Primoris Services Corporation Reports Fourth Quarter and Full Year 2024 Results

DALLAS--(BUSINESS WIRE)--Primoris Services Corporation (NYSE: PRIM) (“Primoris” or the “Company”) today announced financial results for its fourth quarter and full year ended December 31, 2024, and provided the Company’s initial outlook for 2025.

For the full year 2024, Primoris reported the following highlights⁽¹⁾:

• Revenue of almost $6.4 billion, up $0.7 billion, or 11.4 percent, compared to the full year of 2023 driven primarily by strong growth in the Energy segment
• Net income of $180.9 million, or $3.31 per diluted share, up 43.4 percent from the full year of 2023 due to higher operating income and lower interest expense
• Record full year net cash provided by operating activities of $508.3 million, up $309.8 million from the full year of 2023, driven primarily by improved working capital and higher net income
• Record total backlog of $11.9 billion, up $1.0 billion or 8.9 percent from year end 2023, including total Master Service Agreements (“MSA”) backlog of $5.8 billion
• Adjusted net income of $211.4 million, or $3.87 per diluted share, an increase of 36.7 percent from the full year of 2023
• Adjusted earnings before interest, income taxes, depreciation, and amortization (“Adjusted EBITDA”) of $435.2 million, up 14.7 percent from the full year of 2023

For the fourth quarter 2024, Primoris reported the following highlights⁽¹⁾:

• Revenue of $1.7 billion, up $225.8 million, or 14.9 percent, compared to the fourth quarter of 2023 driven by growth in the Energy and Utilities segments
• Net income of $54.0 million, or $0.99 per diluted share, up 43.3 percent from the fourth quarter of 2023, driven by higher operating income and lower interest expense
• Record fourth quarter net cash provided by operating activities of $298.3 million, driven primarily by favorable changes in working capital and higher net income
• Adjusted net income of $61.8 million, or $1.13 per diluted share, up 33.4 percent from the fourth quarter of 2023
• Adjusted EBITDA of $116.6 million, or 6.7 percent of revenue, up 11.9 percent, from the fourth quarter of 2023.

“Primoris delivered another year of profitable growth in 2024, highlighting the successful execution of our strategy to allocate capital toward the highest return businesses and prioritize cash flow generation. We finished the year with record levels of revenue, operating income, and cash flow from operations. These accomplishments enabled us to improve margins, pay down debt and set us on a solid path to accomplish the multi-year financial and operational targets we set in the first half of 2024,” said Tom McCormick, President and Chief Executive Officer of Primoris.

“In several high growth areas, we were able to capitalize on favorable market trends to expand our power delivery margins through improved productivity and an active storm year, win and execute on multiple natural gas power generation projects and generate nearly $2.0 billion in revenue in our renewables business. We also ended the year with the highest total backlog in our history of $11.9 billion that is expected to provide the foundation for further revenue and profit growth opportunities.”

“As we progress into 2025, we believe we are well-positioned to meet the growing need for infrastructure investment in North America. Although uncertainty exists with regards to inflation, supply chain constraints, and changing trade and regulatory policies, our commitment to safely providing a broad range of critical infrastructure services enables us to continue building on long-standing, collaborative customer relationships. We are confident in our ability to adapt to these potential opportunities and challenges and grow profitably for the benefit of our customers, employees, and shareholders.”

Fourth Quarter 2024 Results Overview

Revenue was $1.7 billion for the three months ended December 31, 2024, an increase of $225.8 million, compared to the same period in 2023. The increase in revenue was primarily driven by renewables growth in the Energy segment and Utilities growth across all businesses. Operating income was $87.6 million for the three months ended December 31, 2024, an increase of $12.8 million compared to the same period in 2023. The increase was due to improved productivity in power delivery and gas operations in the Utilities segment, partially offset by lower revenues and margins in the pipeline business in the Energy segment. Operating income as a percentage of revenue increased slightly to 5.0 percent from 4.9 percent for the same period in 2023.

This press release includes Non-GAAP financial measures. The Company believes these measures enable investors, analysts, and management to evaluate Primoris’ performance excluding the effects of certain items that management believes impact the comparability of operating results between reporting periods. In addition, management believes these measures are useful in comparing the Company’s operating results with those of its peers. Please refer to “Non-GAAP Measures” and Schedules 1-4 for the definitions and reconciliations of the Company’s Non-GAAP financial measures, including “Adjusted Net Income,” “Adjusted EPS” and “Adjusted EBITDA”.

During the fourth quarter of 2024, net income was $54.0 million, or $0.99 per diluted share, an increase of 43.3 percent compared to $37.7 million, or $0.69 per diluted share, in the fourth quarter of the previous year. Adjusted Net Income was $61.8 million, or $1.13 per diluted share, for the fourth quarter, an increase of 33.4 percent compared to $46.4 million, or $0.85 per diluted share, for the fourth quarter of 2023. Adjusted EBITDA was $116.6 million for the fourth quarter of 2024, an increase of $12.4 million, or 11.9 percent, compared to $104.2 million for the same period in 2023.

Operating performance by segment for the three months ended December 31, 2024, and 2023 were as follows:

Utilities Segment (“Utilities”): Revenue increased by $87.6 million, or 15.2 percent, for the three months ended December 31, 2024, compared to the same period in 2023, primarily due to increased activity across communications, gas operations and power delivery compared to the prior year. Operating income for the three months ended December 31, 2024, increased by $35.1 million, or 228.4 percent, compared to the same period in 2023. The increase was primarily due to increased gross profit. Gross profit as a percentage of revenue increased to 12.1 percent in 2024 compared to 7.4 percent in 2023. The increase in gross profit margin is primarily attributable to improved productivity and storm restoration work in the power delivery market and increased activity from favorable weather in gas operations.

Energy Segment (“Energy”): Revenue increased by $148.1 million, or 15.6 percent, for the three months ended December 31, 2024, compared to the same period in 2023. The increase year-over-year was primarily due to increased renewables activity, partially offset by lower pipeline activity. Operating income for the three months ended December 31, 2024, decreased by $14.2 million, or 17.6 percent, compared to the same period in 2023, primarily due to lower gross profit. The decline in gross profit was primarily attributable to fewer project closeouts in renewables and a decrease in pipeline revenue, partially offset by strong margin performance by our industrial group. As a result, gross profit as a percentage of revenue decreased to 9.5 percent during the three months ended December 31, 2024, compared to 12.0 percent in the same period in 2023.

Full Year 2024 Results Overview

Revenue for the year ended December 31, 2024, increased by $0.7 billion, or 11.4 percent, compared to 2023. The increase was primarily due to growth in the Company’s Energy segment.

For the year ended December 31, 2024, operating income increased by $64.4 million, or 25.4 percent, compared to 2023. The increase was primarily driven by increased gross profit in both segments. Operating income as a percentage of revenue increased to 5.0 percent compared to 4.4 percent in 2023, primarily driven by improved margins in our Utilities segment.

For the full year 2024, net income was $180.9 million, or $3.31 per fully diluted share, compared to $126.1 million, or $2.33 per fully diluted share, in the previous year, an increase of 43.4 percent. Adjusted Net Income was $211.4 million, or $3.87 per fully diluted share, for the full year 2024 compared to $154.7 million, or $2.85 per fully diluted share, in 2023. Adjusted EBITDA was $435.2 million for 2024, an increase of 14.7 percent, compared to $379.5 million for the full year 2023.

Operating performance by segment for the years ended December 31, 2024, and 2023 were as follows:

Utilities: Revenue increased by $28.9 million, or 1.2 percent, during 2024 compared to 2023. The increase is primarily due to increased project work in our power delivery market and increased activity in our gas and communications markets. Partially offsetting the overall increase was the substantial completion of a major substation project in our power delivery market in the second half of 2023. Operating income increased $50.5 million, or 56.6 percent, during 2024 compared to 2023 primarily due to increased gross profit. Gross profit as a percentage of revenue increased to 10.6 percent in 2024 compared to 8.6 percent in 2023. The increase is primarily attributable to productivity issues on some legacy projects from our PLH acquisition experienced in 2023 and higher costs associated with a communications project in 2023. In addition, we had strong performance in our power delivery market and the benefit of higher margin storm work in 2024.

Energy: Revenue increased by $685.8 million, or 20.5 percent, during 2024 compared to 2023, driven by increased renewable energy and industrial activity, partially offset by decreased activity in our pipeline market. Operating income increased by $47.2 million, or 19.0 percent, during 2024 compared to 2023, primarily due to strong revenue growth. Gross profit as a percentage of revenue decreased slightly to 11.0 percent in 2024 compared to 11.4 percent in 2023 as higher pipeline margins on a mid-Atlantic project in 2023 did not repeat in 2024. These amounts were partially offset by growth in higher margin renewable energy work and strong performance by our industrial group in 2024.

Other Income Statement Information

Selling, general and administrative (“SG&A”) expenses were $383.4 million during the year ended December 31, 2024, an increase of $54.6 million, or 16.6 percent, compared to 2023, primarily due to increased personnel costs to support revenue growth as well as higher technology costs associated with ongoing initiatives. SG&A expense as a percentage of revenue increased slightly to 6.0 percent in 2024 compared to 5.8 percent in 2023. SG&A expenses were $96.5 million during the fourth quarter of 2024, an increase of $15.8 million, or 19.6 percent, compared to 2023. SG&A expense as a percentage of revenue increased slightly to 5.5 percent for the fourth quarter of 2024 compared to 5.3 percent for the fourth quarter of 2023. The increase in both SG&A expense and SG&A expense as a percentage of revenue in the fourth quarter of 2024 was primarily driven by higher personnel costs and incentive compensation related to improved operational performance.

Interest expense, net for the year ended December 31, 2024, was $65.3 million compared to $78.2 million for the year ended December 31, 2023. Interest expense, net for the fourth quarter of 2024 was $12.3 million compared to $21.7 million for the fourth quarter of 2023. The decreases of $12.9 million for the full year and $9.4 million for the fourth quarter of 2024 were due to lower average debt balances and interest rates. Interest expense for 2025 is expected to be approximately $44 to $48 million depending on average debt balances and changes in interest rates.

Our provision for income taxes increased $22.5 million to $74.0 million for 2024 compared to 2023. The increase was primarily driven by an increase in pre-tax profits subject to tax. The 2024 effective tax rate was 29.0 percent. The Company expects its effective tax rate for 2025 to be approximately 29 percent but it may vary depending on the mix of states in which the Company operates.

Outlook

The Company is providing its estimates for the year ending December 31, 2025. Net income is expected to be between $203.3 million and $214.3 million. Earnings per Share (“EPS”) is expected to be between $3.70 and $3.90 per fully diluted share. Adjusted EPS is estimated in the range of $4.20 to $4.40, and Adjusted EBITDA for the full year 2025 is expected to range from $440 to $460 million.

The Company is targeting SG&A expense as a percentage of revenue in the low six percent range for full year 2025. The Company estimates capital expenditures for 2025 in the range of $90 to $110 million, which includes $60 to $80 million for construction equipment. The Company’s targeted gross margins by segment are as follows: Utilities in the range of 9 to 11 percent; Energy in the range of 10 to 12 percent.

Adjusted EPS and Adjusted EBITDA are non-GAAP financial measures. Please refer to “Non-GAAP Measures” and Schedules 1-4 below for the definitions and reconciliations. The guidance provided above constitutes forward-looking statements, which are based on current economic conditions and estimates, and the Company does not include other potential impacts, such as changes in accounting or unusual items. Supplemental information relating to the Company’s financial outlook is posted in the Investor Relations section of the Company’s website at www.prim.com.

At December 31, 2024, total Fixed Backlog was $6.1 billion, an increase of $0.9 billion, or 17.2 percent compared to $5.2 billion at December 31, 2023. Total MSA Backlog was $5.8 billion, an increase of $0.1 billion, or 1.3 percent, compared to $5.7 billion at December 31, 2023. Total Backlog as of December 31, 2024, was $11.9 billion, including Utilities backlog of $5.5 billion and Energy backlog of approximately $6.4 billion.

Backlog, including estimated MSA revenue, should not be considered a comprehensive indicator of future revenue. Revenue from certain projects where scope, and therefore contract value, is not adequately defined, is not included in Fixed Backlog. At any time, any project may be cancelled at the convenience of the Company’s customers.

Balance Sheet and Capital Allocation

At December 31, 2024, the Company had $455.8 million of unrestricted cash and cash equivalents. In the fourth quarter of 2024, capital expenditures were $23.6 million, including $21.0 million on facilities and $2.4 million in construction equipment purchases. Capital expenditures for the twelve months ended December 31, 2024, were $126.6 million, including $81.9 million on facilities and $36.6 million for construction equipment.

The Company also announced that on February 19, 2025, its Board of Directors declared a $0.08 per share cash dividend to stockholders of record on March 31, 2025, payable on approximately April 15, 2025. During the twelve months ended December 31, 2024 the Company did not purchase any shares of common stock under its share purchase program. The share purchase plan expired on December 31, 2024.

Conference Call and Webcast

As previously announced, management will host a conference call and webcast on Tuesday, February 25, 2025, at 9:00 a.m. U.S. Central Time (10:00 a.m. U.S. Eastern Time). Tom McCormick, President and Chief Executive Officer, and Ken Dodgen, Executive Vice President and Chief Financial Officer, will discuss the Company’s fourth quarter and full year 2024 results and its business outlook for 2025.

Interested parties are invited to dial-in at 1-800-715-9871, or from outside the U.S. at 1-646-307-1963, using access code: 1324356, or by asking for the Primoris conference call. A link to the webcast will be accessible from the “Investors” section of the Company’s website at www.prim.com. A replay of the conference call will be available Tuesday, February 25, 2025, beginning at 5:00 p.m. U.S. Central Time for seven days. The phone number for the conference call replay is 1-800-770-2030 or, for calls from outside the U.S., 1-647-362-9199, using access code: 1324356 followed by the # key. The replay of the webcast will also be available on the Company’s website following the end of the live call.

Presentation slides to accompany the conference call are available for download under “Events & Presentations” in the “Investors” section of the Company’s website at www.prim.com.

Non-GAAP Measures

This press release contains certain financial measures that are not recognized under generally accepted accounting principles in the United States (“GAAP”). Primoris uses earnings before interest, income taxes, depreciation and amortization (“EBITDA”), Adjusted EBITDA, Adjusted Net Income, and Adjusted EPS as important supplemental measures of the Company’s operating performance. The Company believes these measures enable investors, analysts, and management to evaluate Primoris’ performance excluding the effects of certain items that management believes impact the comparability of operating results between reporting periods. In addition, management believes these measures are useful in comparing the Company’s operating results with those of its competitors. The non-GAAP measures presented in this press release are not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. In addition, Primoris’ method of calculating these measures may be different from methods used by other companies, and, accordingly, may not be comparable to similarly titled measures as calculated by other companies that do not use the same methodology as Primoris. Please see the accompanying tables to this press release for reconciliations of the following non‐GAAP financial measures for Primoris’ current and historical results: EBITDA, Adjusted EBITDA, Adjusted Net Income and Adjusted EPS.

About Primoris

Primoris Services Corporation is a leading provider of critical infrastructure services to the utility, energy, and renewables markets throughout the United States and Canada. Built on a foundation of trust, we deliver a range of engineering, construction, and maintenance services that power, connect, and enhance society. On projects spanning utility-scale solar, renewables, power delivery, communications, and transportation infrastructure, we offer unmatched value to our clients, a safe and entrepreneurial culture to our employees, and innovation and excellence to our communities. To learn more, visit www.prim.com and follow us on social media at @PrimorisServicesCorporation.

Forward Looking Statements

This press release contains certain forward-looking statements, including the Company’s outlook, that reflect, when made, the Company’s expectations or beliefs concerning future events that involve risks and uncertainties, including with regard to the Company’s future performance. Forward-looking statements include all statements that are not historical facts and can be identified by terms such as “anticipates”, “believes”, “could”, “estimates”, “expects”, “intends”, “may”, “plans”, “potential”, “predicts”, “projects”, “should”, “targets”, “will”, “would” or similar expressions.

Company Contact
Ken Dodgen
Executive Vice President, Chief Financial Officer
(214) 740-5608
kdodgen@prim.com

Blake Holcomb
Vice President, Investor Relations
(214) 545-6773
bholcomb@prim.com