Orion Group Holdings Inc Q1 FY2025 earnings call

Management Statement and Operational Highlights

• Market Update: Actions by the Trump administration on government spending and tariffs will not materially impact 2025 results. Secured nearly $350 million in new wins in the first quarter, with backlog plus awarded work at $890 million.
• Segment Wins: Marine had $161 million in wins, concrete had $188 million in wins. Secured 5 data center projects totaling $47 million, with 35 data centers delivered over $235 million.
• Operational Enhancements: Cut over from legacy to new IT systems, consolidating Houston offices from 3 to 1, expecting efficiency and cost savings from new systems and facility consolidation.

Segment Performance

• Marine: First quarter revenue up over 19%. As of March 31, backlog related to Marine was $607 million. Adjusted EBITDA margin was 8.6%. First quarter marine wins totaled $161 million.
• Concrete: First quarter revenue increased 13%. Backlog related to Concrete was $232 million. Adjusted EBITDA margin was negative 4.4%. First quarter concrete wins totaled $188 million. Consolidated revenue for the first quarter was $189 million, with Marine contributing approximately 45.8% of first quarter wins and Concrete contributing approximately 54.2% of first quarter wins.

Guidance

• Full year 2025 revenue expected in the range of $800 million to $850 million.
• Adjusted EBITDA expected in the range of $42 million to $46 million.
• Adjusted EPS expected in the range of $0.11 to $0.17.
• CapEx guidance remains in the range of $25 million to $35 million. Backlog growth expected in 2025.

Risks

• Input cost increases for steel and other products, which could pressure bids.
• Uncertainty in government regulation and macroeconomic conditions could impact project timelines or demand.

Question and Answer Q: On the defense side, when can we expect awards and the size of the opportunity?

A: Likely late 2025/early 2026, with $500 million+ opportunities in the pipeline.

Q: Outlook for the concrete business and margin expansion?

A: No slowdown seen yet, operating leverage will help margins improve over the year.

Q: Marine margins and competitive differentiation?

A: Strong marine margins due to large projects, competitive advantage from strong supplier relationships.

Q: Cash flow and input costs?

A: Cash flow expected to improve as top line increases, bids will account for increasing input costs with mitigation strategies in place