Primoris Q3 Profit Falls as Backlog Reaches Record $14.1B

Primoris Services Corporation reported lower third-quarter revenue and earnings as weakness in its Energy segment outweighed improved Utilities results. However, the specialty contractor ended September with record total backlog of $14.1 billion, supported by growing demand under Utilities master service agreements, particularly in power delivery.

Revenue declined 10.4% to $1.95 billion in the third quarter of 2026 from $2.18 billion a year earlier. Net income fell to $51.3 million, or $0.95 per diluted share, from $94.6 million, or $1.73 per share.

Adjusted net income was $64.9 million, compared with $103.1 million in the prior-year quarter, while adjusted diluted earnings declined to $1.20 from $1.88. Adjusted EBITDA decreased to $134.4 million from $168.7 million.

Consolidated gross profit fell to $204.7 million from $235.7 million, with gross margin edging down to 10.5% from 10.8%. Operating income declined to $94.9 million from $137 million, reducing operating margin to 4.9% from 6.3%.

Utilities offsets part of Energy decline

Utilities revenue increased to $770.9 million from $737.5 million. Segment gross profit rose to $100.2 million from $86 million, lifting gross margin to 13% from 11.7%. Operating income increased to $70.1 million from $55.1 million, while operating margin expanded to 9.1% from 7.5%. Primoris attributed the strong Utilities margins to its Power Delivery and Gas Operations businesses.

Energy revenue declined to $1.22 billion from $1.49 billion. Gross profit fell to $104.5 million from $149.7 million, and gross margin contracted to 8.5% from 10.1%. Segment operating income dropped to $51 million from $108.6 million, with operating margin falling to 4.2% from 7.3%.

The company also said PayneCrest’s revenue and backlog growth exceeded its expectations, although the presentation did not provide separate financial figures for the business.

Backlog reaches record level

Total backlog was $14.07 billion at Sept. 30, up from $13.86 billion at the end of the second quarter and $11.06 billion a year earlier. Master service agreement backlog increased to $8.50 billion from $8.15 billion sequentially, while fixed backlog was $5.57 billion, compared with $5.70 billion at the end of the second quarter.

Management said the sequential backlog increase was driven by MSA growth in Utilities, led by power-delivery demand. Energy represented 57% of total backlog and Utilities accounted for the remaining 43%.

Primoris is seeking to increase recurring MSA revenue to improve the stability and predictability of its business. MSA revenue totaled $2.8 billion for the 12 months through the third quarter of 2026, compared with $2.4 billion in full-year 2025. The company also remains focused on controlling selling, general and administrative costs as a percentage of revenue. SG&A represented 5.9% of revenue for the trailing 12-month period, compared with 5.3% in 2025.

2026 outlook and capital allocation

As of Nov. 4, Primoris expected full-year 2026 diluted EPS of $1.20 to $1.35 and adjusted diluted EPS of $2.10 to $2.25. The company forecast adjusted EBITDA of $290 million to $310 million, corresponding to projected GAAP net income of $65.2 million to $73.2 million.

Primoris expects full-year SG&A expense to be in the low-6% range as a percentage of revenue and an effective tax rate of approximately 33%. Interest expense is projected at $43 million to $47 million.

The company’s targeted 2026 gross-margin ranges are 10% to 12% for Utilities and 6% to 8% for Energy. Fourth-quarter capital expenditures are expected to total $30 million to $40 million, including $20 million to $30 million for construction equipment.

Primoris also announced authorization of a $250 million share-repurchase program. The presentation did not specify the timing or amount of purchases.

The outlook is based on management’s assumptions as of Nov. 4 and remains subject to business, economic and competitive uncertainties. Primoris cautioned that actual results could differ materially from its forward-looking statements.