Limbach Q3 Revenue Rises 25%, Outlook Tracks Near High End

Limbach (NASDAQ: LMB) reported a 24.9% increase in third-quarter revenue as acquisition-related contributions and strong General Contractor Relationships activity supplemented a return to organic growth in its higher-margin Owner Direct Relationships business. The building systems company said its 2026 revenue and adjusted EBITDA are tracking at or near the high end of its existing guidance ranges.

Revenue for the quarter ended September 30 rose to $230.5 million from $184.6 million a year earlier. GAAP net income increased 7.5% to $9.5 million, while adjusted EBITDA advanced 25.9% to $27.4 million. The adjusted EBITDA margin was 11.9%, compared with 11.8% in the prior-year quarter.

Gross profit increased 20.5% to $53.8 million, but gross margin narrowed to 23.4% from 24.2%. Operating income rose 12.9% to $15.1 million, while operating margin declined to 6.5% from 7.2%. Adjusted net income was $16.4 million, or $1.37 per diluted share, up from $12.7 million, or $1.05 per share.

Organic Growth Returns to Owner Direct Business

Owner Direct Relationships, or ODR, revenue increased 6.6% to $150.7 million and represented 65.4% of quarterly revenue, down from 76.6% a year earlier as the GCR business expanded more rapidly. ODR organic revenue grew 2.2%, while acquisitions contributed another 4.4%.

ODR gross profit rose 7.1% to $38.2 million, and its gross margin edged up to 25.4% from 25.2%. The company has been emphasizing direct relationships with facility owners as part of an integrated model spanning planning, fabrication, project delivery and ongoing service.

General Contractor Relationships, or GCR, revenue climbed 84.7% to $79.8 million. Organic growth accounted for 54.4 percentage points of the increase, while acquisition-related revenue contributed 30.4 percentage points. GCR gross profit rose 73.6% to $15.6 million, although segment gross margin declined to 19.6% from 20.8%.

Across the company, organic revenue increased 14.4% in the quarter, with acquisition-related revenue adding 10.5%. Bookings totaled $311.2 million, producing a book-to-bill ratio of 1.4 times. Limbach said customer budgets are progressing and project visibility is improving, while deeper owner relationships remain a strategic focus.

The nine-month results showed a less favorable profit comparison. Revenue rose 18.0% to $542.8 million, but gross margin fell to 22.5% from 26.4%. Adjusted EBITDA declined to $50.0 million from $54.6 million, and GAAP net income decreased to $18.6 million from $26.8 million. Operating income fell 26.5% to $23.4 million. Organic revenue growth for the nine-month period was 2.0%, with acquisitions contributing 16.0%.

Acquisitions Expand Electrical and Data Center Capabilities

Limbach completed its acquisition of 1901, a Wisconsin-based building systems business that adds the company’s largest electrical operation and broadens its mechanical, electrical, plumbing and controls capabilities. The transaction had a base purchase price of $63 million, funded with cash and revolver borrowings.

Previously announced expectations for 1901 call for approximately $140 million of revenue and $11 million of adjusted EBITDA in 2027. These figures relate to the acquired business and are not consolidated Limbach guidance. Management plans to pursue customer growth and operating discipline to improve the operation’s margins over time.

CYMCOR expands Limbach’s data center expertise through program management, commissioning oversight and strategic consulting. The company said early engagement with facility owners could support project selection and connect those relationships with engineering, fabrication, execution and ongoing service. Previously announced 2027 expectations for CYMCOR are about $12 million of revenue and $4 million of adjusted EBITDA, excluding potential synergies and incremental project work.

Cash Flow and 2026 Outlook

GAAP cash from operations was $20.3 million in the third quarter. Company-defined free cash flow, which excludes working-capital changes and certain rental-equipment investment, was $22.2 million, representing 80.9% of adjusted EBITDA. Nine-month free cash flow totaled $43.6 million, or 87.1% of adjusted EBITDA.

At September 30, Limbach held $29.1 million in cash and cash equivalents and had $154.9 million of total debt, resulting in net debt of $125.8 million. Net leverage was 1.63 times trailing-12-month adjusted EBITDA. Total liquidity was $164.2 million following a new $300 million credit agreement completed in September, although an aggregate borrowing-capacity limitation reduced facility availability by $40 million at quarter-end. Limbach also repurchased 194,788 shares during the quarter at an average price of $51.31.

For 2026, the company continues to expect revenue of $760 million to $790 million and adjusted EBITDA of $78 million to $84 million, with results tracking at or near the high end of both ranges. Its fiscal-year performance indicators include total organic revenue growth of 9% to 14%, ODR organic growth of 6% to 10%, an ODR revenue mix of 70% to 80%, gross margin of 23% to 24%, and SG&A expense equal to 15% to 16% of revenue. Company-defined free cash flow is expected to equal 75% of adjusted EBITDA.

Management’s near-term priorities include maintaining bookings momentum, improving project performance, integrating acquisitions and positioning the business for further geographic expansion. The company identified national customer relationships, fabrication and off-site work, and lifecycle services as areas of focus for 2027.

Limbach cautioned that bookings and backlog involve estimates and timing uncertainty and do not guarantee future revenue, profit or cash flow. Its outlook also depends on acquisition integration, project execution and the realization of anticipated acquired-business performance. The company did not provide a reconciliation of projected adjusted EBITDA to a comparable GAAP measure because certain excluded items are variable and difficult to forecast.