Primoris Services (PRIM) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue grew 10.6% year-over-year to $1.56 billion, driven by strong Energy segment growth and expanding data center construction, while Utilities segment revenue declined.

• Net income for Q2 2024 was $49.5 million ($0.91 per diluted share), up from $39.0 million ($0.72) in Q2 2023, reflecting improved margins and higher Energy segment activity.

• Adjusted net income was $57.1 million ($1.04 per diluted share), and Adjusted EBITDA increased to $117.1 million, up from $102.4 million in Q2 2023.

• Backlog as of June 30, 2024, was $10.5 billion, with $4.87 billion expected to convert to revenue in the next 12 months.

• Management raised full-year 2024 guidance for EPS, Adjusted EPS, and Adjusted EBITDA, citing robust demand in renewables, infrastructure, and data centers.

Financial highlights

• Q2 2024 revenue: $1.56 billion (+10.6% YoY); net income: $49.5 million; diluted EPS: $0.91; Adjusted EPS: $1.04.

• Gross profit rose 18.7% to $186.7 million, with gross margin improving to 11.9% from 11.1%.

• Adjusted EBITDA was $117.1 million, up from $102.4 million in Q2 2023.

• Cash and cash equivalents at June 30, 2024: $207.4 million; net cash used in operating activities for six months: $12.4 million.

• SG&A expenses increased to $100.1 million (6.4% of revenue), mainly due to higher personnel and technology costs.

Outlook and guidance

• Full-year 2024 EPS guidance raised to $2.70–$2.90; Adjusted EPS to $3.25–$3.45; Adjusted EBITDA to $400–$420 million.

• SG&A as a percentage of revenue targeted in the low 6% range; gross margins targeted at 9–11% for Utilities and 10–12% for Energy.

• Effective tax rate for 2024 expected to be approximately 29%.

• Capital expenditures for the remainder of 2024 projected at $45–$65 million.

• Management anticipates continued demand for infrastructure services, especially in renewables, utility, and industrial markets, despite inflationary pressures.