Cardinal Infrastructure Group Inc. — Third Quarter 2026 Earnings Summary

Financial Performance:

• Revenue for the three months ended September 30, 2026, increased 65.1% year-over-year to $201.9 million from $122.3 million; year-to-date revenue increased 92.2% to $596.4 million from $310.2 million.
• Organic revenue growth was $23.9 million in Q3 2026 and $144.1 million year-to-date, driven by higher residential project volumes and geographic expansion.
• Cost of revenues increased 85.8% to $191.1 million in Q3 2026 and 100.9% to $527.5 million year-to-date, primarily due to organic/acquisition growth and higher fuel and transportation costs.
• Gross margin decreased 10.5 percentage points to 5.4% in Q3 2026 (from 15.9%) and 3.9 percentage points to 11.5% year-to-date (from 15.4%).
• Project estimate revisions reduced gross profit by $13.2 million in Q3 2026.
• General and administrative expenses increased 187.0% to $14.7 million in Q3 2026 and 227.9% to $34.1 million year-to-date, driven by stock-based compensation, acquisition-related costs, and infrastructure investments.
• Net loss was $11.0 million in Q3 2026 compared to net income of $10.1 million in the prior year; year-to-date net income was $11.7 million compared to $26.2 million.
• Adjusted EBITDA was $8.5 million (4.2% margin) in Q3 2026 compared to $21.4 million (17.5% margin) in the prior year; year-to-date Adjusted EBITDA was $63.4 million (10.6% margin) compared to $55.7 million (17.9% margin).
• Net cash provided by operating activities was $30.3 million for the nine months ended September 30, 2026, compared to $26.3 million in the prior period.
• Capital expenditures were $41.6 million for the nine months ended September 30, 2026, compared to $31.7 million in the prior period.
• As of September 30, 2026, the company held $335.0 million in cash and cash equivalents and $198.5 million in total debt, resulting in $136.5 million of net cash.
• The company has $100.0 million available under its revolving credit facility and $250.0 million available under the delayed draw term loan.

Guidance and Future Outlook:

• The company withdrew its previously issued full-year 2026 revenue and Adjusted EBITDA margin guidance.
• Management expects fourth-quarter Adjusted EBITDA to improve from the third quarter but is not providing specific revenue or margin outlooks.
• Immediate priority is strengthening execution, building operating discipline, and supporting infrastructure to translate growth into consistent profitability.

Business Segments and Product Lines:

• Revenue growth included $55.7 million attributable to acquired businesses in Q3 2026 and $142.0 million year-to-date.
• Backlog totaled $815.5 million as of September 30, 2026, a 26.2% increase from the prior year, primarily reflecting the ALGC acquisition.
• Benji Wood, Chief Operating Officer, will take a more direct role in establishing consistent operating standards focusing on project selection, estimating, project reviews, and accountability.
• The company engaged an independent third-party advisor to support implementation of operational changes and assess estimating and project review processes.

Market and Competitive Landscape:

• Gross margin was negatively impacted by residential pricing pressure and lower initial bid margins on certain commercial and industrial projects.
• Higher fuel and transportation costs contributed to margin compression.
• The company operates as one of the Southeast's fastest-growing full-service infrastructure service providers with a self-performing model.

Risks and Challenges:

• Project estimate revisions significantly impacted profitability, accounting for approximately 6.5 percentage points of the Adjusted EBITDA margin decline in Q3 2026.
• Risks include the ability to successfully implement operational improvement initiatives, volatility in fuel, transportation, and labor costs, and risks associated with fixed-price contracts.
• Challenges include difficulty in sustaining rapid revenue growth, which places demands on administrative, operational, and financial resources.
• The company faces concentration risk in the Southeastern United States.

Management Commentary and Tone:

• CEO Jeremy Spivey stated that the third-quarter results were "not acceptable" and highlighted the need to strengthen how the company estimates, manages, and executes projects.
• Management acknowledged the need to "raise our standard" given the company's experience as a second-generation operator.
• The tone emphasized a shift in focus from expansion to strengthening execution and realizing benefits from existing acquisitions.

Other Key Points:

• The Board of Directors authorized a share repurchase program of up to $50 million of Class A common stock over the next 12 months.
• The proposed acquisition of Hughes Brothers Construction Inc. has been postponed to prioritize strengthening existing operations.
• Mike Rowe resigned as Chief Financial Officer on November 9, 2026, with Spencer Stuart engaged to conduct a search for his successor.
• The company reported a net loss attributable to noncontrolling interests of $6.6 million in Q3 2026.
• Goodwill increased to $133.2 million as of September 30, 2026, from $23.5 million at December 31, 2025.
• Intangible assets increased to $96.9 million as of September 30, 2026, from $15.5 million at December 31, 2025.