Orion Group Holdings ((ORN)) has held its Q1 earnings call. Read on for the main highlights of the call.
Orion Group Holdings’ recent earnings call painted a picture of a promising start to 2025, marked by substantial revenue and EBITDA growth, alongside impressive new contracts and a strong backlog. However, the company also faced challenges, particularly in the concrete segment, and reported increased SG&A expenses and negative cash flow.
Strong Start to 2025
Orion Group Holdings reported a robust revenue of $189 million and an adjusted EBITDA of $8 million, showcasing the effectiveness of its operating model and the successful execution of its strategic priorities. This strong performance sets a positive tone for the year ahead.
Impressive New Wins and Backlog
The company secured nearly $350 million in new contracts, with $161 million in marine and $188 million in concrete projects. The backlog, combined with awarded work, reached an impressive $890 million, indicating a healthy pipeline of future projects.
Record Concrete and Data Center Achievements
Orion Group Holdings achieved significant milestones in the concrete and data center sectors, winning five data center projects totaling $47 million. This brings their total to 35 data centers and over $235 million delivered, highlighting their growing expertise in this area.
Revenue and EBITDA Growth
The company experienced a 17% increase in consolidated revenue, reaching $189 million, while adjusted EBITDA doubled to $8.2 million. The marine segment saw a revenue increase of over 19%, and the concrete segment grew by 13%, reflecting strong operational performance.
High Marine Segment Performance
The marine segment’s adjusted EBITDA margin improved significantly to 8.6%, up from 0.9% in the previous year. This improvement underscores the segment’s strong performance and strategic importance to the company’s overall growth.
Concrete Segment Challenges
Despite overall growth, the concrete segment faced difficulties, reporting a negative EBITDA margin of 4.4%, compared to a positive 5.7% in the prior year. These challenges highlight the need for strategic adjustments in this area.
Increased SG&A Expenses
SG&A expenses rose to $22.5 million, up from $19 million in the comparable period. This increase was primarily due to higher incentive compensation, legal, IT, and operating lease expenses, which the company will need to manage carefully moving forward.
Negative Cash Flow
The company reported a negative cash flow of $3.4 million from operations in the March quarter, indicating a need for improved cash management strategies to support ongoing growth initiatives.
Forward-Looking Guidance
Looking ahead, Orion Group Holdings projects fiscal year revenue between $800 million and $850 million, with adjusted EBITDA expected to range from $42 million to $46 million. Adjusted EPS is anticipated to be between $0.11 to $0.17. The company maintained its CapEx guidance at $25 million to $35 million, and with a robust backlog and favorable government policies, it expects significant growth opportunities in the coming quarters.
In summary, Orion Group Holdings’ earnings call highlighted a strong start to 2025, with impressive revenue and EBITDA growth and a solid backlog. However, challenges in the concrete segment and increased expenses present areas for improvement. The company’s forward-looking guidance suggests optimism, with expectations of continued growth driven by strategic initiatives and favorable market conditions.