Southland Holdings, Inc. reported a significant decline in financial performance for the fiscal year ending December 31, 2025, with total revenue of $772.2 million, a decrease of 21.2% from $980.2 million in 2024. The company's gross loss widened to $155.3 million, compared to a gross loss of $63.0 million in the previous year. This downturn was primarily driven by a $227.1 million revenue drop in the Transportation segment, attributed to projects nearing completion, while the Civil segment saw a modest increase of $19.0 million due to new projects initiated after December 31, 2024.
The company’s operational challenges were exacerbated by an adverse court ruling related to the Washington State Convention Center Project, which resulted in a judgment against Southland of approximately $57.1 million. This ruling led to a derecognition of $40.3 million in contract assets and a long-term accrued liability of $89.1 million, significantly impacting the company's financial statements. The total impact of this ruling on the consolidated statements of operations was $135.8 million, with $46.7 million recorded as a reduction in revenue and $89.1 million as an increase in construction costs.
In terms of strategic developments, Southland made a notable shift in its Materials & Paving business line by discontinuing certain projects and selling related assets. This decision was aimed at reallocating resources to more profitable areas of the business. The company also appointed Nick Campbell as Chief Transformation Officer to provide strategic guidance on improving financial performance and operational efficiency. As of December 31, 2025, Southland's backlog stood at $2.0 billion, indicating a potential for future revenue, although the company acknowledged that backlog figures can be subject to cancellations and adjustments.
The company’s workforce comprised approximately 1,800 employees, with 17% represented by unions. Southland's liquidity position improved following a series of transactions with its surety providers, which included waiving principal and interest payments under its Credit Agreement until maturity, resulting in expected cash savings of approximately $30.2 million over the next twelve months. Despite these challenges, management expressed confidence in the company's ability to meet operational and financial obligations for at least the next year, supported by anticipated cash flows from existing contracts and backlog.
Looking ahead, Southland Holdings remains focused on navigating the complexities of the construction industry, including ongoing supply chain disruptions and fluctuating material costs. The company is also evaluating potential growth opportunities through acquisitions and expanding its service offerings in both the Civil and Transportation segments. However, the overall economic environment and market conditions will continue to play a critical role in shaping the company's future performance.
About Southland Holdings, Inc.
Southland Holdings, Inc. is a leading infrastructure construction company specializing in civil and transportation projects across North America. Its core services include designing and building bridges, tunnels, water systems, and large-scale structures. With a focus on self-performance, owned equipment, and strategic bidding, it serves public and private clients, emphasizing safety, quality, and long-term relationships in a highly competitive industry.
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