Sterling Q3 EPS Jumps 118% to $7.58 on $1.56B Revenue as It Lifts 2026 Outlook

Sterling Infrastructure (STRL) reported record third-quarter results Wednesday after the close, with adjusted diluted earnings per share of $7.58 and revenue of $1.56 billion, up 127% from a year earlier. Both beat the consensus figures provided to MarketCatalyst ($5.60 and $1.191 billion). The company raised its 2026 guidance, with adjusted EPS now expected at $21.70 to $21.96. Growth came overwhelmingly from E-Infrastructure Solutions, the segment that includes data-center site development, while Transportation and Building Solutions revenue declined.

Third-quarter results

Operating margin was 19.6%, up from 18.2%. By our calculation, gross margin was about 24.1% versus 24.7% a year earlier, so profit grew faster than revenue at the operating line even as gross margin eased slightly. Against the consensus figures provided to MarketCatalyst, adjusted EPS beat by about 35% and revenue by about 31%.

Where the growth came from

E-Infrastructure included $425.6 million from CEC, which Sterling acquired on Sept. 1, 2025; Site Development revenue also rose 133%. Management said Transportation revenue fell as resources shifted to E-Infrastructure, and that Building Solutions conditions should stay challenging through 2026 because of housing affordability. E-Infrastructure's operating margin eased from 25.6% a year ago to 22.6%, while adjusted operating margin was 23.2%.

Backlog: signed dipped, combined rose

Signed backlog was $4.14 billion at Sept. 30, up 61% from a year earlier but below the $4.33 billion Sterling reported at June 30. Combined backlog, which adds unsigned awards, was $6.14 billion, up 78%, including $2.00 billion of unsigned awards. Third-quarter book-to-burn was 0.9 times on signed backlog and 1.4 times on combined backlog. A ratio under 1.0 means the company recognized more revenue than it signed in new work during the quarter. Signed backlog, unsigned awards and design-phase work together total nearly $8 billion, up about 90%, the company said.

Guidance raised

By our calculation, the midpoints rose about 15% for revenue, 9% for adjusted EPS and 8% for adjusted EBITDA. The new ranges imply fourth-quarter revenue of roughly $1.07 billion to $1.17 billion, based on nine-month revenue of $3.56 billion, which would be well below the third quarter's $1.56 billion. CEO Joe Cutillo said in the release, "Demand remains strong, and our multi-year visibility continues to expand."

Cash and buybacks

Cash was $216.9 million at Sept. 30, down from $390.7 million at the end of 2025, while long-term debt fell to about $95.1 million. Nine-month operating cash flow was $427.1 million, versus $253.9 million a year earlier, and Sterling spent $107.3 million on share repurchases and $165.0 million on acquisitions, net of cash acquired.

What it means

The quarter shows how much of Sterling's earnings now depends on data-center and other E-Infrastructure work. Investors will look at the 9:00 a.m. ET call on Thursday, Oct. 29, for explanation of the signed-backlog dip, the implied fourth-quarter step-down, and how much of the unsigned awards convert to contracts.

Sources: Sterling Infrastructure, second-quarter results (Aug.) for prior guidance, and its Oct. 28 third-quarter earnings release. Consensus estimates are as provided to MarketCatalyst. This is informational, not a recommendation to buy or sell.