Tutor Perini(TPC) - 2025 Q2 - Quarterly Results

Executive Summary This section provides a high-level overview of Tutor Perini's strong second-quarter 2025 financial performance, key achievements, and updated EPS guidance Second Quarter 2025 Financial Performance Tutor Perini reported strong second-quarter 2025 results with significant year-over-year growth in revenue, income from construction operations, and EPS, driven by increased project execution on higher-margin projects across all segments Financial Performance Metrics (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | Change (Y/Y) | % Change (Y/Y) | | :-------------------------------- | :---------- | :---------- | :----------- | :------------- | | Revenue | $1.37 billion | $1.13 billion | +$0.24 billion | +22% | | Income from construction operations | $76.4 million | $40.5 million | +$35.9 million | +89% | | Net income attributable to Company | $20.0 million | $0.8 million | +$19.2 million | Substantial | | Diluted EPS | $0.38 | $0.02 | +$0.36 | Substantial | | Adjusted Net income attributable to Company | $75.1 million | $17.5 million | +$57.6 million | +329% | | Adjusted EPS | $1.41 | $0.34 | +$1.07 | +315% | - Revenue growth was solid across all three segments, with Civil and Building segments up 34% and 11% respectively. The Civil segment achieved its highest-ever revenue for both the second quarter and first six months of 2025[4] - Income from construction operations was negatively impacted by a $38.5 million increase in share-based compensation expense due to the doubling of the Company's stock price[5] Key Achievements and Records The company achieved record operating cash flow for both Q2 and the first six months of 2025, alongside a record backlog, reflecting strong operational performance and successful project acquisition Key Operational Metrics (Q2 and H1 2025) | Metric | Q2 2025 | H1 2025 | Y/Y Change (Q2) | Y/Y Change (H1) | | :-------------------------- | :---------- | :---------- | :-------------- | :-------------- | | Operating Cash Flow | $262.4 million | $285.3 million | Record | Record | | Backlog (as of Q2 2025 end) | $21.1 billion | N/A | +102% | N/A | - The record backlog includes $3.1 billion of new awards and contract adjustments secured in Q2 2025[6] 2025 EPS Guidance Update Tutor Perini raised its 2025 GAAP and Adjusted EPS guidance, reflecting increased confidence in its performance trajectory, and anticipates even higher EPS in 2026 and 2027 Updated 2025 EPS Guidance | Metric | Previous 2025 Guidance | New 2025 Guidance | | :---------------- | :--------------------- | :---------------- | | GAAP EPS | $1.60 to $1.95 | $1.70 to $2.00 | | Adjusted EPS | $2.45 to $2.80 | $3.65 to $3.95 | - The company expects both GAAP EPS and Adjusted EPS for 2026 and 2027 to exceed the upper end of its increased 2025 guidance[6] Operational and Financial Review This section details the company's record operating cash flow, substantial backlog growth, and significant balance sheet improvements, highlighting strong financial health and operational efficiency Operating Cash Flow Tutor Perini achieved record operating cash flow for both the second quarter and first six months of 2025, significantly increasing year-over-year, primarily due to strong collections from new and ongoing projects Operating Cash Flow (2025 vs 2024) | Period | 2025 Operating Cash Flow | 2024 Operating Cash Flow | Y/Y Change | | :-------------------- | :----------------------- | :----------------------- | :--------- | | Second Quarter | $262.4 million | $53.1 million | Significant increase | | First Six Months | $285.3 million | $151.4 million | Significant increase | - The record operating cash flow was largely driven by collections from newer and ongoing projects, and to a lesser extent, from recent dispute resolutions[7] - The company anticipates continued strong operating cash flow for the remainder of 2025[7] Record Backlog The company's backlog reached a new record of $21.1 billion as of June 30, 2025, driven by $3.1 billion in new awards and contract adjustments during the second quarter, reflecting successful bidding and favorable market conditions Backlog Metrics as of June 30, 2025 | Metric | Value | | :-------------------------------- | :------------ | | Backlog as of June 30, 2025 | $21.1 billion | | Y/Y increase in backlog | 102% | | Q/Q increase in backlog (vs Q1 2025) | 9% | | New awards and contract adjustments in Q2 2025 | $3.1 billion | - The record backlog was achieved due to a strategic bidding approach and favorable market dynamics, including limited competition for larger projects, supported by strong public funding and demand[8] - Backlog for the Civil and Specialty Contractors segments also set new records[8] Significant New Awards Key new awards and contract adjustments in Q2 2025 included a $1.87 billion Midtown Bus Terminal Replacement and a $538 million healthcare project, among others - Key new awards and contract adjustments in Q2 2025 included: * $1.87 billion Midtown Bus Terminal Replacement - Phase 1 project in New York * $538 million healthcare project in California * Two civil works projects in the Midwest valued at $127 million * $90 million additional funding for a mass-transit project in California * $54 million additional funding for another healthcare project in California[10] Significant Balance Sheet Improvements Tutor Perini made substantial improvements to its balance sheet, significantly reducing total debt and achieving a cash-exceeding-debt position for the first time since 2010, while also lowering its Costs and Estimated Earnings in Excess of Billings (CIE) Balance Sheet Highlights (June 30, 2025 vs December 31, 2024) | Metric | As of June 30, 2025 | As of December 31, 2024 | Change | | :------------------------------------------------ | :------------------ | :---------------------- | :----- | | Total Debt | $419 million | $534 million | Down 21% | | Cash vs. Total Debt | Cash exceeded debt by $107 million | N/A | First time since 2010 | | Costs and Estimated Earnings in Excess of Billings (CIE) | $856 million | N/A | Down $91 million (10%) vs Q1 2025 | | CIE Level | Lowest since Q2 2017 | N/A | N/A | - The reduction in CIE was primarily driven by the resolution and billing of various previously disputed matters[9] Management Remarks CEO Gary Smalley highlighted the exceptional second-quarter results, attributing strong revenue growth and profitability to the record backlog, which includes numerous larger, long-duration, and higher-margin projects in early stages. He expressed confidence in continued growth and profitability through 2025 and beyond, supported by record operating cash flow and increased earnings guidance - The strong revenue growth and profitability are being driven by the record backlog, which includes various larger, long-duration, and higher-margin projects, most of which are in early stages[11] - Management is confident that the record backlog will continue to drive higher revenue and strong profitability over the rest of 2025 and even more so in 2026 and 2027 as newer projects advance to construction[11] - The first six months of 2025 saw the highest first-half operating cash flow ever, reinforcing expectations for strong earnings and cash flow to continue[11] Outlook and Guidance This section outlines Tutor Perini's updated 2025 EPS guidance, long-term financial projections, and assessment of market demand and external factors influencing future performance Updated 2025 EPS Guidance Based on strong year-to-date results and increased confidence, Tutor Perini has raised its 2025 GAAP and Adjusted EPS guidance, incorporating a significant contingency for potential unknown outcomes Revised 2025 EPS Guidance | Metric | Previous 2025 Guidance | New 2025 Guidance | | :---------------- | :--------------------- | :---------------- | | GAAP EPS | $1.60 to $1.95 | $1.70 to $2.00 | | Adjusted EPS | $2.45 to $2.80 | $3.65 to $3.95 | - The increased guidance for 2025 continues to factor in a significant amount of contingency for various unknown or unexpected outcomes and developments[13] Long-Term Outlook The company anticipates continued strong operating performance and financial results through 2025, with significantly higher revenue and earnings projected for 2026 and 2027 as large projects advance - Significantly higher revenue and earnings are expected in 2026 and 2027 as various newer large projects advance to the construction phase[12] - Both GAAP EPS and Adjusted EPS for 2026 and 2027 are projected to be higher than the upper end of the increased 2025 guidance[13] Market Demand and External Factors Tutor Perini observes strong demand for its services from both public and commercial sectors, driven by infrastructure projects and new building developments, while monitoring external factors like tariffs - Strong demand for services is driven by well-funded state, local, and federal customers with large-scale, high-priority infrastructure projects, as well as commercial customers advancing projects in healthcare, education, hospitality, and gaming[14] - The company does not currently anticipate significant impact from recently imposed tariffs or federal funding curtailment but continues to monitor these issues[16] - Share-based compensation expense, while substantially increased in Q2 2025 due to stock price, is expected to decrease considerably in 2026 and further in 2027 once certain liability-classified awards vest[15] Non-GAAP Financial Measures This section explains the purpose and definition of non-GAAP financial measures, primarily adjusted net income and EPS, and provides detailed reconciliations to their GAAP equivalents Purpose and Definition Tutor Perini presents non-GAAP financial measures, specifically adjusted net income and adjusted EPS, to provide additional insights into its core operational performance by excluding the volatile impact of share-based compensation expense - Non-GAAP measures are intended to facilitate comparison of past and present performance, assess financial performance, forecast future performance, and enhance transparency for investors[17] - Share-based compensation expense is excluded because it can cause significant volatility in reported earnings, primarily due to fluctuations in the fair value of liability-classified awards indexed to the Company's common stock[19] - These non-GAAP measures are not necessarily comparable to similarly titled measures reported by other companies and should not be considered in isolation from or as a substitute for GAAP measures[20] Reconciliation of Non-GAAP Financial Measures The company provides a reconciliation of GAAP net income and EPS to adjusted net income and adjusted EPS for the three and six months ended June 30, 2025 and 2024, detailing the impact of share-based compensation expense Reconciliation of Net Income and EPS (Q2 and H1 2025 vs 2024) | (in millions, except per common share amounts) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income attributable to Tutor Perini Corporation, as reported | $20.0 | $0.8 | $48.0 | $16.6 | | Plus: Share-based compensation expense | 55.4 | 16.9 | 62.0 | 22.4 | | Less: Tax benefit provided on share-based compensation expense | (0.3) | (0.2) | (0.5) | (0.3) | | Adjusted net income attributable to Tutor Perini Corporation | $75.1 | $17.5 | $109.5 | $38.7 | | EPS, as reported | $0.38 | $0.02 | $0.90 | $0.31 | | Plus: Share-based compensation expense impact per diluted share | 1.04 | 0.32 | 1.17 | 0.43 | | Less: Tax benefit provided on share-based compensation expense per diluted share | (0.01) | (0.00) | (0.01) | (0.01) | | Adjusted EPS | $1.41 | $0.34 | $2.06 | $0.73 | - The substantial increase in share-based compensation expense for the three and six months ended June 30, 2025, compared to prior-year periods, was driven by the significant increase in the Company's stock price[23] Reconciliation of Non-GAAP Guidance A reconciliation is provided for the full year 2025 GAAP EPS guidance to Adjusted EPS guidance, detailing the estimated impact of share-based compensation expense Reconciliation of Full Year 2025 EPS Guidance | (in common share amounts) | Full Year 2025 | | :---------------------------------------------------------- | :------------- | | GAAP EPS guidance | $1.70 to $2.00 | | Plus: Share-based compensation expense impact per diluted share (estimated) | $1.97 | | Less: Tax benefit provided on share-based compensation expense per diluted share (estimated) | $(0.02) | | Adjusted EPS guidance | $3.65 to $3.95 | Company Information This section provides details on Tutor Perini's upcoming Q2 2025 conference call and an overview of the company's extensive experience and diversified construction services Second Quarter 2025 Conference Call Tutor Perini will host a conference call on August 6, 2025, to discuss its second-quarter 2025 results, with details provided for participation and webcast access - The conference call is scheduled for 2:00 PM Pacific Time on Wednesday, August 6, 2025[27] - Access details include dial-in numbers for domestic and international callers, and a live webcast available on www.tutorperini.com, with replay options[27][28] About Tutor Perini Corporation Tutor Perini Corporation is a leading civil, building, and specialty construction company with over a century of experience, offering diversified general contracting and design-build services globally, known for executing large, complex projects - The company provides general contracting, pre-construction planning, and comprehensive project management services, with expertise in design-bid-build, design-build, construction management, and public-private partnership (P3) projects[29] - Tutor Perini often self-performs multiple project components, including earthwork, excavation, concrete forming and placement, steel erection, electrical, mechanical, plumbing, HVAC, and fire protection[29] Forward-Looking Statements This section outlines the forward-looking nature of certain statements in the release, emphasizing that actual results may differ materially due to various risks and uncertainties, including litigation outcomes, economic factors, contract risks, and operational challenges. The company disclaims any obligation to update these statements unless required by law - Forward-looking statements are based on current expectations and beliefs, but there is no assurance that future developments will align with anticipations[30] - Key risks and uncertainties include unfavorable litigation outcomes, revisions of contract estimates, economic factors (inflation, tariffs), contract requirements for extra work, inability to obtain bonding, economic slowdowns, failure to meet schedule requirements, and inability to attract/retain key personnel[30][31] - Other risks involve decreases in government spending, IT interruptions, inclement weather, international operations risks, client cancellations, increased competition, government contract regulations, joint venture partner failures, and fluctuations in common stock price[31] Financial Statements This section presents the condensed consolidated statements of income, balance sheets, cash flows, and detailed segment and backlog information for Tutor Perini Condensed Consolidated Statements of Income The condensed consolidated statements of income show the company's financial performance for the three and six months ended June 30, 2025 and 2024, highlighting significant increases in revenue, gross profit, and net income attributable to Tutor Perini Corporation Condensed Consolidated Statements of Income (Q2 and H1 2025 vs 2024) | (in thousands, except per common share amounts) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | REVENUE | $1,373,681 | $1,127,470 | $2,620,314 | $2,176,457 | | GROSS PROFIT | 195,995 | 117,078 | 330,396 | 232,328 | | INCOME FROM CONSTRUCTION OPERATIONS | 76,430 | 40,493 | 141,755 | 89,299 | | NET INCOME ATTRIBUTABLE TO TUTOR PERINI CORPORATION | $19,974 | $812 | $47,972 | $16,572 | | DILUTED EARNINGS PER COMMON SHARE | $0.38 | $0.02 | $0.90 | $0.31 | Segment Information Segment-level financial data reveals the performance of Civil, Building, and Specialty Contractors segments, detailing revenue, cost of operations, general and administrative expenses, and income (loss) from construction operations for both quarterly and year-to-date periods Three Months Ended June 30, 2025 This section presents the revenue and income (loss) from construction operations for the Civil, Building, and Specialty Contractors segments for the three months ended June 30, 2025 Segment Performance (Q2 2025) | (in thousands) | Civil | Building | Specialty Contractors | Total | | :------------------------------------ | :------ | :------- | :-------------------- | :------ | | Revenue from external customers | $734,187 | $462,082 | $177,412 | $1,373,681 | | Income (loss) from construction operations | $140,115 | $22,450 | $(18,016) | $144,549 | Three Months Ended June 30, 2024 This section presents the revenue and income (loss) from construction operations for the Civil, Building, and Specialty Contractors segments for the three months ended June 30, 2024 Segment Performance (Q2 2024) | (in thousands) | Civil | Building | Specialty Contractors | Total | | :------------------------------------ | :------ | :------- | :-------------------- | :------ | | Revenue from external customers | $546,488 | $417,866 | $163,116 | $1,127,470 | | Income (loss) from construction operations | $75,587 | $5,047 | $(7,846) | $72,788 | Six Months Ended June 30, 2025 This section presents the revenue and income (loss) from construction operations for the Civil, Building, and Specialty Contractors segments for the six months ended June 30, 2025 Segment Performance (H1 2025) | (in thousands) | Civil | Building | Specialty Contractors | Total | | :------------------------------------ | :-------- | :------- | :-------------------- | :-------- | | Revenue from external customers | $1,344,228 | $921,866 | $354,220 | $2,620,314 | | Income (loss) from construction operations | $219,715 | $32,909 | $(25,127) | $227,497 | Six Months Ended June 30, 2024 This section presents the revenue and income (loss) from construction operations for the Civil, Building, and Specialty Contractors segments for the six months ended June 30, 2024 Segment Performance (H1 2024) | (in thousands) | Civil | Building | Specialty Contractors | Total | | :------------------------------------ | :-------- | :------- | :-------------------- | :-------- | | Revenue from external customers | $1,018,653 | $829,808 | $327,996 | $2,176,457 | | Income (loss) from construction operations | $146,330 | $21,167 | $(26,158) | $141,339 | Condensed Consolidated Balance Sheets The condensed consolidated balance sheets show the company's financial position as of June 30, 2025, compared to December 31, 2024, indicating growth in total assets and equity, alongside a reduction in long-term debt Condensed Consolidated Balance Sheets (June 30, 2025 vs December 31, 2024) | (in thousands) | As of June 30, 2025 | As of December 31, 2024 | | :------------------------------------------------ | :------------------ | :---------------------- | | Total current assets | $3,898,222 | $3,286,667 | | Total assets | $4,870,077 | $4,242,710 | | Total current liabilities | $2,955,930 | $2,332,700 | | Long-term debt, less current maturities | $393,298 | $510,025 | | Total liabilities | $3,630,258 | $3,084,104 | | Total equity | $1,239,819 | $1,158,606 | - Cash and cash equivalents increased to $526,090 thousand as of June 30, 2025, from $455,084 thousand at year-end 2024[43] - Costs and estimated earnings in excess of billings (CIE) decreased to $856,379 thousand from $942,522 thousand[43] Condensed Consolidated Statements of Cash Flows The condensed consolidated statements of cash flows show a significant increase in net cash provided by operating activities for the six months ended June 30, 2025, compared to the prior year, while cash used in investing and financing activities also changed Condensed Consolidated Statements of Cash Flows (H1 2025 vs 2024) | (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | | Net income | $89,835 | $43,471 | | NET CASH PROVIDED BY OPERATING ACTIVITIES | $285,275 | $151,413 | | NET CASH USED IN INVESTING ACTIVITIES | $(67,681) | $(24,012) | | NET CASH USED IN FINANCING ACTIVITIES | $(134,702) | $(242,592) | | Net increase (decrease) in cash, cash equivalents and restricted cash | $82,892 | $(115,191) | | Cash, cash equivalents and restricted cash at end of period | $547,080 | $279,489 | - The increase in operating cash flow was significantly influenced by higher net income and changes in working capital components[45] - Financing activities saw a reduction in net cash used, primarily due to lower debt repayments compared to the prior year[45] Backlog Information The backlog information details the company's project pipeline, showing a substantial increase in total backlog as of June 30, 2025, driven by new awards across all segments Backlog for Three Months Ended June 30, 2025 This section details the backlog at the beginning and end of Q2 2025, including new awards and revenue recognized across Civil, Building, and Specialty Contractors segments Backlog Movement (Q2 2025) | (in millions) | Backlog at March 31, 2025 | New Awards in the Three Months Ended June 30, 2025 | Revenue Recognized in the Three Months Ended June 30, 2025 | Backlog at June 30, 2025 | | :-------------------- | :------------------------ | :------------------------------------------------- | :------------------------------------------------------- | :----------------------- | | Civil | $9,682.7 | $2,218.8 | $(734.2) | $11,167.3 | | Building | $6,709.2 | $664.0 | $(462.1) | $6,911.1 | | Specialty Contractors | $3,001.3 | $181.0 | $(177.4) | $3,004.9 | | Total | $19,393.2 | $3,063.8 | $(1,373.7) | $21,083.3 | Backlog for Six Months Ended June 30, 2025 This section details the backlog at the beginning and end of H1 2025, including new awards and revenue recognized across Civil, Building, and Specialty Contractors segments Backlog Movement (H1 2025) | (in millions) | Backlog at December 31, 2024 | New Awards in the Six Months Ended June 30, 2025 | Revenue Recognized in the Six Months Ended June 30, 2025 | Backlog at June 30, 2025 | | :-------------------- | :------------------------- | :----------------------------------------------- | :----------------------------------------------------- | :----------------------- | | Civil | $8,835.6 | $3,675.9 | $(1,344.2) | $11,167.3 | | Building | $7,026.9 | $806.1 | $(921.9) | $6,911.1 | | Specialty Contractors | $2,811.4 | $547.7 | $(354.2) | $3,004.9 | | Total | $18,673.9 | $5,029.7 | $(2,620.3) | $21,083.3 |