Centuri Holdings, Inc. (CTRI) - Q1 2026 Filing Summary
Business Context and Reporting Period
Company: Centuri Holdings, Inc.
Filing Type: Form 10-Q (Unaudited)
Reporting Period: Fiscal quarter ended March 29, 2026 (13 weeks)
Business Overview: A North American utility and energy infrastructure services company providing maintenance, replacement, and installation services for electric and natural gas distribution networks. The company operates through four segments: U.S. Gas, Canadian Operations, Union Electric, and Non-Union Electric.
Key Corporate Event: The company completed its separation from former parent Southwest Gas Holdings, Inc. in September 2025. In November 2025, it acquired Connect Atlantic Utility Services Corporation ("Connect"), which is included in the Canadian Operations segment.
Key Financial Metrics
| Metric (in thousands, except per share) | Q1 2026 | Q1 2025 |
|---|---|---|
| Total Revenue, Net | $723,174 | $550,081 |
| Gross Profit | $35,758 | $20,328 |
| Gross Margin | 4.9% | 3.7% |
| Operating Loss | $(4,742) | $(12,713) |
| Net Loss | $(9,485) | $(17,924) |
| Net Loss Attributable to Common Stock | $(9,527) | $(17,937) |
| Diluted Loss Per Share | $(0.09) | $(0.20) |
| Adjusted EBITDA | $32,570 | $24,228 |
| Adjusted EBITDA Margin | 4.5% | 4.4% |
| Cash and Cash Equivalents (End of Period) | $60,337 | $15,255 |
| Total Debt (Carrying Amount) | $738,969 | $748,418 |
| Unused Revolving Credit Capacity | $303.9 million | N/A |
Material Changes vs. Prior Period
- Revenue Growth: Total revenue increased 31.5% year-over-year to $723.2 million, driven by higher volumes across all segments and the inclusion of Connect in Canadian Operations.
- Profitability Improvement: Net loss narrowed by 47.1% to $9.5 million. Operating loss improved by $8.0 million due to higher gross profit and lower interest expense.
- Segment Performance:
- U.S. Gas: Revenue up 43.9% to a record Q1; gross margin improved from -7.5% to -2.2%.
- Canadian Operations: Revenue up 50.9% to $60.0 million, largely due to the Connect acquisition ($23.2M revenue contribution).
- Union Electric: Revenue up 16.3%; gross margin improved to 8.9% from 6.7%.
- Non-Union Electric: Revenue up 27.3%; gross margin declined to 8.5% from 11.9% due to lower storm restoration profitability and ramp-up costs on a new MSA.
- Interest Expense: Decreased 30.4% to $12.4 million due to lower average debt balances and reduced interest rates on variable-rate borrowings.
- Cash Flow: Operating cash flow turned negative at $(35.0) million compared to positive $16.7 million in the prior year, primarily due to increased accounts receivable/contract assets and higher payments of year-end payables.
Guidance, Outlook, and Risks
- Outlook: Management expects margins on a new master service agreement (MSA) in the Non-Union Electric segment to continue improving throughout the fiscal year. The company believes capital resources are sufficient to meet obligations for the next 12 months.
- Backlog: As of March 29, 2026, backlog was approximately $6.5 billion, with 85% related to MSAs.
- Debt Facilities:
- Refinanced term loan facility to $800 million (maturing 2032) and increased revolving credit facility to $450 million (maturing 2030) in July 2025.
- Amended Accounts Receivable Securitization Facility in May 2026, increasing capacity from $125.0 million to $165.0 million.
- Currently in compliance with all financial covenants (leverage ratio < 4.50x; interest coverage > 2.50x).
- Risks and Contingencies:
- Legal Proceedings: Ongoing dispute with the City of Chicago regarding contract claims. The company has not accrued reserves but notes potential for significant loss if claims are not successful.
- Market Risks: Exposure to rising fuel, labor, and material costs; inflation; and variable interest rates.
- Customer Concentration: One Non-Union Electric customer accounted for 13% of revenue and 23% of combined receivables/contract assets in Q1 2026.
Key Investor Verification Points
- Working Capital Trends: Verify the sustainability of the $31.1 million increase in accounts receivable and contract assets, which drove the negative operating cash flow despite revenue growth.
- U.S. Gas Margin Recovery: Monitor the U.S. Gas segment's ability to return to positive gross margins, as it remains in a loss position (-2.2%) despite record revenue.
- Connect Integration: Assess the long-term margin profile of the newly acquired Connect Atlantic Utility Services relative to legacy Canadian operations.
- Chicago Litigation: Track developments in the City of Chicago contract claim, as an adverse outcome could result in unquantified losses.
- Debt Servicing: Confirm continued compliance with leverage covenants as the company manages a $739 million debt load with variable-rate exposure.