Orion Group Holdings, Inc. (NYSE:ORN) Q4 2025 Earnings Call Transcript

Orion Group Holdings, Inc. (NYSE:ORN) Q4 2025 Earnings Call Transcript March 4, 2026

Operator: Good morning. And welcome to Orion Group Holdings, Inc. Full Year 2025 Financial Results Conference Call. All participants will be in a listen-only mode. After today’s presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I would now like to turn the conference over to Margaret Boyce, Investor Relations for Orion Group Holdings, Inc. Please go ahead.

Margaret Boyce: Thank you, operator, and thank you all for joining us today to discuss Orion Group Holdings, Inc. full year 2025 financial results. We issued our earnings release after the market last night. It is available in the Investor Relations section of our site at oriongroupholdingsinc.com. I am here today with Travis J. Boone, Chief Executive Officer of Orion Group Holdings, Inc., and Alison G. Vasquez, Chief Financial Officer. On today’s call, management will provide prepared remarks and then we will open up the call for your questions. Before we begin, I would like to remind you that today’s comments will include forward-looking statements under the federal securities laws. Forward-looking statements are identified by words such as will, be, intend, believe, expect, anticipate, or other comparable words and phrases.

Statements that are not historical facts are forward-looking statements. Our actual financial condition and results of operations may vary materially from those contemplated by such forward-looking statements. Discussion of the factors that could cause our results to differ materially from these forward-looking statements are contained in our SEC filings, including our reports on Form 10-Q and 10-Ks. With that, I will turn the call over to Travis. Travis, please go ahead.

Travis J. Boone: Thank you, Margaret. Good morning, everyone. Thank you for joining us today to discuss our 2025 results and 2026 guidance. Before we begin, I want to acknowledge the ongoing conflict involving Iran and the Middle East. We extend our sincere appreciation to the men and women bravely serving our country. We recognize the situation remains very fluid, and we are actively monitoring developments and evaluating any potential impacts on our business and markets. Now on to my prepared remarks. 2025 was a year of strong operational execution and meaningful advancement of Orion Group Holdings, Inc.’s long-term strategic priorities. We drove both top- and bottom-line growth and generated good free cash flow. Across the organization, our team delivered with predictable excellence, executing projects safely and profitably, strengthening our balance sheet, and taking important strategic steps that position our company for continued growth ahead.

Over the past several years, we have been very clear about what we set out to do: improve execution, strengthen margins, professionalize the organization, and build a platform capable of capturing the significant opportunities across mission-critical marine infrastructure, defense, and concrete construction. In 2025, we translated that strategy into results. Importantly, we took decisive strategic actions that advanced our long-term growth plan. In December, we closed a new $120,000,000 senior credit facility that improves our liquidity, lowers our cost of capital, and provides flexibility to support both organic growth and accretive acquisitions. We also purchased a derrick barge in December to further increase capacity and execution flexibility.

Q&A Session

As many of you are aware, we have been on the hunt for a large Jones Act derrick barge that will enable our team to pursue a broader range of marine and defense-related work. The barge is currently undergoing some refurbishments, and we expect to deploy it into our operations later this year. Last month, we completed the acquisition of J. E. McAmus. The transaction greatly enhances our marine platform, particularly in complex jetty and breakwater construction where McCamis has deep, proven expertise. Their strong Pacific footprint, experienced workforce, and high-quality equipment fleet expand our ability to execute large, technically demanding projects. Integration is well underway and we are very encouraged by the strong cultural alignment and the collaboration we are seeing across the combined organization contracts awarded to McKamis over the last several weeks.

In 2025, we consolidated our Houston footprint into our new headquarters office, implemented a modern project management platform, favorably settled multiple litigation matters, and monetized non-strategic real estate. Collectively, these deliberate actions improve our readiness for the next wave of large-scale, mission-critical marine and concrete infrastructure opportunities and reflect tangible progress for our strategic plan. While most aspects of our performance met or exceeded expectations in 2025, backlog was the one area where results were not as we anticipated. Even though our win rate in 2025 improved over 2024, for the year, we booked just over $763,000,000 in new contracts and change orders across the company, which represented a 0.9x book-to-bill.

Customer decisions moved to the right, primarily due to tariff-related uncertainty in the private sector at the beginning of the year, followed by the prolonged U.S. Government shutdown later in the year, which delayed public sector bidding and awards. Importantly, we believe this is only a timing issue, with the work simply moving to the right as opposed to going away. We remain confident in our strong demand outlook, which is supported by the tailwinds we are experiencing across our markets. In addition, recent developments in the Middle East may accelerate the government to approve additional defense funding. We remain bullish on our backlog trajectory and long-term growth outlook, with a vibrant, growing pipeline that is currently at $23,000,000,000, which includes the J.

E. McAmus pipeline of $1,400,000,000. Our marine opportunity pipeline increased $3,000,000,000, or 21% sequentially, to over $19,400,000,000 as of December 31. This does not include the McAimis acquisition, which we closed on in February. This growth reflects building demand and urgency across both public and private sector clients, and we are pleased with the 2026 funding for the Department of War Pacific Operations. Across our operating regions, we have a healthy volume of opportunities expected to be awarded throughout the year for clients spending in the U.S. Navy, the Coast Guard, regional port authorities, state departments of transportation, and private energy and chemical clients. Moving on to concrete. Our opportunity pipeline grew to over $2,400,000,000 at the 2025.

Over the last several years, our team has built a strong and expanding position in data centers and the mission-critical construction market. The team produced good bookings throughout 2025, increasing year-over-year backlog by 10% with recent awards spanning data centers and other commercial structures. Our expansion into Florida and Arizona is paying dividends, fueled by a growing project pipeline and solid execution. I would like to drill down into our data center work, a real highlight in our concrete business that is improving literally by the day. I spent a good amount of time with the team last week and let me tell you, they are killing it. Today, our data center count stands at 46 projects, either completed or in progress across Texas, Iowa, and Arizona.

We are seeing a shift toward larger campus-style developments for which execution and schedule certainty reign supreme. And our team has earned an outstanding reputation as a reliable delivery partner on mission-critical programs. In addition to construction of the buildings and foundations, we are increasingly engaging with key clients earlier to address constructability concerns and to implement targeted design improvements. To support these strategies, we have recently expanded into site civil and earthwork to strengthen execution certainty for our clients and also to broaden Orion Group Holdings, Inc.’s scope of services. We expect to see data centers contribute even more significantly to our concrete business this year, with some large opportunities developing in our markets.

In closing, as I reflect on the year, I am excited about the deliberate execution of our strategic priorities buoyed by building momentum in our key end markets. With a $23,000,000,000 pipeline inclusive of Mecamis, a healthy balance sheet, and the best client-centered execution team in the business, we have an excellent runway for 2026 and beyond. I will now turn the call over to Alison to talk through our financial results and our 2026 guidance. Alison?

Alison G. Vasquez: Thanks, Travis. We were pleased with the financial and operational progress we delivered this year, reflecting disciplined execution across the organization and continued focus on profitable growth, cash generation, and balance sheet health. For the full year 2025, revenue increased to $852,000,000, operating income to $15,000,000, adjusted EBITDA to $45,000,000, and adjusted EPS to $0.25 per share. I am also very pleased to report that we generated full-year operating cash flow of $28,000,000 and free cash flow of $14,000,000. Across all metrics, these results were a notable improvement over last year. From a segment perspective, in 2025, Marine delivered $545,000,000 of revenue, a 4.5% annual growth, and more than doubled its adjusted EBITDA to $56,000,000 for the year.

This represents a 10% adjusted EBITDA margin compared to about 5% in 2024. The improvement in adjusted EBITDA was driven by favorable revenue mix, excellent execution, favorable equipment utilization, and positive project closeouts. For reference, Marine’s contribution adjusted EBITDA margin for the year was 15%. In 2025, Concrete revenues increased 12% annually to $307,000,000, and Concrete reported an $11,000,000 loss in adjusted EBITDA. The reported adjusted EBITDA loss is primarily attributable to the impact of corporate allocations in 2025 and favorable project closeout benefits in 2024 that did not reoccur this year. Concrete’s contribution adjusted EBITDA margin for the year, excluding corporate, was 4.5%. To provide increased transparency on segment operating margins, we plan to update our reportable segments beginning in 2026.

Specifically, we plan to break out corporate expenses separately as a non-operating segment and will no longer allocate those costs to Marine and Concrete for external reporting purposes. This change is intended to increase transparency of our operating segments’ results. Moving on to the balance sheet. As many of you are well aware, late in the fourth quarter, we entered into a five-year $120,000,000 credit agreement with UMB Bank. This facility meaningfully improves our liquidity, reduces borrowing costs, extends maturity by two years, and positions the balance sheet to fund future investments. It includes a $60,000,000 revolving line of credit, a $20,000,000 equipment term loan facility, and a $40,000,000 M&A term loan. It also includes an additional $25,000,000 uncommitted accordion to fund future growth.

The UMB facility refinanced and replaced our previous $88,000,000 credit agreement, which was scheduled to mature in May 2028. Borrowings under the UMB credit facility bear interest at a rate of SOFR plus 2.5% to 3%, a 40% reduction in our borrowing cost compared to the prior credit agreement. A big shout out to our treasury and legal teams for getting this across the line. In connection with this refinancing, we paid off our $23,000,000 term loan and ended the year with net debt of just about $6,000,000. I would like to point out that subsequent to year-end, in February, we increased our senior borrowings by $47,000,000 to fund the McCanis acquisition. I will wrap up with our guidance update for 2026. We are very pleased to provide our full year 2026 guidance as follows: revenue in the range of $900,000,000 to $950,000,000, a 9% increase from 2025 at the midpoint; adjusted EBITDA in the range of $54,000,000 to $58,000,000, a 24% increase from 2025 at the midpoint; adjusted EPS in the range of $0.36 to $0.42, a 56% increase from 2025 at the midpoint; and capital expenditures in the range of $25,000,000 to $35,000,000, consistent with last year.

That is it for me. Back to you, Travis.

Travis J. Boone: Thank you, Alison. We are very proud of what we accomplished in 2025, and we view this year as a bridge, not a destination. Over the past twelve months, our operations team executed projects safely while growing revenues and adjusted EBITDA. Meanwhile, our corporate team sold the East West Jones property, restructured our credit facility, purchased the derrick barge, and acquired J. E. McAmus. None of this progress would have been possible without the hard work, dedication, and commitment of our people, and I want to thank them for their outstanding efforts. With a strong operating platform, expanded capabilities, and favorable market tailwinds, we are excited about the opportunities ahead and believe Orion Group Holdings, Inc.

is well positioned as we look to capture more work and continue to execute for our employees, clients, and shareholders in 2026 and beyond. We will now open for questions. Thank you. We will now begin the question and answer session. The first question will come from Tomo Sano with JPMorgan. Please go ahead.

Tomo Sano: Hi, good morning everyone. You talked about some of the delay of the revenue recognitions for awarded projects and could you talk about the impact your reported sales and margin in Q4? And could you specify which segments or projects experienced that delay and quantify the revenue and margins impact in 2026, please? Thank you.

Alison G. Vasquez: Sure, Tomo. I will start, and Travis, feel free to add in. From a Q4 perspective, the fourth quarter came in generally in line with what we expected. We did not see a lot of softness in the quarter, and it was generally in line with what we were targeting and the guidance that we had set out for the full year. I will say that things do typically, in construction, move around a bit in terms of timing and cadence. You probably saw some of that in terms of margin profiles for the individual segments. But from an overall perspective, things came in in line, including from a corporate perspective. There were a few opportunities that—

Travis J. Boone: That split out in Q4 that we were pursuing, but that is more on the pipeline side of things.

Tomo Sano: Yep. Thank you. So could I double click on your commentary about the margins? Alison, if you could talk about the 2026 outlook by segment in terms of the margin expansions from 2025 to 2026?

Alison G. Vasquez: Sure. I would be happy to. We are continuing to expect that we will have modest margin expansion across the business, both from the favorable impacts of blending McCamis into the Marine business. As you probably well recall, McCamus operates at a meaningfully higher margin than the rest of Orion Group Holdings, Inc., so we are expecting to see some favorable blend associated with that acquisition and the incorporation of their results. And then from a Concrete perspective, we do expect that Concrete will deliver margins in the mid-single digit for the year. In 2025, Concrete delivered margins of right around 4.5%, and we do expect to nudge that up in 2026 just as a function of some favorable demand signals that we are seeing in terms of the work that we are bidding on, the work that we are winning and bringing into backlog, as well as just continued growth and scale, which benefits our Concrete business pretty meaningfully.

Tomo Sano: Thank you. If I may squeeze one more on data centers, Travis, you talked about data centers. Could you quantify the impact in 2026, in terms of the revenue compositions as well as some competitive advantages in data center projects for Orion Group Holdings, Inc., please?

Travis J. Boone: I am not sure if I am ready to point to the fence yet on where we are going to land with data centers. As Alison just mentioned, we are seeing a large amount of opportunities that are lining up well with our capabilities and relationships. We have started doing site civil work on some of these data centers, which has been very well received, and we are doing well with that work. I think that will expand and continue. And I think we are going to keep seeing just a large amount of data center work happening. Right now, it is about 40% of our Concrete business. I expect that to probably go up a little next year.

Tomo Sano: Thank you. I appreciate it.

Travis J. Boone: The next question will come from Aaron Michael Spychalla with Craig-Hallum. Please go ahead.

Aaron Michael Spychalla: Yes, good morning, Travis and Alison. Thanks for taking the questions. Maybe first for me, just on the pipeline, can you talk a little bit more about that? It sounds like the expansion is pretty broad-based. Any thoughts on kind of timeline, conversion to orders? I know you have had a slide that kind of has laid out timing potential there. And then just maybe talk about the kind of market and margins you are seeing—quotes and kind of backlog-wise? And then, you know, outside of McCamish, on margins as you are going to bid projects, how is that looking?

Travis J. Boone: Yeah. So the pipeline has expanded. Some of that has been because things have slid, right? So it is kind of building, but there is also some things sliding, which makes it look like it is getting even bigger. But we have quite a few near-term opportunities, as in 2026, that are $100,000,000-plus projects. More than a dozen very real opportunities that are over $100,000,000 in size, which gives us a lot of confidence even though our backlog is down. We are one project win away from the backlog being in good shape. So we are not worried. We are bidding projects in the near term here that we feel good about. With our Marine business, and our Concrete business pipeline is growing and looking really strong. As you may recall, our Concrete pipeline is typically fairly small because there is a lot of book-and-burn, and it is private sector opportunities which are not super visible long in advance.

So we are excited to see the Concrete pipeline creeping up, as well as the Marine pipeline continuing to expand, and then we added in McCamis that gives us even more opportunities to pursue. On the McKayman side of things, nothing has changed as far as the margins, bid margins, and things like that. They are going to continue pursuing projects as they have and—

Alison G. Vasquez: And then on the rest of the business—

Travis J. Boone: The rest of the business looks good. We are not seeing any downturns. In fact, I would say more the opposite in several of our markets.

Aaron Michael Spychalla: Good. And then, you know, maybe second, on the data center side of things, you kind of talked about an expansion—site and civil and earthwork. Any thoughts high level what that means for maybe average project size or how quickly these projects can continue to turn with that dynamic?

Travis J. Boone: Probably not going to give too much information just for competitive reasons, but I think it depends on where the data center is and how much infrastructure and dirt work needs to be put in before the concrete and foundations happen. There can be fairly significant amounts of work that go into that, and it gives us something else to sell to our customers. And as many of them are shifting to bigger campuses, sometimes those get to be much larger. Even though it may be a really large data center, they kind of go a little piece at a time—one little piece and another little piece—and then you look back six months later and you have done a ton of work over a period of time. So these things turn from a $500,000 task order, and next thing you know, you have done $50,000,000 worth of work—a little at a time, but very quick.

Alison G. Vasquez: Yeah, and I think the other important thing there is, because our team has such a high level of credibility in this really critical aspect on the critical path of these projects in terms of building the structure—the infrastructure to support all the really important internal things—we are being engaged earlier in terms of some of the constructability concerns and the things that we have seen over the now 46-and-counting data centers or campuses that we have worked on. Incorporating those lessons for our clients is a really valuable level of expertise that we bring to the table, which means we become a trusted partner in this aspect of the building and the construction. So it is a pretty exciting time. My hat is off to that team who built very strong relationships with a number of key players.

Aaron Michael Spychalla: That sounds great. Thanks for taking the questions. I will turn it over.

Alison G. Vasquez: Thanks, Aaron.

Travis J. Boone: Next question will come from Gerry Sweeney with ROTH Capital. Please go ahead.

Alison G. Vasquez: Good morning, Gerry.

Travis J. Boone: Hi, Gerry.

Gerry Sweeney: Just a couple of follow-up questions maybe, but looking at the Marine side, obviously, pipeline is growing, you said some of the projects pushed to the right per se. But are you hearing any—or do you have any anecdotal commentary on maybe when some of these projects may come to fruition? Obviously, they are quite large, complicated. We have had a government shutdown, and then we have, you know, escalating in the Middle East. But all that said and done, just curious as to maybe some of the anecdotal items that you are hearing on those opportunities.

Travis J. Boone: We are bidding a nice project this week. There are things moving forward now. There is not a single theme for why they moved—different reasons in different cases—but they are just shifting to the right. It is not a never-ending shift. They are actually coming to roost at some point, like the one I just mentioned that was originally supposed to be last year and we are bidding it this week. We are bidding quite a few jobs in the next six months—pretty nice ones—along with the normal run-of-the-mill projects that we always go after. I do not know if I answered your question, but—

Gerry Sweeney: Yeah. Was talking to you. Yeah. Sorry. Go ahead.

Alison G. Vasquez: I would just add, Gerry, that as we look at the pipeline, it continues to be very robust. We continue to have good line of sight into $8,500,000,000 of opportunities that we expect to be awarded in 2026. That is pretty normal. We have seen some clients really engage in a more meaningful way, which to us signals that decisions are likely going to be made in the near term. The pipeline sets up to be probably about a 40/60 split in terms of awards in the first half versus the second half, which is pretty normal—there is usually a spike in the federal government’s third fiscal quarter. We also often talk about the number of opportunities where we have provided all information and are just awaiting award from the client, and that number continues to sit at right around $1,000,000,000.

That is a little bit higher than normative, but it has been consistently at that $1,000,000,000 mark throughout 2025 and continues to be around $1,000,000,000 now. That might just be the new norm in terms of holding the pipeline a little longer. We are seeing some awards, some clients moving and being more active.

Gerry Sweeney: Gotcha. And at some point, that building kind of breaks loose, which is positive, obviously. Right? So—

Travis J. Boone: That is right.

Gerry Sweeney: Okay. That is it for me. I appreciate it. Thanks.

Alison G. Vasquez: Thanks, Gerry.

Travis J. Boone: The next question will come from Alexander Rygiel with Texas Capital. Please go ahead.

Alexander Rygiel: Travis, your historical win rate on bids is sort of in that mid-teens range. Is there any reason to believe that historical win rate will be any different going forward?

Travis J. Boone: No. We saw that win rate tick up between ’24 and ’25. Even though our backlog was down, our win rate was up, which tells you that things were sliding. We have seen it head in the right direction by a percent or two. I do not expect it to change much. It might continue to go up a little, but I do not expect any large jump up or down. We like to be in that 15% to 20% win rate sort of range, and that is where we are. We feel pretty good about it.

Alexander Rygiel: And then, as it relates to your adjusted EBITDA guidance of $54,000,000 to $58,000,000, can you bridge that delta from the $45,000,000 you just reported and help us to understand what is organic versus inorganic? And as it relates to the organic, how that is broken out by segment?

Alison G. Vasquez: Sure. I will give some high-level commentary. We are always gearing the business toward what we view as good organic growth—first and foremost investing to position the company for organic growth. Organic growth in 2026 is good; stepping back, it is probably in the upper single- to low double-digit range from an organic perspective, just because some opportunities are moving a bit to the right, specifically in the Marine business. We do think that Concrete will grow very favorably in 2026. We have signals that that is happening, and that is real. For Marine, those opportunities take time to get through the pipeline and the client’s process to bring them to market and ultimately get awarded. Some of those we expected in ’26 have moved a bit to the right.

That said, we do expect our Marine business to continue to grow in 2026. Will it be at the dynamic growth rates we anticipate with many things coming to market in ’26 and ’27? You will probably see that over the midterm, but that is not built into our 2026 guidance today. From a McKamath perspective, we have good line of sight into what we expect they will deliver, which is right in line with what we set out in the call back in February. They come with a highly qualified, reputable, credible group of people—a phenomenal team and leadership organization. We are very excited about bringing them into the portfolio and about some of the projects they have won recently. They continue to perform well, and we will look forward to bringing them into more of our opportunities and projects to make our pursuit teams even stronger as we look ahead.

Alexander Rygiel: Very helpful. And then the outlook for backlog near term—I get a sense it is probably flattish to maybe trending a little bit down in the first quarter, but you expect a strong rebound in the third and fourth quarters. Is that a fair conclusion?

Alison G. Vasquez: From a backlog perspective, we are gearing the organization around a book-to-bill that is greater than one. Our objective is to always be booking more than we are burning. Quarter to quarter, it is hard to predict backlog—it moves around based on burn, operational cadence, and what gets awarded within the quarter. From a full-year perspective, we expect to deliver good bookings that will elevate backlog balances. I will also say from a Concrete perspective, and from a dredging perspective as well, those businesses have a very quick book-to-burn, so they may have phenomenal years, but you may not see a lot of that manifested in the backlog at quarter-ends or year-end because of the amount of book-and-burn projects. Are we targeting elevated backlog through the year? Yes, absolutely, and we will track that through book-to-bill and how the organization is delivering on that.

Alexander Rygiel: Thank you.

Alison G. Vasquez: Thank you.

Operator: The next question will come from Liam Burke with B. Riley Securities. Please go ahead.

Alison G. Vasquez: Good morning, Liam.

Travis J. Boone: Good morning.

Liam Burke: Travis, you talked about closing on the derrick in late 2025. It is a fairly significant capital commitment—how quickly do you anticipate that investment turning into some sort of measurable return?

Travis J. Boone: We have got some work being done on it for the next, let us say, six to eight months. Once it is in the condition and ready to go, we will get it busy and get it working somewhere in our business. As far as payback, we think we got a pretty good price on it, so I do not think it is going to be a long time to get a return on the investment.

Liam Burke: Great. Thank you. And on the M&A front, the McCamish was opportunistic. Obviously, you do not have a pipeline of opportunistic acquisitions, but what does the acquisition pipeline look like?

Travis J. Boone: It is a pretty active market out there at the moment. Lots of different things happening. It seems like acquisitions have really gotten pretty strong across all sectors—lots of different acquisitions and activity happening. We saw Great Lakes just recently get acquired and go private, and just lots of things happening out there that will potentially give us opportunities to do more in the next year or so.

Liam Burke: Thank you, Travis.

Operator: This concludes our question and answer session. I would like to turn the conference back over to Travis Boone for any closing remarks.

Travis J. Boone: Thank you all for joining us today. We look forward to talking to you again soon.

Operator: The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.