Cardinal’s third-quarter margin falls to 4.2% as company withdraws 2026 guidance
Key Facts
Cardinal Infrastructure withdrew its previous guidance for 2026 revenue and adjusted EBITDA margin after the margin fell to 4.2% in the third quarter from 17.5% in the year-earlier period. The company said adjusted EBITDA was $8.5 million, compared with $21.4 million a year earlier. The announcement marks a shift from the outlook it raised in August, when it set a revenue range of $880–900 million for the year. In its statement, management attributed the quarter’s pressure to project estimate revisions, pricing pressure, and higher fuel and transportation costs. It said it now expects adjusted earnings to improve in the fourth quarter compared with the third, but did not provide a specific revenue or margin figure.
Profitability declined as quarterly revenue fell from the record second-quarter level, when the company reported $226.9 million, up 114% year over year. Cardinal raised its 2026 revenue outlook to $880–900 million in its second-quarter results announcement, before now withdrawing its annual revenue and margin guidance. In August, Chief Executive Jeremy Spivey said keeping pace with demand and investing to meet customer needs had cost more than expected in the second quarter and resulted in margins below plan. For the third quarter, the company said project estimate revisions, pricing pressure, and fuel and transportation costs weighed on margin. That puts management’s immediate focus on execution and profitability in existing operations, alongside the absence of a new annual figure to rely on.
Total backlog was $815.5 million on September 30, up 26.2% from the year-earlier period. The company said the increase primarily reflected the acquisition of ALGC, adding future work to its order book. On the same date, Cardinal had $335.0 million in cash and cash equivalents, against total debt of $198.5 million. Net cash was $136.5 million. These figures provide a picture of liquidity and outstanding obligations at quarter-end, while the backlog highlights the volume of recorded orders and does not remove the need to restore margins that declined during the period.
Separately, Cardinal said it had decided, together with Hughes Brothers, to defer the proposed acquisition. It added that the immediate priority was to improve execution within its existing operations. The deferral comes as the company withdraws its annual guidance and management focuses on project and cost pressures that affected third-quarter margins. The company also announced that its board authorized a Class A share repurchase program of up to $50 million during the twelve months following the announcement. The program does not require the company to repurchase a specific number of shares, according to its statement.
On financial leadership, Chief Financial Officer Mike Rowe informed the company on November 9 of his decision to resign from his position upon the appointment of a successor. Cardinal retained Spencer Stuart to search for a successor. Management was scheduled to discuss results and outlook on a conference call that began on November 12, 2026, at 10:30 a.m. Eastern time. CDNL shares closed at $14.99 in the November 11 session. Management’s coming messages will focus on the earnings trajectory in the fourth quarter, as the company has yet to provide a specific estimate for that quarter’s revenue or margin.