Core Points - Everus Construction Group will release its third quarter 2025 results on November 4, after market close, followed by a webcast on November 5 at 10:30 a.m. EST to discuss the financial results and recent events [1][2] Company Overview - Everus Construction Group, Inc. is a member of the S&P SmallCap 600® index, providing a full spectrum of construction services across the United States, including electrical and mechanical contracting, and transmission and distribution services [3] Financial Performance - The company reported second quarter 2025 revenues of $921.5 million, representing a 31.0% increase year-over-year. Net income for the same period was $52.8 million, up 35.4%, with a net income margin of 5.7% [7]

Core Insights - Everus Construction Group's stock price has more than doubled in the last seven months due to its customer base, which includes electric utilities experiencing growth spurts [1] Company Overview - Everus Construction Group operates as a contractor in two segments: Electrical & Mechanical [1] - The company has a beneficial long position in its shares, indicating confidence in its future performance [1] Industry Context - The growth of electric utilities is a significant factor contributing to the success of Everus Construction Group [1] - The founder and CEO of Starks Energy Economics, LLC, Laura Starks, has extensive experience in the energy sector, covering various segments including utilities and energy service companies [1]

Core Insights - Everus Construction Group, Inc. (ECG) has shown strong year-to-date performance, gaining approximately 33.5% compared to the average return of 4.1% for the Construction sector [4] - ECG currently holds a Zacks Rank of 1 (Strong Buy), indicating positive analyst sentiment and a favorable earnings outlook [3][4] - The Zacks Consensus Estimate for ECG's full-year earnings has increased by 16.2% over the past quarter, reflecting improved analyst expectations [4] Company Performance - ECG is one of 92 stocks in the Construction sector, which ranks 15 in the Zacks Sector Rank [2] - Within the Building Products - Miscellaneous industry, ECG is outperforming its peers, as this industry has only gained about 1.3% year-to-date [6] - Another notable stock in the Construction sector, Frontdoor (FTDR), has also outperformed with a year-to-date return of 19.5% and a Zacks Rank of 2 (Buy) [5][6] Analyst Sentiment - The Zacks Rank system emphasizes earnings estimates and revisions, which has positively influenced ECG's ranking and performance [3] - The improvement in ECG's earnings outlook is supported by a significant increase in the consensus EPS estimate over the last three months [5][4]

Middle Coast Investing, an investment advisor firm, released its third-quarter 2025 investor letter. A copy of the letter can be downloaded here. The third quarter was favorable for Middle Coast Investing. Its collective portfolio outperformed the S&P 500 and is ahead of benchmarks year to date. In Q3 2025, the US Portfolios returned 9.6% compared to 7.8% for the S&P 500. It’s Core U.S. portfolios returned 10% while the Russell 2000 returned 12%, the S&P 600 returned 8.7% and the Nasdaq generated 11.2% for ...

Group 1 - Everus Construction Group, Inc. (ECG) is currently ranked 13 in the Zacks Sector Rank among 88 companies in the Construction group [2] - ECG has a Zacks Rank of 1 (Strong Buy), indicating a positive earnings outlook based on earnings estimates and revisions [3] - The Zacks Consensus Estimate for ECG's full-year earnings has increased by 15.4% in the past quarter, reflecting stronger analyst sentiment [4] Group 2 - ECG has returned approximately 19.9% year-to-date, outperforming the average return of 5.5% for Construction companies [4] - ECG belongs to the Building Products - Miscellaneous industry, which is ranked 146 in the Zacks Industry Rank, with an average gain of 0.6% this year [6] - In comparison, MasTec (MTZ), another Construction stock, has returned 42% year-to-date and belongs to the Building Products - Heavy Construction industry, currently ranked 4 with a year-to-date increase of 34.1% [5][7]

Group 1 - Everus Construction Group, Inc. (ECG) is outperforming its peers in the Construction sector with a year-to-date return of approximately 19.3%, compared to the sector average of 6.6% [4] - ECG currently holds a Zacks Rank of 1 (Strong Buy), indicating a favorable outlook based on earnings estimate revisions and improving earnings outlooks [3] - The Zacks Consensus Estimate for ECG's full-year earnings has increased by 15.4% over the past quarter, reflecting improved analyst sentiment [4] Group 2 - ECG is part of the Building Products - Miscellaneous industry, which has seen an average gain of 2% year-to-date, indicating that ECG is performing better than its industry peers [6] - MasTec (MTZ), another Construction stock, has returned 33.5% since the beginning of the year and also holds a Zacks Rank of 1 (Strong Buy) [5] - The Building Products - Heavy Construction industry, to which MasTec belongs, is currently ranked 7 and has increased by 31.1% year-to-date [6]

Group 1: Everus Construction Group, Inc. (ECG) - Everus Construction provides a full spectrum of construction services, focusing on electrical, mechanical, and transmission and distribution specialty contracting services primarily in the United States [1] - The company has a Zacks Rank of 1 (Strong Buy) and has seen a Zacks Consensus Estimate for current year earnings increase by 8.3% over the last 60 days [1] - Everus Construction's shares have gained 23% over the last three months, outperforming the S&P 500's gain of 9.3%, and it possesses a Momentum Score of A [2] Group 2: nVent Electric (NVT) - nVent Electric specializes in electrical connection and protection solutions, including design, manufacturing, marketing, installation, and servicing [3] - The company holds a Zacks Rank of 1 and has experienced a 6.5% increase in the Zacks Consensus Estimate for current year earnings over the last 60 days [3] - nVent Electric's shares have increased by 34.7% over the last three months, significantly outperforming the S&P 500's gain of 9.3%, and it has a Momentum Score of B [3] Group 3: Harrow, Inc. (HROW) - Harrow is an eyecare pharmaceutical company focused on the discovery, development, and commercialization of innovative ophthalmic pharmaceutical products primarily for the U.S. market [4] - The company has a Zacks Rank of 1 and has seen a substantial increase of 47.4% in the Zacks Consensus Estimate for current year earnings over the last 60 days [4] - Harrow's shares have surged by 56.2% over the last three months, greatly exceeding the S&P 500's gain of 9.3%, and it possesses a Momentum Score of B [4]

Group 1 - Babcock International Group PLC (BCKIY) is currently outperforming its peers in the Construction sector, with a year-to-date gain of approximately 121.4% compared to the sector average of 8.9% [4] - The company holds a Zacks Rank of 2 (Buy), indicating a positive analyst sentiment and a stronger earnings outlook, with a 3.7% increase in the consensus estimate for full-year earnings over the past 90 days [3] - Babcock International Group PLC is part of the Engineering - R and D Services industry, which has an average gain of 10.4% this year, further highlighting BCKIY's superior performance [6] Group 2 - The Construction sector includes 88 individual stocks and has a Zacks Sector Rank of 11, indicating its relative performance compared to other sectors [2] - Another notable stock in the Construction sector is Everus Construction Group, Inc. (ECG), which has gained 14.5% year-to-date and holds a Zacks Rank of 1 (Strong Buy) [4][5] - The Building Products - Miscellaneous industry, to which Everus belongs, has a current Zacks Industry Rank of 89 and has moved +10.1% this year [7]

Part I — Financial Information [Item 1. Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements.) The company reported significant year-over-year growth in revenues and net income for the three and six months ended June 30, 2025. Total assets increased to **$1.48 billion** from **$1.29 billion** at year-end 2024, driven by higher receivables and contract assets. Net cash provided by operating activities improved substantially to **$32.5 million** for the first six months of 2025, compared to **$3.7 million** in the prior year period, reflecting higher net income Condensed Consolidated Statements of Income (Unaudited) | | Three months ended June 30, | Six months ended June 30, | | :--- | :--- | :--- | | (In thousands, except per share amounts) | **2025** | **2024** | **2025** | **2024** | | **Operating revenues** | $921,466 | $703,373 | $1,748,095 | $1,329,062 | | **Gross profit** | $119,869 | $88,577 | $212,362 | $163,294 | | **Operating income** | $72,507 | $51,309 | $123,491 | $90,193 | | **Net income** | $52,843 | $38,972 | $89,515 | $67,186 | | **Diluted EPS** | $1.03 | $0.76 | $1.75 | $1.32 | Condensed Consolidated Balance Sheet Highlights (Unaudited) | (In thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total current assets** | $1,089,026 | $917,229 | | **Total assets** | $1,481,377 | $1,288,463 | | **Total current liabilities** | $614,314 | $513,370 | | **Total liabilities** | $966,968 | $865,851 | | **Total stockholders' equity** | $514,409 | $422,612 | Condensed Consolidated Statements of Cash Flows Highlights (Unaudited) | (In thousands) | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $32,470 | $3,751 | | **Net cash used in investing activities** | ($25,686) | ($11,496) | | **Net cash provided by (used in) financing activities** | ($8,088) | $6,500 | | **Decrease in cash, cash equivalents and restricted cash** | ($1,304) | ($1,245) | [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes detail the company's operations, its recent separation from MDU Resources, and key accounting policies. Revenue is primarily driven by the Electrical & Mechanical (E&M) and Transmission & Distribution (T&D) segments, with significant growth in the E&M segment's commercial customer base. The company has a **$300 million** term loan and a **$225 million** revolving credit facility established post-separation. As of June 30, 2025, remaining performance obligations (backlog) stood at **$2.68 billion**. The company also discloses significant off-balance sheet arrangements, including surety bonds and performance guarantees - The company operates through two reportable segments: Electrical & Mechanical (E&M) and Transmission & Distribution (T&D)[29](index=29&type=chunk)[30](index=30&type=chunk) - The company completed its separation from MDU Resources on October 31, 2024, and is now an independent publicly traded company under the ticker 'ECG'. Financials for periods prior to the separation were prepared on a 'carve-out' basis[32](index=32&type=chunk)[33](index=33&type=chunk)[35](index=35&type=chunk) Remaining Performance Obligations (Backlog) as of June 30, 2025 | (In thousands) | Within 12 months | Greater than 12 months | | :--- | :--- | :--- | | **Electrical & Mechanical** | $1,944,794 | $392,232 | | **Transmission & Distribution** | $266,529 | $73,500 | | **Total** | **$2,211,323** | **$465,732** | - As of June 30, 2025, the company had **$292.5 million** outstanding on its term loan and a borrowing capacity of **$209.4 million** under its revolving credit facility[106](index=106&type=chunk)[108](index=108&type=chunk) - The company has significant off-balance sheet commitments, including potential maximum payments under surety bonds of approximately **$739.2 million** and job performance guarantees of **$659.8 million** as of June 30, 2025[165](index=165&type=chunk)[166](index=166&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=34&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations.) Management attributes the strong Q2 2025 performance to significant growth in the Electrical & Mechanical (E&M) segment, driven by data center and hospitality projects. Operating revenues increased **31.0%** to **$921.5 million**, and net income rose **35.4%** to **$52.8 million** year-over-year for the quarter. The company's backlog grew to **$2.98 billion**. Liquidity remains strong with **$209.4 million** available under the revolving credit facility. Management expects full-year 2025 capital expenditures to be between **$65.0 million** and **$70.0 million** - The company sees strong project opportunities, particularly for data center, underground, and hospitality work, driven by high tech reshoring and utility infrastructure investments[189](index=189&type=chunk) Consolidated Results of Operations - Q2 Comparison | (In millions) | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | **Operating revenues** | $921.5 | $703.3 | 31.0% | | **Gross profit** | $119.9 | $88.5 | 35.5% | | **Operating income** | $72.5 | $51.3 | 41.3% | | **Net income** | $52.8 | $39.0 | 35.4% | - The E&M segment was the primary growth driver, with revenues increasing **41.6%** in Q2 2025, largely due to higher activity in the commercial end market (data centers, hospitality)[202](index=202&type=chunk)[203](index=203&type=chunk) Backlog Trend | (In millions) | June 30, 2025 | Dec 31, 2024 | June 30, 2024 | | :--- | :--- | :--- | :--- | | **Total Backlog** | $2,978.2 | $2,780.6 | $2,403.4 | - Working capital increased to **$474.7 million** as of June 30, 2025, from **$403.9 million** at year-end 2024, supporting project growth[263](index=263&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=48&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk.) The company is exposed to market risks from interest rate changes, commodity price fluctuations, and inflation. The primary interest rate risk stems from its **$292.5 million** variable-rate term loan; a **1%** increase in the rate would raise annual interest expense by approximately **$2.9 million**. Commodity price volatility for materials like copper, aluminum, and steel, along with rising labor costs, could impact project profitability, though the company aims to mitigate these through pricing and efficiency strategies - The company has **$292.5 million** in variable-rate debt outstanding. A hypothetical **1%** increase in the interest rate would increase annual interest expense by approximately **$2.9 million**[284](index=284&type=chunk) - Operations are affected by fluctuations in commodity prices for materials such as copper, aluminum, and steel, as well as potential increases in labor costs due to inflation[285](index=285&type=chunk)[286](index=286&type=chunk) [Item 4. Controls and Procedures](index=49&type=section&id=Item%204.%20Controls%20and%20Procedures.) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures as of June 30, 2025. They concluded that these controls and procedures were effective at a reasonable assurance level. No material changes were made to the company's internal control over financial reporting during the second quarter of 2025 - The CEO and CFO concluded that as of June 30, 2025, the company's disclosure controls and procedures were effective at a reasonable assurance level[287](index=287&type=chunk) - There were no changes in internal control over financial reporting during the quarter that materially affected, or are reasonably likely to materially affect, these controls[288](index=288&type=chunk) Part II — Other Information [Item 1. Legal Proceedings](index=50&type=section&id=Item%201.%20Legal%20Proceedings.) The company reports no material changes to legal proceedings disclosed in its 2024 Annual Report. A previously filed securities class action lawsuit, Scofield v. Everus Construction Group, Inc., et al., which alleged false and misleading statements related to the company's backlog, was voluntarily dismissed on May 29, 2025 - A securities class action lawsuit filed on April 4, 2025, alleging misleading statements about the company's backlog, was voluntarily dismissed on May 29, 2025[292](index=292&type=chunk) - As of June 30, 2025, there were no other material changes to the legal proceedings disclosed in the company's 2024 Annual Report[291](index=291&type=chunk) [Item 1A. Risk Factors & Other Items](index=50&type=section&id=Item%201A.%20Risk%20Factors.) The company states there were no material changes to the risk factors previously disclosed in its 2024 Annual Report. Additionally, the report confirms no unregistered sales of equity securities, no defaults upon senior securities, and no new Rule 10b5-1 trading arrangements by directors or officers during the quarter - There were no material changes to the company's risk factors as of June 30, 2025, from those disclosed in the 2024 Annual Report[293](index=293&type=chunk) - The company reported no unregistered sales of equity securities or defaults on senior securities[294](index=294&type=chunk)[295](index=295&type=chunk)

Financial Data and Key Metrics Changes - The company's second quarter revenue increased by 31% to $921.5 million compared to the same period last year, driven by strong performance in both Electrical and Mechanical (E and M) and Transmission and Distribution (T and D) segments [6][15] - EBITDA for the second quarter rose by 36% to $84.2 million, with EBITDA margins improving to 9.1% from 8.8% in the prior year [7][16] - Total backlog at the end of the second quarter was $3 billion, up 24% year-over-year and 7% from the previous quarter [7][16] Business Line Data and Key Metrics Changes - E and M segment revenues increased by 42% to $713.6 million, with EBITDA rising by 53% to $63.7 million, resulting in an EBITDA margin of 8.9% [19] - T and D segment revenues grew by 3% to $212.4 million, with EBITDA increasing by 19% to $30.4 million, leading to an EBITDA margin of 14.3% [20] Market Data and Key Metrics Changes - The company noted strong demand trends in key end markets, particularly in data centers and hospitality, with favorable growth opportunities across various submarkets [11][36] - The utility end market showed strength, especially in the underground submarket, driven by increased spending plans from key customers [9][10] Company Strategy and Development Direction - The company aims for organic revenue growth of 5% to 7% compounded annually, with EBITDA growth of 7% to 9% on a compound annual basis [13] - The focus remains on attracting and retaining key talent to support growth objectives, with a record employment level achieved [12][30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to generate continued backlog growth, citing strong competitive positioning and favorable demand drivers [10][18] - The outlook for the second half of the year is tempered due to a higher mix of large projects in early stages, impacting margin visibility [23][26] Other Important Information - The company raised its 2025 guidance, forecasting revenues between $3.3 billion and $3.4 billion and EBITDA between $240 million and $255 million [22] - The company is focused on maintaining strong execution and anticipates potential upside as new projects progress [25] Q&A Session Summary Question: Capability to convert backlog and fill gaps with book and burn work - Management highlighted the importance of timing and resource planning, stating they are well positioned to support growth and continue adding headcount [28][30] Question: Weather impact on T and D and hospitality outlook - Management confirmed no weather impacts in the second quarter and noted an uptick in hospitality work in Las Vegas, although not yet at pre-pandemic levels [34][36] Question: Sustainability of gross margin improvements - Management attributed margin improvements to efficiency gains and prefab investments, emphasizing ongoing investments in prefab facilities [40][41] Question: Book to bill ratio and demand environment - Management indicated that the book to bill ratio was affected by backlog lumpiness, but expressed optimism about year-to-date performance [45][46] Question: Growth rates in the back half by segment - Management suggested that growth rates may be tempered in the second half due to tougher comparisons but expected T and D to maintain its growth rate [51][52] Question: Pipeline for M&A and inorganic growth - Management is actively pursuing M&A opportunities and expanding their pipeline, focusing on companies with strong reputations and commitment to safety [56][58] Question: Cash flow and working capital impact - Management expressed confidence in their ability to generate cash flow in the second half, despite increased working capital needs for new projects [60][61]