Southland Announces Second Quarter 2026 Results

Southland Announces Second Quarter 2026 Results GRAPEVINE, Texas--( BUSINESS WIRE)--Southland Holdings, Inc. (NYSE American: SLND and SLND WS) (“Southland”), a leading provider of specialized infrastructure construction services, today announced financial results for the quarter ended June 30, 2026.

(1)

Please refer to “Non-GAAP Measures” and reconciliations for our non-GAAP financial measures, including, “EBITDA” and “Backlog”

“Our results this quarter were largely impacted by unfavorable non-cash adjustments related to legacy disputes," said Frank Renda, Southland's President & Chief Executive Officer. "Despite that impact, we continue to work toward finalizing a comprehensive financing agreement and credit amendment with our surety partners, and we're encouraged by their continued support and the confidence they've shown in our strategic plan. At the same time, we remain focused on capturing new opportunities in our core markets — most recently reflected in the Winnipeg North End Sewage Treatment Plant award we announced in July, which reinforces the strength of our core business as we work through this transition.”

2026 Second Quarter Results

Condensed Consolidated Statements of Operations (unaudited)

Three Months Ended

(Amounts in thousands)

June 30, 2026

June 30, 2025

Revenue

113,306

215,382

Cost of construction

184,539

202,414

Gross profit (loss)

(71,233)

12,968

Selling, general, and administrative expenses

16,705

13,572

Operating loss

(87,938)

(604)

Gain on investments, net

Other income, net

6,447

577

Interest expense

(7,336)

(9,983)

Losses before income taxes

(88,760)

(9,951)

Income tax expense (benefit)

(1,612)

(61)

Net loss

(87,148)

(9,890)

Net income (loss) attributable to noncontrolling interests

(2,881)

416

Net loss attributable to Southland Stockholders

(84,267)

(10,306)

Net loss per share attributable to common stockholders

Basic (1)

(1.55)

(0.19)

Diluted (1)

(1.55)

(0.19)

Weighted average shares outstanding

Basic (1)

54,248,867

54,008,088

Diluted (1)

54,248,867

54,008,088

(1)

Basic net loss per share is the same as diluted net loss per share attributable to common stockholders for the three months ended June 30, 2026, and June 30, 2025, because the inclusion of potential shares of common stock would have been anti-dilutive for the period presented.

Revenue for the three months ended June 30, 2026, was $113.3 million, a decrease of $102.1 million, or 47.4%, compared to the three months ended June 30, 2025. Materials & Paving business contributed $11.7 million to revenue in the three months ended June 30, 2026. The decrease in revenue is primarily due to unfavorable changes in estimates related to certain unresolved contract modifications and claims. During the three months ended June 30, 2026, we performed a comprehensive reassessment of expected recoverability of claims on several projects, including substantially completed projects, in light of recent developments and updated information available regarding the timing and amount of potential recoveries. As a result of this reassessment, we reduced the estimated value of certain claims and recorded cumulative catch-up adjustment that negatively impacted revenue and gross profit for the quarter of $102.3 million and $93.6 million, respectively.

Gross loss for the three months ended June 30, 2026, was $71.2 million compared to gross profit of $13.0 million for the three months ended June 30, 2025. Gross margin decreased from 6.0% to (62.9)% for the three months ended June 30, 2026, compared to the three months ended June 30, 2025. Materials & Paving business negatively impacted gross profit by $16.3 million in the three months ended June 30, 2026.

Selling, general, and administrative costs for the three months ended June 30, 2026, were $16.7 million, an increase of $3.1 million, or 23.1%, compared to the three months ended June 30, 2025. Selling, general, and administrative costs as a percent of revenue were 14.7% for the three months ended June 30, 2026, compared to 6.3% for the three months ended June 30, 2025.

Condensed Consolidated Statements of Operations (unaudited)

Six Months Ended

(Amounts in thousands)

June 30, 2026

June 30, 2025

Revenue

285,711

454,868

Cost of construction

361,700

421,421

Gross profit (loss)

(75,989)

33,447

Selling, general, and administrative expenses

31,648

30,037

Operating income (loss)

(107,637)

3,410

Gain on investments, net

214

Other income, net

6,521

2,321

Interest expense

(16,017)

(18,857)

Losses before income taxes

(116,919)

(13,050)

Income tax expense (benefit)

(1,593)

(374)

Net loss

(115,326)

(12,676)

Net income (loss) attributable to noncontrolling interests

(2,707)

2,182

Net loss attributable to Southland Stockholders

(112,619)

(14,858)

Net loss per share attributable to common stockholders

Basic (1)

(2.08)

(0.28)

Diluted (1)

(2.08)

(0.28)

Weighted average shares outstanding

Basic (1)

54,184,621

53,985,325

Diluted (1)

54,184,621

53,985,325

(1)

Basic net loss per share is the same as diluted net loss per share attributable to common stockholders for the six months ended June 30, 2026, and June 30, 2025, because the inclusion of potential shares of common stock would have been anti-dilutive for the period presented.

Revenue for the six months ended June 30, 2026, was $285.7 million, a decrease of $169.2 million, or 37.2%, compared to the six months ended June 30, 2025. Materials & Paving business contributed $22.7 million to revenue in the six months ended June 30, 2026.

Gross loss for the six months ended June 30, 2026, was $76.0 million compared to gross profit of $33.4 million for the six months ended June 30, 2025. Gross margin decreased from 7.4% to (26.6)% for the six months ended June 30, 2026, compared to the six months ended June 30, 2025. Materials & Paving business negatively impacted gross profit by $29.4 million in the six months ended June 30, 2026.

Selling, general, and administrative costs for the six months ended June 30, 2026, were $31.6 million, an increase of $1.6 million, or 5.4%, compared to the six months ended June 30, 2025. Selling, general, and administrative costs as a percent of revenue were 11.1% for the six months ended June 30, 2026, compared to 6.6% for the six months ended June 30, 2025.

Segment Revenue

Three Months Ended

(Amounts in thousands)

June 30, 2026

June 30, 2025

% of Total

Segment

Revenue

Civil

40,987

36.2%

81,530

37.9%

Transportation

72,319

63.8%

133,852

62.1%

Total revenue

113,306

100.0%

215,382

100.0%

Six Months Ended

(Amounts in thousands)

June 30, 2026

June 30, 2025

% of Total

Segment

Revenue

Civil

144,779

50.7%

184,446

40.5%

Transportation

140,932

49.3%

270,422

59.5%

Total revenue

285,711

100.0%

454,868

100.0%

Segment Gross Profit (Loss)

Three Months Ended

(Amounts in thousands)

June 30, 2026

June 30, 2025

% of Segment

Segment

Gross Loss

Revenue

Gross Profit

Revenue

Civil

(27,074)

(66.1)%

14,257

17.5%

Transportation

(44,159)

(61.1)%

(1,289)

(1.0)%

Gross profit (loss)

(71,233)

(62.9)%

12,968

6.0%

Six Months Ended

(Amounts in thousands)

June 30, 2026

June 30, 2025

% of Segment

Segment

Gross Loss

Revenue

Gross Profit

Revenue

Civil

(12,422)

(8.6)%

36,766

19.9%

Transportation

(63,567)

(45.1)%

(3,319)

(1.2)%

Gross profit (loss)

(75,989)

(26.6)%

33,447

7.4%

EBITDA Reconciliation

Three Months Ended

Six Months Ended

(Amounts in thousands)

June 30, 2026

June 30, 2025

June 30, 2026

June 30, 2025

Net loss attributable to Southland Stockholders

(84,267)

(10,306)

(112,619)

(14,858)

Depreciation and amortization

5,437

5,376

11,081

11,901

Income tax expense (benefit)

(1,612)

(61)

(1,593)

(374)

Interest expense

7,336

9,983

16,017

18,857

Interest income

(270)

(802)

(368)

(1,252)

EBITDA

(73,376)

4,190

(87,482)

14,274

Backlog

(Amounts in thousands)

Balance December 31, 2025

2,031,080

New contracts, change orders, and adjustments

(68,681)

Less: contract revenue recognized in 2026

(285,711)

Balance June 30, 2026

1,676,688

Condensed Consolidated Balance Sheets (unaudited)

(Amounts in thousands, except share and per share data)

As of

ASSETS

June 30, 2026

December 31, 2025

Current assets

Cash and cash equivalents

34,878

52,713

Restricted cash

10,845

14,755

Accounts receivable, net

108,371

145,031

Retainage receivables

93,368

101,779

Contract assets

272,344

389,362

Other current assets

26,771

30,326

Total current assets

546,577

733,966

Property and equipment, net

94,580

107,305

Right-of-use assets

8,282

10,524

Investments - unconsolidated entities

126,824

129,696

Investments - limited liability companies

2,262

2,323

Investments - private equity

2,452

2,588

Deferred tax asset

1,049

Goodwill

1,528

Intangible assets, net

1,180

Other noncurrent assets

—

167

Total noncurrent assets

238,157

255,314

Total assets

784,734

989,280

LIABILITIES AND EQUITY

Current liabilities

Accounts payable

80,538

224,915

Retainage payable

28,657

36,977

Accrued liabilities

61,433

80,011

Current portion of long-term debt

58,041

53,731

Short-term operating lease liabilities

5,934

6,808

Contract liabilities

194,416

252,543

Total current liabilities

429,019

654,985

Long-term debt

148,754

203,971

Long-term operating lease liabilities

13,871

16,403

Deferred tax liabilities

2,311

3,032

Financing obligations, net

41,394

41,440

Long-term accrued liabilities

58,075

Surety payable

298,900

103,205

Other noncurrent liabilities

40,594

40,675

Total long-term liabilities

603,899

466,801

Total liabilities

1,032,918

1,121,786

Stockholders' equity (deficit)

Preferred stock, $0.0001 par value, authorized 50,000,000 shares, none issued and outstanding as of June 30, 2026 and December 31, 2025

—

Common stock, $0.0001 par value, authorized 500,000,000 shares, 54,435,257 and 54,113,036 issued and outstanding as of June 30, 2026 and December 31, 2025, respectively

Additional paid-in-capital

294,022

293,237

Accumulated deficit

(543,777)

(431,158)

Accumulated other comprehensive loss

(3,783)

(3,018)

Total stockholders' equity (deficit)

(253,533)

(140,934)

Noncontrolling interest

5,349

8,428

Total equity (deficit)

(248,184)

(132,506)

Total liabilities and equity

784,734

989,280

Condensed Consolidated Statement of Cash Flows (unaudited)

Six Months Ended

(Amounts in thousands)

June 30, 2026

June 30, 2025

Cash flows from operating activities:

Net loss

(115,326)

(12,676)

Adjustments to reconcile net loss to net cash used in operating activities

Depreciation and amortization

11,081

11,901

Amortization of deferred financing costs

942

916

Bad debt expense

3,173

—

Deferred taxes

(1,698)

(50)

Share based compensation

815

692

Gain on sale of assets

(6,066)

(1,417)

Foreign currency remeasurement (gain) loss

(73)

Loss (earnings) from equity method investments

659

(1,503)

Gain on trading securities, net

(215)

(76)

Changes in assets and liabilities:

Accounts and retainage receivables

64,489

49,131

Contract assets

94,254

(46,552)

Other current assets

3,555

(10,378)

Right-of-use assets

2,242

4,763

Accounts payable, retainage payable and accrued liabilities

(170,973)

12,328

Contract liabilities

(58,129)

1,222

Operating lease liabilities

(2,383)

(4,742)

Other

1,617

(2,490)

Net cash provided by (used in) operating activities

(171,890)

996

Cash flows from investing activities:

Purchase of property and equipment

(384)

(2,885)

Proceeds from sale of property and equipment

7,597

3,448

Distributions from other investments

351

195

Return of investment in limited liability company

—

Net cash provided by investing activities

7,625

758

Cash flows from financing activities:

Payments on notes payable

(51,841)

(25,150)

Payments of deferred financing costs

—

(295)

Payments from (to) related parties

(1)

Payments on finance lease and financing obligations

(1,073)

(539)

Distribution to members

(217)

—

Payment of taxes related to net share settlement of RSUs

(30)

(121)

Proceeds from advancement of surety funds

195,696

—

Net cash provided by (used in) financing activities

142,534

(26,101)

Effect of exchange rate on cash

(14)

Net decrease in cash and cash equivalents and restricted cash

(21,745)

(24,265)

Beginning of period

67,468

87,561

End of period

45,723

63,296

Supplemental cash flow information

Cash paid for income taxes

762

578

Cash paid for interest

12,454

18,047

Non-cash investing and financing activities:

Lease assets obtained in exchange for new leases

636

Assets obtained in exchange for notes payable

—

3,016

Conference Call

Southland will host a conference call at 10:00 a.m. Eastern Time on Thursday, August 13, 2026. The call may be accessed here, or at www.southlandholdings.com. Following the conference call, a replay will be available on Southland’s website.

About Southland

Southland is a leading provider of specialized infrastructure construction services. With roots dating back to 1900, Southland and its subsidiaries form one of the largest infrastructure construction companies in North America, with experience throughout the world. The company serves the bridges, tunnelling, communications, data centers, transportation and facilities, marine, steel structures, water and wastewater treatment, and water pipeline end markets. Southland is headquartered in Grapevine, Texas.

For more information, please visit Southland’s website at southlandholdings.com.

Non-GAAP Financial Measures

This press release includes certain unaudited financial measures not presented in accordance with generally accepted accounting principles (“GAAP”), including but not limited to earnings before interest, taxes, depreciation, and amortization (“EBITDA”), backlog, and certain ratios and other metrics derived therefrom. Note that other companies may calculate these non-GAAP financial measures differently, and therefore such financial measures may not be directly comparable to similarly titled measures of other companies. Further, these non-GAAP financial measures are not measures of financial performance in accordance with GAAP and may exclude items that are significant in understanding and assessing financial results. Therefore, these measures should not be considered in isolation or as an alternative to net income, cash flows from operations or other measures of profitability, liquidity or performance under GAAP. Southland believes that these non-GAAP measures of financial results provide useful information to management and investors regarding certain financial and business trends relating to Southland’s financial condition and results of operations. Southland also believes that these non-GAAP financial measures provide an additional tool for investors to use in evaluating ongoing operating results and trends. These non-GAAP financial measures are subject to inherent limitations as they reflect the exercise of judgments by management about which items of expense and income are excluded or included in determining these non-GAAP financial measures.

Please see the accompanying table for reconciliations of the following non-GAAP financial measures for Southland’s current and historical results: EBITDA (non-GAAP financial measures) to net income (loss) attributable to common stock.

Forward-Looking Statements

This press release contains, and Southland’s officers and representatives may from time to time make, “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as “believe,” “continue,” “expect,” “may,” “plan,” “future,” “will,” “would,” and similar references to future periods. Forward-looking statements may include, among others, statements regarding Southland’s future business, plans, strategies, operating results, financial condition, liquidity, backlog, bonding capacity, project performance, claims recoveries, litigation and dispute resolution, financing arrangements, surety support, capital resources, market conditions and other anticipated events or trends. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on Southland’s current beliefs, expectations and assumptions regarding the future of Southland’s business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of Southland’s control. Southland’s actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements.

Important factors that could cause Southland’s actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others: Southland’s ability to meet liquidity needs and maintain adequate working capital; its ability to comply with, refinance or otherwise address obligations under its debt and surety arrangements; its ability to maintain adequate bonding capacity; the timing and ultimate recoverability of claims, change orders, contract modifications and contract assets; the outcome of pending or future litigation and project disputes; risks that backlog or remaining performance obligations may be delayed, reduced, cancelled or not converted into revenue as expected; risks associated with fixed-price construction contracts, cost estimates, margin pressure, project execution and cost overruns; weather, labor, materials, supply-chain, inflation, tariff and trade-related impacts; general economic conditions; the availability and terms of additional financing; Southland’s ability to maintain the listing of its securities; and other factors discussed in Southland’s latest Annual Report on Form 10-K and Quarterly Reports on Form 10-Q and other reports filed with or furnished to the SEC.

Any forward-looking statement made by Southland in this press release or on the related conference call is based only on information currently available to Southland and speaks only as of the date on which it is made. Southland undertakes no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise, except as required by law.