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    MYRG
    Earnings call· Jun 2026(Q2 FY26)

    MYR GROUP Q2 FY26 earnings call MYRG

    Jul 30, 2026 Source

    Executive summary

    MYR Group Inc. Q2 FY26 — Record Revenue and Backlog Driven by Strong C&I Performance and Strategic Acquisition

    MYR Group delivered a strong second quarter, achieving record revenues and backlog, largely propelled by robust performance in its Commercial and Industrial segment and the strategic acquisition of Valley Electric and Comet Electric. The company continues to benefit from ongoing infrastructure investments and electrification initiatives, maintaining operational discipline and focusing on long-term value creation. Management anticipates continued strong activity across its markets, with large project contributions expected to ramp up in late 2027 and beyond.

    Highlights

    5

    • Record Q2 FY26 revenues of $1.08 billion, up 20% year-over-year.

    • Record C&I segment revenues of $558 million, up 42% year-over-year.

    • Record Q2 FY26 net income of $50 million, up 85% year-over-year.

    • Record total backlog of $3.16 billion as of June 30, 2026, up 20% year-over-year.

    • Diluted EPS of $3.17, an 86% increase year-over-year.

    Concerns

    2

    • Q2 FY26 operating cash flow decreased to $3 million from $33 million in Q2 FY25, primarily due to timing of tax payments and project billings.

    • Q2 FY26 free cash flow was negative $26 million, compared to positive $12 million in Q2 FY25, due to lower operating cash flow and higher capital expenditures.

    Guidance & targets

    6
    CategoryTargetConfidence
    C&I Operating Margin
    mid part of 6% to 9% range
    medium materiality
    High
    T&D Operating Margin
    mid-range of 8% to 11%
    medium materiality
    High
    Valley Electric & Comet Electric Revenue Contribution
    approximately $250 million
    medium materiality
    High
    Valley Electric & Comet Electric EPS Contribution
    more neutral
    medium materiality
    Medium
    Large Transmission Project Revenue Conversion
    starting kind of in that second half of '27
    high materiality
    High
    765kV Work Start
    at best case the end of '27, but more likely '28 and beyond
    high materiality
    Medium

    Segment performance

    2
    SegmentRevenueYoYQoQMargin
    Transmission and Distribution (T&D)
    Revenue increase primarily due to higher revenue on T&E contracts and unit price contracts, partially offset by lower revenue on fixed price contracts. Operating income margin increased from 8% in Q2 FY25, primarily related to better-than-anticipated productivity, favorable job close-outs, and increased scope on a project, partially offset by inefficiencies on certain projects. Awarded 2 large transmission jobs for Xcel Energy (>$200M combined), a 500 kV substation project for Sturgeon Electric, and a 345 kV transmission rebuild for Great Southwestern Construction.
    Work performed under master service agreements: 65% of T&D revenues
    		$524 million4%—9.4% operating income margin
    Commercial and Industrial (C&I)
    Record high revenue for the segment. Revenue increased primarily due to higher revenue on fixed price contracts. Operating income margin increased from 5.6% in Q2 FY25, primarily related to better-than-anticipated productivity on certain projects nearing completion and increased scope on a project, partially offset by inefficiencies. Positively impacted by a larger portion of projects progressing at higher contractual margins. Awarded data center work in New Jersey and Arizona, multiple data center projects in Colorado, aerospace work in California, and hospitality/higher education work in New York.
    		$558 million42%—8.5% operating income margin

    Operational metrics

    14
    Total Revenue
    $1.08 billionup 20% YoY
    Q2 FY26

    Record quarterly revenue for the company.

    Gross Margin
    13.2%vs 11.5% in Q2 FY25
    Q2 FY26

    Company-wide gross margin for the quarter.

    SG&A Expenses
    $74 millionup $11 million YoY
    Q2 FY26

    Selling, General, and Administrative expenses.

    Effective Tax Rate
    25.7%vs 29.2% in Q2 FY25
    Q2 FY26

    Effective tax rate for the quarter.

    Net Income
    $50 millionvs $27 million in Q2 FY25
    Q2 FY26

    Record quarterly net income.

    Diluted EPS
    $3.17up 86% YoY vs $1.70 in Q2 FY25
    Q2 FY26

    Diluted earnings per share.

    EBITDA
    $85 millionvs $56 million in Q2 FY25
    Q2 FY26

    Earnings Before Interest, Taxes, Depreciation, and Amortization.

    Working Capital
    $307 million
    as of June 30, 2026

    Total working capital.

    Funded Debt
    $9 million
    as of June 30, 2026

    Total funded debt.

    Borrowing Availability
    $460 million
    as of June 30, 2026

    Remaining borrowing availability under the credit facility.

    Cash and Cash Equivalents
    $138 million
    as of June 30, 2026

    Cash balance at quarter end.

    Funded Debt-to-EBITDA Leverage Ratio
    0.03x
    as of June 30, 2026

    Leverage ratio at the end of the second quarter.

    Days Sales Outstanding (DSOs)
    could go from mid to low-to-mid 60sfrom near record low
    next few quarters

    Anticipated normalization of DSOs from current low levels.

    Organic Growth
    probably not 13% to 15%
    FY26

    Overall organic growth projection for the full year.

    Industry KPIs

    3
    MetricValueDetails
    Total backlog$3.16 billionUSD
    End market pipeline—
    Acquisition contribution$328 millionUSD

    Orderbook & backlog

    3
    Total Backlog$3.16 billionJune 30, 2026

    20% higher YoY

    T&D Backlog$1.27 billionJune 30, 2026
    C&I Backlog$1.89 billionJune 30, 2026

    Deals & partnerships

    1
    Valley Electric and Comet ElectricAcquisition of all issued and outstanding capital stock of Valley Holdings and subsidiaries, expanding C&I capabilities and geographic presence.$328 million cash consideration

    Funded by $93 million cash on hand and $235 million from revolving credit facility. Subject to working capital and net asset adjustments. Their diverse project portfolios, strong customer relationships, and extensive pre-fabrication capabilities complement existing capabilities.

    Risks & headwinds

    3
    Timing of tax payments and project billings impacting cash flowQ2 FY26, potentially ongoing

    Q2 FY26 operating cash flow was $3 million, down from $33 million in Q2 FY25. Tax payments were $30 million higher YoY.

    Mitigation: Management expects strong EBITDA growth to support future cash flows, but DSOs may normalize from current record lows.

    Increased capital expendituresQ2 FY26, ongoing to support future growth

    Contributed to negative $26 million free cash flow in Q2 FY26, compared to positive $12 million in Q2 FY25.

    Mitigation: Capital expenditures are to support future growth, implying a strategic investment rather than an unmanaged cost.

    Labor market tightnessCurrent, ongoing

    Some areas are a little tighter than others, but a lot of markets are starting to tighten up a little bit.

    Mitigation: MYR Group is strategically positioned with long-term projects and has been building out its groups for a long time. Focus on retaining, advancing, and recruiting employees. Customers are also concerned about labor alignment for projects.

    What to watch in Q3 FY26

    5

    Valley Electric & Comet Electric Revenue Contribution

    next quarter
    CurrentExpected ~$250M for H2 FY26
    TargetProgress towards $250M revenue contribution for H2 FY26

    Why it matters

    Verifies the initial financial impact and integration success of the recent acquisition, which is a key growth driver.

    From a revenue perspective, we expect our contributions will be in that approximately $250 million range rest of the year.

    Q&A highlights

    6

    How will the Valley and Comet Electric acquisition grow the customer base and C&I capabilities/geographic presence?

    The acquisition's capabilities are similar to MYR Group's, allowing for leveraging both their customer base and MYR Group's existing customer base. This is seen as a continued opportunity for expansion, building on strong customer relationships.

    “Their capabilities are very similar to our own. So we see that leveraging both their customer base, and then having an influx with our own customer base. So we've been able to do that on past acquisitions and expand both markets.”

    asked by Caitlin Donohue · answered by Richard Swartz

    2 min read6 chapters

    Detailed Narrative

    01

    Strong Q2 Performance and Market Dynamics

    MYR Group reported record second-quarter revenues of $1.08 billion, a 20% increase year-over-year, and record net income of $50 million, up 85%. This performance was driven by consistent activity across T&D and C&I markets, supported by ongoing infrastructure investments and electrification initiatives. The company emphasized its focus on operational discipline and strategic growth, leveraging strong customer relationships and a diverse project portfolio.

    02

    Strategic Acquisition of Valley Electric and Comet Electric

    On July 1, MYR Group closed the acquisition of Valley Electric and Comet Electric for $328 million. This acquisition significantly expands the company's C&I capabilities and geographic presence, bringing diverse project portfolios, strong customer relationships, and extensive pre-fabrication capabilities. Management expects the acquisition to contribute approximately $250 million in revenue for the remainder of FY26, though its EPS contribution is anticipated to be neutral in the first year due to amortization.

    03

    T&D Segment Highlights and Large Project Awards

    The T&D segment reported $524 million in revenue, a 4% increase year-over-year, with an operating income margin of 9.4%. Key awards included two large transmission jobs for Xcel Energy totaling over $200 million, a 500 kV substation project for Sturgeon Electric, and a 345 kV transmission rebuild for Great Southwestern Construction. These projects are now in backlog, with revenue conversion expected to begin in the second half of 2027. The company continues to see steady bidding activity driven by increasing electricity demand and grid modernization efforts.

    04

    C&I Segment Growth and Market Diversification

    The C&I segment achieved record revenues of $558 million, up 42% year-over-year, with an operating income margin of 8.5%. This growth was attributed to strong activity in mission-critical facilities and complex commercial/industrial projects, including data centers in New Jersey, Arizona, and Colorado, aerospace work in California, and hospitality/higher education projects in New York. Management highlighted the segment's diversified market approach, not solely relying on data centers, and a robust pipeline of projects extending into 2028 and beyond.

    05

    Cash Flow and Liquidity Position

    Operating cash flow for Q2 FY26 was $3 million, down from $33 million in Q2 FY25, primarily due to the timing of📎 tax payments and project billings. Free cash flow was negative $26 million. Despite this, the company maintains a strong liquidity position with $138 million in cash, $460 million in borrowing availability, and a low funded debt-to-EBITDA ratio of 0.03x. Management expects strong EBITDA growth to support future cash flows, though DSOs may normalize from current record lows.

    06

    Labor Environment and Project Execution

    Management acknowledged some market tightness in the labor environment but expressed confidence in MYR Group's strategic positioning to capture future projects, particularly long-term ones. The company's centralized fleet and large project teams, established 20 years ago, enable it to manage both MSA contracts and larger projects effectively. Discussions with customers continue to focus on material delivery and labor alignment for upcoming construction, with terms and conditions becoming more favorable than 8-12 months prior.

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