Detailed narrative
Record Financial Quarter
Q1 2026 revenue was $2.9B, up 56% YoY, with same-store revenue up 51% (+$943M). Gross profit reached $754M (+$351M) at a record 26.3% margin. Operating income rose 132% to $486M, lifting operating margin to 17.0% from 11.4% on both gross-margin expansion and SG&A leverage (SG&A fell to 9.4% of revenue from 10.6%).
Net income was $370M, or $10.51 per share, more than double the prior-year $4.75. EBITDA grew 116% to $524M, taking trailing-12-month EBITDA to $1.74B.
Backlog and Data-Center Demand
Backlog hit a record $12.5B, a same-store sequential increase of just over $500M and a same-store YoY increase of $5.3B; entering Q2, total backlog was $5B higher than a year earlier. Q1 bookings were especially strong in technology. Advanced technology — dominated by data centers — rose to 56% of revenue and remains the largest driver of pipeline and backlog.
Management said data-center demand still exceeds supply, with Texas the biggest epicenter and strong activity across the Mid-Atlantic, Carolinas, Virginia and the Rocky Mountain states.
Margin Strength and a One-Time Closeout Benefit
Gross margin benefited from $43M of favorable developments on late-stage projects, including change orders and descopes, concentrated in Mechanical. Backing this out puts gross margin near 25.2% — still historically high but closer to a normal Q1. Mechanical gross margin improved to 26.9% (from 21.7%) and Electrical to 24.9% (from 23%).
Management characterized the $43M as non-repeatable, disclosed it deliberately, and attributed core margin durability to disciplined work selection, repeatable scopes and field-team execution.
Labor as the Binding Constraint
Management repeatedly framed growth as supply-constrained, not demand-constrained — a paradigm shift versus the prior 30 years. Headcount is 3,000-4,000 higher than Q1 2025 (23,000+ total employees), and materials/equipment as a percent of revenue is up ~200 bps. Electrical grew ~80% organically, driven partly by aggressive recruiting, training and pay.
The field takes only the work it can confidently deliver, which management says is evidenced in the margins.
Modular Capacity and Capital Investment
CapEx was $147M (5.1% of revenue) versus $22M a year ago, including a large modular assembly building purchase in Texas plus automation (cranes, robots, turn tables, paint booths). The company is shifting from leasing to owning buildings because heavy automation investment makes ownership sensible.
It is on track for 4M sq ft of modular capacity by end-2026 and is evaluating more, often securing multiyear volume commitments from customers as a condition of committing capacity.
Electrical Acquisition
In March the company signed a definitive agreement, subject mainly to regulatory approval, to acquire a highly skilled electrical contractor in the West where it already has a mechanical presence. The deal is expected to close in early May and to initially contribute roughly $250M of annualized revenue at EBITDA margins of 8%-10%.
Service, Aftermarket and Long-Term Wallet Share
Service revenue grew 8% and, with faster construction growth, is now 10% of total revenue; service profitability was strong and remains a reliable source of profit and cash. Management sees a large future maintenance/service opportunity on the growing installed base of data centers, with modular units designed for maintainability and retrofit (e.g., adding electrical capacity if future chips need less cooling).