Cardinal Withdraws 2026 Outlook After EBITDA Margin Collapse

The Tip Desk · November 12, 2026 · 3 min read

Adjusted EBITDA margin fell to 4.2% on $201.9 million of third-quarter revenue as the company withdrew full-year guidance.

Cardinal Infrastructure Group Inc. (CDNL), a Southeast infrastructure contractor, reported a net loss of $11.0 million for the three months ended September 30, 2026, after Adjusted EBITDA margin collapsed to 4.2% from 17.5% a year earlier.

Revenue was $201.9 million, up 65.1% from $122.3 million a year earlier. The year-over-year growth rate slowed from 114% in the second quarter, when revenue reached a record $226.9 million. Organic growth was $23.9 million; acquired businesses accounted for the remaining $55.7 million of the $79.6 million increase.

Gross margin compressed to 5.4% from 15.9% a year earlier, and from 10.8% in the second quarter. Cost of revenues rose 85.8% to $191.1 million. The company said that as additional project information became available it revised estimates of costs to complete on certain projects, reducing gross profit by $13.2 million. It also cited residential pricing pressure, lower initial bid margins on certain commercial and industrial work, and higher fuel and transportation costs.

Adjusted EBITDA was $8.5 million, down from $28.1 million in the second quarter. The company attributed the 13.3-percentage-point year-over-year margin decline primarily to project estimate revisions (about 6.5 points), residential pricing pressure and lower initial bid margins (about 3.6 points), and higher fuel and transportation costs (about 3.5 points), partially offset by about 0.3 points from other factors.

General and administrative expenses were $14.7 million, including $3.2 million of non-cash stock-based compensation, $2.3 million from acquired businesses, and $1.8 million of acquisition-related costs.

Chairman and Chief Executive Officer Jeremy Spivey said the results were “not acceptable” and that the company needed to strengthen how it estimates, manages and executes projects. He said Chief Operating Officer Benji Wood would take a more direct role in establishing operating standards across the platform, focusing on project selection, estimating, project reviews and accountability, and that Cardinal would engage an independent third-party advisor to support those changes.

The company withdrew previously issued full-year 2026 revenue and Adjusted EBITDA margin guidance. It had raised 2026 revenue guidance to $880 million to $900 million in the second-quarter release. Cardinal said it currently expects fourth-quarter Adjusted EBITDA to improve from the third quarter, without a specific revenue or margin outlook.

In collaboration with Hughes Brothers, the company postponed the proposed acquisition, saying the priority is strengthening execution across existing operations. The board authorized a share repurchase program of up to $50 million of Class A common stock over the next 12 months.

Backlog was $815.5 million as of September 30, 2026, down from $866 million as of June 30, 2026, and 26.2% above the prior-year period, primarily reflecting the ALGC acquisition. Cash and cash equivalents were $335.0 million against $198.5 million of total debt, or $136.5 million of net cash, with $100.0 million of revolving availability and $250.0 million under a delayed draw term loan.

On November 9, 2026, Chief Financial Officer Mike Rowe said he would resign upon appointment of a successor. The company engaged Spencer Stuart to search for a replacement.