Primoris Services (NYSE:PRIM) FY Conference March 24, 2026 11:30 AM ET Company ParticipantsAnthony Vorderbruggen - Head of RenewablesBlake Holcomb - VP of Investor RelationsTravis Stricker - Chief Accounting Officer and Senior VP of FinanceConference Call ParticipantsPhil Shen - Managing Director and Senior Research AnalystNone - AnalystPhil ShenOkay, let's get it going. Up next we have Primoris, Anthony Vorderbruggen. He is the head of renewables at the company. We also have Blake Hutchkin.Anthony Vorderbr ...

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Company Overview - Primoris is a leading specialty contractor in the engineering and construction sector, primarily operating in North America, focusing on essential infrastructure solutions for utilities, energy, and pipeline clients [6] - The company has a market capitalization of $8.77 billion, with a trailing twelve months (TTM) revenue of $7.46 billion and a net income of $277.14 million [4] Recent Financial Performance - Primoris reported a revenue of approximately $7.6 billion for 2025, representing a 19% increase compared to the previous year, with fourth-quarter revenue of $1.9 billion [7] - Adjusted EBITDA for the year increased by 22% to $531 million [7] Stock Performance and Investor Actions - Shares of Primoris have surged over 120% in the past year, significantly outperforming the S&P 500's nearly 20% return during the same period [8] - Goodlander Investment Management sold all 275,000 shares of Primoris, resulting in a net position value drop of $37.77 million, indicating a potential portfolio rebalancing rather than a rejection of the company [2][10] Market Context - The exit from Primoris by Goodlander Investment Management may reflect a strategy to lock in gains after a substantial stock price increase, while the firm continues to hold several other infrastructure-related investments [8][10] - Primoris remains well-positioned within a strong infrastructure spending cycle, despite the elevated expectations following its stock rally [10]

Core Viewpoint - The analyst maintains a buy rating for Primoris Services Corporation (PRIM) due to strong demand and no identified fundamental weaknesses in the company [1] Company Analysis - The investment approach is fundamentally driven, focusing on identifying businesses with potential for scaling and unlocking significant terminal value [1] - Key factors considered include competitive moat, unit economics, reinvestment runway, and management quality, which are essential for long-term free cash flow generation and shareholder value creation [1] Investment Philosophy - The analyst emphasizes the importance of fundamental research and targets sectors with strong secular tailwinds [1] - The motivation for sharing insights on Seeking Alpha is to provide valuable investment analysis and receive feedback from other investors [1]

Demand Environment - Company projects power demand could grow by 50% over the next decade and potentially double over the next 15 years, driven by data centers, electrification, and on-shoring [1] - Largest utility customers' average CapEx plans suggest about a 50% increase in spending over the next five years compared to the prior five years, focusing on replacing aging infrastructure, hardening the grid, and expanding capacity [1] Company Performance - Primoris reported record revenue, earnings, and backlog for Q4 and full-year 2025, with a backlog exceeding $11.9 billion and Q4 revenue of nearly $1.9 billion [3][6] - The company expanded its workforce by over 2,800 people in 2025, driven by growth in renewables and power delivery [6][8] - Fourth-quarter revenue increased by about 7% year over year, with utility revenue rising nearly $34 million and energy revenue increasing by $88 million [9][10][13] Segment Insights - Utility segment gross margin was 10.5%, down from 12.1%, primarily due to a decrease in storm work in power delivery [11] - Energy segment gross margin fell to 8.5% from 9.5%, attributed to cost overruns on certain renewables projects [13] - Renewables revenue grew over 50% in 2025, with more than $500 million pulled forward from 2026 due to customer-driven resequencing [14] 2026 Guidance - Management guided adjusted EPS of $5.80–$6.00 and adjusted EBITDA of $560–$580 million for 2026, with full-year utility and energy gross margins expected at about 10%–12% [5][17][20] - Company expects to enter 2026 net cash positive with $536 million cash against $470 million long-term debt [19] Project Management and Challenges - Cost overruns in two adjacent renewables projects were due to underestimated geotech/rock conditions, leading to increased project leadership and expectations for margin recovery through 2026 [4][15] - Management has increased investment in project leadership and has a good understanding of remaining work to complete on affected projects [15][16] Capital Allocation and Strategy - Company plans disciplined internal investment in people, systems, and tools to improve execution and margin predictability, along with potential acquisitions to accelerate growth [21]

Financial Data and Key Metrics Changes - The fourth quarter revenue was almost $1.9 billion, an increase of $116.4 million or almost 7% compared to the prior year, driven by growth in both the Energy and Utility segments [26] - Gross profit for the fourth quarter declined by $9.6 million, or approximately 5% to $175 million, with overall gross margins at 9.4%, compared to 10.6% in the prior year [26][27] - For the full year 2025, revenue was up $1.2 billion to almost $7.6 billion, primarily driven by double-digit growth in both segments [28][29] Business Line Data and Key Metrics Changes - In the Utility segment, revenue was up over 10% from the prior year, driven by growth across all business lines, with gas operations and power delivery leading the growth [30] - The Energy segment revenue grew almost 25%, primarily driven by renewables, partially offset by lower industrial and pipeline revenue [17][28] - Renewables grew over 50% in 2025, with significant revenue pulled forward into 2025 due to project resequencing [31] Market Data and Key Metrics Changes - The total backlog at year-end was over $11.9 billion, with total MSA backlog up over 20% compared to the prior year [35] - The average increase in CapEx by the largest utility customers suggests a 50% increase in spending over the next five years compared to the previous five years [11] - The demand for power generation is projected to grow by 50% over the next decade, driven by data centers and increased electrification [10][11] Company Strategy and Development Direction - The company aims to improve margins, generate cash flow, and be the best allocators of capital in the industry, focusing on attracting and retaining talent [39] - There is a commitment to investing in people and systems to enhance execution efficiency and improve gross margins [87] - The company is positioned to assist clients in generating power and providing transmission and distribution solutions to meet growing demand [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong end markets and the company's ability to adapt to changes, emphasizing the importance of relationships with clients [62] - The company expects to see improvements in margins and cash flow in 2026, with a focus on executing projects effectively [22][37] - Management highlighted the importance of maintaining a strong balance sheet to support growth and pursue acquisitions [35][88] Other Important Information - The company increased its labor force by more than 2,800 people in 2025 to meet client needs [13] - The company plans to invest in a new facility for its Premier PV business line in 2026 to increase capacity and align with customer demand [24] Q&A Session Questions and Answers Question: On the gas generation business, how much of the $1.5 billion-$2 billion bidding activity might convert to revenues in 2026 and 2027? - Management indicated that the funnel of opportunities in gas generation is solid, with a meaningful burn expected in 2026, and a line of sight to nearly $6 billion in opportunities [41][42] Question: Can you share more on the challenges faced in renewables and what changes have been made to avoid them in the future? - Management acknowledged underestimating geotechnical conditions in certain projects, leading to cost overruns, and emphasized investments in project leadership to mitigate future issues [45][47] Question: What is the focus on execution moving into 2026? - Management highlighted the importance of better estimating, project controls, and change management as key areas to improve execution across the enterprise [52][53] Question: What is the coverage on guidance and what areas need more bookings to hit targets? - Management expressed confidence in their guidance, noting that while strong backlog supports it, additional bookings in pipeline projects are still needed [56][58] Question: Can you discuss the opportunities in the utility side, especially in Texas? - Management noted Texas as a fertile location for energy markets, with strong relationships and opportunities for power generation and data center clients [61][62]

Financial Data and Key Metrics Changes - Q4 revenue was almost $1.9 billion, an increase of $116.4 million or almost 7% compared to the prior year, driven by growth in both the Energy and Utility segments [26] - Gross profit for Q4 declined by $9.6 million, or approximately 5% to $175 million, with overall gross margins in Q4 at 9.4%, compared to 10.6% in the prior year [26] - For the full year 2025, revenue was up $1.2 billion to almost $7.6 billion, primarily driven by double-digit growth in both segments [28] Business Line Data and Key Metrics Changes - In the Utility segment, revenue was up nearly $34 million compared to the prior year, driven by increased gas operations and power delivery activity [26] - Energy segment revenue increased by $88 million compared to the prior year, primarily due to growth in renewables, partially offset by lower industrial and pipeline revenue [27] - Renewables grew over 50% in 2025, with over $500 million of revenue pulled forward into 2025 from 2026 due to project resequencing [31] Market Data and Key Metrics Changes - The total backlog at year-end was over $11.9 billion, with total MSA backlog up over 20% compared to the prior year [35] - The average increase in CapEx by the largest utility customers suggests around a 50% increase in spending over the next five years compared to the previous five years [11] - The demand for trusted, experienced, and quality contractors is increasing, particularly in solar, natural gas generation, and power delivery [9] Company Strategy and Development Direction - The company aims to improve margins, generate cash flow, and be the best allocators of capital in the industry [39] - There is a focus on attracting, retaining, training, and developing employees to meet the ambitious goals of clients and community shareholders [12] - The company plans to invest in a new facility for its eBOS business in 2026 to increase capacity and align with customer demand [24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong end markets and the company's ability to support the growing demand for energy infrastructure [39] - The company expects earnings per fully diluted share to be between $5.35 and $5.55 for 2026, with adjusted EBITDA guidance of $560 million to $580 million [36] - Management acknowledged operational challenges in 2025 but believes margins will improve in 2026 as excess costs are addressed [22] Other Important Information - The company increased its labor force by more than 2,800 people in 2025 to meet client needs [13] - The company ended the year with cash of $536 million, up from $456 million at the end of 2024, indicating a strong balance sheet [34] - The company is committed to leveraging its SG&A cost base to improve operating margins and expects SG&A to be in the mid to high 5% range for 2026 [32] Q&A Session Summary Question: On the gas generation business, how much of the $1.5 billion-$2 billion bidding activity might convert to revenues in 2026 and 2027? - Management indicated that the funnel of opportunities in gas generation is solid, with a meaningful burn expected in 2026 [42] Question: Can you share more on the challenges faced in renewables and what changes have been made to avoid them in the future? - Management acknowledged underestimating geotechnical conditions and has invested in project leadership to improve execution and mitigate future issues [47] Question: How much of a focus is execution for the company moving into 2026? - Management emphasized that execution will be a focus area across the enterprise, with improvements in estimating, project controls, and change management [53] Question: What is the expected growth in renewables for 2026? - Management expressed confidence in continued growth in renewables, with significant bookings in Q4 indicating a strong market [73] Question: Can you provide guidance on Q1 energy margins? - Management expects Q1 energy margins to be at the lower end of the 10% - 12% range as they work through lower-margin projects [77]

Financial Data and Key Metrics Changes - The fourth quarter revenue was almost $1.9 billion, an increase of $116.4 million or almost 7% compared to the prior year, driven by growth in both the Energy and Utility segments [25] - Gross profit for the fourth quarter declined by $9.6 million, or approximately 5% to $175 million, with overall gross margins at 9.4%, down from 10.6% in the prior year [25][26] - For the full year 2025, revenue was up $1.2 billion to almost $7.6 billion, primarily driven by double-digit growth in both segments [27] Business Line Data and Key Metrics Changes - In the Utility segment, revenue was up $253 million or a little over 10% from the prior year, driven by growth across all business lines, particularly in gas operations and power delivery [28] - The Energy segment revenue grew almost 25%, primarily driven by renewables, partially offset by a challenging year in pipeline services [16] - Renewables grew over 50% in 2025, with significant revenue pulled forward into 2025 due to project resequencing [29] Market Data and Key Metrics Changes - The company finished the year with over $11.9 billion in total backlog, including nearly $3 billion of new work booked in the final quarter [9][33] - The average increase in CapEx by the largest utility customers suggests around a 50% increase in spending over the next five years compared to the previous five years [10] - The demand for trusted, experienced, and quality contractors is increasing, particularly in solar, natural gas generation, and power delivery [7] Company Strategy and Development Direction - The company is focused on attracting, retaining, training, and developing its workforce to meet the ambitious goals of clients and community shareholders [11] - Primoris aims to improve margins, generate cash flow, and be the best allocators of capital in the industry [37] - The company plans to invest in a new facility for its Premier PV business line in 2026 to increase capacity and align with customer demand [23] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth of power demand, projecting a potential 50% increase over the next decade [9] - The company is optimistic about pipeline activity accelerating due to rising natural gas needs and a favorable regulatory environment [16] - Management acknowledged operational challenges in 2025 but expects margins to improve in 2026 as excess costs are addressed [20] Other Important Information - The company increased its labor force by more than 2,800 people in 2025 to meet client needs [12] - SG&A expenses in the fourth quarter were just over $97 million, essentially flat compared to the prior year, with a full-year SG&A of 5.3% of revenue, down from 6% [29] - The effective tax rate in 2025 was 28.4%, with expectations of 29% for 2026 [31] Q&A Session Summary Question: Gas generation business bidding activity - Management indicated that the $1.5 billion-$2 billion bidding activity would have a meaningful burn in 2026, with a strong end market and capital expenditure [40][41] Question: Challenges in renewables projects - Management explained that challenges arose from underestimating geotechnical conditions, leading to cost overruns, but confidence was expressed in remedial measures taken [44][45] Question: Execution focus for 2026 - Management emphasized the importance of execution efficiency, better estimating, and project controls as key areas for improvement [50][51] Question: Guidance coverage and backlog - Management stated that while strong backlog supports guidance, additional bookings are needed, particularly in pipeline projects [52][54] Question: Utility segment developments - Management highlighted Texas as a fertile location for energy markets, with strong relationships and opportunities for power generation and data center clients [60][61] Question: Growth in renewables for 2026 - Management expressed confidence in continued growth in renewables, particularly in battery storage combined with solar modules [70][71]

This presentation contains forward-looking statements within the meaning of the federal securities laws. These statements give the current expectations of the Company's management. Words such as "anticipates", "believes", "could", "estimates", "expects", "intends", "may", "plans", "potential", "predicts", "projects", "should", "will", "would" and similar expressions are used to identify forward-looking statements. Without limiting the generality of the foregoing, forward-looking statements contained in this ...

分组1 - Primoris Services reported quarterly earnings of $1.08 per share, exceeding the Zacks Consensus Estimate of $0.95 per share, but down from $1.13 per share a year ago, resulting in an earnings surprise of +13.68% [1] - The company achieved revenues of $1.86 billion for the quarter ended December 2025, surpassing the Zacks Consensus Estimate by 9.59% and increasing from $1.74 billion year-over-year [2] - Primoris Services has consistently outperformed consensus EPS and revenue estimates over the last four quarters [2] 分组2 - The stock has gained approximately 36.4% since the beginning of the year, significantly outperforming the S&P 500's gain of 0.9% [3] - The current consensus EPS estimate for the upcoming quarter is $0.85 on revenues of $1.71 billion, and for the current fiscal year, it is $5.88 on revenues of $8.01 billion [7] - The Zacks Industry Rank for Building Products - Heavy Construction is in the bottom 41% of over 250 Zacks industries, indicating potential challenges for stock performance [8]