the carbon footprint reduction you deliver to clients, as this is defintely becoming a key factor in major commercial and industrial bids.

Increased project volume in renewable energy (solar, wind) and battery storage.

The growth in utility-scale renewable energy and battery storage is a massive tailwind for your Infrastructure Solutions segment. The U.S. Energy Information Administration (EIA) forecasts a record 63 GW of new utility-scale electric-generating capacity to be added to the U.S. grid in 2025, which is an almost 30% increase from 2024. Critically, solar (32.5 GW) and battery storage (18.2 GW) account for 81% of this anticipated capacity addition.

Your Infrastructure Solutions segment, which generated $498.7 million in revenue in fiscal 2025, is well-positioned to capture this demand through custom engineered solutions, but you must ensure your capacity is not entirely consumed by the data center market. The two largest battery projects planned for 2025, one in California and one in Texas, each have 500 MW of output capacity, illustrating the scale of the utility-grade work available.

This is a clear, near-term opportunity to diversify the Infrastructure segment's revenue stream beyond its current data center focus.

U.S. Planned Utility-Scale Capacity Additions (2025)

Technology	Projected Capacity Addition (GW)	% of Total New Capacity
Solar	32.5 GW	51.5%
Battery Storage	18.2 GW	28.9%
Wind	7.7 GW	12.2%
Natural Gas	4.4 GW	7.0%
Total New Capacity	63.0 GW	100%

Regulations on construction waste disposal and site remediation.

Stricter environmental compliance is a rising operational cost and a key risk for all your construction-related segments. The global Construction and Demolition (C&D) Waste Management Market is valued at $178.7 billion in 2025, driven by stricter government regulations and recycling targets. For a company with $3.37 billion in total fiscal 2025 revenue, the cost of non-compliance can quickly erode margins.

New regulations taking effect in 2025 directly affect your operations:

• Mandatory waste segregation at the source for construction/demolition waste.
• New EPA reporting requirements for Per- and Polyfluoroalkyl Substances (PFAS), which are specifically noted to affect the construction industry.
• Changes to the Resource Conservation and Recovery Act (RCRA) requiring electronic manifests for hazardous waste, which impacts both small and large generators.

You need to invest in digital tracking tools for C&D waste and formal training for site managers. The cost of proper disposal is rising, so pre-planning projects to minimize waste is no longer a soft goal; it's a financial necessity to protect the operating income of your segments.

Focus on reducing the carbon footprint of the company's vehicle fleet.

While IES Holdings has publicly stated a commitment to reducing the environmental impact of its vehicle fleet, specific, quantifiable 2025 targets are not publicly available. This lack of data is a competitive disadvantage when bidding against companies with clear Environmental, Social, and Governance (ESG) metrics.

For a service company like yours, with over 10,000 employees and operations across the U.S., your Scope 1 direct emissions-primarily from your fleet-are a major component of your total carbon footprint. A U.S.-based HVAC company, a comparable peer in the service sector, found its fleet represented more than 90% of its total greenhouse gas (GHG) emissions. This suggests a similar exposure for IES Holdings.

Actionable steps should focus on immediate fleet transition planning:

• Start a pilot program to electrify your light-duty vehicle fleet in a few key states like California or New York.
• Evaluate the cost-effectiveness of renewable diesel for your heavy-duty trucks, as one company achieved a 13% emissions reduction with cost-competitive results.
• Finance: Allocate capital expenditure for a three-year fleet modernization plan by the end of Q1 2026.