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    PRIM
    Earnings call· Dec 2025(Q4 FY25)

    Primoris Services Q4 FY25 earnings call PRIM

    Feb 24, 2026 Source

    Executive summary

    Primoris Q4 FY25 — Record Revenue, Earnings, and Backlog Driven by Strong End Markets

    Primoris delivered record financial performance in Q4 FY25, driven by strong demand in energy infrastructure, particularly data centers and power generation. While facing some project-specific margin pressures in renewables and a decline in storm work, the company's robust backlog and strategic investments in labor and capabilities position it for continued growth. Management is focused on improving execution and leveraging a strong balance sheet for organic expansion and strategic M&A.

    Highlights

    5

    • Achieved record revenue of almost $7.6 billion for FY25, up $1.2 billion YoY.

    • Ended FY25 with record total backlog of over $11.9 billion, including nearly $3 billion in new Q4 bookings.

    • Utilities segment revenue grew over 10% and gross profit increased almost 20% for FY25.

    • Energy segment revenue grew almost 25% for FY25, driven by renewables and natural gas generation.

    • Generated over $470 million in operating cash flow for FY25, exceeding the 4%-5% target range.

    Concerns

    5

    • Q4 gross profit declined by $9.6 million (5%) YoY due to lower gross margins in both segments.

    • Q4 Utilities segment gross margins decreased to 10.5% from 12.1% YoY, primarily due to a decrease in storm work.

    • Q4 Energy segment gross margins fell to 8.5% from 9.5% YoY, mainly due to cost overruns on certain renewables projects.

    • FY25 Energy segment gross margins declined to 10.1% from 11% YoY.

    • Pipeline services experienced another challenging year in FY25.

    Guidance & targets

    10
    CategoryTargetConfidence
    Adjusted EPS
    $5.80-$6.00
    high materiality
    High
    Adjusted EBITDA
    $560 million-$580 million
    high materiality
    High
    SG&A as % of revenue
    mid- to high 5% range
    medium materiality
    Medium
    Net interest expense
    $23 million-$26 million
    medium materiality
    Medium
    Effective tax rate
    29%
    medium materiality
    Medium
    Operating cash flow as a percentage of revenue
    4%-5%
    medium materiality
    Medium
    Capital expenditures
    $120 million-$140 million
    medium materiality
    High
    Utilities segment full-year gross margins
    10%-12%
    medium materiality
    Medium
    Utilities segment Q1 gross margins
    7%-9%
    medium materiality
    Medium
    Energy segment full-year gross margins
    10%-12%
    medium materiality
    Medium

    Segment performance

    2
    SegmentRevenueYoYQoQMargin
    Utilities
    Q4 revenue growth across all business lines, led by gas operations, power delivery, and communications. Q4 gross profit decreased 8% YoY due to lower gross margins, primarily from a decrease in storm work, partially offset by higher margins in communications. FY25 revenue up over 10% and gross profit up almost 20% due to improved margins, particularly in power delivery, despite an $18 million decline in storm work profit.
    Gross Margin: 10.5% (down from 12.1% YoY)Gas Operations Revenue: $1 billion (for FY25)Non-MSA Revenues: increased almost 30% (for FY25)MSA Backlog: growth
    		up nearly $34 million——decreased approximately $7 million
    Energy
    Q4 revenue growth primarily due to renewables, partially offset by lower industrial and pipeline revenue. Q4 gross profit decreased due to lower gross margins, mainly related to cost overruns on certain renewables projects from unanticipated rock and soil conditions. FY25 revenue grew around 25% and gross profit increased 13%, but gross margins declined to 10.1% from 11% YoY due to lower margins on certain renewables projects, partially offset by strong performance in natural gas generation, industrial, and Heavy Civil businesses.
    Gross Margin: 8.5% (down from 9.5% YoY)Renewables Revenue Growth: over 50% (for FY25)Natural Gas Generation Revenue: $480 million (for FY25)Battery Storage Business Revenue: over $250 million (for FY25)
    		increased $88 million——decreased $2.8 million

    Operational metrics

    24
    Total Revenue
    almost $7.6 billionrecord
    FY25

    Up $1.2 billion YoY.

    Total Revenue
    almost $1.9 billionup almost 7%
    Q4

    Compared to prior year.

    Gross Profit
    $175 milliondeclined $9.6 million or approximately 5%
    Q4

    Due to lower gross margins in both segments.

    Gross Profit
    increased $110 millionapproximately 16%
    FY25

    Primarily driven by higher revenue in both segments and improved margins in Utilities segment.

    Overall Gross Margin
    9.4%compared to 10.6%
    Q4

    In the prior year.

    SG&A Expense
    just over $97 millionessentially flat
    Q4

    Compared to the prior year.

    SG&A as % of Revenue
    5.3%down from 6%
    FY25

    In the prior year.

    Net Interest Expense
    $6.4 millioncompared to $12 million
    Q4

    In the prior year, due to lower debt balances and lower interest rates, along with higher interest income.

    Net Interest Expense
    just under $29 milliondown almost $37 million
    FY25

    From the prior year, due to lower debt balances and lower interest rates, along with higher interest income.

    Operating Cash Flow Margin Goal
    4%-5%exceeded
    past 2 years

    Through a combination of improved billing and collections and upfront payments on new awards.

    Cash Collections Pulled Forward
    over $100 million
    Q4

    From Q1 '26 into Q4 '25.

    Capital Expenditures
    $21.8 million
    Q4

    Investment in the quarter.

    Capital Expenditures
    about $130 million
    FY25

    Investment for the full year.

    Cash Balance
    $536 millionup from $456 million
    year-end 2025

    At the end of 2024.

    Total Long-Term Debt
    $470 million
    year-end 2025

    Resulting in a net cash positive position.

    Labor Force Increase
    more than 2,800 people
    2025

    To help support growth and meet client needs.

    Recordable Incidents
    well below the industry average
    2025

    Despite working over 40 million hours.

    Data Center Related Work
    $850 million
    FY25

    Mainly around enabling infrastructure for data centers.

    Data Center Related Work
    $350 million
    early FY26

    Secured in the short start of this year, against $850 million for the full prior year.

    Pipeline Opportunities Funnel
    over $3 billionincreased dramatically
    current

    Up from a historical trend around $1 billion.

    Natural Gas Generation Opportunities Funnel
    $1.5 billion-$2 billion
    H1 2026

    Actively bidding on awards in the first half of the year.

    Natural Gas Generation Opportunities Funnel
    nearly $6 billion
    overall

    Overall funnel with line of sight, weighted to the back half of the year.

    Storm Work Contribution to Adjusted EBITDA
    around $12 million
    2025

    Not included in 2026 guidance.

    Renewables Revenue Pulled Forward
    over $500 million
    2025

    From 2026 into 2025 due to project re-sequencing and accelerated execution.

    Industry KPIs

    5
    MetricValueDetails
    Total backlog$11.9 billionUSD
    End market pipeline—
    Acquisition contribution$75 millionUSD
    Self perform activity mix—
    Craft skilled labor headcount capacityover 2,800 peoplepeople

    Orderbook & backlog

    6
    Total Backlogover $11.9 billionyear-end 2025

    record

    New Bookingsnearly $3 billionQ4 2025
    Total MSA Backlogup over 20%year-end 2025

    up over 20% compared to prior year

    Driven by contract renewals and anticipated spend by customers in the Utilities segment, specifically in power delivery. Approximately $7 billion of total backlog is MSA related, with 90% in the Utilities segment.

    Communications New Awards$100 millionQ3 2025

    Referenced in Q3 call.

    Communications New Awards$200 millionearly FY26

    New bookings at the start of this year.

    Renewables New Bookingsover $1.6 billionQ4 2025

    Booked during the fourth quarter.

    Product announcements

    1
    ProductTypeDetails
    Premier PV (eBOS)expansion

    Deals & partnerships

    1
    non-core businessDivestiture of a non-core business

    Divestiture of a non-core business in Q4 2024 that created a $75 million revenue headwind in 2025.

    Capital programs

    1
    Premier PV new facilityannounced

    Benefit: increase capacity to service the market and add additional products

    We plan to invest in a new facility for this business line in 2026 that will increase our capacity to service the market and add additional products to our portfolio to align with customer demand and preferences. This expansion is expected to come online in Q4 2026.

    Risks & headwinds

    5
    Lower gross margins in Q4 2025Q4 2025

    Overall gross margins 9.4% vs 10.6% prior year. Utilities segment 10.5% vs 12.1% prior year. Energy segment 8.5% vs 9.5% prior year.

    Mitigation: Utilities: focus on growing mix of project work and increasing productivity. Energy: additional equipment/materials for challenging underground conditions, increased project leadership, upfront engineering/design/estimating.

    Decreased storm workFY25

    $18 million decline in gross profit from storm work in FY25.

    Mitigation: Focus on growing mix of project work and increasing productivity in power delivery to improve margins.

    Challenging year for pipeline servicesFY25

    Decline in pipeline revenue in FY25.

    Mitigation: Optimistic for acceleration in 2026/2027 due to increased funnel of opportunities (over $3 billion), rising natural gas demand, and a more favorable regulatory environment.

    Uncertain trade and regulatory environment for renewablesFY25

    Led to several delays, project specification changes, and redesigns.

    Mitigation: Teams responded to customer needs, booked over $1.6 billion in Q4, and helped accelerate project timelines.

    Project cost overruns due to unanticipated ground conditionsQ4 2025, expected to be worked past most excess costs in Q1 2026.

    Required additional labor and equipment, contributed to lower Q4 Energy margins. One sister project in a slight loss position.

    Mitigation: Increased project leadership, management oversight, and upfront engineering, design, and estimating work to mitigate future excursions.

    What to watch in Q1 FY26

    5

    Renewables project margin recovery

    Q1 2026, improving from Q2 2026
    CurrentQ4 Energy gross margin 8.5% (down from 9.5% YoY) due to cost overruns on certain projects. One sister project in slight loss position.
    TargetMargins to improve in 2026 and return to norms, with Q1 Energy margins at the bottom end of 10-12% range, improving from Q2.

    Why it matters

    Indicates successful mitigation of project-specific issues and return to expected profitability for a key growth segment.

    We believe that we have accounted for all of these increased costs and expect renewables margins to improve as we progress into 2026.

    Q&A highlights

    8

    How much of the $1.5B-$2B gas gen opportunities will convert to revenue in '26/'27?

    The $1.5B-$2B for H1 2026 would have meaningful burn in '26, with the overall funnel for gas generation being nearly $6B, weighted towards the back half of the year.

    “The $1.5 billion to $2 billion is notionally first half of the year and would have a meaningful burn in '26. In the overall funnel, it's probably a little bit more weighted to the back half of the year with line of sight to nearly $6 billion.”

    asked by Philip Shen · answered by Koti Vadlamudi

    2 min read7 chapters

    Detailed Narrative

    01

    CEO's Initial Impressions & Culture

    New CEO Koti Vadlamudi highlighted Primoris's strong culture of safety, innovation, and entrepreneurial spirit, evidenced by low recordable incidents and the Primoris Promise charity. He emphasized the company's adaptability to dynamic markets and its focus on customer collaboration, positioning it as a valued partner for large-scale energy infrastructure projects. This foundational culture, combined with a strong balance sheet, is expected to drive future growth and value creation.

    02

    Power Demand & Infrastructure Investment

    Primoris anticipates significant power demand growth, potentially 50% over the next decade and doubling in 15 years, driven by data centers, increased electrification, and onshoring. Utility customers are projected to increase CapEx by approximately 50% over the next five years compared to the previous five, focusing on grid hardening, replacement, and expansion. This trend creates substantial opportunities for Primoris in power generation, transmission, and distribution solutions.

    03

    Labor Force & Self-Perform Capability

    To meet client needs, Primoris increased its labor force by over 2,800 people in 2025, despite tight industry labor markets. The company's ability to self-perform the vast majority of its work is a key advantage, ensuring quality and timely execution. Primoris remains committed to attracting, retaining, training, and developing skilled craft and field labor, as well as project leadership, in anticipation of increased demand.

    04

    Natural Gas Generation Outlook

    Primoris is actively bidding on $1.5 billion to $2 billion of natural gas generation awards in the first half of 2026, with a line of sight to nearly $6 billion in the overall funnel. This segment is expected to see strong bookings in 2026, driven by the rising need for natural gas to fuel power generation and increasing LNG production. The company is prepared with project managers and skilled labor to take on this growing work.

    05

    Renewables & Battery Storage Growth

    Renewables achieved record revenue and operating income in 2025, with over $1.6 billion in new bookings during Q4. The battery storage business grew to over $250 million in 2025 and is expected to continue as a significant growth driver, often combined with solar solutions. Primoris is investing in a new facility for its Premier PV (eBOS) business in 2026 to increase capacity and expand its product portfolio.

    06

    Pipeline Services Rebound

    After a challenging 2025, pipeline services are poised for acceleration in 2026 and 2027, with the funnel of opportunities increasing dramatically to over $3 billion from a historical trend of around $1 billion. This rebound is attributed to the rising need for natural gas to fuel power generation, increasing LNG production, and a more favorable regulatory environment, particularly for large diameter pipeline construction.

    07

    Data Center Enabling Infrastructure

    The company highlighted significant activity in enabling infrastructure for data centers, reporting $850 million in related work for FY25. In the short start of FY26, Primoris has already secured $350 million in this area, indicating strong and accelerating demand. This work includes building major substations and large-scale network builds tied to data center development.

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