Earnings call transcript: Primoris Q3 2025 beats forecasts, stock declines

Primoris Services Corporation reported a strong Q3 2025, with earnings per share (EPS) of $1.88, significantly surpassing the forecast of $1.35, marking a 39.26% surprise. Revenue reached $2.2 billion, exceeding the expected $1.83 billion by 18.58%. Despite these positive results, Primoris’ stock fell by 8.08% in after-hours trading, closing at $136.97, down from the previous close of $143.27.

Key Takeaways

• Primoris exceeded EPS and revenue forecasts by significant margins.
• Despite strong earnings, the stock dropped 8.08% in after-hours trading.
• The company reported a 32% year-over-year increase in Q3 revenue.
• Primoris raised its full-year 2025 EPS guidance.
• Strong growth in renewables and gas generation sectors was highlighted.

Company Performance

Primoris Services Corporation delivered impressive financial results for Q3 2025, showcasing robust growth across its business segments. The company reported a 32% year-over-year increase in revenue, reaching $2.2 billion. This growth was driven by strong demand in utility segments and significant advancements in power generation, gas operations, and communications. Primoris continues to expand its capabilities in renewables and energy infrastructure, positioning itself favorably in the market.

Financial Highlights

• Revenue: $2.2 billion, up 32% year-over-year
• Net Income: $94.6 million, up 61% year-over-year
• Adjusted EPS: $1.88, up 54% year-over-year
• Adjusted EBITDA: $168.7 million, up 32% year-over-year
• Cash from Operations: $180 million in Q3, $327 million year-to-date

Earnings vs. Forecast

Primoris significantly beat market expectations with an EPS of $1.88 compared to the forecasted $1.35, resulting in a 39.26% surprise. Revenue also surpassed expectations, reaching $2.2 billion against the anticipated $1.83 billion, an 18.58% surprise. This marks a substantial outperformance compared to previous quarters, indicating strong operational execution and strategic growth initiatives.

Market Reaction

Despite the strong earnings report, Primoris’ stock fell by 8.08% in after-hours trading, closing at $136.97. This decline comes after the stock reached a 52-week high of $146.16. The drop may reflect investor concerns about future growth prospects or broader market trends affecting the sector.

Outlook & Guidance

Looking ahead, Primoris raised its full-year 2025 EPS guidance to $475-$495, with adjusted EPS expected between $535-$555. The company anticipates continued revenue growth in its gas generation and pipeline segments, with strong bookings expected in Q4 and early 2026. Primoris is also targeting over $100 million in data center network projects and expanding its presence in the battery storage market.

Executive Commentary

David King, Interim CEO, expressed optimism about the company’s future, stating, "We are operating at an extremely high level, and we are seeing the results." He further emphasized, "The outlook for Primoris remains as good as we have seen," highlighting confidence in the company’s strategic direction and market opportunities.

Risks and Challenges

• Potential delays in renewable project bookings due to tariff uncertainties.
• Market saturation or increased competition in the infrastructure services sector.
• Macroeconomic pressures that could impact project funding and execution.
• Regulatory changes affecting energy and utility markets.
• Supply chain disruptions that could affect project timelines and costs.

Q&A

During the earnings call, analysts inquired about the delay in renewable project bookings and the company’s strategies to mitigate potential impacts. Executives confirmed a strong pipeline of opportunities in the energy segment and highlighted growth potential in gas generation and data center projects. Additionally, discussions included revenue recognition and booking strategies to ensure sustained growth.

Full transcript - Primoris Services Corporation (PRIM) Q3 2025:

Conference Operator: Good morning and welcome, everyone, to the Primoris Services Corporation Third Quarter 2025 Earnings Conference call and webcast. Today’s conference is being recorded. All lines have been placed on mute to prevent any background noise. After the speaker’s remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press the star key followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. At this time, I would like to turn the conference over to Blake Holcomb, Vice President of Investor Relations. Please go ahead.

Blake Holcomb, Vice President of Investor Relations, Primoris Services Corporation: Good morning and welcome to the Primoris Third Quarter 2025 Earnings Conference call. Joining me today with prepared comments are David King, Chairman and Interim President and Chief Executive Officer, and Ken Dodgen, Chief Financial Officer. Before we begin, I would like to make everyone aware of certain language contained in our Safe Harbor Statement. The company cautions that certain statements made during this call are forward-looking and are subject to various risks and uncertainties. Actual results may differ materially from our projections and expectations. These risks and uncertainties are discussed in our reports filed with the SEC. Our forward-looking statements represent our outlook only as of today, November 4th, 2025. We disclaim any obligation to update these statements except as may be required by law. In addition, during this conference call, we will make reference to certain non-GAAP financial measures.

A reconciliation of these non-GAAP financial measures is available on the Investors section of our website and in our Third Quarter 2025 Earnings Press Release, which was issued yesterday. I would now like to turn the call over to David King.

David King, Chairman and Interim President and Chief Executive Officer, Primoris Services Corporation: Thank you, Blake. Good morning and thank you for joining us today to discuss our third quarter 2025 operational and financial results. Primoris had another great quarter, once again delivering record revenue, operating income, and earnings. I am proud of our employees and their ability to execute at a high level while providing our customers with safe, reliable service and driving profitable growth. Operating cash flow was also a highlight of the third quarter and further demonstrates the hard work we have put in to improve in this area. As a result of this emphasis, we have been able to make tremendous progress in delivering the balance sheet and allowing us to invest in the business to be well prepared for the surge in demand we are currently seeing across our end markets.

I am particularly proud of how we have generated free cash flow and set new highs on our return on invested capital since making these metrics a priority. We are a company focused on the development of quality people and delivering quality projects for our clients. We continue to allocate our time and resources to capitalize on what we believe is a generational opportunity for our infrastructure solutions that will drive value for our shareholders. Last quarter, I discussed the significant demand on the horizon for power generation and the growing prospect of providing more services which support the development of data centers. I want to reiterate that these and other opportunities remain squarely in front of us. The ramp-up in revenue, combined with the delay of a couple of larger dollar value projects, led to a higher-than-anticipated backlog burn rate in the energy segment.

The timing when projects are signed and placed into backlog can hinge on a number of factors, including changes in scope and design and the shifting of supply chain schedules. We continue to direct our attention toward the things we can control during the process and providing our customers with the resources they need from us to get the projects built timely. I want to emphasize that our lower-than-forecasted bookings in Q3 were not a result of projects being canceled or awarded to other service providers, but are instead being impacted by other circumstances that can affect the timing of executed contracts. Because of this, we remain highly confident that we will sign several high-value energy segment projects in the coming quarters that will set us up for another successful year in 2026. I’ll now turn to our performance for the quarter by segment.

In the utilities segment, third quarter revenue was up double digits from the prior year. We also had double-digit backlog growth in utilities as demand for power, gas, and communication services continues to surge. Leading the revenue growth was gas operations, where activity and margins remain resilient. We are seeing increased customer spend on development programs in the Midwest, Southeast, and Texas that have enabled us to staff up and capitalize on these trends. In regions with more variable activity, we have controlled costs to maintain solid margins. While the fourth quarter can bring unpredictable weather that can impact work schedules, our gas utility business appears to be on track for a record year in 2025. Communications revenue and margins were also up from the prior year, driven by broadband expansion and an increase in major project buildouts.

We believe the emergence of larger EPC network builds tied to data centers will continue to support growth in our communications business. We are targeting over $100 million of these projects over the next few quarters, which, if successful, would complement our fiber-to-home, new build, and maintenance programs. We are also monitoring how states are managing the potential for federal funds to further build out networks in underserved areas, which could be a catalyst in the communications business that we are not currently building into our plans. Power delivery had its best revenue quarter in recent years as demand is rapidly increasing in key geographies. More clients are releasing work orders from engineering at a faster pace, which is leading to increased activity and a more favorable mix of work.

These trends and customer conversations on upcoming plans helped to drive utility segment backlog up from the prior quarter to an all-time high of nearly $6.6 billion. Margins continue to trend in the right direction for power delivery, but were lower compared to the prior year as we did not have the benefit of storm work we had in 2024. We have more progress to make to achieve our longer-term power delivery goals, but I am pleased with the accomplishments of our teams and leaders over the past two years. We’re in a great position to benefit from the expansion and hardening of the electric grid in many of the regions where it is most needed, and I believe our safety culture, expertise, and ability to invest in the business will open the door for further growth across transmission, substation, and distribution.

Turning to the energy segment, the renewables business had a record revenue quarter as utility-scale EPC and battery storage continued to accelerate. A higher-than-expected revenue growth in renewables has been a main driver of the decrease in backlog at an area that has seen project signings push out a quarter or two. However, as mentioned earlier, we remain highly confident that we will sign several high-value projects in the coming quarters that will set us up for another successful year in 2026. The signing of the One Big Beautiful Bill and the subsequent Treasury Department guidance has allowed our customers to have a substantial volume of projects safe-harbored for the next several years. This has provided increased stability and visibility to this market. However, customers are still navigating some uncertainty on tariffs that has slowed down the process of pricing and therefore the signing of certain projects.

The funnel of projects remains very healthy and is expanding with new Tier One customers wanting to work with us on their high-value projects. Based on our conversation with customers, we view this as a near-term adjustment to the timing of bookings and believe we will see backlog begin to build over the next few quarters. The battery storage market outlook is also beginning to improve after a couple of quarters of uncertainty. We’re seeing the increased adoption of battery storage on upcoming projects, adding storage to previously constructed projects, and a growing number of standalone projects as well. This is giving us increased confidence that we can have continued success in an attractive market for growth. Industrial services also saw impressive revenue growth from the prior year as natural gas generation activity has risen to a level not seen in over a decade.

Primoris’s track record for successful execution on gas generation projects has helped us earn an excellent reputation in the market. This has put us in a position of being a leader in the construction of gas-fired power facilities where growth is driven by the further electrification of the industry and data centers. We continue to take a disciplined approach to growth in this market, but expect to have some sizable awards in the fourth quarter and into 2026 that will set us up for meaningful growth and accretive margins with good execution. The pipeline business has faced challenges this year as revenues and margins partially offset the strong results in the quarter. Despite the recent headwinds in the business, our leadership has done well in managing the cost and keeping crew members active as we anticipate what appears to be an emerging upcycle.

Headwinds impacting pipeline services have quickly reversed, and we’re beginning to see tailwinds develop in this business line. We are seeing bids materialize for several large projects, and we anticipate the trend to shift toward the positive with awards as soon as this quarter. It would only take a few awards to see a revenue and margin benefit in the energy segment, and we are optimistic that 2026 will serve as the starting point. In summary, Primoris continues 2025 momentum with a record third quarter, and we are energized about the future opportunities we have to take advantage of the significant tailwinds across our end markets. I’ll now turn it over to Ken for more on our financial results.

Blake Holcomb, Vice President of Investor Relations, Primoris Services Corporation: Thanks, David, and good morning, everyone. Our Q3 revenue was nearly $2.2 billion, an increase of $529 million, or 32% compared to the prior year, driven by double-digit growth in both the energy and utility segments. The energy segment was up $475 million, or 47% from the prior year, driven by increased renewables and industrial activity. In renewables, project progress continues to accelerate, resulting in revenue outpacing our expectations by over $400 million for the quarter and by over $900 million year to date. We have seen significant revenue pulled forward from Q4 and from 2026, driven by strong project execution and early delivery of major materials. We now expect renewables revenue to be closer to $3 billion for the full year 2025, up from our previous estimate of $2.6 billion.

Additionally, our industrial business was up over $100 million compared to Q3 2024, driven by strong execution on gas-powered generation and other industrial work. The utility segment was up over $70 million, or 10.7% from the prior year, driven by higher activity across all service lines led by gas operations and power delivery. Gross profit for the third quarter was $235.7 million, an increase of $37.2 million, or 18.7% compared to the prior year. This was attributable to increased revenue, partially offset by lower margins in both segments. As a result, gross margins were 10.8% for the quarter compared to 12% in the prior year. Looking at our segment results, the utility segment gross profit was $86 million, essentially flat compared to the prior year, resulting in gross margins decreasing to 11.7% compared to 13.1% in the prior year.

The lower gross margins were mainly due to a significant decrease in higher-margin storm work in the current quarter compared to the prior year. In fact, the benefit from storm work and power delivery is about a third of what we saw in Q3 of the prior year. Excluding storm work, utilities’ margins were comparable to the prior year. Despite not realizing this margin benefit, we are seeing quality performance in power delivery and the rest of the utility segment, including an increase in non-MSA work compared to the prior year, which is a strategic priority for us as we seek to improve margins in this segment. In the energy segment, gross profit was $149.7 million for the quarter, an increase of $38.1 million, or 34.2% from the prior year, primarily due to higher revenue. Gross margins in the segment were 10.1%, down from 11% in the prior year.

The decrease in margin was driven by fewer project closeouts in 2025 compared to the prior year. Pipeline margins were also a drag on margins during the quarter due to lower revenue and gross profit compared to Q3 of 2024. However, we are expecting to see some margin improvement in the segment as we close out the year and move into 2026. Looking at SG&A, expenses in the third quarter were $97.7 million, which was in line with the prior year. As a percentage of revenue, SG&A declined 140 basis points from the prior year to 4.5%. This was driven by our record revenue and ongoing efforts to control administrative costs and improve our operating leverage. While SG&A could tick up slightly as we wrap up the year, we expect SG&A as a percent of revenue to be in the mid- to high-5% range for the full year.

Net interest expense in the quarter was $7 million, down $10.9 million from the prior year, primarily due to lower average debt balances and lower interest rates. Based on current trends and expectations, we are updating our guidance for interest expense to be between $30-$32 million for the full year, down from the $33-$37 million guidance we provided last quarter. This is due to our continued reduction in debt and lower interest rates. Our effective tax rate was down slightly because of some discrete tax impacts during the quarter. We now expect that our effective tax rate for the full year will be approximately 28.5%. Net income increased to $94.6 million, or $1.73 per fully diluted share, both up around 61% from the prior year.

Adjusted EPS increased by over 54% to $1.88 per fully diluted share, and adjusted EBITDA was $168.7 million, up 32% compared to the prior year, setting us on a course to achieve record earnings per share and adjusted EBITDA for the full year 2025. Transitioning to cash flow, Q3 cash from operations was a little over $180 million, bringing our year-to-date cash flow to more than $327 million. This represents a $117 million improvement in operating cash flow compared to the first nine months of the year. The increase was driven by higher net income and a continued focus on working capital efficiency. Turning to the balance sheet, we closed Q3 with approximately $431 million of cash and total liquidity of $746 million. We also paid down $100 million on our term loan during the quarter, helping to lower our trailing 12-month net debt-to-EBITDA ratio to 0.1 times EBITDA.

Our balance sheet strength allows us to invest in the resources required to meet our increasing organic opportunities while allowing flexibility to add scale or new services through M&A that meet our financial and strategic criteria. A disciplined approach to accretive M&A remains a focus for us, and we are encouraged by the quality of acquisition targets we are currently seeing in the market. Total backlog at the end of Q3 was around $11.1 billion, down around $430 million sequentially from Q2. Fixed backlog was lower by about $921 million due to a combination of higher revenue burn and the timing of energy segment bookings. As David mentioned, we have seen the signing of some contracts pushed to the right about three to six months as our customers navigated through all of the volatility and change during the past three quarters.

But our large funnel of high-quality opportunities is still very strong, and we view this backlog decline as temporary. Although bookings and our progress on work and backlog will vary quarter to quarter, we have a high degree of visibility to new awards in the coming quarters for the energy segment across solar, natural gas generation, and midstream pipeline. MSA backlog is up $492 million from Q2, driven by increased activity across our utilities businesses and particularly power delivery as customer investment in the power grid ramps. Before turning it back over to David, I’ll close with our updated guidance. We are increasing EPS guidance to $475-$495 per fully diluted share and adjusted EPS guidance to $535-$555 per fully diluted share.

And even though we had about $10 million of Adjusted EBITDA pulled forward from Q4 into Q3, we are also raising our Adjusted EBITDA guidance to $510-$530 million for the full year 2025, with the opportunity to achieve the upper end of that range with good weather in Q4. Additionally, we are increasing the range of our gross capital expenditures by $10 million at the midpoint to $110-$130 million to support this continued growth. We have had an excellent first three quarters of the year generating cash flow, paying down debt, and growing earnings. As we move to close out the year, we are confident that we will finish strong and carry positive momentum into 2026. I’ll now turn it back over to David.

David King, Chairman and Interim President and Chief Executive Officer, Primoris Services Corporation: Thanks, Ken. Before we open the call for questions, I’d like to recap a couple of key points of the quarter. First, Primoris is operating at an extremely high level, and we are seeing the results. We have tailored our strategy to emphasize improved margins, earnings growth, cash flow generation, and the efficient allocation of capital, and we are experiencing success in each of these areas. This is a direct result of our company culture and the dedication of our people in the field and those who support them. Second, the outlook for Primoris remains as good as we have seen, and we have the people in our customer relationships to take advantage of the opportunities ahead of us.

In all areas of our business, we will continue to work with and on behalf of our customers to develop the solutions to meet the infrastructure needs of the communities we serve. There’s a lot of work to be done, and we are in a prime position to be a major contributor to the growth and modernization of the utility and energy infrastructure in North America. Lastly, I want to thank the people at Primoris for their support and efforts during my time as Interim CEO. It has been a privilege to work alongside them these past few quarters, and I am grateful to have had the opportunity to play a role in transitioning Primoris into its next chapter led by Cody Daddaloudi. Cody is a talented and tenured executive that meets all the criteria we are looking for in the next leader of Primoris.

I and the rest of the board are pleased to have him join us, and we look forward to supporting him. It is an exciting time to be in our industry and especially to be part of the Primoris team. I have a high degree of confidence that the best years of Primoris are in front of us. I want to encourage our teams to maintain the high standard of execution they have through the first nine months of the year and close out 2025 strong with a look to the future. We will now open up the call for your questions.

Conference Operator: Thank you. We will now begin the question and answer session. If you have dialed in and would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star one again. We’ll take our first question from Philip Shen at Roth Capital Partners.

Hey, guys. Thanks for taking my questions. You guys had previously expected fiscal 2025 order intake to be back half-weighted. Dave, you just shared in your prepared remarks that you expect energy bookings to improve in the coming quarters. Can you provide some additional color on how bookings might look so far in this quarter, Q4, and then additional color on how they might trend? Thanks, guys.

David King, Chairman and Interim President and Chief Executive Officer, Primoris Services Corporation: Sure, Philip. Thanks for the question. Yeah, we’ve indicated even in some of my opening remarks that some of the timing for some of the energy segment jobs were probably going to be pushed into this Q4 timeframe, and indeed, we’ve seen that. I’ll let Ken kind of give you some rough numbers in a moment, but I would tell you that we’re looking to have a very good book-to-bill in our energy segment and possibly in other areas also in this Q4. We’ve already booked some pretty nice awards and currently doing some paperwork to continue firming up some additional awards in Q4. So just as we’d said, I’m pretty comfortable with where we’re going to end up relative to Q4 bookings, so Ken?

Ken Dodgen, Chief Financial Officer, Primoris Services Corporation: Yeah, yeah. And Philip, the other thing I would add is while we definitely entered the year thinking that it would be back half-loaded, what we weren’t anticipating is all the noise from tariffs and OB3 and everything else. So all that’s done is kind of, as we mentioned in our opening comments, has kind of shipped everything out a quarter to as much as two quarters in a few cases. But looking at Q4 already, just for the energy segment alone, we’ve already booked over $600 million. We have another $600 million that should book within the next 30 days. And for the energy segment, we’re expecting a book-to-bill well north of one for Q4, maybe as high as 1.2 or 1.3, depending on how the rest of the quarter closes out.

Great. That color is very helpful. Thank you. And shifting over to or staying with the energy segment, book-to-bill was 0.3 times. You just talked about how that could be strong. How much of the $300 million Q3 revenue in the energy segment was attributable to pull forward of demand timing? And what do you think Q4 energy revenue looks like? You talked about bookings, but let’s talk about the revenue now. Thanks, guys.

Yeah, the pull forward on revenue was at least $100 million. And I don’t have the exact numbers in front of me right now, but I know there was comfortably a hundred-plus million of revenue that was pulled forward that led to the EBITDA pull forward as well. Revenue for Q4. I’ve got a ballpark number of about $1.2 billion for energy in Q4.

Conference Operator: We’ll take our next question from Sanjita Jain at KeyBanc Capital Markets.

Yes, hi. Good morning. Thanks for taking my question. So I know we’ve discussed a lot about the renewables bookings being pushed out. Can we talk about the gas generation bookings, maybe how the funnel of opportunities looks there and if there were any delays in bookings in that subsegment?

David King, Chairman and Interim President and Chief Executive Officer, Primoris Services Corporation: Sure. Thanks for the question again. Yeah, there was a little bit that kept being pushed out. Remember, we’re trying to work with our customers to get that price, that fixed price. And some of the delays relative to some of the materials that needed in the project, getting firm pricing and things like that kind of pushed them a little bit to the right on us. But as Ken mentioned, we’re seeing those now become bookings. And so again, I’m seeing that delay in some of those bookings getting behind us, especially in Q4. And then we’re still looking at fairly strong bookings in Q1 and Q2 also.

Conference Operator: Got it. And then on the comment in your press release about weather impacting some of your projects in 3Q. Are those projects all done, or should we expect more kind of like margin leakage from those into 4Q?

Ken Dodgen, Chief Financial Officer, Primoris Services Corporation: Yeah, so I think the short answer is not all the projects are done. It was pretty heavily focused on the pipeline part of our business and just a couple of projects there. As those projects finish in Q4 and burn off, we may have a little bit of margin drag in Q4, but that should be it.

All right. Great. Thanks. I’ll come back.

David King, Chairman and Interim President and Chief Executive Officer, Primoris Services Corporation: Thanks, Sanjita.

Conference Operator: Next, we’ll move to Lee Dagoda at CJS Securities.

Hey, good morning. I guess for starters, David, it was fun the second time around, and if Cody’s listening, he’s going to have to work on his southern accent a little bit.

David King, Chairman and Interim President and Chief Executive Officer, Primoris Services Corporation: I agree, Lee. I agree.

If we can start with the utility side of the business, you’ve had four straight quarters of double-digit top-line organic growth. And obviously, the backlog, both on a year-over-year basis and a sequential basis, has improved somewhere between 10% and 20%, depending on which metrics you’re looking at. If you’re sitting here today, how sustainable is that double-digit organic growth on the utility side as we move not just into Q4, but as we look out into 2026?

Let me start out, and then I’ll let Ken add some more color as he sees fit. We did increase our range for those utilities between that 10%-12% for the year, as you knew. I mean, we mentioned that last time. I do think those are sustainable going in. The demand, as you’ve seen, Lee, has been pretty strong in our utility segment. We’re still seeing good buildouts on the communication side of the utilities, good buildouts on the gas side, gas utility side of it. So I would say that I’m still feeling pretty comfortable that we can maintain those.

Well, that’s just on the margin side, that 10% to 12%. I’m more talking on the revenue side. You’ve done 10% plus over the last four quarters in a row.

Okay. I thought you were talking about that growth metric.

No, no, no. Top-line growth.

Okay. On the top line, yeah, the revenue growth has been strongly aided by the gas and communications strength that we’re seeing, and again, we’re still seeing just on the revenue side a tremendous demand out there for our services, continuing to build teams, continuing to train personnel, so I still see that as a pretty strong market for us to continue to grow in.

And then one more, and I’ll hop back in the queue here. So Ken, I think you mentioned $1 million of pull forward year-to-date in energy. And as we continue to pull forward, some of that’s got to come from the future beyond 2025. So despite all these large bookings, and I guess under the framework of what we had been expecting, three-ish hundred million dollars of revenue improvement from energy each of the next couple of years, how does that set up for revenue growth within the energy segment and renewables specifically in 2026?

Ken Dodgen, Chief Financial Officer, Primoris Services Corporation: Yeah, look, the vast majority of that is in the renewables business. So as we started talking about last quarter, I think our revenue growth is going to be much less for renewables going into 2026. Probably a couple hundred million or something like that is my best guess right now. We’re still firming up our 2026 numbers. Where we see the revenue growth opportunity still remaining strong, though, going into 2026 is in our industrial part of our business, predominantly the gas generation that we’ve been talking about, and in pipeline. Despite some of the margin issues we experienced this quarter. The pipeline opportunities for revenue growth are pretty significant right now. So we could see $100 million-$200 million of revenue growth just in pipeline alone going into next year.

David King, Chairman and Interim President and Chief Executive Officer, Primoris Services Corporation: Yeah. And Lee, I would add one more thing on Ken’s comment. The kind of pipeline projects we’re looking at now are really down the fairway for us through the larger diameter pipeline projects. So I feel like we’ll perform better on those in the future than what we’ve been struggling with on some of the work that we’ve seen over this last year or so.

Great. Thanks.

Conference Operator: We’ll take our next question from Julian Dumoulin-Smith at Jefferies.

David King, Chairman and Interim President and Chief Executive Officer, Primoris Services Corporation: Hey, good morning, team. Thank you guys very much. Appreciate the opportunity to connect here. Cody, welcome to the crew, and it’s been a pleasure otherwise too. Look. If I can come back to what you were saying just there a second ago, I mean, what’s the rate of growth there on the pipeline side of the business? I mean, it seems like what you just said a moment ago implies a pretty steep ramp versus where you’re starting. And then also maybe to go back to another comment from earlier, given some of the delay in just booking some of these renewable projects, for instance, what does that say about the cadence of revenue growth here over the next few years on renewables? Is it more back-weighted to 2027, 2028 versus 2026? Or how would you set expectations?

I know you guys used to have those long-term renewable revenue growth targets.

Ken Dodgen, Chief Financial Officer, Primoris Services Corporation: Yeah. So I’ll go in reverse order. On the renewables side, look, I think the cadence is actually coming down for 2026, as I mentioned. And then we’re looking for kind of a return to normal going into 2027 and 2028. The softness in 2026 is pretty heavily driven by the delay in bookings for renewables tied to all the noise that we’ve had this year. The good news is, as we’ve been talking about, is that funnel is as strong as ever, and our customer base has a lot of projects they want us to build. Then switching back to your first question on pipeline, pipelines right now in 2025, a $3 million-$350 million revenue business for us. So all it takes is one or two of those projects David was talking about for it to jump $100 million-$150 million going into 2026.

David King, Chairman and Interim President and Chief Executive Officer, Primoris Services Corporation: And then just given the size of those businesses there, what does that do for margins here and operating margins in terms as you think about scaling up on that front? Especially, well, I’ll leave it there.

Ken Dodgen, Chief Financial Officer, Primoris Services Corporation: Yeah. I mean, nothing really on the renewable side since it’s already a fairly scaled business. On the pipeline side, that’s where there’s some margin accretion opportunity going into 2026 as we get that business back up to scale.

David King, Chairman and Interim President and Chief Executive Officer, Primoris Services Corporation: And Julian, my comment I’ll also add, and I’ve added it each time, is on the pipeline side of the business, those book and burn very quickly. So usually what you book in one quarter, you’re going to burn over the next three to four quarters. So it burns very quickly. Yeah. Absolutely. I hear you. Excellent. Actually, just to clarify your earlier comment, do you think it’s the top of the cycle in 2028, or are you seeing incremental interest in 2029 and 2030 given the safe harbor comments you made there? Does it stay at that 2028 level or even compound?

Ken Dodgen, Chief Financial Officer, Primoris Services Corporation: I don’t know if it compounds, but yeah, we expect strong bookings and revenue kind of through the end of the safe harbor period.

David King, Chairman and Interim President and Chief Executive Officer, Primoris Services Corporation: Okay. Excellent. Thank you for clarifying that. I appreciate the forward look from you.

Conference Operator: Next, we’ll move to Joseph Osha at Guggenheim Partners.

David King, Chairman and Interim President and Chief Executive Officer, Primoris Services Corporation: Hi. Thank you. First, David, congratulations on your interim stewardship here. It’s been great working with you. Two questions. Just following up a bit on Julian’s question, are you guys seeing any, or do you think you’re going to see any attempt to surge solar completions in ’27 as people try and get in under this place in service deadline, or is there enough safe harbor that that just doesn’t matter? And then I have a follow-up. Thanks.

Ken Dodgen, Chief Financial Officer, Primoris Services Corporation: Yeah, Joe. On the safe harbor side, no. All of our customers are telling us they’ve got enough safe harbor that they don’t see any issues with that.

David King, Chairman and Interim President and Chief Executive Officer, Primoris Services Corporation: All right. So no kind of 2027 surge that you see. Everybody’s just plowing ahead because they’ve got enough safe harbor.

Ken Dodgen, Chief Financial Officer, Primoris Services Corporation: Correct.

David King, Chairman and Interim President and Chief Executive Officer, Primoris Services Corporation: Correct. And then you guys have talked a little bit about some of the single-cycle gas business you’ve got, in particular behind the fence. I think you said Stargate. I’m just wondering, as you think about your single-cycle gas business going forward, how does that break down between kind of traditional front-of-the-meter peaker and some of these opportunities sitting next to data centers inside the fence? And how big could that get? Thank you. Well, yeah, we’re currently working on about four projects, not all of them in data centers, but we obviously are working on Stargate. We’ve been awarded, and it’s been announced also that we’re starting to do the PowerGen side on the Fermi project, the one up there in the Amarillo, Texas area. And so that market for us on the simple cycle can continue to grow.

In fact, we’ve built out several teams getting ready for that surge, and we see a tremendous funnel of opportunities in front of us. I’ll let Ken kind of mention a number in a moment because we’ve looked at potentially how big we think that revenue could get in that market for us next year.

Ken Dodgen, Chief Financial Officer, Primoris Services Corporation: Yeah. Joe, I think next year we grow top line $100-$150 million easily, maybe with a little upside to that. And just to kind of firm up what David was saying. There’s a lot of moving pieces right now, but going forward, I think it’s probably going to be about a third behind the meter. That’s a ballpark number. And two-thirds. Standalone, more brownfield sites that are just either merchant or contracted.

David King, Chairman and Interim President and Chief Executive Officer, Primoris Services Corporation: Okay. And can I ask one very quick follow-up? I’m really sorry. As you look at turbine supply, are you finding you have to kind of go to sort of CAD or Atlas Copco or something, or are you able to, or are your customers able to get turbines from the big three? Thank you.

Ken Dodgen, Chief Financial Officer, Primoris Services Corporation: They’re getting them from the big three and from CAD and others. So it depends on the type of turbines and size of turbines they’re getting and where they are in the stack.

David King, Chairman and Interim President and Chief Executive Officer, Primoris Services Corporation: Okay. Thanks, guys.

Conference Operator: Next, we’ll go to Brent Fieldman at DA Davidson.

David King, Chairman and Interim President and Chief Executive Officer, Primoris Services Corporation: Hey, thanks. Good morning, guys. Hey, a question on the utility backlog growth has been pretty notable. Looks like power delivery is a decent part of that this year. And I guess my question, Ken, is as we think about that becoming potentially a bigger piece of the segment as you convert that business. Why wouldn’t it be accretive to the margin profile as we look out 12, 24-plus months?

Ken Dodgen, Chief Financial Officer, Primoris Services Corporation: Yeah. It will be accretive to the margin profile, especially as we continue to build out our project capabilities that we’ve talked about. A big chunk of the backlog growth that we’ve seen thus far has been really on the distribution side, which tends to be a little bit lower margin for us. But the project work is coming, and it is growing. Some of it’s going to be done within the MSAs, and some of it’s going to be done outside the MSAs.

David King, Chairman and Interim President and Chief Executive Officer, Primoris Services Corporation: Got it. And DA Davidson, I think you commented on it, that the relationship with Fermi. Is a portion of that already in the backlog? Is there more to come? If you could just expand on that, that’d be great. No, it wasn’t in the backlog. We were awarded on an LNTP. It’ll be in Q4 backlog. So that was part of the projects I was mentioning that we’ve just got awarded in Q4. Got it. Okay. Thanks, guys.

Conference Operator: We’ll go next to Sean Milligan at Needham.

Hey, thank you, guys, for taking the questions. Two questions. The first one, real quick, on the gas power side and margin expectations there. As you grow that business, do we think about margins being accretive to energy margins on the growth side?

Ken Dodgen, Chief Financial Officer, Primoris Services Corporation: Yeah, they should. Yeah, they will be accretive. They’re running the upper end of that 10%-12% range.

Okay. Great. And then on the data center piece, I know last quarter you kind of outlined some of the pipeline there and the bids you had outstanding. And you commented that, I guess, it’s mostly outside-the-box work. Curious about. As you transition 2026, 2027, are you looking at getting inside the box? Can you do that organically by maybe repositioning teams, or do you need to do that inorganically?

David King, Chairman and Interim President and Chief Executive Officer, Primoris Services Corporation: To answer your question, yes, we are looking at getting inside the box. That was one of the strategic initiatives that we put underway that might be a nice type of an acquisition. But from an organic standpoint, we could limitedly get into that. That’s probably not the most optimum route for us to get inside that box, and so that’s why we’ve got that as a strategic from an acquisition perspective.

Great. Thank you for the time.

Thank you.

Conference Operator: We’ll move next to Adam Solheimer at Thompson Davis.

Hey, good morning, guys. Heck of a beat in Q3. Congrats.

David King, Chairman and Interim President and Chief Executive Officer, Primoris Services Corporation: Thanks, Adam.

Wanted to ask what you are seeing in the pipeline bidding market and what the potential for Primoris could be there in 2026?

Wow. Well, let me mention this way. I was looking at sales information the other day, some marketing data, and where we might have been seeing—and I mentioned this on my call—$200 million type of opportunities for us for several quarters. That thing has now went to well over $1 billion to $2 billion plus of types of opportunities in our funnel for the pipeline side. We are optimistic that we might be able to close some pipeline projects as early as this Q4. And then also some additional ones coming in that Q1, Q2. So as I mentioned in the comments, what was a headwind has rapidly turned to a tailwind, and we’re being selective on which ones we actually want to go after to obviously produce the best margin performance we can.

Sounds great, and then in the prepared comments, you also mentioned I think it was a couple hundred million of projects for the next couple of quarters: broadband expansion, major network buildout, so I was hoping you could expand on that also.

Yeah. We are seeing more of that. There’s a lot of, in the data center side, there’s a lot of fiber in the data center and getting it to the fiber networks. The fiber to home is going to slow down a little bit, but we are seeing a tremendous ramp-up in the other types of fiber network buildouts. So that’s looking positive for us to grow that business again next year.

Ken Dodgen, Chief Financial Officer, Primoris Services Corporation: Yeah, Adam, that’s the fiber loop we’ve been talking about, the data loops, and then also the middle-mile stuff that we started doing.

Okay. And the last one for me was just your traditional civil business. What kind of trends are you seeing there, demand trends?

David King, Chairman and Interim President and Chief Executive Officer, Primoris Services Corporation: I love that question because our groups have done a tremendous job in making that unit a very profitable business unit for us. We’ve kept the revenue top line in that. Ken, you want to mention it?

Ken Dodgen, Chief Financial Officer, Primoris Services Corporation: Yeah. Adam, the revenue’s been just kind of gradually growing like $30 million a year. We’ll do $550-$575 this year. Next year, we’ll probably do $600-$625 or something like that. As we talked about, it’s just a good solid cash cow for us. It’s generating very good margins. And we just kind of let it run its thing.

David King, Chairman and Interim President and Chief Executive Officer, Primoris Services Corporation: The teams that we’ve got right now, Adam, are performing extremely well in the markets they’re in, and like I say, we’ll grow the top line a little bit each year and just making sure that that team can continue to handle and build out as necessary to keep those margins where we want them, so it’s really controlling the margin level more than it is the top line.

Great color. Thanks, guys.

Conference Operator: As a reminder, if you would like to ask a question, please press star one. Next, we’ll go to Avi Jarzolowicz at UBS.

Hey, good morning, guys. So just in terms of the timing delays with signing awards in energy, was that pretty even across the verticals, or was there noise that led to more delays for renewables or pipelines? And is it just around the tariff cost uncertainty, or were there other factors?

David King, Chairman and Interim President and Chief Executive Officer, Primoris Services Corporation: I’ll start out, and then Ken can add as he needs to. But I would tell you it’s more on the renewables side. As we were looking, as you know, all that noise that we were getting out there on the One Big Beautiful Bill and the tariffs, it was causing some of our customers to look at a lot of different supply chains, which meant that we had to redo some engineering and look at before we could really firm up our cost to them. And so it wasn’t a matter, I think I said on my earnings call, that we lost any projects or any projects were delayed or not delayed, but any projects were canceled.

It was a matter of we needed that extra timing, and so did our customers, to get the right supply chain in so we could firm up the price and get ready to sign those projects. And indeed, that’s what we’re talking about happening in Q4 and then also in Q1.

Okay. Got it. And then, Ken, I think you noted that good weather in Q4 could allow you to hit the upper end of guidance. Is there anything that could push you above the upper end? How are you thinking about that? And also, do you have any storm restoration work in Q4 embedded in the guidance?

Ken Dodgen, Chief Financial Officer, Primoris Services Corporation: Yeah. We never put storm restoration in any of our forecasts. So there’s none in there. And then, look, to the upside, it’s going to be a weather issue. It’s going to be project closeouts, other things like that that’ll drive us to the upper end.

Okay. Great. Thank you, guys.

Thanks.

Conference Operator: And that concludes our Q&A session. I will now turn the conference back over to David King for closing remarks.

David King, Chairman and Interim President and Chief Executive Officer, Primoris Services Corporation: Thank you for your questions and interest in Primoris. We are pleased with our third quarter and year-to-date results and look forward to carrying this momentum the remainder of the year and into 2026. Thank you, and we look forward to updating you next quarter.

Conference Operator: This concludes today’s conference call. Thank you for your participation. You may now disconnect.

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