Fluor Corporation (FLR) | The Buildout — AI Infrastructure
The Verdict
Fluor is a global engineering, procurement, and construction firm that designs, builds, and operates large physical projects for the energy and industrial buildout. In the AI infrastructure chain, its role is indirect and selective: management prioritizes gas-fired electricity generation that data center growth pulls into demand, ahead of the data center shells themselves.
| Market Cap | — |
| Revenue (TTM) | $15.2B |
| Revenue Growth | −8.3% |
| EBITDA Margin (TTM) | -3.0% |
| Net Cash | $2.6B |
| Earnings Beats | 2 of 7 |
| P/E (TTM) | — |
| EV/EBITDA (TTM) | — |
What We Like
- Q2 2026 new awards exceeded $6 billion; ending backlog reached $26.9 billion, described as 'almost $27 billion.'
- Management upgraded full-year book-to-burn to 'well above 1' and said about 85% of expected new award revenue is already being worked on.
- New-award margins ran 200 basis points above existing backlog in Q1 2026; Energy Solutions margin guide was raised twice this year to 6–7%.
- Nuclear value chain spans 21 nuclear power plants designed or built and operations support at more than 90 reactors; Centrus enrichment expansion awarded.
- Asset-light transformation complete: Q1 2026 ending cash $3.2 billion and a $1.4 billion 2026 buyback plan in place.
What We’re Watching
- Urban Solutions margin guide has been cut three times this year to 2.5–3.0%, the clearest area of guidance deterioration.
- An unnamed Americas mining project carried a $37 million Q1 charge; scope discussions may take 'a couple of months' to resolve and could affect timing.
- Energy Solutions Q2 profit was closeout-driven; the CFO cautioned closeout strength may not repeat, and H2 mix shifts toward Urban.
- Fluor's data-center risk discipline may leave it under-booked in the fastest-growing market; TeraWulf full EPC terms remain unresolved.
The thesis is strengthening on order intake but not yet on reported earnings. Backlog quality and book-to-bill are improving, while legacy losses and an unresolved mining project still depress margins. The open question is whether the higher-margin new awards start translating into reported profit before the remaining Urban headwinds fade.
Earnings
Fluor reported Q2 2026 revenue of $4.3 billion, up 9% year over year. Adjusted EBITDA was $149 million versus $96 million a year ago. The standout metric was new awards of over $6 billion, which management said arrived earlier than expected and showed pipeline conversion 'taking flight.'
| Metric | Q1 FY2026 | Q4 FY2025 | Q1 FY2025 | YoY |
|---|---|---|---|---|
| Revenue | $3.7B | $4.2B | $4.0B | −8.0% |
| Gross margin | 0.4% | 3.2% | 3.5% | -310bps |
| EBITDA | −$32M | $69M | $109M | −129.4% |
| EPS | $0.91 | $-8.94 | $-1.37 | −166.4% |
| New awards | over $6.0B | $2.7B | n/a | — |
| Ending backlog | $26.9B | $25.7B | n/a | — |
We see power to be the best play for us in the whole data center ecosystem … power #1, data center is #2.— Jim Breuer, CEO, August 7, 2026
Management tone: Management sounded more bullish and operationally confident in Q2 than in Q1. It escalated pipeline language to 'taking flight' and said clients accelerated decisions; the CFO volunteered the preemptive Mexico JV backlog removal as a transparency measure.
Management Guidance
Fluor lowered FY2026 adjusted EBITDA guidance to $500–525 million from $525–560 million, almost entirely because the Mexico JV sale removed about $23 million of expected second-half profit. Adjusted EPS guidance was raised modestly to $2.70–$2.80; operating cash flow guided to $300–320 million excluding NuScale and Mexico JV tax; tax rate 28–30%; revenue mix 65% Urban / 20% Energy / 15% Mission; book-to-burn upgraded to well above 1. Urban margin lowered to 2.5–3.0%, Energy raised to 6–7%, Mission reaffirmed at 6%.
Trajectory
Reported revenue is moving from decline to growth: Q1 2026 revenue was $3,663 million, down 8% year over year, then Q2 2026 revenue rebounded to $4.3 billion, up 9%. Code-computed signals show revenue accelerating while gross, operating, and EBITDA margins are stable at depressed levels; Q1 2026 gross margin was 0.4%. The driver is the end of legacy projects — legacy backlog fell from $255 million at year-end 2025 to $120 million by Q2 2026 — while new awards have not yet burned into revenue at scale. At-cost revenue was 58% of Q1 2026 revenue, so top-line growth may not translate one-for-one into profit.
The Model
The model projects FY+1 revenue of $15,800 million and EBITDA of $537 million, a 3.4% margin, rising to $17,500 million and $724 million, a 4.14% margin, in FY+2. The near-term projection is anchored by backlog near $27 billion and upgraded book-to-burn; FY+2 is driven by the expected conversion of front-end power and LNG work into EPC awards and revenue.
| Metric | FY2025 | Next FY (E) | Following FY (E) |
|---|---|---|---|
| Revenue | $15.5B | $15.8B | $17.5B |
| YoY Growth | — | +1.9% | +10.8% |
| EBITDA | −$310M | $537M | $724M |
| EBITDA Margin | -2.0% | 3.4% | 4.1% |
Projections are the median of 5 independent model runs. The model’s revenue sits 1.3% above analyst consensus.
Fluor lowered FY2026 adjusted EBITDA guidance to $500–525 million from $525–560 million, almost entirely because the Mexico JV sale removed about $23 million of expected second-half profit. Adjusted EPS guidance was raised modestly to $2.70–$2.80; operating cash flow guided to $300–320 million excluding NuScale and Mexico JV tax; tax rate 28–30%; revenue mix 65% Urban / 20% Energy / 15% Mission; book-to-burn upgraded to well above 1. Urban margin lowered to 2.5–3.0%, Energy raised to 6–7%, Mission reaffirmed at 6%.
What Could Go Right — and Wrong
- LNG Canada Phase 2 achieves FID later in 2026 and Fluor books the potential $5–10 billion award.
- Gas-fired power front-end work converts to EPC awards in the first half of 2027, as management expects.
- Mining scope discussions resolve constructively and the project completes around the end of 2026.
- Savannah River combined contract is won early next year, extending the government franchise.
- Centrus ramps as described, adding heavier revenue next year and beyond.
- The unnamed Americas mining project suffers another charge or a material schedule slip.
- Data-center competitors book the wave while Fluor's power opportunities slip past the first half of 2027.
- Middle East conflict escalates and stalls the client pipeline.
- Energy closeouts unwind with no new Energy awards reaching revenue until late 2027, leaving Urban to carry H2.
- A Savannah River recompete loss removes a cornerstone Mission franchise.
Looking Ahead
The next twelve months depend on front-end work converting into EPC awards. Management expects domestic gas power backlog growth in the first half of 2027, and LNG Canada Phase 2 FID is expected later in 2026. Legacy projects are expected to complete by the end of 2026, with a Savannah River contract decision expected early next year.
- Later 2026LNG Canada Phase 2 FID — Full EPC release; potential award sized at $5–10B.
- End of 2026Legacy project completion — LAX People Mover and I-35 Phase 2 expected complete.
- End of 2026Mining project completion — Completion targeted around end of 2026; scope discussions could affect timing.
- Early next yearSavannah River decision — Award decision; 6-month extension expected later this year.
- First half 2027Power EPC award flow — East Coast, Midwest, and standardized plant awards expected to convert.
Financials
Annual Summary
| Metric | FY2024 | FY2025 | TTM | YoY |
|---|---|---|---|---|
| Revenue | $16.3B | $15.5B | $15.2B | -5.0% |
| Gross Margin | 3.5% | -1.3% | -1.6% | 478bps |
| EBITDA | $536M | −$310M | $2.2B | -157.8% |
| EBITDA Margin | 3.3% | -2.0% | -3.0% | 528bps |
| Net Income | $2.1B | −$51M | $350M | -102.4% |
| Free Cash Flow | $664M | −$437M | $1.1B | — |
| Net Cash | — | — | — | — |
Key Ratios (Trailing)
- P/E TTM—
- EV/EBITDA TTM—
- EV/Revenue TTM—
- Price/FCF TTM—
- Gross Margin (TTM)-1.6%
- EBITDA Margin (TTM)-3.0%
- Net Margin (TTM)2.3%
- ROIC-150.7%
- SBC / Revenue0.1%
The Company
Fluor is a global engineering, procurement, and construction firm whose physical output spans power plants, nuclear facilities, industrial sites, mining and metals, infrastructure, and data center work. Its AI-infrastructure role is indirect: management says electricity demand is building from data center growth, and Fluor is positioning more toward gas-fired power generation than lower-margin data center shells.
Fluor reports through Urban Solutions, Energy Solutions, and Mission Solutions. It operates an asset-light, reimbursable-heavy model; 82% of backlog was reimbursable at March 31, 2026. Principal offices include Irving, Texas, Al Khobar, Saudi Arabia, and Amsterdam, Netherlands, with owned and leased locations in the U.K., Poland, the Philippines, and Chile.
Business Segments
Competitive Landscape
The 10-K lists U.S. competitors including AECOM, Amentum, Bechtel, Black & Veatch, Burns & McDonnell, BWXT, EMCOR, Jacobs, KBR, Kiewit, Parsons, Turner, V2X, and Zachry; internationally ACS, Balfour Beatty, Chiyoda, Exyte, Hatch, JGC, Petrofac, AtkinsRéalis, Technip Energies, Wood Group, and WorleyParsons. Management frames differentiation around selectivity and front-end engineering; BWXT names Fluor as part of the EPC execution challenge.
- JacobsListed as a U.S.-based competitor in the 10-K.
- EMCORListed as a U.S.-based competitor in the 10-K.
- AECOMListed as a U.S.-based competitor in the 10-K.
- ParsonsListed as a U.S.-based competitor in the 10-K.
- BWXTListed as a U.S.-based competitor in the 10-K; directly named Fluor as part of the EPC execution challenge.
Supply Chain
Fluor sits between project owners and the equipment, materials, and subcontractors that deliver large infrastructure. No direct supplier disclosure is present; Wiring-derived supplier names are unverified. Centrus and TeraWulf are verified customer-side signals.
More on FLR: Earnings recap