Oct 29, 2026 earnings call — Record revenue, acquisitions, and margin improvement
Record third quarter revenue of $1.26 billion, driven by C&I growth to $704 million.
Revenue $1.3B (est $1.2B) · EPS $3.82 (est $2.97)
Key quotes
"The additions of Valley Electric and Comet Electric have expanded our capabilities, geographic reach, and customer relationships, further strengthening our platform for long-term growth."
"Our third quarter C&I revenues were $704 million, a record high for our C&I segment, and an increase of 58% compared to the same period last year."
"This quarter, L.E. Myers was awarded multiple transmission projects in Indiana, Virginia, and Iowa."
Analyst Q&A 7
C&I end-market growth and margins
Q (Caitlin Donohue · Goldman Sachs): She asked how growth in C&I end markets looks through 4Q 2027 and how margins will progress. She also asked what management is hearing from customers about larger T&D high-voltage projects.
A: Management said they see good activity across key markets, not just data centers. They plan to operate C&I margins in the higher range of their profile at 6%-9% and expect C&I revenue growth around 18%-20% or 22%, T&D 10%-13%, and companywide about 15%-18%. They said larger T&D builds mostly start in 2028 with some projects beginning mid to late 2027.
"I would say from a margin progression standpoint, we plan on operating in the higher range of our profile there on the 6%-9%, so consistent with where we've been in this last quarter." — Rick Swartz (CEO)
Effect of Valley/Comet on C&I margins
Q (Sangita Jain · KeyBanc): She asked whether the strong C&I margins were due to one-time items or performance and how Valley/Comet amortization affected margins. She also asked about revenue contribution from Valley and Comet and the T&D margin outlook.
A: Kelly said the purchase price allocation work showed amortization was less of a headwind than originally expected, and Valley/Comet have a backlog burn for amortization of a little over two years. Rick said margin strength reflects strong performance and better contract terms and that C&I margins should stay toward the upper end of the 6%-9% range next year. Rick also said the revenue contribution from those deals is as they projected and that for T&D margins he meant the middle range (about 8%-11%) while Kelly clarified 10%-13% referred to year-over-year revenue growth.
"As we finished the purchase price allocation work, we did see that being less of a headwind on margins than we had originally anticipated." — Kelly Huntington (CFO)
Backlog from deals and unbilled receivables
Q (Justin Hauke · Baird): He asked whether backlog from the acquisitions matched the prior annualized expectation and whether rising unbilled receivables and pending change orders reflect a mix shift or anything unusual.
A: Rick said they do not break out backlog by division but that backlog from the deals was consistent with what they anticipated. Kelly said the increase in pending change orders is ordinary course fluctuation — sometimes a change order is verbal until final approval and shows up in that bucket — and they are seeing working capital headwinds from higher interest rates and customers pushing payment terms more in negotiations.
"Often we'll get a change order that we have a verbal on, but until we get that final approval, it can show up in that bucket." — Kelly Huntington (CFO)
Valley/Comet performance and M&A pipeline
Q (Manish Somaiya · Cantor Fitzgerald): He asked how Valley and Comet are performing on revenue, profit, backlog and cross-selling. He also asked what the acquisition pipeline looks like by geography or business and whether backlog is a good visibility measure.
A: Rick said Valley and Comet are meeting their expectations and offer good growth and cross-sell opportunities in their markets. He said backlog is lumpy and advised listening to market activity; they expect some larger projects to enter backlog by year-end or Q1. On M&A they are patient, looking for quality targets (not storm-chasing), and said multiples have compressed a bit but they will pay a fair price for the right deal; he indicated C&I multiples are generally within an 8x-10x range and T&D could be a little higher.
"From that standpoint, I would say the acquisitions of Valley and Comet are really meeting our expectations." — Rick Swartz (CEO)
C&I contract terms, project visibility, buybacks
Q (Brent Thielman · Oppenheimer): He asked whether new contract structures give more upside to C&I margins, how far out customers share project visibility beyond backlog, and what the $100 million repurchase program signals about capital allocation.
A: Rick said better contract terms and execution helped margin improvement and they expect C&I margins in the high end of the 6%-9% range next year. He said customers are sharing projects further out, securing labor and material, and some projects can go out into 2029 and 2030. Kelly said the $100 million repurchase program is opportunistic, reflects a strong financial position after the Valley deal, and they expect CapEx to be about 3% of revenues this year and low to mid-3% in 2027 with continued prefab and T&D investments.
"The program we are putting in place is $100 million, and I think reflects that we are in a really strong financial position, even after closing on and funding the Valley acquisition." — Kelly Huntington (CFO)
T&D MSA growth, Valley contribution, M&A scope
Q (Brian Russo · Jefferies): He asked whether higher utility CapEx increases MSA work and if that mainly drives the 10%-13% T&D growth. He also asked to confirm Valley's second-half 2026 revenue and whether M&A will stay electrical-only or include adjacent services.
A: Rick said they see good activity across MSA and small/medium projects and that large projects largely start in the second half of 2027; customers have additional CapEx and they have strong client relationships. Kelly said the 10%-13% T&D growth will be more weighted to the back half of the year. Kelly clarified the 18%-22% C&I growth forecast is inclusive of full-year contributions from Valley and Comet, and Rick said they do not disclose results by district or tie an individual unit into that number. On M&A focus, Rick said they will focus on electrical for C&I and consider T&D companies or ancillary services on the T&D side.
"Just to clarify, the 18%-22% growth next year for C&I that Rick talked about is inclusive of having full-year contributions from Valley and Comet and their continued growth." — Kelly Huntington (CFO)
Where C&I strength showed and prefab progress
Q (Brian Brophy · Stifel): He asked whether any end markets or regions showed disproportionate C&I strength in the quarter. He also asked how far along they are in adopting prefab and how much more opportunity remains.
A: Rick said the quarter's strength was fairly evenly distributed across regions with some normal quarter-to-quarter pockets. He said prefab is a long-standing focus: they keep expanding prefab to take labor out of the field, assemble in controlled environments, and will continue investing in prefab as technology and opportunities evolve; CapEx has supported prefab build-out over the past five, 10 years.
"I would say in the quarter, it was pretty well evenly distributed." — Rick Swartz (CEO)