Below is a snapshot of large-cap industrial companies with market capitalizations above $10B, highlighting those with the highest and lowest quant ratings after the earnings season, underscoring the stocks that strengthened their fundamentals as well as those that lagged behind.

Top-quant rated stocks:

Southwest Airlines (LUV), Quant Rating: 4.93, Strong Buy.

ATI (ATI), Quant Rating: 4.93, Strong Buy.

Sterling Infrastructure (STRL), Quant Rating: 4.87, Strong Buy.

Modine Manufacturing (MOD), Quant Rating: 4.87, Strong Buy.

Sandvik AB (publ) (SDVKY), Quant Rating: 4.83, Strong Buy.

Bottom quant rated stocks:

Thomson Reuters (TRI), Quant Rating: 1.44, Strong Sell.

Experian (EXPGY), Quant Rating: 1.85, Sell.

Copart (CPRT), Quant Rating: 1.93, Sell.

Rheinmetall AG (RNMBY), Quant Rating: 1.96, Sell.

Builders FirstSource (BLDR), Quant Rating: 1.96, Sell.

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Management View

• Joseph Cutillo, CEO, highlighted that Sterling achieved “strong revenue growth of over 32% and adjusted diluted EPS growth of over 53%.” He noted, “Full year gross margins reached 23% and adjusted EBITDA margins exceeded 20% for the first time in our history.” Cutillo emphasized that “operating cash generation remained strong at $440 million” and described 2025 as the fifth consecutive year of over 35% adjusted EPS growth.
• Cutillo reported fourth quarter revenue growth of 69%, driven by “123% growth in E-Infrastructure Solutions and 24% growth in our Transportation Solutions.” Organic growth for the quarter was 36%. He stated, “We grew adjusted earnings per share by 78% to $3.08 and adjusted EBITDA by 70% to $142 million.”
• The signed backlog at quarter-end reached $3 billion, a 78% increase from year-end 2024. Including unsigned awards and pipeline, visibility extends to “a pool of work approaching $4.5 billion.”
• In the E-Infrastructure segment, full year revenue grew 59% and adjusted operating income grew 67%. Cutillo said, “Our Rocky Mountain site development operation… grew more than 150% from the prior year period.” The CEC acquisition is “performing very well,” with fourth quarter CEC revenue up 21% over the prior year.
• Transportation Solutions reported full year revenue growth of 17% and adjusted operating profit growth of 66%. Backlog for this segment rose 81% year-over-year to $1.1 billion. Building Solutions faced challenges, with full year revenue down 6% and adjusted operating profit down 23%.
• CFO Nicholas Grindstaff stated, “Our year-end backlog totaled $3 billion, a 78% increase from year-end 2024 or 49%, excluding CEC.” He added, “Cash flow from operating activities for 2025 was a strong $440 million.” Grindstaff reported share repurchases of $74 million for the year and a remaining authorization of $374 million.
• Grindstaff provided 2026 guidance: “Revenue of $3.05 billion to $3.2 billion; diluted EPS of $11.65 to $12.25. Adjusted diluted EPS of $13.45 to $14.05, EBITDA of $587 million to $620 million. Adjusted EBITDA of $626 million to $659 million.”

Outlook

• The company is initiating 2026 guidance with revenue projected between $3.05 billion and $3.2 billion, diluted EPS of $11.65 to $12.25, adjusted diluted EPS of $13.45 to $14.05, EBITDA of $587 million to $620 million, and adjusted EBITDA of $626 million to $659 million.
• Cutillo indicated, “For 2026, we expect to deliver E-Infrastructure revenue growth of 40% or higher. This includes 20% growth or higher in the legacy business.”
• Adjusted operating profit margins for E-Infrastructure are forecast in the 23% to 24% range. Transportation Solutions revenue is expected to grow in the “low to mid-single digits” with continued margin expansion, while Building Solutions revenue is anticipated to “decline in the high single to low double digits.”

Financial Results

• Fourth quarter revenue grew 69%, with E-Infrastructure Solutions up 123% and Transportation Solutions up 24%. Adjusted EPS for the quarter was $3.08 and adjusted EBITDA reached $142 million.
• Full year operating cash flow was $440 million. Capital expenditures were $77 million, and $482 million was deployed for acquisitions.
• Share repurchases totaled $74 million at an average price of $168.72 per share. The company ended the quarter with $391 million in cash and $291 million in debt.
• Building Solutions saw a 9% revenue decline in the fourth quarter and operating margins of 10%.

Q&A

• Brian Brophy, Stifel: “I just wanted to ask about transportation awards and backlog… Anything notable to call out there?” CEO Cutillo: “Nothing in particular. There wasn’t one big giant project or anything… we will continue to see good bid activity through that September time frame as projects are continuing to be let.”
• Brent Thielman, Davidson: “How the pipeline has evolved at CEC since you’ve acquired it?” Cutillo: “The jobs are getting a lot bigger… These aren’t data centers anymore, they’re data campuses.” He noted, “We see margin improvements in a couple of areas… as we’re combining the exterior electric with the site development.”
• Manish Somaiya, Cantor: “You talked about $1 billion of high probability future phase work. Can you give us a sense if that’s tied to existing customers or programs?” Cutillo: “That $1 billion-plus is tied to projects we’re actively working on today… The lion’s share of that are with the big name hyperscalers.”
• Adam Thalhimer, Thompson Davis: “Talk more about the CEC modular expansion?” Cutillo: “The new facility is over 300,000 square feet… we’re looking at does it or does it make sense to have multiple facilities throughout the U.S. that can make these components.”
• Julio Romero, Sidoti: “As these mission-critical projects get bigger, more complex, is the mix of above-ground work versus underground infrastructure changing at all?” Cutillo: “I wouldn’t say we’ve seen any significant shift on above ground versus below ground… the size and scope of these projects… will get bigger, but the amount of stuff that we will touch will continue to grow.”

Sentiment Analysis

• Analysts focused on margin sustainability, growth in Texas and other geographies, backlog quality, and capital allocation. Their tone was generally positive, with curiosity about capital deployment, CEC integration, and the outlook for key markets. The mood remained constructive, seeking details on execution and market evolution.
• Management’s prepared remarks conveyed strong confidence, using phrases such as “We are pleased to discuss these results… but even more excited about the opportunities ahead of us,” and “Our strong backlog, future phase opportunities and conversations with our core customers… contribute to our confidence.” During Q&A, management reiterated optimism and provided clear responses, occasionally referencing being “ahead of schedule” and “very bullish.”
• Compared to the previous quarter, management’s tone remained confident, though with increased emphasis on scale and execution in new geographies, and more discussion of integrating acquisitions and modular construction. Analyst sentiment was consistently positive across both quarters, with ongoing interest in margin expansion and growth drivers.

Quarter-over-Quarter Comparison

• Guidance for 2026 is more ambitious, with a higher revenue range and targets for adjusted EPS and EBITDA reflecting expected 25%+ year-over-year growth in key metrics.
• Management’s tone remains confident, with a greater emphasis on multiyear visibility, geographic expansion (notably Texas and the Pacific Northwest), and the size of upcoming projects.
• Analysts continued to focus on growth drivers, backlog conversion, and capital allocation, with new questions centered on modular construction and scalability.
• Key metrics such as backlog, E-Infrastructure and Transportation Solutions revenue, and margins all showed substantial increases compared to Q3, while Building Solutions remained challenged.
• Strategic priorities shifted towards integrating acquisitions, expanding modular capabilities, and leveraging the CEC platform for growth.

Risks and Concerns

• Management cited ongoing softness in Building Solutions, with revenue anticipated to decline further in 2026.
• There are challenges ramping up new geographies, with management stating that margins in new markets may initially be lower but are expected to improve with scale and integration.
• Execution risk remains around integrating acquisitions and scaling modular construction.
• Some margin pressure may be present in early phases of large projects, as noted in management’s remarks.

Final Takeaway

Management expressed confidence in Sterling’s ability to capture multiyear growth opportunities driven by a record backlog, robust demand in E-Infrastructure and Transportation Solutions, and expanding capabilities through acquisitions and modular construction. The company targets significant revenue and margin growth in 2026, underpinned by visibility into a substantial pipeline of high-probability future work, geographic expansion, and strategic investments in both organic and inorganic growth.

Read the full Earnings Call Transcript

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Management View

• Joseph Cutillo, CEO, highlighted that Sterling achieved “strong revenue growth of over 32% and adjusted diluted EPS growth of over 53%.” He noted, “Full year gross margins reached 23% and adjusted EBITDA margins exceeded 20% for the first time in our history.” Cutillo emphasized that “operating cash generation remained strong at $440 million” and described 2025 as the fifth consecutive year of over 35% adjusted EPS growth.
• Cutillo reported fourth quarter revenue growth of 69%, driven by “123% growth in E-Infrastructure Solutions and 24% growth in our Transportation Solutions.” Organic growth for the quarter was 36%. He stated, “We grew adjusted earnings per share by 78% to $3.08 and adjusted EBITDA by 70% to $142 million.”
• The signed backlog at quarter-end reached $3 billion, a 78% increase from year-end 2024. Including unsigned awards and pipeline, visibility extends to “a pool of work approaching $4.5 billion.”
• In the E-Infrastructure segment, full year revenue grew 59% and adjusted operating income grew 67%. Cutillo said, “Our Rocky Mountain site development operation… grew more than 150% from the prior year period.” The CEC acquisition is “performing very well,” with fourth quarter CEC revenue up 21% over the prior year.
• Transportation Solutions reported full year revenue growth of 17% and adjusted operating profit growth of 66%. Backlog for this segment rose 81% year-over-year to $1.1 billion. Building Solutions faced challenges, with full year revenue down 6% and adjusted operating profit down 23%.
• CFO Nicholas Grindstaff stated, “Our year-end backlog totaled $3 billion, a 78% increase from year-end 2024 or 49%, excluding CEC.” He added, “Cash flow from operating activities for 2025 was a strong $440 million.” Grindstaff reported share repurchases of $74 million for the year and a remaining authorization of $374 million.
• Grindstaff provided 2026 guidance: “Revenue of $3.05 billion to $3.2 billion; diluted EPS of $11.65 to $12.25. Adjusted diluted EPS of $13.45 to $14.05, EBITDA of $587 million to $620 million. Adjusted EBITDA of $626 million to $659 million.”

Outlook

• The company is initiating 2026 guidance with revenue projected between $3.05 billion and $3.2 billion, diluted EPS of $11.65 to $12.25, adjusted diluted EPS of $13.45 to $14.05, EBITDA of $587 million to $620 million, and adjusted EBITDA of $626 million to $659 million.
• Cutillo indicated, “For 2026, we expect to deliver E-Infrastructure revenue growth of 40% or higher. This includes 20% growth or higher in the legacy business.”
• Adjusted operating profit margins for E-Infrastructure are forecast in the 23% to 24% range. Transportation Solutions revenue is expected to grow in the “low to mid-single digits” with continued margin expansion, while Building Solutions revenue is anticipated to “decline in the high single to low double digits.”

Financial Results

• Fourth quarter revenue grew 69%, with E-Infrastructure Solutions up 123% and Transportation Solutions up 24%. Adjusted EPS for the quarter was $3.08 and adjusted EBITDA reached $142 million.
• Full year operating cash flow was $440 million. Capital expenditures were $77 million, and $482 million was deployed for acquisitions.
• Share repurchases totaled $74 million at an average price of $168.72 per share. The company ended the quarter with $391 million in cash and $291 million in debt.
• Building Solutions saw a 9% revenue decline in the fourth quarter and operating margins of 10%.

Q&A

• Brian Brophy, Stifel: “I just wanted to ask about transportation awards and backlog… Anything notable to call out there?” CEO Cutillo: “Nothing in particular. There wasn’t one big giant project or anything… we will continue to see good bid activity through that September time frame as projects are continuing to be let.”
• Brent Thielman, Davidson: “How the pipeline has evolved at CEC since you’ve acquired it?” Cutillo: “The jobs are getting a lot bigger… These aren’t data centers anymore, they’re data campuses.” He noted, “We see margin improvements in a couple of areas… as we’re combining the exterior electric with the site development.”
• Manish Somaiya, Cantor: “You talked about $1 billion of high probability future phase work. Can you give us a sense if that’s tied to existing customers or programs?” Cutillo: “That $1 billion-plus is tied to projects we’re actively working on today… The lion’s share of that are with the big name hyperscalers.”
• Adam Thalhimer, Thompson Davis: “Talk more about the CEC modular expansion?” Cutillo: “The new facility is over 300,000 square feet… we’re looking at does it or does it make sense to have multiple facilities throughout the U.S. that can make these components.”
• Julio Romero, Sidoti: “As these mission-critical projects get bigger, more complex, is the mix of above-ground work versus underground infrastructure changing at all?” Cutillo: “I wouldn’t say we’ve seen any significant shift on above ground versus below ground… the size and scope of these projects… will get bigger, but the amount of stuff that we will touch will continue to grow.”

Sentiment Analysis

• Analysts focused on margin sustainability, growth in Texas and other geographies, backlog quality, and capital allocation. Their tone was generally positive, with curiosity about capital deployment, CEC integration, and the outlook for key markets. The mood remained constructive, seeking details on execution and market evolution.
• Management’s prepared remarks conveyed strong confidence, using phrases such as “We are pleased to discuss these results… but even more excited about the opportunities ahead of us,” and “Our strong backlog, future phase opportunities and conversations with our core customers… contribute to our confidence.” During Q&A, management reiterated optimism and provided clear responses, occasionally referencing being “ahead of schedule” and “very bullish.”
• Compared to the previous quarter, management’s tone remained confident, though with increased emphasis on scale and execution in new geographies, and more discussion of integrating acquisitions and modular construction. Analyst sentiment was consistently positive across both quarters, with ongoing interest in margin expansion and growth drivers.

Quarter-over-Quarter Comparison

• Guidance for 2026 is more ambitious, with a higher revenue range and targets for adjusted EPS and EBITDA reflecting expected 25%+ year-over-year growth in key metrics.
• Management’s tone remains confident, with a greater emphasis on multiyear visibility, geographic expansion (notably Texas and the Pacific Northwest), and the size of upcoming projects.
• Analysts continued to focus on growth drivers, backlog conversion, and capital allocation, with new questions centered on modular construction and scalability.
• Key metrics such as backlog, E-Infrastructure and Transportation Solutions revenue, and margins all showed substantial increases compared to Q3, while Building Solutions remained challenged.
• Strategic priorities shifted towards integrating acquisitions, expanding modular capabilities, and leveraging the CEC platform for growth.

Risks and Concerns

• Management cited ongoing softness in Building Solutions, with revenue anticipated to decline further in 2026.
• There are challenges ramping up new geographies, with management stating that margins in new markets may initially be lower but are expected to improve with scale and integration.
• Execution risk remains around integrating acquisitions and scaling modular construction.
• Some margin pressure may be present in early phases of large projects, as noted in management’s remarks.

Final Takeaway

Management expressed confidence in Sterling’s ability to capture multiyear growth opportunities driven by a record backlog, robust demand in E-Infrastructure and Transportation Solutions, and expanding capabilities through acquisitions and modular construction. The company targets significant revenue and margin growth in 2026, underpinned by visibility into a substantial pipeline of high-probability future work, geographic expansion, and strategic investments in both organic and inorganic growth.

Read the full Earnings Call Transcript

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Shares were +0.73% pre-market to $384.00.

The Texas-based e-infrastructure, transportation, and building solutions company may buy back outstanding common stock over the next 24 months under the new program.

The buybacks may be made from time to time through transactions in the open market, in privately negotiated transactions, or by other means.

The timing and amount of the repurchases will be at the discretion of management.

The new buyback program replaces the previous one, which was set to expire on December 5. There was $81M of remaining capacity under the previous program.

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Management View

• CEO Joseph Cutillo stated that “Sterling delivered another outstanding quarter as we achieved strong revenue growth, expanded margins, grew backlog and generated excellent cash flow.” He reported that revenue increased 32% year-over-year, led by 58% growth in the E-Infrastructure Solutions segment, including 42% organic growth. The Transportation segment grew 10%.
• Cutillo highlighted that “adjusted earnings per share” grew 58% to $3.48 and “delivered adjusted EBITDA of $156 million, an increase of 47%.” Gross profit margins expanded 280 basis points to 24.7%. Operating cash flow was $84 million. Backlog reached $2.6 billion, up 64% year-over-year, or 34% excluding the CEC acquisition. E-Infrastructure Solutions backlog grew 97%, driven by data center demand, with 45% growth excluding CEC. The total pool of opportunities, including signed and unsigned awards, exceeds $4 billion.
• Cutillo noted that the CEC acquisition contributed $41.4 million in revenue in September and provided adjusted operating margins “in line with our expectations.” He said, “We see tremendous opportunities ahead to leverage our expanded service portfolio.”
• CFO Nicholas Grindstaff stated, “Our third quarter backlog totaled $2.58 billion, a 64% increase from the prior year second quarter. CEC contributed $475 million to backlog.” He noted combined backlog of $3.44 billion, up 88%. Year-to-date operating cash flow was $253.9 million. The company ended the quarter with $306.4 million in cash and $294.6 million in debt. “Our $150 million revolving credit facility remained undrawn during the period.”
• Grindstaff raised 2025 guidance to revenue of $2.375 billion to $2.390 billion, diluted EPS of $8.73 to $8.87, adjusted diluted EPS of $10.35 to $10.52, EBITDA of $448 million to $453 million, and adjusted EBITDA of $486 million to $491 million.

Outlook

• Cutillo said, “We remain very bullish on the multiyear opportunity in each of our markets. Our strong backlog, future phase opportunities and discussions with our customers contribute to our confidence.”
• For E-Infrastructure site development, management anticipates “current strength in data center demand will continue for the foreseeable future” and expects “E-Infrastructure revenue growth of 30% or higher on an organic basis and approaching 50%, including CEC.”
• Adjusted operating profit margins for E-Infrastructure are projected to “approximate 25% for the full year including CEC, as compared to 23.7% in 2024.”
• Transportation Solutions is forecast to achieve “revenue growth in the low teens on an adjusted basis in 2025,” with adjusted operating profit margins in the “13.5% to 14% range compared to 9.6% in 2024.”
• Building Solutions is expected to see “a mid- to high single-digit decline” in revenue, with “adjusted operating margins in the low double digits as compared to 14.8% in 2024.”
• The company continues to seek “small to midsized acquisitions that are the right strategic fit to enhance our service offerings and geographic footprint.”

Financial Results

• Revenue grew 32% year-over-year in Q3 2025, adjusted earnings per share rose 58% to $3.48, and adjusted EBITDA increased 47% to $156 million.
• E-Infrastructure Solutions revenue rose 58%, with data center revenue up more than 125% year-over-year. Adjusted segment operating income increased 57% (48% excluding CEC), and legacy E-Infrastructure operating margins reached 28.4%.
• Transportation Solutions revenue increased 10%, with adjusted operating profit up 40%. Backlog in this segment was $733 million, up 23% year-over-year.
• Building Solutions revenue declined 1%, and adjusted operating income decreased 10%. Legacy residential business revenue dropped 17%.
• Year-to-date operating cash flow was $253.9 million, with $84 million generated in Q3 2025. The balance sheet remains strong with $306.4 million in cash and $294.6 million in debt.

Q&A

• Brent Thielman, D.A. Davidson: Asked about CEC’s momentum and how large data center projects will convert over 12 months. CEO Cutillo: “They had very good and strong bookings and wins in the quarter…we’re really excited about the reception that we’re getting from our end customers.”
• Thielman asked about margin expansion. CEO Cutillo: “On just the pure site development, the size of these projects continue to get bigger and bigger…We’ve seen margins improve 40% just by combining that with the site development.”
• Thielman inquired about project sizes. CEO Cutillo: “We haven’t redefined anything, just the project size of these data centers…e-commerce distribution is up 150% in backlog growth. Those jobs are about 2x to 2.5x the size of historical ones.”
• Julio Romero, Sidoti: Asked about backlog and pipeline mix. CEO Cutillo: “$3 billion of the $4 billion is in E-Infrastructure. The highest percentage…is going to be data center, which would probably be 75% or 80%.”
• Romero asked about Transportation Solutions margin drivers. CEO Cutillo: “We have best-in-class margins, and they continue to get better. It’s really around project selection and focus.”
• Adam Thalhimer, Thompson Davis: Asked about prioritizing megaproject bids. CEO Cutillo: “Our biggest limitation to capacity is around project management…if the pricing is not right, the margins are not right or the complexity of the contracts don’t make sense for us, we’re okay to pass.”
• Thalhimer asked about asset use in Texas. CEO Cutillo: “The smaller assets that we have there are very capable of doing some of the utility and underground work.”
• Noah Levitz, William Blair: Asked about government shutdown impact. CEO Cutillo: “No impacts from government shutdown. The funding that’s on these jobs has already been allocated.”
• Levitz asked about data center growth. CEO Cutillo: “It’s a combination. Some of that is new projects.”
• Alexander Rygiel, Texas Capital: Asked about permitting delays. CEO Cutillo: “The permitting process certainly is longer today than it was pre-COVID…what used to take 6 weeks for a permit now takes 3 months.”
• Rygiel asked about Building Solutions outlook. CEO Cutillo: “We have not seen anything that would tell us we’re going to see an uptick here anytime soon.”

Sentiment Analysis

• Analyst sentiment was generally positive, with focus on understanding the sustainability of strong backlog and margin expansion, as well as details on new project conversion and growth drivers.
• Management maintained a confident tone in both prepared remarks and responses, frequently citing strong growth, backlog visibility, and multi-year opportunities. CEO Cutillo expressed excitement with phrases like “we’re really excited about the reception” and “we feel very good on continued margin enhancement.”
• Compared to the previous quarter, the confidence level remained strong, with even more bullishness on E-Infrastructure prospects following the CEC acquisition and rising data center demand.

Quarter-over-Quarter Comparison

• Guidance for 2025 was raised, with revenue now targeted at $2.375 billion to $2.390 billion (previously $2.1 billion to $2.15 billion), and adjusted diluted EPS increased to $10.35 to $10.52 (from $9.21 to $9.47).
• E-Infrastructure organic revenue growth expectation was significantly raised to 30% or higher (previously 18% to 20%), and backlog visibility expanded beyond $4 billion from $2 billion.
• Management’s tone remains confident, with more emphasis on the breadth of opportunities and expanded service portfolio post-CEC acquisition.
• Analysts’ focus shifted more toward the integration and margin potential of CEC, as well as the increasing size and complexity of projects.
• Transportation Solutions margin guidance increased (now 13.5% to 14% vs. “low teens” previously), while Building Solutions guidance continues to anticipate near-term softness.

Risks and Concerns

• CEO Cutillo highlighted permitting delays as a significant challenge: “What used to take 6 weeks for a permit now takes 3 months.”
• Ongoing softness in the Building Solutions segment, with no near-term improvement expected: “We have not seen anything that would tell us we’re going to see an uptick here anytime soon.”
• Management noted capacity limitations related to project management for large new projects, and the importance of passing on projects with unfavorable pricing or contract complexity.

Final Takeaway

Sterling Infrastructure delivered strong revenue and margin growth in Q3 2025, driven by continued expansion in E-Infrastructure Solutions and a record backlog now exceeding $4 billion in pipeline opportunities. The company increased its full-year 2025 guidance for both top and bottom line results, citing strong visibility and multi-year tailwinds in core markets, particularly data centers and transportation infrastructure. While Building Solutions remains soft, management remains confident in the company’s ability to capitalize on growth opportunities across its diversified portfolio, supported by a robust balance sheet and ongoing strategic acquisitions.

Read the full Earnings Call Transcript

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Management View

• CEO Joseph A. Cutillo expressed enthusiasm over the company’s performance, highlighting continued bottom-line growth “at a rate roughly double top line growth.” Revenue advanced 21% for the quarter, with E-Infrastructure Solutions growing over 29% and Transportation up 24%. Adjusted earnings per share rose 41% to $2.69. Cutillo stated, “Our gross profit margin expanded 400 basis points from the prior year to reach 23.3%. Additionally, operating cash flow generation in the quarter was again very strong at $85 million.”
• Backlog reached $2 billion, up 24% year-over-year, with E-Infrastructure Solutions backlog increasing 44% to $1.2 billion. The CEO underscored “multiyear visibility” and noted, “we have visibility into a pool of E-Infrastructure revenue approaching $2 billion.”
• Cutillo detailed progress on the planned acquisition of CEC Facilities Group, stating it will “add mission-critical electrical and mechanical services to the Sterling portfolio” and is expected to “allow us to capture even more value across the full life cycle of a facility, accelerate project timelines, create stickier customer relationships and expand our geographic footprint.”
• In E-Infrastructure, data center revenue more than doubled year-over-year, with segment operating income up 57% and margins at 28%. Transportation Solutions operating profit grew 78%, while Building Solutions faced a 1% revenue decline and 28% drop in operating income due to housing market softness.
• CFO Nicholas M. Grindstaff remarked, “We ended the quarter with a very strong liquidity position, consisting of $699.4 million of cash and debt of $298.2 million for a cash net of debt balance of $401.2 million.”

Outlook

• Management raised full-year 2025 guidance to revenue of $2.1 billion to $2.15 billion, net income of $243 million to $252 million, diluted EPS of $7.87 to $8.13, adjusted diluted EPS of $9.21 to $9.47, EBITDA of $406 million to $421 million, and adjusted EBITDA of $438 million to $453 million. Grindstaff stated, “This represents an 8% increase at the midpoint of our previous guidance range” for adjusted EPS and a 6% increase for adjusted EBITDA.
• The company expects E-Infrastructure revenue growth of 18% to 20% and adjusted operating profit margins in the mid- to high-20% range for 2025. Transportation Solutions revenue is forecast to grow in the low to mid-teens, with adjusted operating profit margins in the low teens. Building Solutions revenue is anticipated to decline mid- to high-single digits, with adjusted operating margins in the low double digits.

Financial Results

• Adjusted EPS came in at $2.69 and adjusted EBITDA at $126 million. Gross profit margin reached 23.3%. Operating cash flow was $85 million for the quarter. Cash flow from operating activities for the first six months of 2025 was $170.3 million. The company did not repurchase shares during Q2, maintaining $85.6 million available under its buyback authorization.
• Book-to-burn ratios for Q2 2025 were 0.77x for backlog and 1.03x for combined backlog, with year-to-date ratios at 1.36x and 1.47x, respectively.

Q&A

• Michael Louie D DiPalma, William Blair: Asked about the data center market and expansion into Texas and the Northwest. Cutillo responded, “We think we’re positioned extremely well for a large percentage of the data center capital that’s coming out…We are following those customers into some new markets.”
• DiPalma also inquired about the timeline for expansion. Cutillo replied, “In Texas, I’d be disappointed if we didn’t have some wins for the end of this year with the bid activity that we’re seeing.”
• Brent Edward Thielman, D.A. Davidson: Questioned margin sustainability in E-Infrastructure. Cutillo stated, “We believe very strongly with the backlog we have, the future phases we have and the projects we have on the books, we will continue to expand margins.”
• Thielman also asked about Building Solutions. Cutillo indicated, “That market certainly is softer than we would like. The second quarter was slightly softer than what we saw than the first.”
• Julio Alberto Romero, Sidoti: Queried about complexity in E-Infrastructure projects. Cutillo responded, “The more complex, the more risk they have, which helps us, right? Our certainty is a critical thing.”
• Romero also asked about competition. Cutillo explained, “Our biggest competitor, candidly, is local content…As we look forward, with CEC and continue to add electrical and mechanical capabilities…we really believe we could take months out of the development of this project.”
• Adam Robert Thalhimer, Thompson, Davis: Asked about managing mega projects. Cutillo said, “We certainly are getting — we continue to get better at managing that.”

Sentiment Analysis

• Analysts were optimistic regarding data center growth and expansion plans, yet raised pointed questions regarding margin sustainability and the softer Building Solutions market. Management conveyed high confidence in prepared remarks, with Cutillo frequently using phrases like “we are very confident” and “we will continue to expand margins,” but adopted a more cautious tone when discussing housing softness.
• Compared to the previous quarter, management’s sentiment has become more assertive, especially regarding E-Infrastructure and margin outlook, while analysts’ tone remained constructive but sought clarity on execution and market headwinds.

Quarter-over-Quarter Comparison

• The company raised its guidance for revenue and adjusted EPS from the previous quarter. In Q1, guidance for adjusted diluted EPS was $8.40 to $8.90; it now stands at $9.21 to $9.47. Revenue guidance has increased slightly at the midpoint. Management’s confidence regarding E-Infrastructure and Transportation margins is higher, while commentary on Building Solutions remains cautious. Analysts’ focus shifted further toward data center momentum and competitive positioning, with continued attention to housing softness.

Risks and Concerns

• Management cited housing affordability as a headwind for Building Solutions, with revenue from the legacy residential business down 11%. There was also mention of the seasonally slower awards in Transportation Solutions and the impact from winding down the Texas low-bid heavy highway operation. The CEC Facilities Group acquisition is pending regulatory approvals, with timing uncertain due to state licensing and permitting processes. Cutillo noted, “We don’t see any major hangups. It’s just really getting…through the process and the time of state and local agencies at this point.”

Final Takeaway

Sterling Infrastructure delivered strong Q2 results supported by robust growth in E-Infrastructure and Transportation segments, driving a rise in full-year guidance. The company emphasized expanding opportunities in data centers and e-commerce, highlighted a substantial and growing backlog, and reaffirmed its strategic focus on high-margin, mission-critical projects. While housing market softness persists, management projects continued margin expansion, geographic growth, and is advancing the acquisition of CEC Facilities Group to further strengthen its end-to-end service capabilities.

Read the full Earnings Call Transcript

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