8-K: Centuri Achieves Record Q3 Revenue, Updates 2025 Outlook

Centuri Holdings, Inc. reported record quarterly revenue of $850.0 million for Q3 2025, an 18.1% increase year-over-year, while updating its full-year 2025 guidance.

Summary

• Achieved company record quarterly revenue of $850.0 million, an 18.1% increase compared to $720.1 million in the third quarter of 2024.
• Gross Profit for the third quarter was $78.0 million, a 2.9% increase versus the same quarter last year.
• Net Income attributable to common stock was $2.1 million (Diluted Earnings per Share of $0.02) compared to a loss of $(3.7) million (Diluted Loss per Share of $0.04) in the third quarter of 2024.
• Base Revenue, excluding storm restoration services, was $848.6 million, representing a 25% increase versus the third quarter of 2024.
• Base Gross Profit was $77.6 million, a 28% increase from the same quarter last year, with Base Gross Profit Margin increasing to 9.1% from 8.9%.
• Adjusted Net Income was $16.7 million (Adjusted Diluted Earnings per Share of $0.19) compared to $5.3 million (Adjusted Diluted Earnings per Share of $0.06) in the third quarter of 2024.
• Adjusted EBITDA was $75.2 million compared to $78.8 million in the third quarter of 2024.
• Secured bookings of $815 million in the third quarter of 2025, delivering a book-to-bill of 1.8x in the first three quarters of 2025, exceeding the full-year target of at least 1.1x.
• Reached a record high backlog of $5.9 billion, a 59% increase from year-end 2024.
• Updated 2025 revenue guidance to $2.8 to $2.9 billion (previously $2.70 to $2.85 billion).
• Revised 2025 Adjusted EBITDA guidance to $240 to $250 million (previously $250 to $270 million), consistent with lower expected storm restoration services.
• Net Debt to Adjusted EBITDA Ratio was 3.8x as of September 28, 2025, compared to 3.7x as of June 29, 2025.
• Completed a refinancing of existing debt arrangements, extending the revolver maturity to July 9, 2030, and increasing its size to $450 million, and extending Term Loan B maturity to 2032.
• Completed its separation from Southwest Gas Holdings on September 5, 2025, becoming a fully independent public company.
• Appointed Christopher Krummel as Chair of Centuri's Board of Directors.

Sentiment

Score: 7

Explanation: The company reported record revenue and strong base business growth, significantly improved net income, and built a substantial backlog. While Adjusted EBITDA guidance was slightly lowered, it was attributed to unpredictable storm restoration services, not core business weakness. The successful debt refinancing and full separation from Southwest Gas Holdings are also positive developments, indicating a strong operational and strategic trajectory.

Positives

• Achieved company record quarterly revenue of $850.0 million, an 18.1% increase year-over-year.
• Net Income attributable to common stock turned positive at $2.1 million, compared to a loss of $(3.7) million in the prior year quarter.
• Base Revenue, excluding unpredictable storm restoration services, grew significantly by 25% to $848.6 million.
• Base Gross Profit increased by 28% to $77.6 million, with an improved Base Gross Profit Margin of 9.1%.
• Adjusted Net Income saw substantial growth to $16.7 million, up from $5.3 million in Q3 2024.
• Secured bookings of $815 million in Q3 2025, contributing to a strong year-to-date book-to-bill ratio of 1.8x, surpassing the full-year target of 1.1x.
• Achieved a record high backlog of $5.9 billion, representing a 59% increase from year-end 2024, providing strong revenue visibility.
• Increased full-year 2025 revenue guidance to $2.8 to $2.9 billion, driven by base business growth.
• Successfully completed debt refinancing, extending maturities of the revolver (to July 9, 2030) and Term Loan B (to 2032) and increasing revolver size to $450 million, enhancing financial flexibility.
• Completed the separation from Southwest Gas Holdings on September 5, 2025, establishing full independence.
• Experienced broad-based revenue growth across all segments, with Canadian Gas leading at nearly 40% growth and Union Electric at 25%.
• Management anticipates double-digit base revenue and base gross profit growth in 2026, supported by a robust sales pipeline of $13 billion.

Negatives

• Adjusted EBITDA decreased to $75.2 million in Q3 2025 from $78.8 million in Q3 2024.
• Revised consolidated Adjusted EBITDA outlook downwards to $240 to $250 million from $250 to $270 million, primarily due to lower expected storm restoration services.
• Net Debt to Adjusted EBITDA Ratio increased slightly to 3.8x as of September 28, 2025, from 3.7x as of June 29, 2025, impacted by the timing of accounts receivable collections.
• Non-Union Electric segment gross profit decreased by 50.5% in Q3 2025 compared to Q3 2024.
• U.S. Gas segment gross profit for the nine months ended September 28, 2025, decreased by 12.1% compared to the same period in 2024.

Risks

• Capital market risks and the impact of general economic or industry conditions could cause actual results to differ materially from forward-looking statements.
• The unpredictable nature of storm restoration services can lead to variations in revenue and profit margins from period to period.
• Risks detailed in Centuri's Annual Report on Form 10-K for the fiscal year ended December 29, 2024, specifically Item 1A. Risk Factors, could affect business and financial results.

Future Outlook

Centuri updated its 2025 revenue guidance to $2.8 to $2.9 billion, an increase driven by base business growth. However, the 2025 Adjusted EBITDA guidance was revised downwards to $240 to $250 million, consistent with lower expected storm restoration services. Management anticipates a sustained growth trajectory and expects to achieve double-digit base revenue and base gross profit growth in 2026, supported by a robust sales pipeline of $13 billion. The company is also focused on optimizing its operational foundation through a strategic fleet initiative and a comprehensive multi-year strategic planning process aimed at establishing Centuri as a top-tier standalone infrastructure services provider.

Management Comments

• "We delivered strong year-over-year revenue expansion in our base operations alongside meaningful profitability improvements." Christian Brown, President & CEO.
• "Our commercial achievements underscore the underlying strength of our market position, while we continue to execute improvements in operational efficiency." Christian Brown.
• "Our booking activity of $815 million during the quarter brought our year-to-date awards to over $3.7 billion with nearly 80% of new awards secured in the third quarter representing new opportunities." Christian Brown.
• "This commercial momentum, combined with our robust sales pipeline of $13 billion, including near-term MSA renewals and strategic bids of $3.0 billion, provides clear visibility into sustained growth trajectory and positions us well to achieve double-digit base revenue and base gross profit growth in 2026." Christian Brown.
• "We're making strides in optimizing our operational foundation through our strategic fleet initiative, where we've lined up several leasing partners and remain on track to achieve our balanced capital expenditure funding mix goal over the next couple of quarters." Christian Brown.
• "Concurrently, our comprehensive multi-year strategic planning process is underway, focused on establishing Centuri as a top-tier standalone infrastructure services provider. This framework emphasizes sustainable earnings growth, enhanced organizational integration under our 'One Centuri' vision, and world-class resource delivery capabilities." Christian Brown.
• "These initiatives collectively position us to capitalize on the substantial opportunities within North America's expanding energy infrastructure landscape, and we look forward to elaborating on these various facets of our strategy in the months ahead." Christian Brown.

Industry Context

The announcement highlights Centuri's strong position in North America's expanding energy infrastructure landscape. The robust growth in base revenue and record backlog suggest healthy demand for utility infrastructure services, driven by ongoing investment in industrial and electrical substation infrastructure. The company's focus on operational efficiency and strategic planning aligns with broader industry trends towards optimizing service delivery and capitalizing on significant infrastructure development opportunities.

Management Changes

Corporate Governance

Related Party Transactions

• Revenue from related party former parent was $24.816 million in Q3 2025, compared to $27.232 million in Q3 2024.
• Cost of revenue from related party former parent was $23.158 million in Q3 2025, compared to $23.509 million in Q3 2024.
• Accounts receivable, related party former parent, net was $8.819 million as of September 28, 2025, compared to $9.648 million as of December 29, 2024.
• Contract assets, related party former parent, were $2.378 million as of September 28, 2025, compared to $2.623 million as of December 29, 2024.
• Separation-related costs include expenses incurred post-Centuri IPO in connection with the separation and stand-up of Centuri as its own public company, including costs associated with Southwest Gas Holdings' sale of common stock and establishment of the Unutilized Tax Assets Settlement Agreement and other separation-related agreements.

Stakeholder Impact

• **Shareholders**: Positive impact from record revenue, improved net income, strong backlog, and increased revenue guidance. Debt refinancing improves financial stability and flexibility. Full independence from Southwest Gas Holdings could lead to clearer valuation and strategic focus.
• **Employees**: The focus on "enhanced organizational integration under our 'One Centuri' vision" suggests efforts to unify the workforce and improve internal operations.
• **Customers**: Strong bookings and backlog indicate continued customer demand and robust relationships. The emphasis on "world-class resource delivery capabilities" aims to improve service quality and efficiency.
• **Creditors**: Debt refinancing extends maturities and improves interest rates, reducing near-term repayment pressure and enhancing the company's credit profile.

Next Steps

• Achieve a balanced capital expenditure funding mix goal over the next couple of quarters through the strategic fleet initiative.
• Continue the comprehensive multi-year strategic planning process to establish Centuri as a top-tier standalone infrastructure services provider.
• Elaborate on various facets of the company's strategy in the months ahead.
• Achieve double-digit base revenue and base gross profit growth in 2026.

Key Dates

Recommendation

Centuri demonstrated robust core business performance with record base revenue growth and a substantial increase in backlog, providing strong visibility for future revenue. The successful debt refinancing improves financial flexibility and stability. While Adjusted EBITDA guidance was slightly lowered, it was attributed to the volatile storm restoration segment, not a fundamental weakness in the core utility infrastructure business. The company's strategic initiatives and positive outlook for 2026 suggest continued growth and operational improvements, making it an attractive investment for long-term growth in the expanding energy infrastructure market.

Keywords

Utility infrastructure services, Energy network, Gas infrastructure, Electric infrastructure, Storm restoration, Backlog, Book-to-bill, Adjusted EBITDA, Revenue guidance, Debt refinancing, Corporate separation, Centuri Holdings