Sterling Infrastructure More Than Doubles Revenue, Raises 2026 Outlook on Data Center Work

Sterling Infrastructure more than doubled its third-quarter revenue and profit and raised its full-year guidance on Wednesday, riding a wave of data center and other mission-critical construction work.

The Woodlands, Texas-based contractor reported record revenue of $1.56 billion, up 127% from a year earlier, including 70% organic growth, according to the earnings release it filed with an 8-K on Wednesday. Net income rose 133% to a record $214.9 million, or $6.92 per diluted share.

Adjusted net income climbed 119% to $235.4 million, or $7.58 per diluted share, and adjusted EBITDA rose 117% to $337.8 million.

Guidance moves higher

Sterling now expects 2026 revenue of $4.63 billion to $4.73 billion and adjusted diluted EPS of $21.70 to $21.96. On a GAAP basis, it forecasts diluted EPS of $19.16 to $19.42.

CEO Joe Cutillo said the midpoint of the new guidance implies 88% revenue growth, 101% growth in adjusted diluted EPS and 94% growth in adjusted EBITDA from 2025.

"Demand remains strong, and our multi-year visibility continues to expand," Cutillo said in the release. He said signed backlog, unsigned awards and next phases in design on current projects add up to nearly $8 billion of scoped work, up about 90% from a year earlier.

E-Infrastructure does the heavy lifting

E-Infrastructure Solutions revenue jumped 212% to $1.30 billion, and segment operating income rose 176% to $294.5 million. Site development revenue rose 133%.

The CEC electrical business, acquired on Sept. 1, 2025, contributed $425.6 million of revenue, compared with $41.4 million during its partial ownership period a year earlier. On a pro forma basis, CEC revenue rose 305%. Cutillo said the company now believes CEC could generate more than $1 billion in revenue in 2026.

Segment operating margin was 22.6%, down from a year earlier because of CEC's larger contribution. Data center campuses, manufacturing and semiconductor facilities represent about 95% of the nearly $7 billion E-Infrastructure opportunity pipeline, Cutillo said.

Other segments shrink

Transportation Solutions revenue fell 3.1% to $165.2 million as Sterling shifted resources toward higher-margin E-Infrastructure work, but operating income rose 24.0% to $30.2 million.

Building Solutions revenue fell 5.4% to $96.0 million and operating income dropped 47.3% to $5.7 million, reflecting slower homebuilder activity. Cutillo said he expects conditions there to remain challenging through 2026 as housing affordability weighs on demand.

Backlog and cash

Signed backlog reached $4.14 billion at Sept. 30, up 61% from a year earlier, and combined backlog, which includes $2.00 billion of unsigned awards, rose 78% to $6.14 billion. The quarter's book-to-burn ratio was 0.9 times for signed backlog and 1.4 times for combined backlog.

Operating cash flow totaled $427.1 million for the first nine months, and Sterling repurchased $107.3 million of shares over that period. It ended September with $216.9 million in cash.

Management will host a conference call Thursday morning.

Sources

1. Sterling Infrastructure Form 8-K with third-quarter 2026 earnings release (Exhibit 99.1), filed Oct. 28, 2026 (accession 0000874238-26-000122)

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