ORN earnings call analysis

NYSE:ORN Q1 2026 Earnings Call Transcript Generated on 6/6/2026 Operator | Conference Operator: Good day, and welcome to the Orion Group Holdings First Quarter 2026 Financial Results Conference Call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on a touch-tone phone. To withdraw your question, please press star, and then two. Please note, this event is being recorded. I would now like to turn the conference over to Margaret Boyce, Investor Relations for Orion. Please go ahead, ma'am.

Margaret Boyce | Investor Relations, Orion Group Holdings

Thank you, Operator, and thank you all for joining us today to discuss Orion Group Holdings' first quarter 2026 financial results. We issued our earnings release after market last night. It's available in the Investor Relations section of our website at oriangrupholdingsinc.com. I'm here today with Travis Boone, Chief Executive Officer of Orion, and Allison Vasquez, Chief Financial Officer. On today's call, management will provide prepared remarks, and then we'll open up the call for your questions. Before we begin, I'd like to remind you that today's comments will include forward-looking statements under the federal securities laws. Forward-looking statements are identified by words such as will, be, intend, believe, expect, anticipate, or other comparable words and phrases. Statements that are not historical facts are forward-looking statements. Our actual financial condition and results of operations may vary materially from those contemplated by such forward-looking statements. Discussion of the factors that could cause our results to differ materially from these forward-looking statements are contained in our SEC filings, including our reports on Form 10Q and 10K. With that, I'll turn the call over to Travis. Travis, please go ahead.

Travis Boone | Chief Executive Officer

Thank you, Margaret, and good morning, everyone. Thank you for joining us today to discuss our first quarter 2026 results. We delivered a solid start to the year, supported by disciplined operational performance and a healthy $24 billion pipeline of opportunities. This translated into top and bottom line growth and good cash flow generation. Our teams continue to execute at high level, positioning us well for the remainder of 2026. In our marine segment, demand for mission-critical maritime infrastructure continues to build, particularly across defense and port modernization projects. With the Iran conflict and disruption of traffic through the Strait of Hormuz, American naval superiority and domestic energy and petrochem security are front and center. These are meaningful drivers of public and private maritime buildouts that Orion is well positioned for. On another note related to the conflict in the Middle East, You may have heard that the administration paused the Jones Act related to the disruption in the Strait of Hormuz. This is a temporary pause specifically related to the transportation of bulk petroleum and fertilizer products. Previous administrations have made similar actions related to emergencies or disasters. While this limited pause of the Jones Act does not impact our business, we are strongly opposed to any and all Jones Act modifications. It does not align with the America First approach the administration has so publicly promoted, and this action has had little to no impact on reducing fuel prices in the United States. The President's 2027 budget proposal released earlier this month includes a $1.5 trillion defense budget, a historic increase to fund the expansion and modernization of U.S. shipyards, dry docks, and waterfront infrastructure, alongside expanding investment in maritime security and uninterrupted global transportation lanes. This budget prioritizes investment in hard assets tied to US national security, a central theme to Orion's long range growth outlook. Our commercial clients are signaling a growing need for investments that increase energy security and supply diversification, particularly in North America. Buoyed by elevated product prices that support investment economics, we're seeing an acceleration of early work to support energy, chemical and petrochemical projects that include meaningful marine infrastructure to increase export capacity. With the addition of J.E. McCamus in February and continued investment in our people and fleet, our team is well positioned to deliver the maritime infrastructure projects critical to our national defense strategy and commercial resilience. Turning to concrete, this team delivered a fantastic quarter across all key metrics with strong revenue and impressive adjusted EBITDA expansion. Registering a 1.1 times book to bill in the quarter and executing with excellence, concrete is firing on all cylinders. Data center development continues to be a primary pillar for this business. Investment by hyperscalers and greenlining of projects continues to advance at a very brisk pace. In the quarter, data centers accounted for around 40% of concrete revenues. And with the current composition of backlog and pipeline, we believe data centers will continue to be a central driver of profitable growth for our concrete segment going forward. We also continue to see growing opportunities across our other sectors, including advanced manufacturing, transportation, and cold storage. Investments in these areas are driven by reshoring of manufacturing around long-term domestic production strategies, increasing demand for expanded distribution and fulfillment networks, and a favorable regulatory environment. With our recent expansion into site civil, earthwork, and underground utilities, we are seeing the size and scale of concrete pursuits and awards increase while also enhancing execution certainty and control for our clients and our own delivery teams. All in all, an outstanding quarter of bookings, execution, and teamwork for our concrete team. Our backlog is growing and our pursuit pipeline remains healthy with broad-based opportunities across both segments, as we move through the year. Our $24 billion pursuit pipeline is currently evenly distributed over time with roughly $8 billion in opportunities for 2026, $8 billion in 2027, and $8 billion in 2028 and beyond. At the end of the quarter, backlog stood at $668 million and included almost $220 million in new awards and change orders booked in the quarter. Representative awards included a couple of mid-sized port modernization and dredging projects, a bridge project for an Army base, a couple of good winds for the McCamas team, and a nice mix of concrete projects. We've continued the bookings momentum into April and have been awarded well over $200 million in new work that is not yet under contract, so it is not in our backlog, including a $100 million port renovation project, a $40 million dredging project, and a $24 million data center project. These new awards set us up nicely for a strong second quarter. With growing backlog and a robust pipeline, we are pleased to reaffirm our four-year 2026 guidance. I'll now turn it over to Allison to discuss our financials. Allison?

Allison Vasquez | Chief Financial Officer

Thanks, Travis. We're pleased to report first quarter revenue of $216 million, gap net income of $4.7 million, adjusted EBITDA of 8.7 million, and adjusted EPS of 5 cents per share. As compared to the first quarter of 2025, these results represent a 15% growth in revenue, 7% growth in adjusted EBITDA attributable to strong momentum and expansion of services in our concrete segment, and solid, consistent, predictable project execution across the company. Before turning to segment performance, I want to briefly highlight a change to our segment reporting this quarter. We have revised our presentation to begin reporting three segments, marine, concrete, and corporate. We believe this disaggregation of corporate out of the results of marine and concrete will provide greater transparency into the underlying financial performance of each segment and is much more consistent with how we manage the business. Prior results have been recast to conform to the current presentation, and we've included a full recast of FY 2025 in our investor presentation posted on our website. Our marine segment reported revenue of $110 million and adjusted EBITDA of $12 million, representing an 11% margin, compared to $127 million in revenue and adjusted EBITDA of $17 million in the first quarter of 2025. These decreases were primarily due to the ramp down of several large projects and early starts on new projects kicking off. Our concrete business had a standout first quarter, as Travis talked about, reporting revenue of $106 million and adjusted EBITDA of $8.6 million, representing an 8% margin, as compared to revenue of $61.5 million and adjusted EBITDA of $2.8 million in the prior year quarter. These results represent a high watermark for both revenue and adjusted EBITDA, and are the direct result of outstanding productivity, execution, and momentum. We also benefited from the expansion of services that Travis mentioned earlier. From a balance sheet perspective, we ended the quarter with just over $70 million of debt that included $53 million of outstanding borrowings under the UMB credit facility, which we used to fund the McCamus acquisition in the quarter. Our net leverage remains at a healthy level, providing meaningful balance sheet flexibility as we look ahead. All in all, we are pleased to reiterate our full year 2026 guidance initiated last month. That's it for me. Back to you, Travis.

Travis Boone | Chief Executive Officer

Thanks, Allison. As we move through the year, our focus remains on executing our work safely, maintaining discipline across the organization, and delivering consistent results. I want to thank our shareholders for their continued support and recognize our teams across the business whose work every day drives our performance. Before I open the call for Q&A, I'd like to encourage our stockholders to cast your votes and participate in our virtual annual meeting coming up on May 19th. You can find the details in our proxy materials and on our website. Finally, I'd also like to take this opportunity to recognize and thank Tom Eminet and Peggy Fran for their service on our board. Each of them will be retiring from our board at the annual meeting, at which time the size of our board will decrease from eight directors to six directors. With that, I'd like to open it up for questions. Operator?

Operator | Conference Operator

Thank you. We will now begin the question and answer session. To ask a question, you may press star, then one on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star and then two. At this time, we will pause momentarily to assemble the roster. The first question will come from Tomo Sano with J.P.

Morgan. Please go ahead. Tomo Sano | Analyst, J.P. Morgan

Hi, good morning, everyone.

Jerry Sweeney | Analyst, Roth Capital

Good morning, Tomo.

Tomo Sano | Analyst, J.P. Morgan

Morning. Morning. So I'd like to ask about the guidance. Given the solid start of the first quarter and the positive project updates in April, there was no upward revision to your whole year guidance. Is this due to conservative assumptions in your outlook, or does it reflect some lag in the marine segment despite the strong performance in concrete? Could you elaborate on the key factors behind maintaining the current guidance, please?

Allison Vasquez | Chief Financial Officer

Sure. I'll start and Travis can fill in. I would say, I mean, we just initiated the guidance last month and we had a pretty good view and I think we continue to have a good view. We have a, you know, given what Travis talked about in the call with regard to bookings post end of the quarter with the 200 million plus, especially more heavily weighted toward Marine, we're feeling more confident with just kind of what that path looks like as things come into focus. But I would say, you know, from a first quarter perspective, the results came in pretty much right in line with what we expected from a profitability perspective. So we felt like it was prudent just to kind of hold where we are. And then as the year plays out, we'll see as those cards get dealt.

Travis Boone | Chief Executive Officer

Yeah, Toma, we generally, you know, we want to under-promise and over-deliver. So we're going to take a conservative approach to things like this. generally, and we're going to hold the line for now and see how things progress over the next quarter or two.

Tomo Sano | Analyst, J.P. Morgan

Thank you. And if you could talk about adjusted EBITDA margins contracted year over year in the first quarters, but could you elaborate on your concrete plans for the margin recovery after second quarters, please?

Allison Vasquez | Chief Financial Officer

I would say that the margin impacts were attributable to just to the phasing of kind of where we are on projects, specifically in Marine. I mean, I assume that we're talking about Marine, which had the margins came down in that business during the quarter. But really just as a, I think, attributable to just phasing of where we are on projects as we, you know, wrapped up many projects toward the end of last year. a lot of goodness will generally come into the numbers we're kicking off. And as we kick off new projects, we generally are a bit more conservative in where we kind of set the stakes initially. So I would say that it's really kind of more of a timing item. We don't see, we aren't seeing any signals that there would be any, you know, consistent or persistent margin degradation over time. If anything, we're seeing the opposite just with just the pipeline and the number of opportunities that we're seeing on the horizon. And then, I mean, concrete had a pretty monster step up in their EBITDA contribution for the quarter. I'll say that, you know, we benefited in our concrete business from good weather. We, you know, a lot of times we'll talk about bad weather, but I mean, this is a quarter where we benefited from Good strong momentum throughout the quarter, good strong utilization and activity throughout the quarter that was not interrupted by weather. And as the concrete projects get larger, we have opportunities to keep our teams on programs to allow them just to have consistent utilization and execution over time, which ultimately serves to lift the margins as there are all those starts and stops. I wouldn't say there are any big good guys that helped concrete in the quarter. I would say that the margins that they delivered were really a product of just really strong execution, good momentum, uninterrupted momentum, and thanks to the guys too.

Tomo Sano | Analyst, J.P. Morgan

Thank you, and congrats on the quarter.

Operator | Conference Operator

Thanks, Tomo. The next question will come from Aaron Spahala with Craig Hallam, please go ahead.

Aaron Spahala | Analyst, Craig Hallam

Good morning, Travis and Allison. Thanks for taking the questions. Good morning, Aaron. First for me, good to hear the order activity continuing to pick up into April. You noted seeing acceleration for early work on the energy and petrochem side. Can you talk a little bit about the timeline from that early work and when those could maybe turn into project awards and just any thoughts on what those could look like size-wise, content-wise?

Travis Boone | Chief Executive Officer

I think we're seeing a fair amount of activity. I think increased urgency to get projects, you know, with breaking ground and getting going. And there's, you know, I think a lot more conversation about, I think this sort of disruption in the global energy world has woken some things up as well as kind of a, I think probably put some, like I said, put some urgency into getting projects underway.

Allison Vasquez | Chief Financial Officer

Yeah, and generally as we start seeing the early signals of projects coming to us, and so this is, I mean, mostly on the marine side where we're seeing our larger commercial clients begin the signals of green lighting projects. And there may be a period of three months, six months, or a year. But I would say as we look out onto the horizon, there will be certain projects that will move forward very quickly. And there will also be another set of projects that will move forward to try to get the permitting and all the things that they need to do within this administration. So I think that also, I mean, there's some timelines that are in there. But we do have a good number of clients and programs that we see with the momentum picking up. And on those that are quite serious and are more advanced from a permitting perspective, we would expect those to move forward more quickly.

Aaron Spahala | Analyst, Craig Hallam

Thanks for that. And then maybe second, you know, you kind of highlighted an uptick in activity with the Department of War and the Coast Guard. Can you just kind of talk a little bit about what some of those opportunities look like and how you're thinking about timing on those as well?

spk04

The uptick in – on the – oh, yeah, on the president's budget.

Travis Boone | Chief Executive Officer

Yeah, sorry. Yeah, on the president's budget, there were quite a few – budget for military. Now, of course, the president's budget is the way it works. In reality, it's a bit of a wish list that still has to get put in place by Congress. And so I would say directionally, that's the way the administration would like to see things go. And so we'll see how it plays out. But it is good signs, good indicators of what is likely to come out of Congress, assuming they can get a budget passed.

Allison Vasquez | Chief Financial Officer

Yeah, and I mean, even just putting the proposal out there for $1.5 trillion, I mean, we're at $900 now, so even if it goes up to a trillion, that's still a very large increase. We would expect to benefit from that, especially with just the emphasis on naval superiority, naval dominance, marine infrastructure resilience. Those are all themes that are central to this budget and, I mean, really kind of into the world that we're living in right now. So it's very much accentuated by what's going on in the Middle East.

Aaron Spahala | Analyst, Craig Hallam

Understood. Thanks for that. And then maybe one last for me, just with higher fuel prices, you know, some of the kind of tariff developments on maybe Section 232 expansions, just any Margin or backlog sensitivity, any actions you might be taking there on the business side of things?

Travis Boone | Chief Executive Officer

The fuel side is something we're watching. We tend to build in contingency in our bids and things like that for fuel spikes. We buy in advance on parts of our business where we burn a lot of fuel, things like that. We're generally, at the moment, okay. We're watching it close. It is something that You know, if it becomes a very long-term situation with high fuel prices, you know, we could see some minor impacts, but it's right now we're in a kind of watch and see mode and make sure we're protecting ourselves as much as we can.

Aaron Spahala | Analyst, Craig Hallam

And then just anything on, you know, maybe like steel or anything, you know, coming out of the Section 232 expansions?

Travis Boone | Chief Executive Officer

You know, we talked a lot about tariffs, I don't know, about a year ago. And we were generally in pretty good shape with how we bid and bid our work to be, again, either with contingencies in place or we have locked in prices. So we're generally in pretty good shape on the tariff side of things.

Aaron Spahala | Analyst, Craig Hallam

All right. Thanks for the call.

I'll turn it over. Operator | Conference Operator

The next question will come from Min Cho with Texas Capital.

Please go ahead. Min Cho | Analyst, Texas Capital

Great. Thank you. Good morning, Travis and Allison. Congratulations. Yeah. Congratulations on your standout quarter for concrete. And I understand that weather was, you know, helped you guys a little bit here. But just given the level of backlog that you have, do you feel like this level of revenue and margins are sustainable in the intermediate term? Again, assuming that, you know, kind of taking weather out of it.

Travis Boone | Chief Executive Officer

Yeah, I think between the backlog and the activity we're seeing and the kind of outreach we're getting from owners as well as our general contractor partners, it seems to be like it's going to continue. We don't see a cliff coming or a slowdown happening there. It seems it's very, very active at the moment. A lot of activity that we expect to see coming in throughout the year.

Min Cho | Analyst, Texas Capital

That's excellent. Obviously, EBITDA of about 9 million clearly suggesting back half weighted outlook. So, can you just talk about like what specific drivers, maybe volume, mix or margins that gives you the most confidence in achieving this guidance and where you could see some risk to the greatest risk or greatest upside?

Travis Boone | Chief Executive Officer

Yeah, I think it's a timing thing as far as, you know, our marine business a little like this quarter. just with timing of projects and things like that. And then concrete really kicking hard in this quarter. And I think we'll see, as far as the confidence goes, between the backlog and the projects we've won already in the first month of second quarter here. It's been a pretty active quarter this second quarter. And we're We're very confident in the pipeline and backlog we should be able to build this year and work we can deliver in the latter half of the year. I know it's not unlike probably different reasons, but 2024 was a pretty similar year, a little lighter first half and a pretty heavy second half. It's looking to be a similar type of sort of shape to the graph as a couple years ago for different reasons.

Min Cho | Analyst, Texas Capital

Yep. Excellent. And then just finally, Allison, what was J.E. McCamus's contribution to adjust the VEDON recorder?

Allison Vasquez | Chief Financial Officer

It contributed positively, but I would say that Their contribution was more in opportunity pursuit and building backlog for the future. They won some really nice awards that they'll continue to execute through 2026 and into 2027. And very importantly, they have been very integral in supporting some other really interesting opportunities that we're looking at. So I would say that their contribution was meaningful. Like I said, they did contribute from a profit and a revenue perspective, but nominally. But I would say that the meaningful part of their contribution was really in just scaling their true expertise across both projects that we have currently in flight right now, and also in guiding, advising, and pretty meaningfully supporting some high-value pursuits.

Min Cho | Analyst, Texas Capital

Excellent. Great. Well, congratulations, and good luck in the next quarter. Thank you. Thanks, Min.

Operator | Conference Operator

The next question will come from Jerry Sweeney with Roth Capital.

Please go ahead. Jerry Sweeney | Analyst, Roth Capital

Good morning, Travis, Allison, and Barbara. Thanks for taking my call. Morning, Jerry. Morning. I may do something blasphemous and just start with concrete, if that's okay. I appreciate the courtesy laugh. Listen, concrete, really, really great quarter, obviously. And I know you're working on the Iowa projects, but I'm really curious as to, you know, what's your visibility on data center work? Some of our other clients are seeing tons of work coming down the pike. especially as sort of the build-out of these facilities start to expand. And I'm just curious, you know, how much visibility you have and what's the market opportunity this year into next year and even maybe a little bit forward as we look at these projects?

Travis Boone | Chief Executive Officer

Yeah, as we've talked before, but, you know, generally speaking, visibility into data centers is pretty minimal until it's kind of go time, right? Yeah. They're fairly secretive about where they are, what they are, who's doing whatever. Everything's kind of a big secret until it's go time. And so the visibility is always going to be somewhat limited compared to, say, a public sector project in the marine side of the business. However, the activity, as you mentioned, you're hearing is heavy. There's activity really kind of going in several directions. And it seems like there's a lot of big stuff in the works. We're having lots of conversations about really large projects with our key partners and some of the owners that we work with regularly. And it's looking really good for the year for data centers for us.

Jerry Sweeney | Analyst, Roth Capital

And separately, obviously, You know, Iowa was one that you highlighted previously, and I think as you do that and maybe some other projects, does that sort of elevate you in terms of, you know, reference projects and just bring you more and more into this circle, per se?

Travis Boone | Chief Executive Officer

I mean, generally speaking, I mean, Jerry, we've done over 50 data centers now. Okay. It's a big, we've got a lot of them under our belt, so definitely we're one of the, one of the key providers in this space, especially in the Texas market where there's a lot of them underway and planned. And so definitely we're kind of, I wouldn't say we're making decisions with the owners, but I would say we have a seat at the table at a lot of the early conversations.

Jerry Sweeney | Analyst, Roth Capital

Got it. One more question. What about the derivative or knock-on effect? Obviously, as these projects more and more come onto the drawing board and they're hitting shovels in the ground, what does that do to just general capacity in the concrete market and even help margins with other projects? It's got to be pulling talent and capacity into the data set of market and maybe raising pricing or margins in other sectors as well, potentially.

Travis Boone | Chief Executive Officer

Yeah, I think the data center world, I mean, we're seeing it in Texas for sure, where, and it's not just concrete, but a lot of the trades that are working on these projects, you know, their struggles to find people, find resources, even things like housing and food in some of these more remote areas for all the workers that have to be on these sites. And so it's definitely, you know, there's resource challenges, whether it be people, equipment, materials, whatever. And it's the, I think the owners are finding a way to make it happen. The owners, the general contractors, and the teams on the site are finding ways to make it happen. It's a kind of do or die sort of approach that these owners have, and everybody's finding a way.

Jerry Sweeney | Analyst, Roth Capital

Got it. That's it for me. I'm going to save my marine questions for the follow-up, if that's okay.

Travis Boone | Chief Executive Officer

All right.

Operator | Conference Operator

Sounds good.

Thanks. Jerry Sweeney | Analyst, Roth Capital

Thanks, guys.

Operator | Conference Operator

Again, if you have a question, please press star and then one. The next question will come from Liam Burke with B Reilly Securities.

Please go ahead. Liam Burke | Analyst, B. Riley Securities

Thank you. Good morning, Travis. Good morning, Allison.

Operator | Conference Operator

Morning, Liam.

Liam Burke | Analyst, B. Riley Securities

Morning. Your operating cash flow year over year was very strong on what typically would be a slower cash flow quarter. As we look into the balance of the year, is there any priority to de-levering, even though the balance sheet is still in pretty good shape?

Allison Vasquez | Chief Financial Officer

I think the balance sheet is in good shape. I mean, we'll look at opportunities over time. I mean, I would like to potentially carry a little bit less. But I mean, I think we're in a very healthy place. We're right at one and a half time net leverage. And so I think that's a good place for us to be. We might have opportunities to bring that down, but that's not our highest priority. I would say our priority in terms of our capital deployment would be in opportunities to expand just our positioning from an organic growth perspective and whether that means some investments in key equipment, key people, key things that we need to be able to ensure that we are well positioned for the pipeline and converting the organic pipeline maintaining that healthy balance sheet and then potentially other options. But I would say that sitting at a 1.5 times net leverage is a good place for Orion to be, especially with the interest rates that we negotiated earlier this year. And so I think that we're real comfortable right there. But it's always something that we factor into from a capital allocation strategy, but usually we find some productive uses, and especially in a growing business that will require some amount of working capital contributions will probably tend to run around that one and a half times I would expect on a steady state.

Liam Burke | Analyst, B. Riley Securities

So I would gather with your organic opportunities, plus it sounds like McCamus is coming on very nicely, both from an addition and plus the synergies you're gaining. M&A is not one of the options in terms of allocation?

Allison Vasquez | Chief Financial Officer

I wouldn't say that. And Travis, I mean, well, I'll let you start, Travis, and I'll... Yeah, well, she said it.

Travis Boone | Chief Executive Officer

I wouldn't say that. You know, we're going to be... As far as M&A goes, we're going to be very disciplined about the things we look at. But if something comes along that makes good sense and is a reasonable bite, we might be interested in it.

Liam Burke | Analyst, B. Riley Securities

Great. Thank you, Allison. Thank you, Travis.

Operator | Conference Operator

All right.

Allison Vasquez | Chief Financial Officer

Thanks, Liam.

Operator | Conference Operator

Thank you. This concludes our question and answer session. I would like to turn the conference back over to Travis Boone for any closing remarks.

Travis Boone | Chief Executive Officer

Thanks, everyone, for taking the time to join the call today. We look forward to speaking with you in the next quarter.

Operator | Conference Operator

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect. jsPDF 3.0.3 D:20260606090330-00'00'

NYSE:ORN Q4 2025 Earnings Call Transcript Generated on 6/6/2026 Operator | Conference Operator: Good morning and welcome to the Orion Group Holdings full year 2025 financial results conference call. All participants will be in a listen only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero on your telephone keypad. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your telephone keypad. To withdraw your question, please press star, and then two. Please note, this event is being recorded. I would now like to turn the conference over to Margaret Boyce, Investor Relations for Orion.

Please go ahead. Margaret Boyce | Investor Relations, Orion Group Holdings

Thank you, Operator, and thank you all for joining us today to discuss Orion Group Holdings' full-year 2025 financial results. We issued our earnings release after the market last night. It is available in the investor relations section of our website at oriangroupholdingsinc.com. I'm here today with Travis Boone, Chief Executive Officer of Orion, and Allison Boskett, Chief Financial Officer. On today's call, management will provide prepared remarks, and then we will open up the call for your questions. Before we begin, I'd like to remind you that today's comments will include forward-looking statements under the federal securities laws. Forward-looking statements are identified by words such as will, be, intend, believe, expect, anticipate, or other comparable words and phrases. Statements that are not historical facts are forward-looking statements. Our actual financial condition and results of operations may vary materially from those contemplated by such forward-looking statements. Discussion of the factors that could cause our results to differ materially from these forward-looking statements are contained in our SEC filings, including our reports on Form 10Q and 10K. With that, I'll turn the call over to Travis. Travis, please go ahead.

Travis Boone | Chief Executive Officer, Orion Group Holdings

Thank you, Margaret, and good morning, everyone. Thank you for joining us today to discuss our 2025 results and 2026 guidance. Before we begin, I want to acknowledge the ongoing conflict involving Iran and the Middle East. We extend our sincere appreciation to the men and women bravely serving our country. We recognize the situation remains very fluid and we are actively monitoring developments and evaluating any potential impacts on our business and markets. Now onto my prepared remarks. 2025 was a year of strong operational execution and meaningful advancement of Orion's long-term strategic priorities. We drove both top and bottom line growth and generated good free cash flow. Across the organization, our team delivered with predictable excellence, executing projects safely and profitably, strengthening our balance sheet, and taking important strategic steps that position our company for continued growth ahead. Over the past several years, we have been very clear about what we set out to do, improve execution, strengthen margins, professionalize the organization, and build a platform capable of capturing the significant opportunities across mission-critical marine infrastructure, defense, and concrete construction. In 2025, we translated that strategy into results. Importantly, we took decisive strategic actions that advanced our long-term growth plan. In December, we closed a new $120 million senior credit facility that improves our liquidity, lowers our cost of capital, and provides flexibility to support both organic growth and accretive acquisitions. We also purchased a derrick barge in December to further increase capacity and execution flexibility. As many of you are aware, we've been on the hunt for a large Jones Act derrick barge that will enable our team to pursue a broader range of marine and defense-related work. The barge is currently undergoing some refurbishments, and we expect to deploy it into our operations later this year. Last month, we completed the acquisition of JE McCamus. The transaction greatly enhances our marine platform, particularly in complex jetty and breakwater construction, where McCamus has deep proven expertise. Their strong Pacific footprint, experienced workforce, and high quality equipment fleet expand our ability to execute large, technically demanding projects. Integration is well underway, and we're very encouraged by the strong cultural alignment and the collaboration we're seeing across the combined organization and contracts awarded to McCamus over the last several weeks. In 2025, we consolidated our Houston footprint into our new headquarters office, implemented a modern project management platform, favorably settled multiple litigation matters, and monetized non-strategic real estate. Collectively, these deliberate actions improve our readiness for the next wave of large-scale, mission-critical marine and concrete infrastructure opportunities and reflect tangible progress for our strategic plan. While most aspects of our performance met or exceeded expectations in 2025, backlog was the one area where results were not as we anticipated. Even though our wind weight in 2025 improved over 2024, For the year, we booked just over $763 million in new contracts and change orders across the company, which represented a 0.9 times book to bill. Customer decisions moved to the right primarily due to tariff-related uncertainty in the private sector at the beginning of the year, followed by the prolonged U.S. government shutdown later in the year, which delayed public sector bidding and awards. Importantly, We believe this is only a timing issue with the work simply moving to the right as opposed to going away. We remain confident in our strong demand outlook, which is supported by the tailwinds we're experiencing across our markets. In addition, recent developments in the Middle East may accelerate government action to approve additional defense funding. We remain bullish on our backlog trajectory and long-term growth outlook with a vibrant growing pipeline that is currently at $23 billion, which includes the JE McCamus pipeline of $1.4 billion. Our marine opportunity pipeline increased $3 billion or 21% sequentially to over $19.4 billion as of December 31st. This does not include the McCamus acquisition, which we closed on in February. This growth reflects building demand and urgency across both public and private sector clients And we're pleased with the 2026 funding for the Department of War Pacific Operations. Across our operating regions, we have a healthy volume of opportunities expected to be awarded throughout the year for clients spanning the US Navy, the Coast Guard, regional port authorities, state departments of transportation, and private energy and chemical clients. Moving on to concrete, where our opportunity pipeline grew to over $2.4 billion at the end of 2025. Over the last several years, our team has built a strong and expanding position in data centers and the mission-critical construction market. The team produced good bookings throughout 2025, increasing year-over-year backlog by 10%, with recent awards spanning data centers and other commercial structures. Our expansion into Florida and Arizona is paying dividends, fueled by a growing project pipeline and solid execution. I'd like to drill down into our data center work, a real highlight in our concrete business that is improving literally by the day. I spent a good amount of time with the team last week, and let me tell you, they are killing it. Today, our data center count stands at 46 projects, either completed or in progress, across Texas, Iowa, and Arizona. We're seeing a shift toward larger campus-style developments for which execution and schedule certainty reign supreme. and our team has earned an outstanding reputation as a reliable delivery partner on mission critical programs. In addition to construction of the buildings and foundations, we are increasingly engaging with key clients earlier to address constructability concerns and to implement targeted design improvements. To support these strategies, we've recently expanded into site civil and earthwork to strengthen execution certainty for our clients and also to broaden Orion's scope of services. We expect to see data centers contribute even more significantly to our concrete business this year with some large opportunities developing in our markets. In closing, as I reflect on the year, I'm excited about the deliberate execution of our strategic priorities buoyed by building momentum in our key end markets. With a $23 billion pipeline inclusive of McCamus, a healthy balance sheet, and the best client-centered execution team in the business. We have an excellent runway for 2026 and beyond. With that, I'll turn the call over to Allison to talk through our financial results and our 2026 guidance. Allison?

Allison Boskett | Chief Financial Officer, Orion Group Holdings

Thanks, Travis. We were pleased with the financial and operational progress we delivered this year, reflecting disciplined executions across the organization and continued focus on profitable growth, cash generation, and balance sheet health. For the full year 2025, revenue increased to $852 million, operating income to $15 million, adjusted EBITDA to $45 million, and adjusted EPS to 25 cents per share. I am also very pleased to report that we generated full-year operating cash flow of $28 million and free cash flow of $14 million. Across all metrics, these results were a notable improvement over last year. From a segment perspective, in 2025, Marine delivered 545 million of revenue, a 4.5% annual growth, and more than doubled its adjusted EBITDA to 56 million for the year. This represents a 10% adjusted EBITDA margin compared to about 5% in 2024. The improvement in adjusted EBITDA was driven by favorable revenue mix, excellent execution, favorable equipment utilization, and positive project closeouts. For reference, Marine's contribution adjusted EBITDA margin for the year was 15%. In 2025, concrete revenues increased 12% annually to $307 million, and concrete reported an $11 million loss in adjusted EBITDA. The reported adjusted EBITDA loss is primarily attributable to the impact of corporate allocations in 2025 and favorable project closeout benefits in 2024 that did not reoccur in this year. Concrete's contribution-adjusted EBITDA margin for the year, excluding corporate, was 4.5%. To provide increased transparency on segment operating margins, we plan to update our reportable segments beginning in the first quarter of 2026. Specifically, we plan to break out corporate expenses separately as a non-operating segment and will no longer allocate those costs to marine and concrete for external reporting purposes. This change is intended to increase transparency of our operating segment's results. Moving on to the balance sheet. As many of you are well aware, late in the fourth quarter, we entered into a five-year, $120 million credit agreement with UMB Bank. This facility meaningfully improves our liquidity, reduces borrowing costs, extends maturity by two years, and positions a balance sheet to fund future investment. It includes a $60 million revolving line of credit, a $20 million equipment term loan facility, and a $40 million M&A term loan. It also includes an additional $25 million uncommitted accordion to fund future growth. The UMB facility refinanced and replaced our previous $88 million credit agreement, which was scheduled to mature in May of 2028. Borrowings under the UMB credit facility bear interest at a rate of SOFR plus 2.5% to 3%, a 40% reduction in our borrowing costs compared to the prior credit agreement. A big shout out to our treasury and legal teams for getting this across the line. In connection with this refinancing, we paid off our $23 million term loan and ended the year with net debt of just about $6 million. I would like to point out that subsequent to year end in February, we increased our senior borrowings by $47 million to fund the McCamus acquisition. I'll wrap up with our guidance update for 2026. We're very pleased to provide our full year 2026 guidance as follows. Revenue in the range of $900 million to $950 million a 9% increase from 2025 at the midpoint. Adjusted EBITDA in the range of 54 million to 58 million, a 24% increase from 2025 at the midpoint. Adjusted EPS in the range of 36 cents to 42 cents, a 56% increase from 2025 at the midpoint. And capital expenditures in the range of 25 to 35 million consistent with last year. That's it for me. Back to you, Travis.

Travis Boone | Chief Executive Officer, Orion Group Holdings

Thank you, Allison. We're very proud of what we accomplished in 2025, and we view this year as a bridge, not a destination. Over the past 12 months, our operations team executed projects safely while growing revenues and adjusted EBITDA. Meanwhile, our corporate team sold the East West Jones property, restructured our credit facility, purchased the Derek Barge, and acquired J.E. McCamus. None of this progress would have been possible without the hard work, dedication, and commitment of our people. I want to thank them for their outstanding efforts. With a strong operating platform, expanded capabilities, and favorable market tailwinds, we're excited about the opportunities ahead and believe Orion is well positioned as we look to capture more work and continue to execute for our employees, clients, and shareholders in 2026 and beyond. We'd now like to open up the call for your questions.

Operator | Conference Operator

Thank you. We will now begin the question and answer session. To ask a question, you may press star, then 1 on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star and then 2. At this time, we will pause momentarily to assemble our roster. And the first question will come from Tomo Sano with JP Morgan.

Please go ahead. Tomo Sano | Analyst, JP Morgan

Hi, good morning, everyone.

spk05

Morning, Tomo. Morning, Tomo.

Tomo Sano | Analyst, JP Morgan

Thank you. In Q4, you talk about some of the delay of the revenue recognitions for awarded projects. And could you talk about the impact your reported sales and margins in Q4? And could you specify which segments or projects, experiences that delays and quantify the revenue and margins impact in 2026, please?

Thank you. Allison Boskett | Chief Financial Officer, Orion Group Holdings

I'll start, and Travis, if you want to add in. But from a 2024 perspective or from a Q4 perspective, the fourth quarter came in generally in line with what we expected. We didn't see a lot of softness in the quarter coming generally kind of in line with what we were targeting and in line with the guidance that we had set out for the full year. I'll say that things do typically in construction, they will move around a bit in terms of just timing and cadence. And you probably saw some of that in terms of just margin profiles for the individual segments. But from an overall perspective, things came in in line, including from a corporate perspective. Does that answer your question, Tomo?

Travis Boone | Chief Executive Officer, Orion Group Holdings

There were a few, there were some opportunities that slid out of Q4 that we were pursuing. But that's not on the, that's more on the kind of pipeline side of things.

Tomo Sano | Analyst, JP Morgan

Yeah, thank you. So could I double click on your commentary about the margins, Alison, if you could talk about the 2026 outlook by segment in terms of the margins expansions from 2025 to 2026?

Allison Boskett | Chief Financial Officer, Orion Group Holdings

Sure, I'd be happy to. We are continuing to expect that we will have modest margin expansion across the business, both from the favorable impacts of blending McCamus into the marine business. As you probably well recall, McCamus operates at a meaningfully higher margin than the rest of Orion. So we are expecting to see some favorable blend associated with that acquisition and incorporation of their results. And then from a concrete perspective, we do expect that concrete will deliver margins in the mid-single digits. For the year in 2025, concrete delivered margins of right around 4.5%. And we do expect to nudge that up in 2026, just as a function of some favorable demand signals that we're seeing in terms of the work that we're bidding on, the work that we are winning and bringing into backlogs. as well as just continued growth and scale, which benefits our concrete business pretty meaningfully.

Tomo Sano | Analyst, JP Morgan

Thank you. If I may squeeze one more on a data center, Travis, you talk about data centers. Could you quantify the impact in 2026 in terms of the revenue compositions as well as some competitive advantages in data center projects for Orion, please?

Travis Boone | Chief Executive Officer, Orion Group Holdings

I'm not sure if I'm ready to point to the fence yet on where we're going to land with data centers. As Allison just mentioned, we're seeing a large amount of opportunities that are lining up well with our capabilities and relationships and all of that. We've got We did start, as I mentioned, we've started doing site civil work on some of these data centers, which has been very well received, and we're doing well with that work. So I think that'll expand and continue. And I think we're going to keep seeing just a large amount of data center work happening. I mean, right now it's 40% of our concrete business is data centers. I expect that to probably go up a little in the next year.

Tomo Sano | Analyst, JP Morgan

Thank you.

I appreciate it. Operator | Conference Operator

The next question will come from Aaron Spahala with Craig Hallam.

Please go ahead. Aaron Spahala | Analyst, Craig Hallam

Yeah, good morning, Travis and Allison. Thanks for taking the questions. Morning, Aaron. Morning. You know, maybe first for me, just on the pipeline, you know, can you talk a little bit more about that? Sounds like, you know, the expansion pretty broad-based. You know, any thoughts on kind of timeline, you know, conversion to orders? I know you've had a slide that kind of has laid out, you know, timing potential there. And then just, you know, maybe talk about the kind of market and margins you're seeing, you know, quotes and then kind of backlog wise.

Travis Boone | Chief Executive Officer, Orion Group Holdings

Yeah. So the pipeline is, um, has expanded some of that then because things have slid, right. Um, so it's kind of, it's building, but there's also some things sliding, which makes it, uh, get, look like it's getting, uh, even more big, but it's, it's, uh, we've got quite a few near-term opportunities is in 2026, um, that are, you know, a hundred million plus projects, uh, more, let's say more than a dozen, uh, very real, uh, opportunities that are, you know, over, over a hundred million in, uh, in size, which are, you know, gives us a lot of confidence, even though our backlog is down. Um, we're, we're one job away. One project went away from, from the backlog being in, being in good shape. So we're, we're not worried. We're, we're bidding projects, uh, in the real near term here that we feel good about. So, um, we're not, uh, I know maybe, maybe some concern about backlog, but from our, in our minds, we're, uh, we're, we're, we're, we're nowhere near, uh, getting worried. We're, we're in good shape. Uh, we have, we have all the opportunities in front of us and, uh, Like I said, we're one win away from being just fine on the backlog for our marine business. And our concrete business pipeline is growing and looking really strong. As you may recall, our concrete pipeline is typically fairly small because there's a lot of book and burn activity. and its private sector opportunities, which are not super visible, you know, long in advance. So we're excited to see the concrete pipeline creeping up as well as the marine pipeline continuing to expand. And then we added in McCamus that makes it even, gives us even more opportunities to pursue.

Aaron Spahala | Analyst, Craig Hallam

And then, you know, outside of McCamus, are you on margins kind of in the, you know, as you're going to bid projects? Is that still, you know, how's that looking?

Travis Boone | Chief Executive Officer, Orion Group Holdings

On the McCamish side of things, nothing has changed as far as, you know, margins, bid margins and things like that. They're going to continue pursuing projects as they have.

Allison Boskett | Chief Financial Officer, Orion Group Holdings

And on the rest of the business?

Travis Boone | Chief Executive Officer, Orion Group Holdings

And the rest of the business. Things are looking good. We're not seeing any, like, downturns or anything like that. In fact, I would say more the opposite in several of our markets.

Aaron Spahala | Analyst, Craig Hallam

Good. Good. And then, you know, maybe second, you know, on the data center side of things, you kind of talked about an expansion, you know, site and civil and earthwork. Any thoughts, high level, what that means for, you know, maybe average project size or, you know, how quickly these projects can continue to turn with that dynamic?

Travis Boone | Chief Executive Officer, Orion Group Holdings

Probably not going to give too much information just for competitive reasons, but... I think it depends on where the data center is and how much infrastructure and dirt work and things like that need to be put in before the concrete and foundations happen. But there can be fairly significant amounts of work that goes into that. And it gives us something else to sell to our customers. And as many of them are kind of shifting to bigger campuses, sometimes those get to be much larger, right? They still do these data centers, and we've talked about this before, but they don't, even though it may be a really large data center, they kind of go a little piece at a time. And it's literally, you know, here's one little piece and another little piece and another little piece, and then you look back, you know, six months later, and you've done a ton of work over a period of time. So it's It's these things turn in from, you know, from a $500,000 task order. And next thing you know, you've done $50 million worth of work a little out of time. So, well, a little out of time, but very quick.

Allison Boskett | Chief Financial Officer, Orion Group Holdings

Yeah. And I think the other important thing there is as our team, because our team has such a high level of credibility in this really critical aspect on the critical path of these projects in terms of just the buildings, the structure, the infrastructure to support all the really important internal things. But because our team has such credibility in that area, we are being engaged earlier in terms of, as Travis mentioned in the call, some of the constructability, some of the concerns, some of the things that we have seen over the now 46 and counting data centers and campuses that we've worked on in incorporating those lessons for our clients. Our clients are seeing that as a really valuable opportunity. level of expertise that we bring to the table, which means that ultimately, you know, we do become a trusted partner in this aspect of the building and the construction. So it's a pretty exciting time. I mean, really my hat's off to that team who's built very, very strong relationships with a number of key players.

Aaron Spahala | Analyst, Craig Hallam

That sounds great. Thanks for taking the questions. I'll turn it over. Thanks, Aaron. Thanks, Aaron.

Operator | Conference Operator

Again, if you have a question, please press star and then one. The next question will come from Jerry Sweeney with Roth Capital.

Please go ahead. Jerry Sweeney | Analyst, Roth Capital

Good morning, Travis and Allison. Thanks for taking my call. Good morning, Jerry.

Margaret Boyce | Investor Relations, Orion Group Holdings

Hi, Jerry.

Jerry Sweeney | Analyst, Roth Capital

Just a couple of follow-up questions, maybe. But just looking at the marine side, obviously, pipeline is growing. You said some of the projects pushed to the right, per se. But are you hearing anything, or do you have any anecdotal commentary on – maybe once some of these projects may come to fruition, obviously they're quite large, complicated. We've had a government shutdown and then we have, you know, escalating conflict in the middle East, but, uh, all that said and done, I'm just curious as to maybe some of the anecdotal, uh, uh, items that you're hearing on those opportunities.

Travis Boone | Chief Executive Officer, Orion Group Holdings

So, uh, I mean, we're bidding one of them. We're bidding a nice project this week. Um, There are things moving forward now. I guess there's not like a theme, if you will, of the different reasons that they've moved. Some of them move for different things, but they are just shifting to the right. It's not a never-ending shift to the right. They are actually coming to roost at some point, like the one I just mentioned. That was originally supposed to be last year, and we're finally bidding it this week. So there are projects that are coming through. We're bidding quite a few jobs in the next six months, pretty nice ones, along with the normal kind of run-of-the-mill projects that we always go after. But I don't know if I answered your question. Yeah, sorry, go ahead.

Allison Boskett | Chief Financial Officer, Orion Group Holdings

Well, I'll just add, Jerry, that as we look at the – The pipeline does continue to be very robust. We continue to have our good line of sight into eight, eight and a half billion of opportunities that we expect to be awarded in 2026. And that's pretty normal. We have seen some clients really engage in a more meaningful way, which to us signals that some decisions are likely going to be made in the near term. But as we think about the pipeline, it stacks up to be probably about a 40-60 split in terms of what's going to, for the 2026, what we have visibility into of what will be awarded in the first half versus the second half, which is pretty normal, just given in the federal government there's usually a spike in the third quarter. And so, yes, there are a good number of opportunities that we have both at we are working on bidding on. And then a lot of times we will talk about the number of opportunities that we have provided all information on that we are just awaiting award from the client. And that number continues to sit at right around a billion dollars. So to us, that's a little bit higher than normative, but it's been consistently at that billion dollar mark throughout 2025 and continues to be around a billion dollars now. So that might just be the new norm in terms of You know, when Travis talks about holding the pipeline a little longer, we do continue to see that number just stay right around a billion. But we are seeing some awards, some clients like moving and being more active.

Jerry Sweeney | Analyst, Roth Capital

Gotcha. And at some point, that billion kind of breaks loose, which is positive, obviously, right? That's right. Yeah. Okay. That's it for me.

I appreciate it. Thanks. Operator | Conference Operator

Thanks, Jared. The next question will come from Alex Regal with Texas Capital.

Please go ahead. Alex Regal | Analyst, Texas Capital

Thank you, Travis and Allison. Travis, your historical win rate on bids sort of is in that mid-teens range. Is there any reason to believe that historical win rate will be any different going forward?

Travis Boone | Chief Executive Officer, Orion Group Holdings

No, we saw that win rate kind of between from 24 to 25, it tipped up, even though our, you know, even though our backlog was down, our win rate was up. So it tells you that things were sliding. So we have seen it head in the right direction just a little bit, a percent or two. And I don't expect it to change much. I mean, it might continue to go up a little, but I don't expect it to be any large jump up or down on the win rate. We kind of like to be in that let's say 15 to 20% win rate sort of range. And that's where we are and feel pretty good about where we are.

Alex Regal | Analyst, Texas Capital

And then as it relates to your adjusted EBITDA guidance of 54 to 58 million, can you bridge that delta from the 45 million you just reported and help us to understand sort of what's organic versus inorganic? And as it relates to sort of the organic Kind of how that's broken out by segment.

Allison Boskett | Chief Financial Officer, Orion Group Holdings

Sure. I'll give some high-level commentary. I would say that we are always gearing the business toward what we view as good organic growth. So that is like first and foremost really what we are doing to position the company is to invest in organic growth. Organic growth in 2026 is good. I would say it's probably, just in terms of stepping back, I'd say it's in the kind of upper single to low double-digit growth rate from an organic perspective, just because of some of the opportunities that we see moving a bit to the right, specifically in the marine business. I do think that concrete will grow very favorably in 2026. We have signals that that is happening and that it's real. But for Marine, those opportunities, they just take time to get through the pipeline, to get through all of the machine associated with bringing those opportunities to market by our client and then ultimately getting those things awarded. So some of those things that we expected we would see in 2026 have moved a bit to the right. That being said, we do expect that our marine business will continue to grow in 2026. Will it be at the dynamic growth rates that we are anticipating with some of the many things that are coming to market in 26 and 27? Probably you'll see that, I would expect, over the midterm, but that is not today built into our 2026 guidance. What I will say is I'll say that also from a McCamus perspective, that we have good line of sight into what we expect McCamus will deliver, which is right in line with kind of what we set out in the call back in February. They come with a very highly qualified, very reputable, very credible group of people. It's a phenomenal team. It's a phenomenal leadership organization there. We're very excited about bringing them into the portfolio. And we're also very excited about some of the projects that they have won just recently. So they continue to perform. They continue to perform well. And we'll look forward to just bringing them into more of our opportunities and our projects to make our pursuit teams even stronger as we look ahead.

Alex Regal | Analyst, Texas Capital

Very helpful. And then the outlook for backlog near term, I kind of get a sense here that it's probably flattish to maybe trending a little bit down in the first quarter and the second quarter, but you expect a strong rebound in the third and fourth quarters. Is that a fair conclusion to come to?

Allison Boskett | Chief Financial Officer, Orion Group Holdings

It's hard to tell just from a backlog perspective. We are working – We are gearing the organization around really a book to build that is greater than one. That is our objective. Our objective is to always be booking more backlogs than we are burning. With that in mind, it's hard from a quarter-to-quarter perspective to predict what backlog is. It does move around just based on how we burn, how operational cadence of the project, and then what gets awarded within a quarter. But from a full year perspective, we do expect to meaningfully deliver good bookings, which ultimately will serve to elevate our backlog balances. I'll also say that from a concrete perspective and really from a dredging perspective as well, Like those two businesses have a very quick book to burn, and so they may have phenomenal years, but you may not see a lot of that manifested in the backlog at quarter ends or year ends just because of the amount of book and burn projects that they get awarded. But are we targeting elevated backlog through the year? Yes, that is absolutely a goal, and we'll track that really through kind of the book to bill and kind of how the organization is delivering on that.

Alex Regal | Analyst, Texas Capital

Thank you.

Allison Boskett | Chief Financial Officer, Orion Group Holdings

Thank you.

Thank you. Operator | Conference Operator

The next question will come from Liam Burke with B Reilly Securities. Please go ahead.

spk05

Thank you. Good morning, Travis. Good morning, Allison. Good morning, Liam. Travis, you talked about closing on the DEREC in late 2025. How quickly, it's a fairly significant commitment, capital commitment. How quickly do you anticipate that investment turning into some sort of measurable return?

Travis Boone | Chief Executive Officer, Orion Group Holdings

We'll get it, as I mentioned, we've got some work being done on it for the next, I don't know, six to, let's say six to eight months. And once it's kind of in the condition and ready to go, we'll have it. we'll get it busy and get it operational or get it working somewhere in our business. As far as, you know, payback on it, I think we got a pretty good price on it, so I don't think it's going to be a long time to get to kind of return on the investment.

spk05

Great. Thank you. And on the M&A front, the McCamus was opportunistic. Obviously, You don't have a pipeline of opportunistic acquisitions, but what does the acquisition pipeline look like for you?

Travis Boone | Chief Executive Officer, Orion Group Holdings

It's a pretty active market out there at the moment. Lots of different things happening in the, I don't know, it seems like it's not just across the board. It seems like acquisitions have really gotten pretty strong across all sectors. I'm seeing it kind of all over the place, lots of different acquisitions and activity happening. I mean, we saw, you know, we saw Great Lakes just recently get acquired and go private, and just lots of things happening out there that will give us, potentially give us opportunities to do more in the next year or so.

spk05

Thank you, Travis.

Operator | Conference Operator

This concludes our question and answer session. I would like to turn the conference back over to Travis Boone for any closing remarks.

Travis Boone | Chief Executive Officer, Orion Group Holdings

Thank you all for joining us today. We look forward to talking to you again soon.

Operator | Conference Operator

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect. jsPDF 3.0.3 D:20260606090332-00'00'

NYSE:ORN Q3 2025 Earnings Call Transcript Generated on 6/6/2026 Allison | Chief Financial Officer: 14 million year to date. We wrapped up the quarter with 21 million of net debt or just under half a turn of leverage on a TTM EBITDA basis, which is a very healthy place for Orion. As the boss covered earlier, in October, we were very happy to close on the sale of the East West Jones property. The transaction resulted in a significant cash upside of over $22 million net of commissions and taxes and a nominal book charge, which will be reflected in our fourth quarter results. We expect to use the proceeds to pay down debt and for general corporate purposes. From a backlog perspective, we added approximately $160 million in new awards and change orders in the quarter, and at quarter end, backlog stood at $679 million. Moving on to segment results. From a segment perspective, marine revenues increased just about 2% over the third quarter of 2024 and 6% sequentially to $143 million in the quarter. And marine adjusted EBITDA grew over 50% to $18 million in the quarter, which represents a 12% margin this period compared to 7% in the same quarter of 2024. Strong marine margins are attributable to a greater mix of higher margin revenue, excellent execution and project closeouts, and favorable equipment utilization. Concrete revenues decreased 5% over prior years and were up 17% sequentially to $82 million in the quarter, and concrete incurred a $4 million loss in adjusted EBITDA for the quarter compared to a $4 million profit in the third quarter of 2024. The reported adjusted EBITDA reduction is primarily attributable to favorable project closeout benefits in 2024 that did not reoccur in 2025. Some weather issues in the quarter also impacted chargeability in our concrete business this quarter. For reference, concrete's contribution EBITDA margin in the quarter was right at 2%. I'll wrap up with our guidance update. We're very pleased to update our full year 2025 guidance as follows, increasing our revenue guide to $825 million to $860 million, increasing our adjusted EBITDA guide to $44 million to $46 million, increasing our adjusted EPS guide to $0.18 to $0.22, and reiterating our CapEx guide of $25 to $35 million. I'll now pass it back to Travis to wrap it up.

Travis Boone | Chief Executive Officer

Thanks, Allison. We have all the pieces in place to finish the year strong, and I'm even more excited about what lies ahead in 2026 and beyond. I want to thank our shareholders for their continued confidence in us and our people for the exceptional work they do every day in the field to deliver safely for our customers. Operator, we're ready to take questions.

Operator | Conference Operator

Thank you. We will now begin the question and answer session. To ask a question, you may press star, then 1 on your touchtone phone. If you're using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star, then 2. And our first question today will come from Erin Spectula with Craig Hallam.

Please go ahead. Erin Spectula | Analyst, Craig-Hallam & Co.

Yeah, good morning, Travis and Allison. Thanks for taking the questions. You know, first for me, you know, noticed a slide in the deck on the pipeline, you know, detail on award dates and opportunity size. Can you just maybe talk a little bit about that? You know, has that split by opportunity size been pretty consistent? And just any thoughts on expected traction with some of those larger opportunities?

Travis Boone | Chief Executive Officer

Good morning, Aaron. Sure, yeah, we can hit on that slide. So it's um you know we we have been talking about our pipeline for uh for a while in the in the in the increase in size of our pipeline so we have been working to kind of provide some more information on the pipeline based on a lot of questions about about it and so we uh we we just could try to find a way to break it up so people could have a little better fuel for what's in there, when it's coming, and the size of the opportunities. But generally speaking, I would say it's fairly consistent. Our pipeline for next year is very strong. Still got some good opportunities this year that we're working on bringing in the door, and good, very strong opportunities for 2026. So anything to add to that?

Allison | Chief Financial Officer

Just to reiterate the comment from the call on the over a billion dollars of projects and opportunities that we have that are in the queue awaiting award decisions. The number has stayed pretty consistent around that 1.2 billion, so over a billion, which is a really healthy place for us to be. That number has actually grown through the year. If we look back through the earlier part of the year, just because of some of the delays that we're seeing with some of our clients and some of the pauses that our clients have put on. So it's nice to see that bid submitted and awaiting award number continue to be a very robust 1.2 billion.

Erin Spectula | Analyst, Craig-Hallam & Co.

Understood. Uh, thanks for the color there. And then, you know, does that include the, the, the opportunity in Washington with the estuary or, or, you know, maybe just, can you give an update there on, on how, uh, that. Yeah, good.

Travis Boone | Chief Executive Officer

Good question. So that's the, uh, the Deschutes estuary project that we won, uh, almost a year ago when I believe in late, late 2024, early 2025 timeframe. Uh, it's, it's not included in the, in the pipeline. Um, it's kind of in a weird spot where it's, uh, It's an awarded, not booked project because we've won it, but it's not – so it doesn't show up in backlog, nor does it show up in our pipeline. It's in kind of a weird limbo spot until we actually get under contract to do the work, which is probably going to be about a year or so out before we actually start that work.

So good question. Erin Spectula | Analyst, Craig-Hallam & Co.

Got it. And then – You know, can you just give a little bit more detail on the data center opportunity? Just, you know, how much of the concrete business does that represent today and maybe the pipeline there? You know, are you seeing quoting, you know, pickup, any, you know, average deal size pickup and just how you're thinking about opportunity there as we head into 2026?

Travis Boone | Chief Executive Officer

Definitely, it's remained very steady on the data center opportunity side of things. We've been, you Bidding quite a large number of projects on data centers. To your question specifically, it's about 27% of our pipeline is data centers and about 27% of our current revenue in 2020 and the quarter, I should say, for concrete was 27% of concrete's revenue for Q3 was data centers. And lots of continuing activity there with bid opportunities.

Erin Spectula | Analyst, Craig-Hallam & Co.

Understood. Thanks for taking the questions. I will turn it over. The next question is from Liam Burke with B Reilly Securities.

Operator | Conference Operator

Please go ahead.

Liam Burke | Analyst, B. Riley Securities

Thank you. Good morning, Travis. Good morning, Allison. Good morning, Liam. Travis, you had, or Allison touched on the negative operating profit for concrete. We're looking at sequential backlog step up. Could we anticipate a more profitable mix in the backlog as we move into the fourth quarter?

Travis Boone | Chief Executive Officer

Yes, definitely. We're expecting concrete to continue to be in a good place. As she mentioned, when you compare it over last year, it doesn't look super favorable based on some big pickups around this time last year. But as far as the concrete business, we remain confident in the profitability and the good business that it is.

Liam Burke | Analyst, B. Riley Securities

Great. Thank you. And have you seen any either good or bad movement on major projects due to policy changes with the administration?

Travis Boone | Chief Executive Officer

None that affect us, no. We haven't seen any movement related to policy changes. Some of the movement that's happened has been related to You know, there's been movement in the private sector over the last couple of quarters with awarding projects based on kind of uncertainty around tariffs and things like that. There's been some movement in other, you know, whether it's the Navy opportunities in the Pacific that I talked about last quarter, some of that slid out a year based on funding from Congress and some other things, but no policy-related shifts or changes.

Allison | Chief Financial Officer

Yeah, I would... I would just add that from a regulatory perspective, I mean, the deregulation that we're seeing happening is a benefit to our clients, and some of the tax benefits that are coming in on deductibility of interest and deductibility of fixed assets, the acceleration of those things, those things should continue to reduce the outlook for our commercial clients especially.

Liam Burke | Analyst, B. Riley Securities

Great. Thank you, Travis. Thank you, Allison.

Operator | Conference Operator

Of course. The next question will come from Brent Salmon with DA Davidson.

Please go ahead. Brent Salmon | Analyst, D.A. Davidson

Hey, thanks. Good morning. I guess Travis or Allison, maybe the first question just back to Maureen. I'm trying to think through these really strong results here, the contribution from your two big projects to those margins. And then I guess really get into the point of, you know, what we think is kind of a sustainable solution margin threshold going forward through the segment, especially considering some of the somewhat slower bookings here in the last couple quarters.

Allison | Chief Financial Officer

Sure. I'll start on that. From a margin perspective, we were really pleased with the Marines' performance in the quarter. And I would say that there were some – we saw some benefits that came through, some upsides. But I would also add that they were not unusual in terms of the amounts or the magnitudes we had – or the magnitude. We had really great performance across the business. We had great performance. across the Atlantic, in the Gulf. We had really strong performance in dredging, which you'll see just the uptick in those when we publish the queue later today. But the dredging was very strong in the quarter, which ultimately benefits us, top line and bottom line, because of the very favorable equipment utilization that we get out of that. While there were a handful of upsides that we recognized in the quarter, I wouldn't say they were meaningful. I would say that the more meaningful driver of performance was really the operational performance really led this quarter by dredging so hats off to that team.

Brent Salmon | Analyst, D.A. Davidson

Okay. And then the elevated SG&A, Allison, as you mentioned, is sort of a factor for the lower year-on-year performance. EBIT performance. I guess your thoughts on where that goes going forward. What is that predominantly focused toward? How do you harvest that investment you're making in the business as we think about that going forward?

Allison | Chief Financial Officer

Sure. I would say that A couple of million of the SG&A uptick from a year-over-year perspective is related to investments in the business, like just directly in the advancement of or the expansion into the Atlantic or region for concrete into Phoenix, some of those offices that we're investing in that we're setting up so that they will fuel some of the organic growth that we are expecting going forward. And then I would say that probably the other big driver is there is some lumpiness associated with how certain employee costs were recorded last year as compared to this year that created a quarter over quarter increase, but from a sequential perspective, pretty consistent and in line.

Brent Salmon | Analyst, D.A. Davidson

Okay. And then last one, just in consideration of the balance sheet here, you've obviously got the property sale, which comes in at the end of the year. Maybe just your expectations for cash flow in the fourth quarter, I guess, especially as some of these larger projects wind down, presumably receivables come in. Should we or could we see sort of a big windfall in cash flow into year end?

Allison | Chief Financial Officer

The East West Jones for sure, results in just a $23 million of cash that drops to the bottom line. Now, that'll go through investing, so that'll be an investing activity, not an operating activity, but cash in our treasury, which is nice. And that cash, we have already received that cash, so it's nice to have that in our pocket now. From the rest of the business perspective, I don't see really a downturn in the cash collection cadence. The team is really focused on very keenly identifying, targeting, and going after and reducing our past due balance sheet and really optimizing the working capital on the balance sheet. And I think that you can see that while we only report from a quarter to quarter perspective, you can see that really in the interest expense and the significant step down that we had this quarter from an interest expense perspective. And that step down is related to Just a significant amount of work that the team has put into optimizing the balance sheet so that we could minimize borrowings under the revolver. So do I think that from a fourth quarter perspective, we could see good cash? We will see good cash from East West Jones. We've not seen a slowdown in cash collection activity in the rest of the business. We have a couple of months to go, so we'll see. But so far through October, it's been good.

Operator | Conference Operator

Great.

Thank you. Travis Boone | Chief Executive Officer

Thanks, Brent.

Operator | Conference Operator

The next question will come from Alex Rigel with Texas Capital.

Please go ahead. Alex Rigel | Analyst, Texas Capital

Thank you. Good morning, Travis and Allison, and congratulations on the sale of EastWest.

That's great news. Travis Boone | Chief Executive Officer

Thanks, Alex. You've been hearing us talk about that for a lot of years, so.

Alex Rigel | Analyst, Texas Capital

Good to see you got the sale done. Quick question for you on that. Is there a way for us to think about what the present value of the dredge spoil sort of 10-year agreement is at that site?

Travis Boone | Chief Executive Officer

Yeah, probably we're going to keep the details on that. just for competitive advantage purposes to ourselves. But part of the reason we were okay taking a lower purchase price on that is because we were able to find a way to kind of use the property again through being able to use it for dredge spoils going forward.

It's good news. Alex Rigel | Analyst, Texas Capital

And then as it relates to your expanded bonding capacity, can you talk about the value of bonds you have outstanding right now? And I guess what I'm trying to get to here is just what is the kind of remaining opportunity balance that you have with that new bonding capacity?

Travis Boone | Chief Executive Officer

I'll say it this way. We had a fair amount of available capacity before we got this increase. What this does is just allow us to – continue to bid larger projects and facilitate the growth that we see coming here in the next few years. So obviously we're going to keep working on adding additional bonding capacity to the mix to continue to kind of stay in front of our ability to grow and bid bigger projects.

Alex Rigel | Analyst, Texas Capital

And then lastly, as it relates to the data centers, Have you seen a notable increase in the size of the project opportunity for these data centers? And how does that compare to, say, two or three years ago?

Travis Boone | Chief Executive Officer

Compared to two or three years ago, I would say definitely there's some bigger ones in the mix now. We did do a large one a couple of years ago in North Texas, and that was kind of a one-off, but it seems like now there are more of those larger type – larger data centers that we have visibility to and are bidding on. We've talked about the one we're working on in Iowa. It's a large data center, a very large data center.

Thank you very much. Operator | Conference Operator

Again, if you have a question, please press star, then 1. Our next question will come from Jason Usainer with Bumbershoot Holdings.

Please go ahead. Jason Usainer | Analyst, Bumbershoot Holdings

Good morning. Thanks for taking my questions and congrats on finally closing the East West Jones sale in a great quarter. It was about a year ago that I was asking you during the World Series about this field of dreams vision and there was kind of clear daylight for significant growth in demand for the marine services coming over the next couple of years and just not a lot of contention it felt like that you've kind of built the right platform to capitalize it and so the question i had then was kind of really around execution and margin profile and so it feels like kind of this year some of those big pursuits with the navy slid out a little bit um you know kind of started to talk about the transformational growth 2026 and beyond and so not a lot of change in the vision but just kind of maybe this delayed onset so just kind of to update on the overall long-term vision that you're you know you're building it and that it's coming on the demand side, everything from your prepared script, you know, the bonding, the pre-approved Mac team kind of sounds like there's still a lot of clear catalysts that all the growth is coming and, you know, answered it a little bit in the Q and a, but maybe just, reiterate anything that could cause shocks to that investment in the Pacific and just sort of this whole vision of demand materializing. And then, you know, to the extent that it does kind of come the way you're envisioning, whether, you know, you still think it's likely to translate to some of those long-term profitability targets that you previously laid out.

Travis Boone | Chief Executive Officer

Sure. Yeah. Thanks, Jason. I think you kind of answered your question for me, I think, a little bit, but it definitely – The way we saw it a year ago, we still see everything the same, if not even more confident now, because we've delivered on getting some things accomplished over the last year that we were working toward. And so as far as the vision, if you will, is still the same. The only thing that's changed a little bit is some of those delays and some of the bigger changes contract opportunities in the Pacific that slid out a year. So that's really the only thing that's changed from a year ago. And so we're continuing to invest and work toward the growth opportunity that we see in front of us. Everything is going as planned. Everything that's in our control is going better than planned, I would say. And there's a couple of, you know, the biggest thing out of our control is those opportunities sliding to the right. But we feel like we've executed well on our plan, and we've delivered, and we're going to continue to do that. And, you know, when those opportunities do show up, we're going to knock them down and keep going.

Allison | Chief Financial Officer

Yeah, and I would just ask that, Jason, that, I mean, the beautiful part about this business is it's not singularly threaded. Like, this is a multifaceted business, and so the opportunities in the Pacific are exciting, and they, you know, afford us, you know, some pretty interesting growth catalysts in the future. But, you know, today we're starting on, you know, a large project or starting on a large project in Texas on a large bridge project over water. We have a big port project that's going on in South Carolina. So there are a number of other opportunities that we pursue and that we win and that we are executing that are outside of the Pacific. The Pacific is exciting, but it's not the only story here.

Jason Usainer | Analyst, Bumbershoot Holdings

Okay, great. Appreciate the answers and congrats on a great quarter.

Travis Boone | Chief Executive Officer

Thanks, Jason.

Operator | Conference Operator

Thanks. This concludes our question and answer session. I would like to turn the conference back over to Mr. Travis Boone for any closing remarks.

Please go ahead. Travis Boone | Chief Executive Officer

Thank you all for joining our call today. We're super excited about where we are as a company and looking forward to coming back to you with our year-end results here in a few months. And also want to thank our team, all of you guys working hard every day to make this business work.

Operator | Conference Operator

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect. jsPDF 3.0.3 D:20260606090333-00'00'