Cardinal Infrastructure Group Inc. Annual Report - How They Did This Year

What does this company do and how did they perform this year?

Cardinal Infrastructure Group Inc. builds things! They offer many infrastructure services. These services are for homes, businesses, factories, cities, and states. They do more than just build roads. Their work includes:

• Wet utility installations (like water, sewer, and stormwater systems)
• Grading and site clearing
• Erosion control
• Drilling and blasting
• Paving and other site services

They want to be the top choice for complex projects. Their main work areas are in the Southeastern United States. They use their own skilled team and special equipment. This reduces the need for outside contractors. It also keeps projects running smoothly. They do most contract work with their own crews. Subcontractors are only for specialized tasks. This approach helps them earn good profits.

They find the housing market very appealing. They have strong ties with national homebuilders. This helps them grow with these builders into new areas. A big benefit is negotiating work directly. They don't always have to bid against others. This can lead to higher profits. It also helps them offer more services.

Their experience in home projects helps them win bigger jobs. These include industrial, commercial, city, and state work. For example, they prepare sites for retail centers. They also work on manufacturing plants. They even pave highways for state Departments of Transportation.

The year 2025 was very busy and important. They went public and bought several companies. They also claim to be one of the fastest-growing infrastructure companies in their region.

The numbers support this growth. Their markets, especially North Carolina, have grown steadily. This population growth drives infrastructure spending. North Carolina was the fourth fastest-growing state from 2010 to 2024. Its population grew by 15.8%. It expects another 6.3% growth by 2030. More people mean more homes, businesses, and roads. This directly boosts demand for Cardinal's services. Nationally, the U.S. housing market lacks 4.5 million homes. This shortage, despite high mortgage rates, fuels new construction. It especially drives infrastructure in fast-growing areas like the Southeast.

Looking at specific areas, their sales growth from 2023 to 2025 was strong:

• Raleigh area: Sales jumped from $230 million to $330 million.
• Charlotte area: Sales soared from $18 million to $94 million.
• Greensboro area: Sales grew from almost nothing to $32 million.

They also have a strong pipeline of future work. This "backlog" was solid as of December 31, 2025:

• Raleigh: About $463 million
• Charlotte: About $140 million
• Greensboro: About $79 million

You can find their stock on The Nasdaq Stock Market LLC. Their ticker symbol is CDNL.

Major Changes and Strategic Moves

Cardinal Infrastructure Group had an exciting 2025!

• They Went Public! (IPO in December 2025): This was a huge step. Cardinal Infrastructure Group Inc. offered its shares to the public in December 2025. This means you can now buy their shares on a stock exchange.
  • The company raised about $277.7 million before costs.
  • They used about $258.3 million of the money left after costs. This bought ownership units in their main operating company. That company is Cardinal Civil Contracting Holdings LLC, or "OpCo."
  • They also reorganized their ownership. They created different types of common stock (Class A and Class B).
  • As of March 18, 2026, there were 15,292,984 Class A shares available. There were also 27,573,875 Class B shares outstanding.
  • The company you invest in (Cardinal Infrastructure Group Inc., or "PubCo") is now a holding company. It has no direct operations. Its main asset is its ownership in the operating company (OpCo).
  • As of December 31, 2025, Cardinal Group Inc. (PubCo) owned 39.0% of the operating company. The original owners (called "Continuing Equity Holders") still owned 61.0%. Cardinal Group Inc. manages the operating company. So, it still controls the business.
  • This setup is called an "Up-C" structure. It's common when private companies go public. It lets original owners keep tax benefits. Public investors still get to own a piece of the company. For public investors, the public company's results depend on the operating company. Cash coming to the public company relies on payments from OpCo.
• Acquisition Spree! (Growth through Buying Other Companies): Cardinal bought several companies in 2025. This greatly expanded its operations:
  • Purcell: They bought Purcell in January 2025. This likely added new building skills and future projects.
  • Page: They added Page in May 2025. This further expanded their reach and project pipeline.
  • RedClay: They acquired RedClay in October 2025. This brought new brands, customer ties, and more future work. These purchases show a strong growth strategy. They aim to quickly expand their market presence. They focus on civil construction areas like grading, paving, and underground services. In fact, they've bought six companies in the last five years. This has really driven their growth. They often seek smaller companies in new markets. For example, they entered Charlotte in 2023. They bought a company with about $26 million in yearly sales. These are easier to bring into the company. They also quickly add to profits.
• New Financing Secured: Cardinal got a new loan package. This "October 2025 Credit Facility" helps fund growth and operations. It includes a long-term loan and a flexible line of credit. This shows they can get money to support their big plans.
• Employee & Director Incentives: They created new employee and director stock awards. These were in October and December 2025, near the IPO. They also set up a 2025 Stock Incentive Plan. This is common for new public companies. It helps motivate employees and leaders to help the company succeed.
• Tax Receivable Agreement (TRA): They also signed a special tax sharing agreement in 2025. This is often seen when private companies go public. It's part of the "Up-C" structure. It means the company shares some tax savings with the original owners. Specifically, the original owners expect 85% of these tax benefits. Cardinal Group Inc. (the public company) expects to keep 15%. These payments to original owners will be large cash outflows for the public company. They will reduce the cash Cardinal Group Inc. would otherwise get. This mostly benefits the original owners.

Financial performance - revenue, profit, growth metrics

Let's look at the numbers! Cardinal has grown impressively. This is especially true in its key markets:

• Strong Sales Growth in Key Markets: From 2023 to 2025, they saw big sales increases. This was in their core North Carolina markets:
  • Raleigh: Sales grew from $230 million to $330 million.
  • Charlotte: Sales jumped from $18 million to $94 million.
  • Greensboro: Sales went from zero to $32 million. This shows they are growing fast in these high-demand areas.
• Healthy Future Work: As of December 31, 2025, they had a large "backlog." This means projects they've won but not yet started or finished. It's a good sign for future sales:
  • Raleigh: ~$463 million
  • Charlotte: ~$140 million
  • Greensboro: ~$79 million This backlog suggests a strong pipeline of work for the coming year.
• Diversified Customer Base: No single customer made up more than 10% of their sales in 2025. This is a good sign for stability. It means they don't rely too much on one big client. This reduces risk.

Financial health - cash, debt, liquidity

Cardinal Infrastructure Group took on new debt. This was with their October 2025 loan package. This package includes a long-term loan and a flexible line of credit. It gives them money for operations and growth. They also have other debts from buying companies.

Interest rates on some debt are tied to variable rates like SOFR. This means their interest payments can change. If interest rates rise, Cardinal's borrowing costs could increase. This would reduce their profits. This is especially true if they don't protect against rate changes.

The company also got a lot of cash from its IPO. It raised about $277.7 million before costs. As noted, about $258.3 million of this money bought ownership units in the operating company. Remember, the public company (Cardinal Group Inc.) is a holding company. Its main asset is its ownership in the operating company.

This means it relies on cash payments from the operating company. These payments cover its taxes and expenses. This includes large payments under the Tax Receivable Agreement. The operating company might have limits on these payments. This could affect the public company's available cash.

Key risks that could hurt the stock price

• Customer Concentration Risk: The company notes a risk if customers are too few. This applies to private and public sector clients. It also covers different contract types. If they rely too much on a few big clients, losing one could cut sales. (However, no single customer made up over 10% of 2025 sales. This helps reduce the risk.)
• Variable Interest Rates: Their new loan package has interest rates tied to SOFR. If overall interest rates rise, Cardinal's borrowing costs increase. This would reduce their profits.
• Integration Risk: They made three big purchases in one year. Bringing these new companies into Cardinal might be harder or costlier than expected. This could disrupt operations. It might also lead to lower-than-expected benefits.
• Economic Downturns: If the economy slows, people and governments might spend less. Less infrastructure spending would directly hurt Cardinal's business. This could mean less demand and canceled projects.
• Geographic Concentration: They work in specific areas of the Southeastern U.S. If construction in those areas declines, Cardinal could be hit hard. This could be due to local economics or natural disasters.
• Reliance on Suppliers & Subcontractors: Cardinal needs other companies for materials and specialized work. Problems with these suppliers could raise costs. Delays could also impact profits and reputation.
• Utility Costs: Shortages or price hikes for electricity or fuel could raise operating costs. This directly affects project costs and profits.
• Bidding Risks: When they bid for a project, they estimate costs and risks. If these estimates are wrong, they might earn less profit. They could even lose money on a project.
• Schedule Delays: Construction is time-sensitive. If Cardinal misses deadlines, it could harm their reputation. It might also lead to financial penalties.
• Equipment Costs: Buying, leasing, and maintaining heavy equipment is expensive. If these costs rise, or equipment value drops, it could hurt their finances.
• Volume Sensitivity: They have many fixed costs, like equipment and salaries. So, their profits depend heavily on how much work they get. If project volume drops, profits can fall significantly.
• Aggregates Supply: They need materials like gravel and sand. If they misjudge the quality, amount, or cost of these, problems can arise. This can cause delays and cost overruns.
• Key Personnel: The company relies on its top leaders and skilled staff. Losing key people or struggling to find workers could hurt operations. It could also impact project execution and growth. Labor shortages and rising labor costs are also concerns.
• Government Permits & Regulations: They need various permits and licenses. If they can't get them, or new rules emerge, projects could slow or stop. This could also raise costs.
• Trade Policies: Changes in trade rules, like tariffs, could raise material costs. This could affect concrete or other important construction materials.
• Data Security: Like any company, they face data privacy and cybersecurity risks. A breach could be costly. It could lead to legal fees and harm their reputation.
• Expansion Risks: They plan to expand into new markets. But new ventures might not succeed as hoped. This could mean big investments without guaranteed returns.
• Accounting for Long-Term Projects: Cardinal uses a method to recognize sales over time. They record sales and profits as a project progresses. This is based on costs incurred. If initial cost estimates are wrong, they might have to reduce past reported sales and profits. This can surprise investors.
• Public Company Expenses: Being a public company adds many costs. These include legal, accounting, and investor relations. These can reduce profits compared to when they were private.
• Reliance on Estimates in Financial Statements: The company's financial reports use many estimates. These include acquisition values or future tax benefits. If these estimates are wrong, they might have to reduce or remove past reported sales and profits. This leads to restatements.
• Backlog Not Guaranteed: They have a "backlog" of projects. But there's no guarantee all projects will happen or be profitable. Projects can be delayed, canceled, or changed. So, a big backlog doesn't always mean big future profits.
• Dependence on Operating Company's Cash: As a holding company, Cardinal Group Inc. relies on its operating company's cash. This cash pays its bills, including taxes and payments to original owners. If the operating company can't make these payments, it could hurt Cardinal Group Inc.'s finances.
• Continuing Equity Holders' Influence: The original owners still own 61% of the operating company. They have a lot of say in the public company's decisions. Their interests might not always match those of new public shareholders.
• Historical Data May Not Predict Future Costs: Due to changes and acquisitions, past financial data might not show future operating costs. This makes historical comparisons less reliable for forecasting.
• Litigation and Claims: They face risks from lawsuits or other claims. These relate to project performance, environmental issues, or labor disputes. Such claims could be costly and harm their business.

Competitive positioning

Cardinal Infrastructure Group wants to lead in the Southeastern United States. They have key strengths that make them stand out:

• Comprehensive Services: They offer many services. This makes them a "full-service" provider. They can handle almost all parts of a project themselves. This reduces the need for outside contractors. It gives them better control over project timing and staff. It also helps them bid competitively. This leads to good profits. Customers like that they can finish projects quickly.
• Strong Relationships with Home Builders: They have deep, lasting ties with big home builders. This is a huge advantage. It often lets them negotiate contracts directly. They don't always have to compete on price. This also creates chances for higher profits. It helps them offer more services. As these home builders grow, Cardinal can grow with them. They consistently win new projects.
• Leadership Position in Their Markets: They are a leader in their work areas. This comes from their long history, experienced leaders, and good reputation. They have many different customers. No single customer made up more than 10% of their sales in 2025. This means they don't depend too much on one client. Their local approach serves both local needs and bigger projects.
• Distinct Scale Advantage: The construction market often has many small players. Cardinal's size gives them an edge. They can take on large projects that smaller rivals cannot. Unlike bigger general contractors, Cardinal focuses its expertise. They efficiently do many critical services in-house. This gives them better control over project timing, quality, and costs. This helps them gain market share and deliver better value.
• Consistent History of Managing Project Risks: With their experience, they deeply understand construction risks. Project managers are heavily involved in bidding. Senior leaders review all proposals. This increases accountability. It also helps them learn from every project. Doing most work themselves also reduces supply chain problems. This is a big plus for clients.
• Opportunistic Acquisition Process: They have bought six companies in the last five years. This has been a major reason for their growth. They strategically buy companies to expand in existing areas. These include Raleigh, Charlotte, and Wilmington. Or they enter new markets. They often look for smaller purchases. These are easier to bring into the company. They also quickly add to profits.

They believe they are well-positioned to grow. This is in a diverse and attractive industry.

Leadership or strategy changes

The IPO itself was a huge strategic change. It turned the company from private to public. Their aggressive buying strategy shows a clear focus. They aim for rapid expansion and market growth. The new stock incentive plans also show a commitment. They want to align leaders' and employees' interests with new public shareholders.

Cardinal is also an "Emerging Growth Company" (EGC). It's also a "Non-accelerated filer." This means it's a smaller public company. It benefits from fewer reporting rules for a few years. However, they chose not to use the extra time. This was for following new accounting standards. This suggests they aim for full compliance sooner.

The "Up-C" structure means you invest in Cardinal Infrastructure Group Inc. (the public company). But the original owners still hold 61% of the operating company. They have a lot of influence over decisions. This includes those needing shareholder approval. This structure means the original owners' interests might not always match public shareholders'.

Future outlook

Cardinal Infrastructure Group Inc. is not slowing down! After a busy 2025, they plan another purchase. They intend to buy AL Grading Contractors LLC in February 2026. This shows a continued strategy of growth through buying companies. They also want to expand their services. Their strong future work pipeline, along with good market conditions, points to a busy future. Population growth and the housing shortage drive demand. They will profit from ongoing demand for infrastructure development.

Market trends or regulatory changes affecting them

Beyond general economic conditions, Cardinal could be affected by:

• Population Growth: Significant population growth in their key markets is a big positive. North Carolina grew 15.8% from 2010-2024. It expects another 6.3% by 2030. This directly drives demand for their services. This includes home, business, and city projects.
• U.S. Housing Shortage: A key market trend supporting Cardinal is the national housing shortage. At least 4.5 million homes are needed. This lack of homes, due to high mortgage rates and labor shortages, fuels demand. It especially drives new construction in the fast-growing Southeast.
• Trade Policies: As noted in the risks, changes in U.S. trade policies could impact costs. Tariffs on imported materials could raise prices. This affects materials like concrete.
• Data Privacy & Cybersecurity: New laws in this area mean they must adapt. They need to protect sensitive information. This could lead to compliance costs and risks.