Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Organic revenue growth of nearly 60% was primarily driven by the data center and technology end market, where speed-to-market requirements from clients are accelerating.
Management attributes the record $5.7 billion backlog to a 'momentum' effect, where increasing project complexity and size favor firms with large-scale technical expertise and fabrication capacity. Strategic diversification into life sciences, healthcare, and education provided a stable growth foundation, while the manufacturing sector is emerging as a high-growth area due to reshoring trends. Operational efficiency is being realized through a 200,000 square foot expansion of fabrication capacity, allowing for more work to be shifted from the field to controlled factory environments.
The company successfully reduced pro forma net leverage from 3.0x to 1.5x in three quarters, despite completing the Bowers acquisition, which management views as a validation of their capital allocation strategy. A shift toward larger project awards, some exceeding $100 million, is creating higher quarterly booking volatility but reinforcing the company's competitive moat in mission-critical systems. Full-year 2026 revenue guidance was raised to $4.7-$4.8 billion, reflecting strong backlog coverage and faster-than-anticipated execution on fabrication projects.
Management expects the manufacturing end market to benefit significantly from reshoring and domestic semiconductor investments over the coming years. Capital expenditure guidance was increased by $15-$20 million to support incremental fabrication capacity expansion, including advanced tooling and automation to offset labor constraints. The M&A pipeline is described as being at its most active level ever, with a focus on high-end contractors that align with mission-critical service objectives.
Guidance assumes a continuation of current project timelines, though management noted that clients are increasingly seeking to lock in capacity for 2027 and beyond. A second-quarter impairment of goodwill and intangibles was recorded for the sustainability consulting business due to soft demand from commercial real estate clients. Reported gross margins were impacted by a mix shift toward the Installation and Maintenance segment following the Bowers acquisition, which carries lower margins than Engineering.
The company noted that large project bookings can come in 'waves,' which may lead to fluctuations in the quarterly book-to-bill ratio despite a strong 12-month trend of 1.4x. Legacy profit interest expenses continue to create volatility in reported GAAP results and effective tax rates, though these are non-cash items borne by pre-IPO shareholders. Nvidia-level potential. 30M+ investors trust Moby to find it first.
Extract — continue reading at the source.
