Everus Construction Group, Inc 10-Q for FY2026 Q1

Everus Construction Group, Inc. (ECG)

10-Q 2026-05-06 For: 2026-03-31

Added on May 06, 2026

About this 10-Q

Everus Construction Group, Inc filed this 10-Q on May 6, 2026, covering the quarter ended March 31, 2026 (FY2026 Q1).

Headline figures

Quarter ended March 31, 2026, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $1.04B; up 25.4% from $826.63M a year earlier
Net income: $58.32M; up 59.0% from net income of $36.67M a year earlier
Diluted EPS: $1.14; up 58.3% from $0.72 a year earlier

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Delaware			99-1952207
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)


1730 Burnt Boat Drive Bismarck, North Dakota			58503
(Address of principal executive offices)			(Zip code)


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐


			Page
Industry Information			2
Part I -- Financial Information			3
Item 1. Financial Statements . (Unaudited)			3
Condensed Consolidated Statements of Income - Three Months Ended March 31, 2026 and 2025			3

Condensed Consolidated Balance Sheets - March 31, 2026 and December 31, 2025			4
Condensed Consolidated Statements of Equity - Three Months Ended March 31, 2026 and 2025			5
Condensed Consolidated Statements of Cash Flows - Three Months Ended March 31, 2026 and 2025			6
Notes to Condensed Consolidated Financial Statements			7
1. Background and Nature of Operations			7
2. Basis of Presentation and Summary of Significant Accounting Policies			7

3. Revenue from Contracts with Customers			11
4. Goodwill and Other Intangible Assets			15
5. Fair Value Measurements			15

6. Debt			17
7. Leases			18
8. Earnings Per Share			20

9. Stock-Based Compensation			21
10. Income Taxes			22

11. Segment Information			22

12. Commitments, Contingencies and Guarantees			25
13. Related-Party Transactions			26

14. Subsequent Events			26
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.			27
Item 3. Quantitative and Qualitative Disclosures About Market Risk.			38
Item 4. Controls and Procedures.			39
Part II -- Other Information			41
Item 1. Legal Proceedings.			41
Item 1A. Risk Factors.			41
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.			41
Item 3. Defaults Upon Senior Securities.			41
Item 4. Mine Safety Disclosures.			41
Item 5. Other Information.			41
Item 6. Exhibits.			42
Signatures			43


	Three months ended March 31,
		2026		2025
		(In thousands, except per share amounts)
Operating revenues		$	1,036,953	$	826,629
Cost of sales		906,224		734,136
Gross profit		130,729		92,493
Selling, general and administrative expenses		53,045		41,509
Operating income		77,684		50,984
Interest income		2,324		937
Interest expense		4,620		5,631
Other income, net		552		567
Income before income taxes and income from equity method investments		75,940		46,857
Income taxes		20,252		13,573
Income from equity method investments		2,628		3,388
Net income		$	58,316	$	36,672

Earnings per share:
Basic		$	1.14	$	0.72
Diluted		$	1.14	$	0.72
Weighted average common shares outstanding:
Basic		51,082		51,042
Diluted		51,189		51,091


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


	March 31, 2026		December 31, 2025
	(In thousands, except share and per share amounts)
Assets
Current assets:
Cash, cash equivalents and restricted cash	$	293,356	$	170,500
Receivables, net of allowance for credit losses of $5,125 and $5,282, respectively	781,563		769,828
Contract assets	258,058		255,767

Inventories, net	47,978		45,271
Prepaid expenses	21,998		38,161
Other current assets	18,304		16,854
Total current assets	1,421,257		1,296,381
Noncurrent assets:


Investments	22,182		27,082
Property, plant and equipment, net of accumulated depreciation of $180,742 and $174,914, respectively	174,161		168,498
Operating lease right-of-use assets	82,504		88,705
Goodwill	143,224		143,224




Other noncurrent assets	4,419		4,841
Total noncurrent assets	426,490		432,350
Total assets	$	1,847,747	$	1,728,731
Liabilities and Stockholders’ Equity
Current liabilities:
Current portion of long-term debt	$	15,000	$	15,000
Accounts payable	259,869		226,264
Contract liabilities, net	344,959		305,111

Taxes payable	22,127		6,483

Accrued compensation	70,200		86,960
Accrued payroll-related liabilities	48,935		47,189
Current portion of operating lease liabilities	32,900		33,905
Other accrued liabilities	10,048		15,278
Total current liabilities	804,038		736,190
Noncurrent liabilities:
Long-term debt, net of unamortized issuance costs	263,024		266,549

Deferred income taxes	14,910		14,869
Operating lease liabilities	51,665		56,634
Other noncurrent liabilities	27,166		24,671
Total noncurrent liabilities	356,765		362,723
Total liabilities	$	1,160,803	$	1,098,913
Commitments and contingent liabilities
Stockholders’ equity:
Preferred stock, 10,000,000 shares authorized, $0.01 par value, none issued and outstanding	$	—	$	—
Common stock, 300,000,000 shares authorized, $0.01 par value, 51,041,606 and 51,006,719 shares issued and outstanding as of March 31, 2026 and December 31, 2025, respectively	510		510
Additional paid-in capital	142,376		143,566
Retained earnings	544,058		485,742

Total stockholders’ equity	686,944		629,818
Total liabilities and stockholders’ equity	$	1,847,747	$	1,728,731


	Common Stock
(In thousands, except shares)	Shares	Amount		Additional Paid-in Capital		Retained Earnings		Total
Balance as of December 31, 2025	51,006,719	$	510	$	143,566	$	485,742		$	629,818
Net income	—	—		—		58,316			58,316
Stock-based compensation	34,887	—		(1,190)		—			(1,190)


Balance as of March 31, 2026	51,041,606	$	510	$	142,376	$	544,058		$	686,944


	March 31, 2026		December 31, 2025
	(In thousands)
Cash, cash equivalents and restricted cash	$	18,339	$	17,828
Other accrued liabilities	2,543		2,381
Other noncurrent liabilities	$	6,018	$	6,326


Three months ended March 31, 2026	E&M		T&D		Total
	(In thousands)
Fixed-price	$	430,271	$	104,273	$	534,544
Cost reimbursable*	393,476		65,556		459,032
Unit-price	11,377		34,634		46,011
Total contract revenues	835,124		204,463		1,039,587
Eliminations	(33)		(2,601)		(2,634)
Total operating revenues	$	835,091	$	201,862	$	1,036,953


Three months ended March 31, 2025	E&M		T&D		Total
	(In thousands)
Fixed-price	$	350,566	$	93,603	$	444,169
Cost reimbursable*	285,886		62,983		348,869
Unit-price	11,775		28,429		40,204
Total contract revenues	648,227		185,015		833,242
Eliminations	(4,236)		(2,377)		(6,613)
Total operating revenues	$	643,991	$	182,638	$	826,629


	Within 12 months		Greater than 12 months
	(In thousands)

E&M	$	2,333,215	$	410,733
T&D	268,519		81,822
Total	$	2,601,734	$	492,555


	Fair Value Measurements as of March 31, 2026, Using
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Balance as of March 31, 2026
	(In thousands)
Assets:

COLI contracts	$	—	$	9,919	$	—	$	9,919
Total assets measured at fair value	$	—	$	9,919	$	—	$	9,919


	Fair Value Measurements as of December 31, 2025, Using
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Balance as of December 31, 2025
	(In thousands)
Assets:

COLI contracts	$	—	$	7,615	$	—	$	7,615
Total assets measured at fair value	$	—	$	7,615	$	—	$	7,615


	Three months ended March 31,
	2026		2025
	(In thousands)
Operating activities:
Net income	$	58,316	$	36,672
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	8,071		6,774
Amortization of intangible assets	—		116
Deferred income taxes	41		1,048
Net credit loss reversals	(24)		(1,729)
Amortization of debt issuance costs	394		394
Stock-based compensation costs	2,004		1,747
Net unrealized losses on investments	247		117
Gain on sale of assets	(1,970)		(2,371)
Equity in earnings of unconsolidated affiliates, net of distributions	7,203		(2,743)
Changes in operating assets and liabilities:
Receivables	(11,711)		(1,052)

Contract assets	(2,291)		(54,861)
Inventories, net	(2,707)		(3,663)
Other current assets	14,713		(4,464)
Accounts payable	33,539		43,625
Contract liabilities, net	39,848		(20,733)

Other current liabilities	(4,640)		7,579
Other noncurrent changes	2,642		672
Net cash provided by operating activities	143,675		7,128
Investing activities:
Capital expenditures	(15,470)		(18,539)

Net proceeds from sale or disposition of property, plant and equipment	3,719		3,310
Proceeds from insurance contracts	—		2,174
Investments	(2,550)		(1,766)
Net cash used in investing activities	(14,301)		(14,821)
Financing activities:


	March 31, 2026		December 31, 2025
	(In thousands)
Materials and supplies	$	15,604	$	15,571

Work in process	4,162		3,230
Finished goods	28,799		27,057
Less: valuation allowance	(587)		(587)
Inventories, net	$	47,978	$	45,271


	March 31, 2026		December 31, 2025
	(In thousands)
Costs incurred on uncompleted contracts	$	6,432,746	$	8,036,495
Estimated earnings	909,542		1,172,516
Costs and estimated earnings on uncompleted contracts	7,342,288		9,209,011
Less: billings to date	(7,429,189)		(9,258,355)
Net contract liabilities	$	(86,901)	$	(49,344)


	March 31, 2026		December 31, 2025
Weighted average remaining lease term (in years)	1.13 years		1.15 years
Weighted average discount rate (in percentages)	5.36	%	5.43	%


	Weighted Average Interest Rate as of March 31, 2026		March 31, 2026		December 31, 2025
	(percentage)		(In thousands)
Term loan due on October 31, 2029	5.70	%	$	281,250	$	285,000
Revolving credit facility			—		—
Less: unamortized debt issuance costs			(3,226)		(3,451)
Total long-term debt			278,024		281,549
Less: long-term debt - current portion			(15,000)		(15,000)
Long-term debt			$	263,024	$	266,549


	Remainder of 2026		2027		2028		2029		Total
	(In thousands)
Long-term debt maturities, including current portion	$	11,250	$	15,000	$	15,000	$	240,000	$	281,250


Three months ended March 31, 2026	E&M		T&D		Corporate and Other		Eliminations		Consolidated Total
	(In thousands)
Operating revenues	$	835,091	$	201,862	$	—	$	—	$	1,036,953
Intersegment revenues	33		2,601		1,694		(4,328)		—
Segment revenues	835,124		204,463		1,694		(4,328)		1,036,953
Cost of sales	735,069		174,322		1,161		(4,328)		906,224
Gross profit	100,055		30,141		533		—		130,729
Selling, general and administrative expenses	29,482		9,793		13,770		—		53,045
Operating income	$	70,573	$	20,348	$	(13,237)	$	—	77,684
Interest income									2,324
Interest expense									4,620
Other income, net									552
Total consolidated income before income taxes and income from equity method investments									$	75,940


	Three months ended,
	March 31, 2026				March 31, 2025
	E&M		T&D		E&M		T&D
	(In thousands)
Depreciation and amortization expense	$	1,574	$	6,546	$	1,482	$	5,449


Interest expense, net1	(2,058)		568		(1,823)		700
Income tax expense	19,083		4,964		13,267		3,442
Capital expenditures2	$	4,345	$	11,191	$	9,319	$	9,820


	Three months ended March 31,
		2026		% of revenues		2025		% of revenues		% change
		(In millions, except percentages)
Operating revenues		$	1,036.9	100.0	%	$	826.6	100.0	%	25.4	%
Cost of sales		906.2		87.4		734.1		88.8		23.4
Gross profit		130.7		12.6		92.5		11.2		41.3
Selling, general and administrative expenses		53.0		5.1		41.5		5.0		27.7
Operating income		77.7		7.5		51.0		6.2		52.4
Interest income		2.3		0.2		0.9		0.1		NM
Interest expense		4.6		0.5		5.6		0.7		(17.9)
Other income, net		0.6		0.1		0.6		0.1		—
Income before income taxes and income from equity method investments		76.0		7.3		46.9		5.7		62.0
Income taxes		20.3		2.0		13.6		1.6		49.3
Income from equity method investments		2.6		0.3		3.4		0.3		(23.5)
Net income		$	58.3	5.6	%	$	36.7	4.4	%	58.9	%

NM - Not Meaningful


	Amounts estimated to be recognized within 12 months		March 31, 2026		December 31, 2025		March 31, 2025
	(In millions)
E&M	$	2,639.1	$	3,291.2	$	2,843.8	$	2,704.4
T&D	293.7		388.9		384.5		353.1
Total	$	2,932.8	$	3,680.1	$	3,228.3	$	3,057.5


Grant Date:			[Grant Date]
Number of RSUs:			[No. of Shares] RSUs, subject to adjustment as provided under Section 4.2 of the Plan.
Vesting Commencement Date:			[Vesting Commencement Date]
Vesting Schedule:			Subject to the provisions of the Award Agreement and the Plan, provided that the Participant remains continuously employed by the Company and/or any Subsidiary and/or any entity that controls or is under common control with the Company or any Subsidiary (an “Affiliate”) through the applicable vesting date described below, the RSUs (and related Dividend Equivalents, if any) shall vest in respect of (i) one-third of the RSU Shares and Dividend Equivalents on the first anniversary of the Grant Date (the "First Vesting Date"), (ii) one-third of the RSU Shares and Dividend Equivalents on the second anniversary of the Vesting Commencement Date (the "Second Vesting Date") and (iii) one-third of the RSUs and Dividend Equivalents on the third anniversary of the Vesting Commencement Date (the "Third Vesting Date"). Each


			of the First Vesting Date, the Second Vesting Date, and the Third Vesting Date are referred to herein as a “Vesting Date.” Except for termination of employment due to Retirement, death or Disability or in the event of a Qualifying Termination, any unvested portion of the Award will be forfeited and/or cancelled on the date the Participant ceases to be an employee of the Company or an Affiliate. For purposes of this Award: “Cause” means, if the Participant is a participant in the Company’s Change in Control Severance Plan, the definition set forth in such plan, and otherwise (a) the Participant’s fraud or dishonesty that has resulted, or is likely to result, in material economic damage to the Company or a Subsidiary, or (b) the Participant’s willful nonfeasance if such nonfeasance is not cured within ten days of written notice from the Company or a Subsidiary, in each case as determined in good faith by a vote of at least two-thirds of the non-employee members of the Board at a meeting of the Board at which the Participant is provided an opportunity to be heard. “Good Reason” means if the Participant is a participant in the Company’s Change in Control Severance Plan, the definition set forth in such plan, and otherwise the occurrence of any of the following without the Participant’s prior written consent:
			(a)A reduction of the Participant’s annual base salary, target annual incentive, or target annual long-term incentive opportunity, in each case, from that in effect immediately prior to the Change in Control, or if higher, that in effect at any time thereafter; (b)A relocation of the Participant’s primary place of employment by more than fifty miles; or (c)Any material reduction in the Participant’s titles, authority, reporting relationship, duties, or responsibilities.


			In order to invoke a termination for Good Reason, the Participant shall provide written notice to the Company of the existence of one or more of the conditions described in clauses (a) through (c) within ninety days after the Participant first becomes aware of the existence of such condition or conditions, specifying in reasonable detail the conditions constituting Good Reason, and the Company shall have thirty days following receipt of such written notice (the “Cure Period”) during which it may remedy the condition. In the event that the Company fails to remedy the condition constituting Good Reason during the applicable Cure Period, the Participant’s “Separation from Service” (within the meaning of Section 409A of the Code) must occur, if at all, within thirty days from the earlier of (i) the end of the Cure Period, or (ii) the date the Company provides written notice to the Participant that it does not intend to cure such condition. The Participant’s mental or physical incapacity following the occurrence of an event described above in clauses (a) through (c) shall not affect the Participant’s ability to terminate employment for Good Reason and the Participant’s death following delivery of a notice of termination for Good Reason shall not affect the Participant’s estate’s entitlement to the severance payments and benefits provided hereunder upon a termination of employment for Good Reason. “Qualifying Termination” means a termination of the Participant’s employment during the two-year period beginning on and including the date of a Change in Control, by the Participant for Good Reason or by the Company other than for Cause, death, or Disability. "Retirement" means a Participant's termination of employment other than for Cause after the Participant has reached age 55 and completed 10 Years of Service. “Year of Service” shall mean the full twelve-month years a Participant is employed by the Company and/or a Subsidiary.


Settlement Date:			Except as otherwise expressly provided in the Award Agreement and the Plan, each vested RSU will be settled in Shares, and all vested Dividend Equivalents, if any, will be paid in cash, as soon as practicable following vesting but in no event later than sixty days after such RSUs vest.
Dividend Equivalents:			Yes (if the Company pays dividends). (The Company does not currently pay dividends so this is not currently applicable.)


			For purposes of this Award: “Disability" means that the Participant is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, as reasonably determined by the Board of Directors. "Retirement" means a Participant's termination of service (including a decision not to stand for re-election to the Board of Directors).
Settlement Date:			Except as otherwise expressly provided in the Award Agreement and the Plan, the vested RSUs will be settled in Shares as soon as practicable following vesting but in no event later than sixty days after the Vesting Date.