10-Q · May 5, 2026
Sterling Infrastructure, Inc. significantly outperformed expectations for Q1 2026, reporting revenues of $825.68 million and EPS of $3.59. This reflects a substantial 92% increase in revenue from the same quarter last…
Earnings analysis · 10-Q
STRL earnings analysis
Filed August 4, 2026 · Our reading of the company's report
The latest report
Sterling delivered an exceptional Q2, with revenue up 90% to $1.168 billion, GAAP diluted EPS of $5.00, and operating margin expanding to 18.8%. E-Infrastructure was the central driver, with revenue up 192%, while…
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Sterling delivered an exceptional Q2, with revenue up 90% to $1.168 billion, GAAP diluted EPS of $5.00, and operating margin expanding to 18.8%. E-Infrastructure was the central driver, with revenue up 192%, while backlog grew to $4.33 billion and combined backlog reached $5.62 billion. Offsetting factors are shrinking Transportation volume, continued residential weakness in Building Solutions, acquisition/integration exposure, and a $68.1 million first-half Contract Capital cash use.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
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.
Where revenue came from
The business segments reported by the company.
Shares of the segments disclosed in this filing, largest first.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $5.0
What stood out
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Revenue and EPS accelerated sharply
Q2 revenue reached $1.168 billion, up $553.7 million (90%) from $614.5 million in Q2 2025 and approximately 41% from $825.7 million in Q1 2026. GAAP diluted EPS was $5.00, versus $2.31 a year ago and $3.09 in Q1 2026.
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Margins expanded despite acquisition costs
Gross margin expanded 150 basis points year over year to 24.8% from 23.3%, while operating margin rose 180 basis points to 18.8% from 17.0%. The operating margin also improved from 16.7% in Q1 2026.
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E-Infrastructure drove growth
E-Infrastructure revenue increased 192% to $905.0 million, driven by large mission-critical projects. The late-Q3 2025 electrical and mechanical acquisition supplied $239.9 million of quarterly revenue and $25.2 million of operating-income contribution, including $2.3 million of intangible amortization.
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Backlog rose 44% with strong awards
Backlog increased to $4.33 billion at June 30 from $3.01 billion at December 31, 2025; combined backlog including unsigned awards reached $5.62 billion versus $3.31 billion. Six-month backlog and combined-backlog book-to-burn ratios were 1.7x and 2.3x, respectively.
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Cash conversion remained strong
Six-month operating cash flow nearly doubled to $328.0 million from $170.3 million. After $69.6 million of capital-equipment purchases, calculated free cash flow was $258.4 million, equivalent to 21.6% of six-month revenue.
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Net cash strengthened and debt was repaid
Cash and cash equivalents rose $73.7 million in the first half to $464.5 million. The company paid off all $285 million of term-loan principal and interest outstanding on July 2, 2026.
What to watch
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No material risk-factor updates
Item 1A states there were no material changes from risk factors in the 2025 Form 10-K. Existing risks remain relevant, including project-cost escalation, funding, labor, customer-concentration, acquisition, and joint-venture exposures.
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Transportation volume contracted
Transportation revenue fell $40.1 million, or 20%, year over year to $156.7 million. Although operating margin improved to 18.0% from 13.2%, the volume decline reflects lower heavy-highway and other revenue.
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Residential downturn pressures Building
Building Solutions revenue declined $0.8 million to $106.5 million and operating income declined $1.4 million to $8.5 million; its operating margin compressed to 8.0% from 9.2%. Management anticipates residential demand will remain muted in the near term because of affordability pressure.
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Receivables increased working-capital needs
Accounts receivable consumed $242.4 million of cash during the first six months, and net Contract Capital was a $68.1 million use of cash. This working-capital requirement was substantially above the $24.6 million use in the prior-year period.
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Acquisition integration and control scope risk
Stone Ridge required $140.0 million of cash consideration and carries an earn-out opportunity of up to $15.0 million. In addition, CEC and Stone Ridge represented 32.5% of total assets and 20.4% of quarterly revenue excluded from management's June 30 controls assessment under the newly-acquired-business SEC accommodation.
Management's outlook
The 10-Q does not provide quantitative revenue or EPS guidance. Management discusses favorable long-term E-Infrastructure opportunities and expects muted near-term Building Solutions demand; quantitative outlook was deferred to the August 3 earnings release/call.
Earlier filings 4
10-K · February 26, 2026
Sterling’s 2025 10-K shows material backlog growth to $3.01 billion (from $1.69 billion at 12/31/24) and strategic expansion into higher‑margin E‑Infrastructure via the September 1, 2025 CEC acquisition (total purchase…
10-Q · August 5, 2025
Sterling reported a stronger Q2 with revenue of $614,468 (in thousands) and diluted EPS of $2.31, both up versus the prior-year quarter. Gross profit rose to $143,140 (in thousands) and operating income increased to…
10-Q · May 6, 2025
Sterling Infrastructure reported Q1 revenue of $430,949,000 (vs. prior-year $440,360,000) and diluted EPS of $1.28 (vs. $1.00 a year ago). Margins expanded materially (gross margin 22.0% and operating margin 13.0%) and…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.