Tutor Perini (NYSE:TPC) executives used the company’s fourth-quarter 2025 earnings call to highlight what CEO Gary Smalley described as “perhaps our best year ever,” driven by record revenue, a return to strong profitability, and another year of record operating cash flow.
Record 2025 results driven by higher-margin project mix
Smalley said 2025 results were highlighted by a record $5.5 billion of revenue, $4.29 of adjusted earnings per share, and a fourth consecutive year of record operating cash flow, with $748 million generated during the year. He attributed the cash performance largely to contributions from new and ongoing projects.
Revenue increased 28% year over year, with growth tied to ramping activity on large Civil and Building projects in the Northeast, Hawaii, and Guam. Soroka cited projects including AirTrain Newark replacement, Midtown Bus Terminal Phase I, Brooklyn and Manhattan Jails, the Honolulu Rail Project, and Apra Harbor Waterfront Repairs in Guam.
Segment performance: Civil leads, Building rebounds, Specialty improves
Tutor Perini’s Civil segment—described by management as the company’s highest margin segment—generated $2.8 billion of 2025 revenue, up 34% and the segment’s highest annual revenue ever. Civil segment operating income nearly tripled to $391 million from $138 million in 2024, producing a 13.7% operating margin, which Soroka said was within the company’s expected 12% to 15% range. Soroka noted favorable adjustments earlier in the year tied to change order settlements and improved performance on a domestic mass transit project, which were “mostly offset” by an unfavorable fourth-quarter adjustment associated with a legacy tunneling dispute in Canada.
The Building segment posted $1.9 billion of 2025 revenue, up 15%, and delivered its highest annual revenue since 2020. Operating income improved to $58 million from an operating loss of $24 million in 2024, with margin improving to 3.1% from negative 1.5%. Soroka said the company anticipates Building segment margins of 3% to 6%, supported by certain higher-margin projects.
The Specialty Contractors segment delivered $844 million in revenue, up 43%, reflecting increased electrical and mechanical work on large Civil and Building projects. While the segment posted a slight operating loss of $7 million for 2025, it improved substantially from a $103 million loss in 2024 and returned to profitability in the second half “ahead of expectations,” management said. Smalley told analysts the segment’s recent quarterly margins have improved and the company expects the business to “eventually and consistently” generate 5% to 8% margins, with additional contingency still embedded in near-term expectations.
Backlog rises to $20.6 billion; management flags near-term lumpiness
Management reported year-end backlog of $20.6 billion, up 10% year over year, and a 1.34x book-to-burn ratio. Smalley said backlog growth reflected $7.4 billion of new awards and contract adjustments booked during 2025, including:
- $1.87 billion Midtown Bus Terminal Replacement Phase I (New York)
- $1.18 billion Manhattan Tunnel project (New York)
- UCSF Benioff New Children’s Hospital (California), approximately $1 billion
- $538 million healthcare project (California)
- $241 million additional funding for Apra Harbor Waterfront Repairs (Guam)
- $182 million military defense project (Guam)
- $155 million Diego Rivera Performing Arts Center (San Francisco)
- $131 million additional funding for an electrical project (Texas)
- An electrical project at Cook Children’s Medical Center (Texas), valued at more than $100 million
Smalley said the company has won nine “mega projects” over the past three years totaling approximately $16 billion, each valued at roughly $1 billion or more, and emphasized that these projects carry “very healthy margins,” more favorable contractual terms, and longer durations than many prior large awards.
However, Smalley cautioned investors to expect some “lumpiness” in backlog going forward. With many major opportunities expected to enter bidding around mid-2026 and into the first half of the following year—combined with expectations for significantly higher revenue conversion from existing backlog—management anticipates “a modest backlog reduction in the near term,” followed by resumed growth as new awards are captured.
Guidance and outlook: double-digit growth expected, with 2026 EPS target
For 2026, Tutor Perini guided to adjusted EPS of $4.90 to $5.30, with Smalley stating the company anticipates double-digit revenue growth and “strong earnings” in 2026, with even higher earnings expected in 2027 as newer large projects move further into construction. In response to analyst questions, Smalley said the company has “great visibility” into 2026 results and does not require major new awards to meet guidance, though additional awards could enhance performance. He also noted typical first-quarter seasonality and said weather impacts, including a large New York snowstorm and a roughly two-week suspension on the Manhattan Tunnel project, were accounted for in guidance contingency.
Soroka provided several 2026 modeling assumptions, including G&A expense of $400 million to $410 million, depreciation and amortization of approximately $50 million, interest expense of $40 million to $50 million, and an expected effective tax rate of 27% to 30%. He also forecast noncontrolling interest of $75 million to $85 million, approximately 54 million weighted average diluted shares, and capital expenditures of $125 million to $135 million, with a majority of 2026 capex expected to be owner-funded equipment purchases tied to new projects.
Balance sheet, capital returns, and disputes
Soroka said Tutor Perini paid down total debt by 24% in 2025 and reduced construction-in-evidence (CIE) by 13%, helped by billings and collections including disputed matter resolutions. The company ended 2025 with cash and equivalents exceeding total debt by $327 million, compared with a $79 million net debt position at the end of 2024, and reported $271 million of cash available for general corporate purposes.
Management also discussed refinancing plans for the company’s debt. Soroka referenced the company’s “eleven and seven eighths” coupon and said a refinancing is being evaluated, with an expectation of meaningful interest savings and a range that assumes “roughly mid-year” timing.
On capital returns, Smalley noted that the board authorized the company’s first-ever quarterly cash dividend of $0.06 per share and a $200 million share repurchase program in November. He said the board declared another $0.06 quarterly dividend that was paid on March 26.
Regarding legacy disputes, Smalley and management said the company has made progress and is “chiseling away” at remaining matters. Smalley told analysts the company has reduced significant legacy jobs from about 50 to roughly 12, and said one larger dispute related to a long-completed project is expected to be settled in the coming days without material earnings impact, while producing an expected near-term cash collection of approximately $40 million.
About Tutor Perini (NYSE:TPC)
Tutor Perini Corporation is a leading U.S. construction company that provides diversified general contracting, construction management and design-build services to private clients and public agencies. The company operates through three principal market segments—Civil, Building and Specialty Contractors—serving a broad range of infrastructure and vertical construction needs.
In its Civil segment, Tutor Perini delivers heavy civil infrastructure projects including highways and bridges, water management, dams, tunnels and rail systems.
