What specifically is driving the higher E&M margins, such as workforce leverage or performance bonuses, and what is the outlook for future margin performance?

Margin uplift is attributed to planning, contract reviews, good estimates, and a repeatable playbook. Execution, building customer relationships for repeat business, and emphasizing labor access, training, and tools all contribute to margin performance. “We attribute our margin results to planning the work, making sure we have good deals upfront, contract reviews, good estimates, all of these processes that we put in place and what we call a repeatable playbook.”

How should investors think about the conversion of the $4.5 billion backlog in H2 2026 and 2027, and the associated margins?

Approximately 80% of the backlog is expected to convert within 12 months. Margins in the new work are comparable to prior periods, with a focus on execution to improve upon initial project margins. “And we're still about that 80% range of backlog that burns up in 12 months. And we look at the work that we're getting and the margins are comparable in what we've seen over prior periods.”

Can management provide insight into the data center concentration within the E&M backlog and the overall diversification across customers and geographies?

Data centers remain the largest part of the backlog, but the company serves its largest customer in multiple regions. Backlog has increased sequentially across almost all end markets, including industrial, institutional, renewables, service, and utility, indicating diversification. “Data centers, as we've said before in previous quarters, and it still is the case. It's the largest part of our backlog.”

ECG

Everus Construction Group (ECG) Q2 FY26 earnings call: guidance and Q&A

Earnings call· Jun 2026 (Q2 FY26)· Industrials· Aug 5, 2026

Source: earnings call transcript

Executive summary

Everus Construction Group Q2 FY26 — Record Revenue, Margin Expansion, and Strategic Acquisitions

Everus Construction Group delivered a strong second quarter, marked by record revenues and EBITDA, significant margin expansion, and robust backlog growth. The company's strategic focus on operational excellence and targeted acquisitions, including SE&M and the pending Epsilon Industries deal, is driving expansion in modular construction capabilities and market presence. Management raised full-year guidance, reflecting continued momentum and strong project execution, while reiterating long-term growth targets.

Highlights

Record second quarter revenues of $1.23 billion, up 34% from prior year.
Record second quarter EBITDA of $128.6 million, up 53% from prior year.
EBITDA margin expanded by 130 basis points to 10.4%.
Total backlog reached $4.55 billion, up 53% from the same period last year.
Organic revenue growth was 30%, excluding the SE&M acquisition.

Concerns

Cyclical market conditions

Guidance & targets

Category	Target	Timeline	Confidence
Full-year 2026 Revenue	$4.5 billion to $4.7 billion high materiality	FY26	High
Full-year 2026 EBITDA	$410 million to $425 million high materiality	FY26	High
Full-year 2026 EBITDA margins	around 9% medium materiality	FY26	High
H2 2026 EBITDA margins	around 8.5% medium materiality	H2 FY26	High
Long-term organic revenue growth	5% to 7% high materiality	Long-term (5+ years)	High
Long-term EBITDA CAGR	7% to 9% high materiality	Long-term (5+ years)	High
Epsilon acquisition contribution to 2026 guidance	Not included medium materiality	FY26	High

Segment performance

Segment	Revenue	YoY	QoQ	Margin
E&M Increase driven primarily by growth in commercial and industrial end markets, as well as the addition of SE&M. Higher gross margin due to project timing and strong project execution. Organic revenue growth: 37%EBITDA: $109.3 millionEBITDA growth YoY: 72%EBITDA margin change YoY: +190 bps (from 8.9%)Backlog growth YoY: 62%	$1.01 billion	42%	—	10.8% EBITDA margin
T&D Increase driven by growth in the utility end market. EBITDA: $32.8 millionEBITDA growth YoY: 7.9%EBITDA margin change YoY: +10 bps (from 14.3%)	$227.5 million	7.1%	—	14.4% EBITDA margin

ECG operating KPIs by quarter

ECG operating KPIs stated on its earnings calls, by fiscal quarter
KPI	Dec 2025 Q4 FY25	Mar 2026 Q1 FY26	This call Jun 2026 Q2 FY26	Change vs prior quarter
Backlog	$3.23B At December 31, total record backlog was $3.23 billion, up 16% from December 31, 2024, even while we delivered record revenue during the fourth quarter. Source: earnings call transcript	$3.68B At March 31, total backlog was $3.68 billion, up 20% from March 31 of last year. Source: earnings call transcript	$4.55B Our backlog at the end of the second quarter was $4.55 billion, up 53% from the same period last year, driven by continued strength in E&M The favorable demand trends are broad-based, and we continue to benefit from positive momentum across diverse markets with growth in nearly all submarkets sequentially. Source: earnings call transcript	+23.6%

Operating figures the company stated on at least two of the calls shown, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Orderbook & backlog

Total backlog $4.55 billion June 30, 2026

up 53% from prior year

Backlog conversion within 12 months around 80% Q2 FY26

Consistent with prior periods; management focuses on execution to improve margins.

Product announcements

Product	Type	Timeline	Details
Modular Construction Capabilities (via Epsilon Industries acquisition)	expansion	expected to close later this year

Deals & partnerships

SE&M Constructors Expands geographic footprint, diversifies business, and deepens market presence.

First transaction as a stand-alone public company. Integration is on track, and expanded opportunities are being explored.

Epsilon Industries Leading provider of off-site modular construction solutions, expanding capabilities and enhancing growth in key geographic areas.

Epsilon has over 25 years of experience, proprietary capabilities, and multiple strategic facilities in the U.S. and Canada. It will enhance growth in Florida, Texas, the Mid-Atlantic, and the Northeast.

Risks & headwinds

Cyclical market conditions Long-term (5+ years)

Long-term growth targets (5-7% organic revenue, 7-9% EBITDA CAGR) are set to account for cyclicality over a period greater than 5 years.

Mitigation:Diversified growth strategy across various end markets (data centers, industrial, institutional, renewables, service, utility) and geographies; focus on operational excellence and strategic acquisitions.

What to watch in Q3 FY26

Epsilon acquisition close

later this year

Current Pending

Target Closed

Why it matters

The acquisition is expected to meaningfully expand modular construction capabilities and enhance growth in key geographic areas, impacting future revenue and strategic positioning.

Our guidance does not include any contribution from the Epsilon acquisition, which we expect to close later this year.

Find out whether ECG delivers this. Inve re-checks your case every morning.

Q&A highlights

What are the foreseen synergies with Epsilon, particularly regarding integration with field services and new customer opportunities?

Epsilon will provide access to new geographies and modular solutions, with potential for satellite locations. There will be continued growth in mechanical and cross-selling opportunities in electrical, leveraging both companies' customer lists and modular expertise.

“They're going to provide access for us in new geographies through their modular solutions, and there's also going to be potential to add satellite locations to support their business.”

asked by Brent Thielman · answered by Jeff Thiede

2 min read 6 chapters

Detailed narrative

Record Performance and Margin Expansion

Everus achieved record second quarter revenues of $1.23 billion, a 34% increase year-over-year, with organic growth of 30% excluding the SE&M acquisition. This top-line performance was complemented by strong project execution, leading to a 53% increase in EBITDA to $128.6 million and a 130 basis point expansion in EBITDA margin to 10.4%.

Management attributes this success to diligent use of their operational playbook, including effective planning, contract reviews, and estimates.

Strategic Acquisitions Driving Growth and Capabilities

The company continued its inorganic growth strategy with the acquisition of SE&M Constructors in April, which is integrating as planned and contributed approximately $100 million to backlog. Additionally, Everus announced the pending acquisition of Epsilon Industries, a leading provider of off-site modular construction solutions.

This acquisition is expected to significantly expand Everus's modular construction capabilities, enhance geographic reach in key areas like Florida, Texas, and the Mid-Atlantic, and provide cross-selling opportunities.

Robust Backlog Growth and Diversified Market Demand

Total backlog grew 53% year-over-year to $4.55 billion by the end of Q2, primarily driven by strong growth in the E&M segment. Demand remains broad-based, with growth across nearly all submarkets sequentially. Data centers continue to be the largest component of the backlog, but the company emphasizes diversification, with sequential increases also seen in industrial, institutional, renewables, service, and utility markets.

No project cancellations or notable changes in activity have been observed.

Operational Excellence and Modular Construction Focus

Everus's operating results benefit from efficient project execution, particularly through its modular construction and prefabrication services. This off-site approach supports safer work conditions, more efficient use of labor and materials, and predictable project outcomes. The acquisition of Epsilon, with its 25 years of experience, proprietary capabilities, 50 engineers, and 120 skilled tradespeople, is expected to further enhance these operational advantages and drive innovation.

Disciplined Capital Allocation and Leverage

The company maintains a strong balance sheet with net leverage at 0.3x net debt to trailing 12-month EBITDA, well below its targeted range of 1.5x to 2x. This provides ample flexibility for continued investment in strategic growth initiatives, including M&A.

Operating cash flow for the first six months of 2026 was $196.8 million, significantly up from $32.5 million in the prior year, contributing to $167 million in free cash flow.

Long-Term Growth Framework Reaffirmed

Management reaffirmed its long-term growth targets of 5% to 7% organic revenue growth and 7% to 9% EBITDA CAGR. While current performance is exceeding these figures, executives clarified that these are long-term targets designed to account for cyclical market conditions over a period greater than five years, indicating a sustainable framework rather than a short-term forecast.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.