Cardinal Infrastructure Group Q1 Earnings Call Highlights

Key Points

• Cardinal Infrastructure reported a strong Q1, with revenue up about 105% year over year to $168 million and adjusted EBITDA up 84% to $27 million, driven by organic growth and contributions from its A.L. Grading Contractors acquisition.
• The company raised its 2026 revenue guidance to $675 million-$685 million and cited a record $854 million backlog, which it said provides more than 12 months of revenue visibility at the current run rate.
• Management highlighted ongoing vertical integration and an active M&A pipeline, plus early wins in data centers and progress on a new asphalt plant, while maintaining a low leverage profile with no revolver borrowings.

Cardinal Infrastructure Group NASDAQ: CDNL reported sharp first-quarter growth and raised its full-year revenue outlook, citing record backlog, strong organic demand and early contributions from its A.L. Grading Contractors acquisition.

Chairman and Chief Executive Officer Jeremy Spivey said revenue grew approximately 105% year over year in the first quarter of 2026, including organic growth of about 64%. Backlog ended the quarter at $854 million, which Spivey called an all-time high for the company.

“These are exceptional numbers, and they are the result of years of building this platform and a team that executes relentlessly at every level,” Spivey said.

Record Backlog Supports Higher Revenue Outlook

Chief Financial Officer Mike Rowe said first-quarter revenue totaled $168 million, up 105% from the prior-year period. A.L. Grading Contractors, which Cardinal acquired in mid-February, contributed roughly six weeks of results in the quarter.

Rowe said growth was broad-based across regions and markets. Raleigh revenue increased more than 40%, Charlotte and Greensboro continued to scale, and A.L. Grading Contractors grew in the mid-teens despite a tougher weather comparison.

Cardinal raised its 2026 revenue guidance to a range of $675 million to $685 million, up from its prior range of $665 million to $678 million. The company reiterated its expectation for full-year adjusted EBITDA margins above 20%.

Rowe said the guidance increase reflected a stronger-than-expected first quarter, the company’s $854 million backlog, robust bidding activity, contributions from A.L. Grading Contractors and the benefits of vertical integration. He said the backlog represents more than 12 months of revenue at the company’s current run rate.

Adjusted EBITDA for the quarter was $27 million, up 84% year over year, while adjusted EBITDA margin was 16%, down from the prior-year period. Rowe said margins were affected by winter weather, which limited deployment of higher-margin work, and by growth initiatives across the business.

Margins Improve at Gross Profit Level Despite Seasonal Headwinds

Gross profit rose to $24.9 million, or 14.9% of revenue, compared with $9.9 million, or 12.1% of revenue, in the same quarter last year. Rowe said the 280-basis-point improvement in gross margin reflected scale benefits from higher volume and controlled operating costs.

Adjusted gross profit increased 107% year over year to $34 million, while adjusted gross margin expanded by about 20 basis points. Rowe said that improvement was meaningful given first-quarter seasonal headwinds and integration activity tied to A.L. Grading Contractors.

General and administrative expenses were $10 million, or 6% of revenue. Rowe said about $3.5 million of the increase was non-recurring, tied to acquisition costs and one-time public company readiness expenses. On a continuing basis, G&A was 3.9% of revenue, and the company expects that ratio to improve as revenue increases during the construction season.

Operating cash flow was $9.3 million, down from $12.1 million in the prior-year quarter, which Rowe attributed to working capital required for growth, particularly higher billings not yet collected. Capital expenditures were $9.3 million excluding acquisitions, reflecting work on an asphalt manufacturing facility and investments in fleet and equipment. Cardinal maintained its full-year capital expenditure forecast of $58 million.

Vertical Integration Remains Central to Strategy

Spivey emphasized Cardinal’s vertically integrated model, under which the company self-performs services including clearing, erosion control, drilling and blasting, grading, wet utility installation and paving. He said that structure reduces delays tied to subcontractor availability and can compress schedules by six to eight weeks.

According to Spivey, more than 80% of Cardinal’s customers are recurring in nature. He said Raleigh, which again grew more than 40% organically in the quarter, is the clearest example of the company’s model at scale.

Spivey said Charlotte and Greensboro are still in earlier stages of building labor force, density and equipment needed for turnkey projects. Those markets are currently dilutive to consolidated margins, but he said they have “significant runway ahead” and should see margin expansion as they mature.

The company also highlighted diversification beyond its historical residential base. Spivey said Cardinal was approximately 75% residential-focused before its IPO, but that figure has declined to 65% as it expands into commercial, manufacturing, industrial and other end markets.

A.L. Grading Integration and M&A Pipeline

Chief Operating Officer Benji Wood, who joined Cardinal through the A.L. Grading Contractors acquisition, said the company’s acquisition strategy has two tracks: tuck-in deals that deepen vertical integration in existing markets and platform deals that provide geographic expansion.

Wood said Cardinal has completed seven acquisitions since 2021, bringing in approximately $310 million in acquired pro forma annual revenue across multiple geographies and end markets. He said the current acquisition pipeline is “the most active it has ever been,” with tuck-in opportunities around Charlotte, Greensboro and Atlanta, as well as platform-style opportunities in adjacent Southeast geographies.

Wood said Cardinal targets tuck-in acquisitions at roughly 4 times EBITDA and platform acquisitions around 6 times EBITDA. He added that platform acquisitions are expected to be accretive to, or in line with, the company’s consolidated margin profile.

During the question-and-answer session, Spivey said Cardinal has already found synergies with A.L. Grading Contractors, including bringing drilling and blasting, paving-related services and cement stabilization work into the Atlanta region. He also said A.L. Grading Contractors has grading equipment that Cardinal can learn from and use across its Carolinas operations.

Data Center Opportunity and Asphalt Plant Update

Spivey said Cardinal recently won its first data center contract, a $24 million project under which the company will self-perform all services, with completion expected in 2027. He said bidding activity in the mission-critical market is active, particularly following the company’s expansion into Georgia.

In response to an analyst question, Spivey said Cardinal is focused on executing the current data center project while also bidding on several other opportunities. He said margins in the data center market need to be at or better than those in the company’s residential work, and said the opportunities Cardinal is seeing meet that threshold.

Spivey also provided an update on Cardinal’s asphalt plant, saying it remains on track for a second-quarter start despite some delays tied to electrical, gas and permitting items. He said the plant is nearly fully constructed and that the company has already won a large resurfacing project adjacent to the facility.

Cardinal ended the quarter with $196 million outstanding on its term loan and no borrowings on its $75 million revolving credit facility. Rowe said net leverage was approximately 1.2 times, below the company’s 2.5-times covenant, leaving capacity to fund operations, capital expenditures and acquisitions.

About Cardinal Infrastructure Group NASDAQ: CDNL

We provide a comprehensive suite of infrastructure services to the residential, commercial, industrial, municipal, and state infrastructure markets. Our operations leverage a large highly skilled workforce and a fleet of specialized equipment to deliver wet utility installations (water, sewer, and stormwater systems), as well as grading, site clearing, erosion control, drilling and blasting, paving, and other related site services. We are becoming the platform of choice for a diverse array of infrastructure construction projects in our target geographies that require high-level technical expertise and sophistication.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.