Key insights
- Cardinal Infrastructure Group Inc. (CDNL) reported a significant third-quarter earnings miss and a sharp decline in adjusted EBITDA margin to 4.2% from 17.5% year-over-year. This was attributed to project estimate revisions, pricing pressure, and higher costs. The company withdrew its full-year 2026 guidance and postponed an acquisition. Shares tumbled 33% in pre-market trading. Despite revenue growth, the margin deterioration and operational issues led to a negative influence score.
Investing.com -- On Thursday, Cardinal Infrastructure Group Inc. (NASDAQ: CDNL) reported third quarter results that fell sharply below analyst expectations, with the company posting a loss of -$0.21 per share compared to the consensus estimate of $0.41 earnings per share.
Shares of the company tumbled 33% in pre-market trading following the results, reflecting investor concern over the significant margin deterioration and operational challenges.
Revenue reached $201.9 million for the quarter, up 65.1% YoY from $122.3 million.
The company’s adjusted EBITDA margin plunged to 4.2% from 17.5% in the prior-year period, driven by $13.2 million in project estimate revisions, residential pricing pressure, lower initial bid margins on commercial and industrial work, and higher fuel and transportation costs. Cardinal withdrew its full-year 2026 revenue and adjusted EBITDA margin guidance and postponed its proposed acquisition of Hughes Brothers.
"Revenue grew 65.1% this quarter to $201.9 million, but our third-quarter Adjusted EBITDA margin fell to 4.2%, well below our expectations," said Jeremy Spivey, Chairman and Chief Executive Officer. "These results are not acceptable, and they make clear that we need to strengthen how we estimate, manage and execute projects across Cardinal."
The company reported a net loss of $11.0 million compared to net income of $10.1 million in the prior-year period. Gross margin declined 10.5 percentage points to 5.4% from 15.9% a year earlier.
Cardinal announced several operational changes, including Chief Operating Officer Benji Wood taking a more direct role in establishing operating standards across the platform. The company also authorized a $50 million share repurchase program over the next 12 months.
Total backlog as of September 30, 2026 was $815.5 million, up 26.2% from the prior year. The company had $335.0 million in cash and $198.5 million in total debt, representing net cash of $136.5 million.
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