SOLV Energy — Third Quarter 2026 Earnings Summary

Financial Performance:

• Revenue for the three months ended September 30, 2026, was $1,242 million, a 65% increase year-over-year (YoY) from $753 million; year-to-date (YTD) revenue was $2,870 million, a 69% YoY increase from $1,697 million.
• Gross profit for the quarter was $221 million (17.8% margin) compared to $148 million (19.7% margin) in the prior-year period; YTD gross profit was $480 million (16.7% margin) versus $320 million (18.9% margin) in the prior year.
• Adjusted Gross Profit for the quarter was $215 million (17.3% margin) compared to $148 million (19.7% margin) in the prior year; YTD Adjusted Gross Profit was $484 million (16.9% margin) versus $320 million (18.9% margin) in the prior year.
• Net income was $123 million for the quarter compared to $70 million in the prior year; YTD net income was $162 million compared to $114 million in the prior year.
• Adjusted EBITDA was $173 million (13.9% margin) for the quarter compared to $122 million (16.1% margin) in the prior year; YTD Adjusted EBITDA was $383 million (13.3% margin) compared to $242 million (14.3% margin) in the prior year.
• Cash and cash equivalents ended the quarter at $422 million, up from $395 million at the end of 2025; total liquidity was approximately $609 million including $187 million available under the revolving credit facility.
• Accounts receivable increased to $649 million from $269 million at the end of 2025; contract liabilities increased to $323 million from $309 million.
• Term debt was fully repaid following the February 2026 IPO, resulting in $0 long-term term debt at September 30, 2026, compared to $392 million at the end of 2025.
• A $11 million loss on extinguishment of term debt and a $77 million one-time non-cash compensation charge related to legacy equity awards were recorded YTD.

Guidance and Future Outlook:

• SOLV raised its full-year 2026 financial guidance based on strong YTD execution and current expectations.
• Revised FY26 Revenue guidance is $4,030–$4,120 million (up from $3,870–$3,970 million).
• Revised FY26 Adjusted Gross Profit guidance is $660–$690 million (up from $620–$660 million).
• Revised FY26 Adjusted Gross Margin guidance is 16.4%–16.7% (up from 16.0%–16.6%).
• Revised FY26 Adjusted EBITDA guidance is $525–$540 million (up from $485–$505 million).
• Revised FY26 Adjusted EBITDA Margin guidance is 13.0%–13.1% (up from 12.5%–12.7%).
• Management cited a growing backlog and continued demand across markets as drivers for the outlook.

Business Segments and Product Lines:

• Revenue growth was driven by increased new construction activity and existing infrastructure revenue.
• Total backlog as of September 30, 2026, was approximately $9.2 billion.
• The company has over 24 GW under contract for Operations and Maintenance (O&M) services.
• On October 30, 2026, the company completed the acquisition of ASB Energy Services, a Texas-based contractor specializing in substation foundations, civil construction, and battery energy storage system infrastructure.
• ASB Energy Services adds self-perform high-voltage construction capabilities and expands presence in Texas and other high-growth regions, serving data center, energy storage, renewable energy, and industrial sectors.

Market and Competitive Landscape:

• The company operates in the power industry infrastructure sector, providing engineering, procurement, construction, testing, commissioning, O&M, and repowering services.
• Since 2008, the company has built over 24 GW of generating capacity.
• Trailing twelve-month safety metrics were reported as below industry benchmarks.

Risks and Challenges:

• Forward-looking statements note risks including project timing, performance, or profitability impacts, potential liquidated damages, and project terminations.
• Risks include changes in government incentives or regulations for renewable energy and battery storage, material and labor cost increases, and labor availability.
• Potential risks involve contract cancellations, customer defaults, warranty claims, and legal proceedings.
• The company disclosed material weaknesses in internal control over financial reporting, with remediation effectiveness being a risk factor.
• Operational hazards include severe weather, electrical hazards, and climate change impacts.
• Risks related to debt include interest rate fluctuations and covenant compliance.

Management Commentary and Tone:

• CEO George Hershman stated the company delivered "another quarter of strong results" driven by execution, safety focus, and employee dedication.
• Management expressed confidence in the strength of the backlog and opportunities throughout the energy infrastructure lifecycle, positioning the company well for 2027.
• The tone emphasized disciplined execution, responsible growth, and expanding customer value.

Other Key Points:

• The company completed the acquisition of ASB Energy Services on October 30, 2026, for approximately $36 million in cash (net of cash acquired) and 376,836 shares of Class A common stock.
• The company repaid term debt in connection with its February 2026 IPO, significantly reducing interest expense.
• A change in accounting classification beginning in 2026 moved certain annual incentive compensation from SG&A to Cost of Revenue, affecting gross profit presentation but not net income or EBITDA.
• The company issued Class A common stock net of underwriting discount for $844 million during the nine months ended September 30, 2026.
• Non-cash compensation expense for the nine months ended September 30, 2026, was $77 million, primarily related to the IPO.