Sterling Infrastructure (STRL) Q2 2024 earnings summary

Executive summary

• Achieved record Q2 2024 results with revenue of $582.8M, up 12% year-over-year, and net income of $51.9M, up 31% year-over-year, with diluted EPS of $1.67.

• Gross margin reached a record 19.3%, and EBITDA rose 18% to $87.0M.

• Backlog at quarter-end was $2.10B, with combined backlog (including unsigned awards) at $2.45B.

• Operating cash flow for the first half was $170.6M, with cash and equivalents at $540.0M and net cash position of $211M.

• Raised full-year 2024 guidance based on strong first half and backlog position.

Financial highlights

• Q2 2024 revenue: $582.8M (+12% year-over-year); organic revenue growth was 8.4%.

• Gross profit: $112.7M (+22% year-over-year); gross margin: 19.3% (up 160 bps).

• Operating income: $72.7M (+20.7% year-over-year); operating margin: 12.5%.

• Net income: $51.9M (+31.5% year-over-year); diluted EPS: $1.67 (up from $1.27).

• EBITDA: $87.0M (+18% year-over-year); EBITDA margin: 14.9%.

Outlook and guidance

• Full-year 2024 revenue guidance: $2.15B–$2.23B; gross margin: 18.5%–19.0%; net income: $175M–$180M; EBITDA: $300M–$310M; diluted EPS: $5.60–$5.75.

• Midpoint of guidance implies 11% revenue growth, 28% EPS growth, and 18% EBITDA growth for the year.

• E-Infrastructure Solutions expected to approach 20% operating profit growth; Building Solutions operating profit growth expected to exceed 20% in 2024.

• General and administrative expense expected at ~5% of revenue; effective tax rate anticipated at ~25%.

• Non-cash expenses for 2024 expected at $25–$30M.