Primoris Services Corporation’s Revised Q1 2025 Results: Growth Amid Accounting Adjustments

Primoris Services Corporation (NASDAQ: PRIM) has reported its first-quarter 2025 financial results, marked by robust revenue growth and operational improvements. However, the press release title’s “CORRECTING and REPLACING” caveat signals underlying adjustments to prior disclosures. This article dissects the financial highlights, the reasons for the restatements, and what they mean for investors.

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Financial Highlights: A Strong Start to 2025

Primoris delivered a 16.7% year-over-year revenue increase to $1.65 billion, driven by its Utilities and Energy segments. The Utilities division grew 15.5% to $560 million, fueled by power delivery, communications, and gas projects. Meanwhile, the Energy segment surged 17% to $1.087 billion, with renewable energy contracts leading the charge.

Net income more than doubled to $44.2 million ($0.81 per diluted share), while Adjusted EBITDA hit $99.4 million, a 34.8% jump from 2024. The company also raised its 2025 outlook, projecting full-year net income of $203–214 million and adjusted EPS of $4.20–$4.40.

The Corrections: Accounting Adjustments Explained

The “CORRECTING and REPLACING” note stems from an internal audit conducted in April 2025, which identified discrepancies in accounting practices. Key adjustments included:
1. Revenue Recognition: Prior errors led to premature recognition of revenue, which was revised to align with ASC 606 standards.
2. Inventory Valuation: Miscalculations in COGS were corrected, reducing gross profit but improving accuracy.
3. Prior Period Depreciation: Errors in depreciation schedules from 2024 were adjusted, impacting Q1 net income by $0.5 million.

These changes reduced retained earnings by $55 million as of Q1 2025. While non-material to liquidity or debt covenants, the corrections highlight management’s commitment to transparency and compliance.

Backlog and Operational Strength

Despite a 4.3% drop in total backlog to $11.4 billion, the company remains well-positioned. The $5.8 billion MSA backlog ensures steady revenue visibility, while the $5.6 billion Utilities backlog underscores demand for critical infrastructure. Additionally, SG&A expenses fell as a percentage of revenue (to 6.0%), signaling improved cost discipline.

2025 Outlook: Can Primoris Deliver?

The company’s revised guidance assumes gross margins of 9–11% for Utilities and 10–12% for Energy, achievable given the strong segment performances. A $150 million share repurchase program and a modest $0.08 dividend reflect confidence in cash flow. However, risks persist: state tax rates (now 29%) could rise further, and project delays in renewables may pressure margins.

Conclusion: A Growth Story with Growing Pains

Primoris’ Q1 results underscore its dominance in utilities and renewables—a sector benefiting from global infrastructure spending. While the accounting adjustments raise minor concerns, the swift internal audit and restatements suggest management’s accountability. With a backlog exceeding $11 billion and a focus on capital returns, Primoris appears poised to meet its 2025 targets.

Investors should monitor execution risks but remain encouraged by the 16.7% revenue growth, 34.8% EBITDA expansion, and proactive corrections. The stock’s recent performance—up 18% year-to-date—reflects optimism, but the coming quarters will test whether Primoris can sustain momentum in a competitive market.

In short: Primoris’ corrections were a necessary step to build investor trust, and its fundamentals remain strong. For those focused on long-term infrastructure trends, this is a story worth watching.