What Shimmick (SHIM) Said on Its Q3 Earnings Call

Key Points

• Shimmick returned to profitability in Q3 2026, reporting $0.9 million in net income as revenue rose 27% to $136 million and adjusted EBITDA increased to $8.9 million. Gross margin improved to 12.5%, and the company generated $10 million in operating cash flow.
• Backlog totaled $907 million, with another $401 million in awards awaiting contracts, bringing the combined pipeline to about $1.3 billion—up 33% year over year. Shimmick expects most pending awards to convert to backlog within 90 days.
• The company narrowed its 2026 revenue outlook to $500 million–$525 million and raised and narrowed adjusted EBITDA guidance to $20 million–$25 million. Management cited strong demand in water infrastructure, electrification, and mission-critical projects.

Shimmick NASDAQ: SHIM returned to profitability in the third quarter of 2026, reporting its first positive net income in 12 quarters as new projects ramped up and the infrastructure contractor continued to wind down lower-margin work.

The company reported approximately $0.9 million in net income, compared with a loss of about $4 million a year earlier. Revenue rose 27% to $136 million, while adjusted earnings before interest, taxes, depreciation and amortization, or EBITDA, increased to $8.9 million from approximately $4 million.

CEO Ural Yal said the results reflected stronger margins on Shimmick projects and the closeout of non-core work. The quarter was the company’s fifth consecutive period of positive adjusted EBITDA.

Margins and Cash Flow Improve

Total gross margin increased to 12.5% from 7.6% a year earlier. CFO Todd Yoder attributed the improvement to new projects ramping up and a favorable mix of work. Selling, general and administrative expenses were $14.3 million, roughly unchanged from the prior-year quarter.

Yoder said revenue growth included $69 million from new projects, partly offset by $26 million of lower activity on projects winding down and a $14 million reduction following the completion of a lower-margin operations and maintenance project.

Shimmick reported earnings of $0.02 per diluted share, compared with a loss of $0.12 per diluted share a year earlier. Adjusted net income was $4 million, or $0.08 per diluted share, compared with an adjusted net loss of approximately $200,000, or $0.01 per share.

The company generated $10 million in operating cash flow, its first positive quarter since the fourth quarter of 2024. Liquidity ended the quarter at $53 million, up $20 million from the second quarter, while working capital turned positive at $11 million.

Yal cautioned that the liquidity increase included one-time items related to the timing of receivables and project closeouts. Shimmick expects positive operating cash flow for 2027 overall.

Pending Awards Support Backlog Outlook

Shimmick ended the quarter with $907 million in backlog and another $401 million in awards awaiting executed contracts. The combined figure of approximately $1.3 billion was up 33% from a year earlier. Non-core projects represented less than 2% of backlog.

The company booked $48 million in new awards during the quarter, resulting in a book-to-burn ratio of 0.4 times. Yal said the figure reflected contract timing rather than weaker demand. Shimmick expects the majority of its pending awards to convert to backlog over the next 90 days.

During the question-and-answer session, Yal said a good portion of previously pending contracts had converted since quarter-end. Approximately half of the $401 million in pending awards involved mission-critical infrastructure work, he said.

Yal said the company’s existing backlog allows it to be selective about projects and contract terms. He also noted that project ramp-up timing can cause quarterly variability and that conversion into construction activity has taken longer than initially expected.

Guidance and Market Outlook

Shimmick narrowed its 2026 revenue outlook to $500 million to $525 million and raised and narrowed its adjusted EBITDA guidance to $20 million to $25 million. Yoder said the lower revenue outlook reflected non-core work that was not expected to contribute gross margin and therefore did not affect profitability expectations.

Yal said demand remains strong across the company’s focus markets, including water infrastructure, electrification and mission-critical projects. He said Shimmick had not seen a slowdown in its data center pipeline, where it generally works as a specialty subcontractor on projects that are already funded and permitted.

The CEO also said the company expects electrical work to increase from the high teens as a percentage of backlog to 30% or more in 2027. On inflation, Yal said Shimmick generally includes contingencies in bids or passes higher costs to customers, although rising costs could eventually pressure public-sector construction budgets.

About Shimmick (NASDAQ:SHIM)

Shimmick Corporation NASDAQ: SHIM is a heavy civil construction company that delivers infrastructure projects for public agencies and other customers. Its work focuses primarily on water infrastructure, transportation systems and other complex civil construction programs. The company's capabilities include the construction and rehabilitation of dams, reservoirs, water-treatment facilities, tunnels, bridges, highways, transit systems and marine structures. Shimmick also provides related engineering, construction management and project-delivery services, with an emphasis on technically demanding projects and long-term infrastructure needs.

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