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Primoris (PRIM) Q4 FY25 earnings call: guidance and Q&A

Earnings call· Dec 2025 (Q4 FY25)· Industrials· Feb 24, 2026

Source: earnings call transcript

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

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

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

PRIM operating KPIs by quarter

PRIM operating KPIs stated on its earnings calls, by fiscal quarter
KPIThis call Dec 2025 Q4 FY25 Mar 2026 Q1 FY26 Jun 2026 Q2 FY26Change vs prior quarter
Backlog
$11.9B+ We finished the year with over $11.9 billion in total backlog, including booking nearly $3 billion of new work in the final quarter of the year. Source: earnings call transcript
$11.6B With respect to backlog, we ended the quarter with $11.6 billion in total backlog compared to $11.9 billion at the end of 2025. Source: earnings call transcript
<$13.9B Total backlog at the end of Q2 was just under $13.9 billion, an increase of approximately $2.2 billion sequentially from Q1 and a record for Primoris. Source: earnings call transcript
—
Orders
<$3B We finished the year with over $11.9 billion in total backlog, including booking nearly $3 billion of new work in the final quarter of the year. Source: earnings call transcript
—
$3.9B+ During the quarter, we secured more than $3.9 billion of new awards, including approximately $1.5 billion in the Utilities segment and $2.4 billion in the Energy segment. Source: earnings call transcript
—

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

Total Backlog over $11.9 billion year-end 2025

record

New Bookings nearly $3 billion Q4 2025
Total MSA Backlog up 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 million Q3 2025

Referenced in Q3 call.

Communications New Awards $200 million early FY26

New bookings at the start of this year.

Renewables New Bookings over $1.6 billion Q4 2025

Booked during the fourth quarter.

Product announcements

ProductTypeDetails
Premier PV (eBOS)expansion

Deals & partnerships

non-core business Divestiture 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

Premier PV new facility announced

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

Lower gross margins in Q4 2025 Q4 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 work FY25

$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 services FY25

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 renewables FY25

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 conditions Q4 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

Renewables project margin recovery

Q1 2026, improving from Q2 2026
Current Q4 Energy gross margin 8.5% (down from 9.5% YoY) due to cost overruns on certain projects. One sister project in slight loss position.
Target Margins 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.

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

Q&A highlights

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 read 7 chapters

Detailed narrative

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.

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.

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.

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.

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.

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.

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.

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