Cardinal Infrastructure Raises Revenue Outlook as Margins Compress
The infrastructure firm raised its full-year revenue guidance midpoint by $210 million to a range of $880 million to $900 million.
Cardinal Infrastructure Group (CDNL) reported record second-quarter revenue of $226.9 million.
The infrastructure firm saw revenue growth accelerate to 114% year-over-year, up from the 105% growth reported in the first quarter. However, this expansion coincided with a decline in profitability as the company faced rising operational costs.
Adjusted EBITDA margin for the second quarter compressed to 12.4%, down from 16.0% in the first quarter and 18.6% in the second quarter of the previous year. The pressure was due to a decline in adjusted gross profit margin, which fell to 15.9% from 21.3% a year ago. Increased costs for equipment rentals and subcontracted labor were the primary drivers of the margin erosion.
Growth in the company's project pipeline also moderated. Backlog as of June 30, 2026, stood at $866 million, a 35% increase year-over-year. This represented a deceleration from the 60% year-over-year growth reported at the end of the first quarter.
Cardinal raised its full-year 2026 revenue guidance to between $880 million and $900 million, compared to a previous range of $675 million to $685 million. Simultaneously, the company lowered its full-year adjusted EBITDA margin guidance to 16-18%, down from a previous target of more than 20%.
The company announced the acquisition of Allied Paving for approximately $120 million. The deal adds $108 million in annual revenue and carries an adjusted EBITDA margin of 20.3%.
Cash and cash equivalents rose to $339.1 million as of June 30, 2026, up from $44.0 million at the end of the prior quarter. Quarterly capital expenditures, excluding acquisitions, increased to $24.7 million from $9.3 million in the first quarter.