Q4 2025 Primoris Services Corp Earnings Call

February 24, 2026

Speaker #1: Good morning , ladies and gentlemen . Thank you for standing by . My name is Perla and I will be your conference operator today Welcome to the Primoris Services Corp .

Speaker #1: Fourth quarter and full year 2025 earnings Conference Call and webcast . All lines have been placed on mute to prevent any background noise .

Speaker #1: After the speaker's remarks , there will be a question and answer session . If you would like to ask a question during this time , simply press star , followed by the number one on your telephone keypad .

Operator: If you would like to ask a question during this time, simply press star followed by the number 1 on your telephone keypad. If you would like to withdraw your question, please press star 1 again. Thank you. I would now like to turn the conference over to Blake Holcomb, Vice President of Investor Relations. You may begin.

Speaker #1: If you would like to withdraw your question , please press the star one again . Thank you . I would now like to turn the conference over to Blake Holcomb , Vice President of Investor Relations .

Speaker #1: You may begin

Speaker #2: Good morning , and welcome to the fourth quarter and full year 2020 earnings conference call Joining me today with prepared comments are Cody Vadlamudi President and Chief Executive Officer .

Blake Holcomb: Good morning, and welcome to the Primoris Q4 and full year 2025 Earnings Conference Call. Joining me today with prepared comments are Koti Vadlamudi, President and Chief Executive Officer, and Ken Dodgen, Chief Financial Officer. Before we begin, I'd like to make everyone aware of certain language contained in our safe harbor statement. The company cautions that certain statements made during this call are forward-looking and are subject to various risks and uncertainties. Actual results may differ materially from our projections and expectations. These risks and uncertainties are discussed in our reports filed with the SEC. Our forward-looking statements represent our outlook only as of today, 24 February 2026. We disclaim any obligation to update these statements except as may be required by law. In addition, during this conference call, we will make reference to certain non-GAAP financial measures.

Speaker #2: And Kenneth Dodgen Chief Financial Officer Before we begin , I'd like to make everyone aware of certain language contained in our safe harbor statement .

Speaker #2: The company cautions that certain statements made during this call are forward looking and are subject to various risks and uncertainties Actual results may differ materially from our projections and expectations .

Blake Holcomb: Actual results may differ materially from our projections and expectations. These risks and uncertainties are discussed in our reports filed with the SEC. Our forward-looking statements represent our outlook only as of today, 24 February 2026. We disclaim any obligation to update these statements except as may be required by law.

Speaker #2: These risks and uncertainties are discussed in our reports filed with the SEC . Our forward looking statements represent our outlook only as of today , February 24th , 2026 .

Speaker #2: We disclaim any obligation to update these statements except as may be required by law In addition , during this conference call , we will make reference to certain non-GAAP financial measures A reconciliation of these non-GAAP financial measures are available on the investor section of our website .

Blake Holcomb: In addition, during this conference call, we will make reference to certain non-GAAP financial measures. A reconciliation of these non-GAAP financial measures are available on the investor section of our website in our Q4 and full year 2025 earnings press release, which was issued yesterday. I would now like to turn the call over to Koti Vadlamudi.

Blake Holcomb: A reconciliation of these non-GAAP financial measures are available on the investor section of our website in our Q4 and full year 2025 earnings press release, which was issued yesterday. I would now like to turn the call over to Koti Vadlamudi.

Speaker #2: In our fourth quarter and full year 2025 earnings press release, which was issued yesterday, I would now like to turn the call over to Cody Vadlamudi. Thank you.

Speaker #2: Blake . Good morning , and thank you for joining us today to discuss our fourth quarter and full year 2025 results and our initial outlook for 2026 .

Koti Vadlamudi: Thank you, Blake. Good morning, and thank you for joining us today to discuss our Q4 and full year 2025 results and our initial outlook for 2026. Prior to reviewing our 2025 performance, I want to begin by providing a few thoughts and impressions from my first several months as CEO. To start, Primoris is a great company because it has great people that embody a great culture. I have spent much of my time learning from and engaging with our employees, whose efforts are essential to our past and future success. There is a culture of safety and caring that promotes the health and well-being of our fellow employees. This has consistently placed Primoris well below the industry average in terms of recordable incidents, even while working more than 40 million hours in 2025.

Speaker #2: Prior to reviewing our 2025 performance, I want to begin by providing a few thoughts and impressions from my first several months as CEO. To start, Primoris is a great company because it has great people that embody a great culture.

Speaker #2: I have spent much of my time learning from an engaging with our employees whose efforts are essential to our past and future success .

Koti Vadlamudi: I have spent much of my time learning from and engaging with our employees, whose efforts are essential to our past and future success. There is a culture of safety and caring that promotes the health and well-being of our fellow employees. This has consistently placed Primoris well below the industry average in terms of recordable incidents, even while working more than 40 million hours in 2025.

Speaker #2: There is a culture of safety and caring that promotes the health and well-being of our fellow employees This is consistently placed primoris well below the industry average in terms of recordable incidents , even while working more than 40,000,000 hours in 2025 .

Speaker #2: There was always more work to be done to achieve zero incidents , but those who fit in best at Primoris place a priority on visualizing and assessing risks to prevent injuring themselves or others .

Koti Vadlamudi: There is always more work to be done to achieve zero incidents, but those who fit in best at Primoris place a priority on visualizing and assessing risks to prevent injuring themselves or others. There is also the recently launched Primoris Promise, a nonprofit charity to support our people, communities, and the causes that matter, which is funded by voluntary employee contributions, company donations, and public support. These aspects of our culture help build morale, attract and retain talent, execute consistently, and uphold trust with our customers. I have also witnessed a culture of innovation and an entrepreneurial spirit that keeps us nimble to adapt to our dynamic end markets, promote growth, drive productivity, and provide solutions to customers as a valued partner.

Speaker #2: There is also the recently launched Primoris Promise, a non-profit charity to support our people, communities, and the causes that matter, which is funded by voluntary employee contributions.

Speaker #2: Company donations and public support . These aspects of our culture help build morale , attract and retain talent , execute consistently and uphold trust with our customers .

Koti Vadlamudi: These aspects of our culture help build morale, attract and retain talent, execute consistently, and uphold trust with our customers. I have also witnessed a culture of innovation and an entrepreneurial spirit that keeps us nimble to adapt to our dynamic end markets, promote growth, drive productivity, and provide solutions to customers as a valued partner.

Speaker #2: I have also witnessed a culture of innovation and an entrepreneurial spirit that keeps us nimble to adapt to our dynamic end markets , promote growth , drive productivity and provide solutions to customers as a valued partner .

Speaker #2: This manifests itself in providing existing service to a non-traditional customer, such as building a major substation for a chip manufacturer, or developing a new service for existing customers in need of a solution.

Koti Vadlamudi: This manifests itself in providing existing service to a non-traditional customer, such as building a major substation for a chip manufacturer or developing a new service for existing customers in need of a solution in the case of Premier PV. This culture is also exhibited in the utilization of digital tools and technologies. Our teams are using and developing tools that can assist our teams in managing project risk and contracts, improving cost estimates and scheduling, and are increasing our productivity and predictability in the benefit of Primoris and our clients. Engaging with our customers has been another focus for me, and I am impressed with the collaboration and client partnerships that have been nurtured to achieve ambitious plans in the coming years.

Speaker #2: In the case of premiere PV This culture is also exhibited in the utilization of digital tools and technologies Our teams are using and developing tools that can assist our teams in managing project risk and contracts , improving cost estimates and scheduling , and are increasing our productivity and predictability in the benefit of Primoris and our clients Engaging with our customers has been another focus for me , and I am impressed with the collaboration and client partnerships that have been nurtured to achieve ambitious plans in the coming years The scope and scale of projects , specifically in solar , natural gas generation and power delivery , continue to increase , and the need for trusted , experienced and quality contractors is only becoming more critical .

Koti Vadlamudi: Our teams are using and developing tools that can assist our teams in managing project risk and contracts, improving cost estimates and scheduling, and are increasing our productivity and predictability in the benefit of Primoris and our clients. Engaging with our customers has been another focus for me, and I am impressed with the collaboration and client partnerships that have been nurtured to achieve ambitious plans in the coming years.

Koti Vadlamudi: The scope and scale of projects, specifically in solar, natural gas generation, and power delivery, continue to increase, and the need for trusted, experienced, and quality contractors is only becoming more critical. Primoris is in a prime position to be a provider of solutions to these customers and to form partnerships with new customers we may not have historically served. In summary, I'm excited and privileged to be in a position to lead Primoris in this next chapter of growth and value creation. I want to thank the Primoris Board of Directors for entrusting me with this responsibility, and thank our chairman, David King, for stepping in during that transitional period last year. With that, I'll move on to the highlights of our 2025 performance and the state of our end markets.

Speaker #2: Primoris is in a prime position to be a provider of solutions to these customers and to form partnerships with new customers . We may not have historically served .

Speaker #2: In summary , I'm excited and privileged to be in a position to lead Primoris in this next chapter of growth and value creation .

Koti Vadlamudi: In summary, I'm excited and privileged to be in a position to lead Primoris in this next chapter of growth and value creation. I want to thank the Primoris Board of Directors for entrusting me with this responsibility, and thank our chairman, David King, for stepping in during that transitional period last year. With that, I'll move on to the highlights of our 2025 performance and the state of our end markets.

Speaker #2: I want to thank the Board of Directors for entrusting me with this responsibility and thank our chairman , David King , for stepping in during the transitional period last year With that , I'll move on to the highlights of our 2025 performance and the state of our end markets Primoris delivered another strong year of operation on financial performance in 2025 , achieving record revenue , earnings and backlog .

Koti Vadlamudi: Primoris delivered another strong year of operational and financial performance in 2025, achieving record revenue, earnings, and backlog. We also generated strong cash flow that improved our liquidity and bolstered our balance sheet. This positions us to continue deploying capital to organically grow and expand our capabilities through acquisitions. We finished the year with over $11.9 billion in total backlog, including booking nearly $3 billion of new work in the final Q4 of the year. This is a testament to the tireless efforts of our employees, our valued client partnerships, and the strength of our end markets. For most of the previous 2 decades, power demand had remained relatively flat. We are now seeing projections that suggest power demand could grow by 50% over the next decade and potentially double over the next 15 years.

Speaker #2: We also generated strong cash flow that improved our liquidity and bolstered our balance sheet. This positions us to continue deploying capital to organically grow and expand our capabilities through acquisitions.

Speaker #2: We finished the year with over 11.9 billion in total backlog , including booking nearly 3 billion of new work in the final quarter of the year This is a testament to the tireless efforts of our employees , our valued client partnerships and the strength of our end markets For most of the previous two decades , power demand had remained relatively flat .

Koti Vadlamudi: We finished the year with over $11.9 billion in total backlog, including booking nearly $3 billion of new work in the final Q4 of the year. This is a testament to the tireless efforts of our employees, our valued client partnerships, and the strength of our end markets. For most of the previous 2 decades, power demand had remained relatively flat. We are now seeing projections that suggest power demand could grow by 50% over the next decade and potentially double over the next 15 years.

Speaker #2: We are now seeing projections that suggest power demand could grow by 50% over the next decade , and potentially double over the next 15 years .

Speaker #2: There are several reasons driving these higher estimates , including data centers , increased electrification and onshoring of critical parts of the supply chain .

Koti Vadlamudi: There are several reasons driving these higher estimates, including data centers, increased electrification, and onshoring of critical parts of the supply chain. While the rate of growth could ebb and flow based on energy efficiency gains or other factors, there is certainly evidence that our utility customers and hyperscalers are making investments in energy infrastructure to support a significant increase in load demand. The average increase in CapEx by our largest utility customers suggests that around a 50% increase in spending over the next 5 years compared to the previous 5 years. Replacing infrastructure that is past its intended lifespan, hardening the grid to be more resilient to weather events, and building or upgrading power infrastructure to support growing demand are all high priorities for these customers.

Speaker #2: While the rate of growth could ebb and flow based on energy efficiency gains or other factors, there is certainty that our utility customers and hyperscalers are making investments in energy infrastructure to support a significant increase in load demand.

Speaker #2: The average increase in CapEx by our largest utility customers suggests that around a 50% increase in spending over the next five years , compared to the previous five years Replacing infrastructure that is past its intended lifespan Hardening the grid to be more resilient to weather events and building or upgrading power infrastructure to support growing demand are all high priorities for these customers The hyperscalers project plans for cloud computing and artificial intelligence are expected to result in trillions of dollars of investment , and a substantial amount of power .

Koti Vadlamudi: The average increase in CapEx by our largest utility customers suggests that around a 50% increase in spending over the next 5 years compared to the previous 5 years. Replacing infrastructure that is past its intended lifespan, hardening the grid to be more resilient to weather events, and building or upgrading power infrastructure to support growing demand are all high priorities for these customers.

Koti Vadlamudi: The hyperscalers' project plans for cloud computing and artificial intelligence are expected to result in trillions of dollars in investment and a substantial amount of power. We believe that the power generation needed to support the expected demand growth will require an all-of-the-above energy source solution, including solar, natural gas, nuclear, and others. Primoris is well positioned to assist our clients in generating power to satiate the growing demand and also provide the transmission and distribution solutions needed to deliver energy where it is needed. Given the trends we are seeing, Primoris has been and will continue to be focused on attracting, retaining, training, and developing our people to help meet the ambitious goals of our clients and community shareholders. Our employees are essential to our success and our most valuable asset.

Speaker #2: We believe that the power generation needed to support the expected demand growth will require an all of the above energy source solution , including solar , natural gas , nuclear and others .

Speaker #2: Primoris is well positioned to assist our clients in generating power to satiate the growing demand , and also provide the transmission and distribution solutions needed to deliver energy where it is needed Given the trends we are seeing , Primoris has been and will continue to be focused on attracting and retaining training and developing our people to help meet the ambitious goals of our clients and shareholders .

Koti Vadlamudi: Primoris is well positioned to assist our clients in generating power to satiate the growing demand and also provide the transmission and distribution solutions needed to deliver energy where it is needed. Given the trends we are seeing, Primoris has been and will continue to be focused on attracting, retaining, training, and developing our people to help meet the ambitious goals of our clients and community shareholders. Our employees are essential to our success and our most valuable asset.

Speaker #2: Our employees are essential to our success and are our most valuable asset to help support our growth. We increased our labor force by more than 2,800 people in 2025 and remain committed to attracting and retaining the brightest and best in the industry. While some industry labor markets are tighter than others, such as certified journeyman linemen, we have been successful in attracting qualified craft and field labor to meet our clients' needs. We have also focused on bringing in experienced project managers and developing new project leadership in anticipation of increased demand for projects not yet in our backlog.

Koti Vadlamudi: To help support our growth, we increased our labor force by more than 2,800 people in 2025 and remain committed to attracting and retaining the brightest and best in the industry. While some industry labor markets are tighter than others, such as certified journeymen linemen, we have been successful in attracting qualified craft and field labor to meet our clients' needs. We have also focused on bringing in experienced project managers and developing new project leadership in anticipation of increased demand for projects not yet in our backlog. There is growing interest in the labor market to join organizations like Primoris that have strong secular tailwinds and are doing important work that improves the lives of our communities and supports economic growth in North America.

Koti Vadlamudi: We have also focused on bringing in experienced project managers and developing new project leadership in anticipation of increased demand for projects not yet in our backlog. There is growing interest in the labor market to join organizations like Primoris that have strong secular tailwinds and are doing important work that improves the lives of our communities and supports economic growth in North America.

Speaker #2: There is growing interest in the labor market to join organizations like Primoris that have strong secular tailwinds and are doing important work that improves the lives of our communities and supports economic growth in North America .

Speaker #2: We believe our ability to the vast majority of our work will continue to be an advantage for Primoris , and we are confident that we will have a fungible labor force to continue to grow and service our customers safely , timely , and with the highest quality .

Koti Vadlamudi: We believe our ability to self-perform the vast majority of our work will continue to be an advantage for Primoris, and we are confident that we'll have a fungible labor force to continue to grow and service our customers safely, timely, and with the highest quality. Now, let's look at the operating segment performance in more detail. In the utility segment, revenue and backlog both increased double digits for the year. The revenue growth was driven by better-than-anticipated activity in gas operations and continued strength in power delivery and communications. Power delivery contract renewals and rising demand led to MSA backlog growth as we continue to see market activity accelerate to upgrade, expand, and maintain the electric grid. Margins in the utility segment also rose for the second consecutive year, despite a decrease in storm response work in 2025, which is particularly accretive to power delivery margins.

Speaker #2: Now let's look at the operating segment performance in more detail In the utility segment , revenue and backlog , both increased double digits for the year .

Speaker #2: The revenue growth was driven by better than anticipated activity in gas operations and continued strength in power delivery and communications . Power delivery .

Koti Vadlamudi: The revenue growth was driven by better-than-anticipated activity in gas operations and continued strength in power delivery and communications. Power delivery contract renewals and rising demand led to MSA backlog growth as we continue to see market activity accelerate to upgrade, expand, and maintain the electric grid. Margins in the utility segment also rose for the second consecutive year, despite a decrease in storm response work in 2025, which is particularly accretive to power delivery margins.

Speaker #2: Contract renewals and rising demand led to MSA backlog growth. As we continue to see market activity accelerate to upgrade, expand, and maintain the electric grid, margins in the utility segment are improving.

Speaker #2: Also rose for the second consecutive year . Despite a decrease in storm response work in 2025 , which is particularly accretive to power delivery margins .

Speaker #2: We continue to focus on our growing mix of project work and increasing productivity , specifically in power delivery , to improve our margins .

Koti Vadlamudi: We continue to focus on our growing mix of project work and increasing productivity, specifically in power delivery, to improve our margins. In 2025, we made progress in both, with non-MSA revenues increasing almost 30% in the segment and with increased efficiency and utilization in several key geographies. We still have work to do in getting our margins and power delivery where we aspire to be in certain areas, but I want to credit our leadership and employees who have taken ownership in achieving this goal. We have made and continue to make investments in people and equipment to prepare for what we are expecting to be a significant increase in transmission and substation opportunities in the coming years. In gas operations, we exceeded our growth expectations, reaching $1 billion in revenue for the first time.

Speaker #2: In 2025 , we made progress in both with non MSA revenues increasing almost 30% in the segment and with increased efficiency in utilization in several key geographies .

Speaker #2: We still have work to do in getting our margins and power delivery where we aspire to be in certain areas , but I want to credit our leadership and employees who have taken ownership in achieving this goal .

Koti Vadlamudi: We have made and continue to make investments in people and equipment to prepare for what we are expecting to be a significant increase in transmission and substation opportunities in the coming years. In gas operations, we exceeded our growth expectations, reaching $1 billion in revenue for the first time.

Speaker #2: We have made and continue to make investments in people and equipment to prepare for what we are expecting to be a significant increase in transmission and substation opportunities in the coming years in gas operations , we exceeded our growth expectations , reaching 1 billion in revenue for the first time .

Speaker #2: Market share gains and capital program expansions , particularly in the Midwest and Southeast , drove our record revenues , as did more favorable weather conditions for much of the year .

Koti Vadlamudi: Market share gains and capital program expansions, particularly in the Midwest and Southeast, drove our record revenues, as did more favorable weather conditions for much of the year. Although we are not expecting a similar growth rate in 2026 due to several large projects not expected to recur, the business is in a solid position and operating at a high level. Communications had a year of double-digit growth through market share gains and further success in winning and executing large-scale network, long-haul builds tied to data center development. We are seeing this trend continue in Q4 and year-to-date, receiving $100 million in new awards that we referenced in our Q3 call. The favorable trend in this market appears to be accelerating as we are seeing more opportunities to bid over the last few months than we had seen in previous years.

Speaker #2: Although we are not expecting a similar growth rate in 2026 due to several large projects not expected to recur , the business is in a solid position and operating at a high level .

Speaker #2: Communications had a year of double-digit growth through market share gains and further success in winning and executing large-scale network long-haul builds tied to data center development.

Koti Vadlamudi: Communications had a year of double-digit growth through market share gains and further success in winning and executing large-scale network, long-haul builds tied to data center development. We are seeing this trend continue in Q4 and year-to-date, receiving $100 million in new awards that we referenced in our Q3 call. The favorable trend in this market appears to be accelerating as we are seeing more opportunities to bid over the last few months than we had seen in previous years.

Speaker #2: We are seeing this trend continue in Q4 and year to date , receiving 100 million in new awards that we referenced in our third quarter call .

Speaker #2: The favorable trend in this market appears to be accelerating , as we are seeing more opportunities to bid over the last few months than we had seen in previous years .

Speaker #2: Our ability to sustain success in this market and perform to our standard will help support revenue and margins in this segment . Moving over to the energy segment , revenue grew almost 25% , primarily driven by renewables , partially offset by another challenging year in pipeline services .

Koti Vadlamudi: Our ability to sustain success in this market and perform to our standard will help support revenue and margins in this segment. Moving over to the energy segment, revenue grew almost 25%, primarily driven by renewables, partially offset by another challenging year in pipeline services. We are optimistic that 2025 will represent a trough in the cycle for pipeline, as our funnel of opportunities has increased dramatically over the past year to over $3 billion. In recent years, we have seen our funnel trend around one-third of this value. However, with the rising need for natural gas to fuel power generation, increasing LNG production, and a more favorable regulatory environment, we believe that our pipeline activity is poised to accelerate. This is specifically true for large-diameter pipeline construction, where we typically excel from execution and margin standpoint.

Speaker #2: We are optimistic that 2025 will represent a trough in the cycle for pipeline , as our funnel of opportunities has increased dramatically over the past year to over $3 billion in recent years , we have seen our funnel trend around one third of this value .

Koti Vadlamudi: In recent years, we have seen our funnel trend around one-third of this value. However, with the rising need for natural gas to fuel power generation, increasing LNG production, and a more favorable regulatory environment, we believe that our pipeline activity is poised to accelerate. This is specifically true for large-diameter pipeline construction, where we typically excel from execution and margin standpoint.

Speaker #2: However, with the rising need for natural gas to fuel power generation, increasing LNG production, and a more favorable regulatory environment, we believe that our pipeline activity is poised to accelerate.

Speaker #2: This is specifically true for large diameter pipeline construction , where we typically excel from execution and margin standpoint . Contrary to many other projects in the energy segment , pipeline projects tend to mobilize to the construction phase more quickly upon contract signing and can often be completed within the calendar year depending on the scope This leads us to be optimistic that pipeline could see meaningful improvement in 2026 , and heading into 2027 .

Koti Vadlamudi: Contrary to many other projects in the energy segment, pipeline projects tend to mobilize to the construction phase more quickly upon contract signing and can often be completed within the calendar year, depending on the scope. This leads us to be optimistic that pipeline could see meaningful improvement in 2026 and heading into 2027. Industrial construction had a solid year of performance, highlighted by natural gas generation, which contributed $480 million in revenue. This helped to keep revenues mostly flat at just over $1 billion, despite lower activity in Canada and the divestiture of a non-core business in Q4 2024, that created a $75 million revenue headwind in 2025. As I alluded to earlier and in previous comments, Primoris is excited about our potential growth in natural gas generation in the coming years. We are actively engaged in discussions.

Speaker #2: Industrial construction had a solid year of performance , highlighted by natural gas generation , which contributed $480 million in revenue . This helped to keep revenues mostly flat at just over $1 billion .

Koti Vadlamudi: This helped to keep revenues mostly flat at just over $1 billion, despite lower activity in Canada and the divestiture of a non-core business in Q4 2024, that created a $75 million revenue headwind in 2025. As I alluded to earlier and in previous comments, Primoris is excited about our potential growth in natural gas generation in the coming years. We are actively engaged in discussions.

Speaker #2: Despite lower activity in Canada and the divestiture of a non-core business in Q4 2024 . That created a $75 million revenue headwind in 2025 .

Speaker #2: As I alluded to earlier , and in previous comments , Primoris is excited about our potential growth in natural gas generation in the coming years .

Speaker #2: We are actively engaged in discussions or bidding on one and a half to $2 billion of awards in the first half of this year , and our conversations with clients suggest the list of opportunities will continue to grow .

Koti Vadlamudi: We're bidding on one and a half to two billion dollars of awards in the first half of this year, and our conversations with clients suggest the list of opportunities will continue to grow. We are prepared with the project managers and skilled labor necessary to take on more work, and we are confident that our expertise and relationships will result in a strong bookings year for natural gas generation in 2026. We remain disciplined in the types of projects we are pursuing and the terms we are willing to accept to balance risk more equitably between contractor and client and ensure the jobs are completed successfully and on schedule. Heavy civil continued its high performance in 2025, contributing solid margins and cash flow.

Speaker #2: We are prepared with the project managers and skilled labor necessary to take on more work , and we are confident that our expertise and relationships will result in a strong bookings year for natural gas generation in 2026 .

Koti Vadlamudi: We remain disciplined in the types of projects we are pursuing and the terms we are willing to accept to balance risk more equitably between contractor and client and ensure the jobs are completed successfully and on schedule. Heavy civil continued its high performance in 2025, contributing solid margins and cash flow.

Speaker #2: We remain disciplined in the types of projects we are pursuing and the terms we are willing to accept to balance risk more equitably between contractor and client and ensure the jobs are completed successfully and on schedule .

Speaker #2: Heavy civil continued its high performance in 2025 , contributing solid margins and cash flow . While not a primary driver of top line growth , the team has delivered consistent execution and is directing their efforts on projects that align with their expertise and delivering margins above their historical average .

Koti Vadlamudi: While not a primary driver of top-line growth, the team has delivered consistent execution and is directing their efforts on projects that align with their expertise in delivering margins above their historical average. Finishing the energy segment with renewables, it was another year of record revenue and operating income, despite having to navigate an uncertain trade and regulatory environment for much of the year. These conditions led to several delays, project specification changes, and redesigns. In the end, our teams were able to respond to our customers' needs and closed out the year by booking over $1.6 billion in new projects during Q4. A huge accomplishment by our sales and support teams to get these contracts signed and over the finish line to help our clients move these projects forward.

Speaker #2: Finishing the energy segment with renewables . It was another year of record revenue and operating income . Despite having to navigate an uncertain trade and regulatory environment for much of the year , these conditions led to several delays .

Koti Vadlamudi: These conditions led to several delays, project specification changes, and redesigns. In the end, our teams were able to respond to our customers' needs and closed out the year by booking over $1.6 billion in new projects during Q4. A huge accomplishment by our sales and support teams to get these contracts signed and over the finish line to help our clients move these projects forward.

Speaker #2: Project specification changes and redesigns . But in the end , our teams were able to respond to our customers needs and closed out the year by booking over $1.6 billion in new projects during the fourth quarter , a huge accomplishment by our sales and support teams to get these contracts signed and over the finish line to help our clients move these projects forward .

Speaker #2: We also helped our clients accelerate project timelines and break ground on projects ahead of schedule during the year . To meet their needs .

Koti Vadlamudi: We also helped our clients accelerate project timelines and break ground on projects ahead of schedule during the year to meet their needs, a testament to the valued partnerships we have with our clients and vendors, and our team's willingness to deliver our best when called upon. Of course, we did face some operational challenges during the year as well, that led to higher-than-expected costs on certain projects that contributed to lower margins during Q4. One project required additional equipment and materials to overcome challenging underground conditions that were drastically different from the conditions on an adjacent project we had previously constructed. These situations can happen when you work on as many projects as we do. We believe we have worked past most of the excess costs on these projects and would expect to see margins improve in 2026 and return to the norms we expect.

Speaker #2: A testament to the valued partnerships we have with our clients and vendors and our team's willingness to deliver our best when called upon .

Speaker #2: Of course , we did face some operational challenges during the year as well . That led to higher than expected costs on certain projects that contributed to lower margins during the fourth quarter .

Speaker #2: One project required additional equipment and materials to overcome challenging underground conditions that were drastically different from the conditions on an adjacent project we had previously constructed .

Koti Vadlamudi: One project required additional equipment and materials to overcome challenging underground conditions that were drastically different from the conditions on an adjacent project we had previously constructed. These situations can happen when you work on as many projects as we do. We believe we have worked past most of the excess costs on these projects and would expect to see margins improve in 2026 and return to the norms we expect.

Speaker #2: These situations can happen when you work on as many projects as we do. We believe we have worked past most of the excess costs on these projects and would expect to see margins improve in 2026 and return to the norms we expect.

Speaker #2: We have also continued to add quality people and management oversight to assist with upfront engineering design and estimating work that will help mitigate excursions in the future .

Koti Vadlamudi: We have also continued to add quality people and management oversight to assist with upfront engineering, design, and estimating work that will help mitigate excursions in the future. Ultimately, the demand for our solar solutions remains high, and our customers have an extensive volume of projects, safe harbored in accordance with the Treasury guidance. We are seeing our average project size increase, and new customers continue to engage with us to build their projects. We saw tremendous growth in our battery storage business in 2025 to over $250 million and believe the market is poised to continue being a growth driver in renewables.... Solar, and specifically solar with battery storage, remains one of the lowest cost and fastest to market sources of power generation, which in our view, makes it a crucial part of helping to meet the energy demands of the future.

Speaker #2: Ultimately , the demand for our solar solutions remains high and our customers have an extensive volume of projects . Safe harbor . In accordance with the Treasury guidance , we are seeing our average project size increase and new customers continue to engage with us to build their projects .

Koti Vadlamudi: We saw tremendous growth in our battery storage business in 2025 to over $250 million and believe the market is poised to continue being a growth driver in renewables.... Solar, and specifically solar with battery storage, remains one of the lowest cost and fastest to market sources of power generation, which in our view, makes it a crucial part of helping to meet the energy demands of the future.

Speaker #2: We saw tremendous growth in our battery storage business in 2025 to over $250 million , and believe the market is poised to continue being a growth driver in renewables , solar , and specifically solar with battery storage remains one of the lowest costs and fastest to market sources of power generation , which in our view makes it a crucial part of helping to meet the energy demands of the future .

Speaker #2: We also recently commissioned our remote operations Control Center that adds asset management capacity for our O&M business . It also opens the door for deeper engagement with our clients .

Koti Vadlamudi: We also recently commissioned our remote operations control center that adds asset management capacity for our O&M business. It also opens the door for deeper engagement with our clients, should remediation be needed on facilities damaged by weather events or replacement of outdated components. Our eBoss business, Premier PB, built on its success in 2025, supplying components to the projects we construct and to the market. We plan to invest in a new facility for this business line in 2026, that will increase our capacity to service the market and add additional products to our portfolio to align with customer demand and preferences. Overall, Primoris had an exceptional 2025 and is set up for a successful year in 2026.

Speaker #2: Should remediation be needed on facilities damaged by weather events or replacement of outdated components ? Our business Premier PV , built on his success in 2025 , supplying components to the projects we construct and to the market .

Koti Vadlamudi: Our eBoss business, Premier PB, built on its success in 2025, supplying components to the projects we construct and to the market. We plan to invest in a new facility for this business line in 2026, that will increase our capacity to service the market and add additional products to our portfolio to align with customer demand and preferences.

Speaker #2: We plan to invest in new facility for this business line in 2026 . That will increase our capacity to service the market and add additional products to our portfolio to align with customer demand and preferences .

Speaker #2: Overall , Primoris had an exceptional 2025 and is set up for a successful year in 2026 . The demand backdrop for our services is as good as we've seen as a company , and we are focused on the people , equipment and expertise to help our customers succeed Now I'll hand it over to Ken for more on our financial results Thanks , Cody , and good morning , everyone .

Koti Vadlamudi: Overall, Primoris had an exceptional 2025 and is set up for a successful year in 2026. The demand backdrop for our services is as good as we've seen as a company, and we are focused on the people, equipment, and expertise to help our customers succeed. Now I'll hand it over to Ken for more on our financial results.

Koti Vadlamudi: The demand backdrop for our services is as good as we've seen as a company, and we are focused on the people, equipment, and expertise to help our customers succeed. Now I'll hand it over to Ken for more on our financial results.

Ken Dodgen: Thanks, Cody, and good morning, everyone. Our Q4 revenue was almost $1.9 billion, an increase of $116.4 million, or almost 7% compared to the prior year. The increase was driven by growth in both the energy and utility segments. Gross profit for Q4 declined by $9.6 million, or approximately 5% to $175 million, due to lower gross margins in both segments. Overall, gross margins in Q4 were 9.4%, compared to 10.6% in the prior year. Looking at our results by segment, the utility segment revenue is up nearly $34 million compared to the prior year. The growth was across all business lines, led by increased gas operations in the Midwest and power delivery and communications activity in Texas and the Southeast.

Ken Dodgen: Thanks, Koti, and good morning, everyone. Our Q4 revenue was almost $1.9 billion, an increase of $116.4 million, or almost 7% compared to the prior year. The increase was driven by growth in both the energy and utility segments. Gross profit for Q4 declined by $9.6 million, or approximately 5% to $175 million, due to lower gross margins in both segments.

Speaker #2: Our fourth quarter revenue was almost 1.9 billion , an increase of 116.4 million , or almost 7% , compared to the prior year .

Speaker #2: The increase was driven by growth in both the energy and utility segments Gross profit for the fourth quarter declined by 9.6 million , or approximately 5% , to 175 million , due to lower gross margins in both segments Overall , gross margins in the fourth quarter were 9.4% , compared to 10.6% in the prior year .

Ken Dodgen: Overall, gross margins in Q4 were 9.4%, compared to 10.6% in the prior year. Looking at our results by segment, the utility segment revenue is up nearly $34 million compared to the prior year. The growth was across all business lines, led by increased gas operations in the Midwest and power delivery and communications activity in Texas and the Southeast.

Speaker #2: Looking at our results by segment , the utility segment revenue was up nearly 34 million compared to the prior year . The growth was across all business lines , led by increased gas operations in the Midwest and power delivery and communications activity in Texas and the southeast Gross profit decreased approximately 7 million , or about 8% , compared to the prior year , due to lower gross margins .

Ken Dodgen: Gross profit decreased approximately $7 million, or about 8% compared to the prior year, due to lower gross margins. Gross margins were 10.5%, down from 12.1% in the prior year. The lower gross margins were due to a decrease in storm work in the power delivery business, partially offset by higher margins in communications. Excluding storm work, utility margins were comparable to Q4 of the prior year. Energy segment revenue increased $88 million compared to the prior year, primarily due to growth in our renewables business, partially offset by lower industrial and pipeline revenue. Gross profit decreased $2.8 million compared to the prior year, as lower gross margins offset the higher revenue. Gross margins fell to 8.5%, compared to 9.5% in the prior year.

Speaker #2: Gross margins were 10.5% , down from 12.1% in the prior year . The lower gross margins were due to a decrease in storm work in the power delivery business , partially offset by higher margins in communications .

Speaker #2: Excluding storm work , utility margins were comparable to Q4 of the prior year . Energy segment revenue increased 88 million compared to the prior year , primarily due to growth in our renewables business .

Ken Dodgen: Energy segment revenue increased $88 million compared to the prior year, primarily due to growth in our renewables business, partially offset by lower industrial and pipeline revenue. Gross profit decreased $2.8 million compared to the prior year, as lower gross margins offset the higher revenue. Gross margins fell to 8.5%, compared to 9.5% in the prior year.

Speaker #2: Partially offset by lower industrial and pipeline revenue . Gross profit decreased 2.8 million compared to the prior year , as lower gross margins offset the higher revenue gross margins fell to 8.5% compared to 9.5% in the prior year .

Speaker #2: The lower gross margins were primarily related to certain renewables projects that experienced cost overruns due to unanticipated rock and soil conditions , which required additional labor and equipment .

Ken Dodgen: The lower gross margins were primarily related to certain renewables projects that experienced cost overruns due to unanticipated rock and soil conditions, which required additional labor and equipment. We believe that we've accounted for all of these increased costs and expect renewables margins to improve as we progress into 2026. Partially offsetting these declines was strong performance in our natural gas generation, industrial, and heavy civil businesses. For the full year 2025, revenue was up $1.2 billion to almost $7.6 billion, primarily driven by double-digit growth in both segments. Gross profit increased by $110 million, or approximately 16%, primarily driven by higher revenue in both segments and improved margins in our utility segment.

Speaker #2: We believe that we've accounted for all of these increased costs and expect renewables margins to improve as we progress into 2026 , partially offsetting these declines was strong performance in our natural gas generation , industrial and heavy civil businesses For the full year 2025 , revenue was up 1.2 billion to almost 7.6 billion , primarily driven by double digit growth in both segments .

Ken Dodgen: Partially offsetting these declines was strong performance in our natural gas generation, industrial, and heavy civil businesses. For the full year 2025, revenue was up $1.2 billion to almost $7.6 billion, primarily driven by double-digit growth in both segments. Gross profit increased by $110 million, or approximately 16%, primarily driven by higher revenue in both segments and improved margins in our utility segment.

Speaker #2: Gross profit increased by $110 million, or approximately 16%, primarily driven by higher revenue in both segments and improved margins in our utility segment.

Speaker #2: Turning to performance by segment for the year , utilities revenue was up 253 million , or a little over 10% from the prior year , driven by growth across all business lines .

Ken Dodgen: Turning to performance by segment for the year, utilities revenue was up $253 million, or a little over 10% from the prior year, driven by growth across all business lines. Gross profit increased $51 million, or almost 20%, due to the improved gross margins, particularly in power delivery. The improvement in power delivery margins came even though gross profit from storm work declined by $18 million in 2025 compared to the prior year. Revenue growth and improved margins in our gas operations and communications businesses also benefited overall segment margins. Energy revenue grew by almost $1 billion, or around 25% this year, primarily driven by growth in our renewables and natural gas generation businesses, partially offset by a decline in pipeline revenue and the wind down or divestiture of non-core industrial businesses.

Speaker #2: Gross profit increased 51 million , or almost 20% , due to the improved gross margins , particularly in power delivery . The improvement in power delivery margins came even though gross profit from storm work declined by 18,000,000 in 2025 compared to the prior year revenue growth , and improved margins in our gas operations and communications businesses also benefited overall segment margins .

Ken Dodgen: Revenue growth and improved margins in our gas operations and communications businesses also benefited overall segment margins. Energy revenue grew by almost $1 billion, or around 25% this year, primarily driven by growth in our renewables and natural gas generation businesses, partially offset by a decline in pipeline revenue and the wind down or divestiture of non-core industrial businesses.

Speaker #2: Energy revenue grew by almost 1 billion , or around 25% this year , primarily driven by growth in our renewables and natural gas generation businesses , partially offset by a decline in pipeline revenue and the wind down or gesture of noncore industrial businesses .

Speaker #2: Renewables grew over 50% in 2025 , as we had over 500 million of revenue pulled forward into 2025 from 2026 due to project Resequencing .

Ken Dodgen: Renewables grew over 50% in 2025, as we had over $500 million of revenue pulled forward into 2025 from 2026 due to project resequencing at the request of a customer and accelerating project execution. Gross profit increased by $59 million, or 13% compared to the prior year, primarily due to higher revenue, partially offset by a decline in gross margins to 10.1% versus 11% in the prior year. The gross margin decline was mainly due to lower margins on certain Renewables projects, partially offset by strong performance in our natural gas generation, industrial, and heavy civil businesses. SG&A expense in Q4 was just over $97 million, essentially flat compared to the prior year. For the full year, SG&A was 5.3% of revenue, down from 6% in the prior year.

Speaker #2: At the request of a customer and accelerated project execution . Gross profit increased by 59 million , or 13% , compared to the prior year , primarily due to higher revenue .

Speaker #2: Partially offset by a decline in gross margins to 10.1% versus 11% in the prior year . The gross margin decline was mainly due to lower margins on certain renewables projects , partially offset by strong performance in our natural gas generation .

Ken Dodgen: The gross margin decline was mainly due to lower margins on certain Renewables projects, partially offset by strong performance in our natural gas generation, industrial, and heavy civil businesses. SG&A expense in Q4 was just over $97 million, essentially flat compared to the prior year. For the full year, SG&A was 5.3% of revenue, down from 6% in the prior year.

Speaker #2: Industrial and heavy civil businesses . SG&A expense in the fourth quarter was just over 97 million , essentially flat compared to the prior year .

Speaker #2: For the full year , SG&A was 5.3% of revenue , down from 6% in the prior year . We have prioritized leveraging our G&A cost base to .

Ken Dodgen: We have prioritized leveraging our SG&A cost base to improve operating margins. We are pleased with the progress we made in 2025. We plan to invest with discipline in our information technology and personnel to support growth while continuing to drive efficiencies across the organization. For 2026, we expect that our SG&A will be in the mid to high 5% range. Net interest expense in the Q4 was $6.4 million, compared to $12 million in the prior year. Full year net interest expense was down almost $37 million from the prior year to just under $29 million. These decreases were due to lower debt balances and lower interest rates, along with higher interest income. Given our current debt level, we expect interest expense for 2026 to be between $23 to $26 million.

Speaker #2: Improve operating margins , and we are pleased with the progress we made in 2025 . We plan to invest with discipline in our information technology and personnel to support growth while continuing to drive efficiencies across the organization .

Speaker #2: For 2026 , we expect that our SG&A will be in the mid to high 5% range . Net interest expense in the fourth quarter was 6.4 million , compared to 12 million in the prior year .

Ken Dodgen: Net interest expense in the Q4 was $6.4 million, compared to $12 million in the prior year. Full year net interest expense was down almost $37 million from the prior year to just under $29 million. These decreases were due to lower debt balances and lower interest rates, along with higher interest income. Given our current debt level, we expect interest expense for 2026 to be between $23 to $26 million.

Speaker #2: And full year net interest expense was down almost 37 million from the prior year to just under 29 million . These decreases were due to lower debt balances and lower interest rates , along with higher interest income .

Speaker #2: Given our current debt level , we expect interest expense for 2026 to be between 23 and 26 million . Our effective tax rate in 2025 was 28.4% , and we expect it to be 29% for 2026 , but it may vary depending on the mix of tax jurisdictions in which we operate .

Ken Dodgen: Our effective tax rate in 2025 was 28.4%, and we expect it to be 29% for 2026, but it may vary depending on the mix of tax jurisdictions in which we operate. Operating cash flows in Q4 were approximately $143 million and over $470 million for the full year, demonstrating another solid year of working capital management and cash conversion, along with a little over $100 million of cash collections pulled forward from Q1 2026 into Q4. We have exceeded our operating cash flow margin goal of 4% to 5% the past two years through a combination of improved billing and collections and upfront payments on new awards.

Speaker #2: Operating cash flows in the fourth quarter were approximately 143 million , and over 470 million for the full year , demonstrating another solid year of working capital management and cash conversion , along with a little over 100 million of cash collections pulled forward from Q1 26 into Q4 .

Speaker #2: We have exceeded our operating cash flow margin goal of 4 to 5% the past two years through a combination of improved billing and collections, and upfront payments on new awards.

Ken Dodgen: We have exceeded our operating cash flow margin goal of 4% to 5% the past two years through a combination of improved billing and collections and upfront payments on new awards. Although we expect some continued progress in these areas, we anticipate cash flow from operations as a percentage of revenue is likely to trend more toward our target range of 4% to 5% in 2026. Continuing with CapEx, we invested $21.8 million in Q4 and about $130 million for the full year.

Speaker #2: Although we expect some continued progress in these areas , we anticipate cash flow from operations as a percentage of revenue is likely to trend more toward our target range of 4 to 5% in 2026 , continuing with CapEx , we invested 21.8 million in the fourth quarter and about 130 million for the full year , consistent with 2025 .

Ken Dodgen: Although we expect some continued progress in these areas, we anticipate cash flow from operations as a percentage of revenue is likely to trend more toward our target range of 4% to 5% in 2026. Continuing with CapEx, we invested $21.8 million in Q4 and about $130 million for the full year. Consistent with 2025, we expect 2026 CapEx to be between $120 to $140 million, with equipment accounting for $90 to $110 million, and the balance spent on facilities and IT upgrades. Moving over to the balance sheet and liquidity, we ended the year with cash of $536 million, up from $456 million at the end of 2024.

Ken Dodgen: Consistent with 2025, we expect 2026 CapEx to be between $120 to $140 million, with equipment accounting for $90 to $110 million, and the balance spent on facilities and IT upgrades. Moving over to the balance sheet and liquidity, we ended the year with cash of $536 million, up from $456 million at the end of 2024.

Speaker #2: We expect 2026 CapEx to be between 120 to 140 million , with equipment accounting for 90 to 110 million . And the balance spent on facilities .

Speaker #2: And it upgrades . Moving over to the balance sheet and liquidity , we ended the year with cash of 536 million , up from 456 million at the end of 2024 .

Speaker #2: Total long term debt was 470 million at year end , giving us a net cash positive position to begin 2026 . Our strong balance sheet has us well positioned to meet our working capital needs , deploy capital to our higher growth , higher margin businesses and pursue acquisitions that align with our strategic and financial goals .

Ken Dodgen: Total long-term debt was $470 million at year-end, giving us a net cash positive position to begin 2026. Our strong balance sheet has us well positioned to meet our working capital needs, deploy capital to our higher growth, higher margin businesses, and pursue acquisitions that align with our strategic and financial goals. These include targets that augment our power delivery capabilities and enhance our service offering on industrial, power generation, and data center projects. Transitioning to backlog, we closed the year with a very strong Q4 of bookings, like we expected, that brought total backlog to over $11.9 billion. Total MSA backlog was up over 20% compared to the prior year, driven by contract renewals and anticipated spend by customers in the utility segment, specifically in power delivery.

Speaker #2: These include targets that augment our power delivery capabilities and enhance our service offering on industrial power generation and data center projects. Transitioning to backlog.

Ken Dodgen: These include targets that augment our power delivery capabilities and enhance our service offering on industrial, power generation, and data center projects. Transitioning to backlog, we closed the year with a very strong Q4 of bookings, like we expected, that brought total backlog to over $11.9 billion. Total MSA backlog was up over 20% compared to the prior year, driven by contract renewals and anticipated spend by customers in the utility segment, specifically in power delivery.

Speaker #2: We closed the year with a very strong fourth quarter of bookings like we expected . That brought total backlog to over 11.9 billion .

Speaker #2: Total MSA backlog was up over 20% compared to the prior year , driven by contract renewals and anticipated spend by customers in the utility segment .

Speaker #2: Specifically in Power Delivery, we see exciting potential for further backlog growth in the coming quarters across natural gas generation, renewables, and pipeline construction that will drive growth in 2026 and set us up for further growth in 2027.

Ken Dodgen: We see exciting potential for further backlog growth in the coming quarters across natural gas generation, renewables, and pipeline construction that will drive growth in 2026 and set us up for further growth in 2027. I will conclude with our earnings guidance for 2026. We expect earnings per fully diluted share to be between $5.35 and $5.55, and our adjusted EPS to be between $5.80 and $6.00 per share. Our adjusted EBITDA guidance is $560 to $580 million for 2026. I want to point out that this guidance does not include potential benefits from storm work, which contributed around $12 million of adjusted EBITDA in 2025. Additionally, our Q1 is typically our lowest quarter of the year for both revenue and net income due to seasonality, which primarily impacts our utility segment.

Speaker #2: I will conclude with our earnings guidance for 2026. We expect earnings per diluted share to be between $5.35 and $5.55, and our adjusted EPS to be between $5.80 and $6.00 per share.

Speaker #2: Our adjusted EBITDA guidance is 560 to 580 million for 2026 . I want to point out that this guidance does not include potential benefits from storm work , which contributed around 12 million of adjusted EBITDA in 2025 .

Ken Dodgen: Our adjusted EBITDA guidance is $560 to $580 million for 2026. I want to point out that this guidance does not include potential benefits from storm work, which contributed around $12 million of adjusted EBITDA in 2025. Additionally, our Q1 is typically our lowest quarter of the year for both revenue and net income due to seasonality, which primarily impacts our utility segment.

Speaker #2: Additionally , our first quarter is typically our lowest quarter of the year for both revenue and net income due to seasonality , which primarily impacts our utility segment .

Speaker #2: As a result, we expect our Utility segment margins to be in the 10% to 12% range for the full year, with Q1 in the 7% to 9% range.

Ken Dodgen: As a result, we expect our utility segment margins to be in the 10 to 12% range for the full year, with Q1 in the 7 to 9% range. For our energy segment, we expect gross margins to be in the 10 to 12% range for the full year. With that, I'll turn it back over to Cody.

Speaker #2: And for our Energy segment, we expect gross margins to be in the 10% to 12% range for the full year. And with that, I'll turn it back over to Cody. Before we open up the call to your questions, I'd like to reiterate some of our key takeaways from the prepared comments today.

Koti Vadlamudi: Before we open up the call to your questions, I'd like to reiterate some of our key takeaways from prepared comments today. First, I am proud to be part of Primoris and help support our leadership team build on our successful foundation. I look forward to fostering our culture and expanding our horizons of who we can be and who we can serve as an organization. I believe we are doing work that matters to grow the economies of North America and better the lives of the communities we serve. I also look forward to engaging with our analysts and investors and sharing with them our vision for the future of Primoris in the years to come. Second, we are energized to tackle the tremendous opportunities ahead of us across our end markets.

Speaker #2: First, I am proud to be part of Primoris and help support our leadership team, building on our successful foundation. I look forward to fostering our culture and expanding our horizons of who we can be and who we can serve as an organization.

Speaker #2: I believe we are doing work that matters to grow the economies of North America and better the lives of the communities we serve .

Koti Vadlamudi: I believe we are doing work that matters to grow the economies of North America and better the lives of the communities we serve. I also look forward to engaging with our analysts and investors and sharing with them our vision for the future of Primoris in the years to come. Second, we are energized to tackle the tremendous opportunities ahead of us across our end markets.

Speaker #2: I also look forward to engaging with our analysts and investors and sharing with them our vision for the future of Primoris in the years to come Second , we are energized to tackle the tremendous opportunities ahead of us across our end markets .

Speaker #2: The energy infrastructure needed to not only support innovative technologies, but to sustain, upgrade, or replace aging and outdated infrastructure is enormous.

Koti Vadlamudi: The energy infrastructure needed to not only support innovative technologies, but to sustain, upgrade, or replace aging and outdated infrastructure is enormous. We believe Primoris will have an integral and vitally important role to play in supporting this demand. Finally, in pursuit of these objectives, we remain committed to improving margins, generating cash flow, and being the best allocators of capital in our industry. We are exceeding the goals we laid out in 2024 and are looking forward to establishing new targets and strategic initiatives as we approach the latter part of the decade. It is our view that the success in these areas and remaining nimble and adaptable to changes in our markets are the best ways to create long-term value for our employees, our customers, and our shareholders. With that, I'll now open it up for questions.

Speaker #2: We believe Primoris will have an integral and vitally important role to play in supporting this demand. Finally, in pursuit of these, we remain committed to improving margins, generating cash flow, and being the best allocators of capital in our industry.

Speaker #2: We are exceeding the goals we laid out in 2024 and are looking forward to establishing new targets and strategic initiatives as we approach the latter part of the decade .

Koti Vadlamudi: We are exceeding the goals we laid out in 2024 and are looking forward to establishing new targets and strategic initiatives as we approach the latter part of the decade. It is our view that the success in these areas and remaining nimble and adaptable to changes in our markets are the best ways to create long-term value for our employees, our customers, and our shareholders. With that, I'll now open it up for questions.

Speaker #2: It is our view that success in these areas, and remaining nimble and adaptable to changes in our markets, are the best ways to create long-term value for our employees.

Speaker #2: Our customers and our shareholders . And with that , I'll now open it up for questions

Speaker #1: Thank you . And ladies and gentlemen , we will now begin the question and answer session . If you have dialed in and would like to ask a question , simply press Star One on your telephone keypad to raise your hand and join the queue .

Operator: Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. If you have dialed in and would like to ask a question, simply press star one on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star one again. As a reminder, please limit yourself to one question and one follow-up. With that, your first question comes from the line of Philip Shen with Roth Capital. Please go ahead.

Speaker #1: If you would like to withdraw your question, simply press star one again. And as a reminder, please limit yourself to one question and one follow-up.

Speaker #1: With that , your first question comes from the line of Philip Chen with Roth Capital . Please go ahead .

Speaker #3: Hey guys , thanks for taking my questions First one is on the gas gen business you talked about bidding activity being in the one and a half to $2 billion .

Philip Shen: Hey, guys. Thanks for taking my questions. First one is on the gas gen business. You talked about bidding activity being in the one and a half to $2 billion. Was wondering how much of that might be converted to revenues in 2026 and 2027? Thanks.

Speaker #3: I was wondering how much of that might be converted to revenues in '26 and '27. Thanks.

Speaker #2: Yeah . Thanks for the question , Philip . I can take that . And yeah , as I said in prepared remarks , the funnel of opportunities in in gas generation power are really solid .

Koti Vadlamudi: Yeah, thanks for the question, Philip. I can take that. As I said in prepared remarks, the funnel of opportunities in gas generation power are really solid. The one and a half to $2 billion is notionally first half of the year and would have meaningful burn in 2026. In the overall funnel, it's probably a little bit more weighted to back half of the year, with line of sight to nearly $6 billion. Really, really strong end market with strong capital CapEx.

Speaker #2: The $1.5 to $2 billion is notionally the first half of the year and would have meaningful burn in 2026 in the overall funnel.

Speaker #2: It's probably a little bit more weighted to back half of the year with line of sight to nearly 6 billion . So really , really strong end market with strong capital CapEx

Speaker #4: Great . Thanks , Cody . And welcome to the promotion as well . And the question on . Yeah , on renewables , you guys gave us some color on the margin performance in Q4 .

Philip Shen: Great. Thanks, Koti. Welcome to the Primoris as well. Second question-

Koti Vadlamudi: Thanks, bud.

Philip Shen: here on, yeah, on renewables. You guys gave us some color on the margin performance in Q4. I just was wondering if you could share a little bit more on, like, when you guys kind of learned about the challenges and what gives you confidence that this won't happen again? Ultimately, what changes have you guys made to avoid this from happening again? Thanks, guys.

Speaker #4: Just was wondering if you could share a little bit more on like when you guys kind of learned about the challenges and what gives you confidence that this won't happen again .

Speaker #4: And ultimately, what changes have you guys made to avoid this from happening again? Thanks, guys.

Speaker #2: Yeah , I'll take that one . Phillip . And then Ted can add some more color , but yeah , these were projects , a project in an environment where we under underappreciated the geotech and soil conditions from an estimate standpoint and mitigation measures , we took didn't prove efficacious .

Koti Vadlamudi: Yeah, I'll take that one, Philip, and then Ken can add some more color. Yeah, these were projects, a project in an environment where we underappreciated the geotech and soil conditions from an estimate standpoint. Mitigation measures we took didn't prove efficacious, and then that cascaded with equipment and labor escalation. Despite that, this particular program is sort of at the midpoint of construction, so we feel like we have a really, really good understanding of what's left to complete. In terms of additional measures, as we looked at the in detail auditing the project and what was left to go, we put more investment in project leadership.

Speaker #2: And then that cascaded with equipment and and labor escalation . Despite that this this particular program is sort of at the midpoint of construction .

Koti Vadlamudi: Despite that, this particular program is sort of at the midpoint of construction, so we feel like we have a really, really good understanding of what's left to complete. In terms of additional measures, as we looked at the in detail auditing the project and what was left to go, we put more investment in project leadership. This was a program in a hot market, where we did have some turnover in the project staff. With that additional focus, we feel pretty confident the remedial measures we've taken, that it'll come in, as we've forecasted.

Speaker #2: So we feel like we have a really , really good understanding of what's left to complete in terms of additional measures . As we looked at the in detail , auditing the project and what was left to go , we put more investment in project leadership .

Speaker #2: This was a program in a hot market where we did have some turnover in the project staff . So with that additional focus , we feel pretty confident in the remedial measures we've taken that it'll come in as we've as we've forecasted

Koti Vadlamudi: This was a program in a hot market, where we did have some turnover in the project staff. With that additional focus, we feel pretty confident the remedial measures we've taken, that it'll come in, as we've forecasted.

Speaker #4: Great . Thanks again . And Cody , looking forward to working with .

Philip Shen: Great. Thanks again, and Koti, looking forward to working with you.

Speaker #5: You .

Speaker #2: Thank you .

Koti Vadlamudi: Thank you.

Speaker #1: And your next question comes from the line of Steven Fisher with UBS financial . Please go ahead .

Operator: Your next question comes from the line of Steven Fisher with UBS Financial. Please go ahead.

Speaker #6: Thanks . Good morning . And congrats , Cody on on taking the role . I just wanted to follow up on that last question .

Steven Fisher: Thanks. Good morning, and congrats, Koti, on taking the role. I just wanted to follow up on that last question, I mean, just more broadly about execution. As you move through 2026, you know, just curious, how much of a focus or a priority for you is that in your list? What are some of the things you're doing more broadly, just beyond that solar project? Just, you know, curious, you know, it sounds like you have quite a bit of great prospects. I think we're just looking for more confidence in the execution, as we've had a little bit of a hiccup in the last couple quarters.

Speaker #6: I mean , just more broadly about execution as you move through 2026 , you're just curious how much of a of a focus or a priority for you .

Speaker #6: Is that in your list ? One of the things what are some of the things you're doing more broadly , just beyond that solar project ?

Speaker #6: Just curious. It sounds like you have quite a bit of great prospects. I think we're just looking for more confidence in the execution, as we've had a little bit of a hiccup in the last couple of quarters.

Speaker #2: Yeah , thanks for the question , Steve . And so we highlighted the the performance execution , scrutiny and the renewable segment . There are some other areas that I would say would fall basket of efficiency gain in through project execution .

Koti Vadlamudi: Yeah. Thanks for the question, Steve. We highlighted the performance execution scrutiny in the renewable segment. There are some other areas that I would say would fall in the basket of efficiency gain in through project execution, and that gets down to better estimating, better project controls, better change management. These are particular levers that will help drive better growth, project growth margin, and ultimately better predictable execution. It'll be a focus area across the enterprise. I would have a lot of confidence based on the length of some of these client relationships, customers that have confidence in giving us continuing, ongoing work, as well as the deep confidence we have in the services we provide.

Speaker #2: And that gets down to better estimating , better project controls , better change management . These are particular levers that will help drive better , better gross project gross margin and ultimately better predictable execution .

Koti Vadlamudi: These are particular levers that will help drive better growth, project growth margin, and ultimately better predictable execution. It'll be a focus area across the enterprise. I would have a lot of confidence based on the length of some of these client relationships, customers that have confidence in giving us continuing, ongoing work, as well as the deep confidence we have in the services we provide.

Speaker #2: So it'll be a focus area across the enterprise . But I would have a lot of confidence based on the length of some of these client relationships .

Speaker #2: Customers that are have confidence in giving us continuing ongoing work , as well as the deep confidence we have in the services we provide

Speaker #6: Okay , thanks . And just as a follow up , as it relates to your guidance , just curious for your perspectives on the coverage that you have on that in your backlog .

Steven Fisher: Okay, thanks. Just as a follow-up, as it relates to your guidance, just curious for your perspectives on the coverage that you have on that in your backlog. Curious what you still think you need to book in order to hit the guidance. Just any areas within the guidance you felt like you maybe needed to leave a little room for any particular uncertainties that you see over the course of the year.

Speaker #6: Curious what you still think you need to book in order to hit the guidance ? And then just any areas within the guidance you felt like you maybe needed to leave a little room for any particular uncertainties that you see over the course of the year

Speaker #2: Ella can take that one . Yeah .

Koti Vadlamudi: I'll let Ken take that one.

Speaker #7: Steve , it's a good question . Look , I mean , we feel as comfortable with our guidance this year as we probably have any other year .

Ken Dodgen: Yeah, Steve, it's a good question. Look, I mean, we feel as comfortable with our guidance this year as we probably have any other year. Strong backlog helps with that. Just like any year, we still have to book a little bit in order to make that. Just like any every other year, we always feel like we've got some upside to our guidance as well. I wouldn't view our guidance this year as any different than any other year from a pluses and minuses standpoint. The one area where we probably still need to focus on some bookings, to the second part of your question, is in pipeline. As you know, those tend to be pretty quick book and burn type projects. We don't have all that in backlog yet.

Speaker #7: Strong backlog helps with that . But just like any year , we still have to book a little bit in order to make that .

Speaker #7: And, just like every other year, we always feel like we've got some upside to our guidance as well. So I wouldn't view our guidance this year as any different than any other year from a pluses and minuses standpoint.

Ken Dodgen: I wouldn't view our guidance this year as any different than any other year from a pluses and minuses standpoint. The one area where we probably still need to focus on some bookings, to the second part of your question, is in pipeline. As you know, those tend to be pretty quick book and burn type projects. We don't have all that in backlog yet. We would like to get a little bit more in backlog. In general, between the MSA and the project group, we feel like we're right where we need to be for this year.

Speaker #7: But the one area where we probably still need to focus on some bookings to the second part of your question is , is in pipeline , as you know , those tend to be pretty quick .

Speaker #7: Book and burn type projects . We don't have all that backlog yet . We would like to get a little bit more in backlog , but in general , between the MSA and the project work , we feel feel we're right , right where we need to be for this year .

Ken Dodgen: We would like to get a little bit more in backlog. In general, between the MSA and the project group, we feel like we're right where we need to be for this year.

Speaker #6: Thanks very much

Steven Fisher: Thanks very much.

Speaker #1: Thank you . And your next question comes from the line of Julian Smith with Jefferies . Please go ahead

Operator: Thank you. Your next question comes from the line of Julien Dumoulin-Smith with Jefferies. Please go ahead.

Speaker #8: Hey , guys . Good morning . Thank you again for the time . Cody . Looking looking forward to working with you as well .

Julien Dumoulin-Smith: Hey, guys, good morning. Thank you again for the time, Cody. Looking forward to working with you as well. Can you talk a little bit about both what's forthcoming here on the utility side? Obviously, you've got some neighbors here in your hometown that could be announcing some big things here in the short order. Can you talk a little bit about what you would expect on the back of developments in Texas? I know your prepared remarks included some commentary there. How would you expect that to shape, especially as you think about, like, backlog, what is, more importantly, what is not reflected? Separately, you also had some comments in the prepared remarks around communications activity. Can you comment a little bit about what you're seeing materialize there?

Julien Dumoulin-Smith: Hey, guys, good morning. Thank you again for the time, Koti. Looking forward to working with you as well. Can you talk a little bit about both what's forthcoming here on the utility side? Obviously, you've got some neighbors here in your hometown that could be announcing some big things here in the short order. Can you talk a little bit about what you would expect on the back of developments in Texas? I know your prepared remarks included some commentary there.

Speaker #8: Can you talk a little bit about both with forthcoming here on the utility side ? Obviously you've got some neighbors here in your hometown that could be announcing some big things here in the short order .

Speaker #8: Can you talk a little bit about what you would expect on the back of developments in Texas ? I know your prepared remarks included some commentary .

Speaker #8: There . How would you expect that to shape , especially as you think about backlog ? What is more importantly , what is not reflected ?

Julien Dumoulin-Smith: How would you expect that to shape, especially as you think about, like, backlog, what is, more importantly, what is not reflected? Separately, you also had some comments in the prepared remarks around communications activity. Can you comment a little bit about what you're seeing materialize there? Again, in the vein of trying to understand what is and what is not in the backlog thus far, and specifically around BEAD there.

Speaker #8: And then separately , you also had some comments in the prepared remarks around communications activity . Can you comment a little bit about what you're seeing materialized there ?

Speaker #8: Also , again , in the vein of trying to understand what is and what is not in the backlog thus far and specifically around beads , there .

Julien Dumoulin-Smith: Again, in the vein of trying to understand what is and what is not in the backlog thus far, and specifically around BEAD there.

Speaker #2: Sure . Thanks for the question . And I'll first start out by saying Texas is a really fertile location for the energy markets .

Koti Vadlamudi: Sure. Thanks for the question. I'll first start out by saying Texas is a really fertile location for the energy markets, and we certainly see a lot of opportunity for power generation and by derivative attracting data center clients and hyperscalers. You know, with that, we have a high conviction on the relationships we've established here locally. Specifically, the distribution space and substation build, we see meaningful capital where we can be a partner in the delivery of those programs on an EPC basis. Feel really strong about the backlog and the opportunity funnel. I think we highlighted in the presentation deck, the portion of our backlog of the $11.9 billion that's MSA related, I think that's about $7 billion.

Speaker #2: And we certainly see a lot of opportunity for power generation . And by derivative attracting data center clients and and hyperscalers . So , you know , with that we have a high conviction on the relationships we've established here locally , specifically the distribution space and substation build .

Koti Vadlamudi: Specifically, the distribution space and substation build, we see meaningful capital where we can be a partner in the delivery of those programs on an EPC basis. Feel really strong about the backlog and the opportunity funnel. I think we highlighted in the presentation deck, the portion of our backlog of the $11.9 billion that's MSA related, I think that's about $7 billion.

Speaker #2: We see meaningful capital where we can be a partner in the delivery of those programs on an EPC basis . So really feel really strong about the the backlog and the opportunity funnel .

Speaker #2: I think we highlighted in the presentation , Dak , the portion of our backlog of the 11.9 billion , that's MSA related . I think that's about 7 billion .

Speaker #2: The majority, I think 90% of that, is in the utility segment. So it sort of highlights the strength of our relationships as well as the market funnel with respect to communications.

Koti Vadlamudi: The majority, I think 90% of that, is in the utility segment. Sort of highlights the strength of our relationships as well as the market funnel. With respect to communications, we're seeing some really good indications at the start of this year with some new wins, $200 million in bookings and line of sight to additional opportunities in the year. Feel pretty good about the fiber business and the communications market in general.

Speaker #2: We're seeing some really good indications . The at the start of this year , with some new wins , a couple hundred million in bookings and line of sight to additional opportunities in the year .

Speaker #2: So feel feel pretty good about the fiber business and the communications market in general

Speaker #8: Got it . Excellent . And then just going back to the gas gen side of the equation , obviously fairly lumpy opportunity set here .

Julien Dumoulin-Smith: Got it. Excellent. Then just going back to the gas gen side of the equation, obviously fairly lumpy opportunity set here. Can you comment a little bit about what you're seeing on that front? Just set expectations accordingly in what you're seeing perhaps in the near term for bookings. Obviously, there's a lot of projects that could come into your fold here. I just want to make sure I'm hearing right, how you would set those expectations, specifically in the coming couple quarters on those kind of lumpier awards, and when those might translate-

Speaker #8: Can you comment a little bit about what you're seeing on that front? Just set expectations accordingly, in what you're seeing.

Speaker #8: Perhaps in the near term for bookings . Obviously there's a lot of projects that could come into your fold here , but I just want to make sure I'm hearing right how you would set those expectations , specifically in the in the coming couple quarters on those kind of lumpier awards and when those might translate into revenue , given the protracted timing on that front , to .

Koti Vadlamudi: Sure

Julien Dumoulin-Smith: ... into revenue, given the protracted timing on that front, too.

Speaker #2: Sure . And I think you were correct . Characterize it as lumpy because these these opportunities are pretty big . The investments are , from a scale standpoint , measured in gigawatts .

Koti Vadlamudi: Sure. I think you are correct to characterize it as lumpy because these opportunities are pretty big. The investments are from a scale standpoint, measured in gigawatts, so they're multibillion-dollar investments. On the one hand, you have this push to define scope and get the estimate right, we're working with the clients, sitting at the table with them, trying to nail down scope, definition, and the appropriate commensurate cost. That takes time. You have a driver in the other way, which is the ultimate customer, is usually a power-hungry data center that has milestones for server operativeness, and you have that pushing the other way. Sort of a way of saying that there is some lumpiness to this.

Speaker #2: So they're multi-billion dollar investments . On the one hand , you have this push to define scope and get the estimate right . And so we're working with the client sitting at the table with them trying to nail down scope definition .

Speaker #2: And the appropriate commensurate cost . That takes time . And then you have a driver in the other way , which is the ultimate customer , is usually a power hungry data center that has milestones for server readiness .

Koti Vadlamudi: That takes time. You have a driver in the other way, which is the ultimate customer, is usually a power-hungry data center that has milestones for server operativeness, and you have that pushing the other way. Sort of a way of saying that there is some lumpiness to this.

Speaker #2: And so you have that pushing the other way . But sort of a way of saying that there is some lumpiness to this .

Speaker #2: What gives me confidence is that we've got line of sight to that billion and a half , 2 billion near term . Of course , the book to bill is quite influenced in the quarter by , you know , if it crosses over the milestone at the end of the quarter , that book to bill can be quite skewed .

Koti Vadlamudi: What gives me confidence is that we've got line of sight to that billion and a half, $2 billion near term. Of course, the book-to-bill is quite influenced in the quarter by, you know, if it crosses over the milestone at the end of the quarter, that book-to-bill can be quite skewed. We like to look at it more like a trailing twelve months, which kind of eliminates that waviness.

Speaker #2: So we like to look at it more like a trailing 12 month , which kind of eliminates that that waviness

Speaker #8: All right , fair enough guys , I'll leave you there . Thank you all very much . Good luck . See you soon

Julien Dumoulin-Smith: All right, fair enough, guys. I'll leave you there. Thank you all very much. Good luck. See you soon.

Speaker #1: Thank you . And your next question comes from Lee with CJS securities . Please go ahead

Operator: Thank you, your next question comes from Lee Jagoda with CJS Securities. Please go ahead.

Speaker #9: Hey . Good morning and welcome , Cody . Thank you . Just I guess starting with the energy segment and the building blocks there in 2026 , it sounds like implicit in the guidance is pretty nice .

Lee Jagoda: Hey, good morning, and welcome, Koti.

Koti Vadlamudi: Thank you.

Lee Jagoda: Just I guess starting with the energy segment, and the building blocks there in 2026, it sounds like implicit in the guidance is pretty nice growth in natural gas power, pretty nice growth in pipeline. How should we think about the growth in renewables in 2026?

Speaker #9: Growth in natural gas power . Pretty nice growth in pipeline . How should we think about the growth in renewables in 2026 ?

Speaker #2: Yeah . So the first thing I'd say is we you know , of course last year saw a steep incline as projects accelerated and reflected in the burn .

Koti Vadlamudi: Yeah. The first thing I'd say is we and of course, last year, saw a steep incline as projects accelerated and reflected in the burn. We enjoyed a, you know, quick ramp and those are projects that were on the books. They just hit the field earlier, and we bought equipment and ramped up labor pretty quick. Still a really strong end market for us. As I indicated in prepared remarks, in Q4, $1.6 billion of the $3 billion in new bookings was renewables. I think it's it underpins our conviction that this is a market that will continue to grow.

Speaker #2: So we enjoyed a , you know , quick ramp . And those are projects that were on the books . They just hit the field earlier and we bought equipment and ramped up labor pretty quick .

Speaker #2: Still a really strong end market for us . As I indicated in prepared remarks in Q4 , 1.6 billion of the 3 billion in in new bookings was renewables .

Speaker #2: So I think it's the underpins our conviction that this is a market that will continue to grow . I said also in prepared remarks that it's the it's now often a combined scope of the the best the battery storage with the solar modules .

Koti Vadlamudi: I said also in prepared remarks that it's now often a combined scope of the BESS, the battery storage, with the solar modules. Our expertise, the strength of our share in this market, sort of underpins our conviction and confidence that we'll continue to grow more than our fair share in this growing space.

Speaker #2: So our expertise , the strength of our share in market sort of underpins our conviction and confidence that we'll continue to grow more than our fair share in this , in this growing space

Speaker #9: Got it . And then I think you mentioned you're about you're midway through the the project that had some of those issues in Q4 .

Lee Jagoda: Got it. I think you mentioned you're midway through the project that had some of those issues in Q4, and you gave us the, sort of the look at what margins should be in the utility segment for Q1. Can you kind of give us any guidance on what the Q1 energy margins might look like? Again, getting to that 10% to 12% for the year.

Speaker #9: And you gave us sort of the look at what margins should be in the utility segment for Q1 . Can you can you kind of give us any guidance on what the Q1 energy margins might look like ?

Speaker #9: Again , getting to that 10 to 12% for the year ?

Speaker #7: Yeah .

Speaker #2: I'll let Ken .

Adam Thalhimer: Yeah, I'll let Ken-

Koti Vadlamudi: Yeah, I'll let Ken-

Speaker #7: Yeah , yeah . Look , we think we think we've got most of that behind us . What we are going to see in Q1 , though , is the projects running at those lower margins and burning off and getting wrapped up .

Koti Vadlamudi: Yeah, yeah, Lee, look, we think we've got most of that behind us. What we are going to see in Q1, though, is the projects running at those lower margins and burning off and getting wrapped up. Most of it should be wrapped up by the end of Q1. I think in Q1, for the energy segment, we will still be in that 10 to 12% range, but we'll definitely be in the bottom end of that range as we get that worked off. Kind of, you know, starting in Q2 for the rest of the year sequentially, kind of getting back up in that 10.5 to 11.5% range, with the opportunity to get above that where we have good project closeouts.

Ken Dodgen: Yeah, yeah, Lee, look, we think we've got most of that behind us. What we are going to see in Q1, though, is the projects running at those lower margins and burning off and getting wrapped up. Most of it should be wrapped up by the end of Q1. I think in Q1, for the energy segment, we will still be in that 10 to 12% range, but we'll definitely be in the bottom end of that range as we get that worked off. Kind of, you know, starting in Q2 for the rest of the year sequentially, kind of getting back up in that 10.5 to 11.5% range, with the opportunity to get above that where we have good project closeouts.

Speaker #7: Most of them should be wrapped up by the end of Q1. So I think in Q1, for the energy segment, we will still be in that 10 to 12% range.

Speaker #7: We will definitely be in the bottom end of that range as we get that worked off . And then kind of , you know , starting in Q2 for the the the rest of the year sequentially , kind of getting back up in that ten and a half , 11.5% range with the opportunity to get above that , where we have good project Closeouts .

Speaker #9: And if I could just sneak one more in on margins , just the given that in the energy segment , some of the mix sounds like it could be shifting a little bit more towards natural gas power , more towards pipeline .

Lee Jagoda: If I could just sneak one more in on margins, just the, given that in the energy segment, some of the mix sounds like it could be shifting a little bit more towards natural gas power, more towards pipeline. Can you just refresh us on a normalized basis, what do gross margins look like in the various businesses? If the mix does shift towards a little more natural gas power, a little more pipeline, I assume that should give us more confidence in that guidance range.

Speaker #9: Can you just refresh us on on a normalized basis ? What do gross margins look like in the various businesses ? And if the mix does shift towards a little more natural gas power , a little more pipeline , I assume that should give us more confidence in that guidance range

Speaker #7: Yeah , it should , but as you know , I mean , our our bid margins are generally run in that 10 to 12% range for the segment that we talk about , where we always have the upside opportunity is in project Closeouts .

Koti Vadlamudi: Yeah, it should, Lee, but as you know, I mean, our bid margins are generally run in that 10% to 12% range for the segment that we talk about. Where we always have the upside opportunity is in project closeouts. Gas generation, pipeline, and in renewables always have that upside opportunity. It really just depends on which quarter we wrap up the job in or reach certain milestones in and where we are on actual costs relative to bid costs. Across all three of them, we always have the opportunity to exceed, or at least come to the upper end of the range or exceed the 10% to 12%.

Speaker #7: And so gas generation pipeline and in renewables always have that upside opportunity . It really just depends on which quarter we wrap up the job in or reach certain milestones in and where we are on actual cost , relative to bid to bid cost .

Speaker #7: But across all three of them, we always have the opportunity to exceed, or at least come into the upper end of the range, or exceed the 10% to 12%.

Speaker #9: Got it . Thanks very much

Lee Jagoda: Got it. Thanks very much.

Speaker #1: Thank you and your next question comes from Sangeeta Jain with KeyBanc Capital Markets . Please go ahead .

Operator: Thank you. Your next question comes from Sangita Jain with KeyBanc Capital Markets. Please go ahead.

Speaker #10: Great . Thank you . Hi , Cody . Can Blake , if I can ask a follow up on the gas generation question that came up earlier , can you help us understand if you're looking still at simple cycle or maybe Ccgt and what the average project size may be in that one and a half to $2 billion number that you gave us , Cody .

Sangita Jain: Great. Thank you. Hi, Cody, Ken, Blake. If I can ask a follow-up on the gas generation question that came up earlier, can you help us understand if you're looking still at single cycle or maybe CCGT? What the average project size may be in that $1.5 to 2 billion number that you gave us, Cody?

Sangita Jain: Great. Thank you. Hi, Koti, Ken, Blake. If I can ask a follow-up on the gas generation question that came up earlier, can you help us understand if you're looking still at single cycle or maybe CCGT? What the average project size may be in that $1.5 to 2 billion number that you gave us, Koti?

Speaker #2: Yeah , sure . Good to hear your voice again , yeah . On the gas generation side , it's we're not just looking at simple cycle .

Koti Vadlamudi: Yeah, sure. Good to hear your voice again, Sangita. Yeah, on the gas generation side, we're not just looking at single cycle. It's probably notionally, probably a majority in that type of scope. Just anecdotally, just a few weeks ago, we were looking at a estimate for a 1.6 gigawatts combined cycle plant. It's early phases, but you know, we have a resume for both. Notionally, I'd say the vast majority of the ones we're looking at are single cycle. Then the second part of your question, what? I forgot. Say it again, please.

Speaker #2: It's probably notionally probably a majority in that type of scope . But just anecdotally , just a few weeks ago , we were looking at a estimate for a 1.6GW combined cycle plant , and it's early , early phases .

Speaker #2: But , you know , we have a resume for both . But notionally , I'd say the the vast majority of the ones we're looking at are are single cycle .

Speaker #2: And then the second part of your question , I forgot , say it again , please .

Speaker #10: The average project size that . you average , that may be . Yeah .

Sangita Jain: The average project size that.

Koti Vadlamudi: Oh, average size.

Sangita Jain: That may be. Yeah.

Speaker #2: I don't have we don't keep a metric on average size . But just just from a capacity standpoint . They're measured in in gigabyte gigawatts in terms of services revenue that we might burn .

Koti Vadlamudi: We don't keep a metric on average size, but just to get from a capacity standpoint, they're measured in gigawatts. In terms of services revenue, that we might burn, that's probably $a few hundred million.

Speaker #2: That's probably a few hundred million

Speaker #10: Got it. And then on capital allocation, Cody, there was a quote from you in the press release that talked about using the balance sheet to create value.

Sangita Jain: Got it. On capital allocation, Cody, there was a quote from you in the press release that talked about using the balance sheet to create value. Hoping to get color from you on where you think the capital is best going to be used and what criteria you're thinking about as you make these decisions for M&A.

Sangita Jain: Got it. On capital allocation, Koti, there was a quote from you in the press release that talked about using the balance sheet to create value. Hoping to get color from you on where you think the capital is best going to be used and what criteria you're thinking about as you make these decisions for M&A.

Speaker #10: So hoping to get color from you and where you think the capital is best going to be used . And what criteria you're thinking about as you make these decisions for M&A .

Speaker #2: Sure , the first I'll say I'm really pleased to come into a position where the balance sheet is strong and that really is a testament to the management teams execution on prior priorities .

Koti Vadlamudi: Sure. First, I'll say I'm really pleased to come into a position where the balance sheet is strong, and that really is a testament to the management team's execution on prior priorities. Really, really strong cash flow generation, good position from a leverage standpoint. It does give us a lot of levers. You know, we talked about in an earlier question, execution efficiency. There are opportunities to invest in ourselves, to the extent that people and systems and tools, as we've grown, can be improved to deliver more predictable execution and improve gross margins. That said, there are areas that'll be catalysts for growth, either in markets where we're subscale, and we think we can accelerate our growth through acquisition, and position the balance sheet to the best of our advantage.

Speaker #2: So really , really strong cash flow generation , good position from a leverage standpoint . It does give us a lot of levers .

Speaker #2: You know , we've talked about in an earlier question , execution efficiency . So there are opportunities to invest in ourselves . The extent that people and systems and tools , as we've grown can be improved to deliver more predictable execution and improve gross margins .

Koti Vadlamudi: There are opportunities to invest in ourselves, to the extent that people and systems and tools, as we've grown, can be improved to deliver more predictable execution and improve gross margins. That said, there are areas that'll be catalysts for growth, either in markets where we're subscale, and we think we can accelerate our growth through acquisition, and position the balance sheet to the best of our advantage. That said, we will bias our lens and filter will be on looking for opportunities that are driven by high, sustainable growth trajectory, as well as cultural fit to Primoris and the way we execute work in our markets.

Speaker #2: That said , there are areas that will be catalysts for growth , either in markets where we're subscale and we think we can accelerate our growth through acquisition and position .

Speaker #2: The balance sheet to the best of our advantage . That said , we will bias our our our lens , our lens , and filter will be on looking for opportunities that are driven by high sustainable growth trajectory .

Koti Vadlamudi: That said, we will bias our lens and filter will be on looking for opportunities that are driven by high, sustainable growth trajectory, as well as cultural fit to Primoris and the way we execute work in our markets.

Speaker #2: As well as cultural fit to Primoris and the way we execute work in our markets .

Speaker #10: Great. Thank you so much.

Sangita Jain: Great. Thank you so much.

Speaker #1: Thank you. Thank you. And your next question comes from Adam Thalhimer with Thompson Davis. Please go ahead.

Koti Vadlamudi: Thank you.

Operator: Thank you. Your next question comes from Adam Thalhimer with Thompson Davis & Co. Please go ahead.

Speaker #11: Hey , good morning guys . Congrats on the Q4 beat . And Cody , welcome to the call .

Adam Thalhimer: Hey, good morning, guys. Congrats on the Q4 beat, and Koti, welcome to the call.

Speaker #2: Thank you

Koti Vadlamudi: Thank you.

Adam Thalhimer: Cody, I was hoping you could just, from a high level, give us a sense for what are some of your goals for Primoris over the next few years?

Speaker #11: Cody , I was hoping you could just from a high level , give us a sense for what are some of your goals for Primoris over the next few years ?

Adam Thalhimer: Koti, I was hoping you could just, from a high level, give us a sense for what are some of your goals for Primoris over the next few years?

Speaker #2: Yeah , great question . And first , I'll double down on my earlier comments . I'm really excited to come into an organization that , foundationally , has a great culture , and I spoke to from the work we do in partnering with our clients from a safety standpoint , an attention to detail and quality .

Koti Vadlamudi: Yeah, great question. First, I'll double down on my earlier comments. I'm really excited to come into an organization that foundationally has a great culture. I spoke to, from the work we do in partnering with our clients from a safety standpoint, an attention to detail and quality. I've really been encouraged that this is a foundational aspect. The company also has this spirit of entrepreneurship, from segment presidents to job superintendents. They're looking to do the right thing for our clients and help us as grow. I think, we talked about the balance sheet. It's really exciting to me to come in with a company with such a strong foundational culture that we can now nurture with the health of the balance sheet to drive further growth.

Speaker #2: I've really been encouraged that this is a foundational aspect . The company also has this spirit of entrepreneurship from segment presidents to job superintendents .

Koti Vadlamudi: The company also has this spirit of entrepreneurship, from segment presidents to job superintendents. They're looking to do the right thing for our clients and help us as grow. I think, we talked about the balance sheet. It's really exciting to me to come in with a company with such a strong foundational culture that we can now nurture with the health of the balance sheet to drive further growth.

Speaker #2: They're looking to do the right thing for our clients and and help us as grow . I think we talked about the balance sheet .

Speaker #2: It's really exciting to me to come in with a company with such a strong foundational culture that we can now nurture , with the balance sheet , to drive further growth .

Speaker #2: I'm really excited about the end market and where we play . I like the geographies . I think North America , it's our backyard to continue to drive growth in these exciting , growing end markets .

Koti Vadlamudi: I'm really excited about the end markets and where we play. I like the geographies. I think North America, it's our backyard to continue to drive growth in these exciting growing end markets. Really excited about the prospect to take us on the journey to the next step of growth.

Speaker #2: So really , really excited about the to take us on the journey to the next step of of growth

Speaker #11: Okay . And then I wanted to ask about backlog growth potential this year from the standpoint of if you go back to 2023 and 2024 , you guys grew backlog kind of linearly throughout the year .

Adam Thalhimer: Okay. I wanted to ask about backlog growth potential this year from the standpoint of, if you go back to 2023 and 2024, you guys grew backlog kinda linearly throughout the year, whereas in 2025, Q1, Q2, Q3, backlog flat, but then you had a surge in Q4. Just curious how you see 2026 playing out from that standpoint.

Speaker #11: Whereas in 25 , Q1 , Q2 , Q3 , backlog flat . But then you had a surge in Q4 . Just curious how you see 2026 playing out from that standpoint ?

Speaker #2: Yeah , I think on the last , of course , I wasn't on the last quarter call . It was a lot of focus on the backlog , and we'd indicated in in narrative that Q4 would be pretty strong bookings quarter and notionally show that quarter over quarter growth .

Koti Vadlamudi: Yeah, I think on the last, of course, I wasn't on the last quarter call. There was a lot of focus on the backlog, and then we had indicated in narrative that Q4 would be a pretty strong bookings quarter and notionally show that quarter-over-quarter growth. That did prove out. I will go back to my earlier comment, because the size of the projects are quite large, sometimes the investment decisions and the selection take a little bit longer, and if they cross over the quarter, they do make for a little bit of lumpiness. You need to sort of smooth that out and look at it sort of more on a trailing twelve with respect to book-to-bill.

Speaker #2: That did prove out . I will go back to my earlier comment , because the size of the projects are quite large . Sometimes the investment decisions and the selection take a little bit longer , and if they cross over the quarter , they do make for a little bit of lumpiness .

Koti Vadlamudi: That did prove out. I will go back to my earlier comment, because the size of the projects are quite large, sometimes the investment decisions and the selection take a little bit longer, and if they cross over the quarter, they do make for a little bit of lumpiness. You need to sort of smooth that out and look at it sort of more on a trailing twelve with respect to book-to-bill. Overall backlog, we feel pretty strong on the end markets as we colored earlier, and we think should drive solid revenue growth as we implied from our EBITDA margin growth ambitions.

Speaker #2: So you need to sort of smooth that out and look at a sort of more on a trailing 12 with respect to book , to book to Bill overall backlog .

Koti Vadlamudi: Overall backlog, we feel pretty strong on the end markets as we colored earlier, and we think should drive solid revenue growth as we implied from our EBITDA margin growth ambitions.

Speaker #2: We feel pretty strong on the end markets as we colored earlier . And we think should drive solid revenue growth as we implied from our EBITDA margin growth ambitions .

Speaker #11: Thanks , Cody .

Adam Thalhimer: Thanks, Koti.

Speaker #2: Thank you

Koti Vadlamudi: Thank you.

Speaker #1: And your next question comes from the line of Brent Tillman with D.A. Davidson. Please go ahead.

Operator: Your next question comes from the line of Brent Thielman with D.A. Davidson. Please go ahead.

Speaker #12: Hey , thanks . Welcome , Cody as well . Hey , just wanted to ask on you've done really well in terms of driving margins higher in the utility segment over the last few years .

Brent Thielman: Hey, thanks. Welcome, Cody, as well. Hey, I just wanted to ask, I mean, you've done really well in terms of driving margins higher in the utility segment over the last few years, so still seems like it could be a lever for you. As you go forward, could you talk through some of the key things that need to happen in order for you to continue to drive those margins higher over time?

Brent Thielman: Hey, thanks. Welcome, Koti, as well. Hey, I just wanted to ask, I mean, you've done really well in terms of driving margins higher in the utility segment over the last few years, so still seems like it could be a lever for you. As you go forward, could you talk through some of the key things that need to happen in order for you to continue to drive those margins higher over time?

Speaker #12: So still seems like it could be a lever for you . Is you is you go forward . Could you talk through some of the key things that you need to happen or for you to continue to drive those margins higher over time ?

Speaker #2: Yeah , I think it's a good question . And Ken , you can add some color based on history , but the team has look management team is specifically looked in areas where we can make improvements .

Koti Vadlamudi: Yeah, I think it's a good question. Ken, you can add some color based on history. The management team specifically looked in areas where we can make improvements. Power delivery is an area where the team has been working over the past year at how we execute in the field, from upfront planning to site logistics and execution, productivity. All of those are enhancements that we think are gonna drive margin improvement and power delivery. This past year, we enjoyed on the gas operations, the utility side, some strong growth where we've been, you know, presence in that for a long time with our customers, and drove some really, really healthy margin, which improved quality of margin in the segment.

Speaker #2: Power delivery is an area where the team has been working over the past year at how we execute in the field from upfront planning to Site logistics and execution productivity .

Speaker #2: All of those are enhancements that we think are going to drive margin improvement and power delivery . This past year , we enjoyed on the gas operations , the utility side , some strong growth where we've been , you know , presence in that for a long time with our customers and drove some really , really healthy margin , which improved quality of margin in the segment .

Koti Vadlamudi: All of those are enhancements that we think are gonna drive margin improvement and power delivery. This past year, we enjoyed on the gas operations, the utility side, some strong growth where we've been, you know, presence in that for a long time with our customers, and drove some really, really healthy margin, which improved quality of margin in the segment. You know, overall, I think margin efficiency, in addition to growing the top line, will be a focus for us, going forward.

Speaker #2: So overall , I think margin efficiency , in addition to growing the top line , will be a focus for us going forward .

Koti Vadlamudi: You know, overall, I think margin efficiency, in addition to growing the top line, will be a focus for us, going forward.

Speaker #7: Yeah . The only thing I would add is same thing , Brent , that we talked about in the past is it's a it's also a mix issue , especially within Power Delivery where we're still predominantly distribution , which is a great business .

Ken Dodgen: Yeah, the only thing I would add is, same thing, Brent, that we talked about in the past, it's also a mix issue, especially within power delivery, where we're still predominantly distribution, which is a great business. There's a ton of money being spent there, but it doesn't have the same margins as the project work on the substation and transmission side. We've started adding leadership who has the ability to win and execute that work. As we continue to grow that over the course of the next few years, I think that's going to also contribute to margin enhancement.

Speaker #7: There's a ton of money being spent there , but it doesn't have the same margins as the project work on the substation and transmission side .

Speaker #7: So we've started adding leadership . Who has the ability to win and execute that work . And as we continue to grow that over the course of the next few years , I think that's going to also contribute to margin enhancement

Speaker #12: Okay , maybe maybe one more just on the the battery side , recognize the scheme of your total revenue . It's not that big , but it's growing a lot .

Brent Thielman: Okay. maybe one more just on the battery side. Recognize the scheme of your total revenue, it's not that big, but it's growing a lot. I mean, any sort of thought in where that can go in 2026, 2027?

Speaker #12: I mean, any sort of thought on where that can go in 2026, '27.

Speaker #7: Yeah .

Speaker #2: I think I colored in the comments . Nearly 250 million or more this past past year . I we do think that's a a solid mark for us .

Koti Vadlamudi: Yeah, I think, I colored in the comments, nearly $250 million or more, this past year. We do think that's a solid mark for us. Often it's now been combined with the solar module solution in installation. Do you see a lot of opportunities? Most of the on-premise solutions that the hyperscalers are looking at include some form of battery storage. I think over the next couple of years, seeing that the business double in size, I think is within line of sight.

Speaker #2: Often . It's now been combined with the solar solar module solution in installation . So do you see a lot of opportunities ? Most of the on premise solutions that the hyperscalers are looking at include some form of battery storage .

Speaker #2: I wouldn't. I think, over the next couple of years, seeing the business double in size, I think is within line of sight.

Speaker #12: Okay . Thank you

Brent Thielman: Okay. Thank you.

Speaker #1: Thank you . And your next question comes from Adam with Goldman Sachs . Please go ahead .

Operator: Thank you. Your next question comes from Aman Gupta with Goldman Sachs. Please go ahead.

Speaker #13: Hi . Good morning and look forward to working together . Cody , one follow up on the utilities margins . I think you're targeting normalized 10 to 12% in 2026 versus 11.5% gross margins in 2025 .

Aman Gupta: ... Hi, good morning, and look forward to working together, Koti. One follow-up on the utilities margins. I think you're targeting normalized 10% to 12% in 2026 versus 11.5% gross margins in 2025. How are you just thinking about the different puts and takes for utilities margins in 26 versus 25, and potential to get back up to the high end of that range? What, what could be the tailwind from more project work? Commercially, could you see any mixed headwind, given the strong growth in gas in 2025?

Speaker #13: How are you just thinking about the different puts and takes for utilities margins in 26 versus 25 ? And potential to get back up to the high end of that range ?

Speaker #13: What could be the tailwind from more project work ? Conversely , could you see any mix headwind given the strong growth in gas in 2025 ?

Speaker #7: Yeah . Good question . Adam . Look , I think it's purely going to be a mix issue in power deliveries . We continue to work on that .

Ken Dodgen: Yeah, good question, Adam. Look, I think it's purely going to be a mix issue in power deliveries. We continue to work on that. You know, but from a margin perspective, our gas business and our communications business were as strong, if not stronger, than our power delivery margins. That's fairly consistent with our past. As gas and communications grow, they tend to be just as accretive to margins, if not more so sometimes than power delivery, given our mix right now.

Speaker #7: You know , but from a margin perspective , our gas our gas business and our communications business were as strong if not stronger than our power delivery margins .

Speaker #7: And that's that's fairly consistent with with our past . So as gas and communications grow , they tend to be just as just as accretive to margins , if not more so .

Speaker #7: Sometimes than power delivery. Given our mix right now,

Speaker #13: Got it . And then based on the 10-K , it looks like your hourly workforce increased 22% in 2025 . We hear a lot about labor constraints , what's allowed you folks to be so flexible , growing headcount and what type of employee growth are you budgeting for in 2026 ?

Aman Gupta: Got it. Then based on the 10-K, it looks like your hourly workforce increased 22% in 2025. We hear a lot about labor constraints. What's allowed you folks to be so flexible growing headcount, and what type of employee growth are you budgeting for in 2026?

Speaker #7: Yeah .

Speaker #2: I'll take , you know , in general , it is a constrained market for labor . This , you know , in my short tenure , I have been involved in estimate reviews and go no goes on on project decisions .

Koti Vadlamudi: Yeah, you know, in general, it is a constrained market for labor. This, you know, in my short tenure, I have been involved in estimate reviews and go/no-go's on project decisions. One thing I'm very pleased with is the team has really good discipline in looking at the labor posture and understanding what we need to do to mobilize workforce when it's required. You know, look at our past history, and I, you know, ask the team about this. We have not been on projects we've bid, won, and executed, gated by the ability to attract the workforce. I think that's a testament to the credibility we have in the market. Going forward, we think while that's a challenge in a constrained market, we have the wherewithal to address that challenge.

Speaker #2: And one thing I'm very pleased with is the team has really good discipline . And looking at the labor posture and understanding what we need to do to mobilize workforce when it's required , you know , look at our past history and I , you know , ask the team about this .

Koti Vadlamudi: You know, look at our past history, and I, you know, ask the team about this. We have not been on projects we've bid, won, and executed, gated by the ability to attract the workforce. I think that's a testament to the credibility we have in the market. Going forward, we think while that's a challenge in a constrained market, we have the wherewithal to address that challenge.

Speaker #2: We have not been on projects. We've bid one and executed, dated by the ability to attract the workforce. And I think that's a testament to the credibility we have in the market.

Speaker #2: So going forward we think , while that's a challenge in a constrained market , we have the wherewithal to address that challenge Furthermore , we are making investments in creating some bench , specifically in gas generation and power delivery to enable , you know , in a , in a in advance of the the pipeline coming to fruition .

Koti Vadlamudi: Furthermore, we are making investments in creating some bench, specifically in gas generation and power delivery, to enable, you know, in advance of the pipeline coming to fruition. We've got the project teams that we can mobilize to support and execute.

Speaker #2: We've got the project teams that we can mobilize to support and execute.

Speaker #13: Great . Thanks so much

Aman Gupta: Great. Thanks so much.

Speaker #1: Thank you . And your next question comes from Jerry Revich with Wells Fargo Securities . Please go ahead .

Operator: Thank you. Your next question comes from Jerry Revich with Wells Fargo Securities. Please go ahead.

Speaker #14: Yes . Hi . Good morning everybody . And Cody , congratulations and welcome . I want to ask in terms of the the seat that you folks have at the table on the power side is really interesting .

Jerry Revich: Yes. Hi, good morning, everybody. Koti, congratulations, and welcome.

Koti Vadlamudi: Thanks, Jerry.

Jerry Revich: ask in terms of the seat that you folks have at the table on the power side is really interesting, just given the breadth of capabilities that you folks have from behind the meter, turbines, single cycle. Can you just talk about the mix of work that you're looking at, the $6 billion number that you mentioned, and what proportion that is behind the meter? As you folks think about the projects that you're bidding on, how do you see bridge power versus island power developing for data centers? What's your take on what's going to be permanent within that infrastructure setup?

Speaker #14: Just given the breadth of capabilities that you folks have from behind the meter turbines , single cycle . Can you just talk about the mix of work that you're looking at ?

Speaker #14: The $6 billion number that you mentioned , what proportion of that is behind the meter ? And as you folks think about the projects that you're bidding on , how do you see bridge power versus island power developing for for data centers ?

Speaker #14: What what's your take on what's going to be permanent within that infrastructure setup ?

Speaker #2: Yeah , Jerry , thanks for the question . I haven't analyzed the exact split between behind the meter and and the rest so we could follow up on that .

Koti Vadlamudi: Yeah, Jerry, thanks for the question. I haven't analyzed the exact split between behind the meter and the rest, we could follow up on that. There is, you know, on the data center piece of it, there is a meaningful demand as you would expect and as people read and talk about. From a data center perspective, last year, I think we narrated, what was it? $850 million in work related to mainly around enabling infrastructure for data center. I'd just give more of an anecdotal. Just in the short start of this year, we're at $350 million against $850 million, which was a full year.

Speaker #2: But there is , you know , on the data center piece of it , there is a meaningful demand , as you would expect and as as people read and talk about from a data center perspective last year , I think we narrated what was it , $850 million in work related to mainly around enabling infrastructure for for data center .

Speaker #2: Just give more of an anecdotal just in the short start of this year , we're at 350 million against 850 , which was a full year .

Speaker #2: So just gives a little bit of color on the aptitude of our clients to to make these investments and partner with Primoris to get that that piece of the equation in place for data center development .

Koti Vadlamudi: Just gives a little bit of color on the aptitude of our clients to make these investments and partner with Primoris to get that piece of the equation in place, for data center development. We could follow up on the split on the on premise. It's probably notionally around 25% to 30%-ish.

Speaker #2: And we could follow up on the split on the on-premise. It's probably notionally around 25% to 30%-ish.

Speaker #14: Very interesting . And then can we shift gears a little bit here to talk about on the renewable side , you folks have gained significant share and have generally had positive project closeouts the the problem project that we're talking about , this quarter , is it still in a is it still in a profit position ?

Jerry Revich: Very interesting. You know, can we shift gears a little bit here to talk about on the renewable side, you folks have gained significant share and have generally had a positive project closeouts. The problem project that we're talking about this quarter, is it still in a profit position? Can you just give us an update on that, Ken, and just put it in perspective for us. I feel like this is the first time you called out negative variance on a project. What's the scoreboard look like in terms of positive closeouts versus negative closeouts for that line of business, just to put today's news into perspective?

Speaker #14: Can you just give us an update on that, Ken, and just put it in perspective for us? I feel like this is the first time you called out negative variance on a project.

Speaker #14: What's the scoreboard look like in terms of positive closeouts versus negative closeouts for that line of business ? Just to put . Today's news into perspective .

Speaker #7: Yeah , look , the vast majority of our renewables projects are very good performers have and either meet as bid margins or above ad above as bid margins .

Ken Dodgen: Yeah, look, the vast majority of our renewables projects are very good performers, have, and either meet as-bid margins or above as-bid margins. We, in those cases, as you know, we have good project closeouts to the upside. As Cody pointed out earlier, this was an unusual situation. A couple of projects, a couple of sister projects being built right next to each other, where we literally ran into more the subservice conditions is basically a lot of rock underneath, and we ran into more rock than we've ever seen on any project we've ever executed. It's very unusual situation. The sister projects, one is actually in a slight loss position, the other one is still positive margin.

Speaker #7: So we in in those cases , as you know we have good project closeouts to the upside . As Cody pointed out earlier , this this was an unusual situation .

Speaker #7: A couple of projects , a couple of sister projects being built right next to each other Where we literally ran into more the subsurface conditions is basically a lot of rock underneath , and we ran into more rock than we've ever seen on any project we've ever executed .

Ken Dodgen: A couple of projects, a couple of sister projects being built right next to each other, where we literally ran into more the subservice conditions is basically a lot of rock underneath, and we ran into more rock than we've ever seen on any project we've ever executed. It's very unusual situation. The sister projects, one is actually in a slight loss position, the other one is still positive margin.

Speaker #7: So very unusual situation . The sister projects . One is actually in a slight loss position . The other one is still a positive margin , but again , this these are , you know , two sister projects out of , you know , 25 or 30 projects that we have ongoing at any point in time that are all , you know , for the most part , executing very well .

Ken Dodgen: Again, this, these are, you know, two sister projects out of, you know, 25 or 30 projects that we have ongoing at any point in time, that are all, you know, for the most part, executing very well. It just so happens that these had some larger dollars on the cost side than anything we've ever experienced in this type of situation. In general, the renewables business is still a very solid business, and we expect really good execution in 2026.

Speaker #7: It just so happens that these had some larger dollars on the cost side than anything we've ever experienced in this type of situation.

Speaker #7: But in general, the renewables business is still a very solid business, and we expect really good execution in '26.

Speaker #14: Thank you

Maheep Mandloi: Thank you.

Speaker #1: Thank you . And your next question comes from Manish Somaiya with Cantor . Please go ahead .

Operator: Thank you. Your next question comes from Manish A. Shah with Cantor. Please go ahead.

Speaker #15: Good morning everyone . Just a couple of things for me . First Ken on the working capital front where you benefited this quarter and pull forward some working capital from Q1 26 .

Manish A. Shah: Good morning, everyone. Just a couple of things for me. First, Ken, on the working capital front, where you benefited this quarter, and pull forward some working capital from Q1 2026, is that going to be a headwind for us in 2026 when we think about cash flows? Then secondly, for Cody, of course, let me add my welcome as well. Just wanted to get your thoughts around M&A versus organic growth. Obviously, you've a lot of opportunities. You talked about the opportunities that you have in front of you. How do you intend to sort of close them, especially where you feel that the company is subscale?

Manish Shah: Good morning, everyone. Just a couple of things for me. First, Ken, on the working capital front, where you benefited this quarter, and pull forward some working capital from Q1 2026, is that going to be a headwind for us in 2026 when we think about cash flows? Then secondly, for Koti, of course, let me add my welcome as well. Just wanted to get your thoughts around M&A versus organic growth. Obviously, you've a lot of opportunities.

Speaker #15: Is that going to be a headwind for us in 26 ? When we think about cash flows ? And then secondly , for Cody , of course , let me add my welcome as well .

Speaker #15: Just wanted to get your thoughts around M&A versus organic growth . Obviously , a lot of opportunities . You talked about the opportunities that you have in front of you .

Manish Shah: You talked about the opportunities that you have in front of you. How do you intend to sort of close them, especially where you feel that the company is subscale? Maybe just give us some context around, you know, the size of acquisitions that might be on the table, and how that would kind of relate to the debt target of 1.5x that you've kind of put out? Thank you.

Speaker #15: How do you intend to sort of close them , especially where you feel that the company is subscale ? So maybe just give us some context around , you know , the size of acquisitions that might be on the table and how that would kind of relate to the debt target of one and a half times that you've got to put out .

Manish A. Shah: Maybe just give us some context around, you know, the size of acquisitions that might be on the table, and how that would kind of relate to the debt target of 1.5x that you've kind of put out? Thank you.

Speaker #15: Thank you .

Speaker #2: Yeah . Well , let me just address the sort of that strategic question around capital allocation , specifically M&A . And then , Ken , can take the second half .

Koti Vadlamudi: Well, let me just address the sort of that strategic question around capital allocation, specifically M&A, and then Ken can take the second half, the other part of the question on cash flow. The first I'd say is the way we look at M&A is it has to comport with our strategy. We're not doing M&A just to grow top line. As I mentioned before, we're really excited about the portfolio, and over the past few years, we've intentionally biased to end markets that we think show demonstrative, sustainable growth. There are some areas where we are trying to grow organically and are subscale. That said, we are prepared to put our capital to play organically where it makes sense and drive growth, albeit maybe at a slower cadence.

Speaker #2: The other part of the question on cash flow , but the first I'd say , is the way we look at M&A , is it has to comport with our strategy .

Speaker #2: We're not doing M&A just to to grow top line . As I mentioned before , we're really excited about the portfolio . And over the past few years , we've intentionally biased to end markets that we think show demonstrative , sustainable growth .

Koti Vadlamudi: As I mentioned before, we're really excited about the portfolio, and over the past few years, we've intentionally biased to end markets that we think show demonstrative, sustainable growth. There are some areas where we are trying to grow organically and are subscale. That said, we are prepared to put our capital to play organically where it makes sense and drive growth, albeit maybe at a slower cadence.

Speaker #2: There are some areas where we're trying to grow organically and our subscale . That said , we are prepared to put Put our capital to play organically where it makes sense and drive growth , albeit maybe at a slower cadence .

Speaker #2: There is opportunity again , with the help of the balance sheet , to to look at M&A . There is no shortage of deal flow .

Koti Vadlamudi: There is opportunity, again, with the help of the balance sheet to look at M&A. There is no shortage of deal flow. I think it is a fertile market for opportunities for us. I think, from a size and color standpoint, we have a lot of latitude, given the growth we've seen organically over the past year. Our appetite is pretty wide and varied. I think it'll be biased to end markets that were either subscale or we think, if, you know, with the proper investment, will catalyze or accelerate growth. Again, this has to be done with a view that there's proper cultural fit, as well as really extreme good diligence and in filtering out opportunities.

Speaker #2: I think it is a fertile market , fertile market for opportunities for us . I think from a size and color standpoint , we have a lot of latitude .

Speaker #2: Given the growth we've seen organically over the past past year . So our appetite is pretty wide and varied . I think it'll be biased to end markets that we're either subscale or we think , you know , with the proper investment will catalyze or accelerate growth .

Speaker #2: Again, this has to be done with a view that there's proper cultural fit as well as really extreme, good diligence in filtering out opportunities.

Speaker #7: Yeah . And then on the cash side , look , we had a great two great years . We honestly expect to have another good solid year in in 26 .

Ken Dodgen: Yeah, then on the cash side, look, we had a great two great years. We honestly expect to have another good, solid year in 2026. I don't expect it to be down or below our target range just because we had a good, strong 2025. If anything, as I said in my prepared comments, I expect it to be just another good, solid year. Operating cash flow, kind of in that 4% to 5% of revenue range. In general, from a free cash flow perspective, our goal is to be kind of, you know, at least 50% of adjusted EBITDA, if not higher, based on the working capital trajectory that we have.

Speaker #7: I don't expect it to be down or below our target range just because we had a good strong 25 . If anything , as I said in prepared comments , I expect it to be just another good , solid year .

Speaker #7: Operating cash flow kind of in that 4 to 5% of revenue range . And in general , from a free cash flow perspective , our goal is to be kind of , you know , at least 50% of adjusted EBITDA , if not higher , based on based on the working capital trajectory that we have

Speaker #15: Alrighty . Thank you so much . Good luck .

Manish A. Shah: All righty. Thank you so much. Good luck.

Manish Shah: All righty. Thank you so much. Good luck.

Speaker #7: Thanks , Andy .

Koti Vadlamudi: Thanks, Manish.

Speaker #1: Our next question comes from the line of Mahesh Mandloi with Mizuho . Please go ahead .

Operator: Your next question comes from the line of Maheep Mandloi with Mizuho. Please go ahead.

Speaker #12: Hey .

Maheep Mandloi: Hey, thanks for squeezing me in. I'll just keep it quick. On the Premier PV, the EBOS business, can you talk about the growth there? What do you see in 2026? Then any thoughts on some of the OEMs kind of trying to get into that business, and how do you see that competition over there? Thanks.

Speaker #16: Thanks for squeezing me and I'll just keep it quick on the payment or the boss business . Could you talk about the growth there ?

Speaker #16: What do you see in 2026 and any thoughts on some of the OEMs kind of trying to get into that business ? And how do you see that competition over there ?

Speaker #16: Thanks .

Speaker #2: Yeah, I'll take the first part of it. I think we, you know, we are investing in that business with increasing manufacturing capacity.

Koti Vadlamudi: Yeah, I'll take the first part of it. I think, you know, we are investing in that business with increasing manufacturing capacity. It sort of underpins our confidence that that's a sector where we can deploy the manufacturing that product for our own use as well as for our clients, and it's a profitable segment. I'll let Ken maybe give a little bit of color.

Speaker #2: So it's sort of underpins our confidence that that's a sector where we can deploy the manufacturing that product for our own use , as well as for our clients .

Speaker #2: And it's a profitable segment . I'll let Ken maybe give a little bit of color on .

Speaker #7: Yeah . On the growth , you know , on the growth . Honestly , we ran pretty close to capacity during 25 . We expect to be at capacity during 26 .

Ken Dodgen: On the growth, you know, on the growth, honestly, we ran pretty close to capacity during 25. We expect to be at capacity during 26. That's the reason we previously talked about the investment that we're making in 26 in order to expand capacity. From 25 to 26, sequentially, we're going to be relatively flat. It's not going to be till 27 that we're going to see, you know, the next phase of growth in our, in our EBOS solution as that expansion comes online.

Speaker #7: That's the reason we previously talked about the that we're making in 26 . In order to expand capacity . So from 25 to 26 sequentially , we're going to be relatively flat .

Speaker #7: It's not going to be until 27 that we're going to see , you know , the next phase of growth in our in our solution as that expansion comes online .

Speaker #7: Most likely in Q4 of 26 .

Koti Vadlamudi: Most likely in Q4 of 2026.

Speaker #16: Appreciate that . Thank you

Rachel Smith: Appreciate that. Thank you.

Koti Vadlamudi: Appreciate that. Thank you.

Speaker #1: Thank you . And that concludes our question and answer session . I would like to turn it back to Cody Vadlamudi for closing remarks .

Operator: Thank you. That concludes our question and answer session. I would like to turn it back to Koti Vadlamudi for closing remarks.

Speaker #2: Thank you, operator. I want to again congratulate our employees who contributed to an outstanding year in 2025. It's the more than 20,000 men and women of Primoris that enable us to do what we do.

Koti Vadlamudi: Thank you, operator. I want to again congratulate our employees who contributed to an outstanding year in 2025. It's the more than 20,000 men and women of Primoris that enable us to do what we do. Their focus on safety, operational, and financial performance are the reasons for our success. I look forward to their continuing contributions in 2026 and beyond. Thank you to those who joined us today. We appreciate your time and interest in Primoris. We look forward to updating you on the business next quarter. Thank you.

Speaker #2: Their focus on safety , operational and financial performance are the reasons for our success . And I look forward to their continuing contributions in 2026 and beyond .

Speaker #2: Thank you to those who joined us today . We appreciate your time and interest in Primoris , and we look forward to updating you on the business next quarter .

Speaker #2: Thank you .

Operator: Thank you. Ladies and gentlemen, this concludes today's conference call. Thank you all for joining. You may now disconnect.

Q4 2025 Primoris Services Corp Earnings Call

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