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    ECG
    Earnings call· Jun 2026(Q2 FY26)

    Everus Construction Group Q2 FY26 earnings call ECG

    Aug 5, 2026 Source

    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

    5

    • 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

    1

    • Cyclical market conditions

    Guidance & targets

    7
    CategoryTargetConfidence
    Full-year 2026 Revenue
    $4.5 billion to $4.7 billion
    high materiality
    High
    Full-year 2026 EBITDA
    $410 million to $425 million
    high materiality
    High
    Full-year 2026 EBITDA margins
    around 9%
    medium materiality
    High
    H2 2026 EBITDA margins
    around 8.5%
    medium materiality
    High
    Long-term organic revenue growth
    5% to 7%
    high materiality
    High
    Long-term EBITDA CAGR
    7% to 9%
    high materiality
    High
    Epsilon acquisition contribution to 2026 guidance
    Not included
    medium materiality
    High

    Segment performance

    2
    SegmentRevenueYoYQoQMargin
    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 billion42%—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 million7.1%—14.4% EBITDA margin

    Operational metrics

    6
    Organic revenue growth
    30%
    Q2 FY26

    Excluding the contribution from the recently acquired SE&M.

    Total EBITDA
    $128.6 millionup 53% from prior year
    Q2 FY26

    Driven by solid revenue growth and continued strong project execution.

    EBITDA margin
    10.4%up 130 bps from 9.1% prior year
    Q2 FY26

    Result of strong revenue growth and project execution.

    Net leverage
    0.3xwell below 1.5x to 2x targeted range
    as of June 30

    Provides ample flexibility for continued investment in strategic growth initiatives.

    Capital expenditures
    $35.6 millionup modestly from $31.6 million in prior year period
    first 6 months of 2026

    Modest increase year-over-year.

    SE&M contribution to backlog
    ~$100 million
    Q2 FY26

    Contribution from the recently acquired SE&M to the E&M backlog at quarter end.

    Industry KPIs

    8
    MetricValueDetails
    Total backlog$4.55 billionUSD
    12 month backlogaround 80%%
    Book to bill ratio—
    End market pipelineData centers: largest part of backlog; Semiconductor: ramping project; Growth in industrial, institutional, renewables, service, utility
    Acquisition contributionSE&M: ~$100 million to backlogUSD
    Self perform activity mix—
    Same store organic revenue growth30%%
    Craft skilled labor headcount capacity50 engineers and 120 skilled tradespeoplepeople

    Orderbook & backlog

    2
    Total backlog$4.55 billionJune 30, 2026

    up 53% from prior year

    Backlog conversion within 12 monthsaround 80%Q2 FY26

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

    Product announcements

    1
    ProductTypeDetails
    Modular Construction Capabilities (via Epsilon Industries acquisition)expansion

    Deals & partnerships

    2
    SE&M ConstructorsExpands 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 IndustriesLeading 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

    1
    Cyclical market conditionsLong-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

    5

    Epsilon acquisition close

    later this year
    CurrentPending
    TargetClosed

    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.

    Q&A highlights

    6

    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 read6 chapters

    Detailed Narrative

    01

    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.

    02

    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.

    03

    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.

    04

    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.

    05

    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.

    06

    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.

    AI-generated summary of the company’s earnings call. Not investment advice.