Electrical construction and infrastructure services provider MYR Group (NASDAQ: MYRG) reported Q2 CY2025 results beating Wall Street’s revenue expectations, with sales up 8.6% year on year to $900.3 million. Its GAAP profit of $1.70 per share was 15.3% above analysts’ consensus estimates.

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Management CommentsRick Swartz, MYR’s President and CEO, said, “Our second quarter performance resulted in quarterly revenues of $900 million and backlog of $2.64 billion with net income, consolidated gross profit, gross margin and EBITDA all increasing compared to the same period of 2024.”

Company Overview

Constructing electrical and phone lines in the American Midwest dating back to the 1890s, MYR Group (NASDAQ: MYRG) is a specialty contractor in the electrical construction industry.

Revenue Growth

A company’s long-term performance is an indicator of its overall quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Luckily, MYR Group’s sales grew at a solid 9.6% compounded annual growth rate over the last five years. Its growth beat the average industrials company and shows its offerings resonate with customers.

We at StockStory place the most emphasis on long-term growth, but within industrials, a half-decade historical view may miss cycles, industry trends, or a company capitalizing on catalysts such as a new contract win or a successful product line. MYR Group’s recent performance shows its demand has slowed as its annualized revenue growth of 1.3% over the last two years was below its five-year trend.

We can dig further into the company’s revenue dynamics by analyzing its backlog, or the value of its outstanding orders that have not yet been executed or delivered. MYR Group’s backlog reached $2.64 billion in the latest quarter and was flat over the last two years. Because this number is lower than its revenue growth, we can see the company hasn’t secured enough new orders to maintain its growth rate in the future.

This quarter, MYR Group reported year-on-year revenue growth of 8.6%, and its $900.3 million of revenue exceeded Wall Street’s estimates by 6%.

Looking ahead, sell-side analysts expect revenue to grow 5.7% over the next 12 months. Although this projection indicates its newer products and services will fuel better top-line performance, it is still below the sector average.

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Operating Margin

Operating margin is a key measure of profitability. Think of it as net income - the bottom line - excluding the impact of taxes and interest on debt, which are less connected to business fundamentals.

MYR Group’s operating margin has been trending up over the last 12 months and averaged 3.5% over the last five years. The company’s higher efficiency is a breath of fresh air, but its suboptimal cost structure means it still sports lousy profitability for an industrials business. This result isn’t too surprising given its low gross margin as a starting point.

Looking at the trend in its profitability, MYR Group’s operating margin might fluctuated slightly but has generally stayed the same over the last five years. This raises questions about the company’s expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability.

In Q2, MYR Group generated an operating margin profit margin of 4.4%, up 6.9 percentage points year on year. The increase was solid, and because its operating margin rose more than its gross margin, we can infer it was more efficient with expenses such as marketing, R&D, and administrative overhead.

Earnings Per Share

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

MYR Group’s solid 11.5% annual EPS growth over the last five years aligns with its revenue performance. This tells us it maintained its per-share profitability as it expanded.

Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.

For MYR Group, its two-year annual EPS declines of 4.6% mark a reversal from its (seemingly) healthy five-year trend. We hope MYR Group can return to earnings growth in the future.

In Q2, MYR Group reported EPS at $1.70, up from negative $0.91 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects MYR Group’s full-year EPS of $4.79 to grow 47.5%.

Key Takeaways from MYR Group’s Q2 Results

We were impressed by how significantly MYR Group blew past analysts’ revenue expectations this quarter. We were also glad its EPS and EBITDA outperformed Wall Street’s estimates. Zooming out, we think this was a good print with some key areas of upside. The stock traded up 5.8% to $212 immediately after reporting.

MYR Group had an encouraging quarter, but one earnings result doesn’t necessarily make the stock a buy. Let’s see if this is a good investment. We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free.