Everus Q3 2026 Earnings: E&M Growth Supports Higher Guidance

Everus Construction Group (NYSE: ECG) reported third-quarter 2026 revenue of $1.38 billion, up 40.3% year over year, while diluted EPS increased 61.3% to $1.79 from $1.11. E&M was the primary growth engine, gross margin expanded by 220 basis points, and backlog reached $5.48 billion, supporting another increase to full-year guidance.

Core Earnings Data

Revenue growth remained predominantly organic: reported revenue increased 40.3%, while revenue excluding 2026 acquisitions rose 35.8%. Gross profit grew faster than revenue due to higher workloads, project execution and timing, as well as a $7.6 million benefit from resolving a dispute over prior billings.

SG&A expenses increased 55.8%, reflecting $13.4 million of additional incentive compensation, $6.7 million of acquisition-related costs and $5.7 million of higher acquisition-related amortization. Even with that expense growth, net income and EBITDA margins both expanded.

EBITDA, EBITDA margin and organic revenue growth are non-GAAP measures.

Business and Segment Performance

Electrical and Mechanical produced the larger growth contribution, supported by commercial and industrial work, particularly data center and high-tech projects. Lower renewable-energy revenue partially offset those gains. Transmission and Distribution benefited from utility work in transmission, distribution and underground markets, while transportation revenue declined.

E&M organic revenue increased 42.3%, while its EBITDA margin rose from 8.7% to 10.5%. Its backlog nearly doubled year over year, increasing 98.9%. By comparison, T&D margins were unchanged, and backlog slipped from $375.8 million a year earlier and $384.5 million at the end of 2025.

Organic Growth Remained the Main Driver Despite Acquisitions

Acquisitions contributed to the quarter, but the difference between 40.3% reported revenue growth and 35.8% organic growth indicates that existing operations generated most of the increase. The same pattern was visible in E&M, where reported revenue rose 48.0% and organic revenue increased 42.3%.

Acquisitions were more significant to future workload and capabilities. Businesses acquired during the first nine months of 2026 contributed an estimated $742.3 million to consolidated backlog. Everus also completed its acquisition of Epsilon Industries on September 1, expanding its off-site modular construction and prefabrication capabilities.

Profitability, Cash Flow and the Balance Sheet

Cash-flow figures were provided for the first nine months of 2026 rather than Q3 alone. Operating cash flow increased to $267.3 million from $108.6 million, while free cash flow rose to $221.2 million from $74.8 million. Capital expenditures increased to $53.4 million as Everus invested in vehicles and equipment to support growth.

Acquisitions required $380.5 million of net cash during the nine-month period. At September 30, unrestricted cash totaled $244.8 million and gross debt was $571.5 million, compared with $152.7 million and $285.0 million, respectively, at the end of 2025. Net leverage consequently increased from 0.4x to 0.7x.

Everus had $247.8 million available under its revolving credit facility. Working capital increased to $612.3 million from $560.2 million, with acquisitions, project timing, workload and billing fluctuations contributing to higher receivables and cash, partly offset by contract liabilities, accounts payable and accrued compensation.

2026 Guidance

Everus raised its full-year revenue and EBITDA forecasts, citing results from the first three quarters and acquisitions completed during 2026. At the midpoint, the new revenue range is approximately 9.8% above the previous midpoint, while the EBITDA range is about 17.4% higher.

The capital expenditure forecast represents approximately 1.8% to 2.0% of projected revenue.

Recent Insider Transactions

The supplied six-month summary reports 8,867 shares purchased across 12 transactions and 3,300 shares sold in one transaction, resulting in net purchases of 5,567 shares. The ten most recent reported transactions also include several director stock awards; all were reported as direct holdings.

Risks Investors Should Watch

• Dependence on E&M and selected end markets: E&M accounted for $5.11 billion of the $5.48 billion consolidated backlog. Recent growth has been concentrated in data center and high-tech work, while renewable-energy revenue declined.
• Margin comparability: Q3 gross margin benefited from project timing and a $7.6 million dispute-resolution gain. The latter may not recur in future periods.
• Acquisition costs and integration: Acquisition-related costs and amortization increased SG&A, while acquisition spending contributed to higher debt. The integration and expansion of Epsilon’s modular capabilities remain important execution factors.
• T&D backlog: T&D revenue grew, but its backlog declined slightly from both the prior year and year-end 2025, potentially limiting near-term growth compared with E&M.
• Working-capital requirements: Receivables increased to $1.07 billion from $769.8 million at the end of 2025. Continued growth, project timing and billing fluctuations could affect cash conversion despite the improvement in nine-month operating cash flow.

Summary

Everus delivered E&M-led organic growth, higher margins and substantially larger backlog in Q3 2026. Acquisitions added capabilities and future workload while also increasing expenses and debt. The raised guidance reflects continued operating momentum, but margin sustainability excluding the dispute benefit, Epsilon’s integration, T&D backlog and working-capital conversion remain the main items to monitor.