SOLV Energy (MWH) Q3 2026: Revenue Beats but EPS Falls Short

SOLV Energy posted Q3 2026 revenue of $1.24 billion, clearing the consensus estimate of $1.20 billion by 3.63% and representing a 65% increase year over year. That growth was driven by a sharp rise in new construction activity and higher contributions from existing infrastructure projects. The quarter also benefited from lower interest expense after SOLV used proceeds from its February 2026 IPO to repay term debt.

On the earnings side, GAAP EPS of $0.53 came in below the $0.56 analyst estimate, missing expectations by about 6%. The shortfall was partly shaped by one-time items in the period, including $5.3 million in transaction, integration, and non-capitalized IPO-related costs, a $1.25 million tax receivable agreement remeasurement benefit, and a $2.42 million non-cash compensation reversal. Gross margins also narrowed to 17.8% from 19.7% a year earlier, partly because the company reclassified certain compensation costs from selling, general, and administrative expenses into cost of revenue.

Adjusted EBITDA for the quarter reached $173 million on a 13.9% margin, up from $122 million in the same period a year prior. That improvement gave management enough confidence to raise full-year 2026 Adjusted EBITDA guidance to a range of $525 million to $540 million, up from the prior range of $485 million to $505 million. Full-year revenue guidance was also lifted to $4,030 million to $4,120 million, from a prior range of $3,870 million to $3,970 million.

Underpinning the guidance raise is a backlog of approximately $9.2 billion as of September 30, 2026, alongside more than 24 gigawatts under contract for operations and maintenance services. CEO George Hershman cited strong execution and broadening market demand heading into 2027 as driving the upward revision. Shortly after quarter-end, the company completed the acquisition of ASB Energy Services on October 30, 2026 for approximately $36 million in cash, net of cash acquired, plus 376,836 Class A shares, expanding its self-perform high-voltage construction capabilities in Texas and other high-growth regions.

Investors will want to monitor how the ASB integration progresses and whether gross margins can recover toward prior-year levels as the compensation reclassification becomes a consistent baseline. The company also flagged material weaknesses in internal control over financial reporting, along with risks tied to tariffs, government incentive changes, and a tax receivable agreement liability of $289.8 million, all of which bear watching as SOLV scales through its backlog.