Participants

Alex Gaddy; Senior Vice President, Strategy, Investor Relations & Treasurer; Mirion Technologies Inc

Thomas Logan; Founding Chairman, Chief Executive Officer, Director; Mirion Technologies Inc

Brian Schopfer; Chief Financial Officer; Mirion Technologies Inc

Chris Moore; Analyst; CJS Securities

Vlad Bystricky; Analyst; Citi Investment Research

Andy Kaplowitz; Analyst; Citi Investment Research

Presentation

Operator

Hello and welcome to the Mirion Technologies' first quarter 2024 earnings conference. (Operator Instructions) Please note this event is being recorded. I would now like to hand the call over to Alex Gaddy, Senior Vice President of Strategy and Investor Relations.

Alex Gaddy

Good morning, everyone, and thank you for joining Mirion's first quarter 2024 earnings call. A reminder that comments made during this presentation will include forward looking statements and actual results may differ materially from those projected in the forward-looking statements. Factors that could cause actual results to differ are discussed in our annual report on Form 10 K and quarterly reports on Form 10-Q that we file from time to time with the SEC under the caption Risk Factors and in Myriad's other filings with the SEC.
Quarterly references within today's discussion are related to the first quarter ended March 31, 2024. Comments made during this call will also include certain financial measures that were not prepared in accordance with generally accepted accounting principles.
A 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 the call today. All earnings materials can be found on Myriad's IR website at ir.mirion.com. Joining me on the call today are Tom Logan, Chief Executive Officer; and Brian Schopfer, Chief Financial Officer. Now I will turn it over to our Chief Executive Officer, Tom Logan. Tom?

Thomas Logan

Alex, thank you and good morning, everyone. To get us started today, I'd like to firstly thank my Mirion colleagues for delivering a very solid start to 2024 taking a look at our Q1 results, there are a few key highlights that I'd like to note for you.
First, our end markets remain healthy across the enterprise, supported by improving fundamentals, particularly in nuclear power and cancer care order growth was relatively flat in Q1, but this isn't surprising given the strength we saw last year and the fact that Q1 is historically our lightest volume quarter.
Overall, we continue to see excellent customer engagement. The timing dynamics impacted quarterly order growth. As an example, we received an approximately $15 million European defense order at the outset of Q2, which is not included in the results shared today.
Second, I am proud to announce the commercialization of our instant dose view technology, which we believe will revolutionize the occupational dosimetry space. We have commercially deployed thousands of units during a Q1 soft launch and customer interest in the product is high.
We expect the adoption cycle for instance does view to be lengthy, but we are confident in the distinct differentiation that this product brings to the marketplace knows that for competitive reasons, we will not be providing quarterly updates on batch volume going forward.
Third, in terms of financial performance, we delivered total company organic revenue growth of 5.5% in the quarter, which was in line with our expectations. The technologies business led the way with 8% organic growth.
Total company adjusted EBITDA grew by 8% year over year, reaching nearly $40 million for the quarter. We delivered 40 basis points of adjusted EBITDA margin expansion led by our technologies business, which provided 170 basis points of expansion.
Finally, we have reaffirmed our 2024 financial guidance and continue to project organic revenue growth of 4% to 6% and adjusted EBITDA of $193 million to $203 million. Brian will provide more detail on our quarterly financial performance.
So I'd like to use most of my time today to discuss areas of critical importance as we think about medium and longer-term growth note at the outset that more than two-thirds of our top-line growth is driven by two super trends, namely nuclear power and cancer care, which we expect to be robust, global, and long, and [material].
Turning first to nuclear power, which is in the midst of a global resurgence, the world's demand for energy is increasing dramatically with all geographies struggling to find reliable sources of cost-efficient clean power. The emergence of AI and the attendant growth of high energy consuming data centers is putting increased demands on energy infrastructure.
Additionally, we see continued decarbonization commitments globally and the push for energy independence driving elevated interest in nuclear power. As stated before, we believe nuclear power is a green energy source and will play a primary role in meeting increased energy demand through both utility-scale reactors and small modular reactors. While the overall demand function from Iran's nuclear business remains robust, there's an emerging body of public policy that makes us confident in the significant tailwinds in the end market.
Looking at the US for a moment, the federal government has set a net zero target for the year 2050, and it's difficult to see a path where nuclear power doesn't play a meaningful role in meeting that goal. Nuclear power plant operators are performing well financially, which is changing the calculus surrounding capacity utilization, life extension and even capacity upgrades extraordinarily.
We saw the restart announcement of the Palisades nuclear power plant in Michigan in Q1, a previously doomed facility. We view this as yet another evidentiary point, supporting the criticality of nuclear power and the American power market beyond life extensions and restarts, the EPA has recently issued sweeping new rules requiring existing coal plants to limit and capture carbon emissions as such for strict operating rules for future new coal plants.
Additionally, in April, publication from the DOE under the auspices of its coal to nuclear initiative highlights the expected economic and environmental benefits replacing coal power plants with SMRs or utility-scale reactors with 30% of the nation's coal plants expected to retire by 2035 and over 300 existing and retired coal plants that have been deemed suitable to be replaced by nuclear plants.
Nuclear has a promising opportunity here now while the dynamics I've just touched on are US centric that can be broadly extrapolated to global markets as well. As a reminder, nearly 40% of our total company revenue in 2023 was tied to nuclear power as we are the leading provider of safety, critical radiation detection and measurement solutions to the global nuclear fleet.
Mirion's unmatched product portfolio as reactor technology agnostic and serves all three stages of the plant's life cycle, namely new construction, plant operations and decommissioning. We are in robust strategic engagement with the burgeoning SMR community and are committed to extending our relationships with traditional utility scale OEMs and utilities worldwide.
There was a similar super trend unfolding in the area of cancer care, which represents nearly 30% of our total company revenue. This has been driven by fundamental growth in radiation therapy, which is supported by an aging population, demographic in developed markets and improving standards of care in developing markets as well as the revolution in nuclear medicine catalyzed by the emergence of therapeutic radioligand treatments more to come here in future calls, but the opportunity for Merian to participate and drive future growth is clear, compelling and significant.
Now turning into commercial and operating teams and focused on improving our execution in the following areas. First, I'm committed to continued improvement within our French business, which will improve our organic growth margins and capital efficiency.
Second, we are aggressively executing on self-help themes, including extending pricing, heuristics cost-out and procurement programs, internally focused AI on automation and capitalizing upon Myriad's inherent operating leverage. Let me reiterate here that we remain confidently committed to reaching our five-year 30% adjusted EBITDA margin target.
Third, the continued evolution and enhancement of the Mirion solution set to our investments in digital capabilities, customer facing AI and our robust new product development pipeline. And lastly, supplementing the business through strategic and opportunistic M&A, primarily geared toward new capabilities and defending and extending our category leadership. With that, let me pass the call over to our Chief Financial Officer, Brian Schopfer. Brian?

Brian Schopfer

Thanks, Tom, and good morning, everyone to kick off my commentary this morning. Let's turn to Slide 4 to take a look at our first quarter results. Total company revenue was up 5.8% and adjusted EBITDA was up 7.9%.
Total revenue for the quarter was $192.6 million and organic growth was 5.5%. Adjusted EBITDA totaled $39.5 million, with margins expanding 40 basis points to 20.5%. Overall, quarterly performance was in line with our expectations, and I am pleased with the progress shown with regard to margin expansion.
Let's now dive into more detail around our segment performance during the first quarter. Let's begin with the medical segment on Slide 5. Medical revenue grew 0.6% on both a reported and organic basis. And the EC squared acquisition almost fully offset the biotech's divestiture in terms of revenue contribution as a reminder, this will be the last quarter of inorganic impact from the biotech's divestiture.
Medical top line performance was negatively impacted by approximately $4 million stemming from the implementation of a new ERP system within our nuclear medicine business. While we did expect an impact from the ERP implementation, the temporal impact was larger than originally anticipated. The implementation was completed in February we do not expect further material ERP related issues in Q2 or the rest of 2024.
Order dynamics and backlog remained strong within nuclear medicine, exemplified by order growth, 17% and a doubling of our backlog versus the same period last year. Excluding the impact from the ERP Medical, organic growth would have been approximately 7.1%.
Medical adjusted EBITDA margin was 30.7% in the quarters, generally flat compared to the same period last year. Had we not have the ERP blip, we would have seen solid margin expansion in the segment. Margin enhancement remains a key area of focus where we expect year-over-year margin expansion in Medical for the full year.
Moving on now to Slide 6 and the technology segment. Technologies revenue grew by 8.7% for the quarter with organic growth of 8.4%. Top-line growth was broad-based across the segment and supported by strong quarters from our nuclear power and lab businesses.
Technologies adjusted EBITDA was $33.1 million, up 16.1% from the same period last year. Adjusted EBITDA margin expanded 170 basis points to 26.3%. As expected, technology's margins took a step forward in Q1, supported by strong execution.
Overall, I am pleased with the progress made against our improvement initiatives, particularly in France, where we are gaining momentum. We still have work to do and expect improvement in the back half of the year, but Q1 was a good first step.
Turning over now to our cash flow performance. For Q1, adjusted free cash flow was negative $4.5 million and net working capital was a burn in the quarter. This was generally in line with expectations and while negative in the quarter performance versus the same period last year is an improvement.
More specifically, inventory momentum is improving as we saw an $11 million reduction versus the same period last year. Secondarily, you will also see a larger than normal CapEx number, and that is reflective of us executing our institutional view launch plan by adding product on hand, absent the CapEx investment, it is to do some cash flow would have been positive in Q1. Our target for the first half continues to be cash flow positive for the enterprise.
Before diving into our reaffirmed guidance for the year, I wanted to highlight the warrant redemption announcement we made a couple of weeks ago. We've opted to exercise our right under our warrant agreement to redeem all of our outstanding public warrants.
Warrant holders may choose to exercise their warrants by either paying the exercise price for one full share or redeeming their warrants on a cashless basis at a ratio of 0.22 shares per warrant before May 20, 2024. This action is a meaningful step in simplifying our overall capital structure while eliminating future dilutionary effects for existing shareholders.
Finally, I'd like to close out my comments by highlighting our reaffirmed 2024 guidance on Slide 8. Given our solid start to 2024, we are maintaining our previously issued financial expectations with organic revenue growth of 4% to 6% for the year, supported by mid-single digit organic growth from both segments. We are also reaffirming our adjusted EBITDA guide of $193 million to $203 million.
Thinking through the cadence for the rest of the year, we are expecting Q2 margin pressure in our technologies segment, primarily related to product mix. In addition, we're making investments in supply chain and procurement with the associated costs hitting in the first half, it benefits beginning to materialize in the second half and into 2025.
We are very excited about this initiative, and we'll talk more later in the year about it despite the dynamic visibility into our margin expansion in the second half is robust and supportive of the overall enterprise expansion target for the year.
Adjusted free cash flow remained at $65 million to $85 million for the year and adjusted EPS in the range of $0.37 to $0.42. Overall, the first quarter was a good start to the year, and I'm encouraged heading into the rest of 2024. With that, I'll now pass things back to Alex to open the call up for Q&A.

Alex Gaddy

Thank you, Brian and Tom. That concludes our formal comments for this morning. Let me pass things back over to the operator to open up the session for Q&A.

Question and Answer Session

Operator

(Operator Instructions) Chris Moore, CJS Securities.

Chris Moore

Hey, good morning, guys. Thanks for taking my couple of questions. Maybe we'll just start on the nuclear as you know, Thomas talk about it. All you hear about these days is the need for electrification, nuclear power more and more is viewed as part of the equation. You mentioned a new restart in Michigan. I think there was a long-awaited new reactor that came online in Georgia recently as well. I guess I'm just trying to understand within the US obviously SMRs seemed like they are an easier sell. What are you hearing in terms of new utility scale build here?

Thomas Logan

Yeah, Chris, I think the the view on new utility-scale billed in US still is one of caution. I think if I were to put together of the hierarchy of effects that I would expect to see in the in the US market, it would go something like us. Firstly, if you look at plants that were deemed marginal five years ago or 10 years ago that are still in operations and were kind of easing up toward a decommissioning event.
I think the majority of those, if not the entirety of that group is now viewed as candidates for for life extension. And with that, typically there are some amount of some of our capital spending associated with that with we're doing that oftentimes additional permitting requirements, et cetera.
Secondly, I would highlight the SMR initiatives, which continue to really gain steam, yes, it's funny. It's seems like maybe within the last six months, the world has kind of awakened to the fact that they're really catalyzed by the incredible growth of AI related data centers. The world simply doesn't have enough electrical generating capacity.
And as we look at the kind of the extrapolated requirements well into the future, have a more robust AI driven economy. It's very, very clear that the demands for nuclear power, but nuclear, both utility scale and SMRs, we are going to mount. And I think in this country, it's a combination of that phenomenon, coupled with the of policy goals of decarbonization that ultimately are going to drive us into a period where I think growth meaningfully exceeds what people may have projected even five years ago in the American market.

Chris Moore

That's extremely helpful mix and it makes perfect sense with everything at Mirion. A backlog, $841 million down a little sequentially up $100 million year over year. Maybe you can just talk a little bit about this split between the segments, how that's changed? I know it's probably more on the nuclear side, but and then trying to get a sense as to how much of that backlog will likely recognize this year.

Brian Schopfer

Chris, thanks for the question. Look, Tom and I are not the sequential backlog is not something we're worried about it. We love the dynamics as we head into Q2. We've had a bunch of calls last couple of weeks with our team and very positive sentiment across across the business.
So we look last quarter to quarter as we think about it as a normal longer-cycle business timing matters we're tightening. That is a little bit last quarter to quarter on when things get blocked. You heard Todd talk about the almost $50 million or well, a $50 million order getting booked early in Q2. So we like it historically.
What we've said is if you look at the next 12 months of revenue, 45% to 50%, that's already in backlog I don't think that dynamic has changed a whole lot. It's probably closer to the higher end of the range versus the lower end of the range. And we continue to be we continue to like what we see it here, and we'll focus on executing what's ahead of us.

Chris Moore

Got it. Helpful. And maybe the last one for me. Maybe can you just provide a little more specifics on the current challenges on the French bridge business that you talked a little bit about?

Brian Schopfer

Yeah, look we saw, meaning for progress in the first quarter, even though we're all super engaged content in Europe next week, I'm headed there in a couple of weeks. So we continue to guide, it will be very involved. We're happy with what the French team is doing it.
Then the broader European team, frankly, part of the good news for the first quarter for us is it wasn't only the French business, that's all margin expansion were actually solid kind of across the segment in the Technologies business.
And so we want we like our setup. We're confident in the plan and the team is executing, takes a little bit of time specifically in Europe to kind of see everything play out. But we feel we feel good about where we sit today.

Thomas Logan

And Chris, I would add to that to noting that in France, specifically, our largest and cherished customers, the EDF, the operator of all the nuclear power stations in Europe, I think widely known that EDS had a difficult year last year because of widespread number of outages that were related to certain component issues within their power plant infrastructure.
And that had an impact overall on demand patterns in a year and kind of a knock-on effect on us, again, because this is the dominant customer we have in the region, candidly, I think we were a little bit slow to adjust to some of that, and we're all over and we've made some some operating model changes in the in the arena and it's all the self-help things that we've talked about. It's us being a little bit smarter about pricing in the market.
It is continuing to drive extensively our business system and the inherent inherent focus there on, you know, all of the classical elements of big ERP, which would include procurement, production, scheduling, distribution, et cetera, basic blocking and tackling the team is doing a great job. I'm actually headed over there this afternoon to catch up with them and encourage them and continue to see how we can go further faster. But we feel like we're definitely on the rails are.

Brian Schopfer

We had a really good, really good first quarter two with the French that branch customer tops talking about. So no, I think we feel pretty good about ourselves.

Chris Moore

Got it. I appreciate it, guys. I will leave it there.

Operator

Vlad Bystricky, Citigroup.

Vlad Bystricky

Hey, good morning, guys. Thanks for taking my call. So maybe just to start off a follow-up on Chris's question about around backlog. I guess, can you just give us a little more color into how you're thinking about or how we should think about orders and backlog this year and given your expectations around potential new build nuclear work and your comments around nuclear sentiment, whether you would expect at year end to have grown overall backlog?

Brian Schopfer

Look, I think, it's a good question. I think that we need to we're always a bit careful honestly about flat about talking about kind of quarter-to-quarter dynamics just because these projects some some of the bigger projects that really move the backlog move around a bit I think I think what I what I am willing to say is I'm encouraged about where we sit. I think we think that and if things go right, we would see backlog expansion this year by the end of the year.
But I think that depends on a few things we're working on in the pipeline. And, you know, I just yes, some of that stuff moved. So if it doesn't happen, I don't think that's a concerning issue for us because it's probably just moved a little bit to the right as some of these folks do, but the order dynamics are great. Customer engagement is great. And yeah, I think we would expect to see some backlog growth by year end, but I'm I'm less concerned if that happens there and are in the first half of next year.

Thomas Logan

Let me tag on to Brian's comments, say a couple of couple of additional things. Firstly, yes, let me reiterate what Brian said, and that is that we we take a very, very cautious approach to projecting backlog, particularly as it relates to nuclear built new newbuild activity simply because the timing can be very difficult to pin down.
And also, we take a very conservative kind of probabilistic approach to what we think will win and what ultimately the quantum, some of you don't have a project order aggregation might look like. And generally from your actual performance from a from a bid and backlog standpoint has exceeded that to that point of view.
But again, our goal here is to be very conservative, and that's just not something we would guide. But the other thing that I think is maybe more important is to note that people that give them what I think all participants in the in the nuclear industry see as a, you know, a maxed out nuclear industry where strategic partnerships and alliances are far more important.
I can tell you the energy that we are in and I am spending focused on more strategic relationships with the most significant players in the industry that's gone up considerably as to versus where it has been historically. And that's really where the energy is being spent. It's on how do we really forge longer term strategic relationships that can accommodate what we all anticipate as being a period of strong growth and a rising tide that will lift all boats.

Vlad Bystricky

Got it. That's helpful color, guys. Appreciate it. And then maybe just on as I'm thinking about the year, if you can give us any more color into how you're thinking about seasonality or the cadence of 2Q is usually stronger than 1Q. So do you see sort of normal seasonality there this year and then mixed in with that $4 million of nuclear related revenue. Should we expect that sort of flowing through ratably? Or is there some larger catch-up here in 2Q? Just how should we think about that $4 million coming back?

Brian Schopfer

Yeah, I don't think the the season now for the changes time, I mean, I did say in my comments, I expect a little bit of margin pressure in the second quarter, mainly on the technology side and then in some of the investments we're making in our supply chain, which was by the way, we're super excited about.
We take this as a very have a nice impact to us in the back half of the year, but probably more in the '25 as we think about that. But we'll take some of that cost here in the second quarter. But then I think the back half of the year from a margin standpoint looks looks very good and the cadence isn't any different really than last year. But the business from a growth perspective is much more even, right?
We saw 5.5% in the first quarter. I think we like to do that type of range kind of each quarter and with a little bit of margin pressure in the second quarter. But the back end is definitely set up to be a it'll be a margin expansion in a pretty robust way.

Vlad Bystricky

Great. Thanks, Brian. I'll hop back in queue.

Operator

(Operator Instructions) Andy Kaplowitz, Citigroup.

Andy Kaplowitz

Hey, good morning, guys. Well, I wanted to ask about free cash flow. You did have a better, I guess, lower cash burn than last year's first quarter, but kind of seems like two steps forward, one step back in terms of cash generation. So what happened in the quarter and what is your conviction that you can get to the target that you have for the year? And I did notice your number, the first half, you expect positive free cash flow. So it seems like you get a lot of that back in Q2?

Brian Schopfer

Yeah, I mean, look, we held our guidance that our conviction is clearly how strong that will be within that range. I think what I'd actually think the first quarter was a good step forward for us. As I talked about in my comments, we made a strategic investment on the institutional side and the CapEx number. So it's a that's a elevated CapEx number for the quarter for us specifically in the first quarter. And I think absent that, you would have saw a positive cash flow number versus versus the negative one you saw. So we feel good.
And like I said it, we did first as cash flow positive for us, which is different than it was last year and we're set up well. I would reiterate that we are spending we continue to spend a ton of time. I'm with the team on this This continues to be a very high priority for us. And in the company, there is still a lot of room here for us to continue to improve. I mentioned the $11 million in inventory reduction year over year. So that's beginning to take hold as well, maybe a little bit slower than we'd like. But we feel very good about where we're sitting, but we like our free cash flow guide for the year right now.

Andy Kaplowitz

It's helpful, Brian. And then I'm sorry if I missed this detail, but you know, the European integration I just wanted to sort of ask you it happens a lot for our industrial companies in general, so we understand it at the same time. It always is a little surprising when you have it like are there anything is there anything else to focus on any other ERP integrations that we need to sort of care about? Is this really more of a one-off? And then your commentary around getting the $4 million back, does it really come sooner versus later given the strong orders in nuclear medicine?

Brian Schopfer

Yeah, it's a blip. I mean, we did and we had some challenges for a couple of weeks as we put it in March were strong. April was good and on track so we feel good about them. Our progress and that kind of coming back, look, I think, will we're evaluating do we do with one more this year, which is pretty it's a smaller business smaller than the nuclear medicine business, even I think we learned a lot from this. So there's a double down effort on this. It would not be going into one, but the bigger guys also is just so clear on.
So yes, I think we'll see one more later in the year. Again, smaller, I think as you think about the cadence of that coming back. I expect and I expect half of that to come back in the second quarter and the rest probably in the third quarter. And that's more just a capacity and guide us through the process more than anything else. The orders are robust, continue to be robust, and we feel really good about where the business sits.

Andy Kaplowitz

Helpful. And then maybe just one for Tom, like there's been sort of an increasing crescendo around SMRs and they still have time to sort of make their way into the market obviously. But like how does that impact sort of the order profile? Could we start to see more along that maybe even as early as '25 or '26? I know you've had some already, but like is it meaningful to the quarter profile over the next couple of years, Tom?

Thomas Logan

I would say, Andy, that it will be material but not significant. So I think last year we booked about $10 million in SMR orders. I don't know that we've disclosed what we anticipate this year, but as we as we look at the activity and look at the nature of the discussions that we're engaged in, my expectation continues to get kind of moved up in terms of, you know, how solid the the demand is likely to be here and the viability in particular of some of the top players in this space overall. So my view is that, yes, over our planning horizon, we will see within the nuclear vertical, we will see a material growth in SMR orders. But again, I wouldn't characterize it as necessarily being significant.

Andy Kaplowitz

Thank you.

Operator

Yuan Zhi, B. Riley Securities.

Good morning, Tom and Brian. Thanks for taking my questions. I'm just curious about what factors contributed to the order growth for the nuclear medicine this quarter to order growth 17% quarter over quarter and the backlog doubled year over year. Should we anticipate similar growth trend throughout the year?

Thomas Logan

Well, the I guess your I would say that when we look at the nuclear medicine space, as you know, this space above all others, I think is likely to grow at the fastest rate. There is a a revolution taking place in radioligand therapy that will have a massive impact on cancer treatment modalities throughout the world.
And we believe we're well positioned to take it to participate in this through a combination of our legacy position as market leader and does calibration instruments and a variety of compounding and transport and clinical assessment instrumentation in the nuclear medicine space Secondly, through the acquisition of the EC squared software platform, which is the leading data management and workflow software platform in the nuclear medicine space in North America.
And then thirdly, through the ability for us to leverage the first two items to really bring to the market, a much broader solution set that encompasses much of our legacy instrumentation that historically has been deployed exclusively on the technology side.
So when you look at the combination of a market that I think axiomatic Clay is going to increase at a very strong rate coupled with the, um, the strengthening position that we have in that space. Our view is that the growth prospects here will be positive, and I wouldn't necessarily be specific about the first part of your question, but I would tell you that we're very bullish about the larger prospects in this space.

Got it. That's very helpful. And another question we have is recently, you mentioned that about [60% -- 60% of your life sciences] lab already had acted activity is DOE foundation and focusing all the environmental environmental remediation and government ways to fight. Do you see this continue to be the main driver of that category? Or how should we look at this going forward?

Thomas Logan

We see that as a very solid foundation and for many decades, that has been the case. And we don't we don't see that that base that foundation, that historical presence, not only the American DoD space but globally and many of the many of the top people analogs how we see that continuing. But when we look at it, what is beyond that in the life sciences space, where kind of the core of what we do there is to develop and field very, very accurate spectroscopic instruments that are that have a very high degree of resolution and are incredibly important for understanding the composition of on those samples.
But we see the ability to extend that further. And a good example would would be nuclear medicine, whereas we are seeing an evolution in the therapeutic strategies, in particular, a shift toward a hub, an acutely elevated focus on alpha emitters, where there is a tremendous opportunity, I think, to bring our unparalleled gamma spectra of gamma spectroscopy capabilities to bear in a way that would actually improve clinical efficiency and safety. So our view is that over time that we see many opportunities to really kind of build beyond that base that historical DOD related base in this space overall costs.

Thank you so much for taking our questions.

Operator

This concludes our question-and-answer session, I would like to turn the conference back over to Tom Logan closing remarks.

Thomas Logan

Ladies and gentlemen, thank you for participating today and let me just wrap up with a few closing comments. Firstly, we continue to see very strong demand and engagement across our end markets. We're well positioned to take advantage of these positive macro trends driving growth, and we're committed to superior execution.
Our financial performance for Q1 was in line with our expectations, and I'm proud of the execution within our technologies business and the resulting adjusted EBITDA margin expansion we reported today. We remain focused on improving our free cash flow dynamics heading into the rest of '24 and beyond.
We continue to expect to be cash flow positive in the first half of the year and have reiterated our cash flow guide for the full year. Overall, I'm proud of our first quarter results and believe the business is solidly on track to deliver the year. We look forward to updating you with our second-quarter results in a few months. So again, thank you for participating today. And operator, that will conclude the call.

Operator

The conference has now concluded. Thank you for attending today's presentation, and you may now disconnect.