Earnings Recap — Q2 FY2026
CY Q3 2026 · Reported August 4, 2026 · Beat 6 of last 7 quarters
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Everus's record backlog and raised guidance underscore sustained demand for electrical and mechanical construction tied to data center and semiconductor buildouts. The pending Epsilon acquisition expands off-site modular capabilities, which could enhance efficiency and capacity for large-scale AI infrastructure projects. The company's strong free cash flow and low leverage position it to continue investing in growth, potentially signaling further M&A in the construction services space.
Everus delivered record second-quarter revenue of $1.23B, up 34% YoY, with E&M revenue up 42% (37% organic) and T&D up 7.1%. EBITDA rose 53% to $128.6M, with margin expansion of 130 bps to 10.4%. Backlog grew 53% to $4.55B, driven by E&M strength. The company completed the SE&M acquisition in April and announced the pending Epsilon Industries acquisition. Operating cash flow for the first half was $196.8M, up from $32.5M a year ago, and free cash flow was $167M.
Management raised full-year 2026 guidance to revenue of $4.5B-$4.7B and EBITDA of $410M-$425M, implying roughly 9% EBITDA margins at the midpoint, with second-half margins expected around 8.5%. The guidance excludes any contribution from the pending Epsilon Industries acquisition, which is expected to close later this year and expand off-site modular construction capabilities. Demand remains strong across nearly all end markets, with data centers the largest backlog component and a semiconductor project ramping as expected. Management reiterated its long-term growth targets as a multi-year framework, noting near-term performance is running above those levels. The acquisition pipeline remains active, and net leverage of 0.3x provides ample flexibility for further M&A.
“We have not experienced any project cancellations or notable changes in activity with our customers or projects.”
on Demand resilience
“Our goal is to become indispensable to our customers.”
on Customer strategy
“We're always striving to be able to have margin uplift. And our goal, of course, is the 20 to 30 basis points gross margin expansion.”
on Margin trajectory
Could you talk about whether there's a previous relationship with Epsilon and the synergies you foresee with your existing operations?
Jeff Thiede highlighted Epsilon's strong customer list in the mechanical space, access to new geographies, and cross-selling opportunities in electrical. He noted potential to add satellite locations and leverage Epsilon's modular expertise combined with Everus's existing capabilities.
How should we think about backlog conversion and margins in the backlog?
Jeff Thiede said about 80% of backlog burns off in 12 months, and margins in new work are comparable to prior periods. Max Marcy added that the majority of the sequential backlog increase was not in the commercial market, indicating diversification.
Can you talk about the semiconductor end market and opportunities for inorganic growth on the T&D side?
Jeff Thiede noted 30+ years in semiconductor, with a new geography project ramping and contributing this year and next. He said M&A is being evaluated in both E&M and T&D, with a focus on disciplined, selective acquisitions.