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Shimmick (SHIM) Q1 2026 Earnings Transcript

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Thursday, May 14, 2026 at 4:30 p.m. ET

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Image source: The Motley Fool.Thursday, May 14, 2026 at 4:30 p.m. ETNeed a quote from a Motley Fool analyst? Email pr@fool.comContinue reading

Image source: The Motley Fool.

Thursday, May 14, 2026 at 4:30 p.m. ET

CALL PARTICIPANTS

Chief Executive Officer — Ural Yal
Chief Financial Officer — Todd Yoder

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TAKEAWAYS

Consolidated Revenue — $88 million, reflecting a decline due to project completions and lower new project burn, but signaling an expected ramp-up as new awards proceed.
Gross Margin — 12% for total consolidated revenue, improving from 4% the previous year, with Shimmick core projects at 11%, up from 6%.
Adjusted EBITDA — $3 million, a turnaround from negative $3 million the prior year, attributed to higher gross margin on core projects.
Net Loss — $4 million, favorably improved versus $10 million the previous year, supported by a stronger gross margin profile.
Total Backlog — $944 million at quarter end, the highest reported in over two years, driven by $289 million in new bookings this quarter.
Book-to-Burn Ratio — 2.6, the highest since IPO, indicating backlog growth outpacing revenue burn.
Noncore Project Revenue — $200,000, sharply reduced from $29 million the prior year due to termination of the Chickamauga Lock Replacement Project and continued wind-down of legacy work.
Noncore Backlog — Less than 5% of total, further supporting gross margin improvement as mix shifts to core projects.
Liquidity — $34 million at quarter end, with $15 million in unrestricted cash and $19 million available under credit agreements.
Full-Year Guidance — Revenue expected to grow 12%-22% with adjusted EBITDA projected to increase 200%-500%, unchanged despite the Chickamauga project termination.
Major Contract Awards — Notable new wins in California and Texas, including flood protection infrastructure, wastewater treatment plant expansion, and the Vista Grande Drainage Basin Improvements project.
Emerging Markets — Axia electrical business performing well and increased bidding activity in the data center segment, particularly in Texas and Reno.
Leadership Addition — Appointment of Sarah Tacker as Executive Vice President and Chief Operating Officer, emphasizing operational execution and risk management.
Collaborative Contracting — Selection for a $50 million progressive design-build wastewater plant in Southern California with California Water Service, post quarter-end and not yet reflected in backlog.
Project Pipeline — Expected monthly bidding activity of $600 million to $1 billion, providing sustained revenue visibility and flexibility in project selection.
Margin Trend in Backlog — Projects currently in backlog bid between 10%-20% margins, facilitated by improved backlog quality and selectivity.
Average Project Duration — Approximately 2.5 years, supporting revenue into 2027 and beyond.

SUMMARY

Shimmick Corporation (SHIM +8.19%) reported a significant sequential increase in new project awards and sustained margin improvement, while successfully reducing noncore activities and maintaining robust liquidity. Management reinforced that guidance remains unchanged despite the Chickamauga project termination, highlighting confidence in backlog quality and near-term growth drivers. Notably, contract wins in core infrastructure and the expansion into data centers underscore the company’s strategic evolution and revenue visibility for future periods.

CFO Todd Yoder stated, “book-to-burn of 2.6 for the quarter, which is the highest book-to-burn achieved since becoming a public company.”
CEO Ural Yal said, “noncore work now representing less than 5% of total backlog, further supporting visibility and execution consistency going forward.”
The company confirmed the Chickamauga Lock Replacement Project termination reduced legacy work and no material negative impact on client relationships or future bidding is expected.
Management indicated that higher commodity costs and fuel are incorporated into current bid pricing, mitigating risk from input price inflation.
Current backlog will provide revenue into 2027 and some projects extend into 2028, lengthening revenue visibility beyond the current fiscal year.

INDUSTRY GLOSSARY

Book-to-Burn Ratio: The ratio of new project awards (bookings) to revenue recognized (burned) over a given period, used to gauge backlog growth versus project execution.
Progressive Design Build: A collaborative project delivery method where the contractor and owner work together through design and construction phases, allowing flexible scoping and early contractor involvement.
Backlog: The value of contracted projects not yet recognized as revenue, indicating future work and revenue pipeline.
Adjusted EBITDA: Earnings before interest, taxes, depreciation, and amortization, adjusted for nonrecurring or special items to reflect operating performance.
Noncore Projects: Legacy or nonstrategic contracts outside the company’s current focus, typically associated with lower margins or specific risks.

Full Conference Call Transcript

Ural Yal: Good afternoon, and thank you all for joining us on today’s call. I’m joined by Todd Yoder, Shimmick’s CFO. As always, I would like to recognize the men and women who work at Shimmick, safely and effectively delivering the projects we take on. We’re all very proud of the work we put in every day that makes a real difference in communities across the states we operate in. With that, I’m going to start by discussing our financial results for the first quarter of 2026.

I’m pleased to report that we are continuing to make progress on our strategy, which centers around growing our top line by bidding and winning work aligned with our expertise, winding down noncore projects and executing at a high level to deliver consistent margins. For the first quarter, we delivered consolidated revenue of $88 million, 12% gross margin and adjusted EBITDA of approximately $3 million. We expanded our gross margin on Shimmick projects to 11%, an 89% improvement over last year. We’re already seeing increasing monthly top line revenues as the winter weather subsides and new projects start to ramp up. What’s important also is the trajectory.

We now have secured and continuing to secure backlog that is going to fuel our growth the rest of the year and beyond. We are excited by the progress we’re making on our backlog and have achieved our highest book-to-burn ratio since the company went public, reflecting strong demand and improving project quality. At the same time, we continue to scale Shimmick projects as a percentage of the overall portfolio with noncore work now representing less than 5% of total backlog, further supporting visibility and execution consistency going forward. Looking forward, we expect activities on existing and newly won projects pick up as we head into the summer months.

July, August and September are when we expect to see more visible inflection in revenue as new projects begin generating consistent burn. Meanwhile, we’re continuing to win new work, and our teams are well positioned to deliver consistent and growing revenues. For our noncore projects, revenue was $200,000 compared to $29 million a year ago, largely as a result of the termination by the U.S. Army Corps of Engineers of the Chickamauga Lock Replacement Project in Chattanooga, Tennessee, which I’d like to address in more detail. From time to time, differences of view arise on projects, including scope of work and schedules. And in this instance, the matter is proceeding through the customary federal process.

We remain constructive in our approach, appreciate our clients’ focus on project completion and are confident that the parties will be able to reach a mutually agreeable resolution in due course. Importantly, this situation does not affect our broader relationship with the U.S. Army Corps of Engineers, who has been a long-term client for us with our first project dating back to the 1940s through our legacy companies. We currently have 2 other projects underway with the core, one approximately halfway complete and the other one nearing completion, and these projects continue to progress as planned.

As we continue to wind down noncore activities, this development further reduces our remaining noncore backlog to under 5%, allowing us to remain focused on our core priorities. Now I’d like to spend some more time digging into our progress, provide an update on market conditions and discuss our continued focus on execution. We continue to see strong momentum across our core geographies, highlighted by our ongoing success winning work in Texas and sustained bidding activity across the platform. Importantly, the work we are booking is firm, contracts are signed, visibility is solid and the projects we’ve added to backlog are scheduled to begin ramping up this year.

This gives us confidence not just in demand, but in timing and execution as we move through the balance of 2026. We’re seeing healthy demand across our end markets and improved selectivity in the work we pursue. This momentum reflects the collective efforts of our teams across the organization, and our focus remains on sustaining a book-to-burn profile that supports consistent growth and improved revenue visibility over time. With that backdrop, Axia continues to perform well, and we’re encouraged by the growth and momentum we’re seeing in the segment. The electrical business remains an important pillar of our long-term strategy, and Axia’s progress reinforces our confidence in that vertical as we look to further expand capabilities and market share.

We’re also seeing increasing opportunity in data centers, which remains an attractive and growing end market for us. Today, we have multiple active bids in Reno and in Texas, and we are in regular dialogue with those customers. While still early, the level of engagement and inbound activity reinforces our view that data centers represent a compelling growth vertical over the medium and to long-term. From a commercial standpoint, the environment looks very similar to last quarter with a strong and growing backlog, a healthy pipeline of work and several pending items we expect to convert over the next quarter or 2. Our overall 24-month pipeline remains robust with expected $600 million to $1 billion in bidding volumes per month.

Looking forward, our pipeline continues to be a real strength, allowing us to grow our revenues and margins while being selective and strategic about what we pursue. Our elevated level of bidding activity translated directly into meaningful backlog growth during the quarter with the total backlog increasing to $944 million at the end of the first quarter of 2026. This represents our highest backlog level in more than 2 years, reflecting both improved win rates and continued discipline around the work we pursue. This momentum is also evident in our book-to-burn ratio of 2.6 in the first quarter. During the quarter, we booked $289 million in new work.

Taken together, these wins enhance revenue visibility and support our expectation for accelerated growth as projects begin to ramp up over the course of the year. These new projects include major flood protection and storm water infrastructure projects in California as well as wastewater expansion work in Texas, reflecting strong demand for our core capabilities across our target markets. In California, we were awarded several water resources projects that speak to the critical nature of our work and our in-depth experience in the state. In Northern California, the Vista Grande Drainage Basin Improvements project represents a large-scale modernization of stormwater infrastructure designed to address chronic flooding challenges and improve resilience for the surrounding community.

The project involves complex underground construction and integrated civil, mechanical and electrical scopes, aligning well with our core self-perform capabilities. We were also awarded additional flood protection work in Napa, where we will construct new flood walls as part of the county’s broader long-running flood management program. This project further expands our presence in Northern California and reinforces our role in delivering essential infrastructure that protects communities and local economies. And in Texas, we continue to see attractive opportunities tied to population growth and long-term infrastructure investment. During the quarter, we were selected for a wastewater treatment plant expansion project in Austin, supporting the city’s efforts to increase capacity and meet rising demand.

The scope includes complex concrete structures, underground systems and process-related infrastructure and reflects continued demand for our technical expertise in water and wastewater markets. Our strategy is focused on improving execution, so revenue growth translates into stronger and more consistent net income. That starts with operational discipline. We’ve been implementing targeted enhancements across the business to improve visibility, accountability and decision-making as we scale. Experienced leadership is a key part of that. In April, we announced the appointment of Sarah Tacker as Executive Vice President and Chief Operating Officer. We continue to bolster our management team with hands-on operational experience at scale, which is driving more disciplined project execution and risk management.

We’re also strengthening our project controls and technology, giving us better insight into cost, schedule and productivity. This allows us to identify issues earlier and manage performance more proactively. Centralized procurement is improving purchasing efficiency and cost control by leveraging our scale and standardizing processes across the organization. And talent retention and acquisition remain a top priority for us. Having the right people in place is critical to executing our strategy effectively in a competitive labor market. Additionally, we continue to advance our shift towards more collaborative contracting models.

Subsequent to quarter end, we were selected for a project with California Water Service for a wastewater treatment plant in Southern California delivered through a progressive design build contract with an estimated construction value of $50 million. While this opportunity is not reflected in our quarter end backlog, it showcases demand for our capabilities and supports our strategic focus on projects that give us an opportunity to partner with our clients earlier in the project life cycle. These projects support our strategy toward risk balance contracts where we provide value to our clients through our technical expertise. With that, I’d like to turn to Todd, who will review our financials in more detail.

Todd Yoder: Thank you for joining us today. The Shimmick team has delivered another solid quarter of performance, and we are seeing our strategic changes over the past year continue to drive results, not only drive year-over-year improvements, but more importantly, establishing the foundation for continued growth and profitability moving forward. Before I hit the financials, I just want to echo your role in thanking all of the talented men and women across Shimmick. I thank each of you for your continued commitment to executing the strategy, your focus on safety, which is the most important thing we do. Your commitment to the quality of the work we deliver to our clients every day and your dedication to executing with excellence.

Your contributions have had a significant impact on the achievements we’ve made over the past 15 months and put us in a strong position to continue growing the business and winning the right way. Now let’s jump into the financial results. I have revenue and gross margin in Slide 8, but I will talk to — I will talk about the overall performance for the quarter and reference additional information that is available in our 10-Q filing posted to our website. All comparisons I make will be on a quarter-over-quarter basis as compared to the same period in 2025, unless otherwise noted. Shimmick project revenue for Q1 2026 was $88 million versus $93 million in Q1 of 2025.

The net difference of $5 million was driven by prior year projects reaching completion during 2025 or nearing completion and winding down earlier this year, combined with a lower burn on new projects, which we will continue to see ramp up throughout 2026. Noncore project revenue for Q1 ’26 was $200,000, nearly flat, down from $29 million in Q1 of 2025. The $29 million decrease was driven by the termination of the Chickamauga Lock Replacement Project as well as a $10 million impact from the continued progress we’ve made in moving all noncore projects to completion. I’ve discussed the negative gross margin impact from noncore projects on our total gross margin on prior calls.

And I couldn’t be more excited to end the quarter with noncore backlog now less than 5% of our total backlog. This means we will continue to see favorable mix impact on total gross margin moving forward on a year-over-year basis. Shimmick consolidated total revenue for Q1 ’26 was $88 million as compared to $122 million in Q1 of ’25. Shimmick project gross margin was $10 million for Q1 ’26, up $5 million or 89% as compared to $5 million in Q1 of ’25. Gross margin as a percentage of revenue was up significantly to 11% for Q1 of 2026 versus 6% for Q1 of 2025.

A $5 million increase in gross margin was driven by $3 million from new projects and $2 million from existing projects. The noncore project gross margin was $1 million for Q1 ’26 as compared to negative $1 million for Q1 of 2025. The $2 million increase in gross margin was driven by a positive outcome from a project closeout as well as cost overruns on noncore lost projects during the first quarter of 2025 that did not recur this year. Shimmick consolidated total gross margin for Q1 2026 was $11 million, up $6 million or 132% compared to $5 million of gross margin in Q1 of 2025.

Total gross margin as a percentage of revenue improved to 12% from 4% in Q1 of 2025. G&A expense for Q1 ’26 was $14 million, flat as compared to Q1 of 2025. This is as we continue to optimize our overhead while growing the business. Net loss for Q1 was $4 million, favorable $6 million or 55% as compared to a net loss of $10 million in Q1 of 2025. Adjusted EBITDA for Q1 ’26 was $3 million as compared to negative $3 million in the first quarter 2025. The improvement was driven by the significant increase in gross margin from Shimmick projects on a year-over-year basis. Turning to liquidity. We ended the first quarter with $34 million of liquidity.

The $34 million consisted of unrestricted cash, cash equivalents of $15 million and another $19 million of availability under our credit agreements. New awards booked during Q1 ’26 were $289 million, a sequential increase of $150 million from Q4 of 2025, giving us a book-to-burn of 2.6 for the quarter, which is the highest book-to-burn achieved since becoming a public company. We ended the quarter with total backlog of $944 million. On Slide 9, I have our 2026 full year guide. As I mentioned on our last call, we expected a slower start to 2026 and largely, the first quarter was in line with our expectations.

We expect quarter-over-quarter sequential improvement throughout the year as these new project awards start to ramp up. Despite the termination of the Chickamauga Lock Replacement Project that I mentioned earlier, we are reaffirming our full year 2026 guidance. We expect Shimmick consolidated revenue to grow year-over-year between 12% and 22%. That is 17% at the midpoint, representing approximately $550 million to $600 million of work put in place for the full year 2026. We also expect adjusted EBITDA to increase year-over-year between 200% and 500%. That’s 350% at the midpoint. We would finish the year with adjusted EBITDA in the range of $15 million to $30 million.

With that, I want to thank you for joining us today and for your interest in Shimmick, and I’ll turn it back to you, Ural.

Ural Yal: Overall, we are energized by our first quarter performance. We delivered our highest book-to-burn ratio since becoming a public company and ended the quarter with the largest backlog we’ve reported in more than 2 years. Just as importantly, we continue to make progress winding down noncore work, further improving backlog quality and positioning the business for more consistent execution and sustainable growth. As we look ahead, we believe the momentum exiting the quarter provides a solid foundation for the remainder of the year. We look forward to updating you on our progress as we move forward in 2026. Operator, you may now open the line for questions.

Operator: [Operator Instructions] Our first question will come from Aaron Spychalla with Craig-Hallum.

Aaron Spychalla: Maybe first for me, just on — Todd, you kind of just talked about it on backlog, but just wanted to kind of confirm. So, Chick Lock, out of backlog and then for the guide, revenue and EBITDA, can you just kind of talk about the impact there, reiterating the guidance. Any other financial impact? And then it sounds like you don’t expect any impact on your ability to go out and win — and bid on new work from that?

Ural Yal: Yes. Maybe I’ll start and then turn it over to Todd. Thanks for the question. So yes, generally, we’re — even though there’s a reduction in revenue from Chick Lock, we believe we can — we believe we’re going to hit the guidance on the revenue side. We may trend towards maybe a little bit on the lower side, but we think based on the really strong backlog we got over this quarter and everything that we’re planning to book that’s pending. We have a really good start to the year, and we expect to see pretty significant revenue growth here the rest of the year.

Todd Yoder: Yes. I would just add to that, in ’25, we burned in noncore just under $100 million. And we didn’t expect to burn anywhere near that in ’26. So, it’s not as big of an impact as when you’re looking at it on a year-over-year basis. And then the second thing to Ural’s point, with $289 million of new awards booked just in the first quarter, we have — we feel very confident that the numbers are achievable.

Ural Yal: And going back to the ability to win work, we’re bidding just like we have been. We don’t expect any slowing down there. And like I said, we have some pending awards, but we’re continuing to bid at about the same clip that we have been for the last 6, 8 months.

Aaron Spychalla: Good. And then just on margins, good performance in the quarter for the core business. Can you just kind of talk about confidence there, margins that are in backlog and what you’re bidding? And then just any — how you’re kind of navigating impact from higher commodity costs in that as well?

Ural Yal: Yes. We’re — generally, as far as higher commodity costs, new work we’re bidding, that’s all getting built into the pricing. So, if you’re going to win a project, that’s the inflation and supply chain issues will be built into our pricing. So, we don’t expect any issues there, the same as fuel. And we’re managing the rest of it for the book of business that we have. I expect we’re going to continue to grow on the gross margin side and start to really get into those 12s and the 13s as we get through and start really burning the work that we have won in 2025 since Todd and I have joined.

Todd Yoder: Yes. And I would just add to that, when you’re modeling it out with the noncore that we did have in backlog ending 2025, right? It was a significant drag on — even though they are lost projects with 0 margin, there’s always costs that occur to keep those projects operating. So, when you take that kind of drag off of it, it may be a little lumpy as construction businesses, right? But an 11% print on Shimmick work is very encouraging.

Aaron Spychalla: Yes. Good. And that kind of just the last question, you kind of started to touch on it there. Just I mean, cash flow and the outlook there. It sounds like there might be — or might have been some drag on completing some of the legacy work. So just kind of outlook for cash flows as some of these new projects ramp up to you.

Ural Yal: Yes. The less legacy work we have, the better for our cash flow generally, that has been the case. So, we expect improvement there as well as not only as we really just burn all of the legacy work, noncore work, but also as these newer projects get online and start generating upfront cash to help with the cash flow. So, we’re very optimistic about the rest of the year on that side as well.

Todd Yoder: Yes. I covered very optimistic on liquidity. The rest of the business outside of the legacy projects, noncore projects have generated cash and continue to generate cash. So very optimistic.

Operator: Your next question will come from Gerry Sweeney with ROTH.

Gerard Sweeney: I wanted to talk about gross margins a little bit further. Obviously, I think you highlighted selectivity, your ability to, I guess, be a little bit more selective with projects on a go-forward basis. And I think you printed 11% for Shimmick projects this quarter. Those projects that you’re seeing in — that are coming through today, when were they bid? And what were they bid at versus what you’re bidding today?

Ural Yal: Yes. Good question. So, within the Shimmick portfolio, there are projects anywhere between 10% and 20%. But as we get in a better position from a backlog perspective, we’re able to be more selective with what we bid because we have the kind of the core backlog already in place. We’re now in that position. We’re going to inch that up to about 2.5x as far as revenue backlog versus revenue. So that’s our goal through as the rest of the year unfolds. But generally, having that kind of a strong backlog now allows us to bid at higher margins or pick the projects to bid that we can get at higher margins.

So, I expect that to continue to — that 11% to continue to go up from here.

Gerard Sweeney: And with over $900 million in backlog, you’re starting to book business into ’27 and later, correct?

Ural Yal: Yes. Our average job is about 2.5 years. So, it’s — we have a year-long job. We have 4-year job, but if you average it out, it’s about 2.5 years. So, we’re setting ourselves up really well for ’27 and some of it into 2028, yes.

Gerard Sweeney: Got it. And then switching gears to data centers, everybody is talking about data centers. And obviously, you rebranded Axia. But the way we sort of been dissecting the data center work is, it probably takes between 2 and 3 years between say, hey, we want to build a data center to site selection, permitting to maybe shovels hitting the ground, and we’re starting to see a lot of dollars come through on some front-end E&C companies on the concrete side. Arguably, the electrical is a little bit further along in that curve, right?

And I know you’re going after data centers, but what I’m trying to say is as that business starts to accelerate and you’re getting into that business, there’s probably a dearth of probably qualified electricians. So, we should start to see more and more opportunities on the electrical side for you as we move through this year into next year. Is that a fair assumption?

Ural Yal: That’s a fair assumption. And also, I would say the types of work that we’re bidding within the data center world is in the mechanical and the electrical side. So, we’re not really doing a lot of the — bidding a lot of the kind of earthwork concrete pieces of it that fits this type of work fits us better. So, water treatment, water purification, electrical data center, the racks, the switchgear, the medium voltage and then even the power generation side. So, we have a lot of opportunity there that both fits the Axia brand, the electrical business as well as the core business as well from a water treatment process mechanical piece.

Gerard Sweeney: Got it. I was just using concrete like that’s sort of the first step in your after that. At what point would a data center or — I assume you’re working with the data centers will be other E&C companies. But how much visibility do you have between bidding and maybe the start of the jobs that are related to the data center?

Ural Yal: It’s usually — again, it’s not that different from our public works projects. So, we bid it and then over the next few months after that, we have — we will know if we want it or not. So, we’re bidding actively right now. And I mean, I think the good news is lot of these data centers are really shifting towards Texas, which is where we’re growing as well. So that has brought in a lot more opportunity. And then on the West Coast, it’s Reno, that’s kind of the work center in Reno, which also is a great, easy place for us to work. So, we’re in the right place right now.

Gerard Sweeney: Got you. One last question. I know the legacy work was only $200,000 and there was some of the Chickamauga negotiations with the Army Corps. How much — if that had not occurred, I’m just curious how much sort of revenue from Chickamauga would have come through because you had the $88 million of revenue, you had a weather hit and you had Chickamauga. Just trying to levelize what happened in 1Q as well, if that makes sense.

Ural Yal: Somewhere around $20 million to $30 million this year. So, this year, it went down more than half.

Gerard Sweeney: Okay. And like we said, I mean, at the end of the day, this helps your margin profile, helps your cash flow and it’s going to go through the standard federal process, correct?

Ural Yal: Yes. That’s — yes, obviously, it’s — yes, it’s — there’s an established process there, and we’re working — we’re confident we’re going to get to an amicable solution. It takes a while with the federal process. But in the meantime, everything you said about backlog and cash and everything else is very accurate.

Gerard Sweeney: And that’s a legacy from like 2017 or 2018. It’s — I think it started 2004 originally, but not here.

Ural Yal: Yes. We did that project in 2017, pre-COVID, a long time ago, along with a couple of other of these legacy projects. So, we’re looking forward to really getting them done and moving for new work.

Gerard Sweeney: Congrats. Very nice quarter on the margins.

Operator: There are no further questions at this time. I’d now like to turn the call over to Ural all for closing remarks.

Ural Yal: We’ve had another strong quarter aligned with our expectations and the strategy that we put in place back in 2025 and a lot of the backlog and our margins, gross margins are reflecting that. We’re still in the early phases of our growth, but we expect the rest of the year to be — to continue to improve and have a very strong year and looking forward to the next quarter. Thank you.