Primoris Services Corp

Previous wording

This Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2025 (“First Quarter 2025 Report”) contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which are subject to the “safe harbor” created by those sections. Forward-looking statements include information concerning our possible or assumed future results of operations, business strategies, financing plans, competitive position, industry environment, growth opportunities, the effects of regulation and the economy, generally. Forward-looking statements include all statements that are not historical facts and usually can be identified by terms such as “anticipates,” “believes,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “projects,” “should,” “will,” “would” or similar expressions.

Current wording

This Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2025 (“Second Quarter 2025 Report”) contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended , and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which are subject to the “safe harbor” created by those sections. Forward-looking statements include information concerning our possible or assumed future results of operations, business strategies, financing plans, competitive position, industry environment, growth opportunities, the effects of regulation and the economy, generally. Forward-looking statements include all statements that are not historical facts and usually can be identified by terms such as “anticipates,” “believes,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “projects,” “should,” “will,” “would” or similar expressions.

Previous wording

We discuss many of these risks in detail in Part I, Item 1A “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2024 and our other filings with the Securities and Exchange Commission (“SEC”). You should read this First Quarter 2025 Report, our Annual Report on Form 10-K for the year ended December 31, 2024 and our other filings with the SEC completely and with the understanding that our actual future results may be materially different from what we expect.*

Current wording

We discuss many of these risks in detail in Part I, Item 1A “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2024 and our other filings with the Securities and Exchange Commission (“SEC”). You should read this Second Quarter 2025 Report, our Annual Report on Form 10-K for the year ended December 31, 2024 and our other filings with the SEC completely and with the understanding that our actual future results may be materially different from what we expect.*

Previous wording

Given these uncertainties, you should not place undue reliance on these forward-looking statements. Also, forward-looking statements represent our management’s beliefs and assumptions only as of the date of this First Quarter

Current wording

Given these uncertainties, you should not place undue reliance on these forward-looking statements. Also, forward-looking statements represent our management’s beliefs and assumptions only as of the date of this Second Quarter 2025 Report. We assume no obligation to update these forward-looking statements publicly, or to update the reasons actual

Previous wording

2025 Report. We assume no obligation to update these forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in any forward-looking statements, even if new information becomes available.

Current wording

results could differ materially from those anticipated in any forward-looking statements, even if new information becomes available.

Previous wording

The following discussion and analysis should be read in conjunction with the unaudited financial statements and the accompanying notes included in Part 1, Item 1 of this First Quarter 2025 Report and our Annual Report on Form 10-K for the year ended December 31, 2024.

Current wording

The following discussion and analysis should be read in conjunction with the unaudited financial statements and the accompanying notes included in Part 1, Item 1 of this Second Quarter 2025 Report and our Annual Report on Form 10-K for the year ended December 31, 2024.

Previous wording

We actively monitor the impact of the macroeconomic environment, including the impact of inflation, tariffs, and volatility in the commodities markets, on all aspects of our business. We have experienced increased operating costs and anticipate that elevated levels of cost inflation could persist in 2025. In an effort to mitigate the impacts of inflation on our operations, we attempt to recover increases in the cost of labor, equipment, fuel and materials through price escalation provisions that allow us to adjust billing rates for certain major contracts annually; by considering the estimated effect of such increases when bidding or pricing new work; or by entering into back-to-back contracts with suppliers and subcontractors. However, the annual adjustment provided by certain contracts is typically subject to a cap and there can be an extended period of time between the impact of inflation on our costs and when billing rates are adjusted. In some cases, our actual cost increases have exceeded the contractual caps, and therefore negatively impacted the profitability of our operations until the contracts have been renegotiated to reflect these higher costs.

Current wording

We actively monitor the impact of the macroeconomic environment, including the impact of inflation, tariffs, and volatility in the commodities markets, on all aspects of our business. We have experienced increased operating costs and anticipate that elevated levels of cost inflation could persist in the latter half of 2025. In an effort to mitigate the impacts of inflation on our operations, we attempt to recover increases in the cost of labor, equipment, fuel and materials through price escalation provisions that allow us to adjust billing rates for certain major contracts annually; by considering the estimated effect of such increases when bidding or pricing new work; or by entering into back-to-back contracts with suppliers and subcontractors. However, the annual adjustment provided by certain contracts is typically subject to a cap and there can be an extended period of time between the impact of inflation on our costs and when billing rates are adjusted. In some cases, our actual cost increases have exceeded the contractual caps, and therefore negatively impacted the profitability of our operations until the contracts have been renegotiated to reflect these higher costs.

Previous wording

The following discussion compares the results of the three months ended March 31, 2025, to the three months ended March 31, 2024.

Current wording

The following discussion compares the results of the three and six months ended June 30, 2025, to the three and six months ended June 30, 2024.

Previous wording

Revenue was $1,648.1 million for the three months ended March 31, 2025, an increase of $235.4 million, or 16.7%, compared to the same period in 2024. The increase was due to growth in both our Energy and Utilities segments.

Current wording

Revenue was $1,890.7 million for the three months ended June 30, 2025, an increase of $327.0 million, or 20.9%, compared to the same period in 2024. The increase was due to growth in both our Energy and Utilities segments.

Previous wording

Gross profit was $170.7 million for the three months ended March 31, 2025, an increase of $37.3 million, or 28.0%, compared to the same period in 2024. The increase was primarily due to an increase in revenue in both segments and improved margins in our Utilities segment. Gross profit as a percentage of revenue increased to 10.4% for the three months ended March 31, 2025, compared to 9.4% for the same period in 2024 primarily driven by improved margins in our Utilities segment.

Current wording

Gross profit was $231.7 million for the three months ended June 30, 2025, an increase of $45.0 million, or 24.1%, compared to the same period in 2024. The increase was primarily due to an increase in revenue in both segments and improved margins in our Utilities segment, partially offset by lower margins in our Energy segment. Gross profit as a percentage of revenue increased to 12.3% for the three months ended June 30, 2025, compared to 11.9% for the same period in 2024 primarily driven by improved margins in our Utilities segment, partially offset by lower margins in our Energy segment.

Previous wording

SG&A expenses were $99.5 million during the three months ended March 31, 2025, an increase of $10.9 million, or 12.3%, compared to 2024, primarily due to increased people costs to support revenue growth and costs associated with the separation agreement entered into with our former Chief Executive Officer. SG&A expenses as a percentage of revenue decreased to 6.0% compared to 6.3% for the corresponding period in 2024 due to increased revenue.

Current wording

SG&A expenses were $204.1 million during the six months ended June 30, 2025, an increase of $15.3 million, or 8.1%, compared to 2024, primarily due to increased people costs to support revenue growth and costs associated with the separation agreement entered into with our former Chief Executive Officer. SG&A expenses as a percentage of revenue decreased to 5.8% compared to 6.3% for the corresponding period in 2024 due to increased revenue.

Previous wording

Non-operating income and expense items for the three months ended March 31, 2025, and 2024 were as follows (in thousands):

Current wording

Non-operating income and expense items for the three and six months ended June 30, 2025, and 2024 were as follows (in thousands):

Previous wording

Interest expense, net for the three months ended March 31, 2025, decreased $10.2 million compared to the same period in 2024 due to lower average debt balances and lower average interest rates.

Current wording

Interest expense, net for the three and six months ended June 30, 2025, decreased $9.6 million and $19.8 million, respectively, compared to the same periods in 2024 due to lower average debt balances and lower average interest rates.

Previous wording

The effective tax rate for the three-month periods ended March 31, 2025 and March 31, 2024, of 29.0% differs from the U.S. federal statutory rate of 21.0% primarily due to the impact of state income taxes and nondeductible components of per diem expenses.

Current wording

The effective tax rate for the six-month periods ended June 30, 2025 and 2024, of 29.0% differs from the U.S. federal statutory rate of 21.0% primarily due to the impact of state income taxes and nondeductible components of per diem expenses.

Previous wording

We recorded income tax expense for the three months ended March 31, 2025, of $18.1 million compared to $7.7 million for the three months ended March 31, 2024. The $10.4 million increase is primarily driven by a $35.6 million increase in pretax income.

Current wording

We recorded income tax expense for the six months ended June 30, 2025, of $52.5 million compared to $28.0 million for the six months ended June 30, 2024. The $24.5 million increase is primarily driven by a $84.6 million increase in pretax income.

Previous wording

Revenue increased by $75.5 million, or 15.5%, for the three months ended March 31, 2025, compared to the same period in 2024, primarily due to increased activity in our power delivery, communications and gas operations markets.

Current wording

Revenue increased by $72.2 million, or 11.6%, for the three months ended June 30, 2025, compared to the same period in 2024, primarily due to increased activity in our power delivery, communications and gas operations markets.

Previous wording

Operating income for the three months ended March 31, 2025 increased $17.9 million compared to the same period in 2024 due to revenue growth and improved gross margins. Gross profit as a percentage of revenue increased to 9.2% during the three months ended March 31, 2025 compared to 6.0% in the same period in 2024, primarily due to strong performance in our power delivery market in 2025.

Current wording

Operating income for the three months ended June 30, 2025 increased $30.9 million compared to the same period in 2024 due to revenue growth and improved gross margins. Gross profit as a percentage of revenue increased to 14.1% during the three months ended June 30, 2025 compared to 10.3% in the same period in 2024, primarily due to strong performance across all markets in 2025, including the favorable impact of project closeouts in our gas operations market.

Previous wording

Revenue increased by $160.7 million, or 17.0%, for the three months ended March 31, 2025, compared to the same period in 2024, primarily due to increased renewable energy activity.

Current wording

Revenue increased by $263.3 million, or 27.0%, for the three months ended June 30, 2025, compared to the same period in 2024, primarily due to increased renewable energy activity, partially offset by lower pipeline activity.

Previous wording

Operating income for the three months ended March 31, 2025, increased by $12.3 million, or 18.4%, compared to the same period in 2024, due to strong revenue growth. Gross profit as a percentage of revenue decreased slightly to 10.7% during the three months ended March 31, 2025, compared to 11.0% in the same period in 2024.

Current wording

Operating income for the three months ended June 30, 2025, increased by $7.8 million, or 9.2%, compared to the same period in 2024, primarily due to strong revenue growth, partially offset by lower gross margins. Gross profit as a percentage of revenue decreased to 10.8% during the three months ended June 30, 2025, compared to 12.6% in the same period in 2024 primarily due to a more favorable impact from the close out of renewables projects in 2024 compared to 2025. Additionally, we experienced increased costs in 2025 on certain renewables projects due in part to unfavorable weather conditions.

Previous wording

The majority of our revenue is derived from customers in the United States with approximately 2.2% generated from sources outside of the United States during the three months ended March 31, 2025, principally in Canada.

Current wording

The majority of our revenue is derived from customers in the United States with approximately 2.3% generated from sources outside of the United States during the six months ended June 30, 2025, principally in Canada.

Previous wording

For infrastructure services contractors, backlog can be an indicator of future revenue streams. Different companies define and calculate backlog in different manners. We define backlog as anticipated revenue from the uncompleted portions of existing contracts where scope is adequately defined, and therefore we can reasonably estimate total contract value (“Fixed Backlog”), and the estimated revenue on MSA work (“MSA Backlog”). We present two measures of backlog; one that includes Fixed Backlog and MSA Backlog for the next twelve months, and total backlog that includes all Fixed Backlog and MSA Backlog to the end of the MSA agreement. We do not consider renewals when estimating MSA Backlog. We do not include certain contracts in the calculation of fixed backlog where scope, and therefore contract value, is not adequately defined. We estimate MSA Backlog based on historical trends, anticipated seasonal impacts and estimates of customer demand based on information from our customers.

Current wording

For infrastructure services contractors, backlog can be an indicator of future revenue streams. Different companies define and calculate backlog in different manners. We define backlog as anticipated revenue from the uncompleted portions of existing contracts where scope is adequately defined, and therefore we can reasonably estimate total contract value (“Fixed Backlog”), and the estimated revenue on MSA work (“MSA Backlog”). We present two measures of backlog; one that includes Fixed Backlog and MSA Backlog for the next twelve months, and total backlog that includes all Fixed Backlog and MSA Backlog to the end of the MSA agreement. In addition, many of our MSAs are subject to renewal, and these potential renewals are not considered in estimating MSA Backlog. We do not include certain contracts in the calculation of fixed backlog where scope, and therefore contract value, is not adequately defined. We estimate MSA Backlog based on historical trends, anticipated seasonal impacts and estimates of customer demand based on information from our customers.

Previous wording

Liquidity represents our ability to pay our liabilities when they become due, fund business operations, and meet our contractual obligations and execute our business plan. Our primary sources of liquidity are our cash balances at the beginning of each period and our cash flows from operating activities. If needed, we have availability under our lines of credit to augment liquidity needs, and we have a current shelf registration statement filed with the SEC that allows for the issuance of an indeterminate amount of debt and equity securities. Our short-term and long-term cash requirements consist primarily of working capital, investments to support revenue growth and maintain our equipment and facilities, general corporate needs, and to service our debt obligations. As of March 31, 2025, there were no outstanding borrowings under the Revolving Credit Facility, commercial letters of credit outstanding were $24.6 million, and available borrowing capacity was $300.4 million. In addition there were no outstanding borrowings under our Canadian credit facilities as of March 31,

Current wording

Liquidity represents our ability to pay our liabilities when they become due, fund business operations, and meet our contractual obligations and execute our business plan. Our primary sources of liquidity are our cash balances at the beginning of each period and our cash flows from operating activities. If needed, we have availability under our lines of credit to augment liquidity needs, and we have a current shelf registration statement filed with the SEC that allows for the issuance of an indeterminate amount of debt and equity securities. Our short-term and long-term cash requirements consist primarily of working capital, investments to support revenue growth and maintain our equipment and facilities, general corporate needs, and to service our debt obligations. As of June 30, 2025, there were no outstanding borrowings under the Revolving Credit Facility, commercial letters of credit outstanding were $20.7 million, and available borrowing capacity

Previous wording

2025, commercial letters of credit outstanding were $0.4 million in Canadian dollars and available borrowing capacity was $13.6 million in Canadian dollars.

Current wording

was $304.3 million. In addition there were no outstanding borrowings under our Canadian credit facilities as of June 30, 2025, commercial letters of credit outstanding were $0.4 million in Canadian dollars and available borrowing capacity was $13.6 million in Canadian dollars.

Previous wording

In June 2023, we entered into an Accounts Receivable Securitization Facility (the “Facility”) with PNC Bank, National Association to reduce interest costs and improve cash flows from trade accounts receivable. In July 2024 we renewed the Facility for a two-year term, added Regions Bank to the Facility, and increased the maximum purchase commitment to $150.0 million, at any one time. In March 2025 we entered into an amended and restated Accounts Receivable Securitization Facility (the “Amended Facility”), modifying certain terms of the Facility and extending the maturity date of the Facility to March 24, 2027. Under the Amended Facility, certain of our designated subsidiaries may sell or pledge their trade accounts receivable as they are originated to a wholly owned bankruptcy remote Special Purpose Entity created specifically for this purpose. The total outstanding balance of trade accounts receivable that have been sold and derecognized is $100.0 million as of March 31, 2025. As of March 31, 2025, we had $50.0 million in available capacity under the Amended Facility.

Current wording

In June 2023, we entered into the Facility with PNC to reduce interest costs and improve cash flows from trade accounts receivable. In July 2024 we renewed the Facility for a two-year term, added Regions to the Facility, and increased the maximum purchase commitment to $150.0 million, at any one time. In March 2025 we entered into the “Amended Facility, modifying certain terms of the Facility and extending the maturity date of the Facility to March 24, 2027. In August 2025, we increased the maximum commitment amount under the Amended Facility to $250.0 million. Under the Amended Facility, certain of our designated subsidiaries may sell or pledge their trade accounts receivable as they are originated to a wholly owned bankruptcy remote SPE created specifically for this purpose. The total outstanding balance of trade accounts receivable that have been sold and derecognized is $100.0 million as of June 30, 2025. In addition, the total amount of trade accounts receivable that have been pledged is $50.0 million as of June 30, 2025. As of June 30, 2025, we did not have any available capacity under the Amended Facility, prior to the August 2025 amendment.

Previous wording

Our cash and cash equivalents totaled $351.6 million as of March 31, 2025, compared to $455.8 million as of December 31, 2024. We anticipate that our cash and investments on hand, existing borrowing capacity under our credit facilities, access to and capacity under a shelf registration statement, and our future cash flows from operations will provide sufficient funds to enable us to meet our operating needs, our planned capital expenditures, and settle our commitments and contingencies for the next twelve months and the foreseeable future.

Current wording

Our cash and cash equivalents totaled $390.3 million as of June 30, 2025, compared to $455.8 million as of December 31, 2024. We anticipate that our cash and investments on hand, existing borrowing capacity under our credit facilities, access to and capacity under a shelf registration statement, and our future cash flows from operations will provide sufficient funds to enable us to meet our operating needs, our planned capital expenditures, and settle our commitments and contingencies for the next twelve months and the foreseeable future.

Previous wording

The construction industry is capital intensive, and we expect to continue to make capital expenditures to meet anticipated needs for our services. During the three months ended March 31, 2025, we spent approximately $40.6 million for capital expenditures, which included $21.7 million for construction equipment and $15.5 million on our facilities. Capital expenditures for the remaining nine months of 2025 are expected to total between $50.0 million and $70.0 million, which includes $40.0 million to $60.0 million for equipment.

Current wording

The construction industry is capital intensive, and we expect to continue to make capital expenditures to meet anticipated needs for our services. During the six months ended June 30, 2025, we spent approximately $73.7 million for capital expenditures, which included $40.5 million for construction equipment and $22.1 million on our facilities. Capital expenditures for the remaining six months of 2025 are expected to total between $25.0 million and $45.0 million, which includes $20.0 million to $40.0 million for equipment.

Previous wording

Cash flows during the three months ended March 31, 2025 and 2024 are summarized as follows (in millions):

Current wording

Cash flows during the six months ended June 30, 2025 and 2024 are summarized as follows (in millions):

Previous wording

The cash flows provided by (used in) operating activities for the three months ended March 31, 2025 and 2024 were as follows (in millions):

Current wording

The cash flows provided by (used in) operating activities for the six months ended June 30, 2025 and 2024 were as follows (in millions):

Previous wording

Net cash provided by operating activities for the three months ended March 31, 2025 was $66.2 million compared to $28.5 million cash used in operating activities for the three months ended March 31, 2024. The change year-over-year was primarily due to improvement in the impact from the changes in assets and liabilities and an increase in net income.

Current wording

Net cash provided by operating activities for the six months ended June 30, 2025 was $144.6 million compared to $12.4 million cash used in operating activities for the six months ended June 30, 2024. The change year-over-year was primarily due to improvement in the impact from the changes in assets and liabilities and an increase in net income.

Previous wording

The significant components of the $0.9 million change in assets and liabilities for the three months ended March 31, 2025 are summarized as follows:

Current wording

The significant components of the $29.6 million change in assets and liabilities for the six months ended June 30, 2025 are summarized as follows:

Previous wording

The significant components of the $66.8 million change in assets and liabilities for the three months ended March 31, 2024, are summarized as follows:

Current wording

The significant components of the $113.9 million change in assets and liabilities for the six months ended June 30, 2024 are summarized as follows:

Previous wording

For the three months ended March 31, 2025, cash used in investing activities was $33.2 million compared to $4.2 million provided by the three months ended March 31, 2024.

Current wording

For the six months ended June 30, 2025, cash used in investing activities was $59.1 million compared to $39.3 million provided by investing activities for the six months ended June 30, 2024.

Previous wording

During the three months ended March 31, 2025, we purchased property and equipment for $40.6 million compared to $10.4 million during the same period in the prior year. We believe the ownership or long-term leasing of equipment is generally preferable to renting equipment on a project-by-project basis, as this strategy helps to ensure the equipment is available for our projects when needed. In addition, this approach has historically resulted in lower overall equipment costs.

Current wording

During the six months ended June 30, 2025, we purchased property and equipment for $73.7 million compared to $34.6 million during the same period in the prior year. We believe the ownership or long-term leasing of equipment is generally preferable to renting equipment on a project-by-project basis, as this strategy helps to ensure the equipment is available for our projects when needed. In addition, this approach has historically resulted in lower overall equipment costs.

Previous wording

We periodically sell assets, typically to update our fleet. We received proceeds from the sale of assets of $7.4 million during the three months ended March 31, 2025, compared to $14.6 million during the same period in the prior year.

Current wording

We periodically sell assets, typically to update our fleet. We received proceeds from the sale of assets of $14.6 million during the six months ended June 30, 2025, compared to $73.9 million during the same period in the prior year.

Previous wording

Financing activities used cash of $137.3 million for the three months ended March 31, 2025, compared to $15.1 million for the three months ended March 31, 2024, which was primarily due to the following:

Current wording

Financing activities used cash of $151.7 million for the six months ended June 30, 2025, compared to $39.1 million for the six months ended June 30, 2024, which was primarily due to the following:

Previous wording

Financing activities used cash of $15.1 million for the three months ended March 31, 2024, which was primarily due to the following:

Current wording

Financing activities used cash of $39.1 million for the six months ended June 30, 2024, which was primarily due to the following:

Previous wording

For a description of our credit agreements, see Note 7— “Credit Arrangements” in Item 1, Financial Statements of this First Quarter 2025 Report.

Current wording

For a description of our credit agreements, see Note 7— “Credit Arrangements” in Item 1, Financial Statements of this Second Quarter 2025 Report.

Previous wording

For a discussion of items affecting our common stock, please see Note 11 — “Stockholders’ Equity” in Item 1, Financial Statements of this First Quarter 2025 Report.

Current wording

For a discussion of items affecting our common stock, please see Note 11 — “Stockholders’ Equity” in Item 1, Financial Statements of this Second Quarter 2025 Report.