Sterling Infrastructure Doubles Credit Line as Revenue Growth Accelerates
Sterling Infrastructure expanded its credit facility to $1.5 billion, a $1.05 billion increase, days after posting 92% revenue growth in the strongest quarter of a four-quarter acceleration.
Sterling Infrastructure (STRL) amended its credit facility to raise borrowing capacity to $1.5 billion, a $1.05 billion increase, while extending the maturity to July 2031 and reducing pricing margins, according to the company. The infrastructure contractor's expanded balance-sheet flexibility follows a stretch of quarters in which growth has repeatedly outrun the company's own guidance, and it positions Sterling for further acquisitions after a busy first half.
The credit amendment builds directly on the Q1 2026 earnings report Sterling filed weeks earlier, in which revenue reached $825.7 million, up 92% year-over-year. That marked a sharp acceleration from 51% growth in the fourth quarter of 2025 and 32% in the third quarter, driven by the CEC acquisition, which contributed $156.1 million in the quarter, alongside organic growth exceeding 55%.
Profitability expanded alongside the top line. Adjusted EBITDA margin topped 20% in the first quarter, extending a run that included a fourth-quarter-record 22% gross margin in Q4 2025 and a full-year 2025 adjusted EBITDA margin above 20% for the first time in the company's history. Net income rose 143% year-over-year to $96.0 million, and adjusted diluted earnings per share climbed 120% to $3.59 a share, the fourth straight quarter of accelerating EPS growth, up from 78% growth in Q4 2025 and 58% in Q3 2025.
The growth was concentrated in E-Infrastructure Solutions, which climbed to 72% of total revenue in the first quarter from 51% a year earlier, continuing a mix shift that had already pushed the segment to 69% of revenue in Q4 2025 from 47% a year prior. Transportation Solutions shrank to 16% of revenue from 28%, with growth decelerating to 10% year-over-year in the first quarter from 24% in Q4 2025, as the company scaled back its low-bid Texas heavy highway business; adjusted operating income growth in that segment slowed to 26% from 103% the prior quarter. Building Solutions posted its third straight quarter of declining operating income, down 42% year-over-year in Q1 2026 after drops of 35% and 10% in the two preceding quarters, a homebuilder-affordability headwind the company expects to persist through 2026.
Backlog told a similar story of momentum. Total backlog reached $3.80 billion in the first quarter, up 78% year-over-year and roughly $790 million higher than the $3.01 billion reported at year-end 2025, which itself was up 78% from a year earlier. Combined backlog, which includes awarded-but-not-booked work, hit $5.15 billion, up 131% year-over-year from $3.31 billion at Q4 2025.
That backlog strength underpinned a substantial guidance increase. Sterling raised its FY2026 revenue outlook to $3.70-3.80 billion and adjusted EBITDA to $843-873 million at Q1 2026 reporting, up from the $3.05-3.20 billion revenue and $626-659 million adjusted EBITDA guidance issued just one quarter earlier at Q4 2025 results — a roughly 21% increase to the revenue midpoint within a single quarter.
The guidance raise predates a further acquisition that will push the numbers higher still. Sterling closed its purchase of Stone Ridge Contracting on 2026-06-09, expected to add $180-200 million of full-year 2026 revenue and mid-teens EBITDA margins to the E-Infrastructure segment. The company said it would update its FY2026 guidance to reflect the deal when it reports second-quarter results.
Cash reserves rebuilt through the quarter, rising to $511.9 million at the end of Q1 2026 from $390.7 million at year-end 2025 and $306.4 million at the end of Q3 2025, when the CEC acquisition had drawn cash down from $664.2 million at year-end 2024. The newly expanded, lower-cost credit facility gives Sterling additional room to fund further deals without drawing that cash balance back down.