Primoris Services Corporation Q3 FY2025 earnings call

• Primoris delivered record revenue, operating income, and earnings in Q3 2025, with operating cash flow being a highlight and progress in delevering the balance sheet.
• Focused on developing quality people and delivering quality projects, capitalizing on infrastructure opportunities across end markets.
• Utility segment had double-digit revenue growth, with gas operations, communications, and Power Delivery performing well. Energy segment saw growth in renewables and industrial services, with pipeline business anticipating an upcycle.

Utility Segment

• Third quarter revenue was up double digits from the prior year. Gas operations led revenue growth with resilient activity and margins. Communications revenue and margins were up due to broadband expansion and major project build-outs. Power Delivery had its best revenue quarter in recent years as demand increased in key geographies. Utility segment backlog was at an all-time high of nearly $6.6 billion.

Energy Segment

• Renewables had a record revenue quarter with Utility-scale EPC and battery storage accelerating. Industrial Services saw impressive revenue growth from the prior year due to natural gas generation activity. Pipeline business faced challenges but anticipated an upcycle with bids materializing, expecting revenue and margin benefits in 2026.

• Increased EPS guidance to $4.75 to $4.95 per fully diluted share and adjusted EPS guidance to $5.35 to $5.55 per fully diluted share.
• Raised adjusted EBITDA guidance to $510 million to $530 million for the full year 2025.
• Increased gross capital expenditures range to $110 million to $130 million.
• Anticipated improved Energy segment bookings in coming quarters, including Q4.

• Uncertainty in tariffs and supply chain issues affecting the timing of Energy segment project signings.
• Weather impacting work schedules in the Utility segment, particularly in Power Delivery.

Q: You guys had previously expected fiscal '25 order intake to be back-half weighted. Can you provide additional color on how bookings might look so far in Q4 and trend?

A: David King said some Energy segment jobs' timing were pushed into Q4, with Ken Dodgen noting Q4 Energy segment bookings already over $600 million and expecting a good book-to-bill.

Q: Can we talk about gas generation bookings and funnel of opportunities?

A: David King said gas generation bookings had some delays but were now becoming bookings, with strong bookings expected in Q4, Q1, and Q2.

Q: What does the rate of growth look like on the Pipeline side of the business and cadence of revenue growth on Renewables?

A: Ken Dodgen said Pipeline could jump $100 million to $150 million in 2026, while Renewable revenue growth would be less in 2026 and return to normal in 2027-2028.

Q: Are there any '27 surges in solar completions?

A: Ken Dodgen said no, as customers have enough safe harbor and don't see a '27 surge.

Q: How does the single-cycle gas business break down and potential size?

A: David King said they're working on several projects, including Stargate and FERMI, with potential to grow top line $100 million to $150 million in 2026, with about a third behind the meter and two-thirds stand-alone.

Q: What trends are seen in traditional civil business?

A: Ken Dodgen said revenues are gradually growing, with $550 million to $575 million in 2025 and expected $600 million to $625 million in 2026, a solid cash cow with good margins.

Q: Were timing delays in signing awards in Energy even across verticals?

A: David King said more on the Renewables side due to tariff cost uncertainty and supply chain rework needing extra timing.