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ECG

Everus Construction Group, Inc.
NYSE · INDUSTRIALS · OPERATIVE BUILDERS
100.28
+2.10 +2.13%
USD · close Oct 27
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MKT CAP $5.1BP/E 20.2DIV YIELD —FCF YIELD 4.89%REV TTM $4.3B +30.5%NET INCOME $254.5M +53.5%NET DEBT $273.9M52W 80.42 – 169.16SEC XBRL · TTM TO Invalid Date

How ECG rewrote its risk factors

10-K ITEM 1A · FY2024 → FY2025
Text kept
30%
of sentences unchanged
Added
575
new sentences
Dropped
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sentences removed
Length
+2,060
words, now 37,659

New in FY2025

  • For a discussion and analysis of our results of operations and financial condition for the year ended December 31, 2024, as compared to the year ended December 31, 2023, refer to Part II.
  • Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2024, which was filed with the Securities and Exchange Commission on February 28, 2025, which is available free of charge on the SEC’s website at www.sec.gov and our corporate website at investors.everus.com.
  • Overview We are a leading construction solutions provider offering specialty contracting services to a diverse set of end markets, which are provided to commercial, industrial, institutional, renewables, service, transportation, utility and other customers.
  • We operate throughout most of the United States through two reportable, operating segments: Electrical & Mechanical (“E&M”) : Contracting services including construction and maintenance of electrical and communication wiring and infrastructure, fire suppression systems, renewables infrastructure and mechanical piping and services in both the public and private sectors.
  • Transmission & Distribution (“T&D”) : Contracting services including construction and maintenance of overhead and underground electrical, gas, communication infrastructure and transportation-related lighting, as well as the manufacture and distribution of overhead and underground transmission line construction equipment and tools.
  • Our strong presence in the Western, Midwestern and Eastern regions of the United States has driven opportunities in data centers, high tech, hospitality and utilities, while customer expansion nationwide continues to extend our reach through partnerships through our 15 wholly owned operating companies.
  • Risk Factors” included elsewhere in this 2025 Annual Report.
  • Economic and Industry Factors Impacting Our Business We have experienced increased insurance costs and anticipate continued increases in insurance costs.
  • Premiums in the insurance industry have risen due to many factors, such as economic inflation and a rise in insurance carriers’ losses, in particular for wildfire risks.
  • We experienced these aforementioned impacts with coverage for our insurance lines on a standalone basis following the Separation and again saw increases in insurance costs during our latest renewal cycle partially in part to our revenue growth during 2025 at the time of renewal.
  • However, we are continuing to formulate strategies to minimize these costs and/or ensuring these costs are built into our bidding opportunities going forward.
  • Despite these increased costs, we are focused on growing our total revenues, expanding gross margins, managing costs and generating cash, all of which would result in increased operating income.
  • We continued to have bidding opportunities in the specialty contracting markets we operated in during 2025, as evidenced by our backlog, even with our revenue growth during the fiscal year.
  • Our backlog supports strong project opportunities across our diverse service offerings, particularly for data center, undergrounding and hospitality work.
  • With our successful track record of executing on complex projects, our long-term customer relationships, safe and skilled workforce, quality of service and effective cost management, we believe we remain well-positioned to benefit from favorable demand drivers, including high tech reshoring, data center construction and utility infrastructure investments, giving us the opportunity to continue securing and executing profitable projects in the future.
  • Refer to Note 15 – Related-Party Transactions in the consolidated financial statements contained elsewhere in this 2025 Annual Report for additional information on the transition services agreement.
  • We have incurred costs related to becoming an independent public entity and expect additional ongoing expenses related to continued operations as such.
  • For a complete discussion of the associated risks and uncertainties associated with the Separation and Distribution, see “Risk Factors—Separation and Distribution Risks” contained elsewhere in this 2025 Annual Report.
  • For periods prior to the Separation, financial information included in the accompanying consolidated financial statements and related footnotes included in this 2025 Annual Report were prepared on a "carve-out” basis in connection with the Separation and were derived from the audited consolidated financial statements of MDU Resources as if we operated on a standalone basis.
  • However, the financial information included in the consolidated financial statements and related footnotes for periods prior to the Separation do not necessarily reflect what our results of operations, financial position and cash flows would have been had we operated as a separate, publicly traded company and may not be indicative of our future performance.
  • For additional information related to our basis of presentation, refer to Note 2 – Basis of Presentation and Summary of Significant Accounting Policies in the consolidated financial statements contained elsewhere in this 2025 Annual Report.
  • Before the Separation, we historically participated in MDU Resources’ centralized cash management program through Centennial, including its overall financing arrangements.
  • We had related-party agreements in place with Centennial for the financing of our capital needs, which were reflected as Related-party notes payable on the consolidated balance sheets for periods prior to the Separation.
  • Interest expense in the consolidated statements of income primarily reflected the allocation of interest on borrowing and funding associated with the related-party agreements for periods prior to the Separation.
  • Refer to Note 15 – Related-Party Transactions in the consolidated financial statements contained elsewhere in this 2025 Annual Report for additional information.
  • For additional information related to our current financing arrangements, refer to Note 7 – Debt in the consolidated financial statements contained elsewhere in this 2025 Annual Report.
  • Cash-settled related-party transactions between Everus, MDU Resources, Centennial, and other MDU Resources subsidiaries were included in the consolidated financial statements for periods prior to the Separation.
  • For additional information regarding the agreements between us, MDU Resources and Centennial, refer to the section contained elsewhere in this 2025 Annual Report entitled “Certain Relationships and Related Person Transactions, and Director Independence.” All intercompany balances and transactions between the businesses comprising Everus have been eliminated in the accompanying consolidated financial statements.
  • Consolidated Results of Operations Year Ended December 31, 2025, Compared to Year Ended December 31, 2024 The following table sets forth our consolidated selected statements of income data, with percentages of operating revenues for the years indicated, as well as the percentage change from the prior comparative year: Year ended December 31, 2025 % of revenues 2024 % of revenues % change (In millions, except percentages) Operating revenues $ 3,746.4 100.0 % $ 2,849.7 100.0 % 31.5 % Cost of sales 3,292.3 87.9 % 2,510.2 88.1 % 31.2 Gross profit 454.1 12.1 % 339.5 11.9 % 33.8 Selling, general and administrative expenses 189.3 5.1 % 149.6 5.3 % 26.5 Operating income 264.8 7.1 % 189.9 6.7 % 39.4 Interest income 4.6 0.1 % — — % NM Interest expense 21.5 0.6 % 14.0 0.5 % 53.6 Other income, net 9.9 0.3 % 4.8 0.2 % NM Income before income taxes and income from equity method investments 257.8 6.9 % 180.7 6.3 % 42.7 Income taxes 72.3 1.9 % 49.5 1.7 % 46.1 Income from equity method investments 16.3 0.4 % 12.2 0.4 % 33.6 Net income $ 201.8 5.4 % $ 143.4 5.0 % 40.7 % __________________ * NM - Not Meaningful Year Ended December 31, 2025, Compared to Year Ended December 31, 2024 Operating Revenues Operating revenues for the year ended December 31, 2025, were $3.75 billion, an increase of $896.7 million, or 31.5%, from $2.85 billion for the year ended December 31, 2024.
  • See “Segment Results of Operations–Year Ended December 31, 2025 , Compared to Year Ended December 31, 2024” for further comparative analysis of segment revenues for the years indicated.
  • Changes in estimates associated with performance obligations that were satisfied or partially satisfied prior to the previous year end positively net impacted revenues and accounted for approximately 3.0% of revenues for the year ended December 31, 2025, compared to 2.9% of revenues for the year ended December 31, 2024.
  • For the year ended December 31, 2025, the changes in estimates mentioned above favorably accounted for approximately 4.2% of revenues, compared to 3.8% of revenues for the year ended December 31, 2024.
  • Favorable impacts to revenues were primarily due to project pull forward, labor efficiencies and favorable impacts from projected cost changes, including material costs, project risk mitigation and change orders.
  • However, these changes in estimates unfavorably accounted for approximately 1.2% of revenues for the year ended December 31, 2025, compared to 0.9% of revenues for the year ended December 31, 2024.
  • Unfavorable impacts to revenues were primarily due to labor inefficiencies related to sequencing on projects and unfavorable impacts from project delays and cost overruns.
  • Cost of Sales Cost of sales for the year ended December 31, 2025, was $3.29 billion, an increase of $782.1 million, or 31.2%, from $2.51 billion for the year ended December 31, 2024.
  • This increase primarily related to higher E&M operating costs due to increased workloads and changes in project mix.
  • T&D operating costs remained relatively consistent year over year.
  • Labor, subcontractor, materials and equipment and tools costs increased $367.1 million, $209.7 million, $141.5 million and $43.7 million, respectively, along with higher other job expenses of $20.1 million.
  • Gross Profit Gross profit for the year ended December 31, 2025, was $454.1 million, an increase of $114.6 million, or 33.8%, from $339.5 million for the year ended December 31, 2024.

and 535 more.

Gone since FY2024

  • Overview We are a leading construction solutions provider offering specialty contracting services through two operating segments, which represent our two reportable segments, Electrical & Mechanical and Transmission & Distribution, which provide services to a diverse set of end markets across most of the United States.
  • Our strong presence in the Western, Midwestern and Eastern regions has driven opportunities in high-tech, data centers, hospitality and utilities, while customer expansion nationwide continues to extend our reach through partnerships through our 15 wholly-owned operating companies (the “Operating Companies”).
  • We provide specialty contracting services to commercial, industrial, institutional, service & other, renewables, utilities, transportation, manufacturing and governmental customers.
  • We operate throughout most of the United States through two operating segments: Electrical & Mechanical (“E&M”) : Contracting services including construction and maintenance of electrical and communication wiring and infrastructure, fire suppression systems, and mechanical piping and services in both the public and private sectors.
  • Transmission & Distribution (“T&D") : Contracting services including construction and maintenance of overhead and underground electrical, gas and communication infrastructure, as well as design, manufacturing and distribution of overhead and underground transmission line construction equipment and tools.
  • Risk Factors” included elsewhere in this Annual Report.
  • We continued to have bidding opportunities in the specialty contracting markets we operated in during 2024, as evidenced by our backlog.
  • Although bidding remains highly competitive in all areas, we expect relationships with existing customers, our safe and skilled workforce, quality of service and effective cost management will continue to provide a benefit in securing and executing profitable projects in the future.
  • We also have seen rapidly growing needs for services across the electric vehicle charging, renewable energy generation and energy storage markets that complement existing renewable projects performed by us.
  • Refer to Note 15 – Related-Party Transactions in the audited consolidated financial statements contained elsewhere in this Annual Report for additional information on the transition services agreement.
  • We incurred costs related to becoming an independent public entity and expect additional ongoing expenses related to continued operations as such.
  • For a complete discussion of the associated risks and uncertainties associated with the Separation and Distribution, see “Risk Factors—Separation and Distribution Risks” contained elsewhere in this Annual Report.
  • For periods prior to the Separation, the accompanying audited consolidated financial statements and related footnotes included in this Annual Report were prepared on a "carve-out” basis in connection with the Separation and were derived from the audited consolidated financial statements of MDU Resources as if we operated on a standalone basis.
  • However, the audited consolidated financial statements and related footnotes for periods prior to the Separation do not necessarily reflect what our results of operations, financial position and cash flows would have been had we operated as a separate, publicly traded company.
  • For additional information related to our basis of presentation, refer to Note 2 – Basis of Presentation and Summary of Significant Accounting Policies in the audited consolidated financial statements contained elsewhere in this Annual Report.
  • We had related-party agreements in place with Centennial for the financing of our capital needs, which were reflected as related-party notes payable on the audited consolidated balance sheets for periods prior to the Separation.
  • Interest expense in the audited consolidated statements of income reflected the allocation of interest on borrowing and funding associated with the related-party agreements for periods prior to the Separation.
  • Refer to Note 15 – Related-Party Transactions in the audited consolidated financial statements contained elsewhere in this Annual Report for additional information.
  • For additional information related to our current financing arrangements, refer to Note 7 – Debt in the audited consolidated financial statements contained elsewhere in this Annual Report.
  • Cash-settled related-party transactions between Everus, MDU Resources, Centennial and other MDU Resources subsidiaries were included in the audited consolidated financial statements for periods prior to the Separation.
  • For additional information regarding the agreements between us, MDU Resources and Centennial, refer to the section contained elsewhere in this Annual Report entitled “Certain Relationships and Related Person Transactions, and Director Independence.” All intercompany balances and transactions between the businesses comprising Everus have been eliminated in the accompanying audited consolidated financial statements.
  • Consolidated Results of Operations For the Years Ended December 31, 2024, 2023 and 2022 The following table sets forth our consolidated selected statements of income data, as well as the percentage change from the comparative prior year.
  • Years ended December 31, 2024 2023 2022 2024 vs 2023 % change 2023 vs 2022 % change (In millions, except percentages) Operating revenues $ 2,849.7 $ 2,854.4 $ 2,699.2 (0.2) % 5.7 % Cost of sales 2,510.2 2,532.5 2,423.2 (0.9) 4.5 Gross profit 339.5 321.9 276.0 5.5 16.6 Selling, general and administrative expenses 149.6 131.4 111.4 13.9 18.0 Operating income 189.9 190.5 164.6 (0.3) 15.7 Interest expense 14.0 17.0 6.3 (17.6) NM Other income 4.8 4.0 1.4 20.0 NM Income before income taxes and income from equity method investments 180.7 177.5 159.7 1.8 11.1 Income taxes 49.5 45.3 40.8 9.3 11.0 Income from equity method investments 12.2 5.0 5.9 NM (15.3) Net income $ 143.4 $ 137.2 $ 124.8 4.5 % 9.9 % __________________ * NM - Not Meaningful Year Ended December 31, 2024, Compared to Year Ended December 31, 2023 Operating Revenues Operating revenues for the year ended December 31, 2024, were $2,849.7 million, a decrease of $4.7 million, or 0.2%, from $2,854.4 million for the year ended December 31, 2023.
  • E&M revenues declined $103.4 million, or 4.8%, partially offset by growth in T&D revenues of $102.5 million, or 14.0%.
  • E&M revenues decreased $103.4 million, or 4.8%, as a result of lower revenues for the industrial, service & other, renewables and commercial end markets, partially offset by higher revenues from the institutional end market. • Industrial had lower revenues from reduced workloads in the general industrial, high tech and government submarkets, partially offset by higher workloads in manufacturing. • Service & other and renewables revenues softened due to decreased repair and maintenance demand and the timing of projects within the generation submarket, respectively. • Commercial had revenue shifts within the hospitality submarket from completion of large projects during 2023, partially offset by higher data center activity due to increased workloads. • Institutional revenues increased, partially offsetting the decreases in other end markets, driven from higher workloads in the government and education submarkets.
  • T&D revenues increased $102.5 million, or 14.0%, due to higher utility and transportation end market revenues. • Utility revenues increased from higher workloads and submarket activity across distribution, transmission, substation and telecommunication, partially offset by lower workloads due to timing of project availability in the other submarkets. • Transportation had higher revenues due to submarket activity, with higher workloads in traffic signalization and street lighting.
  • Cost of Sales Cost of sales for the year ended December 31, 2024, was $2,510.2 million, a decrease of $22.3 million, or 0.9%, from $2,532.5 million for the year ended December 31, 2023.
  • This decrease primarily related to lower operating costs supporting decreased E&M workloads and project efficiencies, partially offset by higher T&D operating costs from increased workloads.
  • Labor and material costs decreased by $89.0 million and $51.1 million, respectively, partially offset by higher subcontractor costs and other job expenses of $91.2 million and $26.7 million, respectively.
  • Selling, General and Administrative Expenses Selling, general and administrative expenses for the year ended December 31, 2024, were $149.6 million, an increase of $18.2 million, or 13.9%, from $131.4 million for the year ended December 31, 2023.
  • The increase was driven primarily by higher payroll expense of $10.2 million to support the operational growth of the business, higher professional service-related expenses of $6.1 million, higher insurance expenses of $1.0 million and higher general expenses of $7.2 million, including office and rent expense.
  • There were $6.4 million of public company stand-up costs as part of the increases in expense.
  • Partially offsetting these increases was lower provision for expected credit losses of $6.3 million.
  • Operating Income Operating income for the year ended December 31, 2024, was $189.9 million, a decrease of $0.6 million, or 0.3%, from $190.5 million for the year ended December 31, 2023.
  • The decrease was primarily driven by increased selling, general and administrative expenses as discussed above, largely offset by increased gross profit due to project efficiencies.
  • Operating income, as a percentage of revenues, remained consistent at 6.7%.
  • Interest Expense Interest expense for the year ended December 31, 2024, was $14.0 million, a decrease of $3.0 million, or 17.6%, from $17.0 million for the year ended December 31, 2023.
  • This decrease primarily related to lower fiscal year 2024 pre-Separation related-party debt balances utilized under the MDU Resources cash management program, compared to full year 2023.
  • Partially offsetting the lower related party interest expense was $4.1 million of third-party interest expense associated with our financing arrangements following the Separation.
  • Other Income Other income for the year ended December 31, 2024, was $4.8 million, an increase of $0.8 million, or 20.0%, from $4.0 million for the year ended December 31, 2023.

and 496 more.

Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2024 ↗, FY2025 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

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