Primoris Services (NYSE:PRIM) reported fourth-quarter and full-year 2025 results highlighting record revenue, earnings, and backlog, while also outlining an initial 2026 outlook that management said reflects strong demand across its end markets. The company emphasized continued strength in power delivery, renewables, and natural gas generation-related activity, alongside expectations for an improving pipeline environment.
Leadership commentary and market backdrop
President and CEO Koti Vadlamudi, speaking on the call after his first several months in the role, focused early remarks on company culture, including safety performance and workforce growth. Vadlamudi said Primoris worked more than 40 million hours in 2025 and has consistently remained below industry average in recordable incidents, while noting the company continues to pursue “zero incidents.”
On the demand environment, Vadlamudi said the company is seeing projections that power demand could grow by 50% over the next decade and potentially double over the next 15 years, driven by data centers, electrification, and on-shoring. He said the company’s largest utility customers’ average CapEx plans suggest about a 50% increase in spending over the next five years compared with the prior five years, with priorities including replacing aging infrastructure, hardening the grid, and expanding capacity to meet load growth.
Backlog and workforce expansion
Primoris ended 2025 with more than $11.9 billion of total backlog and booked nearly $3 billion of new work in the fourth quarter, which management characterized as a record year for backlog. CFO Ken Dodgen said total MSA backlog was up over 20% year over year, driven by contract renewals and anticipated customer spending in the utility segment, particularly in power delivery.
Vadlamudi said Primoris increased its labor force by more than 2,800 people in 2025, and noted that while some labor markets are tight—he cited certified journeymen linemen as an example—the company has been successful in attracting qualified craft and field labor. He added that the company has been building a “bench” of project managers and leadership to prepare for opportunities that are not yet in backlog, particularly in gas generation and power delivery.
Segment performance: Utility and Energy
Dodgen reported fourth-quarter revenue of almost $1.9 billion, up about 7% year over year, driven by growth in both the Energy and Utility segments. Gross profit in the quarter declined about 5% to $175 million, and gross margin was 9.4% versus 10.6% a year earlier.
Utility segment: Fourth-quarter utility revenue rose nearly $34 million year over year, with growth across all business lines led by increased gas operations in the Midwest and power delivery and communications activity in Texas and the Southeast. Utility gross margin was 10.5%, down from 12.1%, driven primarily by a decrease in storm work in power delivery. Dodgen said that excluding storm work, utility margins were comparable to the prior-year quarter.
For the full year, utility revenue increased $253 million, and gross profit rose $51 million, with margin improvement “particularly in power delivery,” even as gross profit from storm work declined by $18 million versus 2024. Vadlamudi said non-MSA revenues increased almost 30% in the segment in 2025 as the company pushed further into project work.
Energy segment: Fourth-quarter energy revenue increased $88 million year over year, primarily due to renewables growth, partially offset by lower industrial and pipeline revenue. Gross margin fell to 8.5% from 9.5%, with Dodgen attributing the decline largely to cost overruns on certain renewables projects tied to unanticipated rock and soil conditions that required additional labor and equipment. He said the company believes it has accounted for the increased costs and expects renewables margins to improve as 2026 progresses.
For the full year, energy revenue grew by nearly $1 billion, driven by renewables and natural gas generation, partially offset by a decline in pipeline revenue and wind-down or divestiture of non-core industrial businesses. Dodgen said renewables grew over 50% in 2025, including more than $500 million of revenue pulled forward from 2026 due to customer-driven resequencing and accelerated execution.
Renewables issues and remediation steps
Management provided additional detail during Q&A on the renewables cost overruns. Vadlamudi said the company “underappreciated the geotech and soil conditions from an estimate standpoint,” and initial mitigation measures did not prove effective, contributing to a cascade of higher equipment and labor needs. He said the program is around the midpoint of construction and the company has “a really, really good understanding of what’s left to complete.”
Vadlamudi also said Primoris increased investment in project leadership after auditing the projects, noting the work occurred in a hot market where there was turnover in project staff.
Dodgen said the situation involved two adjacent “sister projects” where the company encountered more subsurface rock than it had seen on any prior renewables project. He said one of the sister projects was in a slight loss position, while the other remained profitable, and characterized the issue as unusual versus the broader renewables portfolio.
2026 guidance, cash flow, and capital allocation
Dodgen outlined 2026 guidance calling for earnings per diluted share of $5.35 to $5.55 and adjusted EPS of $5.80 to $6.00, with adjusted EBITDA of $560 million to $580 million. He noted the guidance excludes potential benefits from storm work, which contributed about $12 million of adjusted EBITDA in 2025, and reiterated that the first quarter is typically seasonally the lowest for revenue and net income.
- Utility segment gross margin: expected 10%–12% for the full year, with Q1 expected at 7%–9% due to seasonality.
- Energy segment gross margin: expected 10%–12% for the full year; Dodgen said Q1 should be at the low end of that range as the lower-margin renewables work burns off, with improvement expected beginning in Q2.
On cash flow, Dodgen reported operating cash flow of approximately $143 million in Q4 and over $470 million for the full year, including more than $100 million of cash collections pulled forward from Q1 2026 into Q4 2025. He said Primoris expects operating cash flow as a percentage of revenue to trend toward its 4%–5% target range in 2026, after exceeding that goal the past two years.
Primoris ended 2025 with $536 million of cash and $470 million of total long-term debt, which Dodgen said resulted in a net cash positive position entering 2026. The company expects 2026 interest expense of $23 million to $26 million. CapEx is expected at $120 million to $140 million in 2026.
Management also discussed capital deployment priorities, including disciplined internal investment in people, systems, and tools to improve execution and margin predictability, and potential acquisitions. Vadlamudi said M&A must align with strategy and cultural fit, and indicated interest in opportunities that can accelerate growth in areas where Primoris is subscale. Dodgen said the company is positioned to pursue acquisitions that augment power delivery capabilities and enhance offerings for industrial, power generation, and data center projects.
About Primoris Services (NYSE:PRIM)
Primoris Services Corporation, a specialty contractor company, provides a range of construction, fabrication, maintenance, replacement, and engineering services in the United States and Canada. It operates through three segments: Utilities, Energy/Renewables, and Pipeline Services. The Utilities segment offers installation and maintenance services for new and existing natural gas distribution systems, electric utility distribution and transmission systems, and communications systems. The Energy/Renewables segment provides a range of services, including engineering, procurement, and construction, as well as retrofits, highway and bridge construction, demolition, site work, soil stabilization, mass excavation, flood control, upgrades, repairs, outages, and maintenance services to renewable energy and energy storage, renewable fuels, petroleum, refining, and petrochemical industries, as well as state departments of transportation.
