Energy Services of America Posts Q1 Fiscal 2026 Gains as Backlog and Utility Demand Rise

Quarter opens with stronger project demand for utility customers

Energy Services of America posts a robust start to fiscal 2026 as project wins and municipal demand drive near‑term visibility. For the quarter ended Dec. 31, 2025, the Tulsa, Oklahoma‑based contractor records $114.1 million in revenue, a 13.4% year‑over‑year gain, with gross profit rising to $14.0 million and gross margin improving to 12.3% from 10.2% a year earlier.

Backlog surge from utility and transmission projects underpins growth

Energy Services of America is seeing a meaningful sequential backlog increase — roughly $41.7 million — that management attributes to stronger demand across Gas & Water Distribution and Gas & Petroleum Transmission. Gas & Water Distribution revenue rises about 30% year‑over‑year as municipalities and private utilities continue replacement and upgrade cycles, providing a steady pipeline of mid‑sized projects. The Gas & Petroleum Transmission business benefits from two new project awards during the quarter, adding to the lift in backlog and helping the company bid with greater confidence on longer‑lead, higher‑margin opportunities.

The backlog build also reflects strengthening in larger, more complex work. Electrical, Mechanical and General project revenue slips slightly year‑over‑year, but backlog in that segment grows by about $7 million sequentially, signaling renewed demand for large project execution. Management frames the backlog as a driver of revenue visibility and margin expansion through the remainder of fiscal 2026, noting that favorable sales mix contributes to the improved gross margin.

The company emphasizes diversified wins across utility-related markets and the operational leverage that rising backlog can deliver, especially as bidding activity remains active in distribution segments. Energy Services is positioning capacity and crews to capture the multi‑segment opportunities that are emerging from public‑sector replacement cycles and private pipeline investments.

Financials, profitability and costs

Net income increases to $2.7 million, or $0.16 per diluted share, versus $854,000 in the prior‑year quarter, while Adjusted EBITDA rises to $8.3 million from $4.3 million. Selling and administrative expenses total $9.1 million compared with $8.6 million a year earlier, with the company attributing the rise mainly to integration and operating costs tied to the December acquisition of Tribute.

Operations and near‑term outlook

Energy Services reports workforce optimization for seasonally slower winter months while maintaining active bidding across Gas & Petroleum Distribution. Management expresses optimism that the strengthened backlog and diversified project mix will sustain revenue visibility and support further margin improvement through fiscal 2026.