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Primoris Services Corp (PRIM)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 delivered revenue of $1.65B (+16.7% YoY), GAAP diluted EPS of $0.81 (+$0.46 YoY), adjusted EPS of $0.98, and adjusted EBITDA of $99.4M; Utilities margin expansion and renewables strength drove the beat .
  • Versus Wall Street consensus, PRIM delivered a material beat: revenue $1.65B vs $1.49B*, GAAP EPS $0.81 vs $0.66*, and EBITDA $91.5M vs $75.6M*; management expressed confidence in achieving the high end of 2025 guidance ranges .
  • Guidance maintained for 2025: EPS $3.70–$3.90, adjusted EPS $4.20–$4.40, adjusted EBITDA $440–$460M; Utilities margin target 9–11%, Energy 10–12%, SG&A ≈6%, tax rate ≈29% .
  • Capital allocation catalysts: new $150M share purchase authorization (through April 2028) and $0.08 dividend; record Q1 operating cash flow of $66.2M supports buybacks and organic growth .
  • Backlog declined sequentially to $11.39B (fixed backlog -$0.56B QoQ) as expected given timing of awards; bookings beat internal plan by ~$300M in Q1 and are anticipated to accelerate in H2 .

Note: *Values retrieved from S&P Global.

What Went Well and What Went Wrong

  • What Went Well

    • Utilities margins improved to 9.2% (from 6.0% YoY) on stronger power delivery execution and communications/gas activity; Utilities operating income rose to $18.1M from near breakeven .
    • Energy segment revenue +17.0% YoY, led by record renewables activity; segment operating income up 18.4% YoY to $78.9M .
    • Management tone confident: “We are now more confident that the higher end of our ranges are achievable” on 2025 EPS/adj. EPS/adj. EBITDA .

  • What Went Wrong

    • Gross margin in Energy dipped slightly to 10.7% (from 11.0% YoY) due to fewer project closeouts and ramping new renewables projects .
    • Total backlog fell to $11.39B from $11.87B at year-end 2024 driven by a ~$567M Energy backlog decrease, reflecting timing softness in Q1 and Q2 after strong H2’24 bookings .
    • SG&A increased 12.3% YoY to $99.5M (6.0% of revenue), including CEO severance costs, though ratio improved versus last year .

Financial Results

MetricQ1 2024Q4 2024Q1 2025
Revenue ($USD Millions)$1,412.7 $1,741.3 $1,648.1
Gross Profit ($USD Millions)$133.4 $184.6 $170.7
Gross Margin (%)9.4% 10.6% 10.4%
Operating Income ($USD Millions)$44.2 $87.6 $70.4
Net Income ($USD Millions)$18.9 $54.0 $44.2
Diluted EPS ($)$0.35 $0.99 $0.81
Adjusted Net Income ($USD Millions)$25.8 $61.8 $53.5
Adjusted EPS ($)$0.47 $1.13 $0.98
EBITDA ($USD Millions)$69.3 $111.1 $91.5
Adjusted EBITDA ($USD Millions)$73.8 $116.6 $99.4
Interest Expense, net ($USD Millions)$18.0 $12.3 $7.8

Segment Breakdown

Segment MetricQ1 2024Q1 2025
Utilities Revenue ($USD Millions)$487.9 $563.4
Utilities Gross Margin (%)6.0% 9.2%
Utilities Operating Income ($USD Millions)$0.2 $18.1
Energy Revenue ($USD Millions)$947.6 $1,108.3
Energy Gross Margin (%)11.0% 10.7%
Energy Operating Income ($USD Millions)$66.6 $78.9

KPIs

KPIQ4 2024Q1 2025
Total Backlog ($USD Billions)$11.87 $11.39
Fixed Backlog ($USD Billions)$6.09 $5.54
MSA Backlog ($USD Billions)$5.77 $5.85
Cash & Equivalents ($USD Millions)$455.8 $351.6
Operating Cash Flow ($USD Millions)$298.3 (Q4) $66.2 (Q1)
Capital Expenditures ($USD Millions)$23.6 (Q4) $40.6 (Q1)
Effective Tax Rate (%)29% (FY guide) 29% (Q1)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
EPS (GAAP)FY 2025$3.70–$3.90 $3.70–$3.90 Maintained
Adjusted EPSFY 2025$4.20–$4.40 $4.20–$4.40 Maintained
Adjusted EBITDA ($USD Millions)FY 2025$440–$460 $440–$460 Maintained
SG&A (% of revenue)FY 2025Low 6% ≈6% Maintained
Segment Gross Margin TargetsFY 2025Utilities 9–11%; Energy 10–12% Utilities 9–11%; Energy 10–12% Maintained
Tax Rate (%)FY 2025≈29% ≈29% Maintained
Interest Expense (net, $USD Millions)FY 2025$44–$48 Monitoring given Q1 upside (no formal change) Maintained (watch)
Capex ($USD Millions)FY 2025$90–$110 (incl. $60–$80 equipment) Remaining 2025 $50–$70 (Q1 actual $40.6) Reaffirmed trajectory
Dividend2025$0.08 declared (Feb 2025) $0.08 declared for July 15, 2025 payment Maintained
Share Repurchase2025Prior plan expired Dec 31, 2024 New $150M authorization through Apr 30, 2028 New authorization

Earnings Call Themes & Trends

TopicQ3 2024 (Q-2)Q4 2024 (Q-1)Q1 2025 (Current)Trend
Utilities margin expansionSequential uplift above seasonality; storm work added ~$5M GP Continued strong margins in power delivery/gas; record Q4 cash flow Utilities margin up to 9.2%; expecting sequential improvement in Q2–Q3 Improving
Renewables demand & executionRecord renewables backlog (~$2.9B), solar EPC demand strong Energy margins down YoY on fewer closeouts; demand strong Record renewables revenue; monitoring IRA/tariffs; closeouts later in year Strong demand; margins to normalize
Tariffs/macro policyNoted industry uncertainty; resilient demand 2025 guidance set amid uncertainty Limited 2025 operational impact; pass-through clauses; battery storage most exposed Manageable near term
Backlog/bookings cadenceQ3 bookings ~$2.5B; book-to-bill >1x Record backlog $11.9B year-end Q1 bookings beat plan by ~$300M; expect H2 acceleration H2 weighted
Interest expenseLower vs prior year; swap impact FY25 guide $44–$48M Q1 net interest $7.8M below expectations; may lower guidance if trend persists Potential tailwind
Cash flowYTD CFO improved; strong customer down payments Record Q4 CFO $298.3M; strong liquidity Record Q1 CFO $66.2M; 2025 CFO guide $200–$225M, potential ≥$250M Strong, improving

Management Commentary

  • CEO: “Primoris had another great quarter to start 2025, delivering solid execution on our strategy to expand margins and increase cash flow generation.” .
  • CFO: “We are now more confident that the higher end of our ranges are achievable” for 2025 EPS, adjusted EPS, and adjusted EBITDA .
  • On tariffs: “We do not expect to see a material impact on our operations during 2025… most materials and components… are supplied by the customer… and we can pass incremental costs through.” .
  • On bookings cadence: “Our plan for the bookings in first quarter, we exceeded those by approximately $300 million.” .
  • On growth vectors: “We’re vetting close to about $1 billion in natural gas projects tied to data centers throughout the U.S. in the coming years.” .

Q&A Highlights

  • Bookings and backlog: Q1 bookings exceeded plan by ~$300M; despite sequential backlog decline, management expects H2 acceleration similar to last year .
  • Interest expense: Q1 net interest came in below expectations; management is monitoring and may adjust guidance if trend persists .
  • Utilities margins: sustained improvement expected through Q2–Q3 driven by seasonality and power delivery execution; margin targets low-to-mid 10% for FY .
  • Renewables/tariffs: minimal impact to 2025 operations; battery storage materials are the most exposed but small in overall project cost; build-arounds feasible .
  • Cash flow: FY 2025 operating cash flow expected at $200–$225M; potential ≥$250M given strong Q1 .

Estimates Context

MetricConsensus (Q1 2025)Actual (Q1 2025)Surprise
Revenue ($USD Millions)$1,490.3*$1,648.1 +$157.8
Primary EPS ($)$0.66*$0.81 (GAAP) +$0.15
EBITDA ($USD Millions)$75.6*$91.5 (GAAP) +$15.9
Adjusted EPS ($)N/A$0.98 N/A

Note: *Values retrieved from S&P Global.

Estimates likely need upward revisions for 2025 given upside on revenue/EPS/EBITDA and commentary pointing toward the high end of ranges .

Key Takeaways for Investors

  • Execution and margin story intact: Utilities margins improved materially; Energy growth led by renewables; management expects higher-end outcomes for 2025 EPS/adj. EPS/adj. EBITDA .
  • Beat vs consensus across revenue/EPS/EBITDA; interest expense tailwind emerging could further support EPS and cash generation if sustained .
  • Capital returns: $150M repurchase authorization through 2028 plus $0.08 dividend offers flexibility; strong Q1 operating cash flow supports deployment .
  • Backlog timing: Sequential decline reflects expected cadence; bookings beat plan in Q1, and H2 looks stronger—stock may react to booking updates and large award announcements .
  • Macro/tariffs manageable: Pass-through mechanisms, customer-supplied materials, and domestic sourcing mitigate 2025 impact; battery storage exposure is limited relative to project size .
  • Data center-linked natural gas generation is a rising opportunity (~$1B pipeline under vetting), expanding Energy segment optionality beyond solar .
  • Trading/PM implications: Near-term catalysts include bookings acceleration, interest expense trajectory, and margin progression; medium-term thesis centers on infrastructure demand, renewables execution, and disciplined capital allocation .