Revenue, Receivables and Contract Assets and Liabilities

3 Months Ended

Apr. 03, 2026

Revenue from Contract with Customer [Abstract]

Revenue, Receivables and Contract Assets and Liabilities

Note 3. Revenue, Receivables and Contract Assets and Liabilities

The following table presents the Company’s revenue disaggregated by contract types:

	Three Months Ended
	April 3,		April 4,
(In thousands)	2026		2025
Fixed-price	$	81,220	$	102,685
Cost reimbursable		6,528		19,015
Equipment and labor		285		410
Total revenue	$	88,033	$	122,110

Projects started after prior ownership ("Shimmick Projects") have focused on critical infrastructure aligned with our strategy, including water, climate resilience, energy transition and sustainable transportation. Projects that started under prior ownership or focus on foundation drilling are referred to as "Non-Core Projects" (formerly referred to as "Legacy and Foundations Projects").

The following table presents the Company’s revenue disaggregated by Shimmick Projects and Non-Core Projects:

	Three Months Ended
	April 3,		April 4,
(In thousands)	2026		2025
Shimmick Projects	$	87,793	$	93,154
Non-Core Projects		240		28,956
Total revenue	$	88,033	$	122,110

Remaining performance obligations

The Company had $920 million of remaining performance obligations yet to be satisfied as of April 3, 2026. Our remaining performance obligations have a weighted average life of 2.1 years as of April 3, 2026.

Contract Balances

The following table provides information about contract assets (also referred to as costs and estimated earnings in excess of billings on uncompleted contracts and retainage receivable) and contract liabilities (also referred to as billings on uncompleted contracts in excess of costs and estimated earnings and forward loss reserve), which include assets and liabilities that are dependent upon future activity:

	April 3,			January 2,
	2026			2026			Change
(In thousands)
Contract assets, current and non-current:
Costs and estimated earnings in excess of billings on uncompleted contracts	$	63,411		$	64,131		$	(720	)
Retainage receivable		42,753			46,145			(3,392	)
Total contract assets		106,164			110,276			(4,112	)
Contract liabilities, current and non-current:
Billings on uncompleted contracts in excess of costs and estimated earnings		(25,018	)		(18,276	)		(6,742	)
Forward loss reserve		(11,195	)		(35,937	)		24,742
Total contract liabilities		(36,213	)		(54,213	)		18,000
Net	$	69,951		$	56,063		$	13,888

Contract terms with customers include the timing of billing and payment, which usually differs from the timing of revenue recognition. As a result, the Company carries contract assets and liabilities within the condensed consolidated balance sheets. These contract assets and liabilities are calculated on a contract-by-contract basis and reported on a net basis at the end of each period and are classified as current or non-current. Many of the contracts under which the Company performs work also contain retainage provisions. Retainage refers to that portion of our billings held for payment by the customer pending satisfactory completion of the project. Unless reserved, the Company assumes that all amounts retained by customers under such provisions are fully collectible. The majority of retainage receivable is expected to be collected within one year. These assets and liabilities are reported in the condensed consolidated balance sheets within “Contract assets, current,” “Contract liabilities, current" and “Contract liabilities, non-current." Costs and estimated earnings in excess of billings on uncompleted contracts consists of revenue recognized in excess of billings.

Billings on uncompleted contracts in excess of costs and estimated earnings consists of billings in excess of revenue recognized. The Company recognized revenue of $9 million during the three months ended April 3, 2026 that was included in contract liabilities as of January 2, 2026.

The Company’s timing of revenue recognition may not be consistent with its rights to bill and collect cash from its clients. Those rights are generally dependent upon advance billing terms, milestone billings based on the completion of certain phases of work or when services are performed. The Company’s accounts receivable represents amounts billed to clients that have yet to be collected and represent an unconditional right to cash from its clients as presented below:

	April 3,			January 2,
	2026			2026
(In thousands)
Total accounts receivable, gross	$	24,972		$	30,954
Allowance for credit losses		(1,032	)		(775	)
Accounts receivable, net	$	23,940		$	30,179

Substantially all contract assets as of April 3, 2026 and January 2, 2026 are expected to be collected within the Company’s estimated operating cycle. The Company’s operating cycle may extend beyond one year.

The Company is in the process of negotiating or awaiting approval of unapproved change orders and claims with its customers. The Company is proceeding with its contractual rights to recoup additional costs incurred from its customers based on completing work associated with change orders, including change orders with pending change order pricing, or claims related to significant changes in scope which resulted in substantial delays and additional costs in completing the work as well as termination cost on one Non-Core Project.

Information about significant customers

Significant Customers as a Percentage of Accounts Receivable, Net
As of April 3, 2026
Customer one	48.2%
As of January 2, 2026
Customer one	39.9%

Significant Customers as a Percentage of Revenue
Three Months Ended April 3, 2026
Customer one	23.1%
Customer two	17.6%
Customer three	10.7%
Three Months Ended April 4, 2025
Customer one	17.7%
Customer two	14.9%
Customer three	11.0%

Revisions in Estimates

Changes in contract estimates resulted in net increases in gross margin of $3 million for the three months ended April 3, 2026, primarily due to a reduction in escalation costs on a Shimmick water project as well as a positive outcome of a project close-out, partially offset by increased forecasted cost to complete on a Shimmick bridge project.

Changes in contract estimates resulted in net decreases in gross margin of $4 million for the three months ended April 4, 2025, primarily due to cost increases related to delays and lower productivity.