NEW YORK, July 31, 2026, 14:13 EDT
- IES shares rose 33.3% to $762.00 in early Nasdaq trade.
- Revenue for the fiscal third quarter increased by 40%. Adjusted earnings per share were up 71%.
- Segments that serve data centers accounted for 92% of segment operating income before corporate costs.
Shares of IES Holdings, Inc. NASDAQ:IESC surged 33.3% following the release of its fiscal third-quarter earnings. The stock was last seen trading at $762.00 at 1:57 p.m. EDT, after hitting an intraday peak of $774.78.
The composition of earnings shifted significantly. IES specifies three divisions catering to the data-center sector: Communications, Infrastructure Solutions, and Commercial & Industrial.
Those businesses generated a combined $918.6 million in revenue and delivered $191.3 million in segment operating income. This accounted for 74% of sales and 92% of segment profit before corporate expenses. In the same period a year ago, the respective shares were 61% and 74%.
Their total operating margin expanded to 20.8% from 17.2%. Revenue jumped 68.8%. Operating income rose by over two times. These figures explain why softness in housing had a smaller impact this quarter.
The consolidated figures showed gains as well.
| Fiscal third quarter | 2026 | 2025 | Change |
|---|---|---|---|
| Revenue | $1,242.7 million | $890.2 million | up 40% |
| Gross margin | 27.4% | 26.9% | increase of 50 bps |
| Operating income | $178.5 million | $111.9 million | gain of 60% |
| Operating margin | 14.4% | 12.6% | up 180 bps |
| GAAP diluted EPS | $7.57 | $3.81 | increase of 99% |
| Adjusted diluted EPS | $6.70 | $3.92 | rise of 71% |
Calculations for margins and basis-point shifts use reported data.
GAAP earnings were supported by investment returns. IES reported a $26.2 million gain from marketable securities. Adjusted EPS increased by 71% even with investment gains and other adjustments factored out.
Chief Executive Matt Simmes stated previous capital allocation had “positioned us to grow revenue and improve margins.” IES increased its production capacity by approximately one million square feet over the last year. GlobeNewswire
The spread in the segment was notably large.
| Segment | Q3 revenue | Revenue growth | Operating income | Operating margin | Margin change |
|---|---|---|---|---|---|
| Communications | $453.1 million | +51.4% | $83.6 million | 18.5% | +251 bps |
| Residential | $324.1 million | -6.3% | $16.3 million | 5.0% | -462 bps |
| Infrastructure Solutions | $224.1 million | +73.1% | $53.4 million | 23.8% | -141 bps |
| Commercial & Industrial | $241.4 million | +109.1% | $54.3 million | 22.5% | +1,126 bps |
| Total serving data centers | $918.6 million | +68.8% | $191.3 million | 20.8% | +367 bps |
Includes Communications, Infrastructure Solutions, and Commercial & Industrial. Corporate costs not included.
Commercial & Industrial posted the biggest increase in margin. Revenue more than doubled, and operating income was four times higher. IES attributed this to an uptick in short-term data-center projects with strong margins. Residential revenue declined 6.3%, while profit fell by 51.2%.
Backlog added to the positive momentum, climbing to $4.53 billion, a 91% increase since September. Of this amount, 91.6% came from the three segments that cater to data centers.
| Backlog measure | June 2026 | September 2025 | Change |
|---|---|---|---|
| Communications | $1.612 billion | $0.756 billion | +113% |
| Residential | $0.382 billion | $0.374 billion | +2% |
| Infrastructure Solutions | $1.129 billion | $0.619 billion | +82% |
| Commercial & Industrial | $1.402 billion | $0.625 billion | +124% |
| Total backlog | $4.525 billion | $2.374 billion | +91% |
| Remaining performance obligations | $2.802 billion | $1.687 billion | +66% |
| Agreements without enforceable obligations | $1.723 billion | $0.687 billion | +151% |
Backlog represents a non-GAAP metric, while remaining performance obligations are disclosed under GAAP.
IES supported its growth without carrying debt at the end of the quarter. The company reported $77.3 million in cash and $310.6 million in marketable securities. Operating cash flow for the nine-month period increased by 55% to $239.4 million.
Capital expenditures totaled $123.0 million for the nine months, marking a 160% increase. The company lifted its fiscal 2026 capital spending outlook to a range of $145 million to $160 million. Management anticipates that backlog and spending on capacity will drive growth through fiscal 2027.
Peer stocks saw limited or negative movement on Friday. Quanta Services, Inc. NYSE:PWR gained 2.4%, while MasTec, Inc. NYSE:MTZ dropped 17.2%.
| Company | Latest report | Revenue growth | Adjusted EPS growth | Backlog growth | Friday move |
|---|---|---|---|---|---|
| IES Holdings NASDAQ:IESC | Fiscal Q3, July 31 | Up 40% | Up 71% | Increase of 119% YoY | Rose 33.3% |
| Quanta Services NYSE:PWR | Q2, July 30 | Up 41% | Up 71% | Backlog up 49% YoY | Added 2.4% |
| MasTec NYSE:MTZ | Q2, July 30 | Up 23% | Up 49% | Backlog up 30% YoY | Dropped 17.2% |
Definitions of backlog vary between companies. Price changes reflect values recorded from 1:56 to 1:57 p.m. EDT.
IES has authorised a two-for-one stock split. Investors who are on record as of August 14 will be issued extra shares following the market close on August 21. According to management, the split is expected to enhance the stock’s trading liquidity.
Risks: Of the backlog, $1.72 billion, equivalent to 38%, had not become legally enforceable. Labor supply challenges persist. The C&I segment saw results bolstered by profitable, short-term projects. A 10% shift in securities would impact pre-tax income by roughly $31.1 million.
The next challenge is converting backlog. IES anticipates an increase in working-capital requirements through the first quarter of fiscal 2027. The ability to sustain data-center margins while expanding both workforce and capacity will determine performance in the upcoming earnings period.
