Earnings Recap — Q2 FY2026
CY Q3 2026 · Reported July 29, 2026 · Beat 7 of last 7 quarters
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MYR Group's record backlog and strong C&I growth, driven by data center and grid modernization demand, underscore the accelerating electrical infrastructure buildout. The company's expanded West Coast footprint via the Valley/Comet acquisition positions it to capture more mission-critical electrical work, while the large Xcel transmission awards highlight the grid reinforcement required to support AI-driven power demand.
MYR Group delivered record second-quarter revenue of $1.08 billion, up 20% year-over-year, driven by strong C&I growth (up 42%) and steady T&D performance (up 4%). Gross margin expanded to 13.2% from 11.5%, and both segments posted operating margin increases, with C&I margin reaching 8.5% and T&D 9.4%. Backlog reached a record $3.16 billion, up 20% year-over-year, and the company closed the Valley Electric and Comet Electric acquisition on July 1 for $328 million. Operating cash flow was $3 million, down from $33 million, due to timing of tax payments and project billings, and free cash flow was negative $26 million.
Management reaffirmed full-year operating margin expectations, with C&I margins expected to land in the midrange of 6%-9% and T&D in the midrange of 8%-11%, despite strong first-half performance. They expect Valley Electric and Comet Electric to contribute approximately $250 million in revenue in the second half of 2026, with a more neutral EPS impact due to higher amortization. Organic revenue growth is projected at 13%-15% for the year. The two large Xcel transmission projects (combined over $200 million) are in backlog, with revenue contribution expected to begin in the second half of 2027 and continue over an 18-month period. Management noted a robust bidding environment across both segments, with large transmission projects (including 765 kV work) expected to start in late 2027 or 2028, and highlighted continued strength in data center and grid modernization demand.
“We achieved solid second quarter financial results, reflecting consistent performance throughout our business. During the quarter, we saw steady activity across our markets with ongoing infrastructure investments and electrification initiatives supporting demand.”
on Quarterly performance
“We continue to see good performance across really our project portfolio. But again, as we look at the total year, nothing has changed with our kind of projections that we will be in the mid part of our projections for operating margins on the C&I of that 6% to 9% and T&D will fall in that midrange of that 8% to 11%.”
on Margin outlook
“We believe these ongoing grid needs are creating opportunities within our T&D markets where we continue to see steady bidding activity.”
on T&D demand
Can you walk us through your expectations now that you have Valley and Comet in-house, how you see that growing your customer base and capabilities within C&I?
Rick Swartz noted that Valley and Comet have capabilities very similar to MYR's, and the acquisition should leverage both customer bases, similar to past acquisitions. He highlighted their strong prefab capabilities and customer relationships, viewing it as a very good acquisition going forward.
Can you help us understand the revenue bridge for second half now that you've closed on the Valley acquisition?
Kelly Huntington said Valley's contribution would be approximately $250 million in revenue for the rest of the year, with a more neutral EPS impact due to higher amortization in the first year. Rick Swartz added that overall organic revenue growth is expected to be in the 13%-15% range.
Could you talk about your ability to absorb new business for the T&D segment given the huge backlog and finite resources?
Rick Swartz said the company is well positioned, having modeled growth for a long time and grown organically on the T&D side. He noted strong alignment with 345, 500, and 765 kV work, with large projects expected to start in the second half of 2027 and beyond, and that they are already doing constructability for projects in 2028 and beyond.