MYR Group Q1 Earnings Call Highlights

Key Points

• MYR reported record Q1 results with revenue up 20% to $1.0 billion, gross margin rising to 13.4%, quarterly net income of $47 million and diluted EPS of $2.99, while EBITDA reached a record $82 million.
• Total backlog hit a record $2.84 billion and liquidity remains strong with $163 million in cash, only $9 million of funded debt, $460 million available on the credit facility and a funded-debt-to-EBITDA leverage of 0.04x.
• Management raised its margin profile and now expects about 12-ish% revenue growth for the year, targeting C&I operating margins of 6%–9% and T&D margins of 8%–11%, while continuing investments in prefabrication and evaluating M&A and share repurchases amid strong demand from data centers and grid modernization.

MYR Group NASDAQ: MYRG reported record first-quarter 2026 results, pointing to higher revenue, expanding margins, and a record backlog as continued infrastructure investment and customer demand supported both of its operating segments.

First-quarter results: revenue up 20% and record profitability

Senior Vice President and Chief Financial Officer Kelly M. Huntington said first-quarter revenue rose to $1.0 billion, up $167 million, or 20%, from the same period last year. Gross margin increased to 13.4% from 11.6%, which Huntington attributed primarily to “a larger portion of our projects progressing at higher contractual margins, some of which are nearing completion,” along with “better-than-anticipated productivity, favorable change orders, and a favorable job closeout.” She noted those benefits were partially offset by higher costs tied to inefficiencies on certain projects.

Net income was a quarterly record $47 million, up from $23 million a year earlier, while diluted EPS increased to $2.99 from $1.45. EBITDA was also a record $82 million, compared with $50 million in the prior-year period. Huntington said SG&A expense rose to $69 million, up about $7 million year over year, driven mainly by “higher employee incentive compensation costs and employee-related expenses to support future growth.”

Segment performance: T&D and C&I both post higher margins

Transmission & Distribution (T&D) revenue increased to $541 million, up 17% year over year. Huntington said the increase was largely due to higher revenue on unit price and time-and-materials work, partially offset by lower fixed-price revenue. Work under master service agreements (MSAs) represented about 70% of T&D revenue, an increase from recent quarters.

T&D operating income margin was 9.7%, up from 7.8% last year, aided by productivity and a favorable closeout, partially offset by inefficiencies on a project.

Commercial & Industrial (C&I) revenue reached $459 million, a record for the segment and a 24% year-over-year increase. Huntington said C&I growth was driven primarily by higher fixed-price contract revenue. C&I operating income margin rose to 8.1% from 4.7%, reflecting higher contractual-margin project mix, productivity, and change orders, partially offset by inefficiencies on certain projects.

Backlog hits record $2.84 billion; liquidity remains strong

Huntington said total backlog at March 31, 2026, was a record $2.84 billion, up 8% from a year ago. Backlog consisted of $981 million in T&D and $1.86 billion in C&I.

Cash generation remained solid. Operating cash flow was $85 million, compared with $83 million a year ago, while free cash flow was $69 million versus $70 million, with the slight decline attributed to higher capital expenditures. Huntington said the company ended the quarter with $258 million of working capital, $163 million in cash and cash equivalents, and just $9 million of funded debt, along with $460 million of availability under its credit facility. Funded debt to EBITDA leverage was 0.04x.

Looking ahead, Huntington discussed working capital dynamics and investment levels. She said the company maintained days sales outstanding (DSO) in the “mid-50s range,” well below its historical average, but said DSO could rise into the “low 60s” depending on award timing and the mix of billing structures. She also reiterated expectations for capital expenditures to trend toward about 3% of revenue for the full year, above historical levels, driven by opportunities in the more capital-intensive T&D business.

Operational highlights: awards, end-market demand, and execution focus

Chief Operating Officer of the T&D segment Brian Stern said the segment’s quarter was supported by “a mix of small to mid-sized projects” and steady bidding activity. He highlighted several awards during the quarter, including:

• Sturgeon Electric Company receiving an MSA in Arizona covering transmission, distribution, and substations, along with EPC program opportunities in the Northwest.
• Great Southwestern Construction securing construction of two greenfield substations in Texas.
• High Country Line Construction selected for substation work in Arizona and a 345 kV transmission line project in South Carolina.
• L.E. Myers Co. selected for a 345 kV transmission job and overhead distribution rebuild projects across Illinois and Iowa.
• Harlan Electric Company awarded overhead transmission work in Pennsylvania.

Stern pointed to broader grid investment themes, citing S&P Global’s “Horizons Top Trends 2026” report and noting that electrification and digital demand are straining existing systems, making grid modernization a “central focus” in 2026. He said the company expects work to remain steady across the U.S. and Canada.

Chief Operating Officer of the C&I segment Don Egan said the segment’s performance was supported by healthy core markets, consistent bidding activity, and expanding backlog. Egan identified data centers and water/wastewater projects as the strongest growth areas, citing FMI’s 2026 outlook that data center construction starts are up “nearly 100% year-over-year.” He also described a divergence in construction markets, with “mission-critical electrical and infrastructure work” showing resilience while “traditional commercial building segments remain volatile.”

Egan said MYR subsidiaries were awarded multiple data center projects in New Jersey, Arizona, California, and Colorado, along with clean energy work in California and multiple water treatment plants in Colorado.

Updated outlook: higher margin profiles and revenue growth expectation

During the Q&A, President and CEO Rick S. Swartz addressed the stronger C&I margin performance and what could sustain it. He said backlog margins were “similar to what they were in the past,” but the company has been “focusing on carrying less risk in our contracts,” along with project execution and prefabrication work done in a controlled environment to reduce field labor risk. Swartz also said some projects nearing completion had “potential upsides.”

Swartz provided updated margin profile targets for the year, while cautioning quarterly results can be “lumpy” based on project timing and other factors. He said the company is looking for C&I operating margin in the 6% to 9% range (up from a prior profile of 5% to 7.5%) and T&D operating margin in the 8% to 11% range (up from 7% to 10.5%), with a goal of operating around the “mid-ish range” on an annual basis.

On revenue, Swartz said the company had entered the year expecting “10-ish% growth,” but based on current visibility he would forecast “kind of that 12-ish% growth this year” across both segments, with potential quarter-to-quarter lumpiness tied to subcontractors and materials deliveries.

Swartz also addressed competitive dynamics in data centers, saying he was “not overly concerned,” citing long-term relationships and the company’s history in the market. He added that the company aims to maintain a balanced business rather than dedicate all resources to data centers, and said it had not seen margin pressure from new entrants.

On large transmission opportunities, Swartz said the company anticipates some large projects could enter backlog during the next two quarters, though some major project awards would not begin construction or generate revenue until 2027 or later. He also discussed 765 kV transmission, saying there has not been much built in the U.S., but the company has performed that work in the past and is having “very good conversations” with clients; he expects those projects “at the earliest” could begin mid-next year.

Capital allocation was another theme. With the company’s strong balance sheet, Swartz said MYR will continue investing in prefabrication, while also evaluating acquisitions and potential share repurchases. Huntington echoed that the company is in a strong position to support organic growth and “pursue the right acquisitions.”

In closing remarks, Swartz said the first-quarter performance reflected the company’s strategies and long-term customer relationships, and that MYR believes it is positioned for continued growth as electrical infrastructure investment increases, supported by “safe execution, disciplined bidding, and close collaboration” with customers.

About MYR Group NASDAQ: MYRG

MYR Group Inc NASDAQ: MYRG is a specialty electrical contractor that provides a broad array of construction, maintenance and emergency restoration services to utility, commercial, industrial and renewable energy customers. The company was formed in 1995 through the consolidation of several regional specialty contractors and has since expanded its capabilities to support complex transmission and distribution projects, substation installations, communication and wireless infrastructure, as well as renewable power interconnections.

Through a network of operating subsidiaries, MYR Group delivers turnkey solutions that include overhead and underground line construction, substation and switchgear installation, substation maintenance and testing, and storm restoration services.

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