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    MYRG
    Earnings call· Mar 2026(Q1 FY26)

    MYR GROUP Q1 FY26 earnings call MYRG

    Apr 30, 2026 Source

    Executive summary

    MYR Group Q1 FY26 — Record Revenue, Net Income, and Backlog Driven by Strong Execution and Electrification Demand

    MYR Group delivered a record-setting first quarter, driven by robust demand for electrical infrastructure and disciplined project execution across both T&D and C&I segments. The company saw significant revenue and profit growth, alongside record backlog, supported by favorable contract terms and increased productivity. Management is raising full-year revenue growth and segment operating margin targets, while actively pursuing strategic acquisitions to complement organic expansion.

    Highlights

    6

    • Total revenue increased 20% year-over-year to $1 billion.

    • Net income increased 106% year-over-year to a record $47 million.

    • Diluted EPS increased 106% year-over-year to $2.99.

    • EBITDA increased to a record $82 million from $50 million year-over-year.

    • Total backlog reached a record $2.84 billion, up 8% year-over-year.

    • C&I segment revenue was a record $459 million, up 24% year-over-year, with operating margin expanding to 8.1% from 4.7%.

    Concerns

    3

    • Increase in costs associated with inefficiencies on certain projects impacted gross margin and segment operating margins.

    • Days Sales Outstanding (DSO) is expected to rise to the low 60s from the current mid-50s.

    • Capital expenditures are expected to increase for the remainder of the year, trending towards 3% of revenue for the full year.

    Guidance & targets

    7
    CategoryTargetConfidence
    C&I Operating Margin
    6% to 9%
    high materiality
    High
    T&D Operating Margin
    8% to 11%
    high materiality
    High
    Total Revenue Growth
    12%
    high materiality
    High
    Days Sales Outstanding (DSO)
    low 60s
    medium materiality
    Medium
    Capital Expenditures as % of Revenue
    3%
    medium materiality
    High
    Large T&D Project Inflow
    start rolling in our backlog
    high materiality
    High
    765 kV Line Project Starts
    mid next year
    medium materiality
    Medium

    Segment performance

    2
    SegmentRevenueYoYQoQMargin
    Transmission and Distribution (T&D)
    Revenues increased primarily due to higher revenue on unit price and T&E contracts, partially offset by a decrease in revenue on fixed price contracts. Operating income margin increased from 7.8% in the prior year, primarily due to better-than-anticipated productivity and a favorable job closeout, partially offset by increased costs from project inefficiencies.
    Work performed under master service agreements: approximately 70% of T&D revenues
    		$541 million17%—9.7% operating income margin
    Commercial and Industrial (C&I)
    Revenues were a record high for the segment, increasing primarily due to higher revenue on fixed price contracts. Operating income margin increased from 4.7% in the prior year, primarily due to a larger portion of projects progressing at higher contractual margins, better-than-anticipated productivity, and favorable change orders, partially offset by increased costs from project inefficiencies.
    Data center construction starts: up nearly 100% year-over-year (FMI report)
    		$459 million24%—8.1% operating income margin

    Operational metrics

    12
    Gross Margin
    13.4%vs 11.6% Q1 FY25
    Q1 FY26

    Increase primarily due to larger portion of projects progressing at higher contractual margins, better-than-anticipated productivity, favorable change orders, and a favorable job closeout, partially offset by increased costs associated with inefficiencies on certain projects.

    SG&A Expenses
    $69 millionup $7 million YoY
    Q1 FY26

    Increase primarily due to higher employee incentive compensation costs and employee-related expenses to support future growth.

    Effective Tax Rate
    26.9%vs 28.9% Q1 FY25
    Q1 FY26

    Decrease primarily due to a favorable impact from stock compensation excess tax benefits, partially offset by higher U.S. taxes on Canadian income and other permanent difference items.

    Net Income
    $47 millionvs $23 million Q1 FY25
    Q1 FY26

    Record net income for the quarter.

    EBITDA
    $82 millionvs $50 million Q1 FY25
    Q1 FY26

    Record EBITDA for the quarter.

    Working Capital
    $258 million
    as of March 31, 2026

    Balance at quarter-end.

    Funded Debt
    $9 million
    as of March 31, 2026

    Balance at quarter-end.

    Borrowing Availability under Credit Facility
    $460 million
    as of March 31, 2026

    Total available under credit facility.

    Cash and Cash Equivalents
    $163 million
    as of March 31, 2026

    Balance at quarter-end.

    Funded Debt-to-EBITDA Leverage Ratio
    0.04x
    as of March 31, 2026

    Improved leverage ratio.

    Days Sales Outstanding (DSO)
    mid-50ssignificantly below historical average
    Q1 FY26

    Current DSO range.

    Capital Expenditures
    —
    Q1 FY26

    First quarter CapEx was light due to timing, meaning an increase for the rest of the year.

    Industry KPIs

    5
    MetricValueDetails
    Total backlog$2.84 billionUSD
    End market pipeline—
    Self perform activity mixapproximately 70%%
    Same store organic revenue growth20%%
    Craft skilled labor headcount capacity—

    Orderbook & backlog

    4
    Total Backlog$2.84 billionMarch 31, 2026

    8% higher YoY

    Record high.

    T&D Segment Backlog$981 millionMarch 31, 2026
    C&I Segment Backlog$1.86 billionMarch 31, 2026
    MSA Backlog (T&D)90 days of workQ1 FY26

    Only this portion of MSA work is counted in backlog.

    Deals & partnerships

    6
    SturgeonMaster Service Agreement (MSA) and EPC program opportunities

    Awarded an MSA in Arizona spanning transmission, distribution, and substations, along with EPC program opportunities in the Northwest.

    Great Southwestern ConstructionConstruction of greenfield substations

    Secured the construction of 2 greenfield substations in Texas.

    High Country Line ConstructionSubstation work and transmission line project

    Selected for substation work in Arizona, along with a 345 kV transmission line project in South Carolina.

    L.E. MyersTransmission job and overhead distribution rebuild projects

    Selected for a 345 kV transmission job and several overhead distribution rebuild projects across Illinois and Iowa.

    Harlan ElectricOverhead transmission work

    Awarded overhead transmission work in Pennsylvania.

    C&I Segment (multiple customers)Data center projects, clean energy work, water treatment plants

    Awarded multiple data center projects in New Jersey, Arizona, California and Colorado, clean energy work in California and multiple water treatment plants in Colorado.

    Risks & headwinds

    3
    Increased costs due to project inefficienciesQ1 FY26

    Impacted gross margin, T&D operating margin, and C&I operating margin in Q1 FY26.

    Mitigation: Better contract management, improved terms and conditions, enhanced project execution, pre-fabrication, and kitting materials.

    Potential rise in Days Sales Outstanding (DSO)Rest of FY26

    Expected to rise from mid-50s to low 60s.

    Mitigation: Mitigation depends on the timing of new awards and the weighting between projects with more favorable billing structures versus MSA-like work.

    Quarterly lumpiness in financial resultsOngoing

    Can affect revenue and margins quarter-to-quarter.

    Mitigation: Due to factors like weather, project timing, and subcontractor/material delivery. Management focuses on yearly targets rather than quarterly fluctuations.

    What to watch in Q2 FY26

    5

    C&I Operating Margin

    Rest of FY26
    Current8.1% (Q1 FY26)
    TargetMid-range of 6%-9%

    Why it matters

    Indicates sustained profitability improvements from contract management and execution in the C&I segment.

    our margin profiles coming into this year, we were at 5% to 7.5%, and we're looking to increase that going forward⏳ for the rest of the year. We're looking kind of at that 6% to 9% margin profile and operating kind of in that mid-ish range on the C&I side.

    Q&A highlights

    6

    What led to the strong C&I margins in Q1, and what should be expected going forward?

    Rick Swartz attributed strength to less risk in contracts, disciplined project execution, pre-fabrication, and favorable job closeouts. He guided C&I operating margins to 6%-9% for the rest of the year, aiming for the mid-range.

    “our margin profiles coming into this year, we were at 5% to 7.5%, and we're looking to increase that going forward for the rest of the year. We're looking kind of at that 6% to 9% margin profile and operating kind of in that mid-ish range on the C&I side.”

    asked by Sangita Jain · answered by Richard Swartz

    2 min read5 chapters

    Detailed Narrative

    01

    Strong Q1 Performance and Margin Expansion

    MYR Group reported record Q1 2026 revenues of $1 billion, a 20% increase year-over-year, with net income reaching a record $47 million, up 106%. Gross margin improved to 13.4% from 11.6% YoY, driven by projects progressing at higher contractual margins, better-than-anticipated productivity, favorable change orders, and job closeouts. Management emphasized improved contract management, better terms and conditions, and enhanced project execution through pre-fabrication and kitting materials as key factors for margin expansion.

    02

    Segment-Specific Growth and Outlook

    The T&D segment saw revenues increase 17% to $541 million, with operating margin at 9.7%. The C&I segment achieved record revenues of $459 million, up 24%, and a significant operating margin increase to 8.1%. Data center and water/wastewater projects were highlighted as primary growth drivers for C&I, with data center construction starts up nearly 100% year-over-year according to FMI's 2026 outlook. The company expects steady work across the U.S. and Canada, driven by grid infrastructure modernization.

    03

    Record Backlog and Future Project Opportunities

    Total backlog reached a record $2.84 billion as of March 31, 2026, an 8% increase YoY, reflecting strong market demand and customer relationships. The T&D segment backlog was $981 million, and C&I backlog was $1.86 billion. Management anticipates some large transmission projects, including 765 kV lines, to roll into backlog this year, with 765 kV projects expected to start construction no earlier than mid-2027. Conversations with clients extend to projects starting in 2030 and beyond, focusing on material and labor security.

    04

    Capital Allocation and Liquidity

    MYR Group maintains a strong balance sheet with $163 million in cash and cash equivalents and a funded debt-to-EBITDA leverage ratio of 0.04x. The company plans to invest in organic growth, including expanding pre-fabrication capacity, and is actively seeking strategic acquisitions, noting good activity in the market for high-quality companies. Share repurchases are also considered as a capital deployment option, leveraging the strong financial position.

    05

    Labor Market and Competitive Landscape

    Management noted that the tight labor market is not currently translating into higher margins due to competitive bidding. However, they hope this dynamic will change in the future. Despite new entrants in the C&I data center market, MYR Group is not overly concerned about increased competition or pricing pressure, citing long-term client relationships and a balanced business approach. The company continues to be selective on larger projects to manage risk.

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