10-Q · May 13, 2026
SOLV Energy, Inc.'s Q1 2026 results reflect robust revenue growth amidst significant challenges in profitability, posting a net loss of $27.4 million compared to a loss of $0.5 million in Q1 2025. Revenue surged by 66%…
Earnings analysis · 10-Q
MWH earnings analysis
Filed August 14, 2026 · Our reading of the company's report
The latest report
SOLV delivered exceptionally strong Q2 growth, with revenue up 77.5% year over year to $951.243 million, diluted EPS of $0.30 and backlog of $8.860 billion. However, gross margin fell to 14.7% from 21.1% a year earlier,…
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SOLV delivered exceptionally strong Q2 growth, with revenue up 77.5% year over year to $951.243 million, diluted EPS of $0.30 and backlog of $8.860 billion. However, gross margin fell to 14.7% from 21.1% a year earlier, cost growth exceeded revenue growth, and six-month operating cash flow declined to $46.039 million as working capital absorbed cash. Debt reduction and $363.968 million of cash improve liquidity, but persistent material weaknesses and a $240.677 million TRA liability remain significant concerns.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
Reported figures
- Earnings per share
- $0.3
- Segment
- One reportable segment: $951.243 million of revenue in Q2 2026, up 77.5% year over year from $535.952 million. By service type: New Construction $913.122 million, up 87.8%; Existing Infrastructure $27.970 million, down 23.2%; Other $10.151 million, down 24.2%.
What stood out
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Revenue accelerated sharply
Q2 revenue rose 77.5% year over year to $951.243 million and increased approximately 40.5% from $677 million in Q1 2026. New construction revenue contributed $913.122 million, including $851.945 million from Solar PV/Solar PV plus battery storage.
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EPS beat and interest costs fell
Q2 diluted EPS was $0.30 versus $0.24 consensus and improved from a $0.20 loss in Q1. Net income increased 49.7% year over year to $66.833 million, helped by a $12.660 million year-over-year reduction in interest expense.
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Operating leverage improved
Q2 operating margin improved to 7.3% from negative 1.1% in Q1, while operating income increased 19.9% year over year to $69.683 million. Six-month Adjusted EBITDA increased to $209.996 million from $120.320 million.
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Backlog supports forward demand
Total backlog was $8.860 billion at June 30, 2026, and remaining EPC performance obligations were $3.546 billion, which management anticipates recognizing substantially over the next 12 to 18 months.
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Balance sheet was delevered
The company repaid approximately $405.6 million of term debt using IPO proceeds and had no revolver borrowings at quarter-end. Liquidity included $363.968 million of cash and $186.6 million of undrawn revolver availability.
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Positive but pressured cash generation
Six-month operating cash flow was $46.039 million and capital expenditures were $15.960 million, implying approximately $30.079 million of six-month free cash flow. Management attributed weaker operating cash conversion partly to higher supplier deposits and materials inventory.
What to watch
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Material gross-margin compression
Gross margin declined to 14.7% in Q2 2026 from 21.1% a year earlier and 17.6% in Q1 2026. Management cited project performance, the prior-year contingency release and repair-project mix, as well as the 2026 classification of certain compensation costs into cost of revenue.
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Working capital absorbed cash
Six-month operating cash flow fell to $46.039 million from $50.836 million despite revenue increasing to $1.628 billion from $943.799 million. Operating assets and liabilities generated $132.040 million of cash outflow, with materials inventory rising to $35.829 million from $4.594 million and accounts receivable rising to $392.766 million from $269.044 million.
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Material weaknesses persist
Disclosure controls remained ineffective as of June 30, 2026 because previously reported material weaknesses continued, including controls over procure-to-pay, percentage-of-completion revenue recognition, valuation analyses and IT general controls. The filing states that these weaknesses had not yet been remediated.
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TRA creates significant cash obligations
The Tax Receivable Agreement liability was $240.677 million at June 30, 2026, and the company is required to pay Continuing Equity Owners 85% of realized or deemed-realized tax benefits. Management expects these cash payments to be significant and says they will reduce cash flow otherwise available to the company.
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Costs outpaced revenue growth
Q2 gross profit increased 23.5% year over year to $139.613 million, materially slower than the 77.5% revenue increase to $951.243 million. Cost of revenue rose 91.9% to $811.630 million, exceeding revenue growth.
Management's outlook
The 10-Q provides no explicit full-year revenue or EPS guidance. Management states that $364.0 million of cash, $186.6 million of undrawn revolver availability and operating cash flows are expected to fund operations for at least the next twelve months; remaining EPC performance obligations were $3.546 billion as of June 30, 2026, with substantially all expected to convert to revenue over the next 12 to 18 months.
Earlier filings 1
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.