Forward Looking Statements
This Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2026 (“Second Quarter 2026 Report”) contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which are subject to the “safe harbor” created by those sections. Forward-looking statements include information concerning our possible or assumed future results of operations, business strategies, financing plans, competitive position, industry environment, growth opportunities, the effects of regulation and the economy, generally. Forward-looking statements include all statements that are not historical facts and usually can be identified by terms such as “anticipates,” “believes,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “projects,” “should,” “will,” “would” or similar expressions.
Forward-looking statements include information concerning our possible or assumed future results of operations, business strategies, financing plans, competitive position, industry environment, potential growth opportunities, the effects of regulation and the economy, generally. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Actual results may differ materially as a result of a number of factors, including, among other things, customer timing, project duration, weather, and general economic conditions; changes in our mix of customers, projects, contracts and business; regional or national and/or general economic conditions and demand for our services; price, volatility, and expectations of future prices of oil, natural gas, and natural gas liquids; variations and changes in the margins of projects performed during any particular quarter; increases in the costs to perform services caused by changing conditions; the termination, or expiration of existing agreements or contracts; the budgetary spending patterns of customers; inflation, tariffs and other increases in construction costs that we may be unable to pass through to our customers; cost or schedule overruns on fixed-price contracts; availability of qualified labor for specific projects; changes in bonding requirements and bonding availability for existing and new agreements; the need and availability of letters of credit; increases in interest rates and slowing economic growth or recession; the instability in the banking system; costs we incur to support growth, whether organic or through acquisitions; the timing and volume of work under contract; losses experienced in our operations; the results of the review of prior period accounting on certain projects and the impact of adjustments to accounting estimates; governmental investigations and/or inquiries; intense competition in the industries in which we operate; failure to obtain favorable results in existing or future litigation or regulatory proceedings, dispute resolution proceedings or claims, including claims for additional costs; failure of our partners, suppliers or subcontractors to perform their obligations; failure to maintain safe worksites; risks or uncertainties associated with events outside of our control, including conflicts in the Middle East, war between Russia and Ukraine, and tension between China and Taiwan and other geopolitical tensions, severe weather conditions, public health crises and pandemics, political crises or other catastrophic events; client delays or defaults in making payments; the cost and availability of credit and restrictions imposed by credit facilities; failure to implement strategic and operational initiatives; risks or uncertainties associated with acquisitions, dispositions and investments, including risks arising from the inability to successfully integrate acquired businesses; possible information technology interruptions, cybersecurity breaches and threats, and inability to protect intellectual property; disruptions related to artificial intelligence; the Company’s failure, or the failure of our agents or partners, to comply with laws; the Company's ability to secure appropriate insurance; new or changing political conditions and legal and regulatory requirements, including those relating to environmental, health and safety matters; the loss of one or a few clients that account for a significant portion of the Company's revenues; and asset impairments.
We discuss many of these risks in detail in Part I, Item 1A “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2025 and our other filings with the Securities and Exchange Commission (“SEC”). You should read this Second Quarter 2026 Report, our Annual Report on Form 10-K for the year ended December 31, 2025 and our other filings with the SEC completely and with the understanding that our actual future results may be materially different from what we expect.
Given these uncertainties, you should not place undue reliance on these forward-looking statements. Also, forward-looking statements represent our management’s beliefs and assumptions only as of the date of this Second Quarter 2026 Report. We assume no obligation to update these forward-looking statements publicly, or to update the reasons actual
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results could differ materially from those anticipated in any forward-looking statements, even if new information becomes available.
The following discussion and analysis should be read in conjunction with the unaudited financial statements and the accompanying notes included in Part 1, Item 1 of this Second Quarter 2026 Report and our Annual Report on Form 10-K for the year ended December 31, 2025.
Introduction
We are a leading provider of infrastructure services operating mainly in the United States and Canada. We provide a wide range of construction, maintenance, replacement, and engineering services to a diversified base of customers through our two segments: Utilities and Energy. The structure of our reportable segments is generally focused on broad end-user markets for our services.
The Utilities segment operates throughout the United States and specializes in a range of services, including the installation and maintenance of new and existing natural gas and electric utility distribution and transmission systems and communications systems.
The Energy segment operates throughout the United States and Canada and specializes in a range of services that include engineering, procurement, construction, and maintenance services for entities in the energy, renewable energy and energy storage, renewable fuels, data center services and petroleum and petrochemical industries, as well as state departments of transportation.
We have longstanding customer relationships with solar facility developers, power producers, gas and electric utilities, refining, petrochemical, communications, midstream, downstream, and engineering companies, as well as transportation agencies across our core markets. We have completed major underground and industrial projects for a number of large natural gas transmission and petrochemical companies in the United States and major electrical and gas projects for a number of large utility companies in the United States. We enter into a large number of contracts each year, and the projects can vary in length from daily work orders to as long as 36 months, and occasionally longer, for completion on larger projects. Although we have not been dependent upon any one customer in any year, a small number of customers tend to constitute a substantial portion of our total revenue in any given year.
We generate revenue under a range of contracting types, including fixed-price, unit-price, time and material, and cost reimbursable plus fee contracts, each of which has a different risk profile. A portion of our revenue is derived from contracts where scope is adequately defined, and therefore we can reasonably estimate total contract value. For these contracts, revenue is recognized over time as work is completed because of the continuous transfer of control to the customer (typically using an input measure such as costs incurred to date relative to total estimated costs at completion to measure progress). For certain contracts, where scope is not adequately defined and we can’t reasonably estimate total contract value, revenue is recognized either on an input basis, based on contract costs incurred as defined within the respective contracts, or an output basis based on units completed. Costs to obtain contracts are generally not significant and are expensed in the period incurred.
The classification of revenue, gross profit, and operating income for segment reporting purposes can at times require judgment on the part of management. Our segments may perform services across industries or perform joint services for customers in multiple industries. To determine reportable segment gross profit and operating income, certain allocations, including allocations of shared and indirect costs, such as facility costs, equipment costs, selling, general, and administrative expenses (“SG&A”) and indirect operating expenses were made.
Material trends and uncertainties
We generate our revenue from construction and engineering projects, as well as from providing a variety of infrastructure services. We depend in part on spending by companies in the communications, gas and electric utilities, energy, chemical, and pipeline industries, as well as state departments of transportation. Over the past several years, each segment has benefited from demand for more efficient and more environmentally friendly energy and power facilities, more reliable gas and electric utility infrastructure, and upgraded and expanded local highway and bridge needs. However, periodically, each of these industries and government agencies is adversely affected by macroeconomic conditions and other challenging market conditions, such as those that have caused declines in the pipeline industry. Economic and other factors outside of our control may affect the amount and size of contracts we are awarded in any particular period.
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We actively monitor the impact of the macroeconomic environment, including the impact of inflation, tariffs, and volatility in the commodities markets, on all aspects of our business. We have experienced increased operating costs and anticipate that elevated levels of cost inflation could persist for the remainder of 2026. Recent geopolitical conflict involving Iran has contributed to increased volatility and upward pressure in global energy markets, which has resulted in higher fuel costs and may continue to impact operating expenses and margins depending on the duration and severity of the disruption. In an effort to mitigate the impacts of inflation on our operations, we attempt to recover increases in the cost of labor, equipment, fuel and materials through price escalation provisions that allow us to adjust billing rates for certain major contracts annually; by considering the estimated effect of such increases when bidding or pricing new work; or by entering into back-to-back contracts with suppliers and subcontractors. However, the annual adjustment provided by certain contracts is typically subject to a cap and there can be an extended period of time between the impact of inflation on our costs and when billing rates are adjusted. In some cases, our actual cost increases have exceeded the contractual caps, and therefore negatively impacted the profitability of our operations until the contracts have been renegotiated to reflect these higher costs.
Fluctuations in the market prices of oil, gas and other fuel sources have affected demand for our services. Volatility in the prices of oil, gas, and liquid natural gas that has occurred in recent years has created uncertainty with respect to demand for our pipeline services, both in the near term and for future projects. While the construction of gathering lines within the oil shale formations may remain at lower levels for a period, we believe that over time, the need for pipeline infrastructure for midstream and gas utility companies will result in a continuing need for our services.
The continuing changes in the regulatory environment have affected the demand for our services, either by increasing our work, delaying projects, or cancelling projects. For example, environmental laws and regulations have provided challenges to pipeline projects, resulting in delays or cancellations that impact the timing of revenue recognition. However, the regulatory environment in certain states has resulted in an increase in the construction of gas-fired power plants. In addition, increased demand for electric power is also expanding opportunities for our Energy segment, such as the need for battery storage and the construction of utility scale solar facilities, and natural gas generation facilities.
We are exposed to certain market risks related to changes in interest rates. To monitor and manage these market risks, we have established risk management policies and procedures. Our Revolving Credit Facility, New Term Loan, and Accounts Receivable Securitization Facility bear interest at a variable rate which exposes us to interest rate risk. From time to time, we may use certain derivative instruments to hedge our exposure to variable interest rates. As of June 30, 2026, none of our variable rate debt outstanding was economically hedged. Based on our variable rate debt outstanding as of June 30, 2026, a 1.0% increase or decrease in interest rates would change annual interest expense by approximately $7.8 million.
Acquisitions
We continuously evaluate the marketplace for acquisition opportunities to further our strategic growth plans. Due to our reputation, size, financial resources, geographic presence and range of services, we have numerous opportunities to acquire companies or selected portions of such companies. We evaluate an acquisition opportunity based on its ability to strengthen our leadership in the markets we serve, the services they provide and the additional new geographies and clients they bring. Acquisitions are inherently risky, and no assurance can be given that our previous or future acquisitions will be successful or will not have a material adverse effect on our financial position, results of operations or cash flows.
Acquisition of PayneCrest
On May 1, 2026, we completed the acquisition of PayneCrest Electric, Inc. (“PayneCrest”) in an all-cash transaction valued at approximately $404.7 million, net of cash acquired. PayneCrest is a leading electrical construction and services provider supporting industrial, manufacturing, and advanced facilities. The acquisition increases our exposure to the high-growth data center services market and expands opportunities for integrating our industrial and renewables businesses with complementary electrical construction capabilities. The total purchase price was funded through a combination of borrowings under our term loan facility (as amended) and cash on hand. We incorporated PayneCrest operations into our Energy segment. For more information, see Note 4 – “Acquisitions” in Item 1, Financial Statements of this Second Quarter 2026 Report.
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Seasonality, cyclicality and variability
Our results of operations are subject to quarterly variations. Some of the variation is the result of weather, particularly rain, ice, snow, and named storms, which can impact our ability to perform infrastructure services. These seasonal impacts can affect revenue and profitability in all of our businesses. Any quarter can be affected either negatively or positively, by atypical weather patterns in any part of the country. In addition, demand for new projects in our Utilities segment tends to be lower during the early part of the calendar year due to clients’ internal budget cycles. As a result, we usually experience higher revenue and earnings in the second, third and fourth quarters of the year as compared to the first quarter.
Our project values range in size from several hundred dollars to several hundred million dollars. The bulk of our work is comprised of project sizes that average less than $3.0 million. We also perform construction projects which tend not to be seasonal, but can fluctuate from year to year based on customer timing, project duration, weather, and general economic conditions. Our business may be affected by declines, or delays in new projects, or by client project schedules. Because of the cyclical nature of our business, the financial results for any period may fluctuate from prior periods, and our financial condition and operating results may vary from quarter to quarter. Results from one quarter may not be indicative of our financial condition, or operating results for any other quarter, or for an entire year.
Critical Accounting Policies and Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the financial statements and that affect the amounts of revenue and expenses reported for each period. These estimates and assumptions must be made because certain information that is used in the preparation of our financial statements cannot be calculated with a high degree of precision from data available, is dependent on future events, or is not capable of being readily calculated based on generally accepted methodologies. Often, these estimates are particularly difficult to determine, and we must exercise significant judgment. Estimates may be used in our accounting for revenue recognized over time, the allowance for credit losses, useful lives of property and equipment, fair value assumptions in analyzing goodwill and long-lived asset impairments, self-insured claims liabilities and deferred income taxes. Actual results could differ significantly from our estimates, and our estimates could change if they were made under different assumptions or conditions. Our critical accounting policies and estimates are described in Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2025. There have been no material changes to our critical accounting policies and estimates since December 31, 2025.
Results of Operations
Consolidated Results
The following discussion compares the results of the three and six months ended June 30, 2026, to the three and six months ended June 30, 2025.
Revenue
Revenue was $1.7 billion for the three months ended June 30, 2026, a decrease of $0.2 billion, or 10.7%, compared to the same period in 2025. The decrease was due to lower revenue in our Energy segment.
Revenue was $3.2 billion for the six months ended June 30, 2026, a decrease of $0.3 billion, or 8.2%, compared to the same period in 2025. The decrease was due to lower revenue in our Energy segment partially offset by growth in the Utilities segment.
Gross Profit
Gross profit was $82.4 million for the three months ended June 30, 2026, a decrease of $149.3 million, or 64.4% compared to the same period in 2025. The decrease was primarily due to a decrease in revenue and margin in the Energy segment and a decrease in margin in the Utilities segment. Gross profit as a percentage of revenue decreased to 4.9% for the three months ended June 30, 2026, compared to 12.3% for the same period in 2025 primarily driven by lower margins in the Energy and Utilities segments.
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Gross profit was $217.1 million for the six months ended June 30, 2026, a decrease of $185.3 million, or 46.0%, compared to the same period in 2025. The decrease was primarily due to a decrease in revenue and margin in the Energy segment. Gross profit as a percentage of revenue decreased to 6.7% for the six months ended June 30, 2026, compared to 11.4% for the same period in 2025 primarily driven by lower margins in the Energy segment.
Selling, general and administrative expenses
SG&A expenses were $106.3 million during the three months ended June 30, 2026, an increase of $1.7 million, or 1.6%, compared to 2025, due to the acquisition of PayneCrest, partially offset by lower incentive compensation costs. SG&A expenses as a percentage of revenue increased to 6.3% compared to 5.5% for the corresponding period in 2025 primarily due to lower revenue.
SG&A expenses were $212.0 million during the six months ended June 30, 2026, an increase of $7.9 million, or 3.9%, compared to 2025, primarily due to the acquisition of PayneCrest, partially offset by lower incentive compensation costs. SG&A expenses as a percentage of revenue increased to 6.5% compared to 5.8% for the corresponding period in 2025 primarily due to lower revenue.
Transaction and related costs
Transaction and related costs were $2.9 million during the three months ended June 30, 2026, compared to $0.5 million for the three months ended June 30, 2025. The increase was primarily due to professional fees paid to advisors associated with the PayneCrest acquisition.
Transaction and related costs were $7.4 million during the six months ended June 30, 2026, compared to $1.3 million for the six months ended June 30, 2025. The increase was primarily due to professional fees paid to advisors associated with the PayneCrest acquisition.
Other income and expense
Non-operating income and expense items for the three and six months ended June 30, 2026, and 2025 were as follows (in millions):
Three Months Ended Six Months Ended
June 30, June 30,
2026 2025 2026 2025
Foreign exchange gain (loss), net $ 0.6 $ (0.4) $ 0.6 $ (0.6)
Other income, net 0.2 — 0.3 —
Interest expense, net (10.6) (7.5) (15.2) (15.3)
Total other expense $ (9.8) $ (7.9) $ (14.3) $ (15.9)
Interest expense, net for the three months ended June 30, 2026, increased $3.1 million compared to the same period in 2025, due to higher average debt balances, offset by a lower average interest rate.
Interest expense, net for the six months ended June 30, 2026, decreased $0.1 million compared to the same period in 2025, due to a lower average interest rate, offset by higher average debt balances.
Provision for income taxes
We are subject to tax liabilities imposed by multiple jurisdictions. We determine our best estimate of the annual effective tax rate at each interim period using expected annual pre-tax earnings, statutory tax rates and available tax planning opportunities. Certain significant or unusual items are separately recognized in the quarter in which they occur, which can cause variability in the effective tax rate from quarter to quarter. We recognize interest and penalties related to uncertain tax positions, if any, as income tax expense.
The effective tax rate for the six month period ended June 30, 2026, of 59.5%, differs from the U.S. federal statutory rate of 21.0%, primarily due to discrete tax benefits for equity compensation paid in the first six months, partially offset by state income tax expense and nondeductible components of per diem expenses. The effective tax rate for the six
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month period ended June 30, 2025, of 29.0% differs from the U.S. federal statutory rate of 21.0% primarily due to state income tax expense and nondeductible components of per diem expenses.
We recorded an income tax benefit for the six months ended June 30, 2026, of $9.9 million compared to an income tax expense of $52.5 million for the six months ended June 30, 2025. The $62.4 million change is primarily driven by a $197.7 million decrease in pretax income and an increase in the effective tax rate.
Segment results
Operating performance by segment for the three months ended June 30, 2026 and 2025 was as follows (in millions):
For the three months ended June 30, 2026
Utilities % of Segment Revenue Energy % of Segment Revenue Corporate and non-allocated costs Consolidated a % of Consolidated Revenue
Revenue $ 712.6 — $ 999.9 — $ (24.3) (1) $ 1,688.2 —
Cost of revenue 627.5 88.1% 1,002.6 100.3% (24.3) (1) 1,605.8 95.1%
Gross profit (loss) 85.1 11.9% (2.7) (0.3)% — 82.4 4.9%
Selling, general, and administrative expenses 30.6 4.3% 53.7 5.4% 22.0 106.3 6.3%
Transaction and related costs — — 2.9 2.9
Operating income (loss) $ 54.5 7.6% $ (56.4) (5.6)% $ (24.9) $ (26.8) (1.6)%
(1) Represents intersegment revenue and cost of revenue of $24.2 million in the Utilities segment and $0.1 million in the Energy Segment eliminated in our Condensed Consolidated Statements of Operations.
For the three months ended June 30, 2025
Utilities % of Segment Revenue Energy % of Segment Revenue Corporate and non-allocated costs Consolidated a % of Consolidated Revenue
Revenue $ 693.0 — $ 1,236.8 — $ (39.1) (1) $ 1,890.7 —
Cost of revenue 595.5 85.9% 1,102.6 89.2% (39.1) (1) 1,659.0 87.7%
Gross profit 97.5 14.1% 134.2 10.8% — 231.7 12.3%
Selling, general, and administrative expenses 32.0 4.6% 41.6 3.4% 31.0 104.6 5.5%
Transaction and related costs — — 0.5 0.5
Operating income $ 65.5 9.5% $ 92.6 7.5% $ (31.5) $ 126.6 6.7%
(1) Represents intersegment revenue and cost of revenue of $39.1 million in the Utilities segment eliminated in our Condensed Consolidated Statements of Operations.
Utilities Segment
Revenue increased by $19.6 million, or 2.8%, for the three months ended June 30, 2026, compared to the same period in 2025, primarily due to increased activity in our gas operations and power delivery businesses, partially offset by decreased activity in our communications business.
Operating income for the three months ended June 30, 2026, decreased $11.0 million, or 16.8% compared to the same period in 2025 due to lower gross margins, partially offset by revenue growth. Gross profit as a percentage of revenue during the three months ended June 30, 2026, decreased to 11.9% compared to 14.1% in the same period in 2025 primarily due to the impact of favorable project closeouts in our gas operations business in 2025, and a decrease in higher margin storm restoration work in 2026.
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Energy Segment
Revenue decreased by $236.9 million, or 19.2%, for the three months ended June 30, 2026, compared to the same period in 2025, primarily attributable to decreased renewable energy activity, due to slower than anticipated start of new projects, release of new work, and slower than expected financial close associated with certain projects. The decrease was partially offset by the incremental impact from the acquisition of PayneCrest.
Operating income for the three months ended June 30, 2026, decreased by $149.0 million compared to the same period in 2025, due to decreased revenue and lower gross margins. Gross loss as a percentage of revenue was (0.3%) during the three months ended June 30, 2026, compared to gross profit as a percentage of revenue of 10.8% in the same period in 2025 primarily due to cost overruns in 2026 associated with six renewable energy projects. These higher costs were driven in part by project redesign efforts, changes in project sequencing, labor productivity challenges, sub-surface issues, and unfavorable weather conditions. Two of the six projects were substantially complete in the second quarter of 2026, three are expected to be substantially complete in the third quarter of 2026, and the remaining project is expected to be substantially complete in the fourth quarter of 2026. In addition, we have had lower than anticipated volumes in 2026, which led to higher relative carrying costs for equipment and personnel.
Operating performance by segment for the six months ended June 30, 2026 and 2025 was as follows (in millions):
For the six months ended June 30, 2026
Utilities % of Segment Revenue Energy % of Segment Revenue Corporate and non-allocated costs Consolidated % of Consolidated Revenue
Revenue $ 1,345.5 — $ 1,955.3 — $ (52.7) (1) $ 3,248.1 —
Cost of revenue 1,198.4 89.1% 1,885.3 96.4% (52.7) (1) 3,031.0 93.3%
Gross profit 147.1 10.9% 70.0 3.6% — 217.1 6.7%
Selling, general, and administrative expenses 62.1 4.6% 96.6 4.9% 53.3 212.0 6.5%
Transaction and related costs — — 7.4 7.4
Operating income (loss) $ 85.0 6.3% $ (26.6) (1.4)% $ (60.7) $ (2.3) (0.1)%
(1) Represents intersegment revenue and cost of revenue of $52.6 million in the Utilities segment and $0.1 million in the Energy Segment eliminated in our Condensed Consolidated Statements of Operations.
For the six months ended June 30, 2025
Utilities % of Segment Revenue Energy % of Segment Revenue Corporate and non-allocated costs Consolidated % of Consolidated Revenue
Revenue $ 1,256.4 — $ 2,345.1 — $ (62.7) (1) $ 3,538.8 —
Cost of revenue 1,107.3 88.1% 2,091.8 89.2% (62.7) (1) 3,136.4 88.6%
Gross profit 149.1 11.9% 253.3 10.8% — 402.4 11.4%
Selling, general, and administrative expenses 65.5 5.2% 81.8 3.5% 56.8 204.1 5.8%
Transaction and related costs — — 1.3 1.3
Operating income $ 83.6 6.7% $ 171.5 7.3% $ (58.1) $ 197.0 5.6%
(1) Represents intersegment revenue and cost of revenue of $62.7 million in the Utilities segment eliminated in our Condensed Consolidated Statements of Operations.
Utilities Segment
Revenue increased by $89.1 million, or 7.1%, for the six months ended June 30, 2026, compared to the same period in 2025, primarily due to increased activity in our power delivery and gas operations markets, partially offset by decreased activity in our communications market.
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Operating income for the six months ended June 30, 2026, increased $1.4 million, or 1.7% compared to the same period in 2025 due to lower gross margins, partially offset by revenue growth. Gross profit as a percentage of revenue during the six months ended June 30, 2026, decreased to 10.9% compared to 11.9% in the same period in 2025 primarily due to a favorable impact from project closeouts in our gas operations business in 2025 and a decrease in higher margin storm restoration work in 2026.
Energy Segment
Revenue decreased by $389.8 million, or 16.6%, for the six months ended June 30, 2026, compared to the same period in 2025, primarily attributable to decreased renewable energy activity, due to slower than anticipated start of new projects, release of new work, and slower than expected financial close associated with certain projects. The decrease was partially offset by the incremental impact from the acquisition of PayneCrest.
Operating income for the six months ended June 30, 2026, decreased by $198.1 million compared to the same period in 2025, due to decreased revenue and lower gross margins. Gross profit as a percentage of revenue decreased to 3.6% during the six months ended June 30, 2026, compared to 10.8% in the same period in 2025 primarily due to cost overruns in 2026 associated with six renewable energy projects. These higher costs were driven in part by project redesign efforts, changes in project sequencing, labor productivity challenges, sub-surface issues, and unfavorable weather conditions. Two of the six projects were substantially complete in the second quarter of 2026, three are expected to be substantially complete in the third quarter of 2026, and the remaining project is expected to be substantially complete in the fourth quarter of 2026. In addition, we have had lower than anticipated volumes in 2026, which led to higher relative carrying costs for equipment and personnel.
Geographic area financial information
The majority of our revenue is derived from customers in the United States with approximately 3.0% generated from sources outside of the United States during the six months ended June 30, 2026, principally in Canada.
Backlog
For infrastructure services contractors, backlog can be an indicator of future revenue streams. Different companies define and calculate backlog in different manners. We define backlog as anticipated revenue from the uncompleted portions of existing contracts where scope is adequately defined, and therefore we can reasonably estimate total contract value (“Fixed Backlog”), and the estimated revenue on MSA work (“MSA Backlog”). We present two measures of backlog: one that includes Fixed Backlog and MSA Backlog for the next twelve months, and total backlog that includes all Fixed Backlog and MSA Backlog to the end of the MSA agreement. In addition, many of our MSAs are subject to renewal, and these potential renewals can be considered in estimating MSA Backlog. We do not include certain contracts in the calculation of fixed backlog where scope, and therefore contract value, is not adequately defined. We estimate MSA Backlog based on historical trends, anticipated seasonal impacts and estimates of customer demand based on information from our customers.
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Fixed and MSA Backlog by reporting segment for the periods ending June 30, 2026, and December 31, 2025, were as follows (in millions):
June 30, 2026 December 31, 2025
Next 12 Months Total Next 12 Months Total
Utilities
Fixed Backlog $ 90.6 $ 90.6 $ 96.1 $ 96.1
MSA Backlog 2,214.6 7,575.4 1,904.8 6,327.3
Backlog $ 2,305.2 $ 7,666.0 $ 2,000.9 $ 6,423.4
Energy
Fixed Backlog (1) $ 3,519.8 $ 5,613.7 $ 3,081.7 $ 4,889.8
MSA Backlog 269.9 576.6 208.8 632.1
Backlog $ 3,789.7 $ 6,190.3 $ 3,290.5 $ 5,521.9
Total
Fixed Backlog $ 3,610.4 $ 5,704.3 $ 3,177.8 $ 4,985.9
MSA Backlog 2,484.5 8,152.0 2,113.6 6,959.4
Backlog $ 6,094.9 $ 13,856.3 $ 5,291.4 $ 11,945.3
(1) Total Fixed Backlog as of June 30, 2026, includes approximately $432.2 million as a result of the PayneCrest acquisition.
Backlog should not be considered a comprehensive indicator of future revenue, as a percentage of our revenue is derived from projects that are not part of a backlog calculation. The backlog estimates include amounts from estimated MSAs, but our customers are not contractually obligated to purchase an amount of services from us under the MSAs. Any of our contracts may be terminated by our customers on relatively short notice. In the event of a project cancellation, we are typically reimbursed for all of our costs through a specific date, as well as all reasonable costs associated with demobilizing from the jobsite, but typically we have no contractual right to the total revenue reflected in backlog. Projects may remain in backlog for extended periods of time as a result of customer delays, regulatory requirements or project specific issues. Future revenue from projects where scope, and therefore contract value, is not adequately defined may not be included in our estimated backlog amount.
Liquidity and Capital Resources
Liquidity represents our ability to pay our liabilities when they become due, fund business operations, and meet our contractual obligations and execute our business plan. Our primary sources of liquidity are our cash balances at the beginning of each period and our cash flows from operating activities. If needed, we have availability under our lines of credit to augment liquidity needs, and we have a current shelf registration statement filed with the SEC that allows for the issuance of an indeterminate amount of debt and equity securities. Our short-term and long-term cash requirements consist primarily of working capital, investments to support revenue growth and maintain our equipment and facilities, general corporate needs, and to service our debt obligations.
On May 1, 2026, we entered into the Fourth Amended and Restated Credit Agreement (the “Amended Credit Agreement”) with CIBC Bank USA, as administrative agent (the “Administrative Agent”) and co-lead arranger, and the financial parties thereto (collectively, the “Lenders”), amending and restating the credit agreement (the “Credit Agreement”) to increase the term loan (the “Term Loan”) by $411.8 million to an aggregate principal amount of $779.6 million (the “New Term Loan”) and to extend the maturity date of the Credit Agreement from August 1, 2027 to May 1, 2031.
In addition to the New Term Loan, the Amended Credit Agreement increased the revolving credit facility to $750.0 million (the “Revolving Credit Facility), whereby the Lenders agreed to make loans on a revolving basis from time to time and to issue up to $400.0 million of letters of credit.
As of June 30, 2026, there were no outstanding borrowings under the Revolving Credit Facility, commercial letters of credit outstanding were $9.3 million, and available borrowing capacity was $740.7 million. In addition, there were no
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outstanding borrowings under our Canadian credit facilities as of June 30, 2026, commercial letters of credit outstanding were $0.4 million in Canadian dollars and available borrowing capacity was $13.6 million in Canadian dollars.
We have an Accounts Receivable Securitization Facility (the “AR Facility”) to reduce interest costs and improve cash flows from trade accounts receivable. Under the AR Facility we may sell or pledge trade accounts receivable as they are originated to a wholly owned bankruptcy remote special purpose entity. The maximum commitment amount under the AR Facility is $250.0 million. The total outstanding balance of trade accounts receivable that have been sold and derecognized is $213.5 million as of June 30, 2026. In addition, no trade accounts receivable have been pledged as of June 30, 2026. As of June 30, 2026, we had $36.5 million of available capacity under the AR Facility.
In order to maintain sufficient liquidity, we evaluate our working capital requirements on a regular basis. We may elect to raise additional capital by issuing common stock, convertible notes, term debt or increasing the borrowing capacity under our credit facilities as necessary to fund our operations or to fund the acquisition of new businesses.
Our cash and cash equivalents totaled $218.2 million as of June 30, 2026, compared to $535.5 million as of December 31, 2025. We anticipate that our cash and investments on hand, existing borrowing capacity under our credit facilities, access to and capacity under a shelf registration statement, and our future cash flows from operations will provide sufficient funds to enable us to meet our operating needs, our planned capital expenditures, and settle our commitments and contingencies for the next twelve months and the foreseeable future.
The construction industry is capital intensive, and we expect to continue to make capital expenditures to meet anticipated needs for our services. During the six months ended June 30, 2026, we spent approximately $50.3 million for capital expenditures, which included $28.4 million for construction equipment and $13.1 million on our facilities. Capital expenditures for the remaining six months of 2026 are expected to total between $70.0 million and $90.0 million, which includes $60.0 million to $80.0 million for equipment.
Cash Flows
Cash flows during the six months ended June 30, 2026 and 2025 are summarized as follows (in millions):
Six Months Ended June 30,
2026 2025
Change in cash:
Net cash (used in) provided by operating activities $ (131.3) $ 144.6
Net cash used in investing activities (431.2) (59.1)
Net cash provided by (used in) financing activities 244.6 (151.7)
Effect of exchange rate changes 0.5 1.0
Net change in cash, cash equivalents and restricted cash $ (317.4) $ (65.2)
Operating Activities
The cash flows provided by operating activities for the six months ended June 30, 2026 and 2025, were as follows (in millions):
Six months ended
June 30,
2026 2025 Change
Operating Activities:
Net (loss) income $ (6.7) $ 128.6 $ (135.3)
Depreciation and amortization 54.4 43.9 10.5
Changes in assets and liabilities (181.9) (29.5) (152.4)
Gain on sale of property and equipment (9.0) (9.9) 0.9
Other 11.9 11.5 0.4
Net cash (used in) provided by operating activities $ (131.3) $ 144.6 $ (275.9)
Net cash used in operating activities for the six months ended June 30, 2026 was $131.3 million compared to $144.6 million cash provided by operating activities for the six months ended June 30, 2025. The change year-over-year was primarily due to the unfavorable impact from the changes in assets and liabilities and a decrease in net income.
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The significant components of the $181.9 million change in assets and liabilities for the six months ended June 30, 2026 are summarized as follows:
● Accounts payable and accrued liabilities decreased by $129.6 million primarily due to the timing of our payments to vendors;
● Contract liabilities decreased $23.7 million, primarily due to lower deferred revenue;
● Accounts receivable increased by $20.0 million, primarily due to the timing of collecting from our customers; and
● Contract assets decreased by $24.2 million, primarily due to the timing of billing our customers.
The significant components of the $29.5 million change in assets and liabilities for the six months ended June 30, 2025 are summarized as follows:
● Accounts payable and accrued liabilities increased by $271.7 million primarily due to revenue growth and the timing of our payments to vendors;
● Contract liabilities increased $56.8 million, primarily due to higher deferred revenue;
● Accounts receivable increased by $185.8 million, primarily due to increased revenue and the timing of
collecting from our customers;
● Contract assets increased by $145.9 million, primarily due to increased revenue and the timing of billing our customers; and
● Other current assets increased by $31.7 million, primarily due to the prepayment of insurance premiums and an increase in prepaid material purchases related to our solar projects.
Investing activities
For the six months ended June 30, 2026, cash used in investing activities was $431.2 million compared to $59.1 million for the six months ended June 30, 2025.
During the six months ended June 30, 2026, we used $401.4 million for the acquisition of PayneCrest.
During the six months ended June 30, 2026, we purchased property and equipment for $50.3 million compared to $73.7 million during the same period in the prior year. We believe the ownership or long-term leasing of equipment is generally preferable to renting equipment on a project-by-project basis, as this strategy helps to ensure the equipment is available for our projects when needed. In addition, this approach has historically resulted in lower overall equipment costs.
We periodically sell assets, typically to update our fleet. We received proceeds from the sale of assets of $12.5 million during the six months ended June 30, 2026, compared to $14.6 million during the same period in the prior year.
Financing activities
Financing activities provided cash of $244.6 million for the six months ended June 30, 2026, which was primarily due to the following:
● Proceeds from the issuance of debt of $411.8 million;
● Payments on our AR Facility of $62.5 million;
● Purchase of common stock of $50.0 million;
● Payments on long-term debt of $21.0 million;
● Payments related to tax withholding for stock-based compensation of $19.8 million; and
● Dividend payments to our stockholders of $8.7 million.
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Financing activities used cash of $151.7 million for the six months ended June 30, 2025, which was primarily due to the following:
● Payments of long-term debt of $182.7 million, including $150.0 million of additional principal payments on our Term Loan;
● Payments related to tax withholding for stock-based compensation of $10.2 million;
● Dividend payments to our stockholders of $8.6 million; and
● Borrowings on our AR Facility of $50.0 million.
Credit Agreements
For a description of our credit agreements, see Note 8 — “Credit Arrangements” in Item 1, Financial Statements of this Second Quarter 2026 Report.
Common stock
For a discussion of items affecting our common stock, please see Note 11 — “Stockholders’ Equity” in Item 1, Financial Statements of this Second Quarter 2026 Report.
Off-balance sheet transactions
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. We have no off-balance sheet financing arrangement with Variable Interest Entities. The following represents transactions, obligations or relationships that could be considered material off-balance sheet arrangements.
● As of June 30, 2026, we had letters of credit outstanding of $9.7 million under the terms of our credit agreements. These letters of credit are used by our insurance carriers to ensure reimbursement for amounts that they are disbursing on our behalf, such as beneficiaries under our self-funded insurance program. In addition, from time to time, certain customers require us to post a letter of credit to ensure payments to our subcontractors or guarantee performance under our contracts. Letters of credit reduce our borrowing availability under our Credit Agreement and our Canadian credit facilities. If these letters of credit were drawn on by the beneficiary, we would be required to reimburse the issuer of the letter of credit, and we may be required to record a charge to earnings for the reimbursement. As of the date of this Second Quarter 2026 Report, we do not believe that it is likely that any material claims will be made under a letter of credit;
● In the ordinary course of our business, we may be required by our customers to post surety bid or payment/performance bonds in connection with services that we provide. As of June 30, 2026, we had bid and payment/performance bonds issued and outstanding totaling approximately $9.3 billion. The remaining performance obligation on those bonded projects totaled approximately $1.9 billion as of June 30, 2026. As of the date of this Second Quarter 2026 Report, we do not anticipate that we would have to fund any material claim under our surety arrangements;
● Certain of our subsidiaries are parties to collective bargaining agreements with unions. In most instances, these agreements require that we contribute to multi-employer pension and health and welfare plans. For many plans, the contributions are determined annually and required future contributions cannot be determined since contribution rates depend on the total number of union employees and actuarial calculations based on the demographics of all participants. The Employee Retirement Income Security Act of 1974 (“ERISA”), as amended by the Multi-Employer Pension Amendments Act of 1980, subjects employers to potential liabilities in the event of an employer’s complete or partial withdrawal of an underfunded multi-employer pension plan. The Pension Protection Act of 2006 added new funding rules that are classified as “endangered”, “seriously endangered”, or “critical” status. Withdrawal liabilities or requirements for increased future contributions could negatively impact our results of operations and liquidity;
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● We enter into employment agreements with certain employees which provide for compensation and benefits under certain circumstances and which may contain a change of control clause. We may be obligated to make payments under the terms of these agreements; and
● From time to time, we make other guarantees, such as guaranteeing the obligations of our subsidiaries.
Effects of Inflation, Tariffs and Changing Prices
Our operations are affected by increases in prices, whether caused by inflation, tariffs or other economic factors. We attempt to recover anticipated increases in the cost of labor, equipment, fuel and materials through price escalation provisions that allow us to adjust billing rates for certain major contracts annually; by considering the estimated effect of such increases when bidding or pricing new work; or by entering into back-to-back contracts with suppliers and subcontractors. However, the annual adjustment provided by certain contracts is typically subject to a cap and there can be an extended period of time between the impact of inflation on our costs and when billing rates are adjusted. In some cases, our actual cost increases have exceeded the contractual caps, and therefore negatively impacted our operations. As a result, we consider the potential impacts of inflation when negotiating contracts with our customers.