MYR Group Inc. 10-Q Summary: Quarter Ended June 30, 2026
Business Context and Reporting Period
MYR Group Inc. is a holding company for specialty electrical construction service providers operating in the United States and Canada. The company reports through two segments: Transmission and Distribution (T&D) and Commercial and Industrial (C&I). This filing covers the quarterly period ended June 30, 2026, and the six months ended on that date. As of July 24, 2026, there were 15,569,250 shares of common stock outstanding.
Key Financial Metrics
| Metric (in thousands) | Three Months Ended June 30, 2026 | Six Months Ended June 30, 2026 |
|---|---|---|
| Contract Revenues | $1,081,727 | $2,082,107 |
| Gross Profit | $142,673 | $277,113 |
| Gross Margin | 13.2% | 13.3% |
| Income from Operations | $67,945 | $132,667 |
| Net Income | $49,851 | $96,651 |
| Diluted EPS | $3.17 | $6.15 |
| Operating Cash Flow (6mo) | $88,074 | |
| EBITDA (6mo) | $166,516 | |
| Total Debt (Outstanding) | $9,372 | |
| Cash and Equivalents | $137,872 | |
| Working Capital | $306,949 |
Material Changes vs. Prior Period
- Revenue Growth: Consolidated revenues increased 20.1% year-over-year for both the three and six-month periods, driven primarily by a 41.5% increase in C&I segment revenue and a 3.5% increase in T&D revenue.
- Margin Expansion: Gross margin improved to 13.2% (Q2) and 13.3% (YTD) compared to 11.5% and 11.6% in the prior year periods. This was largely due to favorable changes in estimates on certain projects, including better-than-anticipated productivity and favorable job close-outs.
- Profitability: Net income for the six months ended June 30, 2026, nearly doubled to $96.7 million from $49.8 million in the prior year period.
- Debt Reduction: Total debt decreased significantly from $59.0 million at December 31, 2025, to $9.4 million at June 30, 2026, as the company repaid borrowings under its revolving credit facility.
- Backlog: Total backlog increased to $3.16 billion as of June 30, 2026, up from $2.64 billion a year ago.
Outlook, Risks, and Subsequent Events
- Subsequent Acquisition: On July 1, 2026, the company acquired Valley Holdings I, Inc. for approximately $328.0 million. The transaction was funded by $93.0 million in cash on hand and $235.0 million in new borrowings under the company's credit facility.
- Liquidity: Following the acquisition, the company maintains approximately $225.5 million in borrowing availability under its $490 million revolving credit facility. Management believes this, combined with operating cash flows, is sufficient for future needs.
- Outlook: Management expects continued healthy bidding activity in T&D due to infrastructure investment and storm restoration needs. C&I opportunities remain strong in data centers, manufacturing, and clean energy sectors.
- Risks: Key risks include project performance issues, labor availability, inflation in material and equipment costs, and the potential for insurance coverage limits to be exceeded during natural disasters. The company also faces risks related to multi-employer pension plans and foreign currency fluctuations in Canadian operations.
Investor Verification Checklist
- Acquisition Integration: Verify the preliminary purchase price allocation and integration progress of the Valley acquisition completed July 1, 2026.
- Estimate Changes: Review the specific projects driving the 0.7% to 0.9% increase in gross margin due to changes in estimates to assess sustainability.
- Debt Covenants: Confirm continued compliance with the Net Leverage Ratio (max 3.0) and Interest Coverage Ratio (min 3.0) covenants following the new $235 million borrowing.
- Customer Concentration: Note that one T&D customer represented 11.9% of consolidated revenues for the six months ended June 30, 2026.
- Working Capital Trends: Monitor the $51.8 million unfavorable year-over-year change in working capital accounts related to construction activities.