Everus Construction Group, Inc. (ECG) Earnings

Management highlights

Overall Quarterly Performance - The company delivered record Q2 2026 results: total revenue of $1.23 billion, up 34% year-over-year; total EBITDA of $128.6 million, up 53% year-over-year; EBITDA margin of 10.4%, up 130 basis points year-over-year. Excluding the recent SC&M acquisition, organic revenue growth was 30% year-over-year. - Ending total backlog reached $4.55 billion, up 53% year-over-year, driven by 62% growth in the E&M segment backlog. No material project cancellations or notable customer activity slowdowns have been observed. Strategic Growth - Management maintains a diversified growth strategy to capture opportunities across varying end market cycles, with current strong demand from data center and semiconductor end markets. - The company completed the acquisition of SEM Constructors (SC&M) in April 2026, with integration progressing on plan; SC&M contributed ~$100 million to ending backlog. - A pending acquisition of Epsilon Industries, a leading North American off-site modular construction provider, was announced after quarter end. The acquisition will expand the company's off-site capabilities, add strategic production facilities across the U.S. and Canada, and strengthen geographic presence in high-growth regions including Florida, Texas, the Mid-Atlantic, and the Northeast. It is expected to close in late 2026. - Net leverage is 0.3x trailing 12-month EBITDA, well below the 1.5x-2x target range, leaving ample capital flexibility for continued inorganic and organic growth. The acquisition pipeline remains active. Operational Excellence - Management prioritizes consistent project execution via a standardized operational playbook focused on delivering projects safely, on time, and on budget. - Off-site modular construction is a core operational focus: it improves work safety, boosts labor and material efficiency, and creates more predictable project outcomes that strengthen customer relationships. The Epsilon acquisition will further scale this capability across the organization.

Guidance

- Management raised full year 2026 guidance based on strong first half performance and sustained business momentum. The updated guidance excludes any potential contribution from the pending Epsilon acquisition. - New full year 2026 revenue guidance is $4.5 billion to $4.7 billion, up from the prior range. - New full year 2026 EBITDA guidance is $410 million to $425 million, implying a full year EBITDA margin of ~9% at the midpoint of the range, reflecting first half execution upside and margin accretion from the SC&M acquisition. - The guidance assumes an EBITDA margin of ~8.5% for the second half of 2026, which management views as a more sustainable level than the higher first half margin. - Long-term (over 5+ year full industry cycle) financial targets of 5-7% annual organic revenue growth and 7-9% EBITDA CAGR are maintained, with management noting these are cycle-level targets and near-term performance may exceed this range.

Segment performance

Everest Construction Group has three operating segments with the following Q2 2026 financial performance: 1. E&M Segment: Second quarter revenue increased 42% year-over-year to $1.01 billion, accounting for ~82.1% of total company revenue. Excluding contributions from the recently acquired SC&M, organic revenue growth was 37% year-over-year. EBITDA for the segment was $109.3 million, up 72% year-over-year, with an EBITDA margin of 10.8% (an increase of 190 basis points from Q2 2025). 2. T&D Segment: Second quarter revenue increased 7.1% year-over-year to $227.5 million, accounting for ~17.9% of total company revenue. EBITDA for the segment was $32.8 million, up 7.9% year-over-year, with an EBITDA margin of 14.4% (a marginal 10 basis point increase from Q2 2025).

Risks & headwinds

- The construction industry is cyclical, with end market demand varying over time, which could lead to lower growth or performance in future periods relative to current strong results. - Forward-looking statements are inherently uncertain, and actual results may differ materially from current expectations due to factors outside the company's control. No other material operational risks or failures were discussed in the call.

Analyst Q&A

• Q: What synergies and relationship background does Everest have with the target Epsilon acquisition? /

  A: Epsilon is a well-established off-site construction business focused primarily on mechanical solutions. It provides new geographic access via its existing production facilities, and creates cross-selling opportunities between Epsilon's customer base and Everest's current operations for both mechanical and electrical services. The acquisition will also expand Everest's existing modular construction expertise across the entire organization.

• Q: How should investors think about backlog conversion timing and backlog margin quality, and how diversified is the E&M backlog? /

  A: Approximately 80% of the current backlog is expected to be completed (burn off) within 12 months, and margin levels on booked backlog are consistent with historical averages. While data centers are the largest single end market in the E&M backlog, backlog has grown sequentially across nearly all end markets including industrial, institutional, renewables, services, and utilities, with the majority of the sequential backlog increase coming outside the commercial segment. Customer concentration is limited by serving the largest customers across multiple regions, while the company continues to expand its overall customer base.

• Q: Why are the company's long-term 5-7% organic growth and 7-9% EBITDA CAGR targets maintained despite current strong above-target performance? /

  A: These targets are long-term, cycle-average targets over a period of more than five years, meant to account for the inherent cyclicality of the construction industry. The company is currently outperforming these targets in the current strong market environment, which is expected, and annual guidance reflects updated short-term expectations. The long-term framework remains appropriate for full-cycle performance.

• Q: What is the outlook for the semiconductor end market, and are there acquisition opportunities in the T&D segment? /

  A: Everest has served the semiconductor market for over 30 years, and currently serves more customers across more geographies, with a new major semiconductor project in the Mountain States region ramping as expected. The project will contribute revenue in 2026 and into 2027, and the company is well-positioned for continued growth in the segment. Management actively evaluates acquisitions across both E&M and T&D; while E&M is the larger revenue segment, the company supports T&D organic growth and will pursue selective, disciplined T&D acquisitions that expand and diversify the business.