Cardinal Infrastructure posts $11M Q3 2026 loss
Cardinal withdrew full-year 2026 revenue and margin guidance and authorized up to $50 million in repurchases over the next 12 months.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Rhea-AI Filing Summary
Cardinal Infrastructure Group Inc. (CDNL) reported third-quarter 2026 revenue of $201.9 million, up 65.1%, while recording a net loss of $11.0 million versus net income of $10.1 million a year earlier. Adjusted EBITDA was $8.5 million, with a 4.2% margin, compared with $21.4 million and 17.5%; project estimate revisions reduced gross profit by $13.2 million.
Cardinal withdrew its previously issued full-year 2026 revenue and Adjusted EBITDA margin guidance; it currently expects fourth-quarter Adjusted EBITDA to improve from the third quarter. At September 30, 2026, it reported $136.5 million in net cash and $815.5 million in backlog. Its board authorized up to $50 million of Class A share repurchases over the next 12 months; the program does not obligate it to repurchase shares.
The proposed Hughes Brothers acquisition was postponed to no earlier than June 30, 2027, unless the parties agree otherwise. Any earnout, if payable, is due at closing, and each party may terminate before June 30, 2027, with prior written notice. Mike Rowe notified Cardinal of his decision to resign as CFO upon appointment of a successor; he will remain in his position until the successor joins.
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- Moderate pointThird-quarter revenue increased 65.1% to $201.9 million.
- Moderate pointNine-month operating cash flow was $30.3 million, versus $26.3 million in 2025.
- Moderate pointBacklog was $815.5 million at September 30, 2026, up 26.2% year over year.
Negative
- Moderate pointThird-quarter Adjusted EBITDA margin fell to 4.2% from 17.5% a year earlier.
- Moderate pointCardinal reported a third-quarter net loss of $11.0 million, versus $10.1 million in net income.
- Moderate pointProject estimate revisions reduced third-quarter gross profit by $13.2 million. 4% of market cap
Filing Explained
The filing reports $319,010 thousand in nine-month equity-offering proceeds and separate borrowing availability of $100 million and $250 million.
The FTC granted early termination of the antitrust waiting period on
The nine-month cash-flow statement reports
8-K Event Classification
Key Figures
Key Terms
Adjusted EBITDA margin financial
organic revenue growth financial
Net (cash) debt financial
delayed draw term loan financial
Earnings Snapshot
Cardinal withdrew its previously issued full-year 2026 revenue and Adjusted EBITDA margin guidance. It currently expects fourth-quarter Adjusted EBITDA to improve from the third quarter, without providing a specific revenue or margin outlook.
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
What were CDNL's third-quarter 2026 revenue and earnings?
Why did CDNL's third-quarter margins decline?
What is the latest update on Cardinal's Hughes Brothers acquisition?
What is Cardinal's 2026 guidance after its third-quarter results?
AI-generated analysis. How Rhea-AI works. Not financial advice.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): |
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(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Securities registered pursuant to Section 12(b) of the Act:
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Trading |
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Item 1.01 Entry into a Material Definitive Agreement.
Amendment to Hughes Brothers Merger Agreement
As previously reported, on October 13, 2026, Cardinal Infrastructure Group Inc. ("Cardinal" or the "Company") entered into an Agreement and Plan of Merger (the "Original Merger Agreement") by and among Cardinal, CHBC Intermediate Holdco, Inc., a Delaware corporation and wholly owned subsidiary of Cardinal ("Merger Sub 1"), CHBC Holding Company, LLC, a Delaware limited liability company and wholly owned subsidiary of Cardinal ("Merger Sub 2"), HBC Holdco, Inc., a Delaware corporation ("Target"), Hughes Brothers Construction Inc., a Florida corporation ("HBC"), the stockholders of HBC party thereto (the "Stockholders"), and Chad Hughes, in his capacity as the representative of the Stockholders (the "Stockholder Representative").
On October 18, 2026, Cardinal, Merger Sub 1, Merger Sub 2, Target, HBC and the Stockholders entered into Amendment No. 1 to the Merger Agreement ("Amendment No. 1" and, together with the Original Merger Agreement, the "Merger Agreement").
On November 11, 2026, Cardinal, Merger Sub 1, Merger Sub 2, Target, HBC and the Stockholders entered into Amendment No. 2 to the Merger Agreement, dated November 11, 2026 ("Amendment No. 2").
In light of the Company’s near-term focus on strengthening execution across its existing operations and realizing the benefits of businesses previously acquired, the parties have agreed to postpone the proposed acquisition of Hughes Brothers. Amendment No. 2 extends the closing date of the transaction (the "Hughes Brothers Transaction") to no earlier than June 30, 2027, unless otherwise agreed by the parties. In light of such extension, the earnout payment, if any, provided for in the Merger Agreement, which is based on HBC's adjusted EBITDA for the twelve months ending June 30, 2027, will now be payable at closing. In addition, each of the parties has the right to terminate the Merger Agreement at any time prior to June 30, 2027 upon prior written notice to the other party.
On November 10, 2026, the Federal Trade Commission informed Cardinal that it had granted early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act for the proposed acquisition of HBC.
The foregoing description of Amendment No. 2 is not complete and is qualified in its entirety by reference to the full text of Amendment No. 2, which is filed as Exhibit 2.1 to this Current Report on Form 8-K (this "Report") and is incorporated herein by reference. The Original Merger Agreement and Amendment No. 1 were filed as Exhibits 2.1 and 2.2, respectively, to Cardinal’s Form 8-K filed on October 19, 2026, and are incorporated herein by reference.
Item 2.02 Results of Operations and Financial Condition.
On November 12, 2026, the Company issued a press release announcing its financial results of operations for the quarter ended September 30, 2026, and other related information. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On November 9, 2026, Mike Rowe notified the Company of his decision to resign from his position as Chief Financial Officer upon the appointment of his successor. Mr. Rowe will continue to serve in his current position until his successor joins the Company. The Company has engaged Spencer Stuart to conduct a comprehensive search for Mr. Rowe’s successor. In connection with Mr. Rowe’s transition, the Company intends to enter into an amendment to his employment agreement. Once the amendment has been executed and its terms have been finalized, the Company will disclose the material terms of the amendment in an amendment to this Current Report on Form 8-K.
Item 7.01 Regulation FD Disclosure.
The disclosure contained in Item 2.02 is incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit |
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Description |
2.1 |
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Amendment No. 2 to Agreement and Plan of Merger, dated as of November 11, 2026, by and among Cardinal Infrastructure Group Inc., CHBC Intermediate Holdco, Inc., CHBC Holding Company, LLC, HBC Holdco, Inc., Hughes Brothers Construction Inc., the Stockholders party thereto and Chad Hughes, as Stockholder Representative |
99.1 |
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Press Release, Dated November 12, 2026 |
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Cover Page Interactive Data File (embedded within the Inline XBRL document) |
Cautionary Statement Regarding Forward-Looking Statements
This Current Report on Form 8-K and the exhibits hereto contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, among other things, statements regarding the proposed acquisition of Hughes Brothers Construction Inc. (the “Hughes Brothers Transaction”), including the timing of the closing and the expected benefits of the Hughes Brothers Transaction; the Company’s expected fourth-quarter performance; the timing, implementation and expected benefits of the Company’s operational improvement initiatives; the Company’s expectations regarding project estimating, project review, forecasting, execution and profitability; the Company’s capital allocation priorities and potential repurchases of Class A common stock pursuant to its share repurchase program; the expected benefits of completed and proposed acquisitions; and the transition of the Company’s Chief Financial Officer and the search for a successor. Statements that are predictive in nature, that depend upon or refer to future events or conditions, or that include words such as “may,” “could,” “plan,” “project,” “budget,” “predict,” “pursue,” “target,” “seek,” “objective,” “believe,” “expect,” “anticipate,” “intend,” “estimate,” “will” and similar expressions that are predictions of or indicate future events and trends and that do not relate to historical matters identify forward-looking statements.
These statements involve risks and uncertainties, and Cardinal’s actual results could differ materially from those expressed or implied by such forward-looking statements. The potential risks, uncertainties and other factors that could cause actual results to differ include, but are not limited to: the ultimate outcome of the Hughes Brothers Transaction; the satisfaction of conditions to the closing of the Hughes Brothers Transaction; the risk that one of the parties to the Hughes Brothers Transaction may elect to terminate the Merger Agreement; the possibility that the anticipated benefits of the Hughes Brothers Transaction or other completed or proposed acquisitions will not be realized to the extent or within the timeframe expected; the risk that integration of acquired businesses will be delayed, more costly or more difficult than expected; challenges in integrating and retaining key employees; the effect of the announcement or postponement of the Hughes Brothers Transaction on business relationships; the Company’s ability to successfully implement its operational improvement initiatives; the timing and effectiveness of improvements to project estimating, project review, forecasting and execution processes; additional changes in estimates of costs or revenues associated with the Company’s contracts; the Company’s ability to improve project profitability and operating margins; volatility in fuel, transportation, labor and other project costs; risks associated with fixed-price contracts; the timing and amount of any repurchases under the Company’s share repurchase program and the effect of any such repurchases on the Company’s liquidity and capital resources; the Company’s ability to identify and transition to a new Chief Financial Officer; difficulty in sustaining rapid revenue growth, which may place significant demands on the Company’s administrative, operational and financial resources; fluctuations in the Company’s revenue; and the concentration of the Company’s business in the Southeastern United States.
Cardinal has based these forward-looking statements largely on its current expectations and projections regarding future events and trends that it believes may affect its business, financial condition and results of operations. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties and other factors described in the section entitled “Risk Factors” in Cardinal’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025, the Company’s most recent Quarterly Report on Form 10-Q and the Company’s other filings with the Securities and Exchange Commission. Accordingly, investors should not rely upon forward-looking statements as predictions of future events. Cardinal cannot assure investors that the results, events or circumstances reflected in the forward-looking statements will be achieved or occur, and actual results, events or circumstances could differ materially from those projected in the forward-looking statements. Although forward-looking statements reflect the good-faith beliefs of Cardinal’s management at the time they are made, forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to differ materially from anticipated future results, performance or achievements expressed or implied by such forward-looking statements. Cardinal undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, changed circumstances or otherwise, except as required by law.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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CARDINAL INFRASTRUCTURE GROUP INC. |
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Date: |
November 12, 2026 |
By: |
/s/ Mike Rowe |
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Mike Rowe |
Exhibit 99.1
Cardinal Infrastructure Group Inc. Reports Third Quarter 2026 Results
Company reports strong revenue growth and outlines actions to strengthen execution and profitability
Raleigh, NC – November 12, 2026 – Cardinal Infrastructure Group Inc. (NASDAQ: CDNL) ("Cardinal" or the "Company"), today announced the Company’s third quarter and year-to-date 2026 financial results.
"Revenue grew 65.1% this quarter to $201.9 million, but our third-quarter Adjusted EBITDA margin fell to 4.2%, well below our expectations," said Jeremy Spivey, Chairman and Chief Executive Officer. "The decline primarily reflected project estimate revisions, residential pricing pressure, lower initial bid margins on certain commercial and industrial work, and higher fuel and transportation costs. These results are not acceptable, and they make clear that we need to strengthen how we estimate, manage and execute projects across Cardinal."
"As a second-generation operator with more than 30 years of experience in this industry, I know what strong project execution requires, and I recognize when we need to raise our standard. We are taking several actions to do just that. Benji Wood, our Chief Operating Officer, is a third-generation operator with more than 30 years of experience and a demonstrated record of success leading ALGC. Benji will now take a more direct role in establishing and implementing consistent operating standards across the Cardinal platform, focusing on project selection, estimating, project reviews and accountability. We will also engage an independent third-party advisor to support implementation of these operational changes and assess our estimating and project review processes."
"Separately, in collaboration with Hughes Brothers, we've decided to postpone the proposed acquisition. We believe the right priority today is strengthening execution across our existing operations and realizing the benefits of the businesses we've already acquired. We also remain focused on capital allocation. Given the strength of the balance sheet, our Board of Directors has authorized a share repurchase program of up to $50 million of our Class A common stock over the next 12 months. Our strategy remains intact. Our immediate priority is strengthening execution and building the operating discipline and supporting infrastructure necessary to translate growth into more consistent profitability."
Third Quarter Results
Revenues increased $79.6 million, or 65.1%, to $201.9 million for the three months ended September 30, 2026 from $122.3 million for the three months ended September 30, 2025. Revenue growth included $23.9 million of organic growth, primarily reflecting higher residential project volumes and continued expansion across the Company's geographic footprint, with the remaining $55.7 million increase attributable to acquired businesses.
Cost of revenues increased $88.2 million, or 85.8%, to $191.1 million for the three months ended September 30, 2026 from $102.9 million for the three months ended September 30, 2025, primarily due to organic and acquisition-related growth and higher fuel and transportation costs.
Gross margin decreased 10.5 percentage points to 5.4% for the three months ended September 30, 2026 from 15.9% for the three months ended September 30, 2025. During the three months ended September 30, 2026, as additional project information became available, the Company revised its estimates of costs to complete on certain projects, resulting in project estimate revisions that reduced gross profit by $13.2 million. Gross margin was also negatively impacted by residential pricing pressure, lower initial bid margins on certain commercial and industrial projects, and higher fuel and transportation costs.
General and administrative expenses increased $9.6 million, or 187.0%, to $14.7 million for the three months ended September 30, 2026 from $5.1 million for the three months ended September 30, 2025, primarily due to $3.2 million non-cash stock-based compensation, $2.3 million of expenses from acquired businesses, $1.8 million of acquisition-related costs, and investments in personnel, systems and infrastructure to support the growth and increased complexity of the organization.
The Company reported a net loss of $11.0 million, compared to net income of $10.1 million in the prior year period. Adjusted EBITDA for the third quarter was $8.5 million, reflecting an Adjusted EBITDA margin of 4.2%, compared to $21.4 million and 17.5%, respectively, in the prior-year period. The 13.3-percentage-point decline in Adjusted EBITDA margin primarily reflected project estimate revisions, which accounted for approximately 6.5 percentage points of the decline; residential pricing pressure and lower initial bid margins on certain commercial and industrial work, which accounted for approximately 3.6 points; and higher fuel and transportation costs, which accounted for approximately 3.5 points. These impacts were partially offset by approximately 0.3 points from other factors.
Year-To-Date Results
Revenues increased $286.1 million, or 92.2%, to $596.4 million for the nine months ended September 30, 2026 from $310.2 million for the nine months ended September 30, 2025. Revenue growth included $144.1 million of organic growth, primarily reflecting higher residential project volumes and continued expansion across the Company's geographic footprint, with the remaining $142.0 million increase attributable to acquired businesses.
Cost of revenues increased $264.9 million, or 100.9%, to $527.5 million for the nine months ended September 30, 2026 from $262.6 million for the nine months ended September 30, 2025, reflecting organic and acquisition-related growth and higher fuel and transportation costs.
Gross margin decreased 3.9 percentage points to 11.5% for the nine months ended September 30, 2026 from 15.4% for the nine months ended September 30, 2025, primarily reflecting higher fuel and transportation costs, the project estimate revisions recorded during the third quarter, residential pricing pressure, and lower initial bid margins on certain commercial and industrial projects.
General and administrative expenses increased $23.7 million to $34.1 million for the nine months ended September 30, 2026 from $10.4 million for the nine months ended September 30, 2025, primarily due to $5.3 million of expenses from acquired businesses, $4.9 million of acquisition-related costs, $3.7 million of non-cash stock-based compensation, and investments in personnel, systems, and infrastructure to support the growth and increased complexity of the organization.
Net income was $11.7 million, compared to $26.2 million in the same period of 2025. Adjusted EBITDA for the nine months ended September 30, 2026 was $63.4 million, reflecting an Adjusted EBITDA margin of 10.6%, compared to $55.7 million and 17.9%, respectively, in the prior-year period.
Select Balance Sheet and Liquidity Information
As of September 30, 2026, Cardinal had $335.0 million in cash and cash equivalents and $198.5 million in total debt, representing $136.5 million of net cash. The Company also had $100.0 million of availability under its revolving credit facility and $250.0 million available under the delayed draw term loan. Net cash provided by operating activities increased to $30.3 million for the nine months ended September 30, 2026, compared to $26.3 million in the prior-year period. Capital expenditures were $41.6 million for the nine months ended September 30, 2026, compared to $31.7 million in the prior-year period.
Share Repurchase Program
The Company’s Board of Directors has authorized a share repurchase program under which the Company may repurchase up to $50 million of its Class A common stock over the next 12 months. Repurchases, if any, may be made from time to time based on market conditions, the Company’s capital requirements and other factors. The program does not obligate the Company to repurchase any particular amount of Class A common stock, and the program may be suspended, modified or discontinued at any time.
Backlog
Cardinal's total backlog as of September 30, 2026, was $815.5 million, a 26.2% increase from the prior-year period, primarily reflecting the ALGC acquisition.
Guidance
The Company is withdrawing its previously issued full-year 2026 revenue and Adjusted EBITDA margin guidance. While the Company currently expects fourth-quarter Adjusted EBITDA to improve from the third quarter, it is not providing a specific revenue or margin outlook.
Leadership Transition
On November 9, 2026, Mike Rowe notified the Company of his decision to resign from his position as Chief Financial Officer upon the appointment of his successor. Mr. Rowe will continue to serve in his current position until his successor joins the Company. The Company has engaged Spencer Stuart to conduct a comprehensive search for his successor.
Conference Call
Cardinal management will discuss results and outlook during its quarterly investor conference call today starting at 10:30 a.m. ET. The call and accompanying slide presentation will be webcast on the "Events & Presentations" section of Cardinal’s website. A replay of the webcast will be available at the same location shortly after the conclusion of the presentation.
About Cardinal
Cardinal Infrastructure Group Inc. (NASDAQ: CDNL) is one of the Southeast's fastest-growing, full-service infrastructure service providers. The Company delivers integrated civil and site development solutions across high-growth markets through a self-performing model supported by skilled labor, specialized fleets and market-leading subsidiaries. This model enables efficient, turnkey project
execution at scale while maintaining focus on building long-term client relationships. Cardinal's strategy is grounded in operational discipline, market expansion and a commitment to integrity from the ground up.
Contacts
investor.relations@cardinalinfrastructuregroup.com
Cautionary Statement Regarding Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, among other things, statements regarding the Company’s expected fourth-quarter performance; the timing, implementation and expected benefits of the Company’s operational improvement initiatives; the Company’s expectations regarding project estimating, project review, forecasting, execution and profitability; the Company’s capital allocation priorities and potential repurchases of Class A common stock pursuant to its share repurchase program; the proposed acquisition of Hughes Brothers Construction Inc., including the timing and expected benefits of the proposed transaction; the expected benefits of completed acquisitions; and the transition of the Company’s Chief Financial Officer and the search for a successor. Statements that are predictive in nature, that depend upon or refer to future events or conditions, or that include words such as “may,” “could,” “plan,” “project,” “budget,” “predict,” “pursue,” “target,” “seek,” “objective,” “believe,” “expect,” “anticipate,” “intend,” “estimate,” “will” and similar expressions that are predictions of or indicate future events and trends and that do not relate to historical matters identify forward-looking statements.
These statements involve risks and uncertainties, and Cardinal’s actual results could differ materially from those expressed or implied by such forward-looking statements. The potential risks, uncertainties and other factors that could cause actual results to differ include, but are not limited to: the Company’s ability to successfully implement its operational improvement initiatives; the timing and effectiveness of improvements to project estimating, project review, forecasting and execution processes; additional changes in estimates of costs or revenues associated with the Company’s contracts; the Company’s ability to improve project profitability and operating margins; volatility in fuel, transportation, labor and other project costs; risks associated with fixed-price contracts; the Company’s ability to successfully integrate completed acquisitions and realize their anticipated benefits; the ultimate outcome of the proposed Hughes Brothers transaction, including the possibility that the transaction may not be completed and that the anticipated benefits of the transaction may not be realized to the extent or within the timeframe expected; the timing and amount of any repurchases under the Company’s share repurchase program and the effect of any such repurchases on the Company’s liquidity and capital resources; the Company’s ability to identify and transition to a new Chief Financial Officer; difficulty in sustaining rapid revenue growth, which may place significant demands on the Company’s administrative, operational and financial resources; fluctuations in the Company’s revenue; expectations regarding future growth, backlog and customer demand; and the concentration of the Company’s business in the Southeastern United States.
Cardinal has based these forward-looking statements largely on its current expectations and projections regarding future events and trends that it believes may affect its business, financial condition and results of operations. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties and other factors described in the section entitled “Risk Factors” in Cardinal’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025, the Company’s most recent Quarterly Report on Form 10-Q and the Company’s other filings with the Securities and Exchange Commission. Accordingly, investors should not rely upon forward-looking statements as predictions of future events. Cardinal cannot assure investors that the results, events or circumstances reflected in the forward-looking statements will be achieved or occur, and actual results, events or circumstances could differ materially from those projected in the forward-looking statements. Although forward-looking statements reflect the good-faith beliefs of Cardinal’s management at the time they are made, forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to differ materially from anticipated future results, performance or achievements expressed or implied by such forward-looking statements. Cardinal undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, changed circumstances or otherwise, except as required by law.
Cardinal Infrastructure Group Inc.
Condensed Consolidated Statements of Operations (Unaudited)
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Three Months Ended |
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Nine Months Ended |
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(in thousands, except per share amounts) |
2026 |
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2025 |
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2026 |
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2025 |
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Revenues |
$ |
201,927 |
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$ |
122,324 |
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$ |
596,371 |
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$ |
310,236 |
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Cost of revenues |
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191,123 |
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102,889 |
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527,493 |
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262,581 |
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Gross profit |
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10,804 |
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19,435 |
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68,878 |
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47,655 |
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General and administrative |
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14,705 |
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5,124 |
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34,128 |
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10,380 |
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Amortization expense |
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4,889 |
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2,292 |
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13,281 |
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5,601 |
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(Loss) income from operations |
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(8,790 |
) |
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12,019 |
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21,469 |
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31,674 |
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Interest expense, net |
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1,734 |
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1,264 |
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7,446 |
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3,872 |
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Other expense (income), net |
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1,066 |
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(331 |
) |
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2,941 |
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(90 |
) |
Net (loss) income before taxes |
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(11,590 |
) |
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11,086 |
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11,082 |
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27,892 |
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Income tax benefit (expense) |
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627 |
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(977 |
) |
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585 |
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(1,691 |
) |
Net (loss) income |
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(10,963 |
) |
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10,109 |
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11,667 |
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26,201 |
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Less: Net (loss) income attributable to noncontrolling interests |
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(6,564 |
) |
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3,016 |
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7,972 |
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6,463 |
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Net (loss) income attributable to Cardinal Infrastructure Group Inc. |
$ |
(4,399 |
) |
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$ |
7,093 |
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$ |
3,695 |
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$ |
19,738 |
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(Loss) earnings per share: |
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Basic |
$ |
(0.21 |
) |
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$ |
0.22 |
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Diluted |
$ |
(0.21 |
) |
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$ |
0.22 |
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Weighted average shares of Class A common stock outstanding: |
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||||||||
Basic |
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20,597 |
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|
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17,118 |
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Diluted |
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20,597 |
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|
|
|
|
|
17,136 |
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Cardinal Infrastructure Group Inc.
Condensed Consolidated Balance Sheets (Unaudited)
(in thousands, except per share amounts) |
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September 30, 2026 |
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December 31, 2025 |
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ASSETS |
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Current assets: |
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Cash |
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$ |
335,003 |
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$ |
97,149 |
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Accounts receivable, net |
|
|
125,157 |
|
|
|
61,282 |
|
Contract assets |
|
|
84,435 |
|
|
|
54,894 |
|
Prepaid expenses |
|
|
2,141 |
|
|
|
1,893 |
|
Other assets |
|
|
2,921 |
|
|
|
433 |
|
Total current assets |
|
|
549,657 |
|
|
|
215,651 |
|
Property and equipment, net |
|
|
154,067 |
|
|
|
84,902 |
|
Operating lease right-of-use assets |
|
|
19,160 |
|
|
|
8,930 |
|
Goodwill |
|
|
133,216 |
|
|
|
23,511 |
|
Intangible assets, net |
|
|
96,963 |
|
|
|
15,514 |
|
Deferred tax assets |
|
|
63,853 |
|
|
|
46,081 |
|
Other non-current assets |
|
|
2,224 |
|
|
|
— |
|
Total assets |
|
|
1,019,140 |
|
|
|
394,589 |
|
|
|
|
|
|
|
|
||
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
||
Current liabilities: |
|
|
|
|
|
|
||
Current portion of notes payable |
|
$ |
11,706 |
|
|
$ |
6,129 |
|
Current portion of finance lease liabilities |
|
|
3,335 |
|
|
|
3,349 |
|
Current portion of operating lease liabilities |
|
|
6,393 |
|
|
|
3,815 |
|
Accounts payable |
|
|
106,870 |
|
|
|
60,600 |
|
Accrued expenses |
|
|
10,954 |
|
|
|
2,956 |
|
Deferred consideration payable |
|
|
900 |
|
|
|
3,967 |
|
Contract liabilities |
|
|
15,691 |
|
|
|
10,832 |
|
Total current liabilities |
|
|
155,849 |
|
|
|
91,648 |
|
Notes payable, less current portion, net of unamortized debt issuance costs |
|
|
186,810 |
|
|
|
113,153 |
|
Finance lease liabilities, less current portion |
|
|
3,191 |
|
|
|
4,974 |
|
Operating lease liabilities, less current portion |
|
|
15,894 |
|
|
|
5,852 |
|
Tax receivable agreement liability |
|
|
55,937 |
|
|
|
39,424 |
|
Contingent consideration |
|
|
12,300 |
|
|
|
— |
|
Total liabilities |
|
$ |
429,981 |
|
|
$ |
255,051 |
|
|
|
|
|
|
|
|
||
Commitments and contingencies (see Note 12) |
|
|
|
|
|
|
||
Stockholders' equity |
|
|
|
|
|
|
||
Preferred stock, $0.0001 par value, 10,000 shares authorized, no shares issued and outstanding as of September 30, 2026 and December 31, 2025 |
|
|
— |
|
|
|
— |
|
Class A common stock, $0.0001 par value, 500,000 shares authorized; 21,121 and 14,947 shares issued and outstanding as of September 30, 2026 and December 31, 2025, respectively |
|
$ |
2 |
|
|
$ |
1 |
|
Class B common stock, $0.0001 par value, 500,000 shares authorized; 26,417 and 23,388 shares issued and outstanding as of September 30, 2026 and December 31, 2025, respectively |
|
|
3 |
|
|
|
2 |
|
Additional paid-in capital |
|
|
256,459 |
|
|
|
57,594 |
|
Retained earnings |
|
|
4,558 |
|
|
|
864 |
|
Accumulated other comprehensive income |
|
|
744 |
|
|
|
— |
|
Total Cardinal Infrastructure Group Inc. stockholders' equity |
|
|
261,766 |
|
|
|
58,461 |
|
Noncontrolling interests |
|
|
327,393 |
|
|
|
81,077 |
|
Total equity |
|
|
589,159 |
|
|
|
139,538 |
|
Total liabilities and stockholders' equity |
|
$ |
1,019,140 |
|
|
$ |
394,589 |
|
Cardinal Infrastructure Group Inc.
Condensed Consolidated Statements of Cash Flows (Unaudited)
|
|
Nine Months Ended |
|
|||||
(in thousands) |
|
2026 |
|
|
2025 |
|
||
Cash flows from operating activities: |
|
|
|
|
|
|
||
Net income |
|
$ |
11,667 |
|
|
$ |
26,201 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
|
||
Depreciation expense |
|
|
19,889 |
|
|
|
17,715 |
|
Amortization of debt issuance costs |
|
|
1,532 |
|
|
|
— |
|
Amortization of other intangible assets |
|
|
13,281 |
|
|
|
5,601 |
|
Noncash stock compensation |
|
|
3,690 |
|
|
|
— |
|
Change in fair value of tax receivable agreement liability |
|
|
1,974 |
|
|
|
— |
|
Provision for deferred income taxes |
|
|
(668 |
) |
|
|
— |
|
Other non-cash adjustments, net |
|
|
1,056 |
|
|
|
(222 |
) |
Changes in operating assets and liabilities: |
|
|
|
|
|
|
||
Accounts receivable, net |
|
|
(45,123 |
) |
|
|
(18,837 |
) |
Contract assets |
|
|
(18,974 |
) |
|
|
(20,935 |
) |
Accounts payable |
|
|
34,529 |
|
|
|
17,231 |
|
Accrued expenses |
|
|
6,626 |
|
|
|
1,612 |
|
Other assets and liabilities, net |
|
|
856 |
|
|
|
(2,026 |
) |
Net cash provided by operating activities |
|
$ |
30,335 |
|
|
$ |
26,340 |
|
|
|
|
|
|
|
|
||
Cash flows from investing activities: |
|
|
|
|
|
|
||
Purchases of property and equipment |
|
$ |
(41,586 |
) |
|
$ |
(31,729 |
) |
Acquisitions, net of cash acquired |
|
|
(133,431 |
) |
|
|
(19,898 |
) |
Other, net |
|
|
285 |
|
|
|
255 |
|
Net cash used in investing activities |
|
$ |
(174,732 |
) |
|
$ |
(51,372 |
) |
|
|
|
|
|
|
|
||
Cash flows from financing activities: |
|
|
|
|
|
|
||
Proceeds from notes payable |
|
$ |
113,000 |
|
|
$ |
45,391 |
|
Principal payments on notes payable |
|
|
(38,394 |
) |
|
|
(11,217 |
) |
Payment of debt issuance costs |
|
|
(4,184 |
) |
|
|
— |
|
Principal payments on finance lease obligations |
|
|
(2,346 |
) |
|
|
(2,357 |
) |
Payments of deferred consideration |
|
|
(4,267 |
) |
|
|
(692 |
) |
Member distributions |
|
|
— |
|
|
|
(8,600 |
) |
Proceeds from equity offering, net of underwriting discounts |
|
|
319,010 |
|
|
|
— |
|
Other, net |
|
|
(568 |
) |
|
|
(22 |
) |
Net cash provided by financing activities |
|
$ |
382,251 |
|
|
$ |
22,503 |
|
Net change in cash |
|
|
237,854 |
|
|
|
(2,529 |
) |
|
|
|
|
|
|
|
||
Cash |
|
|
|
|
|
|
||
Beginning of period |
|
|
97,149 |
|
|
|
20,917 |
|
End of period |
|
$ |
335,003 |
|
|
$ |
18,388 |
|
Non-GAAP Measures
Cardinal presents results of operations in a way that it believes will be the most meaningful and useful to investors, analysts, rating agencies and others who use Company financial information to evaluate performance. Certain of these financial measures are not calculated in accordance with generally accepted accounting principles in the United States ("U.S. GAAP") and are considered non-GAAP under SEC rules and regulations. For example, in this press release, Cardinal presents organic revenue growth, EBITDA, Adjusted EBITDA, Adjusted EBITDA margin, Free Cash Flow, Net (cash) debt, Net (cash) debt / Adjusted EBITDA and Interest Coverage, all of which are non-GAAP financial measures as defined in our Annual Report on Form 10-K for the year ended December 31, 2025, our most recent Quarterly Report on Form 10-Q, and in our other filings with the SEC. These non-GAAP financial measures are presented for supplemental informational purposes only and are not intended to be substitutes for any GAAP financial measures, including net income, and, as calculated, may not be comparable to companies in other industries or within the same industry with similarly titled measures of performance. In addition, these non-GAAP measures should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. Therefore, non-GAAP financial measures should be considered in addition to, not as a substitute for, or in isolation from, measures prepared in accordance with GAAP.
Reconciliation to Non-GAAP Measures
Earnings before interest, taxes, depreciation and amortization ("EBITDA"), adjusted earnings before interest, taxes, depreciation and amortization ("Adjusted EBITDA"), Free Cash Flow, and Net (cash) debt are not measures of results of operations, cash flows from operations or indebtedness under U.S. GAAP and should not be considered as an alternative to other U.S. GAAP measurements. We have presented organic revenue growth, EBITDA, Adjusted EBITDA, Free Cash Flow, and Net (cash) debt to adjust for the items identified below because we believe that it would be helpful to the readers of our financial information to understand the impact of these items on our reported amounts. This presentation enables readers to better compare our results to similar companies that may not incur the impact of various items identified above. Management acknowledges that there are many items that impact a company's reported results or operating cash flows and these lists are not intended to present all items that may have impacted these items. Organic revenue growth, EBITDA, Adjusted EBITDA, Free Cash Flow, Net (cash) debt, and any ratios calculated based on these measures are not necessarily comparable to similarly-titled measures used by other companies or appearing in our debt obligations or agreements. Organic revenue growth, EBITDA, Adjusted EBITDA and Free Cash Flow as presented may not equal column or row totals due to rounding.
We define EBITDA as net income for the period adjusted for interest expense, net income tax expense, depreciation and amortization expense. Adjusted EBITDA further adjusts EBITDA for certain expenses associated with non-routine transactions, including (i) transaction fees and acquisition-related costs incurred in connection with acquisitions and planned acquisitions, (ii) non-routine costs associated with legal matters in which the Company is a defendant, (iii) certain consulting and recruiting costs related to acquisitions and public company readiness, (iv) non-routine revenue impact from customer claims, (v) non-routine loss on extinguishment and refinancing costs, (vi) stock-based compensation, (vii) non-routine IPO related travel and compensation, (viii) remeasurement losses recorded in other expense net, and (ix) other non-routine gains and charges that we do not believe reflect our underlying business performance. We define Adjusted EBITDA margin as Adjusted EBITDA as a percentage of revenue. We define Net (cash) debt as total debt less cash and cash equivalents and Net (cash) debt / Adjusted EBITDA as Net (cash) debt as a multiple of Adjusted EBITDA. We define Interest Coverage as Adjusted EBITDA as a multiple of interest expense, net. We define Free Cash Flow as net cash provided by (used) in operating activities less Capital Expenditures, net of disposals.
The following provides a reconciliation of net income, the most closely comparable GAAP financial measure, to EBITDA, Adjusted EBITDA, Adjusted EBITDA margin, and provides Net (cash) debt / Adjusted EBITDA, Interest Coverage, and Free Cash Flow:
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
December 31, 2025 |
|
|||||||||
(in thousands) |
2026 |
|
2025 |
|
|
2026 |
|
2025 |
|
|
|
|
|||||
Net income (loss) |
$ |
(10,963 |
) |
$ |
10,109 |
|
|
$ |
11,667 |
|
$ |
26,201 |
|
|
$ |
31,093 |
|
Interest expense, net |
|
1,734 |
|
|
1,264 |
|
|
|
7,446 |
|
|
3,872 |
|
|
|
6,826 |
|
Income tax expense (benefit) |
|
(627 |
) |
|
977 |
|
|
|
(585 |
) |
|
1,691 |
|
|
|
1,967 |
|
Depreciation and amortization expense |
|
12,307 |
|
|
8,830 |
|
|
|
33,170 |
|
|
23,316 |
|
|
|
32,375 |
|
EBITDA |
$ |
2,451 |
|
$ |
21,180 |
|
|
$ |
51,698 |
|
$ |
55,080 |
|
|
$ |
72,261 |
|
Transaction fees and acquisition-related costs(1) |
|
1,132 |
|
|
170 |
|
|
|
3,906 |
|
|
393 |
|
|
|
793 |
|
Transition and consulting arrangements(2) |
|
512 |
|
|
— |
|
|
|
825 |
|
|
150 |
|
|
|
150 |
|
Loss on extinguishment and refinancing costs |
|
1,109 |
|
|
— |
|
|
|
1,109 |
|
|
— |
|
|
|
— |
|
Stock-based compensation |
|
3,229 |
|
|
— |
|
|
|
3,690 |
|
|
— |
|
|
|
5,869 |
|
Non-recurring IPO related travel and compensation |
|
— |
|
|
— |
|
|
|
— |
|
|
— |
|
|
|
2,342 |
|
Tax Receivable Agreement Remeasurement(3) |
|
— |
|
|
— |
|
|
|
1,974 |
|
|
— |
|
|
|
— |
|
Other(4) |
|
62 |
|
|
47 |
|
|
|
232 |
|
|
48 |
|
|
|
52 |
|
Adjusted EBITDA |
$ |
8,495 |
|
$ |
21,397 |
|
|
$ |
63,434 |
|
$ |
55,671 |
|
|
$ |
81,466 |
|
Adjusted EBITDA margin |
|
4.2 |
% |
|
17.5 |
% |
|
|
10.6 |
% |
|
17.9 |
% |
|
|
17.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Total debt |
|
|
|
|
|
|
198,516 |
|
|
80,765 |
|
|
|
119,282 |
|
||
Cash and cash equivalents |
|
|
|
|
|
|
335,003 |
|
|
18,388 |
|
|
|
97,149 |
|
||
Net (cash) debt |
|
|
|
|
|
$ |
(136,487 |
) |
$ |
62,377 |
|
|
$ |
22,133 |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Net (cash) debt / Adjusted EBITDA |
|
|
|
|
|
-2.2x |
|
1.1x |
|
|
0.3x |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Adjusted EBITDA |
|
|
|
|
|
$ |
63,434 |
|
$ |
55,671 |
|
|
$ |
81,466 |
|
||
Interest expense, net |
|
|
|
|
|
|
7,446 |
|
|
3,872 |
|
|
|
6,826 |
|
||
Interest coverage |
|
|
|
|
|
8.52x |
|
14.38x |
|
|
11.94x |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Net cash provided by operating activities |
|
8,340 |
|
|
10,018 |
|
|
|
30,335 |
|
|
26,340 |
|
|
|
37,901 |
|
Capital expenditures |
|
(7,601 |
) |
|
(9,108 |
) |
|
|
(41,586 |
) |
|
(31,729 |
) |
|
|
(43,815 |
) |
Free cash flow |
$ |
739 |
|
$ |
910 |
|
|
$ |
(11,251 |
) |
$ |
(5,389 |
) |
|
$ |
(5,914 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
(1) Represents transaction fees and acquisition-related costs incurred in connection with acquisitions and planned acquisitions. |
|
||||||||||||||||
(2) Represents certain consulting and recruiting costs related to acquisitions and public company readiness. |
|
||||||||||||||||
(3) Represents the remeasurement loss related to the tax receivable agreement liability recognized in other expenses, net. |
|
||||||||||||||||
(4) Represents certain other gains and charges that we do not believe reflect our underlying business performance. |
|
||||||||||||||||
We define Organic Revenue Growth as the change in revenues between the current and prior-year periods, excluding the impact of companies acquired or divested during the preceding twelve months. This non-GAAP measure, as reconciled to GAAP below, is considered relevant to aid analysis and understanding of the Company's results, business trends and outlook measures aside from the material impact of the acquisition-related and other charges and ensures appropriate comparability to operating results of prior periods. The following table provides a reconciliation of the non-GAAP financial measure, Organic Revenue Growth, to the most closely comparable GAAP financial measure, GAAP Revenue Growth (in millions):
Three Months Ended September 30, 2026 |
|
|||||||||||||
GAAP Revenue Growth |
|
|
Acquisitions |
|
|
Divestitures |
|
|
Non-GAAP Organic Revenue Growth |
|
||||
$ |
79.6 |
|
– |
$ |
55.7 |
|
+ |
$ |
- |
|
= |
$ |
23.9 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Nine Months Ended September 30, 2026 |
|
|||||||||||||
GAAP Revenue Growth |
|
|
Acquisitions |
|
|
Divestitures |
|
|
Non-GAAP Organic Revenue Growth |
|
||||
$ |
286.1 |
|
– |
$ |
142.0 |
|
+ |
$ |
- |
|
= |
$ |
144.1 |
|