Everus Construction Group, Inc. (NYSE: ECG) Reports Record First Quarter 2026 Results and Raises Full-Year Guidance

Key Highlights from Q1 2026

• Record Revenues: Q1 2026 revenues hit \$1.04 billion, a 25.4% increase year-over-year, marking a quarterly record.
• Profit Surge: Net income soared 58.9% to \$58.3 million, with diluted EPS of \$1.14, up 58.3%. Net income margin improved to 5.6% from 4.4%.
• EBITDA Growth: EBITDA jumped 43.9% to \$88.9 million, with EBITDA margin rising to 8.6% from 7.5%.
• Backlog Expansion: Backlog reached \$3.68 billion at quarter-end, up 14.0% from Dec. 2025 and 20.4% from March 2025, also a quarterly record.
• Segment Strength: Both Electrical & Mechanical (E&M) and Transmission & Distribution (T&D) segments posted robust growth.
• Acquisition News: Completed acquisition of SE&M Constructors, expanding footprint and expertise in the Southeast region.
• Raised 2026 Guidance: Revenue guidance increased to \$4.3–\$4.4 billion (from \$4.1–\$4.2 billion); EBITDA guidance raised to \$345–\$360 million (from \$320–\$335 million).
• Strong Cash Flow: Operating cash flows were \$143.7 million for Q1 2026, up massively from \$7.1 million a year prior. Free cash flow was \$131.9 million, compared to negative \$8.1 million in Q1 2025.
• Financial Flexibility: Pro forma net leverage is just 0.5x following the SE&M acquisition, providing ample capacity for further growth initiatives.

Management Commentary

CEO Jeffrey S. Thiede emphasized disciplined execution and continued momentum across key end markets. He highlighted the benefits from both E&M and T&D growth, improved project execution, and the importance of Everus’ deep customer relationships and strong market tailwinds. Backlog growth is seen as a marker of future opportunity, though management notes backlog may fluctuate quarter-to-quarter.

Segment Performance Details

Electrical & Mechanical (E&M)

• Revenue: \$835.1 million, up 28.8% YoY, driven by commercial market workloads, especially data centers.
• Net Income: \$56.7 million, up 54.9%; margin improved to 6.8% from 5.6%.
• EBITDA: \$75.3 million, up 52.1%; EBITDA margin rose to 9.0% from 7.6%.
• Backlog: \$3.29 billion, up 15.7% from Dec. 2025 and 21.7% from March 2025.
• Note: Growth primarily from data center demand; lower activity in institutional/industrial submarkets.

Transmission & Distribution (T&D)

• Revenue: \$204.4 million, up 10.5% YoY, driven by utility end market, transmission, and storm submarkets.
• Net Income: \$15.0 million, up 42.9%; margin improved to 7.3% from 5.7%.
• EBITDA: \$27.1 million, up 34.8%; EBITDA margin rose to 13.3% from 10.9%.
• Backlog: \$388.9 million, up 1.1% from Dec. 2025 and 10.1% from March 2025.

Balance Sheet and Cash Flow Strength

• Cash & Equivalents: \$293.4 million as of March 31, 2026 (up from \$170.5 million at year-end 2025).
• Gross Debt: \$281.2 million (down slightly from \$285.0 million at year-end).
• Net Leverage: 0.0x as of March 31, 2026, improving from 0.4x; pro forma net leverage post-acquisition is ~0.5x.
• Working Capital: \$617.2 million (up from \$560.2 million at year-end).
• Operating Cash Flow: \$143.7 million for Q1 2026, driven by favorable working capital changes and strong results.
• Capital Expenditures: \$15.5 million for Q1 2026, down from \$18.5 million in Q1 2025 (prior year included a large prefabrication investment).
• Free Cash Flow: \$131.9 million for Q1 2026, compared to negative \$8.1 million a year prior.

Acquisition of SE&M Constructors

On April 2, Everus completed its first acquisition as a stand-alone public company, purchasing SE&M Constructors, Inc., SE&M of the Triangle, Inc., and SECO Rentals, LLC for \$158 million. SE&M, founded in 1923, is headquartered in Elm City, North Carolina, and provides mechanical, electrical, and plumbing services across pharmaceutical, complex industrial, and healthcare sectors. The acquisition expands Everus’ geographic reach and expertise, adds a skilled workforce, and strengthens customer relationships in specialized project markets.

Updated 2026 Guidance

Based on strong Q1 results and the SE&M acquisition, Everus raised its guidance for 2026:

• Revenue: \$4.3–\$4.4 billion (previously \$4.1–\$4.2 billion)
• EBITDA: \$345–\$360 million (previously \$320–\$335 million)
• Capital Expenditures: \$90–\$100 million, 2.0–2.3% of forecasted revenues

The guidance reflects confidence in Everus’ ability to deliver on long-term financial goals and strategic priorities. However, Everus is unable to reconcile forward-looking non-GAAP financial guidance (EBITDA, pro forma net leverage) to GAAP metrics due to incomplete post-acquisition accounting.

Other Notables for Shareholders

• Backlog Commentary: Backlog is a common metric in construction, but management cautions it is not a direct indicator of future revenues or net income due to project delays, cancellations, and scope changes.
• Non-GAAP Measures: Everus uses EBITDA, EBITDA margin, net debt, net leverage, and free cash flow as key metrics. These are considered useful for evaluating operational performance and liquidity, but investors should note they are not standardized and may differ from similar measures at other companies.
• Forward-Looking Statements: Forward-looking statements are subject to risks and uncertainties; actual results may differ materially from guidance or projections due to external factors and assumptions.

Conference Call Details

Management will discuss Q1 2026 results in a webcast at 10:30 a.m. EDT on May 6, accessible via investors.everus.com and this direct link. A replay will be available post-event.

About Everus Construction Group

Everus Construction Group, Inc. is a member of the S&P SmallCap 600® index, providing specialty electrical, mechanical, transmission, and distribution contracting services to commercial, industrial, institutional, renewables, transportation, and utility customers nationwide. For more information, visit everus.com or email [email protected].

Conclusion

The combination of record financial performance, increased guidance, and a transformative acquisition represents substantial news for Everus Construction Group investors. The improved profitability, strong cash flow, and financial flexibility provide a robust foundation for continued growth. The completion of the SE&M acquisition is a strategic milestone, expected to further enhance Everus’ competitiveness and market presence. These developments are likely to be price-sensitive, reflecting enhanced shareholder value potential and positive momentum for the stock.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. All forward-looking statements are subject to risks and uncertainties. Investors should review Everus Construction Group’s filings with the SEC and consult their financial advisor before making investment decisions. The author accepts no liability for actions taken based on this content.

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