Shimmick (NASDAQ:SHIM) reported second-quarter 2026 revenue of $107 million and adjusted EBITDA of $4 million as the infrastructure contractor continued to wind down non-core work, improve project controls and build its backlog of higher-margin projects.
The company said consolidated gross margin rose to 12% from 6% in the prior-year period, while net loss narrowed to $5 million from $9 million. Management said the quarter reflected progress on its strategy to exit lower-margin projects and position newly awarded work for future revenue and margin growth.
Revenue Declines as Legacy Work Winds Down
Non-core project revenue declined to $11 million from $16 million a year earlier. Yoder attributed the decrease to the termination of the Chickamauga Lock replacement project during the first quarter and continued progress toward completing the company’s remaining non-core projects.
Despite lower revenue, total gross margin increased to $12 million from $8 million. Shimmick project gross margin declined by $4 million to $11 million as maturing projects contributed less margin, though newer projects partially offset that decline as they ramped up. Non-core gross margin improved to $2 million from a loss of $7 million a year earlier, when the company recorded cost overruns on non-core loss projects.
SG&A expense increased to $16 million from $15 million, reflecting higher one-time legal costs and expenses related to an equity issuance, according to Yoder.
Backlog Reaches Two-Year High
CEO Ural Yal said Shimmick booked $138 million of new work during the quarter, producing a book-to-burn ratio of 1.4 and marking the company’s fourth consecutive quarter with a positive ratio. Total backlog reached $991 million, its highest level in two years.
The company also cited additional awards after the quarter ended. Yoder said Shimmick had $221 million of awards pending fully executed contracts, bringing combined backlog and pending awards above $1.2 billion. Separately, Yal said the company had announced more than $265 million of new awards across its water, industrial and energy, and infrastructure operations.
Management said less than 10% of the backlog booked during the past 12 months had been converted into revenue so far, leaving substantial work in pre-construction or early project phases. Yal said some projects have taken six or seven months to begin after selection, compared with the company’s typical three- to four-month startup period, due in part to customer permitting and other factors outside Shimmick’s control.
“As these projects ramp and begin burning work at the pace we expect, we anticipate improved absorption of overhead and greater contribution from high-quality work entering the portfolio,” Yal said.
Water, Transit and Electrification Awards Support Growth
Recent awards included approximately $80 million of backlog from the Myers-Shimmick joint venture’s work with Axia Electric on the Los Angeles Metro North Hollywood-to-Pasadena Bus Rapid Transit project, which has advanced into construction.
Shimmick was also selected for the $124 million Coyote Creek Flood Protection Project in Northern California and secured a $42 million contract for the Walnut Creek Wastewater Treatment Plant expansion in Texas. Axia Electric received a $20 million project at the University of California, Berkeley’s electrified heating and cooling plant.
Yal said the company remains focused geographically on California, Texas and Washington. In Texas, management sees a strong pipeline of water infrastructure opportunities alongside growing data-center activity.
To pursue work in data centers, advanced manufacturing, defense, renewables and critical minerals, Shimmick established a dedicated mission-critical business unit. A data-center project in West Virginia was entering pre-construction during August, with construction anticipated to begin within 60 days, Yal said.
Management said monthly bidding volume has ranged from roughly $500 million to $1 billion and win rates have remained in line with historical levels. Yal told analysts that mission-critical awards are heavily weighted toward electrical work and could become a sizable portion of the business over the next 12 months.
Guidance Updated for Revenue, EBITDA Outlook Reaffirmed
Shimmick updated its full-year 2026 revenue guidance to approximately $525 million to $575 million, representing about 12% year-over-year growth at the midpoint. Yoder said the change reflected greater visibility into non-core work removed from backlog and that the work was not expected to contribute gross margin.
The company reaffirmed adjusted EBITDA guidance of $15 million to $30 million for 2026. At the midpoint, that would represent approximately 350% growth from the prior year, according to management.
Shimmick ended the quarter with $33 million in liquidity, consisting of $17 million in unrestricted cash and cash equivalents and $16 million in availability under credit agreements. Yal said the company had fully demobilized from the Tennessee legacy project and that remaining non-core backlog was below 3% of total backlog.
Management said it expects liquidity and cash flow to improve as legacy work declines and newer projects, which it said are performing well so far, move further into execution.
About Shimmick (NASDAQ:SHIM)
Shimmick Corporation provides water and other critical infrastructure solutions in the United States. The company undertakes water and wastewater treatment infrastructure; water storage and conveyance, including dams, levees, flood control systems, pump stations, and coastal protection infrastructure; and mass transit, bridges, and military infrastructure projects. It serves federal, state, and local governments. The company was formerly known as SCCI National Holdings, Inc and changed its name to Shimmick Corporation in September 2023.
