Primoris Services Corporation

First-quarter revenue was $1.6 billion, down $88.2 million or 5.4% year over year. Gross profit was $134.7 million, down $36 million or 21.1%, and gross margin was 8.6% versus 10.4% in the prior year. Utility gross profit was $62 million, up $10.4 million, with utility gross margin at 9.8% versus 9.2%; Energy gross profit was $72.7 million, down $46.4 million, with Energy gross margin at 7.6% versus 10.7%. Full-year 2026 guidance was updated to earnings per fully diluted share of $4.05 to $4.25, adjusted EPS of $4.80 to $5.00, and adjusted EBITDA of $480 million to $500 million. Management now expects Renewables revenue to be approximately $2.3 billion for 2026. They also expect Energy segment gross margins to be in the high-9% to low-10% range for the full year, utility margins to trend toward the midpoint of the 10% to 12% target range, and net interest expense to be $35 million to $38 million. Net debt to EBITDA is expected to remain just under 1.5x, and liquidity was $676.5 million at quarter-end.

Koti Vadlamudi said the quarter was hurt by a limited set of solar projects, but emphasized that Primoris has already taken actions to reduce the risk of repeat issues, including leadership changes, added estimating and project-management talent, and a tighter approach to geographic expansion. He framed the setbacks as isolated to projects booked in 2024 and said the broader portfolio remains healthy, with improvement expected as projects complete and bookings convert through 2026. His tone was cautious on the quarter but constructive on the medium-term outlook, especially for solar, gas generation, utilities, and 2027 and beyond.

Ken Dodgen quantified the quarter’s impact and the updated outlook. He said the guidance change and renewables issues were driven by roughly $400 million of revenue pushout, about $35 million to $40 million of Q1 cost overruns, and about $25 million of lower margins as projects wind down in Q2 and Q3. He also noted first-quarter operating cash flow was negative $122.6 million, largely due to accounts payable timing and lower operating income, but said the $676.5 million liquidity position remains strong and net debt to EBITDA should stay just under 1.5x. On margins, he expects utility margins to rise in Q2 and Q3 and Energy margins to begin improving in Q2, with full-year Energy gross margin in the high-9% to low-10% range.

Analysts focused on the renewables shortfall, the size and timing of the delayed revenue, and whether the problems signal broader execution risk. Management said the issues were tied to six projects from 2024, mostly related to weather, labor, geographies, tax-credit clarification, and redesign complexity, and that most of the margin pressure should roll off by Q4. Questions also centered on power delivery, gas generation, and Paynecrest; management said power delivery remains strong, gas generation has nearly $800 million of imminent verbal awards and a larger multibillion-dollar funnel, and Paynecrest could add upside if a large hyperscaler program closes.