Everus Construction Group Signals Strong Growth Trajectory

Everus Construction Group, Inc. ((ECG)) has held its Q4 earnings call. Read on for the main highlights of the call.

Everus Construction Group, Inc. struck an upbeat tone on its latest earnings call, underscoring record revenue, accelerating EBITDA and a growing backlog that extends visibility well into 2026. Management acknowledged near‑term pressure on free cash flow, higher CapEx and some T&D margin softness, but framed these as investment-driven and transitory versus a structurally stronger earnings base.

Record Top-Line Performance in 2025

Everus delivered its first billion‑dollar quarter, with Q4 2025 revenue topping $1.01 billion, up 33% year over year. Full‑year revenue climbed to $3.75 billion, an increase of roughly 31.5%–32%, powered by broad-based growth in both the Electrical & Mechanical (E&M) and Transmission & Distribution (T&D) businesses.

EBITDA Growth and Margin Expansion

Profitability outpaced sales, with Q4 EBITDA rising 45% to $84.8 million and margin improving 70 basis points to 8.4%. For 2025, reported EBITDA reached about $319.8 million, while adjusted EBITDA was roughly $320 million, representing a 52% increase once incremental stand‑alone costs are excluded.

Backlog Momentum and Project Diversity

Year‑end 2025 backlog increased 16% to approximately $3.23 billion, giving the company strong revenue visibility into 2026 and beyond. Management highlighted a broad pipeline across data centers, hospitality, semiconductor facilities, transmission lines and undergrounding projects, pointing to multiple secular growth drivers.

E&M Segment Leads the Charge

The E&M segment was the primary growth engine, with Q4 revenue jumping 44% to $791.6 million. E&M EBITDA surged 57% to $67.1 million, and segment margin improved by 70 basis points to 8.5%, helped by robust activity in data centers, commercial work and renewable energy projects.

T&D Backlog Strength Despite Margin Pressure

In T&D, backlog expanded 41% year on year, reflecting strong utility demand for transmission upgrades and undergrounding initiatives. However, Q4 T&D revenue grew a more modest 6.8% to $227.7 million, while EBITDA was flat at $30.5 million and margin slipped about 90 basis points to 13.4% on less favorable mix and higher SG&A.

Balance Sheet Flexibility and M&A Firepower

Everus closed the year with $152.7 million in unrestricted cash, $285 million in gross debt and $222.8 million of undrawn revolver capacity. Net leverage sits around 0.4x, well below the 1.5x–2.0x target, giving the company ample room to fund organic growth and pursue strategic acquisitions.

CapEx, Prefabrication and Workforce Investments

Capital expenditures climbed 52.5% in 2025 to $66.8 million, as the company ramped investment in prefabrication, including a new Kansas City facility and expansions in the Pacific Northwest and Southwest. Headcount grew from 8,700 to 9,400, and management cited record safety performance, reinforcing the long‑term scaling strategy.

Cash Flow Headwinds from Growth and CapEx

Despite strong earnings, cash metrics stepped back, with operating cash flow declining to $150.8 million from $163.4 million. Free cash flow fell to $100 million from $128.8 million, as working capital needs and elevated CapEx absorbed more cash, a trade‑off management linked directly to supporting rapid growth.

Higher Working Capital and Stand-Alone Costs

Management emphasized that working capital was intentionally elevated to support the revenue surge, compressing near‑term cash conversion but expected to ease in 2026. Incremental stand‑alone operating costs of about $28 million also weighed on reported EBITDA, though they do not change the underlying profitability trajectory.

Growth Outlook, Tough Comps and M&A Discipline

Executives cautioned that 2026 EBITDA growth will appear modest versus 2025’s step‑change, with guidance implying roughly 5% year‑over‑year expansion. They also noted that, despite significant balance sheet capacity and a robust acquisition pipeline, no deals have closed yet and capital returns are on hold as cash is reserved for growth and potential M&A.

Data Center Concentration Risk

While Everus stressed its diversified end‑market exposure, management acknowledged a heavy and growing reliance on data center work, alongside increasing semiconductor contributions. That concentration is a key watch point for investors, as a slowdown in these sectors could weigh on both revenue growth and backlog quality.

Guidance and Multi-Year Outlook

For 2026, management guided to $4.1–$4.2 billion in revenue and $320–$335 million in EBITDA, implying about 11% top‑line growth and 5% EBITDA growth at the midpoint, with margin just under 8%. Supported by a $3.23 billion backlog, a roughly 25% two‑year adjusted EBITDA CAGR and substantial balance sheet capacity, Everus reaffirmed its long‑term targets for mid‑single‑digit organic growth and disciplined CapEx.

Everus’ call painted a picture of a company in expansion mode, trading some near‑term cash conversion and segment margin variability for higher long‑term earnings power. With record revenue, rising EBITDA, a swelling backlog and under‑levered balance sheet, the story remains skewed positively, though investors will watch T&D margins and data center concentration closely.