ITG (NASDAQ:ITG) reported 49% revenue growth in the third quarter of 2026, as seasonal construction activity, data center projects and acquisitions helped lift results above management’s expectations.
The broadband infrastructure provider said adjusted EBITDA rose 63% from a year earlier to $64.5 million, with its adjusted EBITDA margin expanding 120 basis points to 14%. Revenue was about 5% ahead of plan, Chief Financial Officer Chris Mecray said on the company’s earnings call.
ITG updated its full-year outlook to reflect 37% growth in both revenue and adjusted EBITDA. Mecray said the adjusted EBITDA growth outlook was slightly higher than the 35% projected last quarter and included the third-quarter beat.
Infrastructure Deployment and Data Centers Drive Growth
Chief Executive Officer Andy Parrott said the company’s E&M service line grew 39% year over year, while Infrastructure Deployment revenue rose 63%. Mecray attributed the latter’s growth to the seasonal ramp in project work and the rollout of data center projects.
ITG’s work includes fiber and related infrastructure connecting data center campuses, network routes and end markets. Mecray said the company entered the year with more than $500 million of data center backlog and still had roughly half a billion dollars of scoped backlog after completing some of that work.
Although ITG did not win any major new data center contracts in the third quarter, it has several bids outstanding and expects decisions relatively soon, Mecray said. “We are still equally bullish on that end market,” he said.
Across the business, new awards totaled about $237 million during the quarter, largely from Infrastructure Deployment. Parrott said the largest award came from a newly added customer that builds fiber networks across multiple states.
Next Twelve Month Backlog reached $1.54 billion at quarter-end, up 27% from a year earlier and slightly higher sequentially. Infrastructure Deployment backlog rose 10% from the second quarter, while E&M backlog was essentially stable.
Customer Mix and Acquisition Strategy
Charter and Comcast, ITG’s largest customers, collectively generated more than 20% year-over-year growth and were stable compared with the second quarter, Mecray said. He added that ITG believes it is gaining a larger share of their spending, even as the customers may be slowing overall capital expenditures.
The two customers accounted for less than 50% of third-quarter revenue, down from 60% a year earlier. Mecray said he expects their combined concentration to continue declining as newer customers grow faster, despite anticipated growth from the core accounts.
Parrott said vendor consolidation and customers’ efforts to reduce internal costs could create additional opportunities for ITG. He argued that customers can lower their own overhead by outsourcing work without necessarily requiring ITG to accept lower margins.
ITG completed its first post-IPO acquisition in August, purchasing certain assets of Full Circle Fiber. Parrott said the acquired assets and contracts contributed positively immediately and are expected to generate at least $50 million in annualized sales at corporate-average margins. Mecray said the contribution was relatively small in the third quarter and should increase in the fourth.
Asked about the balance between organic and acquired growth, Mecray said ITG integrates acquired assets quickly, making the two categories difficult to track separately. He said that, holding acquired companies’ revenue at their day-one levels, ITG grew 27% in the third quarter.
Cash Flow, Costs and Outlook
ITG’s third-quarter free cash flow use reflected approximately $18 million of acquired contract assets and a significant increase in work in progress as seasonal volumes rose, Mecray said. He also acknowledged that invoicing was somewhat slow during the quarter.
Management expects working capital to stabilize and cash collection to improve in the fourth quarter. Mecray said ITG continues to see an opportunity for positive free cash flow in 2027 and plans to provide a formal outlook next quarter.
The fourth-quarter forecast accounts for normal seasonal factors, including fewer working days around the holidays and winter conditions in northern states. Mecray also said it incorporates some slippage from a couple of customers compared with prior expectations. He attributed the slower expected year-over-year growth rate partly to acquisitions from the prior year reaching their anniversary.
Looking ahead, Parrott said management remains confident in the 2027 outlook communicated during the IPO process. Mecray said fuel and health care costs remain margin headwinds, although the company is working to improve fleet and workforce utilization and negotiate contract terms that could offset some fuel inflation over time.
Parrott also addressed ITG’s share performance since its IPO, saying management was “surprised and disappointed” and did not believe the price represented the underlying value of the business. He said the company plans to continue investor outreach and communication about business developments.
About ITG (NASDAQ:ITG)
Investment Technology Group, Inc. (ITG) was a financial technology and agency brokerage firm serving institutional investors. Its services included trade execution, execution algorithms, trading analytics and tools designed to help clients manage and evaluate their equity trading. ITG’s products included POSIT, an alternative trading system that matched buyers and sellers, and Triton, an execution management system. The company also provided transaction-cost analysis and related research to help clients assess trading performance.
