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Fluor (FLR) Q2 FY26 earnings call: guidance and Q&A

Earnings call· Jun 2026 (Q2 FY26)· Industrials· Aug 7, 2026

Source: earnings call transcript

Executive summary

Fluor Q2 FY26 — Strong New Awards Drive Backlog Growth and Positive Outlook

Fluor delivered strong Q2 FY26 results, marked by significant new awards and backlog growth, driven by accelerated client decisions across diverse end markets. The company is strategically simplifying its portfolio by completing legacy projects and divesting its Mexican JV, while focusing on high-growth areas like nuclear and power generation for data centers. Management anticipates continued margin expansion in new awards and robust capital returns.

Highlights

5

  • New awards for the quarter were strong at over $6 billion, driving backlog to almost $27 billion.

  • Book-to-bill ratio is expected to be well above 1 for the full year.

  • Adjusted EBITDA increased to $149 million in Q2 FY26, up from $96 million a year ago.

  • Adjusted EPS was $0.91 in Q2 FY26, compared with $0.43 last year.

  • Completed 2 legacy infrastructure projects, with the remaining 2 expected to complete by year-end.

Concerns

4

  • The Gordie Howe project incurred $44 million in additional losses in Q2 due to foreign currency fluctuation, subcontractor bankruptcy, and client-driven changes.

  • Operating cash flow for the quarter was a negative $317 million, including a $357 million tax payment associated with NuScale shares.

  • An additional $94 million in future funding for legacy projects is expected to be concluded in Q3.

  • Foregone profit of about $23 million in the second half of the year from the former Mexican JV impacts comparable guidance.

Guidance & targets

CategoryTargetConfidence
Adjusted EBITDA
$500M-$525M
high materiality
High
Adjusted EPS
$2.70-$2.80
high materiality
High
Adjusted Operating Cash Flow
$300M-$320M
high materiality
High
New awards book-to-burn ratio
well above 1
high materiality
High
G&A
$170M-$180M
medium materiality
High
Assumed tax rate
28%-30%
medium materiality
High
Revenue split
Urban 65%, Energy 20%, Mission 15%
medium materiality
High
Urban Solutions segment margin
2.5%-3%
medium materiality
High
Energy Solutions segment margin
6%-7%
medium materiality
High
Mission Solutions segment margin
6%
medium materiality
High
Share repurchases
$1.4B
high materiality
High
Legacy projects completion
LAX and I-35 Phase II completed
high materiality
High
Power projects backlog growth
Meaningful growth in backlog
high materiality
Medium
Mining and Metals potential awards pipeline
$30B
high materiality
Medium
Savannah River rebid decision
Decision expected
medium materiality
Medium
Savannah River current work extension
6-month extension
medium materiality
High
LNG Canada Phase 2 Final Investment Decision
Expected
high materiality
Medium
Refinery EPC work
Could translate into EPC work
medium materiality
Low

Segment performance

SegmentRevenueYoYQoQMargin
Urban Solutions
Q2 segment profit included $44 million in additional losses on the Gordie Howe project. Expected to drive further growth over the next several quarters and contribute more meaningfully to EBITDA in H2 FY26. Full year segment margin expectation is 2.5% to 3%.
Q2 Segment Profit: $38MQ2 Segment Profit YoY: vs $29MNew Awards: $3.2B
Majority of total revenue——$38M
Energy Solutions
Profit largely arose from higher contributions on projects nearing completion, evidencing high quality of closeout efforts. Expected to be a lesser contributor to EBITDA in H2 FY26 as the business reloads. Full year segment margin expectation is 6% to 7%.
Q2 Segment Profit: $88MQ2 Segment Profit YoY: vs $15M
———$88M
Mission Solutions
Driven primarily by improved fee performance across the DOE portfolio. Expected to have a similar contribution to EBITDA in H2 FY26. Full year segment margin expectation is 6%.
Q2 Segment Profit: $44MQ2 Segment Profit YoY: vs $35M
———$44M

FLR operating KPIs by quarter

FLR operating KPIs stated on its earnings calls, by fiscal quarter
KPI Mar 2026 Q1 FY26This call 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 over $6B Q2 FY26
Total backlog $26.9B End Q2 FY26

grew to almost $27B

Mexican JV backlog removed just over $650M Q2 FY26

Removed preemptively even though sale closed in Q3.

Legacy project remaining backlog $120M End Q2 FY26

decreased

Will continue to wane across the back half of '26.

Urban Solutions new awards $3.2B Q2 FY26

Deals & partnerships

Mexican Joint Venture partner Sale of Fluor's equity in the Mexican joint venture. $175M

Concluded the joint venture after 30+ years due to diminishing backlog and limited prospects in Mexico, allowing former partner more autonomy and sharpening Fluor's focus on targeted growth areas.

Aramco Long-term agreement to support a broad portfolio of capital projects.

Extends decades-long relationship with Aramco, positioning Fluor to support global capital projects.

LNG Canada Limited notice to proceed for Phase 2 of the LNG Canada project.

Enables early planning and advance key activities in support of the client's proposed final investment decision expected later this year.

Centrus Award for the Centrus Fuel Enrichment project.

Continues to build Fluor's presence in the nuclear value chain, supporting uranium enrichment capability in the U.S.

Capital programs

ERP and other technology enhancements underway
Period spend: up to $15M

Excluding up to $15 million across the full year for a potential replacement of our ERP and for other technology enhancements from G&A guidance.

Risks & headwinds

Gordie Howe project additional losses Q2 FY26

$44M

Mitigation:Working collaboratively with client, partners, and subcontractors to resolve remaining commercial matters.

Middle East hostilities Ongoing

No direct impact to guidance

Mitigation:Monitoring evolving situation, prioritizing employee well-being, executing work in backlog without significant disruption, engaged with clients for future opportunities once situation stabilizes.

Legacy project funding requirements Q3 FY26

$94M remaining

Mitigation:Liquidity available to make payments, awaiting partner funding; focus on completing LAX and I-35 Phase II by year-end.

Foregone profit from Mexican JV sale H2 FY26

$23M

Mitigation:Strategic decision to divest for sharpened focus and bolstered liquidity; incorporated into revised guidance.

Mining project additional scope impact Next couple of months for resolution

Likely impact on timing and schedule

Mitigation:Ongoing conversations with the client to resolve additional scope items.

What to watch in Q3 FY26

Remaining legacy project completion

End of FY26
Current $120M backlog, 2 projects (LAX, I-35 Phase II)
Target Completion of LAX and I-35 Phase II

Why it matters

Final resolution of long-standing loss-making projects will remove a significant drag on financial performance and management focus.

The good news is that with the Gordie and LBJ projects now complete, we can focus our remaining efforts on completing LAX and I-35 Phase II by the end of this year.

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

Q&A highlights

The analyst asked about the normalized profitability of Energy Solutions, excluding favorable closeouts, and if the acceleration of new awards impacts 2026 guidance or indicates a broader trend.

Management explained that closeout efforts represent profits that could have been recognized earlier. Energy Solutions' segment profit percentage will diminish in H2 as they reload, with Urban Solutions contributing more. For new awards, strong Q2 performance and good Q3/Q4 prospects support a book-to-bill 'well above 1' for FY26, but no broad acceleration trend was noted.

“So what you'll see in the back half of the year is a shift in the portfolio, whereby Urban Solutions is more meaningfully contributing to the absolute quantum of EBITDA as opposed to Energy Solutions.”

asked by Jamie Cook · answered by John Regan

2 min read 6 chapters

Detailed narrative

Strong New Awards and Backlog Growth

Fluor secured over $6 billion in new awards in Q2 FY26, pushing its backlog to nearly $27 billion. This performance supports a full-year book-to-bill ratio well above 1, with client decisions accelerating across nuclear fuels, fertilizers, copper, and midstream. The company is actively replenishing its front-end pipeline with new opportunities in target markets like fertilizers, data centers, copper, domestic refining, nuclear power, chemicals, and LNG.

Strategic Portfolio Simplification and Legacy Project Resolution

The company completed two legacy infrastructure projects (LBJ, Oakhill Parkway, Red Purple Line, Gordie Howe Bridge) in Q2, with two more (LAX, I-35 Phase II) expected to conclude by year-end, reducing the remaining legacy backlog to $120 million. Additionally, Fluor divested its Mexican joint venture for $175 million in July, resulting in a $90 million pretax book gain. This move sharpens the company's focus on targeted growth areas and bolsters liquidity.

Expanding Presence in the Nuclear Value Chain

Fluor is actively building its presence across the full nuclear life cycle, from commercial power generation and SMR technology (including NuScale and ex Energy) to nuclear fuels, national security, and environmental cleanup. The recent Centrus Fuel Enrichment project award highlights this expansion. Management believes this capability positions Fluor for attractive opportunities as global investment in nuclear infrastructure accelerates.

Focus on Power Generation within Data Center Ecosystem

Fluor views power generation as its primary strategic play within the broader data center ecosystem. The company is making significant progress on front-end work for domestic gas fuel power projects, including combined cycle and single cycle plants. These efforts are expected to lead to meaningful backlog growth in the first half of 2027, while the company remains selective in pursuing data center construction opportunities.

Robust Mining & Metals Pipeline

Fluor's in-house Mining and Metals pipeline includes nearly $30 billion in potential awards over the next 18 months, primarily in copper, fertilizers, steel, and aluminum. The company is collaborating closely with clients to ensure capital efficiency and mitigate risks from escalation and supply chain disruptions. The majority of this work is expected to be reimbursable, attracting historic margins for the business.

Capital Allocation and Liquidity Management

Fluor ended Q2 with $3 billion in cash and cash equivalents, which increased to $3.2 billion by July 31. The company repurchased 6 million shares for $300 million in Q2 and plans $1.4 billion in repurchases for the full fiscal year 2026. Management also continues to evaluate disciplined inorganic opportunities in selected growth markets aligned with its strategic objectives.

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