Key Points
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Record Q3 results: Revenue rose 40% year over year to $1.2 billion, and adjusted EBITDA increased 44% to $108 million. Gross margin improved to 9.5%, supported by more productive new hires and updated contract pricing.
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Growth outlook strengthened: Backlog reached about $6.2 billion, with outstanding bids of $4.8 billion. Management expects 2027 revenue above $4.4 billion and gross margin of 8.5% to 9%.
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Cash flow guidance was reduced: Centuri lowered its 2026 free cash flow expectation to $25 million–$50 million, citing higher-than-expected working capital needs from revenue growth. Management characterized the shortfall as a timing issue and expects cash collections to accelerate in Q4.
Centuri (NYSE:CTRI) reported record third-quarter revenue and gross profit as workforce investments and contract pricing improvements helped the utility infrastructure services company expand margins. Management also projected mid-teens revenue growth in 2027, while lowering its 2026 free cash flow expectation because of higher working capital needs.
Revenue rose 40% from a year earlier to $1.2 billion, while gross profit reached $113 million. Net income attributable to common stock increased to $27 million, or $0.27 per share, from $2 million, or $0.02 per share, a year earlier. Adjusted net income more than doubled to $42 million, or $0.42 per share.
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Adjusted EBITDA rose 44% to $108 million, and adjusted EBIT increased 79% to $73 million, Chief Financial Officer Kelly Youngblood said on the earnings call.
Workforce investments and pricing support margins
Centuri’s gross profit margin improved to 9.5% from 7.2% in the second quarter. President and CEO Chris Brown said employees hired during the first half of 2026 became more productive as they were integrated into operations. The company added approximately 1,800 employees in the first half and about 300 in the third quarter, he said.
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The improvement was particularly evident in U.S. Gas, where third-quarter gross margin rose to 8.2% from 4.2% in the preceding quarter. U.S. Gas revenue increased 40% year over year to $576 million, driven by higher bid work and volumes under master service agreements, or MSAs.
Brown said Centuri has also been updating contract prices to reflect higher fuel, fleet and other costs. All $4.8 billion of outstanding bids incorporate updated pricing, he said, and the company expects the vast majority of its backlog to reflect market pricing by this time next year.
