Electrical construction and infrastructure services provider MYR Group (NASDAQ: MYRG) reported revenue ahead of Wall Street’s expectations in Q2 CY2026, with sales up 20.1% year on year to $1.08 billion. Its non-GAAP profit of $3.17 per share was 19.9% above analysts’ consensus estimates.

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StockStory’s Take

MYR Group’s second quarter results drew a positive market reaction, as the company delivered strong revenue growth and margin improvement fueled by robust demand across both transmission & distribution (T&D) and commercial & industrial (C&I) segments. Management credited higher productivity, favorable project closeouts, and increased scope on certain contracts as key drivers. CEO Rick Swartz highlighted, “We saw steady activity across our markets with ongoing infrastructure investments and electrification initiatives supporting demand.” Segment leaders pointed to both new project awards and repeat business as important contributors to backlog growth this quarter.

Looking forward, MYR Group’s outlook is underpinned by its recent acquisitions, an expanded project backlog, and ongoing infrastructure modernization trends. Management expects the successful integration of Valley Electric and Comet Electric to broaden the company’s capabilities and customer reach, while also supporting organic growth. CFO Kelly Huntington noted that revenue contributions from these acquisitions will be “neutral” to earnings in the near term due to amortization of backlog, but the company anticipates strong EBITDA growth driven by higher-margin projects. Swartz emphasized, “We continue to see opportunities throughout our markets as investment in electrical infrastructure evolves.”

Key Insights from Management’s Remarks

Management attributed the quarter’s performance to strong execution, project diversification, and continued customer demand in both T&D and C&I, with recent acquisitions and large contract wins positioning the company for long-term growth.

• C&I Segment Acceleration: The commercial and industrial segment delivered its highest-ever quarterly revenue, driven by increased activity in data centers, advanced manufacturing, and repeat business across key markets. COO Don Egan cited sustained investment in power infrastructure and industrial facilities as core demand drivers.
• T&D Contract Wins: The transmission and distribution segment secured significant new project awards, including two large transmission jobs for Xcel Energy and multiple substation projects across several states. COO Brian Stern emphasized ongoing grid modernization and rising electricity demand as catalysts for continued bidding activity.
• Margin Expansion: Both segments achieved operating margin improvement, attributed to strong project execution, favorable closeouts, and successful management of project scope increases. Management noted that a larger share of projects progressed at higher contractual margins, particularly in the C&I segment.
• Integration of New Acquisitions: The addition of Valley Electric and Comet Electric, with their strong pre-fabrication capabilities and established customer relationships, is expected to enhance MYR Group’s competitive positioning and geographic footprint. Swartz and Egan both stated that integration is progressing smoothly with system and process alignment underway.
• Healthy Backlog and Customer Mix: Backlog reached a new high, driven by a balanced mix of new wins and repeat customers. Management highlighted that over 90% of business is generated from long-term client relationships, providing stability and lower project risk, while ongoing diversification across end markets supports resilience against market fluctuations.

Drivers of Future Performance

MYR Group’s guidance centers on sustained infrastructure demand, recently acquired capabilities, and an expanding backlog, balanced by cautious expectations for margin progression and cash flow normalization.

• Acquisition Integration and Revenue Contribution: Management expects Valley Electric and Comet Electric to add approximately $250 million in revenue for the remainder of the year, with initial earnings per share impact muted by short-term amortization expense. CEO Rick Swartz sees these acquisitions as expanding both market opportunities and customer relationships, with longer-term accretive potential.
• Infrastructure and Electrification Tailwinds: The company is positioned to benefit from secular growth in U.S. electrical infrastructure, including grid modernization and increased electricity demand from data centers and industrial customers. Stern described robust bidding activity and anticipated project starts in the latter part of the decade as key growth drivers.
• Cash Flow and Working Capital Dynamics: CFO Kelly Huntington indicated that strong EBITDA growth would be partially offset by headwinds from billing and payment timing, as well as a normalization of days sales outstanding (DSOs) from record lows. Management expects project cash flow to even out over the coming quarters as the backlog converts to revenue.

Catalysts in Upcoming Quarters

In the coming quarters, the StockStory team will be watching (1) the pace and profitability of integrating Valley and Comet Electric, (2) conversion of record backlog into revenue, especially as large T&D projects ramp up, and (3) margin trends as project mix evolves. Continued demand in core end markets such as data centers and power infrastructure, along with the ability to manage cash flow as DSOs normalize, will also be critical for sustained performance.

MYR Group currently trades at $328.81, up from $322.06 just before the earnings. At this price, is it a buy or sell? Find out in our full research report (it’s free).

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