MYR Group Inc. (MYRG) - Q1 2026 10-Q Summary
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 March 31, 2026.
Key Financial Metrics
| Metric | Q1 2026 | Q1 2025 |
|---|---|---|
| Contract Revenues | $1,000.4 million | $833.6 million |
| Gross Profit | $134.4 million | $96.9 million |
| Gross Margin | 13.4% | 11.6% |
| Operating Income | $64.7 million | $34.3 million |
| Net Income | $46.8 million | $23.3 million |
| Diluted EPS | $2.99 | $1.45 |
| EBITDA (Non-GAAP) | $81.5 million | $50.2 million |
| Cash from Operations | $84.7 million | $83.3 million |
| Cash and Equivalents | $163.2 million | $10.9 million |
| Total Debt | $9.4 million | $59.0 million |
| Working Capital | $257.6 million | N/A |
Material Changes vs. Prior Period
- Revenue Growth: Consolidated revenue increased 20.0% year-over-year, driven by a $79.2 million increase in T&D revenue and an $87.6 million increase in C&I revenue.
- Margin Expansion: Gross margin improved to 13.4% from 11.6%. This was primarily due to a favorable mix of projects nearing completion and net positive changes in project estimates (+0.8% impact), compared to a negative estimate impact (-1.1%) in the prior year.
- Debt Reduction: Total debt decreased significantly from $59.0 million to $9.4 million. The company repaid all borrowings under its $490 million revolving credit facility, which had a balance of $47.4 million at year-end 2025.
- Segment Performance:
- T&D: Operating income rose to $52.2 million (9.7% margin) from $36.2 million (7.8% margin).
- C&I: Operating income rose to $37.2 million (8.1% margin) from $17.4 million (4.7% margin).
Outlook, Guidance, and Risks
- Backlog: Total backlog stood at $2.84 billion as of March 31, 2026, an increase of $19.2 million from the prior quarter. C&I backlog increased by $56.7 million, while T&D backlog decreased by $37.5 million.
- Outlook: Management expects continued healthy bidding activity in T&D due to infrastructure needs and storm restoration. C&I opportunities remain strong in data centers, manufacturing, and clean energy. The company anticipates that large multi-year projects awarded in 2026 will not significantly impact 2026 results due to construction timing.
- Liquidity: The company maintains $460.5 million in borrowing availability under its credit facility and $163.2 million in cash. No dividends are currently expected.
- Risks: Key risks include project performance issues, labor availability, inflation in material costs, insurance limits regarding wildfires/natural disasters, and the potential for backlog not to be realized. The company is subject to financial covenants (Net Leverage Ratio max 3.0; Interest Coverage Ratio min 3.0) and was in compliance as of March 31, 2026.
Investor Verification Checklist
- Verify the sustainability of the 1.8% gross margin improvement, specifically the reliance on "changes in estimates" which added 0.8% to the margin.
- Confirm the timing of revenue recognition for the $2.53 billion in remaining performance obligations, noting that 85% is expected within 12 months.
- Monitor the $2.70 billion in outstanding performance and payment bonds and the associated $899 million remaining cost to complete.
- Review the impact of the expired $75 million share repurchase program (expired Feb 4, 2026) and future capital allocation plans.
- Assess the exposure to Canadian operations ($158.1 million in identifiable assets) regarding foreign currency fluctuations.