Fluor (FLR) Q2 Profit Drops 60%
Both non-GAAP earnings per share and GAAP revenue for Q2 2025 missed analyst estimates by significant margins, with Non-GAAP EPS for Q2 2025 was $0.43, compared to the expected $0.55.
Margin contraction was observed across Urban and Energy Solutions, driven by cost overruns and legacy project impacts, while total segment profit (non-GAAP) fell 60% year-over-year.
Full-year 2025 guidance was sharply reduced, with both adjusted EBITDA and adjusted EPS ranges cut by over 15% at the midpoint; management continues to highlight temporary nature of setbacks.
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Fluor (NYSE:FLR), an engineering and construction firm with a global footprint in industries spanning urban infrastructure, energy, and government services, released its second-quarter 2025 earnings on August 1, 2025. The most notable news from the release was a substantial miss on both non-GAAP earnings per share and GAAP revenue relative to analyst estimates: Non-GAAP EPS was $0.43, compared to the consensus estimate of $0.55, while GAAP revenue was $4.0 billion, missing expectations of $4.5 billion. The quarter's results were driven by cost overruns on legacy projects, project delays, and a decline in segment profits. Management also slashed its full-year 2025 outlook, lowering adjusted EBITDA guidance from $575–$675 million to $475–$525 million and adjusted EPS guidance from $2.25–$2.75 to $1.95–$2.15 per share, underlining persistent execution and market challenges in the near term.
Metric Q2 2025 Q2 2025 Estimate Q2 2024 Y/Y Change
EPS (Non-GAAP) $0.43 $0.55 $0.85 (49.4%)
Revenue $4.0 billion N/A N/A N/A
Adjusted EBITDA (Non-GAAP) $96 million $165 million (41.8%)
Total Segment Profit $78 million $194 million (59.8%)
Operating Cash Flow $(21) million $282 million -107.4%
Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.
Business Overview and Strategic Focus
Fluor specializes in engineering, procurement, and construction (EPC) services for clients worldwide. Its operations include complex project management for industries such as advanced technologies, life sciences, mining, infrastructure, energy, and government contracts.
Recently, the company's business strategy has been to diversify away from traditional oil and gas markets, with a growing emphasis on markets like life sciences and infrastructure. It puts a strong focus on risk management, steering toward reimbursable contract models for more predictable revenue. Client relationships and consistent project execution remain key priorities.
Quarterly Performance and Notable Events
Fluor's quarter was marked by softer-than-expected results and pressures on profit margins. Total GAAP revenue slipped to $4.0 billion, nearly 6% lower than the prior year period. Non-GAAP EPS dropped 49% year-over-year, missing analyst estimates by 21.8% (non-GAAP). Adjusted EBITDA also fell sharply, reflecting execution issues and ongoing costs from prior projects.
Margins in core segments came under acute pressure. Urban Solutions reported a profit of $29 million in the second quarter, compared to $105 million in the same period of 2024. Margin compressed to 1.4% from 5.7% a year ago. This was principally due to a $54 million hit from cost overrun disputes on three infrastructure projects. Similarly, Energy Solutions GAAP revenue declined 28.3% year-over-year. Segment profit and margin for Energy Solutions fell sharply due to an unexpected $31 million arbitration loss on a completed joint venture project, and continued slowdown in awards. In the more stable Mission Solutions segment, which manages government and defense-related projects, reported revenue of $762 million in the second quarter compared to $704 million in the same period of 2024, and profit of $35 million compared to $41 million.
Segment new awards were mixed. Urban Solutions ending backlog increased 5% to $20.5 billion, compared to $19.6 billion a year ago. The value of new awards in that segment dropped steeply, suggesting clients are delaying or reassessing capital spending. Energy Solutions faced a 34.5% decline in backlog year-over-year and weak new awards, signaling near-term softness in energy markets. Mission Solutions saw a sharp year-over-year jump in new awards. Its backlog contracted from $3.8 billion to $2.0 billion.
There were also notable one-time events this quarter. The company reported a $3.2 billion pre-tax mark-to-market gain on its NuScale Power investment, significantly distorting net earnings under accounting rules but not affecting core operational performance. Additionally, Fluor repurchased $153 million in shares during the quarter, bringing total repurchases so far in 2025 to $295 million. Operating cash flow was $(21) million for the quarter, driven by working capital outflows on large projects and costs related to resolving legacy obligations.
Looking Ahead
Management reduced its full-year 2025 adjusted EBITDA guidance to a range of $475 million to $525 million, down from the prior range of $575 million to $675 million (non-GAAP). The revised adjusted EPS (non-GAAP) range for FY2025 is now $1.95 to $2.15 per share, down from $2.25 to $2.75. Leadership reiterated its operating cash flow guidance of $200 million to $250 million for FY2025, but this is far lower than at the start of 2025 and implying that material improvements in cash collection and project cycling are needed in later quarters to achieve full-year operating cash flow guidance of $200–$250 million.
Investors should monitor several factors going forward. Margin recovery in Urban and Energy Solutions is a particular area of focus, alongside new project awards activity and the company's ability to resolve legacy project cost issues. Variability in client spending and award timing remains a challenge, especially as project delays and shifting client priorities affected backlog and new awards in the quarter. While management described many of the setbacks as temporary, no further quantitative guidance for the second half was detailed beyond the lowered annual forecasts. FLR does not currently pay a dividend.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
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Three Months Ended June 30, Six Months Ended June 30, (dollars in millions, except per share data) 2025 2024 2025 2024 Revenue $ 649.1 $ 488.5 $ 1,218.1 $ 930.2 Cost of revenue 196.9 157.6 356.8 292.5 Gross profit 452.2 330.9 861.3 637.7 Research and development expenses 73.4 53.9 133.0 104.1 Selling, general and administrative expenses 257.7 222.5 518.4 422.2 Operating income 121.1 54.5 209.9 111.5 Interest expense, net (9.5 ) (1.7 ) (8.5 ) (3.0 ) Loss on extinguishment of debt (84.4 ) — (123.9 ) — Other income (expense), net 1.3 (1.8 ) (0.9 ) (2.5 ) Income before income taxes 28.4 51.1 76.5 106.0 Income tax (expense) benefit (5.9 ) 137.5 (18.6 ) 134.1 Net income $ 22.5 $ 188.6 $ 57.9 $ 240.1 Earnings per share: Basic $ 0.32 $ 2.69 $ 0.82 $ 3.43 Diluted $ 0.32 $ 2.59 $ 0.82 $ 3.32 Weighted-average number of common shares outstanding (in thousands): Basic 70,389 70,062 70,330 70,010 Diluted 70,652 73,802 70,641 73,771 Three Months Ended June 30, Six Months Ended June 30, (in millions) 2025 2024 2025 2024 Net income $ 22.5 $ 188.6 $ 57.9 $ 240.1 Add back interest expense, net of tax attributable to assumed conversion of convertible notes — 2.5 — 4.9 Net income, diluted $ 22.5 $ 191.1 $ 57.9 $ 245.0 Note: May not add or recalculate due to rounding. INSULET CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (dollars in millions) June 30, 2025 December 31, 2024 ASSETS Cash and cash equivalents $ 1,121.6 $ 953.4 Accounts receivable, net 444.5 365.5 Inventories 446.9 430.4 Prepaid expenses and other current assets 266.7 142.0 Total current assets 2,279.7 1,891.3 Property, plant and equipment, net 720.4 723.1 Other intangible assets, net 102.3 98.5 Goodwill 51.7 51.5 Other assets 315.1 323.3 Total assets $ 3,469.2 $ 3,087.7 LIABILITIES AND STOCKHOLDERS' EQUITY Accounts payable $ 96.1 $ 19.8 Accrued expenses and other current liabilities 453.4 424.9 Current portion of long-term debt 460.7 83.8 Total current liabilities 1,010.1 528.4 Long-term debt, net 939.0 1,296.1 Other liabilities 57.1 51.7 Total liabilities 2,006.3 1,876.1 Stockholders' equity 1,462.9 1,211.6 Total liabilities and stockholders' equity $ 3,469.2 $ 3,087.7 Note: May not add due to rounding. INSULET CORPORATION Three Months Ended June 30, (dollars in millions) 2025 2024 Percent Change Currency Impact Constant Currency U.S. $ 453.2 $ 352.3 28.7 % — % 28.7 % International 185.8 128.2 45.0 % 6.2 % 38.8 % Total Omnipod Products 639.0 480.4 33.0 % 1.6 % 31.4 % Drug Delivery 10.2 8.1 25.7 % — % 25.7 % Total $ 649.1 $ 488.5 32.9 % 1.6 % 31.3 % Six Months Ended June 30, (dollars in millions) 2025 2024 Percent Change Currency Impact Constant Currency U.S. $ 854.9 $ 670.0 27.6 % — % 27.6 % International 338.1 243.4 38.9 % 1.4 % 37.5 % Total Omnipod Products 1,193.0 913.4 30.6 % 0.4 % 30.2 % Drug Delivery 25.1 16.8 49.2 % — % 49.2 % Total $ 1,218.1 $ 930.2 30.9 % 0.4 % 30.6 % Note: Columns and rows may not add due to rounding. Percentages have been calculated using actual, non-rounded figures and, therefore, may not recalculate precisely. 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(2) Includes tax benefit of $146.9 million and $153.5 million for the three and six months ended June 30, 2024, respectively, resulting from the release of the majority of the Company's income tax valuation allowance. Both periods also include a $4.8 million tax benefit related to a research and development tax credit recovery project for tax years 2017 through 2021. (3) The tax effect on non-GAAP adjustments is calculated based on applicable local statutory rates. Note: Columns and rows may not add due to rounding. Percentages have been calculated using actual, non-rounded figures and, therefore, may not recalculate precisely. ADJUSTED EBITDA Three Months Ended June 30, Six Months Ended June 30, (dollars in millions) 2025 Percent of Revenue 2024 Percent of Revenue 2025 Percent of Revenue 2024 Percent of Revenue Net income $ 22.5 3.5 % $ 188.6 38.6 % $ 57.9 4.8 % $ 240.1 25.8 % Interest expense, net 9.5 1.7 8.5 3.0 Income tax expense (benefit) 5.9 (137.5 ) 18.6 (134.1 ) Depreciation and amortization 22.3 19.3 44.0 38.0 Stock-based compensation expense (1) 7.5 17.0 25.7 31.2 CEO transition (2) 5.4 — 5.4 — Loss on extinguishment of debt (3) 84.4 — 123.9 — Loss on investments (4) — 1.8 7.5 1.8 Adjusted EBITDA $ 157.5 24.3 % $ 90.9 18.6 % $ 291.5 23.9 % $ 180.0 19.4 % (1) Amounts for both the three and six months ended June 30, 2025 includes $10.8 million reversal of stock-based compensation expense associated with the departure of the Company's former Chief Executive Officer (CEO). (2) Represents severance expense related to the departure of the Company's former CEO. (3) Relates to the repurchase of a portion of the Company's convertible debt. (4) Represents losses associated with debt and equity investments. FREE CASH FLOW (in millions) Six Months Ended June 30, 2025 Net cash provided by operating activities $ 260.3 Capital expenditures (30.9 ) Free cash flow $ 229.4 Note: Columns may not add due to rounding. Percentages have been calculated using actual, non-rounded figures and, therefore, may not recalculate precisely. INSULET CORPORATION Year Ending December 31, 2025 U.S. Omnipod 22% - 25% —% 22% - 25% International Omnipod 37% - 40% 3% 34% - 37% Total Omnipod 26% - 29% 1% 25% - 28% Drug Delivery (30)% - (25)% —% (30)% - (25)% Total 25% - 28% 1% 24% - 27% Three Months Ended September 30, 2025 Revenue Growth GAAP Currency Impact Constant Currency U.S. Omnipod 21% - 24% —% 21% - 24% International Omnipod 36% - 39% 3% 33% - 36% Total Omnipod 25% - 28% 1% 24% - 27% Drug Delivery (80)% - (75)% —% (80)% - (75)% Total 23% - 26% 1% 22% - 25%
