PRIMORIS SVCS CORP (PRIM) Q1 2026 Earnings Call Transcript
Primoris Services Corporation provides infrastructure services primarily in the United States and Canada. The company operates in two segments, Utilities and Energy. The Utilities segment offers installation and maintenance of new and existing natural gas and electric utility distribution and transmission systems, and communications systems. The Energy segment provides engineering, procurement, construction, and maintenance services for entities in the energy, renewable energy and energy storage, renewable fuels, and petroleum and petrochemical industries, as well as state departments of transportation. The company also offers replacement and fabrication services. Primoris Services Corporation was founded in 1960 and is headquartered in Dallas, Texas.
Primoris delivered record 2025 results with strong backlog, broad-end-market demand, and reiterated disciplined 2026 guidance including mid-to-high single-digit earnings growth and solid EBITDA.
⭐ Key Highlights
✔Positive Signals
- Backlog of $11.9B and $3B in bookings in Q4 2025
- Record 2025 revenue and segment momentum across Utilities, Energy, and Renewables
- Strong cash flow and net cash-positive balance sheet
- Significant renewables and battery storage growth (e.g., >$250M in 2025)
- Clear 2026 guidance with defined EPS and EBITDA targets and margin ranges
✖Negative Signals
- Q4 gross margins declined to 9.4% from 10.6% prior year, driven by renewables cost overruns
- Lumpiness in gas-generation bookings; cadence may be uneven across quarters
- Energy segment near-term margin softness in Q1 2026 before mid-year recovery
- Some project-specific execution challenges in renewables require stronger project leadership
- Seasonality impacting Utilities margins in Q1 (7–9%); full-year guidance implies sequential recovery
📊Financial Results
- Q4 2025 revenue of nearly $1.9B, up about 7% year over year; gross profit down ~5% to $175M; gross margin 9.4% vs 10.6% prior year
- Full-year 2025 revenue approximately $7.6B; gross profit up about 16% to reflect higher revenue and better segment margins
- SG&A for 2025 at 5.3% of revenue, down from 6% prior year; net interest expense decreased to ~$29M for the year
- Operating cash flow ~$470M for 2025; cash position ended with $536M; debt level remains favorable allowing acquisitions
- Backlog exited at >$11.9B with MSAs up ~20% YoY, supported by renewables, gas generation, and pipeline opportunities
🔮Future Guidance
- 2026 expected EPS of $5.35–$5.55; adjusted EPS of $5.80–$6.00; Adjusted EBITDA guidance of $560–$580M
- Utilities margins targeted at 10–12% for the year, with Q1 at 7–9% due to seasonality
- Energy margins targeted at 10–12% for the full year, with potential upside from project closeouts
- CapEx guidance for 2026 of $120–$140M (equipment $90–$110M; facilities/IT $30–$30M)
- Backlog and bookings expected to drive 2026 growth across natural gas generation, renewables, and pipeline construction
💡Interesting Insights
- Executive emphasis on culture, safety, and the Primoris Promise as a differentiator for attracting and retaining talent amidst a tight labor market
Detailed Analysis
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