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Fluor (FLR) Q1 FY26 earnings call: guidance and Q&A

Earnings call· Mar 2026 (Q1 FY26)· Industrials· May 8, 2026

Source: earnings call transcript

Executive summary

Fluor Q1 FY26 — Strong Pipeline Growth and Backlog Quality Amidst Geopolitical Headwinds

Fluor delivered strong Q1 operating cash flow and continued its capital return program, driven by an asset-light strategy. The company reported significant growth in its prospect pipeline and maintained project selectivity, aiming for higher-margin new awards. While navigating specific project charges and geopolitical uncertainties, Fluor remains focused on converting front-end awards into full EPC releases and exploring strategic M&A opportunities.

Highlights

5

  • Prospect pipeline increased by 50% in the past 12 months, now representing over $100 billion in potential revenue.

  • New awards in Q1 FY26 had margins 200 basis points higher than the current backlog, reinforcing project selectivity.

  • Operating cash flow for Q1 FY26 was $110 million, a $400 million year-over-year improvement.

  • Repurchased 11 million shares, deploying over $0.5 billion in Q1 FY26.

  • Completed NuScale sell-down, generating over $2.4 billion since September 2025, with a MOIC of 4.5x and IRR of 15%.

Concerns

4

  • Urban Solutions segment profit was impacted by a $37 million charge for a mining project in the Americas.

  • Mission Solutions reported a $71 million segment loss due to a $96 million legal outcome related to LOGCAP activities.

  • Full-year 2026 adjusted EBITDA guidance was narrowed to $525 million to $560 million, down from the previous high end of $585 million.

  • Middle East geopolitical situation identified as a potential disruptor, risking supply chain delays and higher costs.

Guidance & targets

CategoryTargetConfidence
Full-year 2026 Adjusted EBITDA
$525 million to $560 million
high materiality
Medium
Full-year 2026 Adjusted EPS
$2.60 to $2.80 per share
high materiality
Medium
Full-year 2026 Operating Cash Flow
$300 million
high materiality
Medium
Full-year 2026 New Awards Book-to-Burn Ratio
above 1
medium materiality
Medium
Full-year 2026 Corporate G&A expenses
$175 million to $185 million
low materiality
Medium
Full-year 2026 Assumed Tax Rate
26% to 28%
low materiality
Medium
Full-year 2026 Revenue Split
Urban 65%, Energy 20%, Mission 15%
low materiality
Medium
Full-year 2026 Urban Solutions Segment Margin
2.5% to 3.5%
medium materiality
Medium
Full-year 2026 Energy Solutions Segment Margin
5% to 6%
medium materiality
Medium
Full-year 2026 Mission Solutions Segment Margin
6%
medium materiality
Medium
Lost Project Funding Completion
substantially complete by end of Q3 2026
low materiality
Medium
Full-year 2026 Share Repurchases
$1.4 billion
high materiality
High
2026 New Awards
significantly higher than 2025
high materiality
High
LNG Canada Phase 2 FID
expected in 2026
high materiality
Medium

Segment performance

SegmentRevenueYoYQoQMargin
Urban Solutions
Segment profit reflects a $37 million impact for a mining project in the Americas due to declining productivity. New awards included a metals project in the Middle East, incremental work for a pharmaceutical facility, and an infrastructure expansion in Chile. Expects percentage of total backlog to rebalance as Energy and Mission Solutions grow.
New awards: $2.1 billionNew awards comparison: compared to $5.3 billion a year agoEnding backlog: $19 billionPercentage of Fluor's total backlog: 74%
———$6 million
Energy Solutions
Results increased primarily due to the recognition of favorable closeout items on three projects. New awards included the FEED award for the America First refinery and front-end engineering for the X-energy small modular reactor project at Dow's plant.
New awards: $213 millionNew awards comparison: compared to $47 million a year ago
———$74 million
Mission Solutions
Segment loss reflects a $96 million impact from a court ruling related to a lawsuit for LOGCAP activities in Afghanistan. Excluding this legal decision, results were consistent with expectations. Awards included a significant FEED award for the Centrus uranium enrichment plant expansion and a $100 million task order for Shaw Air Force Base.
New awards: $332 millionEnding backlog: $2.5 billion
———-$71 million

FLR operating KPIs by quarter

FLR operating KPIs stated on its earnings calls, by fiscal quarter
KPIThis call Mar 2026 Q1 FY26 Jun 2026 Q2 FY26Change vs prior quarter
Backlog
$25.7B Our backlog improved slightly from year-end to $25.7 billion and reflects an additional $1.1 billion in positive project adjustments on current work. Source: earnings call transcript
$26.9B Ending backlog was $26.9 billion and reflects our sizable Q2 awards and the removal of just over $650 million of backlog related to our now former JV in Mexico. Source: earnings call transcript
+4.7%
Orders Urban Solutions
$2.1B New awards for the quarter were $2.1 billion compared to $5.3 billion a year ago when we received a multibillion-dollar award for a life sciences project. Source: earnings call transcript
$3.2B For the quarter, Urban Solutions new awards were $3.2 billion and include construction management for our copper mine in Chile, a feasibility study for Anglo's fertilizer project in the UK and expand its scope for a fertilizer project in Canada, additional scope on the life sciences project in the US and an infrastructure project in Europe. Source: earnings call transcript
+52.4%

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

New awards $2.7 billion Q1 FY26

98% reimbursable

Backlog $25.7 billion Q1 FY26

improved slightly from year-end

Includes $1.1 billion in positive project adjustments; 82% reimbursable

Front-end work representing potential backlog $60 billion Q1 FY26

If clients choose to move forward on these projects with Fluor

Additional prospects $40 billion Q1 FY26

Over the next 3 years

Deals & partnerships

Centrus Nuclear Fuels FEED award for uranium enrichment plant expansion

Significant FEED award for the Centrus uranium enrichment plant expansion.

Dow with X-energy Small modular reactor (SMR) project

Initial award for front-end engineering and execution planning for the SMR project at Dow's plant in Seadrift, Texas.

America First Refinery FEED award for grassroots refinery

FEED award for the America First refinery in Brownsville, Texas, which will be the first grassroots refinery constructed in the U.S. in over 50 years.

TerraWulf Limited notice to proceed for data center campus

Delivering master planning and preconstruction services for a large-scale data center campus in Kentucky with access to 480 megawatts of grid-connected power. Working towards a full notice to proceed.

Anglo American Feasibility study award for Woodsmith fertilizer project

Feasibility study award for Anglo American's large fertilizer project in the U.K.

Shaw Air Force Base $100 million task order for services $100 million

Task order to provide services in support of ongoing operations in the Middle East, in addition to existing work in Kuwait.

Risks & headwinds

Middle East geopolitical situation Q2 2026 and beyond

Potential disruptor to trajectory, supply chain delays, higher inflation and interest rates, capital spending implications

Mitigation:Closely monitoring events, ensuring employee safety, continuing project operations, positioning for reconstruction work, diversifying energy/commodity sourcing.

Mining project productivity issues Q1 FY26, project completion by year-end

$37 million charge in Q1 FY26

Mitigation:Strengthened execution team, detailed analysis of work to go, increased cost estimate, working with client to finish expeditiously.

LOGCAP legal outcome Q1 FY26, appeal expected beyond 2026

$96 million segment loss in Q1 FY26

Mitigation:Expect to appeal the court ruling; any payment dependent on outcome of appeal.

Data center market contract terms Ongoing

Challenging risk allocation

Mitigation:Staying disciplined and selective, working to shape deals on a contract-by-contract basis to ensure opportunities meet return expectations.

Reko Diq project pace reduction Ongoing

Reduced pace of development

Mitigation:Continuing to perform engineering and procurement from offices outside the region.

What to watch in Q2 FY26

Mining project completion and further charges

Next quarter / Q2 FY26
Current 80% through construction, $37M charge in Q1
Target Completion by year-end, no further charges

Why it matters

To ensure the project is completed without additional cost overruns and to confirm the charge was isolated.

This project is significantly advanced in the construction phase. ... I believe we have captured the cost adequately. ... We're going to watch it very closely over the next several months.

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Q&A highlights

How will Fluor achieve the significant ramp-up in adjusted EBITDA for the remaining quarters, given the Q1 results and Middle East headwinds? Also, how do Middle East opportunities factor into the pipeline, and what are the Power Gen opportunities with legacy clients?

The EBITDA ramp-up is driven by normalization of the mining charge and G&A, outperformance in Energy Solutions (especially LNGC), and pull-through from early awards. Middle East opportunities are additive to the existing pipeline, which has already grown 50%. The conflict may accelerate conversion of existing front-end work. Power Gen opportunities are strong with existing and new clients, focusing on discipline and supply chain support.

“So probably the 2 biggest normalization items in the quarter, as you state, are the mining charge and also what appears to be about $20 million worth of higher run rate in Q1 on the G&A front. So those are significant bridging items.”

asked by Jamie Cook · answered by John Regan

2 min read 5 chapters

Detailed narrative

Strategic Focus on Backlog Quality and Pipeline Growth

Fluor is prioritizing building a quality backlog by focusing on large, complex EPC projects and early engagement in the planning phase. The company's prospect pipeline has increased by 50% over the past 12 months, now representing over $60 billion in front-end work and an additional $40 billion in prospects over the next three years. This growth is driven by demand in critical minerals, life sciences, LNG, nuclear, refining, and power markets, with a strong emphasis on project selectivity to ensure favorable margins.

Key Market Opportunities and Project Execution

The company is actively pursuing opportunities in data centers, nuclear small modular reactors (SMRs), and LNG. Fluor secured a limited notice to proceed with TeraWulf for a large-scale data center campus and is engaged in two SMR projects (Dow with X-energy, and NuScale in Romania). Progress continues on major infrastructure projects like the Gordie Howe Bridge and LAX People Mover, with several expected to reach substantial completion this year. The Energy Solutions segment saw increased profit due to favorable closeout items on three projects.

Middle East and Venezuela Outlook

Fluor is closely monitoring the Middle East conflict, ensuring employee safety and continuing project operations without interruption. The company is positioning for potential reconstruction work and sees long-term opportunities in diversifying energy and commodity sourcing. In Venezuela, Fluor is in active discussions with clients and local partners, preparing for potential work in oil and gas, infrastructure, and mining, anticipating more clarity on timing in the coming months as the business environment stabilizes.

Capital Allocation and Balance Sheet Optimization

Fluor has completed its transition to an asset-light model, including the sale of its fab yard in China for over $120 million and the successful sell-down of NuScale shares, generating over $2.4 billion. The company returned over $0.5 billion to shareholders through share repurchases in Q1 and plans to spend $1.4 billion on buybacks for the full year. Fluor is also actively investing in capabilities and people, while reviewing targeted M&A opportunities to enhance efforts in key markets.

Q1 Financial Performance and Discrete Items

Q1 FY26 consolidated segment profit was $8 million, impacted by several discrete items. These included a $96 million legal charge for LOGCAP activities and a $37 million charge for a mining project in the Americas. Offsetting these were a $124 million gain from the sale of the China fab yard and a $16 million FX gain. Adjusted EBITDA for Q1 was $60 million and adjusted EPS was $0.14. Operating cash flow significantly improved to $110 million, the most substantial Q1 generation since 2017.

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