CVS beats estimates, hikes adjusted profit outlook on retail pharmacy and insurance unit strength
The company now expects fiscal 2025 adjusted earnings of $6.30 to $6.40 per share, up from previous guidance of $6 to $6.20 per share. CVS also cut its GAAP earnings guidance, without disclosing additional details.
In an interview, CVS CEO David Joyner said the quarterly beat and guidance hike is in part "a tribute to the work and the effort underway within Aetna," the company's insurer. He was referring to a "multi-year recovery effort" at Aetna, which has been grappling with higher medical costs in privately run Medicare plans like the rest of the insurance industry.
Joyner added that CVS' retail pharmacy business is "performing really well," demonstrating the company's efforts to introduce new technology that improves pharmacy operations and drives efficiency. He also pointed to the company's investments in labor and its new prescription drug pricing model, which has benefited payers and "separated the pharmacy from the pack."
But the company's release said the strength in those two business units was offset by a decline in its health services segment.
The results cap off the third full quarter with Joyner, a longtime CVS executive, as chief executive of the retail drugstore chain. Joyner succeeded Karen Lynch in mid-October, as CVS struggled to drive higher profits and improve its stock performance.
Here's what CVS reported for the second quarter compared with what Wall Street was expecting, based on a survey of analysts by LSEG:
The company posted net income of $1.02 billion, or 80 cents per share, for the first quarter. That compares with net income of $1.77 billion, or $1.41 per share, for the year-earlier period.
Excluding certain items, such as amortization of intangible assets, restructuring charges and capital losses, adjusted earnings were $1.81 per share for the quarter.
CVS booked sales of $98.92 billion for the first quarter, up 8.4% from the same period a year ago due to growth across all three of its business segments.
As part of a broader turnaround plan, the company is pursuing $2 billion in cost cuts over the next several years. Joyner told CNBC that the company still has to close a few more locations as part of reaching that target.
But he said CVS is also "focusing on being in the right geography," noting that the company is still buying stores in the Pacific Northwest because it doesn't have a big footprint there.
All three of CVS' business segments beat Wall Street's revenue expectations for the second quarter. But the company's insurance unit is still under pressure.Aetna and other insurers have grappled with higher-than-expected medical costs over the last year as more Medicare Advantage patients return to hospitals for procedures they delayed during the pandemic.
The insurance unit's medical benefit ratio – a measure of total medical expenses paid relative to premiums collected – increased to 89.9% from 89.6% a year earlier. A lower ratio typically indicates that a company collected more in premiums than it paid out in benefits, resulting in higher profitability.
The company said that the increase was driven by a charge of $471 million from a so-called premium deficiency reserve, which is related to anticipated losses in the 2025 coverage year. That refers to a liability that an insurer may need to cover if future premiums are not enough to pay for anticipated claims and expenses.
The second-quarter ratio was lower than the 90.6% that analysts were expecting, according to StreetAccount estimates.
The insurance business booked $36.26 billion in revenue during the quarter, up more than 11% from the second quarter of 2024. Analysts expected the unit to take in $34.59 billion for the period, according to estimates from StreetAccount.
CVS' pharmacy and consumer wellness division booked $33.58 billion in sales for the second quarter, up more than 12% from the same period a year earlier. The company said the increase was partly driven by higher volume at the pharmacy and the front of store, but offset by pharmacy reimbursement pressure.Analysts expected sales of $31.98 billion for the quarter, StreetAccount said.
That unit dispenses prescriptions in CVS' more than 9,000 retail pharmacies and provides other pharmacy services, such as vaccinations and diagnostic testing.
CVS' health services segment generated $46.45 billion in revenue for the quarter, up more than 10% compared with the same quarter in 2024. Analysts expected the unit to post $43.37 billion in sales for the period, according to StreetAccount.
That unit includes Caremark, one of the nation's largest pharmacy benefit managers. Caremark negotiates drug discounts with manufacturers on behalf of insurance plans and creates lists of medications, or formularies, that are covered by insurance and reimburses pharmacies for prescriptions.
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Consolidated Statements of Comprehensive Income (Loss) U.S. dollars in thousands (except share and per share data) Six Months Ended June 30, Three Months Ended June 30, 2024 2025 2024 2025 (Unaudited) (Unaudited) Revenue $ 119,619 $ 138,053 $ 60,637 $ 70,966 Cost of revenue 25,240 28,238 12,544 14,268 Gross profit 94,379 109,815 48,093 56,698 Operating expenses: Research and development 25,778 36,328 12,239 18,324 Sales and marketing 51,097 63,977 25,857 31,821 General and administrative 21,141 25,685 10,950 13,437 Total operating expenses 98,016 125,990 49,046 63,582 Loss from operations (3,637 ) (16,175 ) (953 ) (6,884 ) Finance income (expenses), net 1,278 (2,642 ) 823 (3,649 ) Loss before income taxes (2,359 ) (18,817 ) (130 ) (10,533 ) Provision for income taxes 1,112 2,291 608 1,316 Net loss $ (3,471 ) $ (21,108 ) $ (738 ) $ (11,849 ) Net loss per share attributable to ordinary shareholders, basic and diluted $ (0.04 ) $ (0.25 ) $ (0.01 ) $ (0.14 ) Weighted-average shares used in computing net loss per share attributable to ordinary shareholders, basic and diluted 79,969,425 83,588,536 80,570,892 84,037,145 Net loss $ (3,471 ) $ (21,108 ) $ (738 ) $ (11,849 ) Other comprehensive (loss) income, net of tax Change in unrealized (loss) gain on cashflow hedges (880 ) 2,054 (363 ) 2,796 Total other comprehensive (loss) income, net of tax (880 ) 2,054 (363 ) 2,796 Total comprehensive loss $ (4,351 ) $ (19,054 ) $ (1,101 ) $ (9,053 ) Expand Share-based compensation costs included above: U.S. dollars in thousands Six Months Ended June 30, Three Months Ended June 30, 2024 2025 2024 2025 (Unaudited) (Unaudited) Cost of revenue $ 390 $ 514 $ 223 $ 265 Research and development 2,802 3,503 1,357 1,709 Sales and marketing 1,991 2,753 806 1,417 General and administrative 3,402 5,183 2,072 2,753 Total $ 8,585 $ 11,953 $ 4,458 $ 6,144 Expand Similarweb Ltd. Consolidated Statements of Cash Flows U.S. dollars in thousands Six Months Ended June 30, Three Months Ended June 30, 2024 2025 2024 2025 (Unaudited) (Unaudited) Cash flows from operating activities: Net loss $ (3,471 ) $ (21,108 ) $ (738 ) $ (11,849 ) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization 5,139 4,443 2,619 2,345 Finance expense (income) 466 (1,200 ) 230 (1,040 ) Unrealized loss (gain) from hedging future transactions 60 (77 ) 29 (47 ) Share-based compensation 8,585 11,953 4,458 6,144 Gain from sale of equipment (7 ) (17 ) (3 ) (17 ) Changes in operating assets and liabilities: Change in operating lease right-of-use assets and liabilities, net (2,513 ) 1,828 (242 ) 2,641 Decrease (increase) in accounts receivable, net 9,619 8,842 2,626 (2,917 ) Decrease in deferred contract costs 583 2,112 170 827 (Increase) decrease in other current assets (2,917 ) (621 ) (1,593 ) 604 Decrease (increase) in other non-current assets 47 (458 ) 14 (221 ) Decrease in accounts payable (3,258 ) (3,101 ) (799 ) (291 ) Increase in deferred revenue 7,316 5,741 328 5,687 Increase in other non-current liabilities 620 111 426 44 (Decrease) increase in other liabilities and accrued expenses (2,857 ) (702 ) (181 ) 950 Net cash provided by operating activities 17,412 7,746 7,344 2,860 Cash flows from investing activities: Purchase of property and equipment, net (908 ) (709 ) (540 ) (208 ) Capitalized internal-use software costs (469 ) — (469 ) — Increase in restricted deposits (289 ) (272 ) (121 ) (137 ) Payment for business combinations, net of cash acquired (3,833 ) (15,671 ) (24 ) (6,397 ) Net cash used in investing activities (5,499 ) (16,652 ) (1,154 ) (6,742 ) Cash flows from financing activities: Proceeds from exercise of stock options 3,057 2,023 386 1,461 Proceeds from employee share purchase plan 555 1,155 555 1,155 Repayment of Credit Facility (25,000 ) — — — Net cash (used in) provided by financing activities (21,388 ) 3,178 941 2,616 Effect of exchange rates on cash and cash equivalents (466 ) 1,200 (230 ) 1,040 Net (decrease) increase in cash and cash equivalents (9,941 ) (4,528 ) 6,901 (226 ) Cash and cash equivalents, beginning of period 71,732 63,869 54,890 59,567 Cash and cash equivalents, end of period $ 61,791 $ 59,341 $ 61,791 $ 59,341 Supplemental disclosure of cash flow information: Interest received, net $ (557 ) $ (680 ) $ (322 ) $ (325 ) Taxes paid $ 848 $ 1,291 $ 16 $ 1,158 Supplemental disclosure of non-cash financing activities: Additions to operating lease right-of-use assets and liabilities $ 4,453 $ 2,743 $ 2,055 $ — Share-based compensation included in capitalized internal-use software $ 33 $ — $ 33 $ — Deferred proceeds from exercise of share options included in other current assets $ 27 $ — $ 27 $ — Deferred costs of property and equipment incurred during the period included in accounts payable $ 6 $ 236 $ 6 $ 236 Expand Reconciliation of Net loss (GAAP) to non-GAAP Net income (loss) Six Months Ended June 30, Three Months Ended June 30, 2024 2025 2024 2025 (In thousands, except for share and per share amounts) (In thousands, except for share and per share amounts) GAAP Net loss $ (3,471 ) (21,108 ) $ (738 ) (11,849 ) Add: Share-based compensation expenses 8,585 11,953 4,458 6,144 Retention payments related to business combinations 819 3,773 591 2,214 Amortization of intangible assets related to business combinations 2,347 1,584 1,227 924 Non-operating foreign exchange (gains) losses (1,297 ) 2,657 (790 ) 3,563 Tax effect of adjustments, net (791 ) (130 ) (492 ) 115 Non-GAAP net income (loss) $ 6,192 $ (1,271 ) $ 4,256 $ 1,111 Non-GAAP net income (loss) margin 5 % (1 )% 7 % 2 % Weighted average number of ordinary shares - basic 79,969,425 83,588,536 80,570,892 84,037,145 $ 0.08 $ (0.02 ) $ 0.05 $ 0.01 Weighted average number of ordinary shares - diluted 85,261,342 83,588,536 85,884,880 88,215,850 Non-GAAP diluted net income (loss) per share attributable to ordinary shareholders $ 0.07 $ (0.02 ) $ 0.05 $ 0.01 Expand Reconciliation of Net cash provided by operating activities (GAAP) to Free cash flow and Normalized free cash flow Six Months Ended June 30, Three Months Ended June 30, 2024 2025 2024 2025 (In thousands) (In thousands) Net cash provided by operating activities $ 17,412 $ 7,746 $ 7,344 $ 2,860 Purchases of property and equipment, net (908 ) (709 ) (540 ) (208 ) Capitalized internal use software costs (469 ) — (469 ) — Free cash flow $ 16,035 $ 7,037 $ 6,335 $ 2,652 Deferred payments related to business combinations — 1,660 — 1,175 Normalized free cash flow $ 16,035 $ 8,697 $ 6,335 $ 3,827 Expand
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'Based on our strong results in the first half of the year, which included the benefit of efficient project execution and favorable project timing, and while considering our project mix and expected project cadence for the second half of the year, we are raising our 2025 guidance. We now expect revenues to be in the range of $3.3 billion to $3.4 billion and EBITDA in the range of $240 million to $255 million.' Second Quarter 2025 Consolidated Results Revenues increased 31.0% to $921.5 million in the second quarter of 2025, compared to $703.3 million in the second quarter of 2024. Electrical and mechanical revenues grew $209.8 million, or 41.6%, and transmission and distribution revenues increased $5.6 million, or 2.7%. Gross profit increased 35.5% to $119.9 million in the second quarter of 2025, compared to $88.5 million in the second quarter of 2024. The increase was primarily due to project timing and efficiency gains on certain projects, partially offset by changes in project mix. Gross profit margin was 13.0% in the second quarter of 2025, up compared to 12.6% in the second quarter of 2024. Selling, general and administrative expenses increased to $47.4 million in the second quarter of 2025, compared to $37.2 million in the second quarter of 2024. The increase was primarily driven by higher labor and professional service-related expenses, including incremental stand-alone operating costs, to support the operational growth of the business, along with higher corporate overhead expenses. Net income increased 35.4% to $52.8 million, or diluted EPS of $1.03, in the second quarter of 2025, compared to $39.0 million, or diluted EPS of 76 cents, in the second quarter of 2024. The increase was primarily from increased gross profit and gross profit margin, partially offset by higher selling, general and administrative expenses, including incremental stand-alone operating costs, interest expense related to the company's borrowing arrangements and income taxes on higher pretax income. Net income margin was 5.7% in the second quarter of 2025, up compared to 5.5% in the second quarter of 2024. EBITDA increased 35.6% to $84.2 million in the second quarter of 2025, compared to $62.1 million in the second quarter of 2024. The increase was primarily from higher gross profit and gross profit margin, partially offset by higher selling, general and administrative expenses, including stand-alone operating costs. EBITDA margin was 9.1%, up compared to 8.8% in the second quarter of 2024. Backlog increased to $3.0 billion as of June 30, 2025, up 7.1% compared to Dec. 31, 2024, and up 23.9% compared to June 30, 2024. Second Quarter 2025 Segment Results Electrical and Mechanical E&M segment revenues increased 41.6% to $713.6 million in the second quarter of 2025, compared to $503.8 million in the second quarter of 2024. The increase was driven by higher workloads in the commercial end market, particularly growth in the data center submarket. The E&M segment had modest revenue declines in the remaining E&M end markets. E&M segment net income increased 61.4% to $47.3 million in the second quarter of 2025, compared to $29.3 million in the second quarter of 2024. E&M segment net income margin was 6.6%, up compared to 5.8% in the second quarter of 2024. E&M segment EBITDA increased 53.5% to $63.7 million in the second quarter of 2025, compared to $41.5 million in the second quarter of 2024. The increase was driven by higher revenues and higher gross profit margin due to project timing and efficiency gains on certain projects, partially offset by changes in project mix and higher selling, general and administrative expenses. E&M segment EBITDA margin was 8.9%, up compared to 8.2% in the second quarter of 2024. E&M backlog increased to $2.6 billion as of June 30, 2025, up 2.4% compared to $2.5 billion as of Dec. 31, 2024, and up 24.4% compared to $2.1 billion as of June 30, 2024. Transmission and Distribution T&D segment revenues increased 2.7% to $212.4 million in the second quarter of 2025, compared to $206.8 million in the second quarter of 2024. The increase was driven by growth in both the transportation and utility end markets, with higher workloads in the underground and traffic signalization submarkets. T&D segment net income increased 20.3% to $17.8 million during the second quarter of 2025, compared to $14.8 million in the second quarter of 2024. T&D segment net income margin was 8.4%, up compared to 7.2% in the second quarter of 2024. T&D segment EBITDA increased 19.2% to $30.4 million in the second quarter of 2025, compared to $25.5 million in the second quarter of 2024. The increase was primarily from higher revenues and higher gross profit margin due to project mix and solid project execution, partially offset by higher selling, general and administrative expenses. T&D segment EBITDA margin was 14.3%, up compared to 12.3% in the second quarter of 2024. T&D backlog increased to $410.1 million as of June 30, 2025, up 49.9% compared to $273.6 million as of Dec. 31, 2024, and up 20.8% compared to $339.6 million as of June 30, 2024. Six Months Ended June 30, 2025, Consolidated Results Revenues increased 31.5% to $1.75 billion for the six months ended June 30, 2025, compared to $1.33 billion for the six months ended June 30, 2024. Electrical and mechanical revenues rose $416.9 million, or 44.1%, while transmission and distribution revenues grew $2.1 million, or 0.5%. Gross profit increased 30.1% to $212.4 million for the six months ended June 30, 2025, compared to $163.3 million for the six months ended June 30, 2024. The increase was primarily driven by higher revenues due to project timing and efficiency gains on certain projects, partially offset by higher operating costs and lower gross profit margin from changes in project mix. Gross profit margin was 12.2% for the six months ended June 30, 2025, compared to 12.3% for the six months ended June 30, 2024. Selling, general and administrative expenses increased to $88.9 million for the six months ended June 30, 2025, compared to $73.1 million for the six months ended June 30, 2024. The increase was primarily driven by higher labor and professional service-related expenses, including incremental stand-alone operating costs, to support the operational growth of the business, along with higher corporate overhead expenses. Net income increased 33.2% to $89.5 million, or diluted EPS of $1.75, for the six months ended June 30, 2025, compared to $67.2 million, or diluted EPS of $1.32, for the six months ended June 30, 2024. The increase was primarily from increased gross profit and higher income from joint ventures, partially offset by higher selling, general and administrative expenses, interest expense related to borrowing arrangements and income taxes on higher pretax income. Net income margin remained consistent at 5.1% for the six months ended June 30, 2025, compared to 5.1% for the six months ended June 30, 2024. The company's EBITDA increased 34.1% to $146.0 million for the six months ended June 30, 2025, compared to $108.9 million for the six months ended June 30, 2024. The increase was primarily from increased gross profit and higher income from joint ventures, partially offset by higher selling, general and administrative expenses. As a result, EBITDA margin was 8.4% for the six months ended June 30, 2025, up compared to 8.2% for the six months ended June 30, 2024. Balance Sheet and Cash Flow Commentary Balance Sheet As of June 30, the company had $64.5 million of unrestricted cash and cash equivalents and $292.5 million of gross debt, compared to $69.9 million and $300.0 million as of Dec. 31, 2024. As of both June 30, and Dec. 31, 2024, the company had $209.4 million available under the revolving credit facility, net of $15.6 million of outstanding standby letters of credit. Net leverage, defined as net debt-to-trailing 12-month EBITDA, was 0.8x as of June 30, 2025, compared to 1.0x as of Dec. 31, 2024. Working capital, defined as current assets minus current liabilities, was $474.7 million as of June 30, 2025, compared to $403.9 million as of Dec. 31, 2024. The working capital changes were primarily driven by project timing, workload activity and billing fluctuations, with higher receivables and contract assets, partially offset by higher accounts payable, contract liabilities, net and accrued compensation and payroll-related liabilities. Cash Flow Operating cash flows were $32.5 million for the six months ended June 30, 2025, compared to $3.7 million for the six months ended June 30, 2024. The increase was primarily related to higher net income, higher non-cash expenses and increased return on investment distributions from joint ventures. Capital expenditures were $31.6 million for the six months ended June 30, 2025, compared to $16.5 million for the six months ended June 30, 2024. The increase was primarily from vehicle, equipment and building investments to support the company's growth. Everus had positive free cash flow of $6.5 million for the six months ended June 30, 2025, compared to negative free cash flow of $7.4 million for the six months ended June 30, 2024. The increase was primarily from higher operating cash flows, partially offset by higher net capital expenditures. Forecast for 2025 Everus is raising its estimated full-year revenues and EBITDA guidance for 2025. Revenues are expected to be in the range of $3.3 billion to $3.4 billion, updated from $3.0 billion to $3.1 billion. EBITDA is expected to be in the range of $240 million to $255 million, updated from $210 million to $225 million, with EBITDA margins expected to be lower than in 2024 due to stand-alone operating costs and associated dis-synergies. Everus is affirming its estimated full-year gross capital expenditures guidance for 2025. Gross capital expenditures for 2025 are expected to be in the range of $65 million to $70 million. Basis of Presentation Prior to the spinoff from MDU Resources Group, Inc. on Oct. 31, 2024, Everus Construction, Inc., including its subsidiaries, operated as a wholly owned subsidiary of CEHI, LLC (Centennial) and an indirect, wholly owned subsidiary of MDU Resources and not as a stand-alone company. Following the separation, Everus Construction is now a wholly owned subsidiary of Everus. As a result, for periods prior to the separation, Everus' financial information, including results of operations, financial condition, cash flows, and accompanying unaudited condensed consolidated financial statements, was prepared on a 'carve-out' basis in connection with the spinoff and was derived from the unaudited condensed consolidated financial statements of MDU Resources as if Everus operated on a stand-alone basis. The calculation of basic and diluted earnings per share for periods presented prior to the spinoff have been retrospectively adjusted to the number of shares outstanding on Oct. 31, 2024, the separation and distribution date. It is assumed that there were no dilutive or anti-dilutive equity instruments as of Oct. 31, 2024, because there were no Everus stock-based awards outstanding for periods prior to the separation. Cash-settled, related-party transactions between Everus Construction, MDU Resources, Centennial or other MDU Resources subsidiaries for general operating activities; Everus Construction's participation in MDU Resources' centralized cash management program through Centennial; and intercompany debt were included in the unaudited condensed consolidated financial statements for periods prior to the separation. These related-party transactions were reflected in the unaudited condensed consolidated balance sheets prior to the separation as due from related-party, due from related-party - noncurrent, due to related-party or related-party notes payable. The aggregate net effect of general related-party operating activities was reflected in the unaudited condensed consolidated statements of cash flows within operating activities for periods prior to the separation. The effects of Everus Construction's participation in MDU Resources' centralized cash management program and intercompany debt arrangements were reflected in the unaudited condensed consolidated statements of cash flows within investing and financing activities for periods prior to the separation. Non-GAAP Financial Measures Throughout this news release, Everus presents financial information prepared in accordance with U.S. generally accepted accounting principles (GAAP), as well as non-GAAP financial measures, including EBITDA, EBITDA margin, net debt, net leverage and free cash flow, and, in some cases, applicable measures by segment. The use of these non-GAAP financial measures should not be construed as alternatives to net income, net income margin, total debt, gross leverage and cash provided by (used in) operating activities. Everus believes the use of these non-GAAP financial measures are beneficial in evaluating the company's financial performance. Please refer to the Non-GAAP Financial Measures sections contained in this news release for additional information. Conference Call Management will discuss Everus' second quarter 2025 results on a webcast at 10:30 a.m. EDT Aug. 13. The webcast and accompanying presentation materials can be accessed at by selecting 'Events & Presentations' and 'Everus Q2 Earnings Call.' After the conclusion of the webcast, a replay will be available at the same location. Participants also can listen to the webcast by phone at 646-307-1963 for toll-based U.S. and international callers or at 800-715-9871 for toll-free U.S. callers, with conference ID 1034822. About Everus Construction Group Everus Construction Group, Inc., a member of the S&P SmallCap 600 ® index, is Building America's Future ® by providing a full spectrum of construction services through its electrical and mechanical, and transmission and distribution specialty contracting services across the United States. These specialty contracting services are provided to commercial, industrial, institutional, renewables, service, utility, transportation and other customers. Its E&M contracting services include construction and maintenance of electrical and communication wiring and infrastructure, fire suppression systems, and mechanical piping and services. Its T&D contracting services include construction and maintenance of overhead and underground electrical, gas and communication infrastructure, as well as the manufacture and distribution of overhead and underground transmission line construction equipment and tools. For more information about Everus, visit or email investors@ Forward-Looking Statements Information in this news release includes certain "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934. The forward-looking statements in this news release, including statements about the company's future performance, financial guidance, long-term targets and statements made by the CEO, are expressed in good faith and are believed by the company to have a reasonable basis. This news release highlights key growth strategies, projections and certain assumptions for the company and its subsidiaries and other matters for each of the company's segments. Many of these highlighted statements and other statements not historical in nature are 'forward-looking statements.' Although the company believes that its expectations are based on reasonable assumptions as of the date they are made, there is no assurance the company's projections, including estimates for growth, shareholder value creation and financial guidance, will be achieved. Readers are encouraged to refer to assumptions contained in this news release, as well as the various important factors listed in Part I, Item 1A. Risk Factors in the company's most recent Annual Report on Form 10-K and subsequent filings with the Securities and Exchange Commission. Changes in such assumptions and factors could cause actual future results to differ materially from growth and financial guidance. All forward-looking statements in this news release are expressly qualified by such cautionary statements and by reference to the underlying assumptions. Undue reliance should not be placed on forward-looking statements, which speak only as of the date they are made. Except as required by law, the company does not undertake any obligation to update or revise any forward-looking or cautionary statements to reflect changes in assumptions, the occurrence of events, unanticipated or otherwise, and changes in future operating results over time or otherwise. Everus Construction Group, Inc. Condensed Consolidated Balance Sheets (Unaudited) June 30, 2025 December 31, 2024 (In thousands, except share and per share amounts) Assets Current assets: Cash, cash equivalents and restricted cash $ 84,708 $ 86,012 Receivables, net of allowances of $3,006 and $7,097, respectively 682,951 590,028 Contract assets 244,502 167,049 Inventories 48,052 43,750 Prepayments and other current assets 28,813 30,390 Total current assets 1,089,026 917,229 Noncurrent assets: Property, plant and equipment, net of accumulated depreciation of $165,888 and $157,278, respectively 150,545 134,409 Goodwill 143,224 143,224 Operating lease right-of-use assets 73,606 67,045 Investments 20,375 21,286 Other 4,601 5,270 Total noncurrent assets 392,351 371,234 Total assets $ 1,481,377 $ 1,288,463 Liabilities and Stockholders' Equity Current liabilities: Current portion of long-term debt $ 15,000 $ 15,000 Contract liabilities, net 230,354 207,304 Accounts payable 199,091 138,097 Taxes payable 10,281 6,768 Accrued compensation 74,040 67,815 Current portion of operating lease liabilities 28,909 26,354 Accrued payroll-related liabilities 44,678 38,995 Other accrued liabilities 11,961 13,037 Total current liabilities 614,314 513,370 Noncurrent liabilities: Long-term debt 273,599 280,648 Deferred income taxes 10,834 8,161 Operating lease liabilities 45,500 41,200 Other 22,721 22,472 Total noncurrent liabilities 352,654 352,481 Total liabilities $ 966,968 $ 865,851 Commitments and contingencies Common stockholders' equity: Common stock, 300,000,000 shares authorized, $0.01 par value, 51,006,575 and 50,980,924 shares issued and outstanding as of June 30, 2025 and December 31, 2024, respectively $ 510 $ 510 Other paid-in capital 140,412 138,130 Retained earnings 373,487 283,972 Total stockholders' equity 514,409 422,612 Total liabilities and stockholders' equity $ 1,481,377 $ 1,288,463 Expand Everus Construction Group, Inc. Condensed Consolidated Statements of Cash Flows (Unaudited) Six months ended June 30, 2025 2024 (in thousands) Operating activities: Net income $ 89,515 $ 67,186 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 13,901 11,130 Amortization of intangible assets 116 1,044 Deferred income taxes 2,305 (1,600 ) Provision for credit losses (1,729 ) (134 ) Amortization of debt issuance costs 788 — Stock-based compensation costs 2,870 689 Net unrealized gains on investments (300 ) (315 ) Gain on sale of assets (3,682 ) (2,458 ) Equity in earnings of unconsolidated affiliates, net of distributions 909 (955 ) Changes in current assets and liabilities: Receivables (91,194 ) (109,058 ) Due from related-party — (1,920 ) Contract assets (77,453 ) 2,674 Inventories (4,302 ) (5,865 ) Other current assets 1,577 2,830 Contract liabilities, net 23,050 2,626 Accounts payable 60,547 29,552 Due to related-party — 1,568 Other current liabilities 14,268 4,752 Other noncurrent changes 1,284 2,005 Net cash provided by operating activities 32,470 3,751 Investing activities: Capital expenditures (31,623 ) (16,517 ) Net proceeds from sale or disposition of property 5,635 5,412 Proceeds from insurance contracts 2,174 — Investments (1,872 ) (391 ) Net cash used in investing activities (25,686 ) (11,496 ) Financing activities: Repayment of long-term debt (7,500 ) — Tax withholding on stock-based compensation (588 ) — Net amounts received from MDU Resources cash management program — 31,925 Transfers to CEHI, LLC and MDU Resources — (25,425 ) Net cash provided by (used in) financing activities (8,088 ) 6,500 Decrease in cash, cash equivalents and restricted cash (1,304 ) (1,245 ) Cash, cash equivalents and restricted cash - beginning of period 86,012 1,567 Cash, cash equivalents and restricted cash - end of period $ 84,708 $ 322 Expand Everus Construction Group, Inc. Segment and Other Financial Information (Unaudited) Revenues The following table sets forth segment revenues for the periods indicated, as well as the percentage change from the prior period: Backlog Backlog is a common measurement in the construction services industry. Everus' determination of backlog can include projects that have a written award, a letter of intent, a notice to proceed, an agreed upon work order to perform work on mutually accepted terms, and conditions and change orders or claims to the extent management believes additional contract revenues will be earned and are deemed probable of collection. Contracts are subject to delays, defaults or cancellations; changes in scope of services to be provided; and adjustments to costs. Backlog also may be affected by project delays or cancellations resulting from weather conditions, external market factors and economic factors beyond Everus' control, among other things. Accordingly, there is no assurance that backlog will be realized. For the periods presented in the following backlog table, Everus did not experience any material impacts related to delays or cancellations of planned projects included in backlog. The timing of contract awards, including contracts awarded pursuant to master service agreements, duration of large new contracts and the mix of services can significantly affect backlog. Backlog at any given point in time may not accurately represent revenue or net income realized in any period, and backlog as of the end of the year may not be indicative of revenue or net income expected to be realized in the following year. Backlog should not be relied upon as a stand-alone indicator of future results. The following table provides estimated backlog as of the dates indicated: Everus Construction Group, Inc. Non-GAAP Financial Measures In addition to information prepared in accordance with GAAP, the company evaluates operating performance using the non-GAAP financial measures of EBITDA, EBITDA margin, net debt and net leverage, and, in some cases, applicable measures by segment, and evaluates its liquidity using the non-GAAP financial measure of free cash flow. These non-GAAP financial measures have limitations as an analytical tool and should not be considered in isolation or as a substitute for an analysis of the company's results as reported under GAAP. Because of these limitations, EBITDA, EBITDA margin, net debt, net leverage and free cash flow should not be considered as replacements for net income, net income margin, total debt, gross leverage and cash provided by (used in) operating activities, the most comparable GAAP measures, respectively. Non-GAAP financial measures are not standardized; therefore, it may not be possible to compare them with other companies' EBITDA, EBITDA margin, net debt, net leverage and free cash flow having the same or similar names. EBITDA and EBITDA Margin Everus utilizes EBITDA and EBITDA margin to consistently assess its operating performance and as a basis for strategic planning and forecasting, since the company believes EBITDA closely correlates to long-term enterprise value. Everus believes that measuring performance on an EBITDA basis is useful to investors, because it enables a more consistent evaluation of its period-to-period operational performance. Everus also believes these non-GAAP financial measures, in addition to the corresponding GAAP measures of net income and net income margin, are useful to investors and provide meaningful information about operational efficiency by excluding the impacts of differences in tax jurisdictions and structures, debt levels and capital investment. Investors also may use EBITDA to calculate leverage as a multiple of EBITDA. Management uses EBITDA and EBITDA margin, in addition to GAAP metrics, to evaluate the company's operating results, calculate compensation packages and determine leverage as a multiple of EBITDA to establish the appropriate funding of operations. EBITDA is calculated by adding back interest expense, net of interest income, income taxes, and depreciation and amortization to net income. EBITDA margin is calculated by dividing EBITDA by operating revenues. The following table reconciles net income to EBITDA and provides the calculation of EBITDA margin. The following tables reconcile net income to EBITDA by segment. Three months ended June 30, 2025 Six months ended June 30, 2025 (In millions) Net income $ 47.3 $ 17.8 $ (12.3 ) $ 52.8 $ 83.9 $ 28.3 $ (22.7 ) $ 89.5 Interest expense, net (1.5 ) 1.0 5.3 4.8 (3.3 ) 1.7 11.1 9.5 Income taxes 16.4 5.9 (2.9 ) 19.4 29.7 9.3 (6.0 ) 33.0 Depreciation and amortization 1.5 5.7 — 7.2 2.9 11.2 (0.1 ) 14.0 EBITDA $ 63.7 $ 30.4 $ (9.9 ) $ 84.2 $ 113.2 $ 50.5 $ (17.7 ) $ 146.0 Expand Three months ended June 30, 2024 Six months ended June 30, 2024 (In millions) Net income $ 29.3 $ 14.8 $ (5.1 ) $ 39.0 $ 52.3 $ 25.0 $ (10.1 ) $ 67.2 Interest expense, net 0.2 1.2 1.9 3.3 0.1 2.1 3.8 6.0 Income taxes 10.4 5.0 (1.8 ) 13.6 18.7 8.4 (3.5 ) 23.6 Depreciation and amortization 1.6 4.5 0.1 6.2 3.2 9.0 (0.1 ) 12.1 EBITDA $ 41.5 $ 25.5 $ (4.9 ) $ 62.1 $ 74.3 $ 44.5 $ (9.9 ) $ 108.9 Expand The following table provides EBITDA and the calculation of EBITDA margin by segment. The following table provides the increased EBITDA guidance reconciliation for full-year 2025. Net Debt and Net Leverage Everus uses net debt and net leverage as a measure of assessing its borrowing capacity and achieving its optimal capital structure. The company believe these non-GAAP financial measures, in addition to the corresponding GAAP measures of total debt and gross leverage, are useful to investors because they provide insight into how long it would take the company to pay back its debt if net debt and EBITDA were constant. Net debt is calculated by adding unamortized debt issuance costs to the total debt balance on the balance sheet, less any unrestricted cash. Net leverage is calculated by dividing net debt by trailing 12-month EBITDA. The following table provides the reconciliations of trailing 12-month EBITDA as of June 30, 2025, and Dec. 31, 2024. The following table provides the reconciliations net leverage as of June 30, 2025, and Dec. 31, 2024. June 30, 2025 December 31, 2024 (In millions) Current portion of long-term debt $ 15.0 $ 15.0 Long-term debt 273.6 280.6 Total debt 288.6 295.6 Add: Unamortized debt issuance costs 3.9 4.4 Total gross debt 292.5 300.0 Less: cash and cash equivalents, excluding restricted cash (64.5 ) (69.9 ) Total net debt $ 228.0 $ 230.1 Trailing 12-month EBITDA for the periods indicated $ 269.3 $ 232.2 Net leverage 0.8x 1.0x Expand Free Cash Flow Everus uses free cash flow as a measure of liquidity that indicates how much cash the company can produce after taking cash outflows from operations and assets into consideration. The company believes this non-GAAP financial measure, in addition to the corresponding GAAP measure of cash provided by (used in) operating activities, is useful to investors because it provides meaningful information about the company's financial health and ability to generate cash, support additional debt obligations, pay future dividends and fund growth. Free cash flow does not represent residual cash flow available for discretionary purposes. Free cash flow is defined as net cash provided by (used in) operating activities less net capital expenditures. The following table provides reconciliations of cash provided by operating activities to free cash flow. Non-GAAP Financial Guidance The company is unable to reconcile forward-looking non-GAAP financial guidance relating to full-year 2025 EBITDA margin to its nearest GAAP measure because the company is unable to predict the timing of these adjustments with a reasonable degree of certainty. By their very nature, non-GAAP adjustments are difficult to anticipate with precision because they are generally associated with unexpected and unplanned events that impact the company and its financial results. Therefore, the company is unable to provide the reconciliation of full-year 2025 EBITDA margin guidance without unreasonable efforts.
