Executive Summary

Strong Q3: revenue $1.415B (+31% Y/Y), GAAP EPS $0.07, Adjusted EPS $1.15; record operating cash flow $289.1M; backlog a record $21.6B (+54% Y/Y); 2025 Adjusted EPS guidance raised to $4.00–$4.20 .
Beat vs consensus: Adjusted EPS of $1.15 vs $0.60*; revenue $1.415B vs $1.384B*; EPS beat driven by higher-margin project mix and segment profitability; revenue slight beat on strong Civil and Specialty execution (see Estimates Context) . Values retrieved from S&P Global.
Mix and margins improved: Civil operating margin 12.9% (above historical range), Building at 3.4%, Specialty back to profitability with 2.7% margin, aided by fewer dispute-related adjustments and ramping contributions from large projects .
Cash and balance sheet: interest expense down 36% Y/Y to $14M on debt reduction; cash now exceeds total debt by $283M, positioning TPC to consider dividends/buybacks once cash reaches target; board to discuss capital allocation imminently .

What Went Well and What Went Wrong

What Went Well
- Record cash generation and net cash position: “operating cash flow was extraordinarily strong…$289 million” in Q3; cash exceeded total debt by $283M; interest expense down 36% Y/Y to $14M .
- Segment execution inflecting: Civil delivered 12.9% operating margin; Specialty turned profitable ahead of expectations; Building profitable with 3.4% margin; drivers were newer, larger, higher‑margin projects .
- Backlog and pipeline: record $21.6B backlog (+$2.0B net awards in Q3); book-to-burn 1.4x; marquee wins include ~ $1B UCSF Benioff Children’s Hospital and $182M Guam defense project; pipeline >$25B over 12–18 months .
What Went Wrong
- Elevated share-based comp and taxes muted GAAP EPS: Q3 included a $58.7M share-based comp expense; G&A up; effective tax rate 44.6% as most of the higher comp is non-deductible, pressuring GAAP EPS to $0.07 despite strong operations .
- Building revenue dipped slightly Y/Y; management expects backlog growth to be “flattish” near term (more lumpiness vs sequential records), tempering immediate upside optics despite strong levels .
- Mobilization benefits mostly realized: management expects strong cash to continue, but notes the exceptional Q3 cash is unlikely to repeat immediately as mobilization payments largely occurred .

Financial Results

Metric	Q3 2024	Q1 2025	Q2 2025	Q3 2025
Revenue ($USD Billions)	$1.083	$1.247	$1.374	$1.415
GAAP EPS ($)	$(1.92)	$0.53	$0.38	$0.07
Adjusted EPS ($)	$(1.61)	—	$1.41	$1.15
Income from Construction Operations ($USD Millions)	$(106.8)	$65.3	$76.4	$40.1
Operating Cash Flow ($USD Millions)	$22.6	$22.9	$262.4	$289.1

Segment performance (Q3 2025 vs Q3 2024):

Revenue and construction ops income by segment

Segment	Q3 2024 Revenue ($M)	Q3 2025 Revenue ($M)	Q3 2024 Income from Construction Ops ($M)	Q3 2025 Income from Construction Ops ($M)
Civil	545.9	770.2	(12.5)	99.2
Building	435.7	418.7	(3.9)	14.4
Specialty Contractors	101.2	226.5	(56.9)	6.2

Operating margins (Q3 2025):

Civil 12.9%; Building 3.4%; Specialty 2.7%

Backlog and awards:

Backlog at quarter-end: $21.641B; New awards in quarter: $1.973B .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Adjusted EPS	FY 2025	$3.65–$3.95	$4.00–$4.20	Raised
GAAP EPS	FY 2025	$1.70–$2.00	Not providing GAAP EPS guidance due to share-based comp volatility	Withdrawn
G&A Expense	FY 2025	—	$410–$420M	New/updated (higher due to share-based comp)
Depreciation & Amortization	FY 2025	—	~$50M (Deprec ~$48M, Amort ~$2M)	New
Interest Expense	FY 2025	—	~ $55M (incl. ~$5M non-cash)	Maintained (per mgmt)
Effective Tax Rate	FY 2025	—	~30%–32% (higher vs prior assumption)	Raised
Non-controlling Interest	FY 2025	—	$75–$85M	Maintained (reiterated)
Diluted Shares	FY 2025	—	~53M	Maintained
Capital Expenditures	FY 2025	—	$170–$180M; $120–$130M owner‑funded TBMs	Updated detail

Note: “Previous Guidance” dashes reflect items not quantified in prior public releases we reviewed.

Earnings Call Themes & Trends

Topic	Previous Mentions (Q-2 and Q-1)	Current Period (Q3 2025)	Trend
Backlog & pipeline	Record backlog: $19.4B (Q1), $21.1B (Q2); confidence in 2026–27 ramp	Record $21.6B; $2.0B awards in Q3; >$25B bid pipeline incl. Sepulveda Transit, Penn Station; book-to-burn 1.4x	Up but near-term “flattish” after sequential records
Segment margins	Civil/Building profitability improving; Specialty negative in H1	Civil 12.9%; Building 3.4%; Specialty 2.7% (back to profitability earlier than expected)	Improving
Cash flow & balance sheet	Q2 OCF $262.4M; cash > debt by $107M (first time since 2010)	Q3 OCF $289.1M; cash exceeds debt by $283M; CIE lowest since 2017	Strong; normalization after mobilization
Share-based comp impact	Q2 comp spiked with share price; introduced adjusted metrics	Q3 comp +$58.7M Y/Y; GAAP ETR 44.6%; 2025 ETR 30–32% due to non-deductible comp	Headwind in 2025; easing in 2026–27
Funding/tariffs risk	No significant tariff/funding impact anticipated	Reiterated: no expected impact from tariffs, budget cuts, or shutdown; projects funded	Stable
Specialty outlook	Losses in 2024; improving activity in 2025 H1	Turned profitable; revenue/margins to increase as NY megaprojects ramp	Positive inflection
Capital allocation	No explicit action; leverage improving	Dividend/buyback under consideration as cash builds; board to discuss next week	Emerging catalyst

Management Commentary

“Our operating cash flow was extraordinarily strong for the quarter at $289 million…$574 million through the first nine months of 2025, setting new records for both respective periods.”
“The Civil segment continues to perform at record levels…Specialty Contractor segment returned to profitability this quarter ahead of expectations.”
“We are raising our guidance for the third consecutive quarter…Adjusted EPS for 2025 is now expected to be in the range of $4–$4.20.”
“We still do not anticipate that tariffs will have a significant impact…our projects are funded and authorized.”
On capital allocation: “We plan to continue building our cash position until…we can comfortably initiate…a recurring dividend and/or a share repurchase program.”
On bidding activity and capacity: “We’re not going to overextend ourselves…We feel really good about where we’re staffed.”

Q&A Highlights

Specialty Contractors inflection: Mgmt attributed profitability to clean execution with little dispute “noise” and expects revenue and margins to trend up as large NY projects ramp, implying 5–8% margins are achievable over time .
Backlog/awards cadence: After consecutive record quarters, near-term backlog growth likely “flattish” and lumpy, though still at very high levels; pipeline robust across NY, CA, Midwest, Indo‑Pacific .
Building margin trajectory: Mix increasingly higher‑margin fixed‑price/complex work; meaningful improvement expected by mid‑2026, further in 2027 .
Cash flow sustainability: Most mobilization payments have occurred; cash to remain strong, though Q3’s $289M is unlikely to repeat immediately .
Capital returns: Board to discuss cash levels and potential dividends/buybacks; management remains conservative to ensure ample liquidity as projects ramp .

Estimates Context

Quarterly consensus vs. actuals (S&P Global):

EPS (Primary): $0.60* consensus vs $1.15 actual (Adjusted EPS) — significant beat; 3 estimates . Values retrieved from S&P Global.
Revenue: $1.384B* consensus vs $1.415B actual — slight beat; 3 estimates . Values retrieved from S&P Global.

Metric	Q3 2025 Consensus*	Q3 2025 Actual
EPS ($)	0.60*	1.15
Revenue ($B)	1.384*	1.415
# of Estimates	3*	—

Values retrieved from S&P Global.

Implications: Street likely raises out-year estimates as Civil/Building margins and Specialty profitability trend ahead of prior expectations; GAAP EPS optics remain noisy due to share-based comp and non-deductibility, but core operating trajectory is stronger than modeled .

KPIs and Balance Sheet Trends

KPI	Q1 2025	Q2 2025	Q3 2025
Backlog ($B)	19.393	21.083	21.641
New Awards ($B)	1.966	3.064	1.973
CIE ($B)	0.948	0.856	0.848
Total Debt ($M)	~405.6 (LT 391.8 + ST 13.8)	~419.4 (LT 393.3 + ST 26.1)	~413.1 (LT 393.0 + ST 20.1)
Cash > Debt ($M)	—	107	283
Interest Expense ($M, quarterly)	14.4	13.6	13.5
Diluted Shares (MM)	53.010	53.194	53.664

Guidance Changes – Additional Detail and Rationale

2025 Adjusted EPS raised to $4.00–$4.20 on stronger-than-expected execution and margin realization; 2026–27 expected “significantly higher” than 2025 upper end .
2025 ETR increased to ~30–32% due to non-deductible share-based comp (a GAAP headwind), while Civil margins remain above historical (13–15% full-year expectation) .
Capex lifted to $170–$180M, largely owner-funded TBMs, reflecting ramping megaproject activity .

Key Takeaways for Investors

Core operations accelerating: multi-segment profitability, record cash generation, and record backlog underpin a multi‑year earnings and cash flow upcycle into 2026–27 .
Quality of backlog improving: mix skews to larger, higher‑margin projects with limited competition; Civil margins above historical range signal durable profitability .
Specialty inflection is real: earlier‑than‑expected profitability with visibility to higher revenue/margins as NY projects ramp — a key upside delta vs prior models .
Estimates likely move up: material EPS beat on an adjusted basis and reiterated strength should drive upward revisions; GAAP optics remain noisy due to share-based comp and taxes .
Capital returns emerging: net cash position growing; management actively evaluating dividend/buybacks once target cash reached — potential catalyst over the next board cycles .
Near-term cadence: awards/backlog growth may be “flattish” after consecutive records; expect lumpiness, but at elevated levels; cash remains strong though Q3’s record unlikely to repeat immediately .
Risk watch: share-based comp volatility and non-deductibility impact GAAP EPS/ETR; continued disciplined bidding and JV execution are essential as megaproject exposure rises .

TUTOR PERINI CORP (TPC)·Q3 2025 Earnings Summary