Everus Construction Q3 profit rises to $91.9M
Everus’s E&M segment includes businesses specializing in mechanical, electrical, plumbing and off-site modular construction services.
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.
Form Type
10-Q
Everus Construction Group, Inc. (ECG) reported third-quarter 2026 revenue of $1,384.2 million, compared with $986.8 million a year earlier, and net income of $91.9 million, versus $57.0 million. Diluted earnings per share were $1.79, versus $1.11.
Nine-month operating cash flow was $267.3 million, compared with $108.6 million. Contract-estimate changes positively affected third-quarter operating revenue by $82.1 million and net income by $62.2 million. Everus completed the SE&M acquisition on April 1 and Epsilon on September 1 for its E&M segment: SE&M's closing cash consideration was $161.7 million, plus contingent consideration of up to $12.0 million tied to post-acquisition targets over one year; Epsilon's total purchase consideration was $288.7 million, including a $27.8 million reorganization tax liability.
Remaining performance obligations were $4.78 billion as of September 30, 2026. A September credit agreement amendment refinanced the prior term loan and provided $477.5 million in aggregate term-loan principal and $350.0 million in revolving commitments. At quarter-end, $100.0 million was outstanding on the revolving commitments and borrowing capacity was $247.8 million.
3 points · 0 major0 major · 0 points
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 was $1,384.2 million, versus $986.8 million in 2025.
- Moderate pointThird-quarter net income was $91.9 million, versus $57.0 million in 2025.
- Moderate pointNine-month operating cash flow was $267.3 million, versus $108.6 million.
Negative
- None.
Filing Explained
The customer billing matter is resolved, and Everus received 29.2 million dollars in October 2026.
This unaudited quarterly report records completed third-quarter results; for the nine months, changes in estimates on work partly completed in earlier periods increased net income by
Those estimate changes also increased nine-month operating revenues by
Separately, Everus and a customer reached a resolution on
Key Figures
Operating revenue: $1,384.2 million
Net income: $91.9 million
Diluted earnings per share: $1.79 per share
+4 more
7 metrics
Operating revenue
$1,384.2 million
Three months ended September 30, 2026; $986.8 million in 2025
Net income
$91.9 million
Three months ended September 30, 2026; $57.0 million in 2025
Diluted earnings per share
$1.79 per share
Three months ended September 30, 2026; $1.11 in 2025
Operating cash flow
$267.3 million
Nine months ended September 30, 2026; $108.6 million in 2025
Remaining performance obligations
$4.78 billion
As of September 30, 2026
Epsilon total purchase consideration
$288.7 million
Acquisition completed September 1, 2026
Revolving credit borrowing capacity
$247.8 million
As of September 30, 2026
Key Terms
remaining performance obligations, cumulative catch-up method, contingent consideration, Term SOFR
4 terms
remaining performance obligations financial
"transaction price allocated to the Company's remaining performance obligations"
Remaining performance obligations are the work a company still needs to complete for its customers, like finishing a service or delivering a product. It’s important because it shows how much future income the company has coming in from current agreements, giving a clearer picture of its ongoing business.
cumulative catch-up method financial
"adjustments in estimated gross profit on contracts under the cumulative catch-up method"
contingent consideration financial
"potential contingent consideration up to $12.0 million"
Contingent consideration is an additional payment agreed when one company buys another that will be paid later only if specific future targets are met, such as revenue, profit, or regulatory milestones. It matters to investors because it shifts risk between buyer and seller and affects the acquiring company's future cash flow and reported value — like promising a bonus after results are proven.
Term SOFR financial
"Term SOFR plus an applicable rate of 1.75% to 2.50%"
Term SOFR is a benchmark interest rate that reflects the cost of borrowing money over a specific period, based on actual transactions in the financial markets. It is used by lenders and borrowers to set the interest rates on loans and financial contracts, helping to ensure rates are fair and transparent. For investors, understanding term SOFR helps gauge borrowing costs and the overall direction of interest rates in the economy.
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
What were ECG's third-quarter 2026 revenue and net income?
ECG reported $1,384.2 million in revenue and $91.9 million in net income for the three months ended September 30, 2026. The comparable 2025 figures were $986.8 million and $57.0 million, respectively.
How much of ECG's remaining performance obligations is expected within 12 months?
The estimated amount within 12 months was $3,948.3 million as of September 30, 2026, including $3,685.2 million in E&M and $263.1 million in T&D.
What interest terms does ECG's amended credit agreement provide?
The agreement sets the Term SOFR borrowing margin at 1.75% to 2.50% and the base-rate margin at 0.75% to 1.50%, based on the Company's total net leverage ratio. Undrawn revolving commitment fees range from 0.25% to 0.40%.
AI-generated analysis. How Rhea-AI works. Not financial advice.
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the quarterly period ended September 30, 2026
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the transition period from _____________ to ______________
Commission File Number: 001-42276
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||||
| (Address of principal executive offices) | (Zip code) | ||||
(701 ) 221-6400
(Registrant’s telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of exchange on which registered | ||||||||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐.
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
☒ | Accelerated filer | ☐ | |||||||||
Non-accelerated filer | ☐ | Smaller reporting company | |||||||||
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. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒ .
Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of November 2, 2026: 51,064,160 shares.
INDEX
| Page | |||||
Industry Information | 2 | ||||
Part I -- Financial Information | 3 | ||||
Item 1. Financial Statements. (Unaudited) | 3 | ||||
Condensed Consolidated Statements of Income - Three and Nine Months Ended September 30, 2026 and 2025 | 3 | ||||
Condensed Consolidated Statements of Comprehensive Income - Three and Nine Months Ended September 30, 2026 and 2025 | 4 | ||||
Condensed Consolidated Balance Sheets - September 30, 2026 and December 31, 2025 | 5 | ||||
Condensed Consolidated Statements of Equity - Three and Nine Months Ended September 30, 2026 and 2025 | 6 | ||||
Condensed Consolidated Statements of Cash Flows - Nine Months Ended September 30, 2026 and 2025 | 7 | ||||
Notes to Condensed Consolidated Financial Statements | 8 | ||||
1. Background and Nature of Operations | 8 | ||||
2. Basis of Presentation and Summary of Significant Accounting Policies | 8 | ||||
3. Revenue from Contracts with Customers | 13 | ||||
4. Acquisitions | 17 | ||||
5. Goodwill and Other Intangible Assets | 21 | ||||
6. Fair Value Measurements | 23 | ||||
7. Debt | 25 | ||||
8. Leases | 28 | ||||
9. Earnings Per Share | 30 | ||||
10. Stock-Based Compensation | 30 | ||||
11. Accumulated Other Comprehensive Loss | 31 | ||||
12. Income Taxes | 32 | ||||
13. Segment Information | 32 | ||||
14. Commitments, Contingencies and Guarantees | 36 | ||||
15. Related-Party Transactions | 38 | ||||
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. | 39 | ||||
Item 3. Quantitative and Qualitative Disclosures About Market Risk. | 58 | ||||
Item 4. Controls and Procedures. | 59 | ||||
Part II -- Other Information | 61 | ||||
Item 1. Legal Proceedings. | 61 | ||||
Item 1A. Risk Factors. | 61 | ||||
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds. | 62 | ||||
Item 3. Defaults Upon Senior Securities. | 62 | ||||
Item 4. Mine Safety Disclosures. | 62 | ||||
Item 5. Other Information. | 62 | ||||
Item 6. Exhibits. | 63 | ||||
Signatures | 64 | ||||
1
Industry Information
Any industry data included in this Quarterly Report on Form 10-Q (“Quarterly Report”) regarding industry size and/or relative industry position is derived from a variety of sources, including company research, third-party studies and surveys, industry and general publications, and estimates based on Everus Construction Group, Inc.’s (“Everus”) knowledge and experience in the industries in which it operates. Everus’ estimates, if any, have been based on information obtained from its customers, suppliers, trade and business organizations, and other contacts in the industry. Everus is responsible for all the disclosures contained in this Quarterly Report, and Everus believes that any third-party data is generally reliable and that its estimates are accurate as of the date of this Quarterly Report. Further, Everus’ estimates and assumptions involve risks and uncertainties and are subject to change based on various factors, including those discussed in “Item 1A. Risk Factors” in this Quarterly Report, as well as Everus’ 2025 Annual Report on Form 10-K (“2025 Annual Report”). These and other factors could cause results to differ materially from those expressed in the estimates and assumptions.
2
PART I — FINANCIAL INFORMATION
Item 1. Financial Statements.
Everus Construction Group, Inc.
Condensed Consolidated Statements of Income
(Unaudited)
| Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
(In thousands, except per share amounts) | |||||||||||||||||||||||
Operating revenues | $ | $ | $ | $ | |||||||||||||||||||
Cost of sales | |||||||||||||||||||||||
Gross profit | |||||||||||||||||||||||
Selling, general and administrative expenses | |||||||||||||||||||||||
| Increase in fair value of contingent consideration | |||||||||||||||||||||||
Operating income | |||||||||||||||||||||||
| Interest income | |||||||||||||||||||||||
Interest expense | |||||||||||||||||||||||
Other income, net | |||||||||||||||||||||||
Income before income taxes and income from equity method investments | |||||||||||||||||||||||
Income taxes | |||||||||||||||||||||||
Income from equity method investments | |||||||||||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||||||||||
Earnings per share: | |||||||||||||||||||||||
| Basic | $ | $ | $ | $ | |||||||||||||||||||
| Diluted | $ | $ | $ | $ | |||||||||||||||||||
Weighted average common shares outstanding: | |||||||||||||||||||||||
Basic | |||||||||||||||||||||||
Diluted | |||||||||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
3
Everus Construction Group, Inc.
Condensed Consolidated Statements of Comprehensive Income
(Unaudited)
| Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||||||||||
Other comprehensive loss, net of taxes: | |||||||||||||||||||||||
Foreign currency translation adjustments | ( | ( | |||||||||||||||||||||
Total other comprehensive loss, net of taxes | ( | ( | |||||||||||||||||||||
Comprehensive income attributable to common stockholders | $ | $ | $ | $ | |||||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
4
Everus Construction Group, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
| September 30, 2026 | December 31, 2025 | ||||||||||
| (In thousands, except share and per share amounts) | |||||||||||
| Assets | |||||||||||
Current assets: | |||||||||||
Cash, cash equivalents and restricted cash | $ | $ | |||||||||
Receivables, net of allowance for credit losses of $ | |||||||||||
Contract assets | |||||||||||
Inventories, net | |||||||||||
Prepaid expenses | |||||||||||
Other current assets | |||||||||||
Total current assets | |||||||||||
Noncurrent assets: | |||||||||||
Investments | |||||||||||
Property, plant and equipment, net of accumulated depreciation of $ | |||||||||||
Operating lease right-of-use assets | |||||||||||
Goodwill | |||||||||||
Other intangible assets, net of accumulated amortization of $ | |||||||||||
Other noncurrent assets | |||||||||||
Total noncurrent assets | |||||||||||
Total assets | $ | $ | |||||||||
| Liabilities and Stockholders’ Equity | |||||||||||
Current liabilities: | |||||||||||
Current portion of long-term debt | $ | $ | |||||||||
Accounts payable | |||||||||||
Contract liabilities, net | |||||||||||
Taxes payable | |||||||||||
Accrued compensation | |||||||||||
Accrued payroll-related liabilities | |||||||||||
Current portion of operating lease liabilities | |||||||||||
Other accrued liabilities | |||||||||||
Total current liabilities | |||||||||||
Noncurrent liabilities: | |||||||||||
Long-term debt, net of unamortized issuance costs | |||||||||||
Deferred income taxes | |||||||||||
Operating lease liabilities | |||||||||||
Other noncurrent liabilities | |||||||||||
Total noncurrent liabilities | |||||||||||
Total liabilities | $ | $ | |||||||||
Commitments and contingent liabilities | |||||||||||
Stockholders’ equity: | |||||||||||
Preferred stock, | $ | $ | |||||||||
Common stock, | |||||||||||
Additional paid-in capital | |||||||||||
Retained earnings | |||||||||||
Accumulated other comprehensive loss | ( | ||||||||||
Total stockholders’ equity | |||||||||||
Total liabilities and stockholders’ equity | $ | $ | |||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
5
Everus Construction Group, Inc.
Condensed Consolidated Statements of Equity
(Unaudited)
| Common Stock | Accumulated Other Comprehensive Loss | ||||||||||||||||||||||||||||||||||
| (In thousands, except shares) | Shares | Amount | Additional Paid-in Capital | Retained Earnings | Total | ||||||||||||||||||||||||||||||
Balance as of December 31, 2025 | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
Net income | — | — | — | — | |||||||||||||||||||||||||||||||
Stock-based compensation | — | ( | — | — | ( | ||||||||||||||||||||||||||||||
Balance as of March 31, 2026 | |||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | |||||||||||||||||||||||||||||||
Stock-based compensation | — | — | |||||||||||||||||||||||||||||||||
Balance as of June 30, 2026 | |||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | |||||||||||||||||||||||||||||||
Other comprehensive loss, net of taxes | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | ||||||||||||||||||||||||||||||||
Balance as of September 30, 2026 | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||
| Common Stock | |||||||||||||||||||||||||||||||||||
| (In thousands, except shares) | Shares | Amount | Additional Paid-in Capital | Retained Earnings | Total | ||||||||||||||||||||||||||||||
Balance as of December 31, 2024 | $ | $ | $ | $ | |||||||||||||||||||||||||||||||
Net income | — | — | — | ||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | |||||||||||||||||||||||||||||||||
Balance as of March 31, 2025 | |||||||||||||||||||||||||||||||||||
Net income | — | — | — | ||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | |||||||||||||||||||||||||||||||||
Balance as of June 30, 2025 | |||||||||||||||||||||||||||||||||||
Net income | — | — | — | ||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | ||||||||||||||||||||||||||||||||
Balance as of September 30, 2025 | $ | $ | $ | $ | |||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
6
Everus Construction Group, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
| Nine months ended September 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| (In thousands) | |||||||||||
Operating activities: | |||||||||||
Net income | $ | $ | |||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Depreciation | |||||||||||
Amortization of intangible assets | |||||||||||
Deferred income taxes | ( | ||||||||||
Provision for credit losses, net of reversals | ( | ||||||||||
| Amortization of debt issuance costs | |||||||||||
Stock-based compensation costs | |||||||||||
Net unrealized gains on investments | ( | ( | |||||||||
Gain on sale of assets | ( | ( | |||||||||
| Increase in fair value of contingent consideration | |||||||||||
Equity in earnings of unconsolidated affiliates, net of distributions | ( | ||||||||||
Changes in operating assets and liabilities, net of effects of acquisitions: | |||||||||||
Receivables | ( | ( | |||||||||
Contract assets | ( | ( | |||||||||
Inventories, net | ( | ( | |||||||||
Other current assets | |||||||||||
Accounts payable | |||||||||||
Contract liabilities, net | |||||||||||
Other current liabilities | |||||||||||
Other noncurrent changes | |||||||||||
Net cash provided by operating activities | |||||||||||
Investing activities: | |||||||||||
Capital expenditures | ( | ( | |||||||||
Net proceeds from sale or disposition of property, plant and equipment | |||||||||||
Acquisitions, net of cash acquired | ( | ||||||||||
Proceeds from insurance contracts | |||||||||||
Investments | ( | ( | |||||||||
Net cash used in investing activities | ( | ( | |||||||||
Financing activities: | |||||||||||
| Issuance of long-term debt | |||||||||||
Repayments of long-term debt | ( | ( | |||||||||
| Repayment of long-term debt assumed through acquisition | ( | ||||||||||
| Proceeds under the credit facility | |||||||||||
Debt issuance costs | ( | ||||||||||
| Tax withholding on stock-based compensation | ( | ( | |||||||||
Net cash provided by (used in) financing activities | ( | ||||||||||
Effect of foreign currency translation adjustments on cash, cash equivalents, and restricted cash | ( | ||||||||||
Increase in cash, cash equivalents and restricted cash | |||||||||||
Cash, cash equivalents and restricted cash - beginning of period | |||||||||||
Cash, cash equivalents and restricted cash - end of period | $ | $ | |||||||||
| Supplemental Cash Flow Information: | |||||||||||
| Interest paid | $ | $ | |||||||||
Income taxes paid, net | $ | $ | |||||||||
| Noncash investing activities: | |||||||||||
Purchases of property, plant and equipment included in Accounts payable | $ | $ | |||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
7
Everus Construction Group, Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
Note 1 – Background and Nature of Operations
Nature of Operations
Everus Construction Group, Inc. (the “Company” or “Everus”) is a leading construction solutions provider headquartered in Bismarck, North Dakota, offering specialty contracting services to a diverse set of end markets, which are provided to commercial, industrial, institutional, renewables, service, transportation, utility and other customers. The Company’s common stock is listed under the ticker symbol “ECG” on the New York Stock Exchange. The Company operates throughout most of the United States and in parts of Canada through two
Electrical & Mechanical (“E&M”): Contracting services including construction and maintenance of electrical and communication wiring and infrastructure, fire suppression systems, renewables infrastructure and mechanical piping and services to customers in both the public and private sectors.
Transmission & Distribution (“T&D”): Contracting services including construction and maintenance of overhead and underground electrical, gas, communication infrastructure and transportation-related lighting, as well as the manufacture and distribution of overhead and underground transmission line construction equipment and tools.
Note 2 – Basis of Presentation and Summary of Significant Accounting Policies
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements were prepared in conformity with generally accepted accounting principles in the United States (“GAAP”). Pursuant to GAAP, certain information and footnote disclosures normally included in the annual consolidated financial statements prepared in accordance with GAAP have been condensed or omitted. Accordingly, these unaudited condensed consolidated financial statements should be read in conjunction with the annual consolidated financial statements included in the Company’s 2025 Annual Report on Form 10-K (“2025 Annual Report”). The information includes all adjustments that are, in the opinion of management, necessary for a fair presentation of the unaudited condensed consolidated financial statements and are of a normal recurring nature.
The results of operations for the three and nine months ended September 30, 2026, are not necessarily indicative of the results to be expected for the year ending December 31, 2026 or any other future period.
All revenues and costs, as well as assets and liabilities, directly associated with the business activities of the Company are included in the unaudited condensed consolidated financial statements. General corporate expenses are included within Selling, general and administrative expenses and Other income, net on the unaudited condensed consolidated statements of income.
Certain reclassifications have been made to the prior year unaudited condensed consolidated financial statements to conform to the current year presentation with regards to prepayments and other current assets on the unaudited condensed consolidated balance sheets. These reclassifications had no impact to the unaudited condensed consolidated statements of income, equity, or cash flows.
Principles of Consolidation
The unaudited condensed consolidated financial statements were prepared in accordance with GAAP and include the accounts of the Company and its wholly owned subsidiaries, as well as entities that the Company controls through its ownership of a majority voting interest or pursuant to control of a variable interest entity (“VIE”), which is discussed in more detail below. All significant intercompany accounts and transactions between the businesses comprising the Company have been eliminated in the accompanying unaudited condensed consolidated financial statements.
Subsequent Events
The Company has evaluated transactions for consideration as recognized subsequent events in these unaudited condensed consolidated financial statements through November 6, 2026, the date of issuance of these unaudited condensed consolidated financial statements, and determined that no events requiring disclosure occurred.
8
Summary of Significant Accounting Policies
Except for with respect to functional currency and translation of financial results, there have been no material changes to the Company’s significant accounting policies described in Note 2 – Basis of Presentation and Summary of Significant Accounting Policies in the Company’s 2025 Annual Report.
Functional Currency and Translation of Financial Results
During the third quarter of 2026, the Company completed an acquisition with foreign operations. See Note 4 – Acquisitions for more information. The U.S. dollar is the functional currency of the Company’s U.S. operations. The functional currency of the acquired business is the Canadian dollar. As a result, foreign currency transaction gains and losses can exist if a transaction results in monetary assets or liabilities that are denominated in a currency different from the functional currency and the currency exchange rate changes, including intercompany foreign currency transactions that are not of a long-term investment nature. These foreign currency transaction gains and losses are recognized in Other income, net on the unaudited condensed consolidated statements of income. For both the three and nine months ended September 30, 2026, the Company recognized $0.8
In preparing its unaudited condensed consolidated financial statements, the Company translates the financial results of its Canadian operations from the functional currency of the Canadian dollar into the U.S. dollar. Revenues, expenses, gains and losses are translated at average monthly rates, while assets and liabilities are translated using the period-end current exchange rate. Stockholders’ equity is translated at the historical exchange rate.
Resulting foreign currency translations adjustments are recognized in Other comprehensive loss, net of taxes within the unaudited condensed consolidated statements of comprehensive income, and reflected in Accumulated other comprehensive loss, within the unaudited condensed consolidated balance sheet and statements of equity, respectively, for the applicable 2026 periods.
Use of Estimates
The preparation of unaudited condensed consolidated financial statements in conformity with GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities, at the date of the unaudited condensed consolidated financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Estimates are used for items such as long-lived assets and goodwill; fair values of acquired assets and liabilities under the acquisition method of accounting; acquisition-related contingent liabilities; property, plant and equipment depreciable lives; tax provisions; revenue recognized using the cost-to-cost measure of progress for contracts; costs on construction contracts; unbilled revenues; expected credit losses; loss contingencies; actuarially determined benefit costs; lease classification; present value of right-of-use assets and lease liabilities; and the valuation of stock-based compensation. As additional information becomes available, or actual amounts are determinable, the recorded estimates are revised. Consequently, operating results can be affected by revisions to prior accounting estimates.
Consolidation of Variable Interest Entities
The Company holds a minority economic interest in a captive insurance company, which has been determined to be a VIE due to its variable ownership interest in the captive insurance company. The captive insurance is structured with protected cell captives for each insured party (“Captive Cells”) in which participants’ assets and liabilities are held separately from each other and is not exposed to the insurance and investment risks that the Captive Cells are designed to create and distribute on behalf of the insured parties. The Company is the primary beneficiary of its individual Captive Cell and has the power to direct the activities that most significantly impact economic performance of its Captive Cell, as well as the obligation to absorb losses of, and receive benefits from the activities of its Captive Cell. Accordingly, the Company has prepared these unaudited condensed consolidated financial statements in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 810, Consolidation. ASC 810 requires that if an entity is the primary beneficiary of a VIE, the assets, liabilities, and results of operations of the VIE should be included in the unaudited condensed consolidated financial statements of such entity. As such, the unaudited condensed consolidated financial statements include the consolidation of the Company’s Captive Cell.
9
| September 30, 2026 | December 31, 2025 | ||||||||||
| (In thousands) | |||||||||||
Cash, cash equivalents and restricted cash | $ | $ | |||||||||
Other accrued liabilities | |||||||||||
| Other noncurrent liabilities | $ | $ | |||||||||
Joint Ventures
The Company accounts for unconsolidated joint ventures using the equity method.
For those joint ventures accounted for under the equity method, the Company’s investment balances for the joint ventures are included in Investments in the unaudited condensed consolidated balance sheets, and the Company’s pro rata share of net income is included in Income from equity method investments in the unaudited condensed consolidated statements of income.
For the three and nine months ended September 30, 2026, the Company recognized income from equity method joint ventures of $2.6 million and $8.6 million, respectively. For the three and nine months ended September 30, 2025, the Company recognized income from equity method joint ventures of $5.5 million and $11.6 million, respectively.
The Company’s investments in equity method joint ventures as of September 30, 2026 and December 31, 2025, were $12.0 million and $19.5 million, respectively.
In addition, the Company received distributions related to its return on investment from these equity method joint ventures of $16.1 million and $7.5 million for the nine months ended September 30, 2026 and 2025, respectively.
Cash, Cash Equivalents and Restricted Cash
As of September 30, 2026 and December 31, 2025, the Company’s cash was held in highly liquid bank accounts, including checking accounts and/or money market deposit accounts. In addition, the Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Restricted cash primarily represents deposits held by the Company’s Captive Cell that are to be used solely for the Captive Cell’s purposes.
As of September 30, 2026 and December 31, 2025, the Company had $264.2 million and $170.5 million of cash, cash equivalents, and restricted cash, respectively, including $19.4 million and $17.8 million of restricted cash largely held by the Captive Cell, respectively.
For the three and nine months ended September 30, 2026, the Company earned $2.2 million and $5.9 million of interest income, including $2.1 million and $5.5 million from its central cash management program, respectively, and $0.1 million and $0.4 million from the Company’s Captive Cell, respectively.
For the three and nine months ended September 30, 2025, the Company earned $1.3 million and $2.8 million of interest income, including $1.2 million and $2.7 million from its central cash management program, respectively, and $0.1
10
Receivables and Allowance for Expected Credit Losses
Receivables consist primarily of trade receivables from the sale of goods and services, net of the allowance for expected credit losses. The Company’s trade receivables are all due in 12 months or less. Receivables, net was summarized as follows as of:
| September 30, 2026 | December 31, 2025 | ||||||||||
| (In thousands) | |||||||||||
| Trade receivables: | |||||||||||
| Completed contracts | $ | $ | |||||||||
| Contracts in progress | |||||||||||
Other | |||||||||||
Receivables, gross | |||||||||||
Less: allowance for expected credit losses | ( | ( | |||||||||
Receivables, net | $ | $ | |||||||||
As part of the $32.0 million of other receivables as of September 30, 2026, the Company had an insurance claim receivable related to a litigation-related contingent liability that was subsequently received in October 2026. See Note 14 - Commitments, Contingencies and Guarantees for more discussion on litigation-related contingent liabilities.
The following table presents the opening and closing balances of Receivables, net as of:
| September 30, 2026 | December 31, 2025 | ||||||||||
| (In thousands) | |||||||||||
Balance at beginning of period | $ | $ | |||||||||
| Receivables, net acquired | |||||||||||
| Net change during period, excluding receivables, net acquired | |||||||||||
Balance at end of period | $ | $ | |||||||||
The Company’s allowance for expected credit losses is determined using historical credit loss experiences, and changes in asset-specific characteristics, among other specific account data. The Company has applied the practical expedient of assuming current conditions as of the balance sheet date remain unchanged when estimating expected credit losses. A review of the Company’s expected credit losses is performed at least quarterly. The Company develops and documents its methodology to determine its allowance for expected credit losses. Risk characteristics used by the Company may include customer mix, knowledge of customers and general economic conditions of the various local economies, among others. Specific account balances are written off when management determines the amounts to be uncollectible.
The decrease in the allowance for expected credit losses during the three and nine months ended September 30, 2026 was primarily driven by write-offs of uncollectible account balances. The increase in the allowance for expected credit losses during the three months ended September 30, 2025 was primarily driven by net provisioning for expected credit losses. The decrease in the allowance for expected credit losses during the nine months ended September 30, 2025 was driven by write-offs of uncollectible account balances, coupled with net credit loss reversals recorded during the period.
Details of the Company's allowance for expected credit losses, disclosed within Receivables, net, for the respective periods presented below, were as follows:
| Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||
Balance at beginning of period | $ | $ | $ | $ | |||||||||||||||||||
Provision for credit losses, net of reversals | ( | ||||||||||||||||||||||
Write-offs charged against the allowance | ( | ( | ( | ( | |||||||||||||||||||
Credit loss recoveries collected | |||||||||||||||||||||||
Balance at end of period | $ | $ | $ | $ | |||||||||||||||||||
11
Inventories
Inventories are stated at the lower of average cost or net realizable value, net of any inventory valuation allowance. The value of inventories may decrease due to obsolescence, physical deterioration, damage, costs to repair, changes in price levels or other causes. Inventory valuation write-downs, as well as inventory allowances, are determined based on specific facts and circumstances.
Inventories, net were summarized as follows as of:
| September 30, 2026 | December 31, 2025 | ||||||||||
| (In thousands) | |||||||||||
Materials and supplies | $ | $ | |||||||||
Work in process | |||||||||||
Finished goods | |||||||||||
Less: valuation allowance | ( | ( | |||||||||
Inventories, net | $ | $ | |||||||||
As of both September 30, 2026 and December 31, 2025, finished goods primarily consisted of manufactured equipment and tools held for sale and/or resale.
New Accounting Standards
Changes to GAAP are typically established by the FASB in the form of an Accounting Standards Update (“ASU”) to the FASB ASC. The Company considers the applicability and impact of all ASUs.
Recently Adopted Accounting Standards Updates
In July 2025, the FASB issued ASU 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, which provided guidance to address stakeholders’ feedback on the challenges of applying Topic 326 to current accounts receivable and current contract assets, specifically related to the costs and complexities of developing reasonable and supportable forecasts to support the estimation of expected credit losses. As a result, this update provides a practical expedient for all entities that allows an entity to assume that current conditions as of the balance sheet date do not change for the remaining life of the asset when developing such forecasts. The standard is effective for fiscal year December 31, 2026, and interim periods beginning January 1, 2026. The Company adopted the standard in the first quarter of 2026 and it did not have a material impact on the unaudited condensed consolidated financial statements.
New Accounting Standards Updates Not Yet Adopted
In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which provided guidance to address investors’ requests for more detailed information about the types of expenses including purchases of inventory, employee compensation, depreciation, amortization, and depletion in commonly presented expense captions, such as cost of sales, selling, general and administrative expenses, and research and development costs. The standard will be effective for fiscal year December 31, 2027, and interim periods beginning January 1, 2028. Early adoption is permitted. The Company is currently evaluating the impact the guidance will have on its disclosures for the year ending December 31, 2027, and future interim periods beginning in 2028.
In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software, which provided guidance to address stakeholders’ feedback for modernizing the accounting for internal-use software costs due to the different methods of software development. This update amended the accounting and disclosure of internal-use software costs and provided entities updated recognition requirements for capitalizing internal-use software development costs, as well as website development costs. The standard will be effective for fiscal year December 31, 2028, and interim periods beginning January 1, 2028. Early adoption is permitted as of the beginning of an annual reporting period. The Company is currently evaluating the impact the guidance will have on its consolidated financial statements as well as whether the Company will early-adopt the standard.
12
In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements, which provided clarity on interim reporting disclosure requirements and which disclosures should be provided in interim reporting periods. The standard will be effective for fiscal year December 31, 2028, and interim periods beginning January 1, 2028. Early adoption is permitted as of the beginning of an annual reporting period. The Company is currently evaluating the disclosure impacts the guidance will have on its interim financial statements as well as whether the Company will early-adopt the standard.
Note 3 – Revenue from Contracts with Customers
Contract Estimates and Changes in Estimates
Changes in cost estimates on certain contracts can arise from, but not limited to, changes in productivity and performance expectations, availability of skilled labor in geographic locations of such projects, costs of labor and/or materials, changes in subcontractor productivity and performance, and extended overhead due to weather or other delays. These changes in estimates may result in the issuance of change orders, which can be approved or unapproved by the customer, or the assertion of contract claims. The Company recognizes amounts associated with change orders and claims as revenue if it is probable that the contract price will be adjusted and the amount of any such adjustment can be reasonably estimated. Change orders and claims are negotiated in the normal course of business and represent management's estimates of additional contract revenues that have been earned and are probable of collection.
As of September 30, 2026 and December 31, 2025, $62.0 million and $69.9 million, respectively, of unexecuted change orders were included in contract transaction price and in Contract assets or Contract liabilities, net on the unaudited condensed consolidated balance sheets. The Company was in the process of negotiating execution of these change orders in the normal course of business and the recognized amounts represent the Company’s best estimates of additional contract revenues for which it is not probable that a significant reversal of the revenue amounts will occur in the future.
As of September 30, 2026 and December 31, 2025, the Company recorded loss provisions of $1.0 million and $2.0 million, respectively, in Contract liabilities, net on the unaudited condensed consolidated balance sheets related to contracts that are still being completed and remain recorded.
As of September 30, 2026 and December 31, 2025, the Company had claim positions of $38.3 million and $25.8 million, respectively, that were excluded from the contract transaction price. The Company continues to evaluate these active claims, and there was no impact to operating income during the quarter.
The Company received notification in October 2023 from a customer that it was withholding payment of approximately $31.3 million on remaining outstanding billings, including retention, on a large project with a contract that was billed on a time and materials basis with no stated maximum price. The Company believed it had substantial defenses against these claims based upon the terms of the contract and that it had performed under the terms of the contract. Therefore, the Company believed collection of the remaining outstanding billings, including retention, was probable and, as a result, recognized the revenues from this project in its historical results. On September 21, 2026, the Company and the customer reached a resolution regarding the matter to settle the majority of outstanding billings. In connection with the resolution, the Company recognized a $7.6 million net benefit to gross profit due to changes in estimates under the contract during the third quarter of 2026. The Company also received a corresponding cash payment of $29.2 million in October 2026 related to the billing resolution.
Additionally, the cost-to-cost method of accounting requires the Company to make estimates about expected revenues and gross profit on each of its contracts in process. Changes in estimates may result from contract modifications, which affect the estimated progress of the related performance obligations. As a result, the Company recognizes additional revenues on a cumulative catch-up basis in the current period from performance obligations that were satisfied or partially satisfied in prior periods or the reversal of previously recognized revenues if the current estimated progress is less than the previous estimate. In some instances, contract modifications may occur after completion of work under the contract. Changes in estimates can also result in contract losses, which are recognized in full when they are determined to be probable and can be reasonably estimated.
Since these changes in estimates could significantly affect the Company’s profitability, the Company reviews and updates contract-related estimates regularly and recognizes adjustments in estimated gross profit on contracts under the cumulative catch-up method. Under this method, the cumulative impact to gross profit is recognized in the period that the adjustment is identified. As such, future operating revenues and gross profit relating to contract performance are recognized using the adjusted estimates.
13
Changes in estimates associated with performance obligations that were satisfied or partially satisfied in prior periods positively net impacted operating revenues, and in turn gross profit, by $82.1 million and $168.3 million for the three and nine months ended September 30, 2026, respectively. As a result, net income was positively net impacted by $62.2 million and $125.9 million and diluted earnings per share (“EPS”) by $1.21 and $2.46 , respectively.
Changes in estimates associated with performance obligations that were satisfied or partially satisfied in prior periods positively net impacted operating revenues, and in turn gross profit, by $51.6 million and $102.2 million for the three and nine months ended September 30, 2025, respectively. As a result, net income was positively net impacted by $37.9 million and $74.8 million and diluted EPS by $0.74 and $1.46 , respectively.
For the three and nine months ended September 30, 2026, net changes in estimates pertaining to certain projects, each individually positively or negatively affecting profitability in excess of $1.0 million, positively net impacted operating revenues, and in turn gross profit, by $49.2 million and $113.9 million, respectively, which resulted in positive net impacts to net income of $37.3 million and $85.2 million and diluted EPS of $0.73 and $1.66 , respectively.
For the three and nine months ended September 30, 2025, net changes in estimates pertaining to certain projects, each individually positively or negatively affecting profitability in excess of $1.0 million, positively net impacted operating revenues, and in turn gross profit, by $21.0 million and $46.4 million, respectively, which resulted in positive net impacts to net income of $15.4 million and $34.0 million and diluted EPS of $0.30 and $0.67 , respectively.
The changes in estimates resulted from changes in performance estimates due to revisions to total estimated costs and/or anticipated contract value and from the mitigation of risks and contingencies as projects progressed to completion. The changes in estimates were made in the ordinary course of business and there were no changes that resulted in material amounts that should have been recognized in a prior period.
Disaggregation of Revenue
In the following tables, revenues are disaggregated by contract type and customer type for each reportable segment. The Company believes this level of disaggregation best depicts how the nature, amount, timing and uncertainty of revenues and cash flows are affected by economic factors. The cost reimbursable contract type includes time and material, time and equipment and cost reimbursable plus fee contracts. For more information on the Company’s reportable segments, refer to Note 13 – Segment Information.
The following tables present revenue disaggregated by contract type:
| Three months ended September 30, 2026 | E&M | T&D | Total | ||||||||||||||
| (In thousands) | |||||||||||||||||
| Fixed-price | $ | $ | $ | ||||||||||||||
| Cost reimbursable | |||||||||||||||||
| Unit-price | |||||||||||||||||
| Total contract revenues | |||||||||||||||||
| Eliminations | ( | ( | ( | ||||||||||||||
Total operating revenues | $ | $ | $ | ||||||||||||||
| Three months ended September 30, 2025 | E&M | T&D | Total | ||||||||||||||
| (In thousands) | |||||||||||||||||
| Fixed-price | $ | $ | $ | ||||||||||||||
| Cost reimbursable | |||||||||||||||||
| Unit-price | |||||||||||||||||
| Total contract revenues | |||||||||||||||||
| Eliminations | ( | ( | ( | ||||||||||||||
Total operating revenues | $ | $ | $ | ||||||||||||||
14
| Nine months ended September 30, 2026 | E&M | T&D | Total | ||||||||||||||
| (In thousands) | |||||||||||||||||
| Fixed-price | $ | $ | $ | ||||||||||||||
| Cost reimbursable | |||||||||||||||||
Unit-price | |||||||||||||||||
| Total contract revenues | |||||||||||||||||
| Eliminations | ( | ( | ( | ||||||||||||||
Total operating revenues | $ | $ | $ | ||||||||||||||
| Nine months ended September 30, 2025 | E&M | T&D | Total | ||||||||||||||
| (In thousands) | |||||||||||||||||
| Fixed-price | $ | $ | $ | ||||||||||||||
| Cost reimbursable | |||||||||||||||||
| Unit-price | |||||||||||||||||
| Total contract revenues | |||||||||||||||||
| Eliminations | ( | ( | ( | ||||||||||||||
Total operating revenues | $ | $ | $ | ||||||||||||||
The following table presents revenue disaggregated by customer type:
| Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||
Commercial | $ | $ | $ | $ | |||||||||||||||||||
Industrial | |||||||||||||||||||||||
Institutional | |||||||||||||||||||||||
Service & other | |||||||||||||||||||||||
Renewables | |||||||||||||||||||||||
Total E&M | |||||||||||||||||||||||
Utility | |||||||||||||||||||||||
Transportation | |||||||||||||||||||||||
Total T&D | |||||||||||||||||||||||
Eliminations | ( | ( | ( | ( | |||||||||||||||||||
Total operating revenues | $ | $ | $ | $ | |||||||||||||||||||
Uncompleted Contracts and Contract Assets and Contract Liabilities, Net
Costs, estimated earnings and billings on uncompleted contracts were summarized as follows as of:
| September 30, 2026 | December 31, 2025 | ||||||||||
| (In thousands) | |||||||||||
Costs incurred on uncompleted contracts | $ | $ | |||||||||
Gross profit | |||||||||||
Revenue on uncompleted contracts | |||||||||||
Less: billings to date | ( | ( | |||||||||
| Contract assets | |||||||||||
| Contract liabilities, net | ( | ( | |||||||||
Net contract liabilities | $ | ( | $ | ( | |||||||
15
The timing of invoicing to customers does not necessarily correlate with the timing of revenues being recognized under the cost-to-cost method of accounting. Contracts from contracting services usually stipulate the timing of payment, which is defined by the terms found within the various contracts under which work was performed during the period. Contracts from contracting services are billed as work progresses in accordance with agreed-upon contractual terms. A variance in timing of the billings in comparison to the timing of revenue recognition may result in contract assets or contract liabilities.
Contract assets consist of unbilled revenue and retainage. Unbilled revenue represents revenues recognized in excess of amounts received or billable, excluding retainage. Such amounts will be billed as standard contract terms allow, usually based on various measures of performance or achievement. Retainage represents amounts that have been contractually invoiced to customers and where payments have been partially withheld pending the achievement of certain milestones, satisfaction of other contractual conditions, or completion of the project. Contract assets are not considered a significant financing component as they are intended to protect the customer in the event the Company does not perform on its obligations under the contract.
Contract liabilities consist of deferred revenues, which are amounts receivable or billable in excess of revenues, excluding retainage. Contract liabilities also consist of accrued loss provision and the effect of retainage, as applicable. Contract liabilities decrease as revenue is recognized from the satisfaction of the related performance obligation. Contract liabilities are not considered to have a significant financing component as they are used to meet working capital requirements that generally are higher in the early stages of a contract and are intended to protect the Company from the other party failing to meet its obligations under the contract.
The Company classifies Contract assets and Contract liabilities, net that may be settled after one year from the balance sheet date as current, consistent with the timing of the Company’s project operating cycle.
Contract assets and Contract liabilities, net consisted of the following as of:
| September 30, 2026 | December 31, 2025 | ||||||||||
| (In thousands) | |||||||||||
Unbilled revenue | $ | $ | |||||||||
Retainage | |||||||||||
Contract assets | $ | $ | |||||||||
Deferred revenue | $ | $ | |||||||||
Accrued loss provision | |||||||||||
Less: retainage | ( | ( | |||||||||
Contract liabilities, net | $ | $ | |||||||||
Total retainage was $222.4 million and $182.1 million as of September 30, 2026 and December 31, 2025, respectively, with the components broken out in the table above.
The following table presents the opening and closing balances of contract assets (liabilities) as of:
| September 30, 2026 | December 31, 2025 | ||||||||||||||||||||||||||||||||||
| Contract Assets | Contract Liabilities, Net | Net Contract Liabilities | Contract Assets | Contract Liabilities, Net | Net Contract Liabilities | ||||||||||||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||||||||||||||
Balance at beginning of period | $ | $ | ( | $ | ( | $ | $ | ( | $ | ( | |||||||||||||||||||||||||
| Identifiable assets and liabilities acquired | ( | ( | |||||||||||||||||||||||||||||||||
| Change during period, net of acquisition effects | ( | ( | ( | ( | |||||||||||||||||||||||||||||||
Balance at end of period | $ | $ | ( | $ | ( | $ | $ | ( | $ | ( | |||||||||||||||||||||||||
16
Contract assets and contract liabilities fluctuate period to period based on various factors, including, but not limited to, changes in the number and size of projects in progress at period end; variability in billing and payment terms, such as up-front or advance billings, interim or milestone billings, or deferred billings; variability in billing of retainage and the satisfaction of the specified condition; unexecuted change orders and contract claims recognized as revenues and impacts from acquisitions. The primary driver of the difference between the Company's opening and closing contract assets and contract liabilities balances is the timing of the Company's billings, including retainage, in relation to its performance of work, as well as the impact from acquisitions.
The Company recognized a net increase in revenues of $19.3 million and $288.3 million for the three and nine months ended September 30, 2026, respectively, related to previously recognized deferred revenues that were included in contract liabilities as of December 31, 2025. The Company recognized a net increase in revenues of $12.7 million and $146.4 million for the three and nine months ended September 30, 2025, respectively, related to previously recognized deferred revenues that were included in contract liabilities as of December 31, 2024.
Remaining Performance Obligations
Remaining performance obligations include unrecognized revenues that the Company reasonably expects to be realized from the uncompleted portion of services to be performed under job-specific contracts to the extent management believes additional contract revenues will be earned and are deemed probable of collection. The majority of the Company's contracts for contracting services have an original duration of less than one year.
As of September 30, 2026 and December 31, 2025, the aggregate amount of the transaction price allocated to the Company's remaining performance obligations was $4.78 billion and $2.80 billion, respectively. The table below shows additional information regarding the Company’s remaining performance obligations as of September 30, 2026, including an estimate of when the Company expects to recognize its remaining performance obligations as revenues:
| Within 12 months | Greater than 12 months | ||||||||||
| (In thousands) | |||||||||||
E&M | $ | $ | |||||||||
T&D | |||||||||||
Total | $ | $ | |||||||||
Businesses acquired during the nine months ended September 30, 2026 contributed estimated remaining performance obligations of $635.3 million as of September 30, 2026, included within the E&M segment detailed above.
Note 4 – Acquisitions
On April 1, 2026, the Company acquired 100 % of the issued and outstanding equity interests of SE&M Constructors, LLC, SE&M of the Triangle, LLC and SECO Rentals, LLC (collectively, “SE&M”). SE&M, founded in 1923 and headquartered in Elm City, North Carolina, provides mechanical, electrical and plumbing services to customers across a variety of sectors, including pharmaceutical, complex industrial and healthcare. The Company believes the acquisition enhances its services capabilities, expands its geographic footprint in the Southeastern U.S., where it sees strong industry tailwinds, and deepens its exposure to attractive end-markets. SE&M is included in the Company’s E&M segment.
The Company acquired SE&M for initial base consideration of $158 million, subject to certain closing adjustments, funded by cash on hand. Cash consideration paid at closing was $161.7 million, and was reflective of the initial base consideration adjusted in accordance with the terms of the purchase agreement for acquired cash, outstanding indebtedness, and target working capital. Transaction terms also allow for potential contingent consideration up to $12.0 million, or approximately 8 % of the initial base consideration, based on certain post-acquisition financial performance targets over a one year period.
On September 1, 2026, the Company acquired 100 % of the issued and outstanding equity interests of Epsilon Industries Inc., incorporated in Canada, including 100 % of the assets of its wholly owned U.S. subsidiary Epsilon, LLC (collectively, “Epsilon”). Epsilon has extensive off-site modular construction capabilities across multiple, strategically located facilities in the U.S. and Canada with nationwide distribution. The Company expects the acquisition to complement its off-site construction capabilities, expand its geographic reach and enhance its presence in key end markets, including data center, advanced manufacturing and healthcare. Epsilon is included in the Company’s E&M segment.
17
The Company acquired Epsilon for initial base consideration of $295 million, subject to certain customary closing adjustments, funded by a combination of borrowings under the Company’s credit facilities and cash on hand. Cash consideration paid at closing was $260.9 million, and was reflective of the initial base consideration adjusted in accordance with the terms of the purchase agreement for working capital, leakage, and certain liabilities assumed. In addition, transaction terms specify the Company assume a reorganization tax liability of $27.8 million as a component of the consideration transferred. As a result, total purchase consideration was $288.7 million. The $27.8 million reorganization tax liability was included within Taxes payable on the unaudited condensed consolidated balance sheet as of September 30, 2026.
The Company accounted for both of these transactions as acquisitions of businesses using the acquisition method under ASC 805, Business Combinations (Topic 805).
The Company incurred $6.7 million and $10.3 million of acquisition-related costs for the three and nine months ended September 30, 2026, respectively, in connection with the acquisitions completed during the nine months ended September 30, 2026. These acquisition-related costs were included in Selling, general and administrative expenses on the unaudited condensed consolidated statements of income.
Purchase Price Allocation
The Company is finalizing the purchase price allocations related to the acquisitions completed during the nine months ended September 30, 2026, and adjustments to the respective preliminary purchase price allocations may occur, since certain necessary data is not yet available to complete the respective allocations. Final valuations of intangible assets and goodwill acquired, contingent consideration liabilities, tax liabilities and the finalization of closing working capital may cause future adjustments to the preliminary purchase price allocations. The Company will finalize the purchase price allocations during the respective 12-month periods following the respective acquisition dates.
18
The following table summarizes the preliminary purchase price allocations of the consideration transferred or estimated to be transferred and the acquisition-date fair value of identifiable assets acquired and liabilities assumed for acquisitions completed during the nine months ended September 30, 2026:
| SE&M | Epsilon | ||||||||||
| (In thousands) | |||||||||||
Cash | $ | $ | |||||||||
| Reorganization tax liability | |||||||||||
| Purchase price adjustments | |||||||||||
| Contingent consideration | |||||||||||
Total consideration transferred | $ | $ | |||||||||
| Identifiable assets acquired and liabilities assumed: | |||||||||||
| Cash, cash equivalents and restricted cash | $ | $ | |||||||||
| Receivables, net | |||||||||||
| Taxes receivable | |||||||||||
| Contract assets | |||||||||||
| Inventories, net | |||||||||||
| Prepaid expenses | |||||||||||
| Other current assets | |||||||||||
| Property, plant, and equipment, net | |||||||||||
Operating lease right-of-use assets | |||||||||||
| Other intangible assets, net | |||||||||||
| Current portion of long-term debt | ( | ||||||||||
| Accounts payable | ( | ( | |||||||||
| Contract liabilities, net | ( | ( | |||||||||
Accrued compensation | ( | ( | |||||||||
| Accrued payroll-related liabilities | ( | ( | |||||||||
| Taxes payable | ( | ||||||||||
| Current portion of operating lease liabilities | ( | ( | |||||||||
| Other accrued liabilities | ( | ( | |||||||||
| Deferred income taxes | ( | ||||||||||
| Operating lease liabilities | ( | ( | |||||||||
| Total identifiable net assets | |||||||||||
| Goodwill | |||||||||||
| Fair value of net assets acquired | $ | $ | |||||||||
During the third quarter of 2026, the Company repaid the $22.3 million current portion of long-term debt assumed in the Epsilon acquisition.
Contingent Consideration
Acquisition-date fair value of contingent consideration that is not subject to continued employment of the sellers was determined using a Monte Carlo simulation model with a risk-free rate of 3.66 %, earnings before interest, taxes, depreciation and amortization (“EBITDA”) volatility of 58.00 %, EBITDA risk premium of 9.16 %, and a credit risk-adjusted discount rate of 7.00 %. Any changes in the final valuation of the acquisition-date fair value of the contingent consideration related to additional information about facts and circumstances that existed at the acquisition date will adjust the acquisition’s purchase price allocation, since it was included as part of the preliminary consideration transferred or estimated to be transferred. However, changes in the fair value of the contingent consideration relating to periods following the acquisition date will be recognized in earnings on the unaudited condensed consolidated statements of income.
Contingent consideration that is subject to continued employment of the sellers is recorded as post-combination expense over the period earned.
19
In addition to the contingent consideration mentioned above, there is $7.7 million of cash retention bonuses and $7.3 million of restricted stock units (“RSUs”), at target, that are classified as post-combination transactions, since these transactions are considered contingent consideration that is subject to continued employment of the respective sellers. The cash retention bonuses can be earned up to 18 months and 36 months following the acquisition date of SE&M and Epsilon, respectively. The RSUs granted to SE&M and Epsilon employees will vest in equal installments over a three-year period from the respective grant dates. Post-combination expense will be recorded over the requisite service periods.
The Company incurred $2.3 million and $2.8 million of post-combination expenses for the three and nine months ended September 30, 2026, respectively, in connection with the acquisitions completed during the nine months ended September 30, 2026. These post-combination expenses were included in Selling, general and administrative expenses on the unaudited condensed consolidated statements of income.
Intangible Assets
The fair value of finite-lived intangible assets acquired, including the gross intangible asset values and appropriate amortization periods, was determined using the following valuation methodologies. Customer relationships and backlog were valued using the multi-period excess earnings method, which utilized various significant inputs and assumptions, including future revenues, contributory asset charges, discount rates, customer attrition rates and tax amortization benefits. Trade names and trademarks were valued using the relief-from-royalty method, which utilized various significant inputs and assumptions, including market royalty rates, forecasted revenues, expected useful lives and obsolescence assumptions, and tax amortization benefits.
The following finite-lived intangible assets were acquired as a result of the acquisitions:
| SE&M | Epsilon | ||||||||||||||||||||||
| Estimated Fair Value | Weighted Average Amortization Period | Estimated Fair Value | Weighted Average Amortization Period | ||||||||||||||||||||
| (In thousands) | (In years) | (In thousands) | (In years) | ||||||||||||||||||||
Customer relationships | $ | $ | |||||||||||||||||||||
| Backlog | |||||||||||||||||||||||
| Trade names and trademarks | — | ||||||||||||||||||||||
Finite-lived intangible assets acquired | $ | $ | |||||||||||||||||||||
The fair value of the indefinite-lived intangible assets acquired was determined using the relief from royalty method-profit split analysis, which utilized various significant inputs and assumptions, including market royalty rates, operating history, brand reputation, discount rates, long-term growth and capitalization rates, and tax amortization benefits.
The following indefinite-lived intangible assets were acquired as a result of the SE&M acquisition:
| Estimated Fair Value | |||||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||
| Trade names and trademarks | $ | ||||||||||||||||||||||
Indefinite-lived intangible assets acquired | $ | ||||||||||||||||||||||
The Company did not incur costs to renew or extend the term of acquired intangible assets during the nine months ended September 30, 2026.
Goodwill
Goodwill recognized in connection with the acquisitions was recorded within the E&M segment.
The full $69.0 million of goodwill related to the SE&M acquisition is expected to be deductible for U.S. income tax purposes. Of the $163.4 million of goodwill related to the Epsilon acquisition, the full amount is expected to be deductible for U.S. income tax purposes, while $119.9 million is not expected to be deductible for Canadian income tax purposes.
20
Impact of Acquisitions
The results of operations of the acquisitions were included in the Company’s unaudited condensed consolidated statements of income for the reporting periods following the respective acquisition dates. For the three and nine months ended September 30, 2026, the acquired businesses contributed $43.7 million and $77.1 million of operating revenues, respectively, and $4.8 million and $3.0 million of net loss, respectively. In addition, the preliminary purchase price allocations of acquisition-date fair value of identifiable assets acquired and liabilities assumed, as well as any measurement period adjustments, were included in the Company’s unaudited condensed consolidated balance sheet as of September 30, 2026.
The pro forma effects on our consolidated results of operations related to the SE&M acquisition were not material to reported revenues or net income.
Note 5 – Goodwill and Other Intangible Assets, Net
Goodwill
Goodwill represents the future economic benefits arising from assets acquired in business combinations that are not individually identified and separately recognized. Changes to goodwill during the period were a result of the acquisitions completed during the nine months ended September 30, 2026, relating to acquiring highly skilled workforces and future business growth opportunities, along with other expected synergies resulting from the acquisitions. Changes in goodwill also reflect foreign currency translation adjustments and measurement period adjustments to preliminary purchase accounting.
Changes in the Company’s carrying amount of goodwill were as follows:
| E&M | T&D | Total | ||||||||||||||||||||||||
| (In thousands) | ||||||||||||||||||||||||||
| Balance as of December 31, 2025 | $ | $ | $ | |||||||||||||||||||||||
| Goodwill acquired | ||||||||||||||||||||||||||
| Measurement period adjustments | ( | ( | ||||||||||||||||||||||||
| Foreign currency translation adjustments | ( | ( | ||||||||||||||||||||||||
| Balance as of September 30, 2026 | $ | $ | $ | |||||||||||||||||||||||
The Company’s reporting units are E&M, T&D, and Wagner Smith Equipment (“WSE”). WSE is within the T&D reportable segment. No
21
Other Intangible Assets, Net
Finite-Lived Intangible Assets
As of September 30, 2026, finite-lived intangible assets, which were within Other intangible assets, net on the condensed consolidated balance sheet consisted of:
| September 30, 2026 | |||||||||||||||||||||||||||||
| Remaining Weighted Average Amortization Period | Gross Carrying Amount | Accumulated Amortization | Foreign Currency Translation Adjustments | Net Carrying Amount | |||||||||||||||||||||||||
| (In years) | (In thousands) | ||||||||||||||||||||||||||||
Customer relationships | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||
| Backlog | ( | ( | |||||||||||||||||||||||||||
| Trade names and trademarks | ( | ( | |||||||||||||||||||||||||||
Total | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||
Amortization expense for finite-lived intangible assets was $5.7 million and $8.9 million for the three and nine months ended September 30, 2026, respectively.
Finite-lived intangible assets held in 2025 were fully amortized during the first quarter, resulting in no amortization expense during the third quarter of 2025, and amortization expense of $0.1 million for the nine months ended September 30, 2025.
Amortization expense is recognized in Selling, general and administrative expenses in the unaudited condensed consolidated statements of income.
As of September 30, 2026, future amortization expense for finite-lived intangible assets was estimated to be as follows:
| September 30, 2026 | |||||
| (In thousands) | |||||
| Remainder of 2026 | $ | ||||
| 2027 | |||||
| 2028 | |||||
| 2029 | |||||
| 2030 | |||||
| Thereafter | |||||
| Total | $ | ||||
22
Indefinite-Lived Intangible Assets
As of September 30, 2026, indefinite-lived intangible assets, which consisted of trade names and trademarks, were within Other intangible assets, net on the condensed consolidated balance sheet. Changes in the Company’s indefinite-lived assets were as follows:
| Total | ||||||||
| (In thousands) | ||||||||
| Balance as of December 31, 2025 | $ | |||||||
| Trade names and trademarks | ||||||||
| Balance as of September 30, 2026 | $ | |||||||
Note 6 – Fair Value Measurements
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date. ASC 820, Fair Value Measurement (“ASC 820”) establishes a three-tier hierarchy for grouping assets and liabilities, based on the significance and availability of inputs in active markets. The estimated fair values of the Company's assets and liabilities measured on a recurring basis are determined using the market approach.
In general, fair values determined by Level 1 inputs use quoted prices in active markets for identical assets or liabilities. Fair values determined by Level 2 inputs use data points that are observable such as quoted prices, interest rates and yield curves. Fair values determined by Level 3 inputs are “unobservable data points” for the asset or liability and include situations where there is little, if any, market activity for the asset or liability.
Assets and Liabilities Measured at Fair Value on a Recurring Basis
The Company’s assets and liabilities measured at fair value on a recurring basis were as follows:
September 30, 2026 | |||||||||||||||||||||||
Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Balance as of September 30, 2026 | ||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||
| Assets: | |||||||||||||||||||||||
COLI contracts | $ | $ | $ | $ | |||||||||||||||||||
Total assets measured at fair value | $ | $ | $ | $ | |||||||||||||||||||
| Liabilities: | |||||||||||||||||||||||
| Contingent consideration | $ | $ | $ | $ | |||||||||||||||||||
Total liabilities measured at fair value | $ | $ | $ | $ | |||||||||||||||||||
December 31, 2025 | |||||||||||||||||||||||
Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Balance as of December 31, 2025 | ||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||
| Assets: | |||||||||||||||||||||||
COLI contracts | $ | $ | $ | $ | |||||||||||||||||||
Total assets measured at fair value | $ | $ | $ | $ | |||||||||||||||||||
23
Assets
The Company measured its investments in certain fixed-income and equity securities at fair value with changes in fair value recognized in the unaudited condensed consolidated statements of income. The Company anticipates using these investments, which consist of corporate-owned life insurance (“COLI”) contracts, to satisfy its obligations under its unfunded, nonqualified deferred compensation plan for eligible Company participants, including its executive officers, certain key management and other employees. The Company invests in these fixed-income and equity securities for the purpose of earning investment returns and capital appreciation.
These investments, which totaled $11.0 million and $7.6 million as of September 30, 2026 and December 31, 2025, respectively, were included in Investments on the unaudited condensed consolidated balance sheets.
For the three and nine months ended September 30, 2026, the Company recognized net unrealized losses of $0.2 million and net unrealized gains of $0.5 million on these investments, respectively. For the three and nine months ended September 30, 2025, the Company recognized net unrealized gains of $0.3 million and $0.6 million, respectively. The changes in fair value were classified in Other income, net on the unaudited condensed consolidated statements of income.
The estimated fair value of the Company’s Level 2 COLI contracts was based on contractual cash surrender values that were determined primarily by investments in managed separate accounts of the insurer. These amounts approximated fair value. The managed separate accounts were valued based on other observable inputs or corroborated market data.
Though the Company believes the methods used to estimate fair value are consistent with those used by other market participants, the use of other methods or assumptions could result in a different estimate of fair value.
The estimated fair values of the Company’s Cash, cash equivalents and restricted cash, Receivables, Accounts payable and Other accrued liabilities approximated their carrying value due to the short-term maturities of these instruments.
Liabilities
As part of the SE&M acquisition, the Company entered into a contingent consideration agreement, including contingent consideration that is not subject to continued employment of the sellers. Following the acquisition date, the fair value of the aforementioned contingent consideration is remeasured at each reporting date, with any changes in fair value recognized in Increase in fair value of contingent consideration on the unaudited condensed consolidated statements of income. The estimated fair value of the contingent consideration is recorded within Other accrued liabilities on the unaudited condensed consolidated balance sheets, and is measured using a probability-weighted discounted cash flow method, which considers significant inputs not observable in the market and are considered Level 3 inputs.
The following table sets forth a summary of changes in the fair value of the Company’s Level 3 financial liabilities:
| Contingent consideration | (In thousands) | ||||
| Balance as of December 31, 2025 | $ | ||||
| Issuances | |||||
| Changes in fair value | |||||
| Balance as of September 30, 2026 | $ | ||||
Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis
The Company applies the provisions of ASC 820 to its nonrecurring, nonfinancial measurements of nonfinancial assets and liabilities, including long-lived asset impairments. These nonfinancial assets are not measured at fair value on an ongoing basis but are subject to fair value adjustments only in certain circumstances. The fair values of intangible assets are also nonrecurring measurements. These measurements are considered Level 3 and these assets are recognized at fair value if they are deemed to be impaired.
24
The Company reviews the carrying value of its long-lived assets, excluding goodwill, whenever events or changes in circumstances indicate that such carrying amounts may not be recoverable. No
Assets and Liabilities Not Measured at Fair Value
The Company's long-term debt was not measured at fair value on the unaudited condensed consolidated balance sheets as of September 30, 2026 and December 31, 2025, respectively, but the corresponding fair values are being provided for disclosure purposes only. The fair values were categorized as Level 2 in the fair value hierarchy and were based on discounted cash flows using current market interest rates. Refer to Note 7 – Debt for additional information on the Company’s long-term debt.
The estimated fair value of the Company's Level 2 gross long-term debt, including current long-term debt, was as follows as of:
September 30, 2026 | December 31, 2025 | ||||||||||
| (In thousands) | |||||||||||
Carrying value | $ | $ | |||||||||
Fair value | $ | $ | |||||||||
The outstanding balances under the term loan and the revolving credit commitments, as applicable, are incorporated into the disclosure above for each period presented.
Note 7 - Debt
Certain debt instruments of the Company contain restrictive and financial covenants and cross-default provisions. In order to borrow under the debt instruments, the Company must be in compliance with the applicable covenants and certain other conditions, all of which the Company was in compliance with as of September 30, 2026. Non-compliance with applicable covenants or conditions may constitute an event of default under the Credit Agreement (as defined below). Subject to any applicable cure periods, failure to remedy such a default may require the Company to pursue alternative sources of funding.
Long-Term Debt
Long-term debt outstanding was as follows as of:
| Weighted Average Interest Rate as of September 30, 2026 | September 30, 2026 | December 31, 2025 | |||||||||||||||
| (percentage) | (in thousands) | ||||||||||||||||
Term loan due on October 31, 2029 | % | $ | $ | ||||||||||||||
| Revolving credit commitments | % | ||||||||||||||||
| Less: unamortized debt issuance costs | ( | ( | |||||||||||||||
Total debt | |||||||||||||||||
Less: current maturities | ( | ( | |||||||||||||||
Total long-term debt | $ | $ | |||||||||||||||
Term Loan and Revolving Credit Commitments
On October 31, 2024, the Company entered into a five-year senior secured credit agreement (the “Original Credit Agreement”), which initially provided for a $300.0 million senior secured first lien term loan (“Original Term Loan”) and a $225.0 million revolving credit facility containing senior secured first lien revolving credit commitments (“Original Revolving Credit Commitments”). The Original Revolving Credit Commitments included a letter-of-credit sublimit aggregate amount of up to $50.0 million.
25
The Company paid $4.4 million and $3.5 million of debt issuance costs for the Original Term Loan and Original Revolving Credit Commitments, respectively. The costs associated with the Original Term Loan were capitalized and classified as a reduction to Long-term debt and the costs associated with the Original Revolving Credit Commitments were capitalized and recorded as Other noncurrent assets. Each will be amortized to interest expense over the term of the Credit Agreement.
On September 1, 2026, the Company entered into a First Amendment (the “First Amendment”) to the Original Credit Agreement (the “Original Credit Agreement” and together with the First Amendment, the "Credit Agreement"). Pursuant to the First Amendment, the Original Credit Agreement was amended to, among other things, (a) refinance the Original Term Loan outstanding, together with interest, under the Original Credit Agreement in full; (b) increase the original Term Loan by an aggregate principal amount of $200.0 million for a total aggregate principal amount of $477.5 million (the "2026 Refinancing Term Loan"); (c) refinance the Original Revolving Credit Commitments outstanding under the Original Credit Agreement in full; and (d) increase the Original Revolving Credit Commitments by an additional $125.0 million for a total aggregate commitment of $350.0 million (the "2026 Refinancing Revolving Credit Commitments"). Any outstanding portion of the $50.0 million aggregate letter-of-credit sublimit under the Original Revolving Credit Commitments will be deemed outstanding under the 2026 Refinancing Revolving Credit Commitments.
The Company paid $2.5 million and $1.6 million of debt issuance costs for the 2026 Refinancing Term Loan and 2026 Refinancing Revolving Credit Commitments, respectively. Costs associated with the 2026 Refinancing Term Loan were capitalized and classified as a reduction to Long-term debt and the costs associated with the 2026 Refinancing Revolving Credit Commitments were capitalized and recorded within Other noncurrent assets. Each will be amortized to interest expense over the remaining term of the Credit Agreement.
In addition, the First Amendment provides more favorable pricing terms to the Company such that borrowings under the amended Credit Agreement now bear interest, at the Company’s option, at an annual rate equal to (a) adjusted term Secured Overnight Financing Rate, defined in a customary manner (“Term SOFR”) plus an applicable rate of 1.75 % to 2.50 % (previously 2.00 % to 2.75 % under the Original Credit Agreement) based on the Company’s total net leverage ratio (as defined below), or (b) the base rate (determined by reference to the highest of (x) the prime rate, (y) the greater of (i) the federal funds effective rate and (ii) the overnight bank funding rate, in each case, plus 0.50 %, and (z) the one-month adjusted Term SOFR rate plus 1.00 % per annum, subject to customary floors (clauses (x) through (z), the “Base Rate”)) plus an applicable rate of 0.75 % to 1.50 % (previously 1.00 % to 1.75 % under the Original Credit Agreement), based on the Company’s total net leverage ratio. Undrawn commitment fees under the 2026 Refinancing Revolving Credit Commitments range from 0.25 % to 0.40 % (previously 0.30 % to 0.45 % under the Original Credit Agreement) based on the Company’s consolidated total net leverage ratio.
At the Company’s option, any outstanding borrowings under the Credit Agreement have borne interest at the Term SOFR plus an applicable rate option (option (a) above).
The proceeds from the 2026 Refinancing Term Loan were made available to the Company (a) to refinance the Original Term Loan, (b) to fund the Epsilon acquisition, (c) to pay fees and expenses related thereto and (d) for working capital and other general corporate purposes.
In connection with the First Amendment, the Company repaid and immediately re-borrowed the outstanding term loan amount of $277.5 million as part of the refinance and also drew $100.0 million under the 2026 Refinancing Revolving Credit Commitments.
The proceeds of any borrowings under the 2026 Refinancing Credit Commitments are expected to be used by the Company for general corporate purposes, including the Epsilon acquisition, acquisitions, restricted payments and other permitted investments, and/or for other purposes not prohibited by the Credit Agreement.
In connection with the First Amendment, the Company paid certain customary fees.
As of September 30, 2026, there was $100.0 million outstanding under the 2026 Refinancing Credit Commitments and $2.2 million of outstanding standby letters of credit. As a result, the Company had a borrowing capacity of $247.8 million under the 2026 Refinancing Credit Commitments as of September 30, 2026.
As of December 31, 2025, there was no outstanding balance under the Original Revolving Credit Commitments, but there were $2.2 million of outstanding standby letters of credit. As a result, the Company had a borrowing capacity of $222.8 million under the Original Revolving Credit Commitments as of December 31, 2025.
26
The Company incurred $6.1 million and $15.3 million of interest expense related to the Credit Agreement for the three and nine months ended September 30, 2026, including $5.4 million and $13.5 million of interest on outstanding borrowings, $0.5 million and $1.3 million of debt issuance costs amortization, and $0.2 million and $0.5 million of commitment fees, respectively.
The Company incurred $5.4 million and $16.3 million of interest expense related to the Credit Agreement for the three and nine months ended September 30, 2025, including $4.8 million and $14.5 million of interest on outstanding borrowings, $0.4 million and $1.2 million of debt issuance costs amortization, and $0.2 million and $0.6 million of commitment fees, respectively.
The Original Term Loan required quarterly amortization payments of 1.25 % of the aggregate initial principal amount of the Original Term Loan on the last business day of each fiscal quarter starting with the fiscal quarter ending on March 31, 2025 and through and including the last full fiscal quarter ending prior to the maturity date, or 5.00 % per annum.
The 2026 Refinancing Term Loan requires quarterly amortization payments of 1.25 % of the aggregate initial principal amount of the 2026 Refinancing Term Loan on the last business day of each fiscal quarter starting with the fiscal quarter ending on September 30, 2026 and through and including the last full fiscal quarter ending prior to the maturity date, or 5.00 % per annum.
For the nine months ended September 30, 2026 and 2025, the Company paid its required quarterly amortization payments under the Original Term Loan and the 2026 Refinancing Term Loan totaling $13.5 million and $11.3 million, respectively.
The Company also paid $10.9 million and $14.5 million of associated interest on outstanding borrowings under the Original Term Loan and the 2026 Refinancing Term Loan for the nine months ended September 30, 2026 and 2025, respectively.
The Credit Agreement also requires mandatory prepayments in connection with certain asset sales, subject to certain exceptions.
The Credit Agreement provides for incremental revolving and term facilities at the Company’s request and at the discretion of the lenders or other persons providing such incremental facilities, and also permits the Company to incur other secured or unsecured debt, in all cases subject to conditions and limitations on the amount of such incremental facility or other debt as specified in the Credit Agreement.
The Credit Agreement contains certain limitations with respect to indebtedness, liens, acquisitions and other investments, fundamental changes, restrictive agreements, dividends and redemptions or repurchases of stock, prepayments of certain subordinated indebtedness, dispositions of assets and transactions with affiliates, in each case subject to certain exceptions.
The Credit Agreement contains financial covenants requiring the Company to maintain a maximum consolidated total net leverage ratio of 3.00 to 1.00 and a minimum interest coverage ratio of 3.00 to 1.00, each determined as of the end of each fiscal quarter. Per the Credit Agreement, consolidated total net leverage ratio is defined as the ratio of (a) consolidated funded indebtedness of the Company to (b) last twelve months (“LTM”) earnings before interest, taxes, depreciation and amortization (“EBITDA”). Interest coverage ratio is defined as the ratio of (a) LTM EBITDA to (b) consolidated cash interest expense of the Company. The consolidated total net leverage ratio may be increased at the Company’s option to 3.50 to 1.00 in connection with certain qualifying material acquisitions. The covenants also include restrictions on the sale of certain assets, loans and investments.
Schedule of Debt Maturities
As of September 30, 2026, the long-term debt maturities schedule, excluding unamortized debt issuance costs, for the remainder of 2026 and the three years following December 31, 2026, aggregated as follows:
Remainder of 2026 | 2027 | 2028 | 2029 | Total | |||||||||||||||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||||||||||||||
Long-term debt maturities, including current portion | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||
Revolving credit commitments by nature do not have contractual maturity and therefore, the $100.0 million outstanding under the 2026 Refinancing Revolving Credit Commitments is excluded from the table above.
27
Note 8 – Leases
Most of the leases the Company enters into are for equipment, buildings and vehicles as part of its ongoing operations. The Company also leases certain equipment to third parties.
Lessee Accounting
The leases the Company has entered into as part of its ongoing operations consist of operating leases. Operating leases are included in Operating lease right-of-use assets, Current portion of operating lease liabilities and Operating lease liabilities within the unaudited condensed consolidated balance sheets. The corresponding lease costs are included in Cost of sales and Selling, general and administrative expenses on the unaudited condensed consolidated statements of income.
In addition, the Company has entered into short-term leases to help support its ongoing operations, consisting primarily of short-term equipment and vehicle leases, which generally have lease terms of less than one year.
The following table provides information on the Company's lease costs for operating leases:
| Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||
| Lease costs: | |||||||||||||||||||||||
| Operating lease cost | $ | $ | $ | $ | |||||||||||||||||||
| Variable lease cost | |||||||||||||||||||||||
| Short-term lease cost | |||||||||||||||||||||||
| Total lease costs | $ | $ | $ | $ | |||||||||||||||||||
The following is summary information of lease terms and discount rates for operating leases as of:
| September 30, 2026 | December 31, 2025 | ||||||||||
| Weighted average remaining lease term (in years) | |||||||||||
| Weighted average discount rate (in percentages) | % | % | |||||||||
The following is a summary of other information and supplemental cash flow information related to operating leases:
| Nine months ended September 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| (in thousands) | |||||||||||
| Cash paid for amounts included in the measurement of lease liabilities: | |||||||||||
| Operating cash flows used for operating lease liabilities | $ | $ | |||||||||
| Right-of-use assets obtained in exchange for new lease liabilities: | |||||||||||
| Operating lease liabilities | $ | $ | |||||||||
As disclosed in Note 4 – Acquisitions, the Company acquired $38.7 million of operating lease right-of-use assets and operating lease liabilities, respectively, during the nine months ended September 30, 2026, which are included in the disclosure above concerning right-of-use assets obtained in exchange for new lease liabilities for the respective period.
28
The reconciliation of future undiscounted cash flows to operating lease liabilities, including current portion of operating lease liabilities, presented on the unaudited condensed consolidated balance sheet as of September 30, 2026 was as follows:
| September 30, 2026 | |||||
| (In thousands) | |||||
| Remainder of 2026 | $ | ||||
| 2027 | |||||
| 2028 | |||||
| 2029 | |||||
| 2030 | |||||
| Thereafter | |||||
Total | |||||
Less: discount | ( | ||||
Total operating lease liabilities | $ | ||||
Lessor Accounting
The Company leases certain equipment to third parties. These leases are considered short-term operating leases with lease terms of less than 12 months, with the majority being month-to-month leases currently. The Company recognizes revenues from operating leases in Operating revenues in the unaudited condensed consolidated statements of income on a straight-line basis over the respective operating lease terms.
The following table provides information on the Company's lease income for operating leases:
| Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||
Lease income: | |||||||||||||||||||||||
Operating lease income | $ | $ | $ | $ | |||||||||||||||||||
Total lease income | $ | $ | $ | $ | |||||||||||||||||||
The following table is a maturity analysis of undiscounted cash flows relating to lease payments expected to be received by the Company as a lessor of operating leases as of:
| September 30, 2026 | |||||
| (In thousands) | |||||
| Remainder of 2026 | $ | ||||
Total lease payments | $ | ||||
The majority of the total lease payments are currently from month-to-month leases as stated above and are included in Receivables, net on the unaudited condensed consolidated balance sheets as rent receivables due to the timing of billings compared to earned operating lease income.
Equipment under lessor operating leases, which was included within Property, plant and equipment, net in the unaudited condensed consolidated balance sheets, was as follows as of:
| September 30, 2026 | December 31, 2025 | ||||||||||
| (In thousands) | |||||||||||
| Machinery and equipment | $ | $ | |||||||||
Less: accumulated depreciation | ( | ( | |||||||||
Property, plant and equipment, net | $ | $ | |||||||||
29
Note 9 – Earnings Per Share
Basic EPS is computed by dividing net income by the weighted average number of shares of common stock outstanding during the applicable period. The Company calculates diluted EPS using the treasury stock method. Diluted EPS is computed by dividing net income by the total of the weighted average number of shares of common stock outstanding during the applicable period, plus the effect of any potentially dilutive securities, except in cases where the effect of such securities would be anti-dilutive.
Basic and diluted EPS were calculated as follows, based on a reconciliation of the weighted average common shares outstanding on a basic and diluted basis:
| Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
(In thousands, except per share amounts) | |||||||||||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||||||||||
Weighted average common shares outstanding - basic | |||||||||||||||||||||||
Effect of dilutive securities - share-based awards | |||||||||||||||||||||||
Weighted average common shares outstanding - diluted | |||||||||||||||||||||||
EPS - basic | $ | $ | $ | $ | |||||||||||||||||||
EPS - diluted | $ | $ | $ | $ | |||||||||||||||||||
Shares excluded from the calculation of diluted EPS due to their anti-dilutive effect | |||||||||||||||||||||||
Note 10 – Stock-Based Compensation
The Company is currently authorized to issue 2.5 million restricted stock units (“RSUs”), performance share awards (“PSAs”) and other stock-based awards under the Everus Construction Group, Inc. Long-Term Performance-Based Incentive Plan (“Everus LTIP”). As of September 30, 2026, there were approximately 2.4 million shares available for issuance, with approximately 2.1 million shares available for grant under the Everus LTIP. There were approximately 0.3 million outstanding stock awards that were either vested, but unsettled in shares of common stock or nonvested as of September 30, 2026. The Company either purchases shares on the open market or issues new shares of common stock to satisfy the vesting of stock-based awards.
The Company’s compensation committee has the authority to select recipients of awards, determine the type and size of awards, and establish certain terms and conditions of award grants.
Total stock-based compensation expense, including Company participants and non-employee directors, was $2.4 million and $7.7 million for the three and nine months ended September 30, 2026, respectively, and $1.9 million and $4.8 million for the three and nine months ended September 30, 2025, respectively. Stock-based compensation expense was included in Selling, general and administrative expenses in the unaudited condensed consolidated statements of income.
Restricted Stock Units
During the nine months ended September 30, 2026 and 2025, the Company’s compensation committee, with approval by the board for the chief executive officer (“CEO”), granted 88,539 and 47,705 time-vesting RSUs to employees under the Everus LTIP at a weighted average grant date fair value per share of $124.33 and $49.60 , respectively. However, 43 time-vesting RSUs of the quantity granted were forfeited during the nine months ended September 30, 2026. Time-vesting RSUs generally vest ratably in equal installments over three years
During the nine months ended September 30, 2026 and 2025, 37,059 and 18,304 shares of common stock were issued, on a net settlement basis, in connection with vested employee RSUs, respectively. The gross issuances of 61,316 shares and 30,939 shares of common stock, respectively, were considered noncash transactions, as no cash was exchanged for the shares. However, the Company withheld/repurchased 24,257 shares and 12,635 shares, respectively, to satisfy the employees withholding tax obligations, as evidenced by the financing cash outflows on the unaudited condensed consolidated statements of cash flows.
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During the nine months ended September 30, 2026 and 2025, the Company’s compensation committee granted 7,274 and 19,664 time-vesting RSUs to the Company’s non-employee directors under the Everus LTIP at a weighted average grant date fair value per share of $159.44 and $59.13 , respectively. The time-vesting RSUs generally vest over one year
During the nine months ended September 30, 2026, 19,664 shares of common stock were issued in connection with vested non-employee director RSUs and were considered noncash transactions, as no cash was exchanged for the shares. Prior to the RSU grants, the non-employee directors received shares of common stock in addition to cash payments for directors’ fees through fully vested stock award grants. On May 22, 2025, the Company granted 6,778 shares with a grant date fair value of $0.4 million to the non-employee directors.
Performance Share Awards
During the nine months ended September 30, 2026 and 2025, the Company’s compensation committee, with approval by the board for the CEO, granted 41,151 and 55,092 PSAs, at target, under the Everus LTIP, respectively. These PSAs are generally earned over a three-year
Under the performance conditions for these PSAs, participants can earn from 0 200 121.56 and $47.27 , respectively.
Under the market condition for these PSAs, participants can earn from 0 200 183.67 and $56.91 , respectively, which was determined by Monte Carlo simulations.
Other Stock Awards
During the nine months ended September 30, 2026 and 2025, the Company issued 718 and 569 shares of common stock to certain non-employee directors who chose to convert a portion of their monthly cash payments for directors’ fees into shares of common stock, respectively. The issuances of shares of common stock were considered noncash transactions, as no cash was exchanged for the shares.
Note 11 - Accumulated Other Comprehensive Loss
Comprehensive income is the sum of net income as reported and other comprehensive loss, net of taxes. The Company's accumulated other comprehensive loss is comprised of foreign currency translation adjustments, which were first recognized in the third quarter of 2026. There was no other comprehensive loss activity in 2025.
Foreign currency translation adjustments are calculated as follows, net of the related tax impact for the respective periods:
| Three months ended September 30, 2026 | Nine months ended September 30, 2026 | ||||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||
Pre-tax foreign currency translation adjustments | $ | ( | $ | ( | |||||||||||||||||||
Income tax effect | |||||||||||||||||||||||
Foreign currency translation adjustments | $ | ( | $ | ( | |||||||||||||||||||
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The after-tax changes in the components of accumulated other comprehensive loss through September 30, 2026 were as follows:
Foreign Currency Translation Adjustments | Total Accumulated Other Comprehensive Loss | ||||||||||
(In thousands) | |||||||||||
Balance as of December 31, 2025 | $ | $ | |||||||||
Other comprehensive loss, net of taxes | ( | ( | |||||||||
Balance as of September 30, 2026 | $ | ( | $ | ( | |||||||
There were no amounts reclassified out of accumulated other comprehensive loss into net income for the three and nine months ended September 30, 2026.
Note 12 – Income Taxes
The Company’s quarterly income tax provision is measured using an estimate of its consolidated annual effective tax rate, adjusted in the current period for discrete income tax items, within the periods presented.
For the three and nine months ended September 30, 2026, income tax expense was $29.4 million and $79.0 million, respectively, resulting in effective tax rates of 24.2 % and 25.2 %, respectively. The effective tax rates for the three and nine months ended September 30, 2026 differed from the 2026 statutory tax rate of 21% primarily due to state income taxes, net of federal income taxes, and certain unfavorable permanent book-tax differences due to meals and entertainment expenses and non-deductible employee compensation, partially offset by research & development tax credits.
For the three and nine months ended September 30, 2025, income tax expense was $20.6 million and $53.6 million, respectively, resulting in an effective tax rate of 26.6 % and 26.8 %, respectively. The effective tax rates for the three and nine months ended September 30, 2025 differed from the 2025 statutory tax rate of 21% primarily due to state income taxes, net of federal income taxes, and certain unfavorable permanent book-tax differences due to meals and entertainment expenses and non-deductible employee compensation.
The effective tax rates for the three and nine months ended September 30, 2026 differed from the effective tax rates for the three and nine months ended September 30, 2025 due to changes in the Company’s permanent book-tax differences between those periods, specifically changes in the Company’s state income taxes and increased non-deductible employee compensation, partially offset by a favorable stock compensation book-tax difference and increased research & development tax credits.
Note 13 – Segment Information
The Company’s reportable segments are those that are based on the Company’s method of internal reporting and management of the business. The Company provides a full spectrum of construction services across most of the United States and in parts of Canada through two
E&M: Contracting services for the construction and maintenance of electrical and communication wiring and infrastructure, fire suppression systems, renewables infrastructure and mechanical piping and services to customers in both the public and private sectors.
T&D: Contracting services for the construction and maintenance of overhead and underground electrical, gas, communication infrastructure and transportation-related lighting, as well as the manufacture and distribution of overhead and underground transmission line construction equipment and tools.
The Company’s Chief Operating Decision Maker (“CODM”) is the Company’s chief executive officer (“CEO”). The Company’s CEO evaluates each reportable segment’s performance, allocates resources and makes decisions based on segment operating income, which is the segment measure of profitability. The CODM uses segment operating income to analyze the results of each reportable segment individually and by comparing the results of the segments with each other. This comparison between segments helps drive decision-making regarding resource allocation and compensation of employees. Segment operating income is also considered when creating the annual budget plan, as well as the forecasting process, including the allocation of capital for uses such as capital expenditures.
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During the first quarter of 2026, the Company updated the information regularly provided to the CODM. Specifically, the CODM reviews gross segment revenues and elimination activity to reconcile to consolidated results (“New CODM basis”), whereas previously the CODM reviewed segment revenues on a net basis (“Old CODM basis”). The Company's segments, significant segment expenses, and segment measure of profit or loss are unchanged. Accordingly, current-period segment information is presented under both the New CODM basis and Old CODM basis, while prior-period segment information is retained under the Old CODM basis.
All intercompany balances and transactions between the businesses comprising the Company have been eliminated in the unaudited condensed consolidated financial statements.
Reconciliations of reportable segment operating revenues, inclusive of the Company’s significant segment expenses of Cost of sales and Selling, general and administrative expenses, to consolidated Income before income taxes and income from equity method investments for the Company’s reportable segments and “Corporate and Other” category were as follows:
New CODM basis:
Three months ended September 30, 2026 | E&M | T&D | Corporate and Other | Eliminations | Consolidated Total | |||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||
Operating revenues | $ | $ | $ | — | $ | — | $ | |||||||||||||||||||||||||
Intersegment revenues | ( | — | ||||||||||||||||||||||||||||||
Segment revenues | ( | |||||||||||||||||||||||||||||||
Cost of sales | ( | |||||||||||||||||||||||||||||||
Gross profit | — | |||||||||||||||||||||||||||||||
| Selling, general and administrative expenses | — | |||||||||||||||||||||||||||||||
| Increase in fair value of contingent consideration | — | |||||||||||||||||||||||||||||||
| Operating income | $ | $ | $ | ( | $ | — | ||||||||||||||||||||||||||
| Interest income | ||||||||||||||||||||||||||||||||
Interest expense | ||||||||||||||||||||||||||||||||
Other income, net | ||||||||||||||||||||||||||||||||
Total consolidated income before income taxes and income from equity method investments | $ | |||||||||||||||||||||||||||||||
Nine months ended September 30, 2026 | E&M | T&D | Corporate and Other | Eliminations | Consolidated Total | |||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||
Operating revenues | $ | $ | $ | — | $ | — | $ | |||||||||||||||||||||||||
Intersegment revenues | ( | — | ||||||||||||||||||||||||||||||
Segment revenues | ( | |||||||||||||||||||||||||||||||
Cost of sales | ( | |||||||||||||||||||||||||||||||
Gross profit | — | |||||||||||||||||||||||||||||||
| Selling, general and administrative expenses | — | |||||||||||||||||||||||||||||||
| Increase in fair value of contingent consideration | — | |||||||||||||||||||||||||||||||
| Operating income | $ | $ | $ | ( | $ | — | ||||||||||||||||||||||||||
| Interest income | ||||||||||||||||||||||||||||||||
Interest expense | ||||||||||||||||||||||||||||||||
Other income, net | ||||||||||||||||||||||||||||||||
Total consolidated income before income taxes and income from equity method investments | $ | |||||||||||||||||||||||||||||||
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Old CODM basis:
Three months ended September 30, 2026 | E&M | T&D | Corporate and Other | Consolidated Total | ||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||
Segment operating revenues | $ | $ | $ | — | $ | |||||||||||||||||||||
Eliminations | ( | ( | — | ( | ||||||||||||||||||||||
Total segment operating revenues | — | |||||||||||||||||||||||||
Cost of sales | ( | |||||||||||||||||||||||||
Gross profit | ||||||||||||||||||||||||||
| Selling, general and administrative expenses | ||||||||||||||||||||||||||
| Increase in fair value of contingent consideration | ||||||||||||||||||||||||||
| Operating income | $ | $ | $ | ( | ||||||||||||||||||||||
Interest income | ||||||||||||||||||||||||||
Interest expense | ||||||||||||||||||||||||||
Other income, net | ||||||||||||||||||||||||||
Total consolidated income before income taxes and income from equity method investments | $ | |||||||||||||||||||||||||
Three months ended September 30, 2025 | E&M | T&D | Corporate and Other | Consolidated Total | ||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||
Segment operating revenues | $ | $ | $ | — | $ | |||||||||||||||||||||
Eliminations | ( | ( | — | ( | ||||||||||||||||||||||
Total segment operating revenues | — | |||||||||||||||||||||||||
Cost of sales | ( | |||||||||||||||||||||||||
Gross profit | ||||||||||||||||||||||||||
| Selling, general and administrative expenses | ||||||||||||||||||||||||||
| Operating income | $ | $ | $ | ( | ||||||||||||||||||||||
Interest income | ||||||||||||||||||||||||||
Interest expense | ||||||||||||||||||||||||||
Other income, net | ||||||||||||||||||||||||||
Total consolidated income before income taxes and income from equity method investments | $ | |||||||||||||||||||||||||
Nine months ended September 30, 2026 | E&M | T&D | Corporate and Other | Consolidated Total | ||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||
Segment operating revenues | $ | $ | $ | — | $ | |||||||||||||||||||||
Eliminations | ( | ( | — | ( | ||||||||||||||||||||||
Total segment operating revenues | — | |||||||||||||||||||||||||
Cost of sales | ( | |||||||||||||||||||||||||
Gross profit | ||||||||||||||||||||||||||
| Selling, general and administrative expenses | ||||||||||||||||||||||||||
| Increase in fair value of contingent consideration | ||||||||||||||||||||||||||
| Operating income | $ | $ | $ | ( | ||||||||||||||||||||||
Interest income | ||||||||||||||||||||||||||
Interest expense | ||||||||||||||||||||||||||
Other income, net | ||||||||||||||||||||||||||
Total consolidated income before income taxes and income from equity method investments | $ | |||||||||||||||||||||||||
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Old CODM basis (continued from previous page):
Nine months ended September 30, 2025 | E&M | T&D | Corporate and Other | Consolidated Total | ||||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||
Segment operating revenues | $ | $ | $ | — | $ | |||||||||||||||||||||||||||
Eliminations | ( | ( | — | ( | ||||||||||||||||||||||||||||
Total segment operating revenues | — | |||||||||||||||||||||||||||||||
Cost of sales | ( | |||||||||||||||||||||||||||||||
Gross profit | ||||||||||||||||||||||||||||||||
| Selling, general and administrative expenses | ||||||||||||||||||||||||||||||||
| Operating income | $ | $ | $ | ( | ||||||||||||||||||||||||||||
| Interest income | ||||||||||||||||||||||||||||||||
Interest expense | ||||||||||||||||||||||||||||||||
Other income, net | ||||||||||||||||||||||||||||||||
Total consolidated income before income taxes and income from equity method investments | $ | |||||||||||||||||||||||||||||||
Additional financial information on the Company’s reportable segments is shown below, which follows the same accounting policies as those described in Note 2 – Basis of Presentation and Summary of Significant Accounting Policies:
| Three months ended, | |||||||||||||||||||||||
| September 30, 2026 | September 30, 2025 | ||||||||||||||||||||||
E&M | T&D | E&M | T&D | ||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||
Depreciation and amortization expense | $ | $ | $ | $ | |||||||||||||||||||
Interest expense, net1 | ( | ( | |||||||||||||||||||||
Income tax expense | |||||||||||||||||||||||
Capital expenditures2 | $ | $ | $ | $ | |||||||||||||||||||
1.Amounts shown are included in Interest expense on the unaudited condensed consolidated statements of income. Also, the amounts include intercompany transactions related to the Company’s cash management and financing program.
2.Capital expenditures for the three months ended September 30, 2026 and 2025 include noncash transactions for capital expenditure-related Accounts payable.
| Nine months ended, | |||||||||||||||||||||||
| September 30, 2026 | September 30, 2025 | ||||||||||||||||||||||
E&M | T&D | E&M | T&D | ||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||
Depreciation and amortization expense | $ | $ | $ | $ | |||||||||||||||||||
Interest expense, net1 | ( | ( | |||||||||||||||||||||
Income tax expense | |||||||||||||||||||||||
Capital expenditures2 | $ | $ | $ | $ | |||||||||||||||||||
1.Amounts shown are included in Interest expense on the unaudited condensed consolidated statements of income. Also, the amounts include intercompany transactions related to the Company’s cash management and financing program.
2.Capital expenditures for the nine months ended September 30, 2026 and 2025 include noncash transactions for capital expenditure-related Accounts payable.
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Reconciliations of reportable segment assets to consolidated assets were as follows as of:
| September 30, 2026 | December 31, 2025 | ||||||||||
| (In thousands) | |||||||||||
E&M segment assets | $ | $ | |||||||||
T&D segment assets | |||||||||||
| Total reportable segment assets | |||||||||||
| Other assets | |||||||||||
Eliminations | ( | ( | |||||||||
| Total consolidated assets | $ | $ | |||||||||
For more information about the disaggregation of the Company’s revenue by contract type and customer type for each reportable segment, refer to Note 3 – Revenue from Contracts with Customers.
Revenues from a single customer accounted for approximately 17.2 % and 17.9 % of total operating revenues for the three and nine months ended September 30, 2026, respectively, which was included in the E&M segment. Revenues from a single customer accounted for approximately 17.4 % and 16.1 % of total operating revenues for the three and nine months ended September 30, 2025, respectively, which was included in the E&M segment.
At a segment level, revenues from a single E&M customer accounted for approximately 12.1 % and 21.9 % of total E&M segment revenues for the three and nine months ended September 30, 2026, respectively. Revenues from two separate E&M customers accounted for approximately 22.3 % and 10.8 % of total E&M segment revenues for the three months ended September 30, 2025, respectively, and for approximately 20.7 % and 11.2 % of total E&M segment revenues for the nine months ended September 30, 2025, respectively.
As for T&D, revenues from a single T&D customer accounted for approximately 17.6 % and 15.6 % of total T&D segment revenues for the three and nine months ended September 30, 2026, respectively. Revenues from a single T&D customer accounted for approximately 15.7 % and 16.9 % of total T&D segment revenues for the three and nine months ended September 30, 2025, respectively.
Trade receivables from a single customer accounted for approximately 14.1 % of total trade receivables as of September 30, 2026, which was included in the E&M segment. Trade receivables from a single customer accounted for approximately 16.3 % of total trade receivables as of December 31, 2025, which was included in the E&M segment.
At a segment level, trade receivables from a single E&M customer accounted for approximately 16.5 % of total E&M segment trade receivables as of September 30, 2026. Trade receivables from a single E&M customer accounted for approximately 19.9 % of total E&M segment trade receivables as of December 31, 2025.
As for T&D, trade receivables from a single T&D customer accounted for approximately 10.1 % of total T&D segment trade receivables as of September 30, 2026. No single T&D customer accounted for more than 10.0% of total T&D segment trade receivables as of December 31, 2025.
Note 14 – Commitments, Contingencies and Guarantees
The Company is a party to claims and lawsuits arising out of its business, including that of its consolidated subsidiaries, which may include, but are not limited to, matters involving property damage; personal injury; and environmental, contractual, statutory and regulatory obligations. The Company accrues a liability for loss contingencies when the incurrence of a loss is probable and the amount can be reasonably estimated. If a range of amounts can be reasonably estimated and no amount within the range is a better estimate than any other amount, then the minimum of the range is accrued. The Company does not accrue liabilities when the likelihood that the liability has been incurred is probable, but the amount cannot be reasonably estimated, or when the liability is believed to be only reasonably possible or remote. For contingencies where an unfavorable outcome is probable or reasonably possible and which are material, the Company discloses the nature of the contingency and, in some circumstances, an estimate of the possible loss.
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Litigation
As of September 30, 2026 and December 31, 2025, the Company had $16.6 million and $2.0 million, respectively, of litigation-related contingent liabilities, which had not been discounted and were included in either Other accrued liabilities or Other noncurrent liabilities on the unaudited condensed consolidated balance sheets. For such cases where the Company determined that the outcome of the outstanding litigation cases will be covered by the Company’s insurance carriers, any amounts due related to the litigation will be paid directly or reimbursed by the Company’s insurance carriers. The Company’s litigation-related contingent liabilities were materially covered after insurance claim receivables as of both September 30, 2026 and December 31, 2025.
The increase in litigation-related contingent liabilities from December 31, 2025, was primarily attributable to the resolution of a single matter arising from the Company’s contractual indemnity obligations. Substantially all of the settlement amount was reimbursed by an excess insurance carrier in October 2026, with the remaining portion covered by amounts previously accrued under the Company’s captive insurance program.
The Company will continue to monitor each matter and adjust accruals as necessary based on new information and further developments. Management believes that the outcomes with respect to probable and reasonably possible losses in excess of the amounts accrued, net of insurance recoveries, while uncertain, either cannot be estimated or will not have a material effect upon the Company’s financial position, results of operations or cash flows. Unless otherwise required by GAAP, legal costs are expensed as they are incurred and are included in Selling, general and administrative expenses on the unaudited condensed consolidated statements of income.
Guarantees
In the normal course of business, the Company has surety bonds related to construction contracts of its subsidiaries. These bonds relate to certain public and private sector contracts to secure contractual performance, including completion of agreed upon contract terms, timing and price, payments to subcontractors and suppliers, and protection for customers from fraudulent practices. In the event a subsidiary of the Company does not fulfill a bonded obligation, the Company would be responsible to the surety bond company for completion of the bonded contract or obligation. A large portion of the surety bonds are expected to expire within the next 12 months; however, the Company likely will continue to enter into surety bonds for its subsidiaries in the future. As of September 30, 2026 and December 31, 2025, the potential maximum payment amounts the Company would be required to make under the outstanding surety bonds were approximately $986.0 million and $767.7 million, respectively, which were not reflected on the unaudited condensed consolidated balance sheets.
As of both September 30, 2026 and December 31, 2025, the Company had $18.1
The Company has outstanding guarantees to third parties for the guarantees of job performance and/or leasing activity of certain subsidiaries of the Company. The job performance guarantees are related to contracts for contracting services. As of September 30, 2026 and December 31, 2025, the fixed maximum amounts guaranteed under these agreements aggregated to $1.00 billion and $641.1 million, respectively. The scheduled expiration of the maximum amounts guaranteed aggregate to $274.3 million for the remainder of 2026, $579.4 million in 2027, $67.7 million in 2028, $10.3 million in 2029, $10.2 million in 2030 and $60.1 million thereafter. There were no
In addition to the above guarantees, there were $2.2
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Note 15 – Related-Party Transactions
Transition Services Agreement
On October 31, 2024, the separation of Everus from MDU Resources Group, Inc. (“MDU Resources”) and its other businesses was completed and Everus became an independent publicly traded company (the “Separation”). As part of the Separation, both parties entered into a transition services agreement (“TSA”) whereby the Company and MDU Resources provided certain transition services to each other. The TSA outlined services that were provided between parties related to tax, legal, treasury, human resources, information technology, risk management and other general and administrative functions.
The transition services were completed over a period of 17 months, and as of March 31, 2026, there were no further obligations for services that existed for either party.
The Company incurred $1.2 million of TSA expenses related to services from MDU Resources for the nine months ended September 30, 2026, and $1.1 million and $3.7 million for the three and nine months ended September 30, 2025, respectively. The TSA expenses were reflected in Selling, general and administrative expenses on the unaudited condensed consolidated statements of income. During the second quarter of 2025, the Company deemed $0.5 million of expenses that were previously recognized as TSA expenses in the first quarter of 2025 to be recurring in nature and thus, not TSA expenses and have been excluded from the year-to-date disclosed amount above.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following information should be read in conjunction with the unaudited condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q (“Quarterly Report”). The following discussion may contain forward-looking statements that are based upon current expectations and are subject to uncertainty and changes in circumstances.
Our actual results could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to these differences include those factors discussed in the following and elsewhere in this Quarterly Report, particularly in the section entitled “Cautionary Note Regarding Forward-Looking Statements.” Refer to the section titled “Item 1A. Risk Factors” in this Quarterly Report, as well as in our 2025 Annual Report on Form 10-K (“2025 Annual Report”) for more information concerning our risk factors. References to the “Company,” “Everus,” “we,” “us,” and “our” refer to Everus Construction Group, Inc. and its consolidated subsidiaries, unless otherwise stated or indicated by context.
Cautionary Note Regarding Forward-Looking Statements
This Quarterly Report contains certain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements that reflect our expectations, assumptions or projections about the future, other than statements of historical facts, including, without limitation, statements regarding plans, trends, objectives, goals, business strategies, market potential, future financial performance and other matters are considered forward-looking statements. The words “believe,” “expect,” “estimate,” “could,” “should,” “would,” “intend,” “may,” “plan,” “predict,” “seek,” “anticipate,” “project” and similar expressions generally identify forward-looking statements, which speak only as of the date the statements were made. In particular, information included under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Item 3. Quantitative and Qualitative Disclosures about Market Risk” of this Quarterly Report contains forward-looking statements.
The matters discussed in these forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results to differ materially from those projected, anticipated or implied in the forward-looking statements. Although we believe that the expectations reflected in any forward-looking statements we make are based on reasonable assumptions as of the date they are made, we can give no assurance that the expectations will be attained and it is possible that actual results may differ materially from those indicated by these forward-looking statements due to a variety of risks and uncertainties. For additional information on identifying factors that may cause actual results to vary materially from those stated in forward-looking statements, see the discussion under “Item 1A. Risk Factors” in this Quarterly Report and in our 2025 Annual Report.
You should read this Quarterly Report completely and with the understanding that actual future results may be materially different from expectations. All forward-looking statements made in this Quarterly Report are qualified by these cautionary statements. These forward-looking statements are made only as of the date of this Quarterly Report, and we do not undertake any obligation, other than as may be required by law, to update or revise any forward-looking or cautionary statements to reflect changes in assumptions, the occurrence of events, unanticipated or otherwise, and changes in future operating results over time or otherwise.
Comparisons of results for current and any prior periods are not intended to express any future trends, or indications of future performance, unless expressed as such, and should only be viewed as historical data.
Overview
We are a leading construction solutions provider offering specialty contracting services to a diverse set of end markets, which are provided to commercial, industrial, institutional, renewables, service, transportation, utility and other customers. We operate throughout most of the United States and in parts of Canada through two reportable, operating segments:
Electrical & Mechanical (“E&M”): Contracting services including construction and maintenance of electrical and communication wiring and infrastructure, fire suppression systems, renewables infrastructure and mechanical piping and services in both the public and private sectors.
Transmission & Distribution (“T&D"): Contracting services including construction and maintenance of overhead and underground electrical, gas, communication infrastructure and transportation-related lighting, as well as the manufacture and distribution of overhead and underground transmission line construction equipment and tools.
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At Everus, people are our core, and we prioritize integrity, safety and growth through comprehensive training, hands-on development, safety compliance metrics and strong union partnerships to instill a safety first culture and ethical leadership across all levels.
We focus on safely executing projects; providing a superior return on investment by building new and strengthening existing customer relationships; ensuring quality service; effectively managing costs; retaining, developing and recruiting talented employees; growing through organic and strategic acquisition opportunities; and focusing efforts on projects that will permit higher margins while properly managing risk. The growth we have experienced in recent years is due in part to the project awards in the end markets and submarkets served and the ability to support national customers in most of the regions in which we operate. Our strong presence in the Western, Midwestern and Eastern regions of the United States has driven opportunities in data center, high tech, hospitality and utilities work, while customer expansion nationwide continues to extend our reach through partnerships through our 17 wholly owned operating companies, including SE&M and Epsilon, which were acquired during the nine months ended September 30, 2026, expanding our geographic footprint in the Northeast and Southeast regions of the United States and Canada.
In particular, we currently generate a significant portion of our revenues from data center and other similar high tech and advanced technology contracts and our revenue mix has changed significantly in the last couple of years. Demand in these markets may fluctuate based on customer procurement and deployment schedules, information technology spending, timing of hyperscale infrastructure investments, timing of new technology deployments, budgets and pace of their AI-related infrastructure investments, timing of our customers’ monetization of AI investments, or customer access to capital. We have not experienced, but may in the future be, adversely affected by reduced, delayed, loss of or canceled projects by one or more of them, including large hyperscale data center companies.
The regulatory and legislative landscape surrounding data center development is evolving rapidly, and we are monitoring increased scrutiny and potential regulation in the near and long term. Any such developments could potentially result in adverse effects on our operations, financial condition, cash flows and stock price in ways that are difficult to predict.
While we believe there is still strong demand for these types of projects in the foreseeable future, we cannot guarantee that will be the case. The loss of, or reduction in business from, these types of contracts could have a material adverse effect on our business, financial condition, results of operations, cash flows and stock price. For more information on the associated risks, see the discussion under “Item 1A. Risk Factors” in our 2025 Annual Report.
Economic and Industry Factors Impacting Our Business
We have experienced increased insurance costs and anticipate continued increases in insurance costs. Premiums in the insurance industry have risen due to many factors, such as economic inflation and a rise in insurance carriers’ losses, in particular for auto and wildfire risks. We experienced these aforementioned impacts with coverage for our insurance lines on a standalone basis following the Separation and again saw increases in insurance costs during our latest renewal cycle, partially due to our continued revenue and operational growth during 2026 at the time of renewal. However, we are continuing to formulate strategies to minimize these costs and/or ensuring these costs are built into our bidding opportunities going forward.
Despite these increased costs, we are focused on growing our total revenues, expanding gross margins, managing costs and generating cash, all of which would result in increased operating income.
Market Conditions and Outlook
The U.S. construction services industry is highly fragmented. It includes a wide spectrum of players, from small, private companies whose activities are geographically concentrated to larger public companies with nationwide capabilities. Competition within the industry is influenced by various elements such as technical expertise, service pricing, financial and operational resources, track record for safety, industry reputation and dependability.
The U.S. construction services industry serves a diverse customer base that includes federal, state and municipal governmental agencies, commercial and residential developers and private parties. The mix of customers varies by region and economic conditions.
The main factors and trends in the U.S. construction services industry include:
•Key economic factors. Many factors affect product demand, including public spending on infrastructure projects, general economic conditions, including population growth and employment levels, imposed and proposed tariffs, U.S. involvement or indirect effects from global conflicts and prevailing interest rates.
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•Inflation. Rising inflation can increase the cost of construction materials, labor and insurance premiums, impacting project budgets and profitability.
•Industry fragmentation. There are thousands of construction services providers of varying scope and size. Market participants may enter new geographies or expand existing positions through organic growth or the acquisition of existing providers.
•Seasonality. Activity in certain areas is seasonal due to the effects of weather, which can impact safety and efficiency of operations but could also lead to demand for our services.
•Cyclicality. The demand for construction services is significantly influenced by the cyclical nature of the economy.
•Regulations. Operations are subject to extensive laws and regulations relating to the maintenance of safe conditions in the workplace.
•Production inputs. Cost of labor, equipment and other inputs can vary over time based on macroeconomic factors and impact profitability of operations.
•Personnel. Ability to maintain productivity and operating performance is heavily dependent on the ability to employ, train and retain qualified personnel necessary to operate efficiently.
We continued to have bidding opportunities in the specialty contracting markets we have operated in during 2026, as evidenced by our backlog, even with our revenue growth during the fiscal year thus far. We believe our backlog supports our strong project pipeline across our diverse service offerings, particularly for data center, high tech and hospitality work. With our successful track record of executing on complex projects, our long-term customer relationships, safe and skilled workforce, quality of service and effective cost management, we believe we remain well-positioned to benefit from favorable demand drivers, including high tech reshoring, data center construction and utility infrastructure investments, giving us the opportunity to continue securing and executing profitable projects in the future.
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Consolidated Results of Operations
Three Months Ended September 30, 2026, Compared to Three Months Ended September 30, 2025
The following table sets forth our consolidated selected statements of income data, with percentages of operating revenues for the interim periods indicated, as well as the percentage change from the prior comparative interim period:
| Three months ended September 30, | |||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | % of revenues | 2025 | % of revenues | % change | |||||||||||||||||||||||||||||||||||||||||||
(In millions, except percentages) | |||||||||||||||||||||||||||||||||||||||||||||||
Operating revenues | $ | 1,384.2 | 100.0 | % | $ | 986.8 | 100.0 | % | 40.3 | % | |||||||||||||||||||||||||||||||||||||
Cost of sales | 1,179.2 | 85.2 | 862.6 | 87.4 | 36.7 | ||||||||||||||||||||||||||||||||||||||||||
Gross profit | 205.0 | 14.8 | 124.2 | 12.6 | 65.1 | ||||||||||||||||||||||||||||||||||||||||||
Selling, general and administrative expenses | 80.7 | 5.9 | 51.8 | 5.3 | 55.8 | ||||||||||||||||||||||||||||||||||||||||||
| Increase in fair value of contingent consideration | 1.9 | 0.1 | — | — | NM | ||||||||||||||||||||||||||||||||||||||||||
Operating income | 122.4 | 8.8 | 72.4 | 7.3 | 69.1 | ||||||||||||||||||||||||||||||||||||||||||
| Interest income | 2.2 | 0.2 | 1.3 | 0.1 | 69.2 | ||||||||||||||||||||||||||||||||||||||||||
Interest expense | 6.1 | 0.4 | 5.4 | 0.5 | 13.0 | ||||||||||||||||||||||||||||||||||||||||||
Other income, net | 0.2 | — | 3.7 | 0.4 | (94.6) | ||||||||||||||||||||||||||||||||||||||||||
Income before income taxes and income from equity method investments | 118.7 | 8.6 | 72.0 | 7.3 | 64.9 | ||||||||||||||||||||||||||||||||||||||||||
Income taxes | 29.4 | 2.2 | 20.6 | 2.1 | 42.7 | ||||||||||||||||||||||||||||||||||||||||||
Income from equity method investments | 2.6 | 0.2 | 5.6 | 0.6 | (53.6) | ||||||||||||||||||||||||||||||||||||||||||
Net income | $ | 91.9 | 6.6 | % | $ | 57.0 | 5.8 | % | 61.2 | % | |||||||||||||||||||||||||||||||||||||
NM - Not Meaningful
Operating Revenues
Operating revenues for the three months ended September 30, 2026, were $1.38 billion, an increase of $397.4 million, or 40.3%, from $986.8 million for the three months ended September 30, 2025. E&M revenues rose $368.4 million, or 48.0%, including 2026 completed acquisitions contributing $43.7 million. T&D revenues increased $32.2 million, or 14.4%. See Segment Results of Operations–Three Months Ended September 30, 2026, Compared to Three Months Ended September 30, 2025 for further comparative analysis of segment revenues for the periods indicated.
Changes in estimates associated with performance obligations that were satisfied or partially satisfied prior to the previous year end positively net impacted revenues and accounted for approximately 6.0% of revenues for the three months ended September 30, 2026, compared to 5.2% of revenues for the three months ended September 30, 2025.
For the three months ended September 30, 2026, the changes in estimates mentioned above favorably accounted for approximately 7.8% of revenues, compared to 7.1% of revenues for the three months ended September 30, 2025. Favorable impacts to revenues were primarily due to labor efficiencies and favorable impacts from projected cost changes, including material costs, project risk mitigation and change orders. As part of the favorable changes in estimates, we recognized a $7.6 million net benefit from a resolution on prior billings from a customer. However, these changes in estimates unfavorably accounted for approximately 1.8% of revenues for the three months ended September 30, 2026, compared to 1.9% of revenues for the three months ended September 30, 2025. Unfavorable impacts to revenues were primarily due to labor inefficiencies related to sequencing on projects and unfavorable impacts from project delays and cost overruns.
Cost of Sales
Cost of sales for the three months ended September 30, 2026, was $1.18 billion, an increase of $316.6 million, or 36.7%, from $862.6 million for the three months ended September 30, 2025. This increase primarily related to higher E&M and T&D operating costs due to increased workloads and changes in project mix, partially offset by efficient project execution. Labor, materials, subcontractors, and equipment and tools costs increased $143.4 million, $71.4 million, $47.7 million and $38.0 million, respectively, along with higher other job expenses of $16.1 million.
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Gross Profit
Gross profit for the three months ended September 30, 2026, was $205.0 million, an increase of $80.8 million, or 65.1%, from $124.2 million for the three months ended September 30, 2025. The increase was primarily from revenue growth and gross margin improvement due to increased workloads, solid project execution and project timing. As mentioned above, we recognized a $7.6 million net benefit related to a dispute resolution on prior billings from a customer. Gross margin increased to 14.8% for the three months ended September 30, 2026, compared to 12.6% for the three months ended September 30, 2025.
Selling, General and Administrative Expenses
Selling, general and administrative expenses (“SG&A”) for the three months ended September 30, 2026, were $80.7 million, an increase of $28.9 million, or 55.8%, from $51.8 million for the three months ended September 30, 2025. The increase was primarily driven by higher incentive compensation of $13.4 million, primarily resulting from increased business performance, acquisition-related costs of $6.7 million in the current period, and higher amortization expenses of $5.7 million from the 2026 completed acquisitions.
Increase in Fair Value of Contingent Consideration
The increase in fair value of contingent consideration for the three months ended September 30, 2026, was $1.9 million. The contingent consideration liability relates to the potential SE&M earn-out payment and is remeasured to fair value at each reporting date. The increase was due to an updated forecast and expected achievement of the financial earn-out target, along with the time value of money. As no contingent consideration arrangements existed during 2025, no corresponding expense was recognized in the prior-year period.
Operating Income
Operating income for the three months ended September 30, 2026, was $122.4 million, an increase of $50.0 million, or 69.1%, from $72.4 million for the three months ended September 30, 2025. The increase was primarily driven by increased gross profit, partially offset by increased SG&A expenses, both of which are discussed above. Operating income margin increased to 8.8% for the three months ended September 30, 2026, compared to 7.3% for the three months ended September 30, 2025. See Segment Results of Operations–Three Months Ended September 30, 2026, Compared to Three Months Ended September 30, 2025 for further comparative analysis of segment operating income and “Corporate and Other” category operating income for the periods indicated.
Interest Income
Interest income for the three months ended September 30, 2026 was $2.2 million, an increase of $0.9 million, or 69.2%, from $1.3 million for the three months ended September 30, 2025. The increase was primarily driven by increased interest income of $0.8 million from our central cash management program, including daily cash sweep and money market deposit account programs, as well as increased interest income of $0.1 million from our captive insurance arrangement.
Interest Expense
Interest expense for the three months ended September 30, 2026, was $6.1 million, an increase of $0.7 million, or 13.0%, from $5.4 million for the three months ended September 30, 2025. The increase is primarily related to higher debt balances under the 2026 Refinancing Term Loan and 2026 Refinancing Revolving Credit Commitments (defined below), partially offset by reduced borrowings under the Original Term Loan (defined below) for the first two months of the current quarter before refinancing and lower average interest rates during the three months ended September 30, 2026, compared to the three months ended September 30, 2025.
Other Income, Net
Other income, net for the three months ended September 30, 2026, was $0.2 million, a decrease of $3.5 million, or 94.6%, from $3.7 million for the three months ended September 30, 2025. Other income, net decreased primarily due to higher miscellaneous income activities in 2025, including settlements, as well as $0.8 million of foreign currency transaction losses in 2026. There was no activity in 2025 related to foreign currency transaction gains or losses.
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Income Taxes
Income taxes for the three months ended September 30, 2026, were $29.4 million, an increase of $8.8 million, or 42.7%, from $20.6 million for the three months ended September 30, 2025, primarily due to greater pretax income for the period, partially offset by a decrease in the effective tax rate for the current period. The effective tax rate was 24.2% for the three months ended September 30, 2026, compared to 26.6% for the three months ended September 30, 2025.
Income from Equity Method Investments
Income from equity method investments for the three months ended September 30, 2026, was $2.6 million, a decrease of $3.0 million, or 53.6%, from $5.6 million for the three months ended September 30, 2025. This decrease primarily related to certain joint venture project completions in 2025, resulting in decreased activity on joint ventures during the current period.
Net Income
Net income for the three months ended September 30, 2026, was $91.9 million, an increase of $34.9 million, or 61.2%, from $57.0 million for the three months ended September 30, 2025. The increase was primarily from increased gross profit, partially offset by higher SG&A expenses, higher income taxes on greater pretax income, and lower other income. Net income margin increased to 6.6% for the three months ended September 30, 2026, compared to 5.8% for the three months ended September 30, 2025.
Nine Months Ended September 30, 2026, Compared to Nine Months Ended September 30, 2025
The following table sets forth our consolidated selected statements of income data, with percentages of operating revenues for the interim periods indicated, as well as the percentage change from the prior comparative interim period:
| Nine months ended September 30, | |||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | % of revenues | 2025 | % of revenues | % change | |||||||||||||||||||||||||||||||||||||||||||
(In millions, except percentages) | |||||||||||||||||||||||||||||||||||||||||||||||
Operating revenues | $ | 3,652.7 | 100.0 | % | $ | 2,734.9 | 100.0 | % | 33.6 | % | |||||||||||||||||||||||||||||||||||||
Cost of sales | 3,134.1 | 85.8 | 2,398.3 | 87.7 | 30.7 | ||||||||||||||||||||||||||||||||||||||||||
Gross profit | 518.6 | 14.2 | 336.6 | 12.3 | 54.1 | ||||||||||||||||||||||||||||||||||||||||||
Selling, general and administrative expenses | 204.8 | 5.6 | 140.7 | 5.1 | 45.6 | ||||||||||||||||||||||||||||||||||||||||||
| Increase in fair value of contingent consideration | 1.9 | 0.1 | — | — | NM | ||||||||||||||||||||||||||||||||||||||||||
Operating income | 311.9 | 8.5 | 195.9 | 7.2 | 59.2 | ||||||||||||||||||||||||||||||||||||||||||
Interest income | 5.9 | 0.2 | 2.8 | 0.1 | NM | ||||||||||||||||||||||||||||||||||||||||||
Interest expense | 15.4 | 0.5 | 16.4 | 0.6 | (6.1) | ||||||||||||||||||||||||||||||||||||||||||
Other income, net | 2.2 | 0.1 | 6.2 | 0.2 | (64.5) | ||||||||||||||||||||||||||||||||||||||||||
Income before income taxes and income from equity method investments | 304.6 | 8.3 | 188.5 | 6.9 | 61.6 | ||||||||||||||||||||||||||||||||||||||||||
Income taxes | 79.0 | 2.1 | 53.6 | 1.9 | 47.4 | ||||||||||||||||||||||||||||||||||||||||||
Income from equity method investments | 8.5 | 0.2 | 11.6 | 0.4 | (26.7) | ||||||||||||||||||||||||||||||||||||||||||
Net income | $ | 234.1 | 6.4 | % | $ | 146.5 | 5.4 | % | 59.8 | % | |||||||||||||||||||||||||||||||||||||
NM - Not Meaningful
Operating Revenues
Operating revenues for the nine months ended September 30, 2026, were $3.65 billion, an increase of $917.8 million, or 33.6%, from $2.73 billion for the nine months ended September 30, 2025. E&M revenues grew $852.1 million, or 40.0%, including 2026 completed acquisitions contributing $77.1 million. T&D revenues increased $66.6 million, or 10.7%. See “Segment Results of Operations–Nine Months Ended September 30, 2026, Compared to Nine Months Ended September 30, 2025” for further comparative analysis of segment revenues for the periods indicated.
Changes in estimates associated with performance obligations that were satisfied or partially satisfied in prior periods positively net impacted revenues and accounted for approximately 4.6% of revenues for the nine months ended September 30, 2026, compared to 3.7% of revenues for the nine months ended September 30, 2025.
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For the nine months ended September 30, 2026, the changes in estimates mentioned above favorably accounted for approximately 5.3% of revenues, compared to 4.6% of revenues for the nine months ended September 30, 2025. Favorable impacts to revenues were primarily due to labor efficiencies and favorable impacts from projected cost changes, including material costs, project risk mitigation and change orders. As part of the favorable changes in estimates during the current period, we recognized a $7.6 million net benefit from a resolution on prior billings from a customer. However, these changes in estimates unfavorably accounted for approximately 0.7% of revenues for the nine months ended September 30, 2026, compared to 0.9% of revenues for the nine months ended September 30, 2025. Unfavorable impacts to revenues were primarily due to labor inefficiencies related to sequencing on projects and unfavorable impacts from project delays and cost overruns.
Cost of Sales
Cost of sales for the nine months ended September 30, 2026, was $3.13 billion, an increase of $735.8 million, or 30.7%, from $2.40 billion for the nine months ended September 30, 2025. This increase primarily related to higher E&M and T&D operating costs due to increased workloads and changes in project mix, partially offset by efficient project execution. Labor, materials, subcontractors, and equipment and tools costs increased $306.6 million, $173.7 million, $138.1 million, and $74.0 million, respectively, along with higher other job expenses of $43.4 million.
Gross Profit
Gross profit for the nine months ended September 30, 2026, was $518.6 million, an increase of $182.0 million, or 54.1%, from $336.6 million for the nine months ended September 30, 2025. The increase was primarily due to continued revenue growth and gross margin improvement due to increased workloads, solid project execution and project timing. As mentioned above, we recognized a $7.6 million net benefit related to a dispute resolution on prior billings from a customer. Gross margin increased to 14.2% for the nine months ended September 30, 2026, compared to 12.3% for the nine months ended September 30, 2025.
Selling, General and Administrative Expenses
SG&A expenses for the nine months ended September 30, 2026, were $204.8 million, an increase of $64.1 million, or 45.6%, from $140.7 million for the nine months ended September 30, 2025. The increase was driven primarily by higher incentive compensation of $28.2 million, primarily resulting from increased business performance, acquisition-related costs of $10.2 million in the current period, higher amortization expenses of $8.9 million from the 2026 completed acquisitions, and increased labor costs, excluding incentive compensation, of $8.4 million to support continued operational growth.
Increase in Fair Value of Contingent Consideration
The increase in fair value of contingent consideration for the nine months ended September 30, 2026, was $1.9 million. The contingent consideration liability relates to the potential SE&M earn-out payment and is remeasured to fair value at each reporting date. The increase was due to an updated forecast and expected achievement of the financial earn-out target, along with the time value of money. As no contingent consideration arrangements existed during 2025, no corresponding expense was recognized in the prior-year period.
Operating Income
Operating income for the nine months ended September 30, 2026 was $311.9 million, an increase of $116.0 million, or 59.2%, from $195.9 million for the nine months ended September 30, 2025. The increase was primarily driven by increased gross profit, partially offset by increased SG&A expenses, both of which are discussed above. Operating income margin increased to 8.5% for the nine months ended September 30, 2026, compared to 7.2% for the nine months ended September 30, 2025. See “Segment Results of Operations–Nine Months Ended September 30, 2026, Compared to Nine Months Ended September 30, 2025” for further comparative analysis of segment operating income and “Corporate and Other” category operating income for the periods indicated.
Interest Income
Interest income for the nine months ended September 30, 2026 was $5.9 million, an increase of $3.1 million, from $2.8 million for the nine months ended September 30, 2025. The increase was primarily driven by increased interest income of $2.9 million from our central cash management program, including daily cash sweep and money market deposit account programs, as well as increased interest income of $0.2 million from our captive insurance arrangement.
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Interest Expense
Interest expense for the nine months ended September 30, 2026, was $15.4 million, a decrease of $1.0 million, or 6.1%, from $16.4 million for the nine months ended September 30, 2025. The decrease during the nine months ended September 30, 2026, compared to the nine months ended September 30, 2025, is primarily related to reduced borrowings under the Original Term Loan (defined below) for approximately eight months of the current-year period, and average lower interest rates, partially offset by September borrowings under the 2026 Refinancing Term Loan and 2026 Refinancing Revolving Credit Commitments (defined below).
Other Income, Net
Other income, net for the nine months ended September 30, 2026, was $2.2 million, a decrease of $4.0 million, or 64.5%, from $6.2 million for the nine months ended September 30, 2025. Other income, net decreased primarily due to higher miscellaneous income activities in 2025, including settlements, as well as $0.8 million of foreign currency transaction losses in 2026. There was no activity in 2025 related to foreign currency transaction gains or losses.
Income Taxes
Income taxes for the nine months ended September 30, 2026, were $79.0 million, an increase of $25.4 million, or 47.4%, from $53.6 million for the nine months ended September 30, 2025, primarily due to greater pretax income for the period, partially offset by a decrease in the effective tax rate for the current period. The effective tax rate was 25.2% for the nine months ended September 30, 2026, compared to 26.8% for the nine months ended September 30, 2025.
Income from Equity Method Investments
Income from equity method investments for the nine months ended September 30, 2026, was $8.5 million, a decrease of $3.1 million, or 26.7%, from $11.6 million for the nine months ended September 30, 2025. This decrease primarily related to certain joint venture project completions in 2025, resulting in decreased activity on joint ventures during the current period.
Net Income
Net income for the nine months ended September 30, 2026, was $234.1 million, an increase of $87.6 million, or 59.8%, from $146.5 million for the nine months ended September 30, 2025. The increase was primarily from increased gross profit, partially offset by higher SG&A expenses and higher income taxes on greater pretax income. Net income margin increased to 6.4% for the nine months ended September 30, 2026, compared to 5.4% for the nine months ended September 30, 2025.
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Segment Results of Operations
Three Months Ended September 30, 2026, Compared to Three Months Ended September 30, 2025
We report our results under two reportable, operating segments: E&M and T&D. The following table sets forth segment revenues, segment operating income and “Corporate and Other” category operating income for the periods indicated, with segment revenues compared to total consolidated revenues and operating income margins for the interim periods indicated, as well as the percentage change from the prior comparative interim period:
| Three months ended September 30, | |||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | % of revenues | 2025 | % of revenues | % Change | |||||||||||||||||||||||||||||||||||||||||||
(In millions, except percentages) | |||||||||||||||||||||||||||||||||||||||||||||||
Operating revenues: | |||||||||||||||||||||||||||||||||||||||||||||||
E&M | $ | 1,135.7 | 82.0 | % | $ | 767.3 | 77.8 | % | 48.0 | % | |||||||||||||||||||||||||||||||||||||
T&D | 255.6 | 18.5 | 223.4 | 22.6 | 14.4 | ||||||||||||||||||||||||||||||||||||||||||
Eliminations | (7.1) | (0.5) | (3.9) | (0.4) | 82.1 | ||||||||||||||||||||||||||||||||||||||||||
Consolidated revenues | $ | 1,384.2 | 100.0 | % | $ | 986.8 | 100.0 | % | 40.3 | % | |||||||||||||||||||||||||||||||||||||
Operating income: | |||||||||||||||||||||||||||||||||||||||||||||||
E&M | $ | 109.1 | 9.6 | % | $ | 57.0 | 7.4 | % | 91.4 | % | |||||||||||||||||||||||||||||||||||||
T&D | 30.9 | 12.1 | 27.5 | 12.3 | 12.4 | ||||||||||||||||||||||||||||||||||||||||||
Corporate and Other1 | (17.6) | (1.3) | (12.1) | (1.2) | (45.5) | ||||||||||||||||||||||||||||||||||||||||||
Consolidated operating income | $ | 122.4 | 8.8 | % | $ | 72.4 | 7.3 | % | 69.1 | % | |||||||||||||||||||||||||||||||||||||
1.Corporate and Other operating income percentage of revenues was calculated by dividing Corporate and Other operating income by consolidated revenues for the periods indicated.
Operating Revenues
E&M
E&M segment revenues for the three months ended September 30, 2026, were $1.14 billion, an increase of $368.4 million, or 48.0%, from $767.3 million for the three months ended September 30, 2025. The increase in revenues was primarily driven by higher revenues in the commercial and industrial end markets, particularly continued growth in the data center and high-tech submarkets, partially offset by lower revenues in the renewables end market. For the three months ended September 30, 2026, 2026 completed acquisitions contributed $43.7 million to E&M segment revenues.
•Commercial revenues grew $290.7 million, primarily from higher data center and hospitality submarket activity due to increased workloads from continued increased demand for services.
•Industrial revenues increased $98.7 million, primarily due to increased activity in the high tech and manufacturing submarkets.
•Institutional revenues declined $3.8 million, primarily from lower project activity in the education submarket due to project timing and decreased demand for services, partially offset by increased activity in the healthcare and low voltage submarkets.
•Service & other revenues declined $5.3 million, as a result of lower repair and maintenance demand.
•Renewables revenues declined $11.9 million, reflecting decreased activity in the generation and commercial submarkets.
Changes in estimates associated with performance obligations that were satisfied or partially satisfied prior to the previous year end positively net impacted E&M revenues and accounted for approximately 5.3% of E&M revenues for the three months ended September 30, 2026, compared to 3.8% of E&M revenues for the three months ended September 30, 2025.
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For the three months ended September 30, 2026, the changes in estimates mentioned above favorably accounted for approximately 5.7% of E&M revenues, compared to 5.0% of E&M revenues for the three months ended September 30, 2025. However, these changes in estimates unfavorably accounted for approximately 0.4% of E&M revenues for the three months ended September 30, 2026, compared to 1.2% of E&M revenues for the three months ended September 30, 2025. The primary drivers of favorable and unfavorable impacts to revenues were previously mentioned in the consolidated results of operations sections above.
T&D
T&D segment revenues for the three months ended September 30, 2026, were $255.6 million, an increase of $32.2 million, or 14.4%, from $223.4 million for the three months ended September 30, 2025. The increase was driven by higher utility end-market revenues, partially offset by lower workloads in the transportation end market.
•Utility revenues increased $41.4 million, primarily from increased project activity across several submarkets, particularly transmission, distribution, underground, and rentals.
•Transportation revenues declined $9.2 million, with reduced project activity in the traffic signalization submarket, partially offset by marginal increase in street lighting submarket activity.
Changes in estimates associated with performance obligations that were satisfied or partially satisfied prior to the previous year end positively net impacted T&D revenues and accounted for approximately 1.6% of T&D revenues for the three months ended September 30, 2026, compared to 1.4% of T&D revenues for the three months ended September 30, 2025.
For the three months ended September 30, 2026, the changes in estimates mentioned above favorably accounted for approximately 3.4% of T&D revenues, compared to 2.0% of T&D revenues for the three months ended September 30, 2025. However, these changes in estimates unfavorably accounted for approximately 1.8% of T&D revenues for the three months ended September 30, 2026, compared to 0.6% of T&D revenues for the three months ended September 30, 2025. The primary drivers of favorable and unfavorable impacts to revenues were previously mentioned in the consolidated results of operations sections above.
Operating Income
E&M
E&M segment operating income for the three months ended September 30, 2026, was $109.1 million, an increase of $52.1 million, or 91.4%, from $57.0 million for the three months ended September 30, 2025. The increase was primarily from E&M segment revenue growth and higher gross profit across commercial and institutional end markets, due to increased workloads, project timing and project execution. E&M gross margin increased to 14.3% for the three months ended September 30, 2026, compared to 11.2% for the three months ended September 30, 2025.
Operating income was also impacted by higher SG&A expenses primarily from higher incentive compensation of $12.9 million, primarily resulting from increased segment performance, and higher amortization expenses of $5.7 million from 2026 completed acquisitions. Operating income margin for our E&M segment increased to 9.6% for the three months ended September 30, 2026 compared to 7.4% for the three months ended September 30, 2025.
T&D
T&D segment operating income for the three months ended September 30, 2026, was $30.9 million, an increase of $3.4 million, or 12.4%, from $27.5 million for the three months ended September 30, 2025. The increase was the result of higher gross profit in the utility end market from higher revenues and efficient project execution, partially offset by lower gross profit in the transportation end market caused by lower revenues and reduced gross margin. T&D gross margin decreased to 16.3% for the three months ended September 30, 2026, from 16.9% for the three months ended September 30, 2025.
SG&A expenses remained relatively consistent period over period, primarily from increased other general expenses of $0.5 million and professional-related services of $0.3 million, partially offset by decreased corporate overhead of $0.4 million. Operating income margin for our T&D segment modestly declined to 12.1% for the three months ended September 30, 2026, compared to 12.3% for the three months ended September 30, 2025.
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Corporate and Other
The increase in Corporate and Other costs during the three months ended September 30, 2026 was primarily due to acquisition-related costs of $6.7 million and increased labor, including incentive compensation, of $1.5 million, partially offset by reduced corporate overhead of $1.2 million.
Nine Months Ended September 30, 2026, Compared to Nine Months Ended September 30, 2025
The following table sets forth segment revenues, segment operating income and “Corporate and Other” category operating income for the periods indicated, with segment revenues compared to total consolidated revenues and operating income margins for the interim periods indicated, as well as the percentage change from the prior comparative interim period:
| Nine months ended September 30, | |||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | % of revenues | 2025 | % of revenues | % Change | |||||||||||||||||||||||||||||||||||||||||||
(In millions, except percentages) | |||||||||||||||||||||||||||||||||||||||||||||||
Operating revenues: | |||||||||||||||||||||||||||||||||||||||||||||||
E&M | $ | 2,981.2 | 81.6 | % | $ | 2,129.1 | 77.8 | % | 40.0 | % | |||||||||||||||||||||||||||||||||||||
T&D | 687.4 | 18.8 | 620.8 | 22.7 | 10.7 | ||||||||||||||||||||||||||||||||||||||||||
Eliminations | (15.9) | (0.4) | (15.0) | (0.5) | 6.0 | ||||||||||||||||||||||||||||||||||||||||||
Consolidated revenues | $ | 3,652.7 | 100.0 | % | $ | 2,734.9 | 100.0 | % | 33.6 | % | |||||||||||||||||||||||||||||||||||||
Operating income: | |||||||||||||||||||||||||||||||||||||||||||||||
E&M | $ | 280.2 | 9.4 | % | $ | 160.5 | 7.5 | % | 74.6 | % | |||||||||||||||||||||||||||||||||||||
T&D | 77.0 | 11.2 | 65.7 | 10.6 | 17.2 | ||||||||||||||||||||||||||||||||||||||||||
Corporate and Other1 | (45.3) | (1.2) | (30.3) | (1.1) | (49.5) | ||||||||||||||||||||||||||||||||||||||||||
Consolidated operating income | $ | 311.9 | 8.5 | % | $ | 195.9 | 7.2 | % | 59.2 | % | |||||||||||||||||||||||||||||||||||||
1.Corporate and Other operating income percentage of revenues was calculated by dividing Corporate and Other operating income by consolidated revenues for the periods indicated.
Operating Revenues
E&M
E&M segment revenues for the nine months ended September 30, 2026, were $2.98 billion, an increase of $852.1 million, or 40.0%, from $2.13 billion for the nine months ended September 30, 2025. The increase was primarily driven by higher revenues in the commercial and industrial end markets, particularly continued growth in the data center and high-tech submarkets, partially offset by decreased revenues in the institutional and renewables end markets. For the nine months ended September 30, 2026, 2026 completed acquisitions contributed $77.1 million to E&M segment revenues.
•Commercial revenues grew $771.6 million, primarily from higher data center and hospitality submarket activity due to increased workloads from continued increased demand for services.
•Industrial revenues increased $161.1 million, primarily from increased project activity in the high tech and manufacturing submarkets.
•Service & other revenues declined $3.6 million, due to decreased repair and maintenance demand.
•Renewables revenues declined $12.3 million, reflecting decreased project activity within the generation and commercial submarkets.
•Institutional revenues declined $64.8 million, primarily from lower project activity due to project timing and decreased demand for services in the education, government and healthcare submarkets.
Changes in estimates associated with performance obligations that were satisfied or partially satisfied in prior periods positively net impacted E&M revenues and accounted for approximately 5.3% of E&M revenues for the nine months ended September 30, 2026, compared to 3.0% of E&M revenues for the nine months ended September 30, 2025.
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For the nine months ended September 30, 2026, the changes in estimates mentioned above favorably accounted for approximately 5.7% of E&M revenues, compared to 3.7% of E&M revenues for the nine months ended September 30, 2025. However, these changes in estimates unfavorably accounted for approximately 0.4% of E&M revenues for the nine months ended September 30, 2026, compared to 0.7% of E&M revenues for the nine months ended September 30, 2025. The primary drivers of favorable and unfavorable impacts to revenues were previously mentioned in the consolidated results of operations sections above.
T&D
T&D segment revenues for the nine months ended September 30, 2026, were $687.4 million, an increase of $66.6 million, or 10.7%, from $620.8 million for the nine months ended September 30, 2025. The increase was primarily driven by increased workloads in the utility end market, partially offset by reduced transportation end-market revenues.
•Utility revenues increased $80.7 million, primarily from increased project activity across many submarkets, particularly transmission, distribution, underground, rentals, storm and substation, partially offset by decreased submarket activity in the gas submarket due to the timing of project availability.
•Transportation revenues declined $14.0 million, reflecting lower workloads in the traffic signalization and street lighting submarkets.
Changes in estimates associated with performance obligations that were satisfied or partially satisfied in prior periods positively net impacted T&D revenues and accounted for approximately 1.6% of T&D revenues for the nine months ended September 30, 2026, compared to 0.8% of T&D revenues for the nine months ended September 30, 2025.
For the nine months ended September 30, 2026, the changes in estimates mentioned above favorably accounted for approximately 3.4% of T&D revenues, compared to 1.0% of T&D revenues for the nine months ended September 30, 2025. However, these changes in estimates unfavorably accounted for approximately 1.8% of T&D revenues for the nine months ended September 30, 2026, compared to 0.2% of T&D revenues for the nine months ended September 30, 2025. The primary drivers of favorable and unfavorable impacts to revenues were previously mentioned in the consolidated results of operations sections above.
Operating Income
E&M
E&M segment operating income for the nine months ended September 30, 2026, was $280.2 million, an increase of $119.7 million, or 74.6%, from $160.5 million for the nine months ended September 30, 2025. The increase was primarily from E&M segment revenue growth and higher gross profit across multiple end markets, particularly commercial, institutional and industrial, due to due to increased workloads, project timing and project execution. As a result, gross margin improved to 13.7% for the nine months ended September 30, 2026, compared to 11.3% for the nine months ended September 30, 2025.
Operating income was also impacted by higher SG&A expenses, primarily from higher incentive compensation of $25.6 million, primarily resulting from increased segment performance, higher amortization expenses of $8.9 million from 2026 completed acquisitions, increased labor cost, excluding incentive compensation, of $3.9 million, to support continued segment operational growth and higher office expenses of $3.9 million. Operating income margin for our E&M segment increased to 9.4% for the nine months ended September 30, 2026, compared to 7.5% for the nine months ended September 30, 2025.
T&D
Operating income in the T&D segment for the nine months ended September 30, 2026, was $77.0 million, an increase of $11.3 million, or 17.2%, from $65.7 million for the nine months ended September 30, 2025. The increase was the result of higher gross profit due to T&D segment revenue growth and efficient project execution within the utility end market, with modest T&D gross margin improvement of 15.7% for the nine months ended September 30, 2026, compared to 15.4% for the nine months ended September 30, 2025.
SG&A expenses remained largely consistent period over period, primarily reflecting increased labor costs, excluding incentive compensation, of $0.8 million to support segment operational growth. Operating income margin for our T&D segment increased to 11.2% for the nine months ended September 30, 2026, compared to 10.6% for the nine months ended September 30, 2025.
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Corporate and Other
The increase in Corporate and Other costs during the nine months ended September 30, 2026, compared to the nine months ended September 30, 2025, was primarily due to acquisition-related costs of $10.2 million and increased labor cost, excluding incentive compensation, of $3.7 million, to support continued business growth, and higher incentive compensation of $2.6 million due to increased business performance.
Backlog
Backlog is a common measurement in the construction services industry. Our determination of backlog can include projects that have a written award, a letter of intent, a notice to proceed, an agreed upon work order to perform work on mutually accepted terms, and conditions and change orders or claims to the extent management believes additional contract revenues will be earned and are deemed probable of collection. Contracts are subject to delays, defaults or cancellations; changes in scope of services to be provided; and adjustments to costs. Backlog may also be affected by project delays or cancellations resulting from weather conditions, external market factors and economic factors beyond our control, among other things. Accordingly, there is no assurance that backlog will be realized. For the periods presented in the backlog table below, we did not experience any material impacts related to delays or cancellations of planned projects that were included in backlog. The timing of contract awards, including contracts awarded underneath master service agreements, duration of large new contracts and the mix of services can significantly affect backlog. Backlog at any given point in time may not accurately represent the revenue or net income that is realized in any period, and backlog as of the end of the period may not be indicative of the revenue or net income expected to be realized within the next 12 months. Backlog should not be relied upon as a standalone indicator of future results. See “Item 1A. Risk Factors” included in our 2025 Annual Report for factors that could cause revenues to be realized in periods and at levels that are different from originally projected.
Subject to the foregoing discussions, the following table provides estimated backlog as of the dates indicated and the amounts we reasonably estimate will be recognized within the next 12 months following September 30, 2026:
Amounts estimated to be recognized within 12 months | September 30, 2026 | December 31, 2025 | September 30, 2025 | |||||||||||||||||||||||
| (In millions) | ||||||||||||||||||||||||||
E&M | $ | 4,135.6 | $ | 5,111.4 | $ | 2,843.8 | $ | 2,570.4 | ||||||||||||||||||
T&D | 299.2 | 371.3 | 384.5 | 375.8 | ||||||||||||||||||||||
| Total | $ | 4,434.8 | $ | 5,482.7 | $ | 3,228.3 | $ | 2,946.2 | ||||||||||||||||||
Changes in backlog from period to period are primarily the result of fluctuations in the timing of contract awards and timing of revenue recognition of contracts, as well as additions from acquisitions. Businesses acquired during the nine months ended September 30, 2026 contributed estimated backlog of $742.3 million as of September 30, 2026, included within the E&M segment detail above.
Non-GAAP Financial Measures
All financial information presented in this Quarterly Report has been prepared in U.S. dollars in accordance with generally accepted accounting principles in the United States (“GAAP”), except for the presentation of the following non-GAAP financial measures: EBITDA, EBITDA margin and free cash flow. We evaluate our operating performance using EBITDA and EBITDA margin, and we evaluate our liquidity using free cash flow. These non-GAAP financial measures are not intended as alternatives to GAAP financial measures and have limitations as an analytical tool and should not be considered in isolation or as substitutes for an analysis of our results as reported under GAAP. Because of these limitations, EBITDA, EBITDA margin and free cash flow should not be considered as replacements for net income, net income margin or cash provided by (used in) operating activities, the most comparable GAAP measures, respectively. Our non-GAAP financial measures are not standardized; therefore, it may not be possible to compare them with other companies’ EBITDA, EBITDA margin and free cash flow having the same or similar names.
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EBITDA and EBITDA Margin
We utilize EBITDA and EBITDA margin to consistently assess our operating performance and as a basis for strategic planning and forecasting, since we believe that EBITDA closely correlates to long-term enterprise value. We believe that measuring performance on an EBITDA basis is useful to investors, because it enables a more consistent evaluation of our operational performance period to period. We also believe these non-GAAP financial measures, in addition to the corresponding GAAP measures of net income and net income margin, are useful to investors to provide meaningful information about operational efficiency by excluding the impacts of differences in tax jurisdictions and structures, debt levels and capital investment. Investors also may use EBITDA to calculate leverage as a multiple of EBITDA. We use EBITDA and EBITDA margin, in addition to GAAP metrics, to evaluate our operating results, calculate compensation packages and determine leverage as a multiple of EBITDA to establish the appropriate funding of operations.
EBITDA is calculated by adding back interest expense, net of interest income, income taxes, and depreciation and amortization to net income. EBITDA margin is calculated by dividing EBITDA by operating revenues. EBITDA and EBITDA margin are considered non-GAAP financial measures and are comparable to the corresponding GAAP measures of net income and net income margin, respectively.
The following table reconciles net income to EBITDA and provides the calculation of EBITDA margin.
| Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | % Change | 2026 | 2025 | % Change | |||||||||||||||||||||||||||||||||
(In millions, except percentages) | ||||||||||||||||||||||||||||||||||||||
Net income | $ | 91.9 | $ | 57.0 | 61.2 | % | $ | 234.1 | $ | 146.5 | 59.8 | % | ||||||||||||||||||||||||||
Interest expense, net | 3.9 | 4.1 | (4.9) | 9.5 | 13.6 | (30.1) | ||||||||||||||||||||||||||||||||
Income taxes | 29.3 | 20.6 | 42.2 | % | 79.0 | 53.6 | 47.4 | % | ||||||||||||||||||||||||||||||
Depreciation and amortization | 15.1 | 7.3 | NM | 35.1 | 21.3 | 64.8 | % | |||||||||||||||||||||||||||||||
EBITDA | $ | 140.2 | $ | 89.0 | 57.5 | % | $ | 357.7 | $ | 235.0 | 52.2 | % | ||||||||||||||||||||||||||
Operating revenues | $ | 1,384.2 | $ | 986.8 | 40.3 | % | $ | 3,652.7 | $ | 2,734.9 | 33.6 | % | ||||||||||||||||||||||||||
Net income margin | 6.6 | % | 5.8 | % | 6.4 | % | 5.4 | % | ||||||||||||||||||||||||||||||
EBITDA margin | 10.1 | % | 9.0 | % | 9.8 | % | 8.6 | % | ||||||||||||||||||||||||||||||
NM - Not Meaningful
Free Cash Flow
We use free cash flow as a measure of liquidity that indicates how much cash we can produce after taking cash outflows from operations and assets into consideration. We believe this non-GAAP financial measure, in addition to the corresponding GAAP measure of cash provided by (used in) operating activities, is useful to investors because it provides meaningful information about our financial health and our ability to generate cash, support additional debt obligations, pay potential future dividends and fund growth. Free cash flow does not represent our residual cash flow available for discretionary purposes.
Free cash flow is defined as net cash provided by (used in) operating activities less net capital expenditures.
The following table provides reconciliations of cash provided by operating activities to free cash flow.
| Nine months ended September 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| (In millions) | |||||||||||
Net cash used in investing activities | $ | (429.5) | $ | (33.6) | |||||||
Net cash provided by (used in) financing activities | $ | 257.2 | $ | (11.8) | |||||||
Net cash provided by operating activities | $ | 267.3 | $ | 108.6 | |||||||
Capital expenditures | (53.4) | (42.1) | |||||||||
Net proceeds from sale or disposition of property, plant and equipment | 7.3 | 8.3 | |||||||||
Free cash flow | $ | 221.2 | $ | 74.8 | |||||||
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Liquidity and Capital Resources
As of September 30, 2026 and December 31, 2025, we had $264.2 million and $170.5 million of cash, cash equivalents and restricted cash, respectively, including $19.4 million and $17.8 million of restricted cash largely held by the Captive Cell, respectively.
On April 1, 2026, we completed the acquisition of SE&M for initial base consideration of $158 million, subject to certain closing adjustments, funded by cash on hand.
On September 1, 2026, we completed the acquisition of Epsilon for initial base consideration of $295 million, subject to certain closing adjustments, funded through a combination of borrowings under the Credit Agreement (defined below) and cash on hand.
To fund day-to-day operations, we may use cash on hand and third-party credit facilities that are available through certain credit arrangements we have in place. In addition, we have a centralized cash management model to monitor and help maximize daily cash flows for our cash needs.
Our ability to fund our cash needs depends on the ongoing ability to generate cash from operations and obtain debt financing with competitive rates. We rely on access to capital markets as sources of liquidity for capital requirements not satisfied by cash flows from operations.
Our principal uses of cash are to fund our operations, working capital needs, capital expenditures, repayment of borrowings and strategic business development transactions.
On October 31, 2024, we entered into a five-year senior secured credit agreement (the “Original Credit Agreement”), whereby we had the capacity to incur indebtedness of up to $525.0 million, which consisted of a $300.0 million senior secured first lien term loan (“Original Term Loan”), in aggregate principal amount, and a $225.0 million revolving credit facility containing senior secured first lien revolving credit commitments (“Original Revolving Credit Commitments”). The Original Revolving Credit Commitments included a letter-of-credit sublimit aggregate amount of up to $50.0 million.
On September 1, 2026, we entered into a First Amendment (the “First Amendment”) to the Original Credit Agreement (together with the First Amendment, the "Credit Agreement"). Pursuant to the First Amendment, the Original Credit Agreement was amended to, among other things, (a) refinance the Original Term Loan outstanding, together with interest, under the Original Credit Agreement in full; (b) increase the Original Term Loan outstanding by an aggregate principal amount of $200.0 million for a total aggregate principal amount of $477.5 million (the "2026 Refinancing Term Loan"); (c) refinance the Original Revolving Credit Commitments outstanding under the Original Credit Agreement in full; and (d) increase the Original Revolving Credit Commitments by an additional $125.0 million for a total aggregate commitment of $350.0 million (the "2026 Refinancing Revolving Credit Commitments"). Any outstanding portion of the $50.0 million aggregate letter-of-credit sublimit under the Original Revolving Credit Commitments will be deemed outstanding under the 2026 Refinancing Revolving Credit Commitments.
The proceeds from the 2026 Refinancing Term Loan were made available to us, (a) to refinance the Original Term Loan, (b) to fund the Epsilon acquisition, (c) to pay fees and expenses related thereto and (d) for working capital and other general corporate purposes.
In connection with the First Amendment, we repaid and immediately re-borrowed the outstanding term loan amount of $277.5 million as part of the refinance and also drew $100.0 million under the 2026 Refinancing Revolving Credit Commitments, which was still outstanding as of September 30, 2026.
The proceeds of any borrowings under the 2026 Refinancing Credit Commitments are expected to be used by us for general corporate purposes, including the Epsilon acquisition, acquisitions, restricted payments and other permitted investments, and/or for other purpose not prohibited by the Credit Agreement.
In connection with the First Amendment, the Company paid certain customary fees.
As a result of the Credit Agreement activity disclosed above, we had $471.5 million outstanding under the 2026 Refinancing Term Loan and $247.8 million of available capacity under the 2026 Refinancing Revolving Credit Commitments, net of $100.0 million of outstanding commitments and $2.2 million of outstanding standby letters of credit, respectively, as of September 30, 2026.
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As of December 31, 2025, we had $285.0 million outstanding under the Original Term Loan and $222.8 million of available capacity under the Original Revolving Credit Commitments, net of $2.2 million of outstanding standby letters of credit.
The term loan (including original and refinancing) and the revolving credit commitments (including original and refinancing) both bear interest at an annual rate equal to adjusted term Secured Overnight Financing Rate, defined in a customary manner (“Term SOFR”) plus an applicable rate.
The Credit Agreement contains financial covenants requiring us to maintain a maximum consolidated total net leverage ratio of 3.00 to 1.00 and a minimum interest coverage ratio of 3.00 to 1.00, each determined as of the end of each fiscal quarter. Per the Credit Agreement, consolidated total net leverage ratio is defined as the ratio of (a) consolidated funded indebtedness of the Company to (b) last twelve months (“LTM”) earnings before interest, taxes, depreciation and amortization (“EBITDA”). Interest coverage ratio is defined as the ratio of (a) LTM EBITDA to (b) consolidated cash interest expense of the Company. The consolidated total net leverage ratio may be increased at the Company’s option to 3.50 to 1.00 in connection with certain qualifying material acquisitions. The covenants also include restrictions on the sale of certain assets, loans and investments.
The Original Term Loan required quarterly amortization payments of 1.25% of the aggregate initial principal amount of the Original Term Loan on the last business day of each fiscal quarter starting with the fiscal quarter ending on March 31, 2025 and through and including the last full fiscal quarter ending prior to the maturity date, or 5.00% per annum.
The 2026 Refinancing Term Loan requires quarterly amortization payments of 1.25% of the aggregate initial principal amount of the 2026 Refinancing Term Loan on the last business day of each fiscal quarter starting with the fiscal quarter ending on September 30, 2026 and through and including the last full fiscal quarter ending prior to the maturity date, or 5.00% per annum.
For the nine months ended September 30, 2026 and 2025, we paid our required quarterly amortization payments under the Original Term Loan and the 2026 Refinancing Term Loan totaling $13.5 million and $11.3 million, respectively.
We also paid $10.9 million and $14.5 million of associated interest on outstanding borrowings under the Original Term Loan and the 2026 Refinancing Term Loan for the nine months ended September 30, 2026 and 2025, respectively.
The Credit Agreement also requires mandatory prepayments in connection with certain asset sales, subject to certain exceptions.
The Credit Agreement provides for incremental revolving and term facilities at our request and at the discretion of the lenders or other persons providing such incremental facilities, and also permits us to incur other secured or unsecured debt, in all cases subject to conditions and limitations on the amount of such incremental facility or other debt as specified in the Credit Agreement.
The Credit Agreement contains certain limitations with respect to indebtedness, liens, acquisitions and other investments, fundamental changes, restrictive agreements, dividends and redemptions or repurchases of stock, prepayments of certain subordinated indebtedness, dispositions of assets and transactions with affiliates, in each case subject to certain exceptions.
In order to borrow under the debt instruments, we must be in compliance with the applicable covenants and certain other conditions, all of which we were in compliance with as of September 30, 2026. Non-compliance with applicable covenants or conditions may constitute an event of default under the Credit Agreement. Subject to any applicable cure periods, failure to remedy such a default may require us to pursue alternative sources of funding. For additional information on our debt arrangements, refer to Note 7 – Debt in the unaudited condensed consolidated financial statements contained elsewhere in this Quarterly Report.
Working Capital
Working capital, defined as current assets minus current liabilities, was $612.3 million and $560.2 million as of September 30, 2026 and December 31, 2025, respectively. Our working capital requirements may increase when we commence multiple projects or particularly large projects because labor, subcontractor, inventory and certain other costs typically become payable before the receivables resulting from work performed are collected. Working capital may also increase when we incur costs for work that is the subject of unpaid retainage, change orders and claims. Acquisitions and credit/financing arrangements have and may in the future impact working capital.
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The typical payment billing terms are due within 30 days but may differ depending on contract terms. Retention on receivables can impact the cash collection cycle beyond expenses incurred. The timing of billings and project completions can contribute to changes in unbilled revenue. As of September 30, 2026, we expect that substantially all unbilled receivables will be billed to customers in the normal course of business within the next 12 months.
Capital Expenditures
Our cash capital expenditures for the nine months ended September 30, 2026, were $53.4 million, or $46.1 million net of proceeds from asset disposals, compared to $42.1 million, or $33.8 million net of proceeds from asset disposals, for the nine months ended September 30, 2025. Capital expenditures were primarily used for vehicle, equipment and building investments to support the operational growth of our business. For the nine months ended September 30, 2026 and 2025, capital expenditures were funded by internal sources and borrowings under our credit and financing arrangements.
We expect capital expenditures and commitments for equipment purchase, lease and rental arrangements to be necessary for the foreseeable future in order to meet anticipated demand for our services. As of September 30, 2026, we still expect gross capital expenditures for full-year 2026 to be in the range of $90.0 million to $100.0 million. Actual capital expenditures may increase or decrease depending upon business activity levels, as well as ongoing assessments of equipment leasing versus purchasing decisions based on short- and long-term equipment requirements. We continuously monitor our capital expenditures for project delays and changes in economic viability and adjust, as necessary. We anticipate that the combination of cash on hand, cash flows from operations, credit facilities and issuances of debt and equity securities, if necessary, will provide sufficient funding to enable us to meet the needs of future capital expenditures.
We also continue to evaluate the potential for future acquisitions and other growth opportunities that would be incremental to our capital program; however, they are dependent on the availability of opportunities and, as a result, capital expenditures may vary significantly from the estimated range provided.
Cash Flows
The following table summarizes our net cash provided by (used in) operating, investing and financing activities for the nine months ended September 30, 2026 and 2025:
| Nine months ended September 30, | 2026 | 2025 | ||||||||||||
| (In millions) | ||||||||||||||
| Net cash provided by (used in): | ||||||||||||||
| Operating activities | $ | 267.3 | $ | 108.6 | ||||||||||
| Investing activities | (429.5) | (33.6) | ||||||||||||
| Financing activities | 257.2 | (11.8) | ||||||||||||
Effect of foreign currency translation adjustments on cash, cash equivalents, and restricted cash | (1.3) | — | ||||||||||||
Increase in cash, cash equivalents and restricted cash | 93.7 | 63.2 | ||||||||||||
Cash, cash equivalents and restricted cash - beginning of period | 170.5 | 86.0 | ||||||||||||
Cash, cash equivalents and restricted cash - end of period | $ | 264.2 | $ | 149.2 | ||||||||||
Operating Activities
Cash provided by operating activities totaled $267.3 million for the nine months ended September 30, 2026, compared to $108.6 million for the nine months ended September 30, 2025, an increase of $158.7 million. The increase in cash provided by operating activities was primarily driven by favorable changes in operating assets and liabilities to support company growth and performance, including revenue growth, and increased operating results.
These changes in operating assets and liabilities drove an increase in cash period-over-period with a use of cash of $16.1 million for the nine months ended September 30, 2026, compared to a use of cash of $59.6 million for the nine months ended September 30, 2025. The changes in operating assets and liabilities period-over-period were primarily related to increases in cash from changes in contract liabilities, contract assets and other current liabilities of $78.7 million, $42.9 million and $33.9 million, respectively, partially offset by decreases in cash from changes in receivables and accounts payable of $97.4 million and $19.7 million, respectively.
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Investing Activities
Cash used in investing activities totaled $429.5 million for the nine months ended September 30, 2026, compared to $33.6 million for the nine months ended September 30, 2025, an increase of $395.9 million in cash used in investing. The increase in cash used in investing activities was primarily due to net cash outflows related to acquisitions of $380.5 million during the nine months ended September 30, 2026, higher net capital expenditures of $11.3 million, and proceeds from insurance contracts of $2.2 million during the nine months ended September 30, 2025, which did not recur in 2026.
Financing Activities
Cash provided by financing activities totaled $257.2 million for the nine months ended September 30, 2026, compared to cash used in financing activities of $11.8 million for the nine months ended September 30, 2025, an increase in cash for financing activities of $269.0 million. The increase in cash for financing activities was primarily the result of the First Amendment to the Credit Agreement entered into in the third quarter of 2026, whereby we refinanced the term loan debt and increased the amount outstanding by $200.0 million. In addition, we borrowed $100.0 million under the revolving credit commitments during 2026, with no such activity occurring in 2025. These increases in cash were partially offset by a $22.3 million repayment of long-term debt that was assumed through acquisition and and increase of $2.2 million in quarterly amortization payments on the term loan.
Material Cash Requirements
As of September 30, 2026, the Company’s material cash requirements were as follows:
| Remainder of 2026 | 2027 | 2028 | 2029 | 2030 | 2031 | Thereafter | Total | |||||||||||||||||||||||||||||||||||||||||||
| (In millions) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Long-term debt maturities1 | $ | 6.0 | $ | 23.9 | $ | 23.9 | $ | 417.7 | $ | — | $ | — | $ | — | $ | 471.5 | ||||||||||||||||||||||||||||||||||
Estimated fixed-maturity interest payments2 | 6.6 | 25.5 | 25.2 | 19.1 | — | — | — | 76.4 | ||||||||||||||||||||||||||||||||||||||||||
| Operating leases | $ | 11.7 | $ | 38.1 | $ | 25.8 | $ | 16.8 | $ | 11.4 | $ | 9.6 | 48.6 | $ | 162.0 | |||||||||||||||||||||||||||||||||||
1.Represents borrowings outstanding under the 2026 Refinancing Term Loan. Unamortized debt issuance costs are excluded from the table.
2.Represents the estimated interest payments associated with the 2026 Refinancing Term Loan, assuming current interest rates and amounts outstanding as of September 30, 2026, until respective maturity date over the periods indicated in the table above.
Revolving credit commitments by nature do not have contractual maturity. The estimated interest payments and the unused commitment fees assuming current interest rates and $100.0 million outstanding under the 2026 Refinancing Revolving Credit Commitments would equal $6.4 million on an annualized basis.
There were no other material changes in our contractual obligations from those reported in our 2025 Annual Report. For more information on our contractual obligations, refer to “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Material Cash Requirements” in our 2025 Annual Report.
Off-Balance Sheet Arrangements
As is common in our industry, we enter into certain off-balance sheet arrangements in the ordinary course of business that result in risks not directly reflected on our balance sheet. Our significant off-balance sheet transactions can include, but are not limited to, surety guarantees, performance guarantees, letters of credit obligations and firm purchase commitments for maintenance items, materials and lease obligations.
Some of our customers require us to post performance bonds issued by a surety. Those bonds guarantee the customer that we will perform under the terms of a contract. In the event that we fail to perform under a contract, the customer may demand the surety to pay or perform under our bond. Surety bonds expire at various times ranging from final completion of a project to a period extending beyond contract completion in certain circumstances. Such amounts also can fluctuate from period to period based upon the mix and level of our bonded operating activity. Our relationship with our sureties is such that we will indemnify the sureties for any expenses they incur in connection with any of the bonds they issue on our behalf.
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As of September 30, 2026 and December 31, 2025, we had approximately $2.66 billion and $2.10 billion in surety bonds outstanding for projects, respectively. As of September 30, 2026 and December 31, 2025, approximately $2.23 billion and $1.66 billion of bonding was posted for E&M, respectively, and approximately $409.8 million and $410.0 million of bonding was posted for T&D, respectively. In addition, approximately $27.9 million of bonding was posted for Corporate and Other for each period presented. These amounts were not reflected on the unaudited condensed consolidated balance sheets as of September 30, 2026 and December 31, 2025. As of September 30, 2026 and December 31, 2025, the potential maximum payment amounts we would be required to make under the outstanding surety bonds were approximately $986.0 million and $767.7 million, respectively.
As of both September 30, 2026 and December 31, 2025, the Company had $18.1 million of surety-backed standby letters of credit that were included in the bonding posted for Corporate and Other.
To date, we are not aware of any losses in connection with surety bonds that have been posted on our behalf, and we do not expect to incur significant losses in the foreseeable future. If we experience changes in our bonding relationships or if there are adverse changes in the surety industry, there would be no assurance that we would be able to effectuate alternatives to providing surety bonds to our customers or to obtain, on favorable terms, sufficient additional work that does not require surety bonds. Accordingly, a reduction in the availability of surety bonds could have a material adverse effect on our financial position, financial results and cash flows.
We also guarantee obligations of our subsidiaries under certain contracts. Generally, we are liable under such an arrangement only if our subsidiary fails to perform its obligations under the contract. As of September 30, 2026 and December 31, 2025, the fixed maximum amounts guaranteed under these agreements aggregated to $1.00 billion and $641.1 million, respectively. Historically, we have not incurred any substantial liabilities as a consequence of these guarantees. However, in the event of default under these guarantee obligations, we would be required to make payments to satisfy our guarantees.
In addition to the above guarantees, there were $2.2 million of outstanding standby letters of credit for certain guarantees to third parties under our revolving credit commitments as of both September 30, 2026 and December 31, 2025. In the event we default under these letter-of-credit obligations, we would be obligated for reimbursement of payments made under the letters of credit.
We do not have any other material financial guarantees or off-balance sheet arrangements other than those disclosed herein. For more information on the circumstances regarding our guarantees and off-balance sheet arrangements, refer to Note 14 – Commitments, Contingencies and Guarantees in the unaudited condensed consolidated financial statements contained elsewhere in this Quarterly Report.
Recently Issued Accounting Pronouncements
For a discussion of recently issued accounting standards, see Note 2 – Basis of Presentation and Summary of Significant Accounting Policies in the unaudited condensed consolidated financial statements contained elsewhere in this Quarterly Report.
Critical Accounting Estimates
Except as disclosed below, there have been no other material changes in our critical accounting estimates from those that were disclosed in our 2025 Annual Report. For further information regarding our critical accounting estimates, please refer to “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Estimates” included in our 2025 Annual Report.
Valuation of Intangible Assets
Finite-lived Intangible Assets
The valuation of acquired intangible assets requires significant assumptions and estimates. The fair value of finite-lived intangible assets acquired on the respective acquisition dates, including the respective gross intangible asset value as well as the appropriate amortization periods, was determined using the following methodologies. Customer relationships and backlog were valued using the multi-period excess earnings method, which utilized various significant inputs and assumptions, including future revenues, contributory asset charges, discount rates, customer attrition rates and tax amortization benefits. Trade names and trademarks were valued using the relief-from-royalty method, which utilized various significant inputs and assumptions, including market royalty rates, forecasted revenues, expected useful lives and obsolescence assumptions, and tax amortization benefits.
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Indefinite-lived Intangible Assets
The fair value of the indefinite-lived intangible asset acquired on the acquisition date was determined using the relief from royalty method-profit split analysis, which used various significant inputs and assumptions, including market royalty rates, operating history, brand reputation, discount rates, long-term growth and capitalization rates, and tax amortization benefits.
Contingent Consideration
The valuation method for the acquisition-date fair value of the contingent consideration that is not subject to continued employment of the sellers involved the use of a Monte Carlo simulation model that used numerous significant inputs, including a risk-free rate, EBITDA volatility, EBITDA risk premium, and a credit risk-adjusted discount rate.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
We are exposed to market risks in the ordinary course of our business, including the effects of interest rate changes, commodity price risk and inflation. Information relating to quantitative and qualitative disclosures about these market risks is set forth below. For more information on our risk factors, including market risk factors, that could be materially harmful to our business, prospects, financial condition and/or financial results if they occur, please refer to “Item 1A. Risk Factors” in this Quarterly Report and in our 2025 Annual Report.
Interest Rate Risk
The primary objective of our investment activities is to maintain cash reserves to meet captive insurance obligations, employee compensation and benefit obligations, and contractual obligations. A mismatch between the duration of liabilities and the duration of investments could expose us to interest rate risk. If interest rates fluctuate, the value of assets may not adequately cover liabilities. And if our investments mature during a period of lower interest rates, we may face reinvestment risk and potentially earn less income on reinvested funds. We will continue to evaluate our investments in order to ensure that we continue to meet our overall objectives. We have a captive insurance arrangement in order to manage our casualty and operational risk.
We are exposed to interest rate volatility with regard to our long-term debt obligations, which bear interest at variable rates. Outstanding amounts, if any, for the 2026 Refinancing Term Loan and 2026 Refinancing Revolving Credit Commitments both bear interest at Term SOFR plus an applicable rate exposing us to higher interest rate risk.
As disclosed in the “Liquidity and Capital Resources” section contained elsewhere in this Quarterly Report, the Credit Agreement was amended on September 1, 2026, which incrementally increased the balance outstanding under the term loan by $200.0 million and increased the revolving credit commitments by $125.0 million. In connection with the First Amendment, we drew $100.0 million under the 2026 Refinancing Revolving Credit Commitments, which remained outstanding as of period end.
As a result, we had $471.5 million outstanding under the 2026 Refinancing Term Loan and $100.0 million outstanding under the 2026 Refinancing Revolving Credit Commitments as of September 30, 2026, with interest rates of 5.51% and 5.43% for the 2026 Refinancing Term Loan and for the 2026 Refinancing Revolving Credit Commitments, respectively. Therefore, a 1% increase to the variable interest rate would have increased the rate to 6.51% for the 2026 Refinancing Term Loan and 6.43% for the 2026 Refinancing Revolving Credit Commitments, respectively, and increased our interest expense by approximately $5.6 million based on the expected balances outstanding for the 2026 Refinancing Term Loan and 2026 Refinancing Revolving Credit Commitments over the next 12 months as of September 30, 2026.
Going forward, the level of our interest rate risk will depend on our utilization of the2026 Refinancing Revolving Credit Commitments and the outstanding debt amount under the 2026 Refinancing Term Loan and will be sensitive to changes in the general level of interest rates.
Foreign Currency Exchange Rate Risk
We are exposed to foreign currency exchange rate risk as the result of some foreign operations beginning in the third quarter of 2026. The functional currency for our primary operations is the U.S. dollar. Our foreign operations use the Canadian dollar as their functional currency. Fluctuations in exchange rates could have a favorable or unfavorable impact on the translation of foreign-denominated assets, liabilities, revenues, or expenses. The impact is recorded as foreign currency translation gains or losses recognized in Other comprehensive loss on the unaudited condensed consolidated statements of comprehensive income.
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For both the three and nine months ended September 30, 2026, we recognized $3.7 million of foreign currency translation losses. During the periods disclosed, the impact of a 10% currency fluctuation in the Canadian dollar relative to U.S. dollar would have increased or decreased foreign currency translation losses by $0.4 million.
Prior to the third quarter of 2026, we did not have exposure to foreign currency exchange rate risk.
Commodity Price and Inflation Risk
Our operations are affected by fluctuations in commodity prices whether caused by inflation, imposed and proposed tariffs, involvement or indirect effects from global conflicts or other economic factors. These fluctuations in commodity prices generally affect us by increasing transportation and construction costs due to higher fuel or material and/or supply prices including, but not limited to, prices for copper, aluminum, steel, electrical components and certain plastics.
In addition, the cost of labor may increase due to similar factors mentioned above, such as inflation or other economic factors. While we do not believe that these factors have had a material effect on our business, financial condition, or financial results for the periods included in our unaudited condensed consolidated financial statements, we continue to monitor the impact of such factors in order to minimize their effects through our pricing strategies, productivity improvements and cost reductions. If our costs were to become subject to significant economic and/or inflationary pressures, we may be unable to fully offset such higher costs through price increases. Our inability or failure to do so could harm our business, financial condition and/or financial results.
Item 4. Controls and Procedures.
The following information includes the evaluation of disclosure controls and procedures by the Company's chief executive officer and chief financial officer, along with any significant changes in internal controls of the Company.
Evaluation of Disclosure Controls and Procedures
The term "disclosure controls and procedures" is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. The Company's disclosure controls and other procedures are designed to provide reasonable assurance that information required to be disclosed in the reports that the Company files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms. The Company's disclosure controls and other procedures are designed to provide reasonable assurance that information required to be disclosed is accumulated and communicated to management, including the Company's chief executive officer and chief financial officer, to allow timely decisions regarding required disclosure.
The Company's management, with the participation of the Company's chief executive officer and chief financial officer, has evaluated the effectiveness of the Company's disclosure controls and other procedures as of the end of the period covered by this report. Based upon that evaluation, the chief executive officer and the chief financial officer have concluded that, as of the end of the period covered by this report, such controls and procedures were effective at a reasonable assurance level.
Changes in Internal Controls
The Company completed the acquisition of SE&M on April 1, 2026 and completed the acquisition of Epsilon on September 1, 2026. Under the current guidelines established by the SEC, companies are permitted to exclude acquisitions from their assessment of internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the first year of an acquisition while integrating the acquired company. The Company is in the process of assessing the internal control over financial reporting of the acquired companies and integrating them with the Company’s existing internal controls over financial reporting. The Company will exclude SE&M and Epsilon internal controls over financial reporting from the scope of management’s annual assessment of the effectiveness of the Company’s controls and procedures.
Except as noted above, there were no changes that occurred in the Company’s internal control over financial reporting during the third quarter of 2026 that materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
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Limitations on the Effectiveness of Internal Controls
The Company’s management, including its chief executive officer and chief financial officer, does not expect that the Company’s disclosure controls and procedures or its internal control over financial reporting will detect or prevent all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements and cannot guarantee that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within the Company have been detected.
These inherent limitations include the realities that judgments in decision-making can be faulty, and breakdowns can occur because of simple errors or mistakes. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.
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PART II — OTHER INFORMATION
Item 1. Legal Proceedings.
SEC regulations require us to disclose certain information about proceedings arising under federal, state or local environmental provisions if we reasonably believe that such proceedings may result in monetary sanctions above a stated threshold. Pursuant to SEC regulations, we have adopted a threshold of $1.0 million for purposes of determining whether disclosure of any such proceedings is required.
Please refer to Note 14 – Commitments, Contingencies and Guarantees in the accompanying notes to our unaudited condensed consolidated financial statements for discussion regarding legal proceedings. There were no other material changes to the legal proceedings that were disclosed in the Company’s 2025 Annual Report as of September 30, 2026.
Item 1A. Risk Factors.
As of September 30, 2026, except as described below, there were no material changes to the Company's risk factors that were previously disclosed in the Company’s 2025 Annual Report. Please refer to the below and the Company's 2025 Annual Report for the risk factors that could materially harm the Company's business, prospects, financial results and/or financial condition if they occur.
Our international operations expose us to legal, political, and economic risks in Canada as well as currency exchange rate fluctuations that could harm our business, financial results and/or cash flows. We could also be adversely affected by our failure to comply with laws applicable to our foreign activities.
During the third quarter of 2026, the Company completed an acquisition with foreign operations. The revenues and net loss from Canadian operations were immaterial to our third quarter 2026 consolidated results. However, to the extent our Canadian operations grow as a proportion of our consolidated results, our exposure to the risks described below will increase.
There are risks inherent in doing business internationally, including, among others:
•Imposition of governmental controls and changes in laws, regulations, policies, practices, taxes, and imposed and proposed tariffs;
•Political and economic instability;
•Changes in United States and other national government import/export requirements, imposed and proposed tariffs, trade policies and relations affecting the market for our services, including arising from policy initiatives implemented by governmental administrations and any retaliatory or responsive actions by foreign governments, which could increase our cost of materials, equipment and components;
•Potential non-compliance with a wide variety of laws and regulations, including among others, the Foreign Corrupt Practices Act, Canada’s Corruption of Foreign Public Officials Act, customs and trade laws, and similar laws, regulations, or international agreements;
•Currency exchange rate fluctuations, devaluations and other conversion restrictions;
•Delays, disruptions and increased costs associated with transporting materials, components and products across borders, and the risk that customs authorities disagree with our tariff classifications or other customs treatment, which could result in fines and penalties;
•Difficulties in enforcing contractual and intellectual property rights in foreign jurisdictions;
•Restrictions on, or fees or taxes associated with, repatriating foreign profit and assets back to the United States; and
•Difficulties in staffing and managing international operations, including integrating any acquired business, managing foreign operations effectively from the United States, and understanding and complying with local laws, regulations and customs, including labor and employment laws.
There is no assurance that our policies or procedures will protect us against liability under certain laws for actions taken by or on behalf of our Company. If we are found to be liable for violations (either due to our own acts or our inadvertence, or due to the acts or inadvertence of others), the Company could suffer severe criminal or civil penalties or other sanctions, which could have a material adverse effect on the Company’s reputation, business, financial results and/or cash flows.
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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
None.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information.
Rule 10b5-1 Trading Plans
The following table shows all directors or officers who adopted a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K during the three months ended September 30, 2026. Except as shown below, no other directors or officers of the Company adopted or terminated
| Trading Arrangement | ||||||||||||||||||||||||||||||||||||||
| Name and Position | Action | Date | Rule 10b5-1* | Non-Rule 10b5-1** | Total Number of Shares to be Sold | Expiration Date | ||||||||||||||||||||||||||||||||
| X | To Be Determined (1) | |||||||||||||||||||||||||||||||||||||
* Intended to satisfy the affirmative defense of Rule 10b5-1(c).
**Not intended to satisfy the affirmative defense of Rule 10b5-1(c).
(1) The aggregate number of shares to be sold, including 2,893 shares of common stock currently held, pursuant to the trading arrangement listed above is dependent, among other things, on sales prices under the trading arrangement, the amount of tax withholding required upon the vesting of 4,409 restricted stock units, and certain certain holding requirements and therefore, is indeterminable at this time.
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Item 6. Exhibits.
Incorporated by Reference | ||||||||||||||||||||||||||
Exhibit Number | Exhibit Description | Filed Herewith | Furnished Herewith | Form | Exhibit | Filing Date | File Number | |||||||||||||||||||
| 3.1 | Amended and Restated Certificate of Incorporation of Everus Construction Group, Inc. | 8-K | 3.1 | 11/1/24 | 001-42276 | |||||||||||||||||||||
| 3.2 | Amended and Restated Bylaws of Everus Construction Group, Inc. | 8-K | 3.2 | 11/1/24 | 001-42276 | |||||||||||||||||||||
| 10.1 | Credit Agreement, dated as of October 31, 2024, by and among Everus Construction Group, Inc., JPMorgan Chase Bank, N.A. and Lenders and L/C Issuers party thereto† | 8-K | 10.4 | 11/1/24 | 001-42276 | |||||||||||||||||||||
| 10.2 | Credit Agreement, dated as of October 31, 2024 (as amended by the First Amendment, dated as of September 1, 2026), by and among Everus Construction Group, Inc., JPMorgan Chase Bank, N.A. and Lenders and L/C Issuers party hereto† | X | ||||||||||||||||||||||||
| 10.3 | Form of Everus Construction Group, Inc. Restricted Stock Unit Award Agreement under the Everus Construction Group, Inc. Long-Term Performance-Based Incentive Plan, for use for Canadian employees+ | X | ||||||||||||||||||||||||
| 31.1 | Certification of Chief Executive Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | X | ||||||||||||||||||||||||
| 31.2 | Certification of Chief Financial Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | X | ||||||||||||||||||||||||
| 32.1 | Certification of Chief Executive Officer furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | X | ||||||||||||||||||||||||
| 32.2 | Certification of Chief Financial Officer furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | X | ||||||||||||||||||||||||
| 101.INS | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document | |||||||||||||||||||||||||
| 101.SCH | XBRL Taxonomy Extension Schema Document | |||||||||||||||||||||||||
| 101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | |||||||||||||||||||||||||
| 101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | |||||||||||||||||||||||||
| 101.LAB | XBRL Taxonomy Extension Label Linkbase Document | |||||||||||||||||||||||||
| 101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document | |||||||||||||||||||||||||
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) | |||||||||||||||||||||||||
+ Management contract, compensatory plan or arrangement. | ||
† Certain schedules and exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company agrees to furnish supplementally a copy of any omitted schedule or exhibit to the SEC upon its request. | ||
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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 thereunto duly authorized.
| Everus Construction Group, Inc. | ||||||||||||||
Date: | November 6, 2026 | By: | /s/ Maximillian J Marcy | |||||||||||
Name: | Maximillian J Marcy | |||||||||||||
Title: | Vice President, Chief Financial Officer and Treasurer | |||||||||||||
(Principal Financial Officer) | ||||||||||||||
By: | /s/ Jon B. Hunke | |||||||||||||
Name: | Jon B. Hunke | |||||||||||||
Title: | Vice President and Chief Accounting Officer | |||||||||||||
(Principal Accounting Officer) | ||||||||||||||
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