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    FLR
    Earnings call· Mar 2026(Q1 FY26)

    FLUOR Q1 FY26 earnings call FLR

    May 8, 2026 Source

    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

    14
    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

    3
    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

    Operational metrics

    18
    Adjusted EBITDA
    $60 millioncompared to $155 million a year ago
    Q1 FY26

    Adjusted to reverse effects of Fab yard sale, FX gain, and LOGCAP ruling.

    Adjusted EPS
    $0.14compared to $0.73 in 2025
    Q1 FY26

    Adjusted to reverse effects of Fab yard sale, FX gain, and LOGCAP ruling.

    G&A expenses
    $61 millionup from $36 million a year ago
    Q1 FY26

    Increase primarily reflects stock compensation accruals tied to share price, which appreciated about $7 per share in Q1 2026.

    Net interest income
    $15 millioncompared to $19 million in Q4 and $17 million a year ago
    Q1 FY26

    Remaining relatively stable sequentially and year-over-year.

    Cash and equivalents
    $3.2 billionincrease of $1 billion from year-end
    Q1 FY26

    Largely driven by proceeds from the sale of NuScale shares.

    NuScale shares sold
    71 million
    Q1 FY26

    Additional 40 million shares sold after quarter end.

    NuScale sell-down proceeds
    $2.4 billion
    since September 2025

    Generated from NuScale sell-down program.

    NuScale MOIC
    4.5x
    since initial investment in 2011

    Multiple on invested capital from NuScale sell-down.

    NuScale IRR
    15%
    since initial investment in 2011

    Internal rate of return from NuScale sell-down.

    Share repurchases
    $0.5 billion
    Q1 FY26

    Part of commitment to return significant value to shareholders.

    Lost project funding
    $87 million
    Q1 FY26

    Provided in Q1 for lost projects; most funding reflected as an investing activity due to JV ownership structure.

    Lost project backlog
    $169 millioncompared to $255 million at year-end
    Q1 FY26

    Reflects continued execution and progress towards completion.

    Gain on sale of fab yard
    $124 million
    Q1 FY26

    Gain on the sale of the China fab yard.

    FX gain
    $16 million
    Q1 FY26

    Arising out of a strengthening U.S. dollar.

    LOGCAP legal impact
    $96 million
    Q1 FY26

    Outcome of a court ruling related to a lawsuit filed in 2013 for LOGCAP activities in Afghanistan. Fluor prevailed on 3 of 4 claims.

    Mining project charge
    $37 million
    Q1 FY26

    Charge for effects of cost growth on a mining project in the Americas due to declining productivity.

    NuScale tax payment
    $400 million
    April 2026

    Paid for state and federal taxes associated with the conversion of NuScale shares in 2025.

    ERP replacement cost
    up to $15 million
    balance of FY26

    Potential cost for a replacement of the ERP system, excluded from normalized G&A.

    Industry KPIs

    3
    MetricValueDetails
    Total backlog$25.7 billionUSD
    Book to bill ratioabove 1
    End market pipeline$100 billionUSD

    Orderbook & backlog

    4
    New awards$2.7 billionQ1 FY26

    98% reimbursable

    Backlog$25.7 billionQ1 FY26

    improved slightly from year-end

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

    Front-end work representing potential backlog$60 billionQ1 FY26

    If clients choose to move forward on these projects with Fluor

    Additional prospects$40 billionQ1 FY26

    Over the next 3 years

    Deals & partnerships

    6
    Centrus Nuclear FuelsFEED award for uranium enrichment plant expansion

    Significant FEED award for the Centrus uranium enrichment plant expansion.

    Dow with X-energySmall 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 RefineryFEED 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.

    TerraWulfLimited 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 AmericanFeasibility 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

    5
    Middle East geopolitical situationQ2 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 issuesQ1 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 outcomeQ1 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 termsOngoing

    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 reductionOngoing

    Reduced pace of development

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

    What to watch in Q2 FY26

    5

    Mining project completion and further charges

    Next quarter / Q2 FY26
    Current80% through construction, $37M charge in Q1
    TargetCompletion 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.

    Q&A highlights

    6

    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 read5 chapters

    Detailed Narrative

    01

    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.

    02

    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.

    03

    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.

    04

    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.

    05

    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.

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