Quarterly Financial Outperformance
Revenue grew 92% year-over-year in 1Q26 and adjusted diluted EPS grew 120%. Adjusted EBITDA more than doubled and adjusted EBITDA margin expanded over 150 basis points to a first-quarter record of 20%.
Sterling Infrastructure
· STRL
May 4th, 2026
Summary
- Earnings Call Date:
- 2026-05-04
- Change Since:
- +63.79%
- Next Earnings Date:
- 2026-08-10
Earnings Call Sentiment
PositiveThe call was strongly positive overall: the company reported exceptional top-line and earnings growth, record margins for 1Q, substantial backlog expansion, a major semiconductor win, accelerated assimilation of the CEC acquisition, and materially raised full-year guidance. The primary negatives were sector-specific headwinds (residential), expected moderation in Transportation revenue, capacity constraints (electricians and PMs), and near-term timing/seasonality risks tied to project starts. On balance, the significant financial outperformance, backlog visibility, and upgraded guidance outweigh the challenges, though execution of capacity expansion and CEC margin improvement are key near-term execution risks.
Company Guidance
Sterling raised its 2026 guidance to revenue $3.7–3.8B (midpoint +20% vs prior guide; >50% vs 2025), diluted EPS $16.50–17.15, adjusted diluted EPS $18.40–19.05 (midpoint +36% vs prior guide; +72% vs 2025), EBITDA $800–831M and adjusted EBITDA $843–873M, while maintaining CapEx guidance of $100–110M; the midpoints imply roughly 51% revenue growth, ~72% adjusted EPS growth and ~70% adjusted EBITDA growth. Key Q1 metrics supporting the raise: revenue +92%, adjusted diluted EPS +120%, adjusted EBITDA more than doubled with margins up >150 bps to a 1Q record 20%, signed backlog $3.8B (+78% YoY), combined backlog $5.2B (+131% YoY), future-phase opportunities >$1.3B and a total pool of work ≈$6.5B, book-to-burn 2.1x (backlog) and 3.5x (combined). Q1 cash flow from operations was $166M, Q1 CapEx $20M, cash $512M, debt $287M (net cash $224M), $150M revolver undrawn, $12M of buybacks in Q1 at an average $305.14/share and $362M remaining repurchase authority.
Backlog Expansion and Strong Visibility
Signed backlog totaled $3.8 billion (up 78% YoY) and combined backlog reached $5.2 billion (up 131% YoY). Visibility into high-probability future phase opportunities exceeds $1.3 billion and total pool of work approaches $6.5 billion, roughly $2.0 billion growth since year-end.
E-Infrastructure / Data Center Surge
E-Infrastructure revenue grew 174% in 1Q26 (organic >100%) with adjusted operating income up 177% and margin expansion despite the dilutive impact of the CEC acquisition. Mission-critical work (data centers, large manufacturing, semiconductor) represented over 90% of E-Infrastructure signed backlog.
CEC Acquisition Contribution and Rapid Assimilation
CEC delivered 78% revenue growth versus prior-year 1Q and contributed meaningfully to backlog (CEC-related combined backlog increased approximately $1.2 billion since year-end 2025). Integration/assimilation accelerated earlier than expected with joint execution beginning in 1Q.
Major Strategic Win — Semiconductor Campus
Awarded the first phase of a multi-phase semiconductor fabrication campus exceeding $500 million (to be executed under a JV), expected completion in late 2027/early 2028, with multi-decade opportunity for additional scopes through 2027 and beyond.
Raised Full-Year Guidance and Material Upside
Updated 2026 guidance: revenue $3.7B–$3.8B (midpoint ~20% above prior guidance; >50% growth vs. 2025), adjusted diluted EPS $18.40–$19.05 (midpoint +36% vs prior guidance; ~72% YoY growth), adjusted EBITDA $843M–$873M. Midpoint implies ~51% revenue growth, ~72% adjusted EPS growth, ~70% adjusted EBITDA growth vs. 2025.
Strong Cash Flow and Balance Sheet Position
Operating cash flow for the quarter was $166 million. Ended the quarter with $512 million cash, $287 million debt (net cash $224 million), $150 million revolver undrawn, and remaining share repurchase authorization of $362 million after $12 million repurchases in 1Q.
Margin Expansion Roadmap
Management expects E-Infrastructure adjusted operating profit margins in the mid-20% range for 2026 and anticipates 300–500 basis points of margin improvement at CEC within 12–18 months as lower-margin businesses are exited and vertical integration/productivity gains are realized.
Operator
Good morning, ladies and gentlemen, and welcome to the Sterling Infrastructure, Inc. First Quarter Webcast and Conference Call. At this time, all lines are in listen-only mode. Following the presentation, we will conduct a question-and-answer session. If at any time during this call you require immediate assistance, please press 0 for the operator. As a reminder, this call is being recorded on Tuesday, 05/05/2026. I would now like to turn the conference call over to Noelle Christine Dilts, Vice President of Investor Relations and Corporate Strategy. Please go ahead.
Noelle Christine Dilts
Good morning to everyone joining us, and welcome to Sterling Infrastructure, Inc.’s 2026 First Quarter Earnings Conference Call and Webcast. I am pleased to be here today to discuss our results with Joseph A. Cutillo, Sterling Infrastructure, Inc.’s chief executive officer, and Nicholas M. Grindstaff, Sterling Infrastructure, Inc.’s chief financial officer. Joseph A. Cutillo will open the call with an overview of the company and its performance in the quarter. Nicholas M. Grindstaff will then discuss our financial results and 2026 guidance, after which Joseph A.
Cutillo will provide some additional commentary on our markets and outlook. We will then open the call up for questions. As a reminder, there are accompanying slides on the Investor Relations section of our website. These slides include details on our full-year 2026 financial guidance. Before turning the call over to Joseph A. Cutillo, I will read the Safe Harbor statement. The discussion today may include forward-looking statements. Actual results could...
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