Sterling’s Backlog and EBITDA Margins Break Records as 2026 Guidance Signals More Growth
Record Backlog and EBITDA Margins Highlight Strong 2025 Performance
Sterling Infrastructure, Inc. (NASDAQ: STRL) has capped off 2025 with a wave of new all-time highs. Most notably, Sterling grew its signed backlog to $3.01 billion, marking a 78% increase year-over-year—an achievement made even more compelling by 49% organic growth after adjusting for acquisitions. The trajectory in EBITDA margins is equally impressive: for the first time in company history, adjusted EBITDA margin surpassed 20% for the full year, reaching 20.2%.
Backlog, Revenue, and Earnings Outpace Industry Benchmarks
2025 revenue climbed to $2.49 billion, an 18% year-over-year gain on a GAAP basis and a 32% surge when excluding last year’s RHB joint venture. Adjusted net income soared 53% to $336.75 million, while adjusted EBITDA shot up 47% to $503.82 million—underlining management’s success in scaling the business with higher-margin offerings.
For the fourth quarter alone, revenues jumped 51% (or 69% ex-RHB), with adjusted net income up 78%. The CEC acquisition contributed $129.1 million in Q4 revenue and $488.9 million in backlog, but even when set aside, the core business maintained momentum, driven by the E-Infrastructure and Transportation segments.
| Metric | Q4 2025 | Q4 2024 | 2025 Full Year | 2024 Full Year |
|---|---|---|---|---|
| Revenue ($M) | 755.61 | 498.83 | 2,490.05 | 2,115.76 |
| Adjusted Net Income ($M) | 95.99 | 53.88 | 336.75 | 220.75 |
| Adjusted EBITDA ($M) | 142.09 | 83.37 | 503.82 | 343.76 |
| Adjusted Diluted EPS ($) | 3.08 | 1.73 | 10.88 | 7.09 |
| Backlog ($B) | 3.01 (at Dec 31, 2025) | 1.69 (at Dec 31, 2024) | ||
Segment Growth: E-Infrastructure and Transportation Drive Earnings Upside
Results show a strategic shift toward higher-margin work, especially within E-Infrastructure Solutions, which now makes up 59% of yearly revenue and saw Q4 revenue expand by 123%. Mission-critical projects—including data centers and semiconductor facilities—represented a staggering 84% of that segment’s backlog. Transportation Solutions enjoyed a 24% revenue increase and a 103% rise in adjusted operating income, driven by project mix and geographic focus. In contrast, Building Solutions softened due to residential market headwinds, reflecting the housing affordability slowdown.
| Segment | Q4 2025 Revenue ($M) | % of Q4 2025 Revenue | Y/Y Growth % | 2025 Operating Margin |
|---|---|---|---|---|
| E-Infrastructure | 521.0 | 69% | 123% | 23.6% |
| Transportation | 152.7 | 20% | 24% | 12.1% |
| Building | 81.9 | 11% | -9% | 10.2% |
2026 Guidance Suggests Accelerating Growth and Margin Expansion
Sterling’s 2026 outlook projects continued acceleration, with revenue targeted between $3.05 billion and $3.20 billion—a 25% year-over-year increase at the midpoint. Adjusted diluted EPS is expected between $13.45 and $14.05, while adjusted EBITDA is set to climb between $626 million and $659 million, representing a further 28% advance over 2025. The company’s robust $4.5 billion project pipeline (inclusive of signed and potential awards) underpins this optimism.
| Metric | 2026 Guidance (Low) | 2026 Guidance (High) | 2025 Actual | Growth at Midpoint (%) |
|---|---|---|---|---|
| Revenue ($B) | 3.05 | 3.20 | 2.49 | 25% |
| Adj. Net Income ($M) | 422 | 441 | 336.75 | 26% |
| Adjusted EBITDA ($M) | 626 | 659 | 503.82 | 28% |
| Adj. Diluted EPS ($) | 13.45 | 14.05 | 10.88 | 26% |
Key Takeaway: Sterling’s Growth Engine Fueled by Portfolio Shift and Backlog Visibility
With a record backlog, EBITDA margin expansion, and increasing exposure to higher-margin end-markets, Sterling Infrastructure is signaling confidence into 2026 and beyond. While macro headwinds remain in some construction segments, the company’s strategic focus—especially in mission-critical E-Infrastructure and selective Transportation projects—continues to drive both top- and bottom-line growth. With strong cash generation, an active share repurchase program, and a robust pipeline bridging into nearly $4.5 billion of potential work, investors and industry observers will be watching how Sterling executes against its ambitious 2026 targets.
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