Limbach (NASDAQ:LMB) reported second-quarter 2026 results that fell short of management’s expectations as project timing, healthcare and institutional-market softness, and margin pressure weighed on profitability. The company also announced the acquisition of data center program manager CYMCOR for $30 million, positioning the deal as part of a broader effort to diversify its end markets and geographic reach.
President and Chief Executive Officer Michael McCann said customer demand remained healthy despite near-term pressure. Limbach recorded $182 million in bookings during the quarter, its third consecutive quarter of strong booking activity, bringing total bookings over the past three quarters to $616 million.
Revenue rises, but margins and earnings decline
Total second-quarter revenue increased to $173.5 million from $142.2 million a year earlier, primarily reflecting a $30.9 million revenue contribution from Pioneer Power. Owner Direct Relationships, or ODR, revenue rose 17.9% to $128.4 million and represented 74% of total quarterly revenue. ODR organic revenue declined 3.4%, while acquisition-related ODR revenue increased 21.3%.
General Contractor Relationships, or GCR, revenue increased 35.3% to $45 million. Organic GCR revenue rose 12%, while acquisition-related revenue increased 23.3%.
Profitability declined as the company’s gross margin fell to 21.5% from 28% in the prior-year quarter. Gross profit decreased 6.4% to $37.3 million. ODR gross margin was 24%, compared with 29% a year ago, while GCR gross margin fell to 14.5% from 24.7%.
Executive Vice President and Chief Financial Officer Jayme Brooks said both segments were affected by Pioneer Power’s lower current margin profile. Margins were also pressured by lower net project write-ups than in the prior-year period and competition for skilled labor and materials related to data center construction activity.
Net income declined 38.8% to $4.7 million, or $0.39 per diluted share, from $7.8 million, or $0.64 per diluted share, in the prior-year period. Adjusted EBITDA fell 22.3% to $13.9 million, and adjusted EBITDA margin declined to 8% from 12.6%.
SG&A expense rose to $28.1 million from $26.6 million, driven primarily by Pioneer Power-related costs and increased stock-based compensation and payroll-related expenses. However, SG&A as a percentage of revenue improved to 16.2% from 18.7%.
Cash flow and liquidity
Limbach generated $18.7 million of operating cash flow during the quarter, compared with $2 million in the year-earlier period. Free cash flow, defined by the company as operating cash flow excluding changes in working capital minus capital expenditures, was $13.7 million, down from $16.1 million a year earlier. The company said free-cash-flow conversion equaled 98.2% of adjusted EBITDA, compared with 89.7% in the prior-year quarter.
As of June 30, Limbach had $17.5 million in cash and cash equivalents and total debt of $41.1 million, including $17.5 million borrowed under its revolving credit facility. Total liquidity was $93.1 million.
On July 24, the company amended its credit agreement to expand available borrowing capacity under its revolving credit facility to $125 million from $100 million. The additional capacity was followed by the completion of the CYMCOR acquisition, which was funded with available cash and revolver borrowings.
CYMCOR acquisition targets data center opportunity
McCann said CYMCOR adds a national program-management capability focused on data center customers and is intended to support Limbach’s push into mission-critical infrastructure. CYMCOR oversees customer project budgets with a cumulative value exceeding $8 billion, according to Limbach.
The company expects CYMCOR to generate $12 million of program-management revenue and $4 million of adjusted EBITDA in 2027. Management said the acquisition should create opportunities to provide engineering, construction, commissioning, maintenance and other lifecycle services to customers that engage CYMCOR early in a facility’s planning process.
McCann compared the opportunity to Limbach’s healthcare program-management platform, which generated approximately $3 million in professional-services revenue and pulled through roughly $60 million in project bookings during the past 12 months.
CYMCOR has operations in Texas as well as Atlanta, Charlotte, Northern Virginia and the Richmond area, McCann said. He noted that several of those markets are outside Limbach’s current footprint and could provide visibility into future geographic expansion opportunities.
The company said Pioneer Power, acquired in July 2025, is performing in line with its integration expectations. McCann said Pioneer Power’s gross margin improved by approximately 1.5 percentage points in the first half of 2026 compared with its margin at acquisition. Limbach is pursuing operational and pricing actions intended to bring the business’s gross margin in line with the company average over the next two to three years.
Outlook revised for higher revenue and lower EBITDA
Limbach increased its 2026 revenue outlook while lowering its adjusted EBITDA forecast to account for project commencement timing, margin pressures and execution headwinds. The revised outlook excludes contributions from CYMCOR and any future acquisitions.
- Revenue: $760 million to $790 million
- Adjusted EBITDA: $78 million to $84 million
- Total organic revenue growth: 9% to 14%
- ODR organic revenue growth: 6% to 10%
- Gross margin: 23% to 24%
- SG&A as a percentage of revenue: 15% to 16%
The company maintained its expectation to convert at least 75% of adjusted EBITDA into free cash flow for 2026 and expects capital expenditures to run at approximately $5 million.
McCann said Limbach is treating 2026 as a reset period while it works to build a more resilient model through data center and industrial expansion, acquisitions in targeted regions, and greater use of its integrated operating platform. He said management expects the strong recent booking activity and a rebuilt GCR backlog to support opportunities for improved performance in 2027, though project timing could shift some of that benefit beyond 2026.
About Limbach (NASDAQ:LMB)
Limbach Holdings, Inc (NASDAQ: LMB) is a U.S.-based mechanical construction firm specializing in the design, installation and maintenance of heating, ventilation and air conditioning (HVAC) systems, piping, plumbing and sheet metal fabrication. The company delivers comprehensive mechanical solutions to commercial, institutional, health care, education, government and industrial clients, drawing on its in-house engineering, prefabrication and construction management capabilities.
The company’s service offerings encompass full-scope mechanical construction, including energy system design, direct digital controls and building automation, retrofits, testing and balancing, preventive maintenance programs and emergency response services.
