Shimmick reaffirms 2026 guidance for $550M-$600M revenue and $15M-$30M adjusted EBITDA while backlog rises to $944M

Earnings Call Insights: Shimmick Corporation (SHIM) Q1 2026

MANAGEMENT VIEW

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"I'm pleased to report that we are continuing to make progress on our strategy, which centers around growing our top line by bidding and winning work aligned with our expertise, winding down noncore projects and executing at a high level to deliver consistent margins." (CEO & Director Ural Yal)

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"For the first quarter, we delivered consolidated revenue of $88 million, 12% gross margin and adjusted EBITDA of approximately $3 million." (CEO & Director Yal)

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"We now have secured and continuing to secure backlog that is going to fuel our growth the rest of the year and beyond." (CEO & Director Yal)

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"For our noncore projects, revenue was $200,000 compared to $29 million a year ago, largely as a result of the termination by the U.S. Army Corps of Engineers of the Chickamauga Lock Replacement Project in Chattanooga, Tennessee." (CEO & Director Yal)

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"We remain constructive in our approach... and are confident that the parties will be able to reach a mutually agreeable resolution in due course." (CEO & Director Yal)

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"The electrical business remains an important pillar of our long-term strategy... We're also seeing increasing opportunity in data centers." (CEO & Director Yal)

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"In April, we announced the appointment of Sarah Tacker as Executive Vice President and Chief Operating Officer." (CEO & Director Yal)

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"Subsequent to quarter end, we were selected for a project with California Water Service... through a progressive design build contract with an estimated construction value of $50 million." (CEO & Director Yal)

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"Shimmick project revenue for Q1 2026 was $88 million versus $93 million in Q1 of 2025." (Executive VP & CFO Todd Yoder)

OUTLOOK

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"Despite the termination of the Chickamauga Lock Replacement Project... we are reaffirming our full year 2026 guidance." (Executive VP & CFO Yoder)

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"We expect Shimmick consolidated revenue to grow year-over-year between 12% and 22%... representing approximately $550 million to $600 million of work put in place for the full year 2026." (Executive VP & CFO Yoder)

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"We also expect adjusted EBITDA to increase year-over-year between 200% and 500%... with adjusted EBITDA in the range of $15 million to $30 million." (Executive VP & CFO Yoder)

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"July, August and September are when we expect to see more visible inflection in revenue as new projects begin generating consistent burn." (CEO & Director Yal)

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"Even though there's a reduction in revenue from Chick Lock, we believe we can... hit the guidance on the revenue side. We may trend towards maybe a little bit on the lower side." (CEO & Director Yal)

FINANCIAL RESULTS

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"Shimmick consolidated total revenue for Q1 '26 was $88 million as compared to $122 million in Q1 of '25." (Executive VP & CFO Yoder)

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"Shimmick consolidated total gross margin for Q1 2026 was $11 million... Total gross margin as a percentage of revenue improved to 12% from 4% in Q1 of 2025." (Executive VP & CFO Yoder)

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"Net loss for Q1 was $4 million... as compared to a net loss of $10 million in Q1 of 2025." (Executive VP & CFO Yoder)

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"We ended the first quarter with $34 million of liquidity... unrestricted cash, cash equivalents of $15 million and another $19 million of availability under our credit agreements." (Executive VP & CFO Yoder)

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"We ended the quarter with total backlog of $944 million." (Executive VP & CFO Yoder)

Q&A

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Aaron Spychalla, Craig-Hallum: asked about Chickamauga Lock coming out of backlog, guidance impacts, and any effect on bidding; CEO & Director Yal responded, "we believe we're going to hit the guidance" and added "we don't expect any slowing down" on bidding, while Executive VP & CFO Yoder pointed to Q1 new awards and said, "we feel very confident that the numbers are achievable."

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Aaron Spychalla, Craig-Hallum: asked about margin durability and commodity costs; CEO & Director Yal said, "new work we're bidding, that's all getting built into the pricing" and added, "I expect we're going to continue to grow on the gross margin side and start to really get into those 12s and the 13s," while Executive VP & CFO Yoder cautioned results can be "a little lumpy" but called "an 11% print on Shimmick work... very encouraging."

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Aaron Spychalla, Craig-Hallum: asked about cash flow as legacy work rolls off; CEO & Director Yal said, "The less legacy work we have, the better for our cash flow" and tied improvement to newer projects that "start generating upfront cash," while Executive VP & CFO Yoder added, "The rest of the business outside of the legacy projects... have generated cash."

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Gerard Sweeney, ROTH: pressed on timing of margin profile by bid vintage and selectivity; CEO & Director Yal said projects in the portfolio are "anywhere between 10% and 20%" and added, "I expect that 11% to continue to go up from here."

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Gerard Sweeney, ROTH: asked about backlog duration; CEO & Director Yal said, "Our average job is about 2.5 years" and added that backlog positioning extends "into 2028."

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Gerard Sweeney, ROTH: asked about data center work type and visibility from bid to start; CEO & Director Yal said the company is bidding "mechanical and the electrical side" including "switchgear" and "medium voltage," and added, "It's usually... not that different from our public works projects. So, we bid it and then over the next few months... we will know if we want it or not."

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Gerard Sweeney, ROTH: asked what Chickamauga revenue would have been; CEO & Director Yal said, "Somewhere around $20 million to $30 million this year."

SENTIMENT ANALYSIS

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Analyst tone was neutral-to-pressing, with repeated diligence around Chickamauga impacts, sustainability of margin improvement, and cash flow timing, including questions like "can you just kind of talk about the impact" (Spychalla) and "when were they bid... versus what you're bidding today?" (Sweeney).

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Management tone was slightly positive and confident, emphasizing reaffirmed guidance and operational trajectory, including "we are reaffirming our full year 2026 guidance" (Executive VP & CFO Yoder) and "we're confident we're going to get to an amicable solution" (CEO & Director Yal).

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Compared with Q4 2025, management language remained consistent on a "slower start" and sequential improvement, while Q1 2026 added more defensive clarification around the federal project termination process, including "the matter is proceeding through the customary federal process" (CEO & Director Yal).

QUARTER-OVER-QUARTER COMPARISON

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Q1 2026 emphasized a step-up in backlog and bookings, including "total backlog increasing to $944 million" and "book-to-burn ratio of 2.6" (CEO & Director Yal), versus Q4 2025 ending backlog of $793 million and book-to-burn of 1.4x (Executive VP & CFO Yoder in Q4 2025).

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Q1 2026 introduced a specific noncore disruption and resolution framing around Chickamauga, while Q4 2025 positioned noncore as "close to 90% complete" and focused more on progressive delivery milestones expected ahead.

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Q1 2026 reiterated the same full-year 2026 guidance ranges previously issued in Q4 2025, with Executive VP & CFO Yoder saying Q1 was "in line with our expectations" after the company "expected a slower start to 2026."

RISKS AND CONCERNS

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"The termination by the U.S. Army Corps of Engineers of the Chickamauga Lock Replacement Project" was the key project risk, with CEO & Director Yal stating "the matter is proceeding through the customary federal process" and adding, "this situation does not affect our broader relationship with the U.S. Army Corps of Engineers."

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Commodity and fuel cost exposure was addressed as a pricing-and-execution topic, with CEO & Director Yal saying, "new work we're bidding, that's all getting built into the pricing" and adding, "we don't expect any issues there."

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Execution and scaling risk was framed around controls and staffing, with CEO & Director Yal highlighting "strengthening our project controls and technology," "Centralized procurement," and noting "talent retention and acquisition remain a top priority... in a competitive labor market."

FINAL TAKEAWAY

Management framed Q1 2026 as a seasonally slower quarter that remained aligned with expectations, highlighted by backlog growth to $944 million and a 2.6 book-to-burn, while reaffirming full-year 2026 guidance of $550 million to $600 million of revenue and $15 million to $30 million of adjusted EBITDA. Leadership also emphasized that noncore work is now less than 5% of backlog, positioned the Chickamauga termination as a federal-process dispute it expects to resolve, and pointed to electrical/data center bidding and progressive design-build selection (including a $50 million California Water Service project) as part of its strategy to improve risk balance and execution consistency.

Read the full Earnings Call Transcript [https://seekingalpha.com/symbol/shim/earnings/transcripts]

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