Connect added $22.3 million of revenue and $2.4 million of gross profit to Centuri’s three months ended June 28. That helped push sales from $724.1 million to $962.0 million, a 32.9% jump that looks substantial until the profit line enters the room.
Gross profit rose only 2.0%, and gross margin slid from 9.4% to 7.2%. Operating income fell 24.9% to $24.1 million, while net income declined to $6.1 million. Centuri grew the top line by nearly $238 million, but added only about $1.3 million of gross profit.
Management points to the mix of work inside Non-Union Electric. Higher volumes on new and existing master service agreements helped revenue, but storm profitability declined and fuel prices cut roughly 140 basis points from that segment’s margin.
"This increase was driven by the acquisition of Connect, which contributed approximately $22.3 million in revenue and $2.4 million in gross profit in the current year period."
Centuri Holdings, 10-Q, Aug. 4, 2026
The acquisition supplied sales and profit, but its contribution was not large enough to keep consolidated margins level while storm profitability declined and elevated fuel prices pressured margins.
Centuri described the electric segment’s volume increase plainly:
"Revenue from our Non-Union Electric segment totaled $166.9 million, reflecting an increase of $17.0 million, or 11.3%, compared to the prior year period due primarily to higher volumes on new and existing MSAs."
Centuri Holdings, 10-Q, Aug. 4, 2026
That is the useful distinction in this filing: demand and contracted volume were present, while the economics of some work were less favorable. The company does not present the revenue increase as a single uniform improvement in profitability.
There was some help below operating income. Net interest expense decreased by $11.6 million because average debt and rates on variable-rate borrowings fell. Cash rose to $40.5 million, and free-cash-flow margin improved by 0.7 percentage points to negative 3.7%, even as capital spending increased in dollars. Those are cash and financing changes, not a repair of the operating margin.
The balance-sheet context keeps the distinction relevant. Centuri’s latest annual facts show $581.4 million of net debt, while the stock’s latest annual P/E is 112.5x. The arithmetic leaves a business with growing revenue, thin current margins, and financing costs that are helping the income statement for now.
The company’s annual results show revenue reached $3.0 billion in 2025, up 13.1%, and net margin reached 0.8%. That history supplies a broader pattern of expansion alongside narrow profitability, but this latest three-month period makes the operating exposure more specific: storm work and fuel prices can matter even when volumes rise.
Centuri’s next quarterly report will put the current 7.2% gross margin beside the comparable period’s 9.4%, giving the clearest factual read on whether the mix and cost pressure described here has changed.
Source: Centuri Holdings’ Form 10-Q for the three months ended June 28, 2026.