Cardinal Infrastructure Group Inc.

Cardinal Infrastructure Group Inc. (CDNL) operates as a holding company, with its primary asset being an equity interest in Cardinal Civil Contracting Holdings LLC ("Cardinal" or "OpCo"), which conducts all business operations through its wholly-owned subsidiaries ¹. The company provides a comprehensive suite of infrastructure services, including wet utility installations (water, sewer, and stormwater systems), grading, site clearing, erosion control, drilling and blasting, paving, and other related site services ². CDNL primarily serves residential, commercial, industrial, municipal, and state infrastructure markets in the Southeastern United States, with a particular focus on North Carolina (Charlotte, Raleigh, and Greensboro areas) and certain projects in South Carolina ³. The business model emphasizes in-house teams and equipment to reduce reliance on subcontractors, aiming for expedited delivery, quality work, and strong margins ⁴. Revenue generation is predominantly through fixed unit price or "lump sum" contracts, with a small portion from cost-plus or "time and material" contracts ⁵.

For the year ended December 31, 2025, CDNL reported total revenue of $456,045,369 ⁶, an increase of 44.7% from $315,187,523 in 2024 ⁷. Gross Profit for 2025 was $63,773,029 ⁸, up 36.7% from $46,635,202 in 2024 ⁹. The Gross Profit Margin decreased to 14.0% in 2025 from 14.8% in 2024 ¹⁰. Operating income was $40,404,407 ¹¹, resulting in an operating margin of 8.9% in 2025, down from 11.4% in 2024 ¹². Net income for 2025 was $31,093,483 ¹³, with a net income margin of 6.8% ¹⁴, compared to $28,297,234 and 9.0% in 2024, respectively ¹⁵. Diluted EPS for the period from December 10, 2025, to December 31, 2025, was $0.06 ¹⁶. Cash and equivalents stood at $97,149,425 as of December 31, 2025 ¹⁷, significantly up from $20,917,108 in 2024 ¹⁸. Total notes payable (including current portion) were $121,178,878 at December 31, 2025 ¹⁹, compared to $47,933,749 in 2024 ²⁰.

The company's revenue growth in 2025 was driven by approximately $103.2 million of organic growth and $37.7 million of acquisition-related revenue growth ²¹. This broad-based organic growth was observed across North Carolina, reflecting strength in the residential market and notable increases from commercial and DOT/Municipal end markets ²². The decrease in Gross Profit Margin to 14.0% in 2025 from 14.8% in 2024 was primarily due to higher amortization expense from intangible assets recognized through 2025 acquisitions ²³. However, Adjusted Gross Profit Margin increased to 21.1% in 2025 from 20.7% in 2024, attributed to effective cost management amid higher revenue ²⁴. General and administrative expenses increased to $23.5 million (5.2% of revenue) in 2025 from $10.7 million (3.4% of revenue) in 2024, mainly due to non-recurring acquisition and IPO-related costs ²⁵.

During 2025, CDNL completed several significant operational developments. On January 3, 2025, Cardinal Civil Contracting Charlotte, LLC acquired Purcell Construction, Inc. and related entities ("Purcell"), expanding its presence in the Charlotte, NC market ²⁶. On May 30, 2025, the company formed Cardinal Civil Contracting Triad, LLC, which acquired Page and Associates, Inc. and MJS & GCP, LLC ("Page"), a site work contractor in Greensboro, NC ²⁷. In October 2025, CDNL acquired Red Clay Industries, Inc. ("Red Clay"), a provider of asphalt paving and related services in North Carolina, for a $40.0 million purchase price, funded by $39.0 million in borrowings and $1.0 million in assumed liabilities ²⁸. The company also completed its initial public offering on December 11, 2025, issuing 13,225,000 shares of Class A Common Stock at $21.00 per share, generating gross proceeds of approximately $277.7 million ²⁹. The net proceeds from the IPO were used to purchase 14,943,750 LLC Units from Cardinal for approximately $258.3 million, with Cardinal using these funds for various purposes including redeeming LLC Units, repaying $24.3 million of borrowings under its October 2025 Credit Facility, and paying IPO costs ³⁰.

CDNL expects to recognize between $489 million and $541 million of its backlog within the twelve months following December 31, 2025 ³¹. This estimated range is based on existing project schedules and current assumptions, though actual timing and amounts may differ due to factors such as changes in project scope, weather-related delays, or contract terminations ³². In addition to this, the company anticipates generating further revenues during the same period from new project awards, renewals, and the conversion of preliminary commitments into executed contracts ³³.

A key growth area for CDNL is leveraging its proven, replicable model to expand within existing markets and into new geographies across the Southeastern United States ³⁴. This strategy involves initially focusing on residential home building in new markets to establish a service reputation, then expanding into industrial, commercial, retail, and municipal/state customer segments ³⁵. The company has already demonstrated this by entering the Charlotte market in 2023 via acquisition, which now represents approximately 21% of total revenue for the twelve months ended December 31, 2025, and entering the Greensboro market in 2024, with further expansion in 2025 ³⁶. Subsequent to the reporting period, on February 18, 2026, CDNL acquired A.L. Grading Contractors, LLC ("ALGC") for $245.5 million, consisting of $129.0 million in cash, 4,186,062 LLC Units (and an equal number of Class B Common Stock shares) valued at $108.0 million, and 345,680 shares of Class A Common Stock ³⁷. This acquisition expands the company's presence into the greater Atlanta, Georgia area ³⁸. Additional market opportunities identified include Wilmington, NC; Columbia, SC; Charleston, SC; Greenville, SC; Savannah, GA; Knoxville, TN; and Nashville, TN ³⁹.

Another significant growth area is the integration of additional services into operations and continued vertical integration ⁴⁰. This involves incorporating new service lines such as paving, asphalt plants, precast concrete manufacturing, CCTV inspection, and drilling and blasting, through both organic growth and small, tuck-in acquisitions ⁴¹. This strategy aims to enhance Gross Profit Margin opportunities and strengthen the ability to compete for a wider range of projects ⁴². As an example of vertical integration, the company is constructing its own asphalt plants, with the first plant in Chatham County, NC, expected to service contracts towards the end of the second quarter of 2026 ⁴³. A second asphalt plant is permitted and in the planning stages ⁴⁴. The company is also exploring adding a concrete casting plant for precast concrete wet utility components, anticipating a similar positive effect on margins ⁴⁵.

Operationally, the company expects margin performance to improve over time as market and end-use expansions integrate and anticipated scale benefits are realized, despite initial lower margin profiles in these expansion areas ⁴⁶. The company is also allocating significant resources to attract and retain talented managers, supervisors, and field personnel, emphasizing high standards of training and internal advancement opportunities ⁴⁷.

Planned capital allocation includes materially higher capital expenditures than prior years to support the construction of its own asphalt manufacturing plant, upgrading the fleet, and making strategic acquisitions ⁴⁸. The company expects to pursue strategic uses of cash, such as investing in capital projects or businesses that meet its Gross Profit Margin and overall profitability targets, managing debt balances, and repurchasing shares of common stock ⁴⁹. As of December 31, 2025, future maturities of notes payable include $6,128,674 in 2026, $6,136,402 in 2027, $9,090,625 in 2028, $9,090,625 in 2029, $90,090,625 in 2030, and $641,927 thereafter, totaling $121,178,878 ⁵⁰. The October 2025 Credit Facility requires quarterly principal amortization commencing March 31, 2026, with annual amounts equal to 5.0% of the original principal during the first two years and 7.5% during years three through five, and the remaining balance due at maturity on October 1, 2030 ⁵¹. In January 2026, Cardinal entered into an interest rate swap for $60.0 million notional of the $120.0 million total facility, fixing the overall rate at 3.8% assuming a term SOFR rate ⁵².

The company faces several material risks, including demand for services decreasing during economic recessions or volatile economic cycles, and a reduction in demand in end markets adversely affecting the business ⁵³. Geographic concentration in North Carolina and the Southeastern United States makes the company vulnerable to declines in the construction industry in these specific markets ⁵⁴. Dependence on suppliers for materials and subcontractors could increase costs and impair contract completion, especially given volatility and disruptions caused by global economic factors, supply chain issues, labor shortages, wage pressures, and inflation ⁵⁵. Inaccurate estimates for fixed-unit price and lump sum contracts can lead to lower than anticipated profits or losses, with costs varying substantially from original estimates due to factors like onsite conditions, delays, material costs, and labor availability ⁵⁶. The infrastructure services industry is highly schedule-driven, and failure to meet contractual schedules can result in additional costs, penalties, liquidated damages, and reputational harm ⁵⁷. The capital-intensive nature of the industry, with significant fixed and semi-fixed costs, makes profitability sensitive to changes in volume ⁵⁸. Interest rate changes on variable rate debt, such as the $121.1 million outstanding as of December 31, 2025, could adversely affect interest payments, earnings, results of operations, and cash flows, especially since the company does not currently hedge against interest rate fluctuations ⁵⁹. Natural and man-made disasters, severe weather, and adverse geologic conditions may increase costs, cause project delays, and reduce consumer demand, with some losses potentially uninsurable or exceeding coverage limits ⁶⁰. The public infrastructure construction industry is highly competitive and regulated, with contracts often awarded to the lowest bidder, and reductions in government funding could adversely affect results ⁶¹. An inability to obtain bonding, which depends on capitalization, working capital, borrowing capacity, and external factors, could limit the aggregate dollar amount of contracts pursued ⁶². The company has identified material weaknesses in internal controls over financial reporting related to IT general controls, segregation of duties, and ineffective controls over the review of estimates to complete for construction contracts ⁶³. The Tax Receivable Agreement requires substantial cash payments to Continuing Equity Holders, equal to 85% of certain tax benefits, which will reduce cash available for reinvestment and could be accelerated or exceed actual benefits in certain circumstances ⁶⁴.

Management emphasizes a strategy of continued growth through leveraging a proven, replicable model to expand within existing markets and into new geographies across the Southeastern United States, integrating additional services, pursuing strategic acquisitions, capitalizing on vertical integration opportunities, and developing employees. The company's Chief Executive Officer and founder, Jeremy Spivey, has over 30 years of civil construction experience, and the seasoned management team averages over 30 years of industry experience ⁶⁵. Management believes that starting with residential construction in new markets provides large, multi-phase opportunities to establish a service reputation, which can then aid in expanding into other adjacent cities and customer segments ⁶⁶. The company is actively pursuing vertical integration, as evidenced by the construction of its own asphalt plants, with the first plant expected to service contracts towards the end of the second quarter of 2026 ⁶⁷. Management expects capital expenditures to be materially higher than prior years to support this vertical integration and fleet upgrades, as well as strategic acquisitions ⁶⁸. The company's overall tone reflects confidence in its ability to continue growing revenue and profitability in a fragmented industry, driven by its competitive strengths, including comprehensive capabilities, strong customer relationships, distinct scale advantage, and experienced workforce ⁶⁹.