MYR GROUP INC. (MYRG)·Q3 2025 Earnings Summary

Executive Summary

• MYR Group delivered a strong quarter with revenue $950.4M and diluted EPS $2.05, driven by margin recovery and execution; both revenue and EPS beat S&P Global consensus by 2.7% and 7.1%, respectively, and EBITDA was above expectations as well (revenue estimate $925.3M; EPS estimate $1.915; EBITDA estimate $61.1M)* .
• Gross margin expanded to 11.8% from 8.7% YoY, aided by better-than-anticipated productivity, favorable change orders, and job closeouts, while headwinds from prior clean energy projects abated .
• Backlog held at $2.66B (+2.5% YoY), with T&D $929M and C&I $1.73B; operating cash flow was a record $95.6M and free cash flow $65.4M, underscoring solid liquidity and execution .
• Management raised its C&I operating margin outlook for next year to 5%–7.5% (from historic 4%–6%) and indicated ~10% company-wide revenue growth for 2026, with T&D margins expected to operate mid-range of the 7%–10.5% band; capex could run near ~3% of revenue given growth opportunities .

Note: Items marked with an asterisk (*) are values retrieved from S&P Global.

What Went Well and What Went Wrong

What Went Well

• Record profitability: Net income $32.1M ($2.05 diluted EPS) and EBITDA $62.7M set quarterly records, reflecting strong execution and margin recovery .
• Margin drivers: “Gross margin was also positively impacted by better-than-anticipated productivity, favorable change orders and favorable job closeouts” .
• Strategic positioning: CEO highlighted secular demand: “The accelerating pace of electrification, future project demand, load growth, and the need for resilient infrastructure are driving investment in electrical infrastructure, which positions us well for continued success” .

What Went Wrong

• SG&A creep: SG&A rose to $65.9M versus $57.5M YoY, driven by incentive compensation and higher employee-related expenses to support growth .
• Operational frictions: Management noted offsets from “project inefficiencies, unfavorable change orders and inclement weather,” which limited upside on margins .
• Tax rate normalization: Effective tax rate rose to 28.3% (vs a 42.5% benefit last year tied to unusual items), trimming net income conversion versus the prior year’s atypical tax benefit .

Financial Results

Key Metrics vs Prior Periods

Actual vs S&P Global Consensus – Q3 2025

Note: Values marked with an asterisk (*) are retrieved from S&P Global.

Segment Revenue Breakdown

KPIs and Balance Sheet

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• Strategy and secular tailwinds: “The accelerating pace of electrification… and the need for resilient infrastructure are driving investment in electrical infrastructure, which positions us well for continued success” — Rick Swartz, CEO .
• Margin drivers: “Gross margin was… positively impacted by better-than-anticipated productivity, favorable change orders and favorable job closeouts” — Company release .
• Segment positioning: T&D “operating income margin was 8.2%… due to clean energy project headwinds abating and better-than-anticipated productivity” — Kelly Huntington, CFO .
• Awards and footprint: Multiple mid-sized T&D awards across regions (Ellie Myers, High Country, E.S. Boulos, Harlan Electric, Great Southwestern, Sturgeon) highlighting geographic breadth — segment leaders .

Q&A Highlights

• C&I margins: Management expects full-year 2025 in upper half of 4%–6%, and raised 2026 outlook to 5%–7.5% reflecting both execution and market conditions .
• 2026 growth: Company-wide ~10% revenue growth indicated, split relatively evenly between C&I and T&D, assuming continued customer spend and project ramp .
• T&D project timing: Large transmission projects likely start in 2027–2029+, while near-term backlog remains skewed to MSAs and small/mid-sized jobs .
• Capital allocation: No Q3 buybacks; capex may run ~3% of revenue to support T&D growth; M&A remains active but disciplined on fit and valuation .
• Data center mix: Opportunity is growing but management does not expect it to outpace other core C&I markets near term .

Estimates Context

• Q3 2025 beats: Revenue $950.4M vs $925.3M estimate; EPS $2.05 vs $1.915 estimate; EBITDA $62.7M vs $61.1M estimate — broad-based beat on top line and profitability*. This, alongside higher C&I margin outlook and 2026 ~10% growth indication, suggests upward bias to outer-period EPS frameworks .
• Target price consensus: $238.4*, with five estimates reflected in the current mean.
• Watchlist for revisions: C&I margin range increase (2026: 5%–7.5%) and capex-to-revenue nearer ~3% imply capacity and mix shifts that could improve operating leverage; T&D mid-range margin confidence supports sustained profitability amid project timing variability .

Note: Values marked with an asterisk (*) are retrieved from S&P Global.

Key Takeaways for Investors

• Broad beat vs consensus on revenue, EPS, and EBITDA, with margin recovery supported by execution and reduced clean energy project drag — constructive for near-term sentiment .
• C&I margin outlook raised for 2026; full-year 2025 trending upper half of the 4%–6% band — a key upward inflection for segment profitability .
• Secular tailwinds (electrification, grid modernization) and MSAs (~60% of T&D revenue) underpin revenue visibility; large T&D project ramps are more 2027+ events .
• Backlog stable at $2.66B with strong operating/free cash flow — reinforces liquidity and the capacity to invest in growth and selective buybacks/M&A .
• Capex could trend closer to ~3% of revenue to position for growth in T&D — supports medium-term capacity expansion and potential operating leverage .
• Data center opportunity constructive but diversified mix persists; management does not expect DC work to dominate C&I near term — lowers concentration risk .
• Macro risks (tariffs, materials) remain, but strengthened contract language and execution discipline provide buffers; expect continued variability in quarterly timing .