What are the top risks for EMCOR Group, Inc. (EME)?

The top risks identified in the 10-Q filing are: Customer and Economic Downturn Risk, Supply Chain Disruptions and Cost Volatility, Geopolitical Instability and Market Volatility. The company faces significant risks from economic downturns, customer financial health, and supply chain volatility. Geopolitical events are escalating, adding complexity. A new regulatory risk regarding climate disclosures has emerged, potentially increasing compliance burdens.

EME - Comprehensive Filing Intelligence

Q3 2025•10-Q•Filed Oct 30, 2025

5.0/10

Filing Health:CAUTION

Notable concerns that warrant closer review

Executive Summary

The company reported record revenues for the third quarter, driven by strong demand in its core markets and successful acquisitions, particularly Miller Electric.. While operating income increased, the operating margin and gross profit margin experienced slight declines due to project-specific profitability challenges in new geographies and acquisition-related amortization costs.. Significant surety bond exposure of $3.0 billion, assuming defaults on all contractual obligations.. Consolidated revenues increased by 16.4% year-over-year, setting a new third-quarter record.

Top Concerns

!Judgment required in identifying contracts for revenue recognition.
!Significant surety bond exposure of $3.0 billion, assuming defaults on all contractual obligations.
!Substantial undiscounted insurance liabilities totaling $345 million related to self-insured retentions and deductibles.
!Customer and Economic Downturn Risk (high)
!Supply Chain Disruptions and Cost Volatility (high)

Top Positives

+The company reported record revenues for the third quarter, driven by strong demand in its core markets and successful acquisitions, particularly Miller Electric.

Analysis Dimensions

Our 5-pass AI analysis examines this filing across multiple dimensions. Each dimension score is derived from direct analysis of SEC filing text.

Narrative Intelligence

7.0/10

Management tone is confidently optimistic with focus on lower profitability on certain projects in new geographies where we encountered reduced labor productivity or availability while investing in the development of a workforce.

Full analysis includes: tone changes vs prior quarter, margin driver breakdown, forward guidance analysis, strategic priorities.

Accounting Quality

7.0/10

Earnings quality shows moderate accounting practices.

Full analysis includes: reserve and allowance changes, non-recurring item analysis, stock-based compensation impact, disclosure concerns.

Hidden Liabilities

Off-balance sheet risk is high with $3.0 billion (Surety Bonds) + $345 million (Undiscounted Insurance Liabilities) in identified exposure.

Full analysis includes: cloud and purchase commitments, VIE/SPE exposure, covenant compliance status, refinancing risk assessment.

Risk Landscape

3.0/10

Overall risk profile shows customer and economic downturn risk as primary concern.

Full analysis includes: 8 risk categories with severity, new vs escalated risks, management response assessment, risk trend analysis.

Segment Performance

7.0/10

Segment health analysis shows United States electrical construction and facilities services as strongest performer while United States industrial services lags.

Full analysis includes: segment-by-segment revenue breakdown, geographic concentration risk, customer concentration analysis, segment margin trends.