Sterling Infrastructure Reports Revenue Growth and Strategic Acquisitions in Q2 2025

Sterling Infrastructure, Inc. reported a notable increase in financial performance for the second quarter and first half of 2025, as detailed in its latest 10-Q filing. The company generated revenues of $614.5 million for the three months ended June 30, 2025, marking a 5.4% increase from $582.8 million in the same period of 2024. For the first half of 2025, revenues reached $1.045 billion, up from $1.023 billion year-over-year. The growth was primarily driven by a $69.1 million increase in the E-Infrastructure Solutions segment and a $38.0 million rise in Transportation Solutions, despite a slight decline in Building Solutions.

Gross profit for the second quarter rose to $143.1 million, a 27.0% increase compared to $112.7 million in the prior year, resulting in a gross margin of 23.3%, up from 19.3%. For the six-month period, gross profit was $238.0 million, reflecting a 25.5% increase from $189.6 million. The improved margins were attributed to higher revenue volumes and a favorable project mix, particularly in the E-Infrastructure and Transportation Solutions segments. Operating income also saw significant growth, reaching $104.6 million for the second quarter, compared to $72.7 million in 2024.

In terms of strategic developments, Sterling completed the acquisition of Drake Concrete, LLC for $25 million in cash, enhancing its Building Solutions segment in the Dallas-Fort Worth area. Additionally, the company announced plans to acquire CEC Facilities Group, LLC for $505 million, which is expected to close in the third quarter of 2025. This acquisition will further bolster Sterling's E-Infrastructure Solutions segment. The company also transitioned to equity method accounting for its 50% owned subsidiary, Road and Highway Builders, LLC, effective January 1, 2025, which will impact future revenue reporting.

Operationally, Sterling's remaining performance obligations (RPOs) increased to $2.01 billion as of June 30, 2025, compared to $1.69 billion at the end of 2024. The company reported a book-to-burn ratio of 1.4X for the first half of 2025, indicating strong demand for its services. The total cash and cash equivalents at the end of the second quarter stood at $699.4 million, up from $664.2 million at the end of 2024, reflecting a solid liquidity position. The company also repurchased $43.8 million of its common stock during the first half of 2025.

Looking ahead, Sterling Infrastructure remains optimistic about growth opportunities across its segments, particularly in E-Infrastructure Solutions, driven by increased investments in data centers and advanced manufacturing. The company anticipates continued demand in the Transportation Solutions segment due to federal and state funding initiatives. However, it acknowledges potential challenges in the Building Solutions segment, where demand has softened due to affordability issues in the housing market. Overall, Sterling is focused on leveraging its strategic acquisitions and improving operational efficiencies to enhance profitability and market share.