Primoris Services Corporation

What they do

Primoris provides construction, maintenance, replacement and engineering services through two segments: Utilities and Energy. The Utilities segment builds and maintains natural gas and electric utility distribution and transmission systems and communications systems across the United States. The Energy segment provides engineering, procurement, construction and maintenance for energy, renewable energy and energy storage, renewable fuels, and petroleum and petrochemical customers in the US and Canada, plus state departments of transportation. Work is performed under multi-year Master Service Agreements and project-specific contracts.

Revenue drivers

• Energy segment — Engineering, procurement, construction and maintenance for renewable energy, energy storage, renewable fuels, and petroleum and petrochemical customers, plus transportation work; drives the segment-level revenue decline cited in the second quarter of 2026.
• Utilities segment — Construction and maintenance of natural gas and electric utility distribution and transmission systems and communications systems; in the second quarter of 2026 it generated $712.6 million of revenue, with segment margins also declining year over year.
• MSA backlog — Multi-year Master Service Agreements provide recurring, visible revenue; total MSA backlog was $8.2 billion of the $13.9 billion total backlog reported at the second quarter of 2026.

Recent performance

Second quarter 2026 revenue was $1,688.2 million, down $202.5 million or 10.7% year over year, driven by lower Energy segment revenue. The company reported a net loss of $24.2 million, or $0.45 per diluted share, versus net income of $84.3 million in the prior-year quarter. Adjusted EBITDA fell 92.6% to $11.4 million from $154.6 million, and gross profit margin dropped to 4.9% from 12.3%. Management attributed the shortfall to challenged renewables projects and lower margins in both segments. Full-year 2025 revenue was $7.57 billion with net income of $274.9 million and diluted EPS of $5.02.

Strategy

The stated strategy is growth through controlled expansion, including expanding service scope, adding customers, moving into new geographies and evaluating acquisitions in renewable energy, electric transmission and distribution, gas distribution, and power generation. Primoris emphasizes a mix of recurring MSA revenue and project work in core competencies, while selectively bidding to limit concentration by customer, industry and labor market. The company owns or long-term leases a large construction fleet and self-performs much of its work with a stable craft workforce. It also states a priority on maintaining a strong balance sheet and conservative capital structure supported by operating cash flow.

Risks

• Renewables project execution — Management said challenges on a limited number of renewables projects reduced second quarter 2026 earnings and that work remains to complete those projects.
• Margin compression — Gross profit as a percentage of revenue fell to 4.9% in the second quarter of 2026 from 12.3% a year earlier, with lower margins in both the Energy and Utilities segments.
• Seasonality and weather — The 10-K states results vary quarter to quarter due to weather such as rain, ice, snow and named storms, and because utility repair demand is lower during winter gas and summer electric peak periods.
• Contract and cost risk — The 10-K cites cost or schedule overruns on fixed-price contracts and construction cost increases from tariffs, inflation or supply chain challenges that may not be passed through to customers.

Outlook

Management said first-half 2026 performance fell short of expectations but pointed to record total backlog of $13.9 billion, including $8.2 billion of MSA backlog. The company expects revenue growth and margin improvement in the second half of 2026, citing improving project mix and operational focus. It describes demand as strong across renewable energy, natural gas generation, pipeline and power delivery markets, and frames 2026 as a foundation for stronger performance in 2027 and beyond.