third quarter of fiscal 2026
Filed Jul 31, 2026IES Holdings reported third-quarter fiscal 2026 revenue growth of 40%, operating income growth of 60%, and net income attributable to IES growth of 98%, supported by data center demand and expanded operating capacity.
Revenue, operating income, net income attributable to IES, and adjusted net income attributable to IES increased substantially year over year. Communications, Infrastructure Solutions, and Commercial & Industrial all grew, while backlog reached approximately $4.5 billion. Residential revenue and operating income declined amid housing-market softness.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| RevenueGAAP | $1,243 million | – | 40% |
| Operating incomeGAAP | $178.5 million | – | 60% |
| Net income attributable to IESGAAP | $153.0 million | – | 98% |
| Diluted earnings per share attributable to common stockholdersGAAP | $7.57 | – | – |
| Adjusted net income attributable to IESnon-GAAP | $135.3 million | – | 70% |
| Diluted adjusted earnings per share attributable to common stockholdersnon-GAAP | $6.70 | – | – |
| Remaining performance obligationsGAAP | approximately $2.8 billion | – | – |
| Backlognon-GAAP | approximately $4.5 billion | – | 91% since the end of fiscal 2025 |
| Communications segment operating incomeGAAP | $83.6 million | – | – |
| Residential segment operating incomeGAAP | $16.3 million | – | – |
| Infrastructure Solutions segment operating incomeGAAP | $53.4 million | – | – |
| Commercial & Industrial segment operating incomeGAAP | $54.2 million | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| CommunicationsStrong demand in the data center market was the primary driver. Demand in the distribution center and high-tech manufacturing end markets also increased year over year. | $453.1 million | – | $153.9 million or 51% |
| ResidentialOngoing softness in the housing market and lower multi-family revenue reflecting the impacts of a decline in backlog during fiscal 2025. | $324.1 million | – | decrease of $22.0 million or 6% |
| Infrastructure SolutionsContinued strong demand in custom engineered solutions, primarily in the data center end market, expanded capacity, and growth in field services offerings. Gulf Island contributed $51.7 million of revenue during the quarter. | $224.1 million | – | $94.6 million or 73% |
| Commercial & IndustrialExpansion of capabilities in the data center end market increased the size and number of projects executed. Results also benefited from certain large, quick-turning jobs at favorable margins and continued successful project execution. | $241.4 million | – | $126.0 million or 109% |
Capital returns
- On July 29, 2026, the board of Directors approved a two-for-one split of the Company's common stock, to be paid in the form of a stock dividend.
- Each shareholder of record as of the close of trading on August 14, 2026 will receive, after the close of trading on August 21, 2026, one additional share for every share held on the record date.
What drove it
- Data center demand was the primary driver of Communications growth and supported Infrastructure Solutions and Commercial & Industrial growth.
- IES added approximately one million square feet of production capacity over the past year through the Gulf Island acquisition and production facilities in Abilene, TX and Manitowoc, WI.
- Improved pricing and productivity at established Infrastructure Solutions operating facilities supported profit improvement.
- Commercial & Industrial benefited from larger and more numerous data center projects, certain large quick-turning jobs at favorable margins, and successful project execution.
- Backlog reached approximately $4.5 billion as capacity and capabilities expanded.
Concerns
- Residential remained affected by reduced housing starts and ongoing softness in the housing market.
- Weaker Residential demand limited the Company's ability to recover higher materials costs through pricing actions, resulting in lower operating margins year over year.
- Infrastructure Solutions operating income as a percent of revenue decreased year over year as the Company continued to invest in more recent acquisitions and reposition their operations.
What to watch
- Whether Gulf Island and the Abilene, TX and Manitowoc, WI facilities make a meaningful contribution to results beginning in fiscal 2027.
- The development of Residential multi-family backlog, which the Company said has begun to grow over the past twelve months and should benefit fiscal 2027.
- Continued demand in the data center, distribution center, and high-tech manufacturing end markets.
- Execution on the Company's capital-spending priority for organic growth and its continuing evaluation of acquisition opportunities.
Balance sheet and cash flow
- The Company ended the quarter with $77.3 million of cash, no debt, and $310.6 million of marketable securities.
- The Company repaid borrowings under its credit facility as of June 30, 2026 with cash flow from operations.
- The Company used $19.5 million to acquire the real property and certain related assets of Broadwind Heavy Fabrications, Inc.'s production facility in Abilene, Texas.
- The Company supported the growth of its operating businesses with $44.6 million in capital expenditures.
- The Company used $70.4 million of excess cash for purchases, net of cash received from sales, of marketable securities.
- The Company used $52.6 million to purchase transferrable federal income tax credits, which it expects will result in a $3.6 million reduction in its federal income tax obligation.
Analysis
IES delivered a strong third quarter of fiscal 2026, with revenue of $1,243 million, up 40% from $890 million, and operating income of $178.5 million, up 60% from $111.9 million. Net income attributable to IES rose 98% to $153.0 million, while diluted earnings per share attributable to common stockholders increased to $7.57 from $3.81. Adjusted net income attributable to IES increased 70% to $135.3 million and diluted adjusted earnings per share attributable to common stockholders was $6.70, compared with $3.92.
Growth was concentrated in the three non-Residential segments. Communications revenue increased $153.9 million or 51% to $453.1 million, driven primarily by data center demand, while its operating income increased to $83.6 million from $47.8 million. Infrastructure Solutions revenue increased $94.6 million or 73% to $224.1 million, including $51.7 million of quarterly revenue from Gulf Island, and operating income increased to $53.4 million from $32.6 million. Commercial & Industrial revenue increased $126.0 million or 109% to $241.4 million, with operating income increasing to $54.2 million from $12.9 million.
Residential was the principal offset. Segment revenue decreased $22.0 million or 6% to $324.1 million and operating income decreased to $16.3 million from $33.4 million. The Company attributed the decline to ongoing housing-market softness, lower multi-family revenue reflecting the prior fiscal-year backlog decline, and limited ability to recover higher materials costs through pricing. Infrastructure Solutions also reported a year-over-year decline in operating income as a percent of revenue as it invested in and repositioned more recent acquisitions.
Demand and capacity expansion remain central to the reported outlook. Remaining performance obligations were approximately $2.8 billion and non-GAAP backlog was approximately $4.5 billion at June 30, 2026, with backlog up 91% since the end of fiscal 2025. Management highlighted capacity additions, including approximately one million square feet of production capacity over the past year, and expects repositioned operations to make a meaningful contribution beginning in fiscal 2027. It also cited growth in multi-family backlog over the past twelve months as a prospective fiscal 2027 benefit.
Capital allocation emphasized organic expansion and balance-sheet restoration. The Company used $19.5 million for the Abilene facility, $44.6 million for capital expenditures, $70.4 million for net purchases of marketable securities, and $52.6 million for transferrable federal income tax credits. It said it repaid credit-facility borrowings by June 30, 2026 with cash flow from operations and ended with $77.3 million of cash, no debt, and $310.6 million of marketable securities. Subsequent to quarter end, the board approved a two-for-one common-stock split. The release provided no forward financial guidance.
Management, verbatim
For the third quarter of fiscal 2026, we delivered a 40% increase in revenue and a 60% increase in operating income compared with the third quarter of fiscal 2025.
Matt Simmes, President and Chief Executive Officer
These efforts to add capacity and expand capabilities helped drive our backlog to $4.5 billion at June 30, 2026, an increase of 91% since the end of fiscal 2025.
Matt Simmes, President and Chief Executive Officer
We ended the quarter with $77.3 million of cash, no debt, and $310.6 million of marketable securities.
Tracy McLauchlin, Chief Financial Officer
Not in the filing
stated, not guessed- Gross profit and gross margin
- Operating expenses
- Income tax rate
- Operating cash flow amount
- Free cash flow
- Cash-flow statement detail
- Dividend amount
- Share-repurchase amount
- Forward revenue guidance
- Forward gross-margin guidance
- Forward operating-expense guidance
- Forward tax-rate guidance
- Prior-quarter comparisons for reported metrics
- Quarter-over-quarter segment revenue comparisons
- Prior guidance for comparison
- Full financial statements and non-GAAP reconciliation tables, as the supplied filing text is truncated
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.