Shimmick Q1 Earnings Call Highlights
Shimmick (NASDAQ:SHIM) reported first-quarter 2026 results that management said reflected progress in its strategy to grow core revenue, improve project margins and reduce exposure to non-core work.
CEO Ural Yal said the infrastructure contractor delivered consolidated revenue of $88 million, a 12% gross margin and adjusted EBITDA of approximately $3 million in the quarter. He said gross margin on Shimmick projects improved to 11%, which the company described as an 89% improvement from the prior year.
“We are continuing to make progress on our strategy, which centers around growing our top line by bidding and winning work aligned with our expertise, winding down non-core projects, and executing at a high level to deliver consistent margins,” Yal said.
Revenue declined, but margins improved
EVP and CFO Todd Yoder said Shimmick project revenue was $88 million in the first quarter, compared with $93 million in the same period of 2025. He attributed the $5 million decline to prior-year projects reaching completion or nearing completion, along with lower burn on new projects that are expected to ramp up through 2026.
Non-core project revenue fell sharply to $200,000 from $29 million a year earlier. Yoder said the decrease was driven by the termination of the Chickamauga Lock Replacement Project and continued progress moving non-core projects toward completion.
Total consolidated revenue was $88 million, compared with $122 million in the first quarter of 2025. Despite the revenue decline, profitability metrics improved. Shimmick project gross margin rose to $10 million from $5 million, while consolidated Total gross margin increased to $11 million from $5 million. Total gross margin as a percentage of revenue improved to 12% from 4% a year earlier.
General and administrative expense was $14 million, flat from the prior-year period. Net loss improved to $4 million from a net loss of $10 million in the first quarter of 2025. Adjusted EBITDA was $3 million, compared with negative $3 million a year earlier.
Backlog reaches highest level in more than two years
Management emphasized backlog growth as a key sign of momentum. Shimmick booked $289 million in new work during the quarter, a sequential increase of $150 million from the fourth quarter of 2025. The company reported a book-to-bill ratio of 2.6, which Yal and Yoder said was the highest since Shimmick became a public company.
Total backlog stood at $944 million at the end of the first quarter, which Yal said was the company’s highest backlog level in more than two years. He said non-core work now represents less than 5% of Total backlog, improving visibility and execution consistency.
The quarter’s new awards included flood protection and stormwater infrastructure projects in California and wastewater expansion work in Texas. Yal highlighted the Vista Grande Drainage Basin Improvements project in Northern California, additional flood protection work in Napa and a wastewater treatment plant expansion project in Austin.
Yal said the company’s 24-month pipeline remains robust, with expected bidding volumes of $600 million to $1 billion per month. He added that Shimmick is focused on sustaining a book-to-bill profile that supports growth and improved revenue visibility over time.
Chickamauga termination reduces non-core exposure
Management addressed the termination by the U.S. Army Corps of Engineers of the Chickamauga Lock Replacement Project in Chattanooga, Tennessee. Yal said the matter is proceeding through the customary federal process and that Shimmick remains constructive in its approach.
“We remain constructive in our approach, appreciate our client’s focus on project completion, and are confident that the parties will be able to reach a mutually agreeable resolution in due course,” Yal said.
He said the situation does not affect Shimmick’s broader relationship with the U.S. Army Corps of Engineers, which he described as a long-term client dating back to the 1940s through legacy companies. Shimmick currently has two other projects underway with the Corps, one approximately halfway complete and the other nearing completion, and Yal said both continue to progress as planned.
In response to an analyst question, Yal said the Chickamauga project would have contributed roughly $20 million to $30 million of revenue this year had the termination not occurred. He said Shimmick still expects to hit its revenue guidance, though it may trend toward the lower side of the range.
Guidance reaffirmed for 2026
Yoder said the first quarter was largely in line with expectations for a slower start to 2026 and that the company expects sequential improvement throughout the year as new awards ramp up.
Despite the Chickamauga termination, Shimmick reaffirmed its full-year 2026 guidance. The company expects consolidated revenue to grow 12% to 22% year over year, representing approximately $550 million to $600 million of work put in place. It also expects adjusted EBITDA to increase 200% to 500% year over year, implying adjusted EBITDA of $15 million to $30 million for the year.
Shimmick ended the quarter with $34 million of liquidity, consisting of $15 million in unrestricted cash equivalents and $19 million of availability under credit agreements.
During the question-and-answer session, Yoder said the company is “very optimistic” about liquidity. Yal said winding down legacy and non-core work should improve cash flow, while newer projects are expected to generate upfront cash as they come online.
Data centers and Axia Electric remain strategic focus areas
Yal said Axia Electric continues to perform well and remains an important part of Shimmick’s long-term strategy. He also pointed to data centers as a growing opportunity, with multiple active bids in Reno and Texas.
In response to an analyst question, Yal said Shimmick is primarily targeting mechanical and electrical work tied to data centers, including water treatment, water purification, racks, switchgear, medium voltage and power generation opportunities. He said the work fits both the Axia Electric business and Shimmick’s core water treatment and process mechanical capabilities.
Yal also said Texas and Reno are attractive markets for data center opportunities and that Shimmick is “in the right place right now.”
Management said Shimmick continues to pursue more collaborative contracting models. After quarter-end, the company was selected for a California Water Service wastewater treatment plant project in Southern California through a Progressive Design-Build contract with an estimated construction value of $50 million. Yal said the award was not included in quarter-end backlog but supports Shimmick’s strategy of partnering with clients earlier in the project life cycle.
Yal closed the call by saying the quarter was aligned with the strategy put in place in 2025 and that backlog and gross margins are beginning to reflect that plan. “We’re still in the early phases of our growth, but we expect the rest of the year to continue to improve and have a very strong year,” he said.
About Shimmick (NASDAQ:SHIM)
Shimmick Corporation provides water and other critical infrastructure solutions in the United States. The company undertakes water and wastewater treatment infrastructure; water storage and conveyance, including dams, levees, flood control systems, pump stations, and coastal protection infrastructure; and mass transit, bridges, and military infrastructure projects. It serves federal, state, and local governments. The company was formerly known as SCCI National Holdings, Inc and changed its name to Shimmick Corporation in September 2023.
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