MYR Group Inc.

Second-quarter 2026 revenue was a record $1.08 billion, up $181 million or 20% year over year. Gross margin was 13.2% versus 11.5% last year. Net income was a record $50 million versus $27 million, and diluted EPS was $3.17 versus $1.70, up 86%. EBITDA was a record $85 million versus $56 million. T&D revenue was $524 million, up 4%, and C&I revenue was a record $558 million, up 42%. T&D operating margin was 9.4% versus 8.0%, and C&I operating margin was 8.5% versus 5.6%. Total backlog reached a record $3.16 billion, up 20% from a year ago. Operating cash flow was $3 million versus $33 million last year, and free cash flow was negative $26 million versus positive $12 million. As of June 30, working capital was about $307 million, funded debt was $9 million, cash and cash equivalents were $138 million, and borrowing availability was $460 million. Management said Valley’s contribution will be about $250 million for the rest of the year and that the acquisition should be neutral to EPS and operating income in the first year because of amortization. For the full year, Rick Swartz said T&D operating margin should land in the midrange of 8% to 11%, C&I in the midrange of 6% to 9%, and organic revenue growth should be about 13% to 15%.

Rick Swartz characterized the quarter as solid, with consistent performance across the business and ongoing support from infrastructure investment and electrification. He emphasized operational discipline, safe execution, and long-term customer relationships, and said the Valley Electric and Comet Electric acquisition expands MYR’s C&I capabilities, customer base, and geographic reach. On outlook, he sounded constructive but measured, saying large T&D projects are still lumpy and likely to contribute starting in the second half of 2027, while current margin strength still points to the middle of the company’s target ranges for the rest of 2026.

Kelly Huntington highlighted record revenue, record net income, record EBITDA, and record backlog, along with materially better margins year over year. She said SG&A rose to $74 million due mainly to higher incentive compensation and employee-related expenses for future growth, and the tax rate fell to 25.7% from 29.2% because of stock-compensation tax benefits, partly offset by taxes on Canadian income and other items. She also pointed to softer cash flow from timing of tax payments and billings, noting operating cash flow of $3 million and free cash flow of negative $26 million, but said liquidity remains strong with $138 million cash, $460 million of borrowing availability, and a leverage ratio of 0.03x. After quarter end, the company funded the $328 million Valley acquisition with $93 million of cash and $235 million of revolver borrowings, and she said remaining credit capacity plus future cash flow should support organic growth, acquisitions and share repurchases.

Analysts focused on the Valley/Comet acquisition, asking whether it expands customer and geographic reach and whether its performance is ahead of expectations. Management said the businesses have similar capabilities, strong prefab and customer relationships, and that the deal is proceeding as expected; Kelly added that the first-year EPS and operating income contribution should be near-neutral because of acquisition amortization, while revenue contribution is expected to be about $250 million in the rest of the year. Questions also centered on margins, backlog conversion, and cash flow: management said full-year margins should stay in the middle of their ranges, the big Xcel awards are in backlog but likely to begin burning in the second half of 2027, and cash flow should improve over time though DSOs may rise from near record lows into the low-to-mid-50s as overbillings normalize.